Natural Alternatives International, Inc. Announces New and Expanded Credit Facility with Wells Fargo Bank

CARLSBAD, CALIF, May 27, 2021 /PRNewswire/ –Natural Alternatives International, Inc. (“NAI”) (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced the execution of a new and expanded credit facility with Wells Fargo Bank, NA (“Wells Fargo”). This new credit facility replaces the previous facility and increases our borrowing capacity from $10 million to $20 million and allows us to use the credit line to not only support on-going working capital needs but also to facilitate potential future acquisitions. The maturity date for the new facility has also been extended to May 24, 2024.
Mark A. Le Doux, Chairman and Chief Executive Officer of NAI stated, “We are grateful for our long-standing relationship with Wells Fargo and we believe this new credit facility is made possible by our continued financial success and strong balance sheet. While we don’t have any current need for this facility, we believe it further strengthens our financial position and provides us the ability to take advantage of growth opportunities that may be presented to us in the future.”

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 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 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 that 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.

SOURCE – Natural Alternatives International, Inc.

CONTACT – Michael Fortin, Chief Financial Officer, Natural Alternatives International, Inc., at 760-736-7700 or [email protected].

Web site: https://www.nai-online.com

Natural Alternatives International Becomes First Company to Meet New SSCI Benchmarking Standards

Contact: Justin Bartolomeo
(202) 400-0480
[email protected]

WASHINGTON, May 12, 2021 – Natural Alternatives International (NAI) has become the first company to meet new safety and benchmarking standards created by the Supplement Safety & Compliance Initiative (SSCI).  The announcement follows a more than five-year effort by the world’s leading nutritional supplement retailers–including Walmart and GNC–in collaboration with the Natural Products Association (NPA) and its members, to set globally harmonized benchmarking standards for natural products.

Some of the world’s largest nutritional supplement retailers including Amazon and Walmart have acknowledged SSCI as a benchmarking standard that companies must meet in order to sell products on their platforms.

“SSCI brings some of the largest retailers, raw material manufacturers and suppliers, dietary supplement manufacturers and other stakeholders together to assist in strengthening safeguards and helping to ensure regulatory compliance from harvest to retailer shelf,” said Dadrion Gaston, Senior Director Corporate Compliance, Health & Wellness Product & Supply Chain Safety for Walmart, and a Board Member of SSCI.

“SSCI is a retailer-led initiative looking to establish the guidance and thought systems necessary to ensure quality, authenticity, safety, and cGMP compliance needed to reduce safety risk,” said Sudipta Veeramachaneni, Ph.D., Vice President of Global Research & Development & Innovation for GNC, and a Board Member of SSCI.

“I would like to thank everyone who participated in this effort,” said Daniel Fabricant, Ph.D., President and CEO of NPA.  “This bold first step is what will maintain consumer confidence globally and will lay the foundation for future audits. We’re extremely grateful to every member of the group who worked hard to pull this together.”

SSCI was established in 2015 to strengthen the quality control measures involved with nutritional supplements.  Industry leaders determined that the international nutritional supplement supply chain lacked harmonized standards.  This reflection led to the idea for an organization by the industry, for the industry.

“The goal for SSCI was to establish a system with the understanding that that the FDA can’t solve all our problems,” added Fabricant.  “Instead, we’re going to show consumers and regulators that they can have confidence in the industry, and this industry-wide effort is how we are going to do that.”

Companies interested in the SSCI process and retailers interested in knowing who has participated in SSCI can find that information on the SSCI website.

###

The Supplement Safety & Compliance Initiative (SSCI) is an industry-driven initiative led by retailers to provide a harmonized benchmark to recognize various safety standards throughout the entire dietary supplement supply chain. SSCI is a bold step forward in providing quality assurance from harvest to retailer shelf. Dietary supplements must meet or exceed the SSCI benchmark to be accepted in major retailers, all with the goal of providing quality products and increasing consumer confidence. SSCI Vision: Safe and authentic dietary supplements for consumers everywhere. Visit: http://www.ssciglobal.org/

 

Natural Alternatives International, Inc. Announces 2021 Q3 and YTD Results

Record Level of Sales, Net Income, and Diluted EPS for the First Nine Months

  • 2021 Q3: $46.3 million Net Sales (+81.8%), $1.9 million Net Income, $0.30 diluted EPS
  • Updates Fiscal Year 2021 Outlook: 45%-55% Net Sales Increase
  • Liquidity, Working Capital Position and Sales Backlog Continue to Remain Strong

CARLSBAD, CALIF, May 13, 2021 /PRNewswire/ –Natural Alternatives International, Inc. (“NAI”) (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $1.9 million, or $0.30 per diluted share, on net sales of $46.3 million for the third quarter of fiscal year 2021 compared to a net loss of $4.0 million, or $0.61 per diluted share, in the third quarter of the prior fiscal year. Our results for the third quarter of fiscal 2020 included the negative impact of a $4.3 million accounts receivable and inventory reserve related to a former customer, which was not repeated in the third quarter of fiscal 2021.

Net sales during the three months ended March 31, 2021 increased $20.8 million, or 81.8%, from $25.5 million recorded in the comparable prior year period. During the same period, private-label contract manufacturing sales increased $19.5 million, or 86.2%, from the comparable quarter last year. Private-label contract manufacturing sales increased for a majority of our distribution channels worldwide primarily due to increased shipments of existing products and sales of newly awarded products to new and existing customers. CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue increased 45.6% to $4.1 million during the third quarter of fiscal 2021, as compared to $2.8 million for the third quarter of fiscal 2020. CarnoSyn® sales increased primarily due to an increase in material shipments resulting from higher sales to existing customers and the increase in athletic activities as gyms and athletic facilities began to reopen in accordance with easing COVID-19 guidelines for various cities and states across the USA.

Net income for the nine months ended March 31, 2021 was $7.8 million, or $1.22 per diluted share, compared to a net loss of $3.4 million, or $0.51 per diluted share, for the nine months ended March 31, 2020.

Net sales during the nine months ended March 31, 2021 increased $50.3 million, or 60.1%, from $83.8 million recorded in the comparable prior year period. For the nine months ended March 31, 2021, private-label contract manufacturing sales increased $51.1 million, or 69.5%, from the comparable period last year. CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue decreased 7.1% to $9.6 million during the first nine months of fiscal 2021, as compared to $10.3 million for first nine months of fiscal 2020.

Based on our current sales order volumes and future period sales forecasts received from our customers, we now expect our annualized fiscal 2021 net sales to increase between 45% and 55% compared to fiscal 2020. We also expect to generate operating income between 7% and 9% of net sales for our fiscal year ending June 30, 2021.

As of March 31, 2021, we had cash of $28.1 million and working capital of $53.8 million compared to $30.5 million and $51.2 million, respectively, as of June 30, 2020. As of March 31, 2021, we had $10.0 million available under our line of credit agreement.

