DHA Golden Child for Martek

DHA Golden Child for Martek

COLUMBIA, Md.--Martek Biosciences Corp. (NASDAQ:MATK)reported that for its fiscal year (FY02), ended Oct. 31 and reported Dec. 12,sales shot through the roof, but they were tempered by a one-time costassociated with acquiring an omega-3 manufacturer.

Revenues totaled $46.1 million for the year, compared to $18.8million in FY01. Gross margin rose to 35.3 percent of sales from 33.3 percent,and operating expenses more than doubled to $41.5 million from $21.2 million inthe same period prior. Selling, general and administrative expenses increased by55 percent to $4.4 million, primarily due to operating costs associated withMartek Boulder. Net loss came in at $24.2 million, or $1.10 per share lost, fromFY01's net loss of $13.7 million, or $.73 per share lost.

Expenses included a one-time, non-cash charge totaling $17.1million related to the year's purchase price of OmegaTech Inc., a Boulder,Colo., producer of docosahexaenoic acid (DHA). The investment seems to be payingoff: 80 percent of the company's sales of DHA and AA (arachidonic acid) were dueto product sold to three of Martek's infant formula licensees. Margins alsoimproved as a result of decreased production costs for AA without a reducedsales price.

"Martek came of age in fiscal 2002," said Henry"Pete" Linsert Jr., chief executive officer. "The company finallyjoined the biotech profit club in the fourth quarter, and I expect both revenuesand profits should increase significantly next year."

The company credits its sales improvements with Health Canada'sfavorable review of Martek's DHA and AA in Canadian infant formulas, announcedin October 2002, and the American Heart Association's well-publicizedrecommendation to increase the consumption of omega-3s for cardiovascularhealth.

In other company news, Richard Radmer, president and chiefscientific officer, plans to retire in spring 2003. For the last few years,Radmer had worked for the company on a part-time basis.

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