Martek Releases FY10 Results

COLUMBIA, Md.Martek Biosciences Corp. released financial results for the fourth quarter (4Q10) and fiscal year (FY10), ended Oct. 31, 2010. Total revenues for 4Q10 were $119.1 million, up 36 percent from the comparable 2009 period. For FY10, revenues rose 30 percent to $450 million.

"Martek's fourth quarter came in at the high end of our expectations and concluded a year of many accomplishments for Martek," said Steve Dubin, CEO. "Revenue grew across all business segments in 2010, our core infant formula ingredients business was strengthened through the extension of the terms of two of our key infant formula sole source supply agreements, and significant improvements on the operational side of the business were implemented which helped drive growth in both margins and income. In addition, we expanded our business platform through the acquisition of Amerifit, and made significant progress on our product and technology pipeline, both of which provide Martek with exciting opportunities for future growth."

Product sales for 4Q10 hit $117.6 million, up 44 percent compared to 4Q09; product sales rose 32 percent for the full year 2010 compared to FY09, totaling $434.8 million. The company attributed the growth to sales of branded consumer health products resulting from the Amerifit acquisition, as well as increased sales of its nutritional ingredients in both the infant formula and non-infant formula markets.

Overall gross margin also increased during 4Q10hitting 52 percentcompared to 44 percent gross margin achieved in 4Q09. For FY10, gross margin was 48 percent, an increase from the 43 percent gross margin in the previous fiscal year.

Martek noted one key strategic objective during FY10 was to secure its position in supplying DHA and ARA to the infant formula industry for several more years beyond the supply agreements with sole-source provisions expiring at the end of 2011. It announced in December 2010 that it extended its global sole-source DHA and ARA supply agreement with a major infant formula customer; customers representing a total of 52 percent and 44 percent of Marteks current infant formula sales are now under contract through at least 2014 and 2015, respectively, with graduated price reductions to the customers over the terms of the extensions. The company anticipates making further progress in this area during FY11.