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.