Martek enters unfamiliar territory: profitability
Martek Biosciences, a Columbia-based biotech firm, posted its first profit in 17 years of business.
washington.bizjournals.com
Martek, which develops an oil that enhances the nutritional value of food and beverages for infants, toddlers and even adults, announced Dec. 11 that it made $375,000, or 2 cents a share, during the quarter ended Oct. 31, compared with a net loss of $3.57 million, or 18 cents a share, for the same quarter last year.
For the year ended Oct. 31, Martek lost $24.2 million, or $1.10 a share, compared with a loss of $13.7 million, or 73 cents a share, last year. Revenues for 2002 were $46 million, compared with revenues of $18.8 million in 2001. Revenues for the fourth quarter of 2002 were $15.1 million. Martek generated $5.75 million during the fourth quarter of 2001.
Sales of enriched baby formula in U.S. spur Martek's first profit
Md. biotech firm had sold most of its additive abroad
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By Meredith Cohn / Baltimore Sun Staff
Originally published December 13, 2002
Formed more than 17 years ago, Martek Biosciences Corp. finally caught the attention of American parents, who bought enough baby formula bolstered by the company's algae--derived nutritional supplement to give the company its first profit. Columbia-based Martek makes the nutritional oils, known as ARA and DHA, from microalgae that it says are important to infant brain and eyesight development. But until recently, the company sold most of its products only overseas.
For the past six months, three licensees have been selling products with Martek's oils in the United States. That helped propel revenue, which is expected to continue rising, the company said yesterday.
Martek earned $375,000 on revenue of $15.12 million in the fourth quarter, which ended Oct. 31, the company reported yesterday. That compares with a net loss of $3.58 million on revenue of $5.75 million in the corresponding period last year.
Per share, the company earned 2 cents, compared to a loss of 18 cents a share in the fourth quarter of last year.
"Martek came of age in [fiscal year] '02," said Henry Linsert Jr., Martek's chief executive officer. "The company finally joined the biotech profit club in Q4, and I expect both revenue and profits should increase significantly next year."
For the year, Martek lost $24.23 million on revenue of $46 million, compared with a loss of $13.7 million on revenue of $18.82 million last year. Per share, the company lost $1.10 this year, compared with a loss of 73 cents a share last year.
Peter L. Buzy, Martek's chief financial officer, said about two-thirds of the company's sales are still overseas. But the company expects U.S. sales to continue rising.
Based on data collected at market checkouts, about 10 percent of the baby formula sold in the United States has the oils developed by Martek, said Scott Van Winkle, an analyst at Adams, Harkness & Hill in Boston who follows the company.
That information led him to estimate that the company would break even in the fourth quarter. "This was better than expected," he said. "It's certainly nothing but good."
Van Winkle said the company began taking in substantial revenue only in the past two years. The company took longer than it had projected to get to this point, he said. But, he added, once revenue started flowing in force, it did not take long to make a profit.
"It's always positive when a development state company starts to realize revenue and then turns profitable. They've done it really in two years. They had some revenue before then, but this is real revenue. ... Consumers are responding both nationally and internationally."
Martek's shares closed up $1.12 yesterday, at $20.52.
Columbia Biotech Firm Martek Turns a Profit Dec 13, 2002
By Michael Barbaro / Washington Post Staff Writer
Martek Biosciences Corp. offered a glimmer of hope to the cash-starved biotechnology sector yesterday, reporting revenue that tripled and a $375,000 profit. Its earnings thrust the Columbia maker of nutritional oils into the tiny club of biotechnology firms operating in the black.
Martek's revenue surged to $15.1 million for the quarter ended Oct. 31 from $5.8 million in the year-earlier period, reflecting higher sales of infant formulas containing its nutritional oils.
Its profit of 2 cents per share followed a loss of $3.6 million (18 cents) during the same period last year.
The company's fiscal year ended with a loss of $24.2 million ($1.10) on $46.1 million in revenue. The previous year, Martek reported a loss of $13.7 million (73 cents) on $18.8 million in revenue.
Martek's nutritional oils contain omega fatty acids, widely touted for improving mental and visual development in infants. Sales of the oils accounted for 80 percent of fourth-quarter revenue, the company said.
After encountering fierce resistance from formula makers for almost a decade, Martek has persuaded the nation's biggest formula manufacturers -- and their consumers -- to use its nutrients. Mead Johnson & Co., Wyeth and Abbott Laboratories now market formula enriched with Martek's algae-based fatty acids, which resemble those found in breast milk.
"The consumer believes that omega-3 fatty acids have a benefit," said Scott Van Winkle, an analyst at investment bank Adams, Harkness & Hill.
Martek went public in 1993, promising investors big profits on sales of its nutritional oils. But convincing investors was not the problem; selling the concept to everybody else was. Formula makers questioned the product's money-making potential, doctors questioned its health benefits, and government regulators questioned its safety. |
