For the first quarter of fiscal 2008, the Company generated $15.1 million of cash from operating activities. Contributing to this cash generation was a near $2 million decline in Martek's inventory balance at quarter-end compared with the amount on-hand at the end of fiscal 2007. At the end of the quarter, Martek had $22.1 million in cash and had the entire balance of its long-term revolving credit facility ($135 million) available for future borrowing.
The Company holds a variety of "AAA" rated interest-bearing auction
rate securities which are comprised of student loans guaranteed by the
federal government. As a result of current negative conditions in the
global credit markets, auctions for the Company's $15.8 million investment
in these securities either have failed or may fail to settle on their
respective settlement dates which will occur over the next few weeks. Given
our strong liquidity position and expected positive operating cash flows,
the Company has the ability to execute its business plan and intends to
hold these securities until conditions improve. As such, the Company has
reclassified these securities from short-term investments to long-term
investments on its balance sheet as of January 31, 2008.
Significant Recent Events
-- Multi-Year Sole Source Supply Agreement with Numico -- In February
2008, Martek and Numico Trading B.V. ("Numico") entered into a license
and supply agreement (the "Agreement"), effective as of January 1,
2008. The Agreement provides that Martek will serve as the exclusive
supplier for all of Numico's arachidonic acid (ARA) and microbially-
derived docosahexaeonic acid (DHA) needs for infant formula products.
Numico may continue to use alternative non-microbial DHA sources. The
Agreement has a 15-year term that runs until December 31, 2022. In
addition to customary termination pr
|SOURCE Martek Biosciences Corporation|
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