Cyanotech Corporation · OTC:CYAN
Cyanotech — Investor Presentation (September 2004)
42 slides from Cyanotech's investor presentation, September 2004
Slide 1: Cyanotech Corporation: Commercializing High Value Natural Products From Microalgae
CYANOTECH CORPORATION Commercializing High Value Natural Products From Microalgae 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement These slides accompany an oral presentation by Cyanotech Corporation, which contains forward-looking statements. The company’s actual results may differ materially from those suggested here. Additional information concerning factors that could cause actual results to vary from
Slide 3: Slide 3
Slide 4: Agenda
Agenda Intro Markets, Products & Selling Strategies Anchor Products Growth Products Development and Production Financials Management Goals Summary
Slide 5: Cyanotech Mission
Cyanotech Mission Cyanotech will strengthen its position as a world leader in the scientific development, production and commercialization of both high quality and high margin natural products from microalgae. Cyanotech is an environmentally friendly company that strives to maintain a safe and envir
Slide 6: Product Sales FY 2004
Product Sales FY 2004 BioAstin 24% Spirulina 55% NatuRose 21%
Slide 7: Product Market Size
Product Market Size NatuRose BioAstin $200 MM ~$200 MM Spirulina $30 MM
Slide 8: Spirulina Pacifica
Spirulina Pacifica ® Concentrated Phytonutrients Carotenoids Anti-viral compounds Recognized for highest quality Mature market Stable market share
Slide 9: Cyanotech Firsts
Cyanotech “Firsts” 2000: Gained FDA approval for NatuRose ® for aquaculture feeds 1999: Gained FDA clearance for BioAstin ® for human nutrition supplements 1996: Gained ISO 9002 Registered Quality System rating for microalgae production 1993: Market certified organic Spirulina
Slide 10: Spirulina Competition
Spirulina Competition Cyanotech -- 20% market share US Competitor -- 20% market share Twelve Foreign Competitors -- 60% market share
Slide 11: Sales Strategy
Sales Strategy Established High Quality Reputation Focus on End-Product Manufacturers Bulk Raw Materials Branded Ingredient Program
Slide 12: Worldwide Customer Base
Worldwide Customer Base Diversified Customer Base Customers in 35 Countries Growth Projected in Foreign Markets Europe Asia Australia / New Zealand
Slide 13: US Customer Base
US Customer Base Over 20 Major US Customers Distributors Formulator / Distributors Retail Product Manufacturers Network Marketers
Slide 14: Agenda
Agenda Intro Markets, Products & Selling Strategies Anchor Products Growth Products Development and Production Financials Management Goals Summary
Slide 15: Annual Sales by Product
Annual Sales by Product $ in millions (Actual) 7 Spirulina NatuRose 6 BioAstin 5 4 3 2 1 0 FY 2002 FY 2003 FY 2004
Slide 16: Microalgal Growth Products
Dp NatuRose Natural Astaxanthin BiofAAstiny NATURAL ASTAXANTHIN
Slide 17: Aquaculture and Poultry Pigmentation Demand
Aquaculture and Poultry Increasing Demand for Natural Pigmentation Driven by Consumers Europe Salmon Japan Cyanotech Japan YK Sea Bream
Slide 18: Applications
Applications NatuRose is used worldwide to pigment shrimp, trout, Coho, Atlantic salmon, red sea bream, tropical fish and egg yolks
Slide 19: NatuRose Competition
NatuRose Competition Natural Astaxanthin No Algal-based natural competitors Low production capacity High production cost Yeast-based products Synthetic Astaxanthin Royal DSM (Hoffman-LaRoche)
Slide 20: Annual Sales by Product
Annual Sales by Product $ in millions (Actual) 7 Spirulina NatuRose 6 BioAstin 5 4 3 2 1 0 FY 2002 FY 2003 FY 2004
Slide 21: Potential for Major Sales Growth
Potential for Major Sales Growth Human Nutrition Market First to Establish Commercial Scale Production Unique Functional Properties Emerging Product Expanding Customer Base High Value to Customers and Consumers High Profit Product
