CARLSBAD, CALIF, September 21, 2023 /PRNewswire/ –Natural Alternatives International, Inc. (“NAI”) (Nasdaq: NAII), a leading formulator, manufacturer, and marketer of customized nutritional supplements, today announced net income of $2.0 million, or $0.35 per diluted share, on net sales of $35.9 million for the fourth quarter of fiscal year 2023 compared to net income of $3.1 million, or $0.52 per diluted share, in the fourth quarter of the prior fiscal year.
Net sales during the three months ended June 30, 2023, decreased $16.6 million, or 31.7%, to $35.9 million as compared to $52.5 million recorded in the comparable prior year period. During the same period, private-label contract manufacturing sales decreased 35.2% to $32.3 million. Private-label contract manufacturing sales decreased for most of our customers primarily due to excess inventory levels associated with softening consumer demand. Many of our customers maintained larger inventory balances during the previous twelve months due to concerns about supply constraints and now that supply chain conditions are improving they have begun to release these excess inventory positions.
CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue increased 36.1% to $3.6 million during the fourth quarter of fiscal year 2023, as compared to $2.6 million for the fourth quarter of fiscal year 2022. The increase was primarily due to increased raw material sales and favorable changes in estimates for volume rebates.
Net income for fiscal year 2023 was $2.5 million, or $0.43 per diluted share, compared to net income of $10.7 million, or $1.74 per diluted share, for fiscal year 2022. Net income for fiscal year 2023 included a benefit of $3.5 million related to anticipated refunds from the Employee Retention Tax Credit program and $1.4 million in recovery of accounts receivable written-off in a prior fiscal year.
Net sales during the year ended June 30, 2023, decreased $17.0 million, or 9.9%, to $154.0 million as compared to $171.0 million recorded in the comparable prior year. During the year ended June 30, 2023, private-label contract manufacturing sales decreased $9.5 million, or 6.1%, from the comparable period last year. CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue decreased 46.1% to $8.7 million during the year ended June 30, 2023, as compared to $16.2 million in the prior year ended June 30, 2022.
On August 16, 2023, we announced the temporary closure of our new facility in Carlsbad, California which is anticipated to occur in October 2023. The closure was necessitated primarily due to excess inventory levels at one of our largest customers. We expect this facility will re-open and our prior level of operations will resume late in our third fiscal quarter of 2024. Subject to this, and our overall sales forecast, we currently anticipate we will experience a net loss in the first half of fiscal 2024, net income in the second half and an overall net loss in fiscal 2024.
As of June 30, 2023, we had cash of $13.6 million and working capital of $41.1 million, compared to $21.8 million and $52.9 million respectively, as of June 30, 2022. As of June 30, 2023, we had $20.0 million available under our line of credit agreement.
Mark A. Le Doux, Chairman and Chief Executive Officer of NAI stated, “Despite our near-term challenges and continued headwinds within our industry and the economy in general, we remain optimistic about our future growth. We continue to aggressively seek opportunities to diversify and increase our sales both through relationship development and product innovation.”
“We believe the foundation we have built over the past several years, including the strength of our balance sheet, will help us weather the turbulence we expect to encounter over the next several quarters.”
An updated investor presentation will be posted to the investor relations page on our website later today (https://www.nai-online.com/our-company/investors/).
NAI, headquartered in Carlsbad, 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 https://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 ability to develop, maintain or increase sales to new and existing customers, our ability to timely attract and retain sufficient labor, the availability of raw materials, our future revenue profits and financial condition, 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 – Michael Fortin, Chief Financial Officer, Natural Alternatives International, Inc., at 760-736-7700 or [email protected].
Web site: https://www.nai-online.com