Cyanotech Corporation

Aloha from Kona, Hawaii. Thank you for joining us today to report Cyanotech's second quarter fiscal year 2026 earnings results. I am Matt Custer, President and Chief Executive Officer of Cyanotech. Joining me on the call today is Jennifer Miyashiro, 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?

Our second quarter reflected continued momentum in both sales growth and profitability. Total revenue increased nearly 20% year-over-year, driven by higher bulk sales and strong performance in our online channels. We also saw meaningful improvement in gross margin as our production volumes continued to increase, driving lower cost per unit and better overall efficiency. Additionally, price increases implemented earlier in the year for our Nutrex branded products contributed to margin expansion. While tariffs impacted our contract extraction competitiveness, we remain focused on operational excellence, disciplined cost control, and building a stronger, more resilient business position for long-term success. With continued momentum across our brands, improving profitability trends, and a dedicated team that continues to deliver despite challenging market conditions, I'm confident that Cyanotech is steadily moving in a positive direction. Turning over to Jennifer to discuss the financial results. Jennifer.

Thank you, Matt, and good evening, everyone. I'll begin with a summary of our key financial results for the second quarter of fiscal year 2026. Net sales for the second quarter reached $7 million, which is an increase of $1.1 million, or 19.3%, versus the same period of the prior year. Gross profit for the second quarter of fiscal 2026 rose to $2.4 million, representing a gross margin of 34.3%, which is up from $1.5 million and 25.3% in the same quarter last year. The nine-point margin expansion reflects both strong top-line growth as well as continued gains in production efficiency, underscoring the company's strong operational momentum. Second quarter operating income was $190,000 compared to an operating loss of $975,000 in the second quarter of the prior fiscal year. Net income for the current quarter was $1,000, or 0 cents per diluted share, compared to a net loss of $1.2 million, or 16 cents lost per diluted share, in the same period of the prior year. At the end of the period, the company had cash of $649,000 and working capital of $39,000 compared to $780,000 and $550,000, respectively, in the prior year. I will now hand the call back to Matt for concluding comments. Matt?

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