Slide 22: BioAstin Benefits
Powerful Antioxidant Anti-inflammatory Can Deliver Benefits to Central Nervous System Growing Body of Positive Human Clinical Trials
Slide 23: Clinical Trials
Clinical Trials Six Completed by Cyanotech Safety Efficacy Patented Applications Others also Conducting Clinical Work Structure / Function Claims Under DSHEA
Slide 24: BioAstin Competition
BioAstin Competition Cyanotech Major Producer Low Cost Producer Limited US Competition Limited Foreign Competition
Slide 25: BioAstin Sales Strategy
BioAstin Sales Strategy Branded Ingredient Program Logo Pull Through on Customers’ Products Capturing Retail Leaders Strategic Inventory Management Maximizing Production Value
Slide 26: Business Strategy
Business Strategy Spirulina NatuRose BioAstin Market Maturity Mature Growing Emerging Market Size $30 MM $200 MM ~$200 MM Branding Strong Moderate Emerging Competition Global vs. Synth. Early Lead Gross Profit Baseline High Higher Margin Production Discretionary Expansion Expansion Capacity
Slide 27: Agenda
Agenda Intro Markets, Products & Selling Strategies Anchor Products Growth Products Development and Production Financials Management Goals Summary
Slide 28: Research and Development
Research and Development Process Development Clinical Trials to Support BioAstin Internally Funded from Operations Increase with Increased Profitability
Slide 29: Cyanotech Corporation
Cyanotech Corporation
Slide 30: Microalgae Production
Microalgae Production Extremely Productive Control Culture Conditions World-wide Unique Production Location High Sunlight Low Rainfall Patented Cold Deep Seawater Process
Slide 31: Production Capacity
Production Capacity 69 – ¾ Acre Algal Culture Ponds Harvested Every 7 Days Spirulina Production Meeting Demand Astaxanthin Capacity Constrained Versatile Infrastructure Ample Expansion Area
Slide 32: Increase Astaxanthin Production
Increase Astaxanthin Production 15 Astaxanthin ponds to 25 ponds Margin expansion strategy Less costly than new pond construction Potential production increase up to 70% Estimated completion December 2004
Slide 33: Target Product Mix
Target Product Mix BioAstin BioAstin Spirulina Spirulina NatuRose NatuRose FY 2004 (A) Post Conversion
Slide 34: Agenda
Agenda Intro Markets, Products & Selling Strategies Anchor Products Growth Products Development and Production Financials Management Goals Summary
Slide 35: Quarterly Net Revenue
Quarterly Net Revenue $ in millions (Actual) 3.5 3 2.5 2 1.5 1 0.5 0 Q1 04 Q2 04 Q3 04 Q4 04 Q1 05
Slide 36: Quarterly Operating Expenses
Quarterly Operating Expenses $ in millions (Actual) 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 Q1 04 Q2 04 Q3 04 Q4 04 Q1 05
Slide 37: Quarterly Net Income
Quarterly Net Income $ in millions (Actual) 0.5 0.4 0.3 0.2 0.1 0 -0.1 -0.2 Q1 04 Q2 04 Q3 04 Q4 04 Q1 05
Slide 38: Annual Financial Highlights
Annual Financial Highlights $ in millions (Actual) FY 2003 % FY 2004 % Net Sales (% y/y) $8.9 9% $11.6 29% GM % 32% 34% Op. Income $(1.2) $0.7 Net Income $(1.8) $0.4 Cash $0.6 $2.5
Slide 39: Management
Management Gerald R. Cysewski, Ph.D. – Chairman of the Board, President & CEO, 21 years Jeffrey H. Sakamoto – Vice President Finance & Administration, 10 years Glenn D. Jensen – Vice President - Operations, 20 years Robert J. Capelli – Vice President - Sales, 3 years Director of Marketing
Slide 40: Cyanotech Corporate Goals
Cyanotech Corporate Goals Increase Astaxanthin Production and Sales Manage Spirulina Sales Increase Gross Margins Continue Expense Management Increasing Profitability
Slide 41: Cyanotech Corporation Summary
Cyanotech Corporation Summary Leading World-wide Microalgae Company Superior Location and Unique Technology Large and Expandable Production Capacity Major Opportunity to Expand Natural Astaxanthin Product Sales Increasing Profitability in FY05 and Beyond
Slide 42: Cyanotech Corporation
Cyanotech Corporation