Mark A. Le Doux, Chairman and Chief Executive Officer of NAI stated, “Sales and profitability for the first nine months of this fiscal year represent a new record for our company. Additionally, we continue to maintain a significant pipeline of orders for delivery in the coming months, and as a result have modified our outlook for the remainder of the year. While maintaining an enviable balance sheet, we are also seizing opportunities as presented to secure inventories for our future needs. This has been challenging for a variety of logistical concerns as issues with COVID-19 management have impacted supply-chains around the world. Nevertheless, we are planning for a robust future as it is clear to us that consumer trends involving making healthier choices will continue to be an enduring dividend from the difficulties of the past year.”

“The dietary supplement industry continues to report robust demand for product and we are in line with that industry trend. We think this supports our belief this trend will continue and is not just a temporary effect of the COVID-19 pandemic.”

“We continue to seek additional growth opportunities both organic and strategic and we believe we are well positioned to take advantage of such opportunities based on our strong working capital position, available capacity, and stellar reputation for excellence within our industry. NAI is the first and currently only company in our industry to be audited and certified by the Supplement Safety Compliance Initiative (SSCI), a retailer led initiative to bolster supply chain and consumer confidence for their member’s nutritional supplement products. The implications for this certification are immense given that major retailers, both in brick and mortar as well as online are increasingly requiring this type of certification to permit products to be sold through their channels.”

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, the impact of COVID-19, our future revenue profits and financial condition, our ability to maintain our patents, generate revenues from the commercialization of our patents and trademarks, secure compliance with our intellectual property rights, 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 that 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.

SOURCE – Natural Alternatives International, Inc.
CONTACT – Michael Fortin, Chief Financial Officer, Natural Alternatives International, Inc., at 760-736-7700 or [email protected].
Web site: https://www.nai-online.com

How COVID-19 Shook The Sports Nutrition Market. Is Recovery In Sight?


Nutritional OutlookNutritional Outlook Vol. 24 No. 2, Volume 24, Issue 2
Paused for pandemic? Reflections and predictions on COVID-19 from sports nutrition suppliers

Much has been written about the impact of the COVID-19 pandemic on the economy, specifically on the business sector. While it’s been widely acknowledged that the immunity product category is sprinting beyond the finish line, it’s also been presented that at the other end of the track, the sports category stalled, at best, and stumbled, at worst.

For example, TSI Group Ltd. (Missoula, MT) President Larry Kolb realistically shares that “Globally, we feel the COVID-19 pandemic [negatively] impacted the sports category the most out of all consumer health categories.” He estimates the global business contracted between 60% and 80%, depending on the geographic territory in question.

However, as sports nutrition/performance ingredient companies reflect on the pandemic-driven havoc that forced many of their category’s consumers out of gyms, taking with them their regular sports supplement regimens, it turns out that these same companies, including TSI, also have reasons for optimism.

“The category significantly impacted brands that were focused on gyms and specialty retail like GNC,” says Kolb. However, he advises, “We saw an increase in brands online as well as significant growth in brand diversity online.”

For Mariko Hill, product development executive, Gencor (Irvine, CA), “The pandemic impacted the sports category in a unique way, by changing the positioning of products in order to cater to the emerging demographic of work-from-home individuals.” With consumers becoming more conscious of their own health and well-being than ever before, Hill believes the sports nutrition industry has the ability to grow in different ways.

“During the initial phases of the pandemic, there was concern that without gyms, the active/sports nutrition market would falter, and product development would stop,” says Steve Fink, vice president, marketing, PLT Health Solutions (Morristown, NJ). “And things did slow down during Q2 of the year. Then, like we have in other phases of our lives, the industry adjusted.”

In fact, Elyse Lovett, vice president, marketing, Nutrition21 (Harrison, NY), points to forecasts from Nutrition Business Journal (NBJ), which in October 2020 projected that sports nutrition supplements could “experience a healthy boost in growth” when final 2020 numbers are tallied—up 8.7% in 2020 from 6.3% in 2019. Also, it noted that 36% of consumers reported increasing their protein powder intake during the pandemic’s early days.1

 

Business as Usual in a Pandemic? Not!

 

Still, the pandemic interrupted the best laid plans for businesses to move forward, and some plans couldn’t be stopped—or, companies believed, shouldn’t be stopped. For example? New product introductions.

Although Nutrition21 actually launched its most recent sports nutrition ingredient, nooLVL, about six months prior to the pandemic, the traction of COVID-19 could have meant disaster for this patented non-stimulant nootropic ingredient that specifically targets consumers looking for an edge, especially gamers who require focus and energy. Instead, esports may have gained trajectory during the pandemic, and according to Lovett, nooLVL is a success story in this category. “Fortunately,” she says, “our customers have not slowed down or delayed any of their product development projects. In fact, several consumer products containing our ingredients launched during the pandemic, and the ingredient is already in more than a dozen products.”

It likely didn’t hurt that “nooLVL is supported by 30 safety and efficacy studies,” she adds. “The most recent clinical study we conducted evaluated its effectiveness in 60 healthy adult gamers who played video games for five or more hours per week for at least six months prior to screening.” The results showed nooLVL started working within 15 minutes, safely increasing energy (defined as perceived energy measured by the validated Profile of Mood States questionnaire) compared to placebo.2

In 2020, PLT Health Solutions introduced three major ingredients for the active/sports nutrition market: Zynamite PX (launched pre-pandemic), Dynagenix Joint+Muscle Formula, and RipFactor Muscle Accelerator. “Each of these ingredients were step-change solutions for the industry,” says Fink. He explains that Zynamite PX addresses mean and peak power in a low dose that clinical studies showed was effective in one hour. Dynagenix, meanwhile, targets the recovery segment and, he claims, is the first ingredient clinically demonstrated to improve both joint and muscle recovery, getting people back in the game faster. RipFactor is a botanical complex that has demonstrated substantial gains in endurance, strength, and muscle growth in a low-dose format.

PLT is especially excited about RipFactor and the science for the branded ingredient that includes two clinical studies. The first study, according to a press release, showed improvements in strength, endurance, and muscle size throughout the eight-week study period for young adult males familiar with weight training; the second study confirmed and expanded on the results of the first.3

Fink attributes the success of all three product launches in this way: “For PLT, the lesson we learned is that, regardless of economic or market conditions, there is always room for really innovative ingredient solutions that address pain points and that deliver demonstrable, significantly better results. Disruptive solutions thrive in disruptive times.”

He discloses that RipFactor in particular was featured in a number of new products in Q4 2020 and is slated for another dozen in early 2021. “We are looking at the potential for millions of units featuring this product [to be] sold in 2021,” he says.

Karen E. Todd, RD, CSCS, vice president of marketing for Kyowa Hakko (New York), says, “As a result of the pandemic, competitive athletic events like marathons were cancelled, and so the demand for high-performing nutrition products decreased; however, people did still work out to maintain their health—they just had to adjust the way they did it when the gyms closed.”

That didn’t stop Kyowa Hakko from launching last April its new ingredient Velox Patented Performance Blend, a clinically studied combination of Kyowa’s L-citrulline and L-arginine—a pairing that, according to the company’s press release, has been shown to increase nitric oxide production and boost nitric oxide levels more rapidly than L-arginine alone.4,5,6

Nor did the impact of the pandemic affect Kyowa Hakko’s active promotion of its other ingredients that generally benefit from athletic competitions and open gyms. “Setria Patented Performance Blends as well as the made-in-the-USA Kyowa Quality amino acids with citrulline, arginine, and glutamine,” says Todd, “all are powerful workout ingredients.”

