Supply, Demand Struggle Limits Cyanotech Sales

Supply, Demand Struggle Limits Cyanotech Sales

KAILUA KONA, HawaiiCyanotechCorp. (NASDAQ:CYAN) posted flat sales for its fourth quarter and fiscal 2005ended March 31, due primarily to difficulty in meeting demand for its spirulinaand animal astaxanthin products. While earnings for the quarter fell to a slightloss from the gain logged a year ago, due to higher research and developmentcosts, income for the year rose 22 percent due primarily to reduced interestexpense on lower debt.

Decreased quarter sales of spirulina and animal astaxanthinwere partially offset by increased sales of bulk human astaxanthin.The companyended the quarter with a backlog of spirulina orders. With the completion of maintenance to its source ponds, thecompany expects to better be able to meet the strong demand.

Although our fiscal 2005 results did not meet ourexpectations, we were able to maintain levels consistent with the prior yeardespite the impact of weather-related difficulties encountered by our Japanaquaculture customers, said Gerald Cysewski, Ph.D., president of Cyanotech.He noted the recent improvements made to meet market demand were funded entirelyby operations.