Martek Revenues Up 18% in Q1

06/03/08 Martek Biosciences Corporation has said that revenues for the first quarter were $82.9 million, up 18% from $70.3 million in the first quarter of fiscal 2007. Net income was $8.7 million, or $0.26 per diluted share, for the first quarter of fiscal 2008 compared with $2.8 million, or $0.08 per diluted share, in last year's first quarter.

Commenting on the quarter, Chief Executive Officer Steve Dubin said, "The results for the first quarter show a solid start to fiscal 2008 and reflect our continued execution of our business plan. During the first quarter, Martek increased overall and non-infant formula revenues and achieved margin, earnings and cash flow growth. Furthermore, several new customers launched products with life'sDHA and an existing customer included our nutritional oils in an expanded number of their products. These new launches, customer launches to date in the second quarter and the success of a number of products that have been introduced by some of our largest customers should bode well for growth in the non-infant formula categories in coming quarters."
First Quarter Revenue Summary

Product sales in the first quarter increased 18% to $78.6 million reflecting continued strong demand from Martek's U.S. and international infant formula customers, the launch of new and growth of existing food and beverage products containing life'sDHA and the Company's increased penetration into its other non-infant formula nutritional markets.

For the second quarter of fiscal 2008, Martek expects total revenues to be between $83 million and $88 million, which include projected non-infant formula nutritional revenue of between $7.4 million and $9.0 million and contract manufacturing sales of between $2.9 million and $3.1 million. Second quarter gross margin is expected to be approximately 41%. Selling, general and administrative and research and development expenses are expected to increase by approximately 8% and 13%, respectively, over first quarter levels. Net income is projected to be between $8.0 million and $8.7 million, and diluted earnings per share are projected to be between $0.24 and $0.26.

The Company's high-end revenue guidance of $88 million for the second quarter reflects a significant increase from the first quarter in sales to infant formula customers. The high-end sales guidance for the second quarter are based on what the company currently believes to be customers' production schedules and related timing issues. Should those levels be achieved, it would likely result in lower infant formula sales in the third quarter of fiscal 2008. The Company continues to anticipate an increase in non-infant formula nutritional revenues in the third quarter as compared to the second quarter; however, if such timing issues occur in our infant formula business, Martek's overall revenues and earnings in the third quarter of fiscal 2008 would be lower than the second quarter. Despite the anticipated quarter-to-quarter fluctuations, the Company projects the annual growth of its infant formula sales in fiscal 2008 compared to fiscal 2007 to be between 7% and 9%, which is slightly higher than previously estimated, with a significant portion of the growth coming from expansion of international markets.