She continues, “While there was a bit of a slowdown midyear as consumers adjusted, it picked up, and in fact a few of our clients launched new finished products [with our ingredients] in the fourth quarter.”

Other companies, too, were quick to adapt plans so as to not let the pandemic get the better of their businesses.

For instance, FrieslandCampina Ingredients (Amersfoort, The Netherlands) launched a new protein gel concept in April 2020, which, according to Ramon Mommersteeg, marketing manager, performance nutrition, “is one of our application suggestions designed to demonstrate to our customers across the globe how dairy-derived ingredients can be used in innovative new formats to respond to the consumer trends currently dominating the sports nutrition market.”

He explains that “this particular concept uses the company’s Nutri Whey Isolate Clear ingredient to inspire brands to tap into the growing demand for easy-to-use, on-the-go sports nutrition products such as squeezable pouches and spoonable pots.” Such concepts no doubt appeal to harried at-homers looking for a quick and convenient delivery method.

What about an ingredient rebrand? Would that get lost during a pandemic?

NuLiv Science’s (Brea, CA) decision to rebrand its ActiGin ingredient was based, in part, as a way to avoid confusion and differentiate the ingredient from the company’s flagship ingredient, AstraGin. Both are part of the company’s sports nutrition portfolio but contain different ingredients and serve different purposes. AstraGin is a proprietary, blended botanical ingredient that helps with nutrient absorption and increases bioavailability of other nutrients such as proteins and amino acids. ActiGin, which has since been rebranded as Senactiv, is also a proprietary botanical ingredient, one that enhances physical performance through energy nourishment and optimized cell turnover specifically in exercised tissue. With four clinical studies supporting the ingredient’s benefits, Josh Beaty, NuLiv’s director of content, says the company is confident the rebranded name better reflects what the research demonstrates: the clearance of senescent cells attributed to intense exercise activity.7,8

The company was set to launch the rebrand in February 2020, according to Beaty.

“But with the increasing concern and speculation of the pandemic spreading,” he says, “a campaign launch [in February] just didn’t seem like the right timing.”

By mid-summer, the company “decided that September would be a good time to pivot, with an uptick in brands inquiring about new ingredients,” states Beaty. “In addition, some gyms were opening regionally on an ad-hoc basis.” He also indicates that early fall was a good time since brands were likely considering new or reformulations going into 2021.

Beaty advises, “We wanted to advance the debut of Senactiv at a time when innovation and reimagining products was ripe for opportunity.” And, based on the response, it appears to have been a smart move. “Looking back,” he says, “we believe the timing was right, as we have brands thrilled about the rebrand and newcomers onboarding.”

TSI faced a potentially different problem. In November 2019, TSI’s Kolb says his company executed an agreement to acquire Metabolic Technologies LLC, and by January 2020 operations were integrated. So, there was no going back—only forward—even as the pandemic bubbled up.

According to a TSI press release announcing the acquisition, Metabolic Technologies is responsible for the discovery of beta-hydroxy beta-methylbutyrate (HMB), a popular ingredient discovered in the early 1990s for strength, recovery, and improved body composition benefits in highly trained and competitive athletes. Additionally, there is a compelling body of evidence showing HMB provides muscle health benefits to a much larger base of consumers beyond traditional sports nutrition shoppers. In its press release, TSI signaled its commitment to communicate these benefits through “its awareness and education growth strategy behind its branded HMB ingredient, myHMB.”9

Says Kolb, “Incorporating the Metabolic Technologies (MTI) employees into TSI was a very smooth transition and really business as usual. TSI and MTI have been working together for two decades in a close partnership, so the transition into TSI’s corporate structure was smooth.”

Where some might have been concerned the pandemic would have disrupted the transition, Kolb believes “the pandemic might have actually helped us, as the Missoula and Ames offices both adopted our new Zoom business culture due to the pandemic, and the Zoom meetings have worked well by enhancing communication. This helped facilitate the smooth integration.”

This past November, HMB got a boost of its own with publication of a year-long randomized, double-blind, placebo-controlled trial that found healthy older adults who supplemented their diets with HMB plus vitamin D3 experienced improved muscle function, even without exercise, according to a company press release. MTI Biotech physiology researcher Lisa Pitchford, PhD, stated, “Those taking HMB+D also reported feeling more active and energetic. While HMB+D does not replace exercise, it can help fill certain lifestyle gaps by helping to protect and even improve muscle health.”10 The study was funded by the National Institutes of Health, and the supplements were supplied by TSI.11

 

Lessons Learned

 

With the pivots required, many ingredient suppliers discovered some silver linings—and some issues that still concern them. Perhaps, above all, they learned the lesson of adaptability, for their own companies and for supplement specialty retailers who had to quickly shift focus from brick-and-mortar to an expanded online presence.

Annie Eng, CEO, HP Ingredients (Brandenton, FL), also points to the adaptability of the category’s consumers. HP Ingredients manufactures LJ100 Eurycoma longifolia, shown to help promote desirable anabolic balance and boost testosterone for energy; ParActin Andrographis paniculata, which assists in recovery by managing inflammatory response; and Bergamonte Citrus bergamia Risso for supporting healthy weight management and performance by improving vasodilation. “All three have desirable applications for adults of all activity levels,” Eng says.

Eng says LJ100 sales remained robust and steady. “People who are devoted to fitness found other ways, such as in-home group participation like Peloton. Many bought weights and carved out spaces in their homes to work out; many others literally hit the road, jogging/walking.”

For Mark LeDoux, chairman and CEO, Natural Alternatives International Inc. (Carlsbad, CA), “The impact of the pandemic was significant when venues such as gyms and vitamin retailers that sold dietary supplements were forced to close their doors.”

LeDoux’s company supplies CarnoSyn, a patented ingredient popular in pre- and post-workout supplements. Without access to gyms and specific retail outlets, many consumers needed to find another avenue to purchase their workout products. Fortunately, LeDoux says, a considerable number of people transitioned to securing their products for home use via other means, such as through mass-market retailers or health food stores that were counted as essential businesses, or online.

LeDoux raises what he views as an industry-wide issue brought to light by the pandemic. He says, “When the pandemic hit the industry in the U.S., the real concern expressed by supply chain managers was how to deal with supply shortages of essential materials, including vitamins, amino acids, proteins, minerals, and other compounds. This also extended to basic items such as packaging containers and lids.”

As he explains it, “While many suppliers had ample safety stocks of inventories to deal with the Chinese New Year celebrations [in 2020], when many Chinese producers were shuttered due to the annual holiday, those supplies became largely oversubscribed by April and May of 2020.” This, he says, is an issue that should create a long-term strategic objective for industry leaders, namely boosting domestic production of raw materials and packaging components in North America. LeDoux adds, “This is also true of things as basic as surgical masks, latex gloves, and other personal protective equipment, and I fully expect to see companies repositioning their supply chains closer to home with repatriation of many of the basic chemical or manufacturing materials that had largely ended offshore over the past three decades.”

