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Natural Alternatives International, Inc. Announces Fiscal 2015 Q1 Results

SAN MARCOS, Calif., Natural Alternatives International, Inc. ("NAI") (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $487,000 or $0.07 per diluted share on net sales of $18.7 million for the quarter ended September 30, 2014.

Net sales during the three months ended September 30, 2014 increased $1.5 million or 9.0% from $17.2 million recorded in the comparable prior year period. For the quarter ended September 30, 2014, private label contract manufacturing sales increased $2.1 million or 14.0% from the comparable quarter last year due primarily to higher sales of existing products and new customer product sales. Patent and trademark licensing revenue decreased 36.7% to $961,000 during the first quarter of fiscal 2015 as compared to $1.5 million for the comparable prior year period. This decrease related primarily to the timing of current year shipments to various customers as compared to the prior year period, and the cessation of the Abbott beta-alanine licensing program during fiscal 2014. Our branded products sales totaled $269,000 for the first quarter of fiscal 2015 as compared to $317,000 for the comparable prior year period.

Our revenue concentration risk for our two largest customers decreased to 57% as a percentage of our total private label contract manufacturing sales for the first three months of fiscal 2015 compared to 58% in the first three months of fiscal 2014.

Net income in the first quarter of fiscal 2015 was $487,000 or $0.07 per diluted share compared to net income of $88,000 or $0.01 per diluted share in the first quarter of fiscal 2014. This increase was primarily attributable to increased private label contract manufacturing sales and a $658,000 reduction in beta-alanine litigation and patent compliance expense. These increases were partially offset by reduced patent and trademark licensing revenue and increased sales, marketing and employee compensation expenses.

As of September 30, 2014, NAI had cash of $16.4 million and working capital of $32.9 million compared to $19.5 million and $31.3 million, respectively, as of June 30, 2014. As of September 30, 2014, we had $5.5 million available under our line of credit agreements.

Mark A. Le Doux, Chairman and Chief Executive Officer stated, "The results for this quarter are superior to year earlier numbers, largely due to retained focus on core domestic and international sales, reduced expenditures in patent litigation, and continued investment in process improvements and new customer acquisition. Additionally, we are currently expanding our SwissMedic licensed facilities in Switzerland to meet anticipated growth in demand from current and prospective customers. Sales for CarnoSyn® have been accelerating during the current quarter and are anticipated to be consistent with historical norms for the balance of this fiscal year. We continue to see increasing acceptance of this remarkable compound in a variety of product offerings and are working to expand its application in multiple areas."

NAI, headquartered in San Marcos, California, is a leading formulator, manufacturer and marketer of nutritional supplements and provides strategic partnering services to its customers. Our comprehensive partnership approach offers a wide range of innovative nutritional products and services to our clients including: scientific research, clinical studies, proprietary ingredients, customer-specific nutritional product formulation, product testing and evaluation, marketing management and support, packaging and delivery system design, regulatory review and international product registration assistance. For more information about NAI, please see our website at http://www.nai-online.com.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that are not historical facts and information. These statements represent our intentions, expectations and beliefs concerning future events, including, among other things, our expectations and beliefs with respect to: our future financial and operating results, revenue, profits and financial condition, our ability to expand our contract manufacturing business, contain our fixed costs, expand our market presence, protect our intellectual property and manage the costs thereof, our ability to execute our business plan, and develop, maintain or increase sales to new and existing customers, as well as future economic conditions and the impact of such conditions on our business. We wish to caution readers these statements involve risks and uncertainties that could cause actual results and outcomes for future periods to differ materially from any forward-looking statement or views expressed herein. NAI's financial performance and the forward-looking statements contained herein are further qualified by other risks including those set forth from time to time in the documents filed by us with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K.

CONTACT – Kenneth Wolf, Chief Operating and Chief Financial Officer, Natural Alternatives International, Inc., at 760-736-7700 or investor@nai-online.com.