Cyanotech Corporation

Aloha from Kona, Hawaii. Thank you all for joining us today to report Scioto Tech's first quarter fiscal year 2026 earnings results. I am Matt Custer, President and Chief Executive Officer of Scioto Tech. Joining me on the call today is Jennifer Rogerson, our Chief Financial Officer. I will turn the call over to Jennifer to provide our forward-looking statement.

Thanks, Matt. Our discussion today may include forward-looking statements. We do not undertake any obligation to update forward-looking statements, either as a result of new information, future events, or otherwise. Our actual results may differ materially from what is described in these forward-looking statements. Some of the factors that may cause results to differ are listed in our publicly filed documents. For additional information, we encourage you to review our 10Q and fiscal year 2025 report filed with the Securities and Exchange Commission. I will turn it back to Matt for comments on the quarter. Matt.

This quarter's net sales declined 1.3% compared to the same period last year. However, improved production efficiencies and continued disciplined inventory management drove a 20% increase in gross profit while operating expenses remained flat. As a result, the company reported a 23% improvement in net loss. Compared to the prior year, our sales mix did shift meaningfully. Bulk spirulina and bulk acesanthin sales increased by 48% and 49% respectively, reflecting a renewed demand in the ingredients channel for U.S. sourced material. This growth was partially offset by a 12% decline in packaged product sales. We remain focused on executing our long-term strategy. This includes driving brand value through differentiated storytelling, deepening relationships in e-commerce and bulk ingredient markets, and focusing on sustainable cash flows. As we navigate the continued macroeconomic challenges, I am proud of the resilience of our team, has shown, and am confident in the progress that we are making. Turning over to Jennifer to discuss the financial results. Jennifer.

Thank you, Matt, and good evening, everyone. Key financial results for the first quarter of fiscal year 2026. In the first quarter this fiscal year, net sales were 5.8 million as compared to 5.9 million last year, a decrease of $78,000 or 1.3%. Gross profit for the first quarter of fiscal 2026 was 1.8 million with a gross profit margin of 30.5% compared to a gross profit of 1.5 million and gross margin of 25% in the first quarter of fiscal year 2025. The 5.5 percentage point increase was a result of higher efficiencies in production driving our costs down. First quarter operating loss was $753,000 compared to an operating loss of $1 million in the first quarter of the prior fiscal year. Net loss for the current quarter was $926,000 or 13 cents per diluted share loss compared to a net loss of 1.2 million or 17 cent loss per diluted share in the prior year. The company had cash of $383,000 and a negative working capital of $255,000 compared to $257,000 and $302,000 respectively in the prior year. I will hand the call back to Matt for concluding comments. Matt.

We have not received any questions. Thank you for joining today's call. Aloha.