NuLiv’s Beaty addresses another issue unveiled by the pandemic. “Standard operating procedures (SOPs), particularly quality and safety protocols that might have been nested as more of a departmental responsibility, were suddenly a high priority organization-wide,” he says. “Both ingredient suppliers and consumer brands had to adapt on the fly, taking into consideration changing guidance from governing bodies.”

The pandemic also led to another quick swivel for marketing and communications efforts that needed to shift from the promotional and general product education messages towards, as Beaty puts it, “an organizational commitment to transparency and safety along the entire supply chain process to the customer experience.”

 

Innovation and Product Line Expansions

 

With the decrease in demand for some sports supplements, some companies took the opportunity, in many cases already underway pre-pandemic, to branch out their product lines with added functionality or different delivery methods.

Gencor’s Hill says, “Although the sports supplement market took a hit during the initial stages of COVID, the industry picked back up as consumers started to settle into their new routine of working out at home and/or outdoors. In order to cater to this new demographic, we started to offer more bespoke formulations in order to offer convenient and ‘fun’ formats for consumers to enjoy consuming supplements from.”

She points to active consumers leaving gyms behind to being homebound as leading to a change in perception as to how existing products can fit into their new routine. As an example, Hill mentions switching out pre-workout stimulants to ready-to-drink (RTD) beverages to enhance cognitive function.

With regard to the sports nutrition market undergoing a significant shift, FrieslandCampina Ingredients’ Floris Daamen, marketing manager, performance nutrition, explains that “previously, there was a clear line between performance nutrition and active nutrition, with protein powders being the go-to staple for serious athletes and a general lack of diversification beyond that. This has been changing over recent years, but the pandemic has sped up the process of blurring lines as ‘ordinary’ people are more proactive in managing their health.”

Daamen also points out that the pandemic has also expedited a change in the kinds of products consumers are seeking. Facing closed gyms and the need to exercise at home while juggling work and home schooling has led to less-structured mealtimes and demand for even more convenient nutrition products. “Now more than ever,” he says, “the everyday active consumer is seeking enhanced benefits from everyday food brands, as well as the traditional sports nutrition brands, in quick and convenient formats to help them embark on a healthier, active lifestyle.”

Of course, Daamen recognizes that convenience isn’t a brand-new trend. He says, “It’s just that the factors driving it are different than they were two years ago.” FrieslandCampina’s high-concentration protein gel concept, providing up to 15% protein content in a small, convenient portion formulated with Nutri Whey Isolate Clear, is one such example.

 

Customer Relationships Count, Especially During a Pandemic

 

The lessons learned during the pandemic weren’t surprising to sports ingredient suppliers. But they certainly reinforced—and heightened awareness for—the importance of some very basic business principles.

“Well, first you have to always be nimble,” says Kyowa Hakko’s Todd. “You have to be able to quickly change direction and have multiple ingredients or products that can be positioned in a different marketplace or in a different way. Good communication is important in being able to move quickly, both internally and with clients.” It was vital, she says, that her company understood its clients’ situations in order to support those needs.

At a time when business was especially fragile, customer relationships truly counted.

Nutrition21’s Lovett says, “Brand marketers that have good, longstanding partnerships with their suppliers have fared better through this cycle than brands that have not made the effort to build those relationships.”

She adds that “throughout this pandemic, we made sure we stayed close to our customers to meet their needs and help them pivot where necessary. We also helped them explore unique categories like esports as a way to take advantage of the increased screen time and surge in video game playing.”

Todd, too, focused on Kyowa Hakko’s customer relationships in innovative ways. “We worked closely with our customers to provide finished products to health and fitness trainers who were conducting virtual training sessions with their clients,” she says. “We also were able to focus on the other benefits of some of those nutritional ingredients—for example, the additional immune health benefits of glutamine, or the heart health aspect of citrulline and arginine.”

Other companies, too, recognize the need to adapt, to pivot, and to move quickly as a means to support their customers.

FrieslandCampina’s Daamen notes that performance nutrition has always been a rapidly evolving market, and the closure of gyms meant big changes—practically overnight—to the ways people usually exercise.

“As more people began exercising at home—including those who weren’t regular exercisers before but who wanted to improve their health because of the pandemic—our priority continued to be to help our customers create innovative solutions that responded to these changes,” says Daamen. “During the pandemic, we also feel that we can support our customers by working with them to facilitate formats that combine ingredients like dairy proteins with other on-trend ingredients, like probiotics, to target broader health issues which are also increasingly a concern for consumers.”

With tradeshows and other in-person conferences either cancelled or conducted virtually, the lack of human touch created a void in relationships. It also created the need to shift some branding strategies. For example, Gencor’s marketing strategy, notes Hill, evolved to being more present online, “where we started presenting the benefits of all our brands through content generation and advertorials.”

“Yes, many lessons were learned from the pandemic, especially how it can impact a consumer market category like sports nutrition and the retail outlets sports products are sold through,” advises TSI’s Kolb. “Consumer market and retail marketing decisions have a huge impact on winners and losers in a pandemic. Brand positioning and diversity are very important lessons learned.”

 

All Eyes on the Future

 

As the country, one hopes, rounds the corner leading back to “normalcy” in 2021, companies in the sports category are especially eager to put the pandemic behind them, to focus on lessons learned, and view the future with optimism.

“In 2021, we can already see how gyms are opening up,” says Kyowa Hakko’s Todd, “and I do think it will rebound as new innovative products will continue to be launched.” She believes that distribution was, and will continue to be, important with this business. “As always,” Todd adds, “with this category, taste, convenience, and the ability to deliver a product that assists people with their performance goals will lead to the rebound in sports nutrition.”

Nutrition21’s Lovett says, “As consumers’ lives start to ‘normalize,’ slowly but surely we believe this will bring customers back to retail and help them ease back into their fitness routines. We also believe esports will be one of the success stories born out of the pandemic.”

Kolb, of TSI, also sees the category coming back overall. He notes, “GNC is very active now that they have emerged from Chapter 11 healthy and well-positioned, and our ingredients and brand partners who are aligned with GNC are performing well. That’s a really good sign for 2021.” And he remains positive about innovation, about which he says, “I don’t think innovation ever left; it was just delayed and disrupted by gym closures and limited retail access.”

Natural Alternatives International’s LeDoux also expresses hope, but it comes with a reality-check for companies to recognize the value in maintaining safety stocks of essential materials for their customers. He advises, “It is very tough to sell finished goods from an empty warehouse, and executives in charge of supply chains and financial needs of industry will be changing their attitudes from a ‘just-in-time’ model to something requiring more investment of resources in physical inventory.”

On the bright side, LeDoux wants the industry to “take heart.” He expects to see continued advances in the industry as science continues to publish benefits and observations from interventional studies. “This pandemic will surely pass, but the benefits will be demonstrated in years to come by more informed consumers who have learned that nutritional supplementation is a critical component of their daily lives,” he states.

