Cyanotech Reports Financial Results for the Fourth Quarter and Fiscal 2009

KAILUA KONA, Hawaii - (BUSINESS WIRE) - Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, today announced financial results for the fourth quarter and fiscal 2009, ended March 31, 2009.

Fiscal 2009

Revenues for fiscal 2009 increased 23% to $13,950,000, compared to revenues of $11,364,000 for fiscal 2008. Gross profit was $5,512,000, with gross profit margin of 40%, compared to a gross profit of $3,071,000 and gross profit margin of 27% reported for fiscal 2008. Net income was $1,142,000, or $0.22 per diluted share, compared to a net loss of $1,139,000, or ($0.22) per diluted share for fiscal 2008.

Cash and cash equivalents were $977,000 at March 31, 2009 compared to the March 31, 2008 balance of $1,090,000. Working capital increased to $3,892,000 at March 31, 2009 compared to $3,092,000 at March 31, 2008.

"In fiscal 2009, we focused on stabilizing Cyanotech by driving sound business fundamentals throughout the organization, thereby creating a strong foundation for the future," said Andrew H. Jacobson, President and Chief Executive Officer.

Mr. Jacobson noted these highlights and results of the company's fiscal 2009 plan:

		1)		Quality - Cyanotech established Hawaiian Spirulina Pacifica as the global nutritional leader. Third party tests confirmed superior nutritional content across all leading brands. In addition, Cyanotech significantly improved the potency of its Astaxanthin biomass.
		2)		Cost Containment - Consolidating vendors, reducing costs and implementing controls throughout the supply chain delivered a 13-point margin improvement.
		3)		Increased Productivity - New cultivation strategies, combined with adherence to stringent production metrics, increased Spirulina productivity by 52% and Astaxanthin productivity by 18%.
		4)		Sales Growth - Sales increased 23% through improved service levels, a strategic price increase across all classes of trade and marketing of the Hawaii difference.
		5)		Net Income - Cyanotech delivered $1.142 million in net income, which represents a $2.281 million turnaround.

"We are excited about fiscal 2010 and will continue to focus on sound business fundamentals. In addition, we will introduce a number of innovative products that will feature our Hawaiian Spirulina Pacifica and BioAstin Natural Astaxanthin," Mr. Jacobson concluded.

Fourth Quarter Fiscal 2009

Revenues for the fourth quarter of fiscal 2009 were $3,422,000, compared to revenues of $3,414,000 for the fourth quarter of fiscal 2008. Gross profit for the fourth quarter was $1,264,000, with gross profit margin of 37%, compared to a gross profit of $1,204,000 and gross profit margin of 35% reported for the fourth quarter of fiscal 2008. Net income for the fourth quarter was $194,000, or $0.04 per diluted share, compared to net income of $181,000, or $0.03 per diluted share for the fourth quarter of fiscal 2008. Lower temperatures and reduced sunlight during the winter months contributed to seasonally reduced productivity in the fourth quarter.

About Cyanotech - Cyanotech Corporation, a world leader in microalgae technology, produces BioAstin Natural Astaxanthin and Hawaiian Spirulina Pacifica-all natural, functional nutrients that leverage our experience and reputation for quality, building nutritional brands which promote health and well-being. Cyanotech's Spirulina products offer complete nutrition, and augment energy and immune response. They are FDA reviewed and accepted as Generally Recognized as Safe (GRAS) for use in food products. BioAstin's superior antioxidant activity and ability to support and maintain a natural anti-inflammatory response enhance skin, muscle and joint health. All Cyanotech products are produced from microalgae grown at its 90-acre facility in Kona, Hawaii using patented and proprietary technology. Cyanotech distributes to nutritional supplement, nutraceutical and cosmeceutical manufacturers and marketers in more than 40 countries worldwide. Cyanotech was the first microalgae company in the world to obtain quality management standards ISO 9001:2000 certification and is GMP-certified by the Natural Products Association^TM. Visit www.cyanotech.com for more information.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

Except for statements of historical fact, the statements in this press release are forward-looking. Such statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include, but are not limited to, general economic conditions, forecasts of sales in future periods, changes in sales levels to our largest customers, weather patterns, production problems caused by contamination, risks associated with the acceptance of new products, competition, foreign exchange fluctuations, government regulation, and other factors more fully detailed in the Company's recent Form 10-Q and annual Form 10-K filings with the Securities and Exchange Commission.

(Financial Tables Follow: The following tables do not contain footnotes or other information contained in the Company's Form 10-K for the periods ended March 31, 2009. As such the following Financial Tables are provided only as a guide and other factors are more fully detailed in the Company's annual Form 10-K filing with the Securities and Exchange Commission.)

CYANOTECH CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
March 31, 2009 and 2008
		2009				2008
		(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents		$	977			$	1,090
Accounts receivable, net of allowance for doubtful accounts of $14 in 2009 and $23 in 2008			1,785				1,934
Inventories			3,124				1,601
Prepaid expenses and other current assets			110				263
Total current assets			5,996				4,888
Equipment and leasehold improvements, net			4,316				4,269
Other assets			475				623
Total assets		$	10,787			$	9,780
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt		$	620			$	567
Accounts payable			1,040				805
Accrued expenses			444				320
Customer deposit			-				104
Total current liabilities			2,104				1,796
Long-term debt, excluding current maturities			909				1,505
Customer deposit			-				100
Total liabilities			3,013				3,401
Stockholders' equity:
Common stock of $.02 par value, authorized 7,500,000 shares; issued and outstanding 5,245,770 shares at 2009 and 5,242,270 shares at 2008			105				105
Additional paid-in capital			27,590				27,337
Accumulated other comprehensive loss			-				(4	)
Accumulated deficit			(19,921	)			(21,059	)
Total stockholders' equity			7,774				6,379
Total liabilities and stockholders' equity		$	10,787			$	9,780

CYANOTECH CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
For the fiscal years ended March 31, 2009, 2008 and 2007
		2009				2008				2007
		(in thousands, except per share data)
Net sales		$	13,950			$	11,364			$	9,683
Cost of sales			8,438				8,293				8,552
Gross profit			5,512				3,071				1,131
Operating expenses:
Research and development			206				143				203
Sales and marketing			1,125				1,355				1,297
General and administrative			2,873				2,478				2,448
Impairment loss on equipment and leasehold improvements			-				-				4,487
Total operating expense			4,204				3,976				8,435
Income (loss) from operations			1,308				(905	)			(7,304	)
Other income (expense):
Interest income			8				24				59
Interest expense			(162	)			(164	)			(186	)
Other income (expense), net			10				(65	)			(3	)
Total other expense, net			(144	)			(205	)			(130	)
Income (loss) before income tax expense (benefit)			1,164				(1,110	)			(7,434	)
Income tax expense (benefit)			22				29				(9	)
Net income (loss)		$	1,142			$	(1,139	)		$	(7,425	)
Net income (loss) per share:
Basic		$	.22			$	(.22	)		$	(1.42	)
Diluted		$	.22			$	(.22	)		$	(1.42	)
Shares used in calculation of net income (loss) per share:
Basic			5,244				5,242				5,234
Diluted			5,248				5,242				5,234

Cyanotech Corporation
Bruce Russell, 310-559-4955 x101
brussell@cyanotech.com