Martek Biosciences / MATK

About Martek Biosciences

6480 Dobbin Rd., Columbia, Md. 21045
www.martekbio.com | 410-740-0081 | Founded: 1985

Industry: Biotechnology | Category: Public Companies

Martek had a difficult year, falling well short of its ambitious sales targets.
Company officials learned last spring that some of its biggest customers had been hoarding its products because of previous shortages caused by production problems. The stock price plunged 46 percent in a single day when the company revealed the problem, and a former vice president paid nearly $55,000 to settle allegations of insider trading.
The hoarding problem cut significantly into sales for much of the year. Annual revenue increased 18 percent, to $218 million, for the fiscal year ended Oct. 31, but profit fell to $15.3 million from $47 million in 2004. First-quarter 2006 results, announced in March, also reflected last year's problem: Revenue for the quarter was $62.9 million, down from $66.5 million in the comparable period a year earlier, when several large customers were amassing their stockpiles.
But things were beginning to look up, company officials said. Both the supply and hoarding issues appear to have been resolved. The company completed a major expansion of its Kingstree, S.C., plant in July and signed a long-term deal with Kellogg Co. to use Martek DHA in food products. The first part of this year also brought good news: Odwalla Inc. introduced soy milk containing Martek DHA, Mission Pharmacal Co. brought out a prenatal vitamin containing the product, and Martek added an infant-formula customer in Israel.
Martek is also beginning to look for a new product: The company recently filed for a patent on the use of new algae-based compounds as anti-inflammatories, based on preliminary animal studies. The company hopes to come up with a strategy for using the compound this year, but commercial use is still a long way off, President Steve Dubin said.
Martek is also undergoing a changing of the guard. Longtime chief executive Henry "Pete" Linsert Jr. is to step down in June. He will be succeeded by Dubin, who has been with Martek since 1992 and has served in a variety of positions including general counsel and finance chief. Dubin expressed optimism that the expanded South Carolina facility would allow Martek to keep growing without having to embark on major construction in the near term. "The bulk of the heavy lifting is done now," Dubin said in an interview. "We're really set for a while."

2005 Financial Data

Revenues: $217,852,000 | Net Income: $15,284,000
Asssets: $578,485,000 | Earnings Per Share: $0.48
Total employees: 582 | Local employees: 121