Fink, of PLT Health, says, “In general, we are very optimistic about the active/sports category and believe it will continue [with] strong growth. It just might grow differently than it has in the past, with products requiring differentiated features and benefits, better and more believable clinical science, and experiential—or fast-acting—results.”

“Looking ahead, I see a bright future for sports nutrition, even if it does take a while to get over the remaining hurdles of the pandemic,” says Daamen of FrieslandCampina. “Innovation and a keen understanding of what consumers want will help to maintain growth in the sector. For many, the pandemic has been the catalyst for wanting to take their health to the next level, and consumers will continue to educate themselves about health and wellness long after the pandemic ends.”

According to Gencor’s Hill, “Sleep, mood, and immunity will be the categories that will see huge focus,” particularly, she says, as anxious consumers start to take a holistic approach to wellness and seek to minimize the risk of stress and illness.

Hill predicts that overall, “I believe we will see tremendous innovation in [the sports] category in months to come as brands will start to merge the needs of active consumers” looking for solutions for performance and recovery with strategies to help prevent conditions such as stress, poor immunity, and pain.

PLT’s Fink similarly says, “One unexpected factor we encountered in 2020—and it may or may not be pandemic related—is the rise in the inclusion of cognitive-support ingredients in active/sports nutrition formulations. Our Zembrin Sceletium tortuosum ingredient saw a dramatic increase in sales—particularly in active/sports products. This might suggest that people are using exercise as a way of maintaining balance and a good outlook on life.”

LeDoux also sees an opportunity to expand his company’s versatile ingredient, CarnoSyn, beyond sports nutrition. “We continue to see companies evaluating the inclusion of CarnoSyn in their arsenal of supplements designed to help bolster the human immune system and healthy stress response,” says LeDoux. CarnoSyn is a component of the dipeptide carnosine, and LeDoux says there is “…evidence that the ingestion of CarnoSyn can help increase muscle and tissue levels of carnosine…”.12,13 He also notes that carnosine has been effectively studied in a variety of clinical undertakings, including those showing possible protective effects on respiratory lung function.14

Of sports nutrition, HP Ingredients’ Eng says, “The category will remain strong and growing. There are many boutique entrepreneurs who are engaging influencers to create a hybrid of fitness and wellness. Sports ingredients continue to evolve…”

She enthuses, “The beauty is that the pandemic taught people to really monitor their health and that they can be stronger, they can be resilient, they can get into shape physically, mentally, and emotionally to better withstand significant stressors that occur in life. This refreshed mentality is a goldmine for our industry. We believe that sports nutrition will morph from an isolated category to a popular part of overall wellness—being active, being metabolically robust, which will improve immune function. It’s a great time for innovation.”

Beaty with NuLiv sums it up this way: “The pandemic forced everyone, organizations included, to reevaluate their priorities personally and professionally. Change is always difficult, regardless of the circumstance. Ideally, a decade from now our industry can look back with amazement at how we all adapted to the shift and grew from this significant disruption.”

 

References

 

  • Morton Reynolds C. “The Analyst’s Take: COVID-19 Affects Forecasts for $47.3B Sports Nutrition and Weight Management Market.” New Hope Network. Published October 1, 2020. Accessed here.
  • Tartar JL et al. “A prospective study evaluating the effects of a nutritional supplement intervention on cognition, mood states, and mental performance in video gamers,” Nutrients, vol. 11, no. 10 (2019): 2326
  • Press release. “PLT Launches RipFACTOR® Muscle Accelerator for Active/Sports Nutrition Products.” Issued September 9, 2020. Accessed here.
  • Press release. “Kyowa Hakko USA Introduces New VELOX® Patented Performance Blend.” Issued April 29, 2020. Accessed here.
  • Suzuki T et al. “The effects on plasma L-arginine levels of combined oral L-citrulline and L-arginine supplementation in healthy males.” Bioscience, Biotechnology, and Biochemistry, vol. 81, no. 2 (February 2017): 372-375
  • Suzuki I et al. “A combination of oral L-citrulline and L-arginine improved 10-min full-power cycling test performance in male collegiate soccer players: a randomized crossover trial.” European Journal of Applied Physiology, vol. 119, no. 5 (May 2019): 1075-1084
  • Press release. “NuLiv Science Launches Senactiv®, a Sport Nutraceutical Ingredient.” Issued September 2, 2020. Accessed here.
  • NuLiv Science website, Senactiv. Accessed here.
  • Krawiec S. “TSI Group Acquires Metabolic Technologies, Repositions HMB for Healthy Aging.” Nutritional Outlook. Published online June 18, 2020. Accessed here.
  • Krawiec S. “HMB with Vitamin D3 Supports Muscle Function in Aged Adults, Says Recent Study.” Nutritional Outlook. Published online October 5, 2020. Accessed here.
  • Rathmacher JA et al. “Long-term effects of calcium β-hydroxy-β-methylbutyrate and vitamin D3 supplementation on muscular function in older adults with and without resistance training: A randomized, double-blind, controlled study.” The Journals of Gerentology. Published online ahead of print on August 28, 2020.
  • Hoffman JR et al. “Effects of β-alanine supplementation on carnosine elevation and physiological performance.” Advances in Food and Nutrition Research. Published online January 8, 2018.
  • Hoffman JR et al. “Effect of high-dose, short-duration β-alanine supplementation on circulating IL-10 concentrations during intense military training.” Journal of Strength and Conditioning Research, vol. 32, no. 10 (October 2018): 2978-2981
  • Tanaka KI et al. “Preventive effects of carnosine on lipopolysaccharide-induced lung injury.” Scientific Reports. Published online February 16, 2017.

 

Source: Nutritional Outlook

Stonegate Capital Partners Initiates Coverage On Natural Alternatives International, Inc. (NASDAQ:NAII)

DALLAS, TX / ACCESSWIRE / March 5, 2021 / Natural Alternatives International, Inc. (NASDAQ:NAII): The full report can be accessed by clicking on the following link: http://stonegateinc.com/reports/NAII Initiation.pdf.

Due to an error in our model, we are updating our report dated March 2, 2021.

Company Description
Natural Alternatives International (NAI) is a global formulator, manufacturer, and marketer of customized nutritional supplements. By combining its science-based formulations, rigorous research, natural ingredients, advanced quality assurance testing procedures, superior manufacturing and packaging capabilities, and broad marketing experience, NAI creates quality nutritional products that are sold globally. NAI generates revenues from two sources: private-label contract manufacturing services and in-house brands called CarnoSyn® and SR CarnoSyn®. Importantly, NAI branded products are backed by NAI’s patent portfolio. NAI has a growth strategy focused on various organic growth initiatives, supplemented by acquisitions.

SUMMARY

  • Large and expanding markets – According to the Nutrition Business Journal, the US Dietary supplement market is large and growing. The US market is estimated at $55B and projected to grow at a 4.6% CAGR through 2023. Furthermore, the global dietary market is estimated at $150B and projected to grow at a CAGR of 4.6% through 2023.
  • NAI’s core capabilities provide a platform for organic growth – NAI has 40 years of experience in the nutritional supplement market. NAI’s core competencies includes customized product formulations; an in-house science board; scientific research and clinical studies backing its branded formulations; material acquisition and analysis expertise; a global manufacturing footprint; industry leading accreditations and certifications; a patent portfolio; and strong sales and marketing support to its customers.
  • In-house brands point to growth – NAI believes it has a significant opportunity to extend the sale of its proprietary ingredients, CarnoSyn® and SR CarnoSyn® beta-alanine into additional markets and channels. With the introduction of SR CarnoSyn®, a sustained release form of beta-alanine, NAI believes it can capture additional market share in the sports nutrition market. This is where NAI’s current instant release form of beta-alanine product CarnoSyn®, is targeting an 18- to 30-year-old demographic. Importantly, NAI is also expanding SR CarnoSyn® into the health and wellness market. First, in Q318, an SR CarnoSyn® product was targeted at the 51+ year-old demographic and emphasizes how SR CarnoSyn® can provide a significant range of support for everyday wellness and healthy aging. And in June 2020, Sustained RX® was launched as a direct-to-consumer product, exclusively on Amazon. The product is marketed as a general wellness supplement.
  • Additional organic growth initiatives in place – NAI believes it is well positioned to expand its relationships with existing customers and to add new customers to its private label manufacturing activities by leveraging its global manufacturing footprint, R&D efforts, and history of execution. Additionally, NAI believes it can drive additional growth by entering new channels, such as healthcare practitioners, OTC, skin care, and specialty retail, among others.
  • Acquisitions are set to supplement organic growth – NAI is using its acquisition strategy to supplement its organic growth initiatives. NAI is looking to execute multiple accretive and complementary acquisitions to improve its competitive position and to enter new markets and/or channels.
  • Valuation – Based on our F22 estimates and using an EV/EBITDA multiple range of 4.5x to 8.5x to compensate for revenue concentration risk, we arrive at a valuation range of $15.00 to $26.75, with a mid-point of $21.00. Additionally, if the Company continues to demonstrate further revenue and EBITDA growth, it is likely the Company could trade toward the higher end of the range. See page 8 for further details

About Stonegate Capital Partners
Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.

CONTACT:
Stonegate Capital Partners
[email protected]
(214) 987-4121

SOURCE: Stonegate Capital Partners

Natural Alternatives International, Inc. Announces Release of Investor Presentation

CARLSBAD, CALIF, February 23, 2021 /PRNewswire/ –Natural Alternatives International, Inc. (“NAI”) (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced it has added an investor presentation to its website. The presentation can be found on the investor relations tab of our website at https://www.nai-online.com/our-company/investors/.

Mark A. Le Doux, Chairman and Chief Executive Officer of NAI stated, “This presentation is part of a broader initiative to increase active communication for current and potential shareholders. Our goal is to further convey our story, the long-term direction of the Company, and management’s goals going forward. Additionally, we plan to be more active in our investor relations approach by meeting with institutional investors and presenting at conferences. We are enthusiastic about our prospects and our ability to capitalize on numerous opportunities in our pipeline.”

About Natural Alternatives International, Inc.

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 http://www.nai-online.com.

The information referenced in 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 future revenue profits and financial condition, our ability to 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 that 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.

SOURCE

Natural Alternatives International, Inc.

CONTACT

Michael Fortin, Chief Financial Officer

Natural Alternatives International, Inc.

760-736-7700

[email protected].

http://www.nai-online.com

Understanding the Role of Nutrients in Human Immune Response Metrics

Understanding the Role of Nutrients in Human Immune Response Metrics

Written By:  Mark A. LeDoux, J.D., Nancy Steely, ND, Di Tan, PhD.

If the year 2020 has taught us anything, it is to recognize that the human condition is not devoid of existential risk.  The declaration of a Pandemic in spring of 2020 by the World Health Organization based on an outbreak of SARS-Cov2 (aka Covid-19), a coronavirus with sinister attributes causing significant damage to the global population, has justifiably brought renewed interest into the field of immune modulating diets and supplements.

Early on in the fight with this outbreak, doctors were tasked with treating vexing conditions such as abnormal vascular function, the eruption of cytokine storms, bizarre symptoms of all sorts including peripheral vascular challenges, and greatly reduced blood oxygenation.  Often the virus attacked the elderly with increased ferocity where these people suffered from other underlying conditions – often related to diabetes, cancer, obesity, or an institutional diet with minimal nutritional profiles.  Medicine was at a loss to clearly understand or identify the appropriate treatments to this disease given the variable symptoms presented which were inflammatory in some patients, and yet somewhat benign in others.  The deployment of ventilating machines often did little to manage the root causes of the problem, and may have exacerbated mortality in final analyses.

For the past several decades, significant research has been conducted on the role of foods, phytochemicals, select nutrients and micronutrients, in providing oxidative stress protection in humans.  Multiple studies were conducted on intake of Vitamins C, E and Beta Carotene, often with mixed results.  Additional work was conducted on catechins (from teas), seeking linkage between biological activity and modulating innate or adaptive immunity responses.  Historically, governments and the scientific community of physicians have refrained from providing supportive commentary on the role of dietary supplements in the management or prevention of disease.  This all changed in 2020.

In a seminal published article in Frontiers in Immunology (15 January 2019) Drs. Wu, Lewis, Pae and Meydani concluded, “It is well-established that nutritional inadequacy greatly impairs the functioning of the immune system.  In addition, it is increasingly recognized that nutrient intake, above what is currently recommended, may beneficially affect immune function, modulate chronic inflammatory and autoimmune conditions, and decrease infection risk.  This includes both macronutrients (lipids such as n-e PUFA) and micronutrients (Zinc, Vitamin D and Vitamin E), in addition to phytochemicals and functional foods (probiotics and green tea).  Many of these nutritive and non-nutritive food components are related in their functions to maintain or improve immune function including inhibition of pro-inflammatory mediators, promotion of anti-inflammatory functions, modulation of cell-mediated immunity, alteration of the antigen-presenting cells (APC) function, and communication between the innate and adaptive immune systems.”

https://www.frontiersin.org/articles/10.3389/fimmu.2018.03160/full

The focus of their research would prove to be most useful by those on the front lines of the Covid pandemic in their quest to administer anything that would alleviate the suffering, prevent or retard the rate of spread, and seek to better understand the mechanisms by which the immune system could be nourished to produce more robust responses to the virus.

Oxidative stress is part of the pathology associated with a number of health challenges. In 2015, scientists from China provided carnosine to mice afflicted with an acute lung injury. Carnosine was shown to increase survival and significantly ameliorate pathological lung conditions including lesions in the lungs. It decreased the lung wet/dry mass ratio in mice with this specific influenza strain by acting as an antioxidant. Combining with other clinical studies of beta-alanine to increase carnosine levels in our bodies, it demonstrates that the use of a dietary ingredient can have an important role in mitigating the immune responses to some stressors associated with various challenges affecting the quality of one’s life.

https://www.srcarnosyn.com/how-beta-alanine-supplementation-boosts-immune-response/

Significant work has been done on ascertaining the role of Vitamin D in the immune system.  Most immune cells express Vitamin D receptor and some can produce 1-alpha-hydroxylase.  The result of this unique situation is both systemic and locally generated Vitamin D in a biologically active form can act on VDR expressed by immune cells in endocrine, paracrine and autocrine manners.  In such manner, Vitamin D has been shown to broadly impact functions of immune cells in both the innate and adaptive immune system, as well as the antigen-presenting cells (APC) that links the two arms of immunity.

The effects of Vitamin D on monocytes and macrophages are recognized the earliest and also have been the most intensively studied.  Vitamin D, by stimulating a host of innate antimicrobial immune responses can enhance elimination of invading bacteria, viruses and fungi. Doctors around the world are now calling for Vitamin D supplementation to support immune function and protect against the covid 19 infection and severity of illness, and identifying the high prevalence of vitamin D deficiency and insufficiency in many countries, especially in those at higher risk for infection.

https://www.vitamindsociety.org/blog-detail.php?id=27

Much has been written about the drug known as Hydroxychloroquine, a synthetic version of an anti-malarial drug patterned after the natural chemical of quinine, oft associated with Tonic Water.  When malarial transfer was correctly identified as carried by mosquitoes instead of ants (originally thought), quinine water was apparently the only effective treatment.  The drugs chloroquine and hydroxychloroquine were developed some 60 years ago, have been widely used since, and malaria has been largely controlled with their prophylactic use.  The theory espoused by early adopters in the fight against Covid was that this molecule would act on the human body cells to be open to uptake of the micronutrient Zinc, which is well-recognized as a key defense against viral-replication.  In order for any coronavirus to establish residence in the host human, the virus must first enter the cell and replicate itself quickly, thereby infecting neighboring cells where the process is repeated.  When Zinc is present within the cell that process is arrested, and the virus cannot replicate, but is rather isolated by immune response actors and subsequently destroyed.

Viral infection leads to reduced zinc levels in the nasopharyngeal areas, which is believed to be a normal reaction to infection, with zinc levels increasing in immune cells. The taste and olfaction difficulties arising with such reduction in local (nasopharyngeal) zinc levels is temporary as the immune system functions to prevent viral replication within the cells of the body. However, in those with pre-existing zinc deficiencies, zinc levels in the nasopharyngeal area remain low, which is suggested to contribute to increased risk of infection and more severe symptoms. Thus the importance of adequate zinc status.

https://onlinelibrary.wiley.com/doi/full/10.1002/lio2.513

Recently, the role of HCQ (Hydroxychloroquine) was accepted by leading medical authorities and journals as an appropriate primary response to infection by Covid-19 – along with other treatments, including Zinc supplementation.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7575721/pdf/fimmu-11-570122.pdf

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7551685/pdf/nutrients-12-02550.pdf

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7247152/

Natural Alternatives International, Inc. Announces 2021 Q2 and YTD Results

CARLSBAD, Calif., Feb. 9, 2021 /PRNewswire/ — Natural Alternatives International, Inc. (“NAI”) (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $3.6 million, or $0.57 per diluted share, on net sales of $48.1 million for the second quarter of fiscal year 2021 ended December 31, 2020 compared to net income of $0.5 million, or $0.07 per diluted share, in the second quarter of the prior fiscal year.

Net sales during the three months ended December 31, 2020 increased $19.0 million, or 65.2%, from $29.1 million recorded in the comparable prior year period.  During the same period, private-label contract manufacturing sales increased $20.5 million, or 82.5%, from the comparable quarter last year. Private-label contract manufacturing sales increased for a majority of our distribution channels worldwide primarily due to increased shipments of existing products and sales of newly awarded products.  CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue decreased 35.5% to $2.8 million during the second quarter of fiscal 2021, as compared to $4.3 million for the second quarter of fiscal 2020.  CarnoSyn® sales have been negatively impacted due to continued competition from generic forms of beta-alanine and the impact the COVID-19 pandemic has had on the sports nutrition industry with limitations on athletic activities, including gyms.

Net income for the six months ended December 31, 2020 was $5.9 million, or $0.91 per diluted share, compared to net income of $0.6 million, or $0.08 per diluted share, for the six months ended December 31, 2019.

Net sales during the six months ended December 31, 2020 increased $29.5 million, or 50.6%, from $58.3 million recorded in the comparable prior year period.  For the six months ended December 31, 2020, private-label contract manufacturing sales increased $31.5 million, or 62.0%, from the comparable period last year. CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue decreased 27.1% to $5.4 million during the first six months of fiscal 2021, as compared to $7.5 million for first six months of fiscal 2020.

Based on our current sales order volumes and future period sales forecasts received from our customers, we continue to expect our annualized fiscal 2021 net sales to increase between 30% and 50% compared to fiscal 2020.  We also expect to generate operating income between 5% and 7% of net sales for our fiscal year ending June 30, 2021.

As of December 31, 2020, we had cash of $28.6 million and working capital of $50.7 million compared to $30.5 million and $51.2 million, respectively, as of June 30, 2020.  As of December 31, 2020, we owed $10.0 million on our line of credit.  This amount was fully repaid February 2, 2021.

Mark A. Le Doux, Chairman and Chief Executive Officer of NAI stated, “Our second quarter sales set another new record for sales and profitability, and we continue to have a strong pipeline of orders for delivery in the coming months.  The first six months of revenue and profits in this current fiscal year are a testament to the hard work and dedication of all of our team members both in the USA and in Switzerland.”

“The continued strength of our sales and order pipeline are consistent with trends we are seeing in the dietary supplement market and point towards the fact consumers are more aware than ever they need to take an active role in their health and wellness and they recognize dietary supplements are an important component of their daily regimen.”

“We continue to seek additional growth opportunities both organic and strategic and we believe we are well positioned to take advantage of such opportunities based on our strong working capital position, available capacity, and stellar reputation for excellence within our industry.”

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 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, the impact of COVID-19,  our future revenue profits and financial condition, our ability to  maintain our patents, generate revenues from the commercialization of our patents and trademarks, secure compliance with our intellectual property rights, 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 that 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: http://www.nai-online.com

 

Natural Alternatives International, Inc. Announces That It Has Repaid All Amounts Outstanding Under Its Credit Line

CARLSBAD, Calif., Feb. 3, 2021 /PRNewswire/ — Natural Alternatives International, Inc. (“NAI”) (Nasdaq: NAIi) , a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced that yesterday it fully repaid all of its outstanding debt by paying off its $10 million credit line with Wells Fargo Bank.

The credit line was initially drawn down to provide safety to the balance sheet during the initial uncertainty brought on by the declaration of the pandemic in March of 2020, and has remained on our balance sheet until this repayment.  This line of credit is now again  available to NAI to draw upon through its term ending November of 2022.

Mark A. Le Doux, Chairman and Chief Executive Officer of NAI stated, “We thank our commercial banking partner for their steadfast support of our enterprise during the last 30+ years of our relationship. With the robust business environment of the past year for our company, brought on by a confluence of factors, the need for this capital on our balance sheet has been deemed unnecessary by our senior management  team.  The shift in consumer sentiments expressed by the overwhelming adoption of consumer behavior in support of dietary supplementation to help bolster overall health is not showing any signs of subsiding, and free cash flow as a consequence has been sufficient to meet all of our financial needs.”

About NAI

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 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, the impact of COVID-19 and our future revenue profits and financial condition. We wish to caution readers that 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. NAl’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]­ online.com.

Benefits Of Beta-Alanine Supplementation For Female Athletes

In female study populations ranging from young to old and various levels of physical fitness, the amino acid beta-alanine showed potential benefits.

Mark LeDoux | Dec 24, 2020

Insider Takes

  • Naturally occurring amino acid beta-alanine supports the synthesis of muscle carnosine in the body.
  • Beta-alanine has shown noteworthy effects specific to women of varying ages and athletic abilities.
  • Female study populations included aging elite cyclists, young women, masters athletes and actives.

In the U.S., roughly half of all individuals over the age of 18 use some form of dietary supplementation, and similar figures are noted globally.1 The use of supplements is more common among male athletes than female athletes, however.

Surveys have shown a variety of reasons for supplement use, including overall health maintenance and deficiency management. Athletes report performance enhancement, muscle recovery and even mood support as benefits of their supplement use. Given the specific concerns and needs of female athletes, including bone and joint health, as well as mental health, scientific research continues to reveal the added benefits of supplementation in a female population.

According to the International Journal of Sport Nutrition and Exercise Metabolism, beta-alanine is an established, evidence-based performance supplement widely used by athletes across the globe.2 Beta-alanine increases muscle carnosine, preventing the acid buildup that contributes to soreness and fatigue. Studies have shown that this delay in the onset of muscle fatigue leads to increased endurance, extended training at increased intervals and reduced recovery time.3 Organizations such as the International Society of Sports Nutrition (ISSN) and the International Olympic Committee (IOC) recommend proper supplementation with beta-alanine for the vital role it can play in improving athletes’ performance, including cognitive functioning and muscle and bone support.4 And beta-alanine supplementation is recommended for vegan athletes whose diet cannot supply optimal levels.

Effects Of Beta-Alanine Supplementation In Women

Supplementation with beta-alanine has been shown to have similar effects on both men and women, as well as noteworthy effects specific to women of varying ages and athletic abilities. In a research trial conducted specifically within the aging population of elite female cyclists, incremental effects were observed on the performance of masters-level female athletes.5 Supplementation of beta-alanine for 28 days increased performance via an extended time to exhaustion and the total work completed with associated lactate clearance during passive rest.

A similar 28-day trial studied the effects of beta-alanine supplementation on isokinetic exercise performance and body composition in female masters athletes.6 The study concluded that beta-alanine supplementation increased peak torque and capacity and improved lower-body exercise performance.

An examination was also made of the effects of 28 days of beta-alanine supplementation on the physical working capacity at both the fatigue and ventilatory thresholds, maximal oxygen consumption and time to exhaustion in women.7 The study noted improved submaximal cycle ergometry performance and time to exhaustion in young women, thought to have resulted from an increased buffering capacity due to elevated muscle carnosine concentrations.

A fourth beta-alanine study on women was conducted to evaluate the effects of beta-alanine supplementation on markers of oxidative stress.8 It was the first study to evaluate the effects of beta-alanine supplementation on in vivo antioxidant effects, and extended its use in both aerobic and anaerobic activities.

Finally, a study was conducted specifically on the effects of beta-alanine on body composition, muscular strength and endurance improvements among recreationally active females participating in progressive resistance training.9 The research suggested that over an eight-week period, progressive resistance training four times a week, combined with beta-alanine supplementation, may be effective for improving lower-body muscular endurance.

Functions And Mechanisms Of Beta-Alanine

Beta-alanine is a naturally occurring amino acid that supports the synthesis of muscle carnosine in the body. It combines with the amino acid histidine to form the dipeptide called carnosine. Over time, carnosine acts as a buffer to help delay the onset of lactic acid and muscle fatigue and failure while building endurance and improving recovery.

Carnosine is a dipeptide, or a compound made up of two linked amino acids: beta-alanine and histidine. This compound is in the active tissues of the body, including the heart and the brain. Carnosine is instrumental in the improvement of muscle strength and performance during exercise.

Beta-alanine and carnosine work together during the process of glycolysis, or the breaking down of glucose to generate energy. For sustained or intermittent high-intensity exercise, glucose is the body’s primary energy source. When the intensity of a workout increases, equal amounts of lactate and hydrogen ions become the major end-products of glucose metabolism.

These highly reactive hydrogen ions cause a fall in pH in the muscle, a process also referred to as acidification. Throughout a workout, hydrogen ions can be actively transported from the muscle cells and into the circulatory system. However, at higher exercise intensities, the rate of hydrogen ion production becomes increasingly insufficient. Progressive acidification may then occur, especially in the strength-generating fast-twitch muscle fibers.

As the muscle pH falls, it exacerbates the onset of fatigue. This rise in acidity compromises the proteins responsible for power generation and shortening of the muscle fibers. Essentially, carnosine buffers that pH decline. When histidine attaches to beta-alanine, it takes on an additional hydrogen ion. The histidine half of the carnosine molecule acts as a buffer, while the beta-alanine prevents the histidine from combining with other amino acids to form proteins. As a result, high concentrations of carnosine accumulate in the muscle cells. High concentrations of carnosine act as a buffer to delay or prevent muscle fatigue.

Comprehensive Wellness Support

Beta-alanine, the key building block of carnosine, is well known for its buffering pH capacity; however, supplementation with beta-alanine also offers comprehensive wellness support. Carnosine’s antioxidant and anti-glycation can improve heart function and lung capacity, as well as promote healthy aging.10 Such benefits are especially evident in the studies conducted on master athletes when different activity levels were measured before and after supplementation.

The strong anti-glycation ability of carnosine specifically protects the brain and supports cognitive function and mental acuity.11 It also decreases everyday occasional anxiety, supports memory, delays mental fatigue, speeds up executive function and increases focus.12 Such mental support has been shown to be a tremendous asset for a wide variety of individuals from female athletes to aging women. Similarly, since carnosine helps regulate muscle contractions and prevents lipid peroxidation in the body, significant potential benefits are available to heart health.10 The same review indicated supplementation with beta-alanine supports healthy circulation and already-healthy blood pressure levels through vasodilation.

Additional benefits include improved muscle function, systemic protection and bone health.13 Promoting muscle quality and optimal function is vital in supporting the musculoskeletal frame, aiding balance, and maintaining strength for both athletic and everyday activity. Beta-alanine supplementation has even been shown to improve physical working capacity in older adults.14 Through its anti-glycation action, carnosine benefits bone and joint health.10 Supplementation can thus contribute to overall skeletal integrity by directly protecting bone structure and supporting muscle function. Carnosine also chelates heavy metals, supports blood sugar levels already in the healthy range and supports healthy immune system response.10 The same review indicated its antioxidant properties protect against free radicals throughout the body.

Finally, carnosine levels naturally decrease with age. Supplementing with beta-alanine (as SR CarnoSyn, from NAI) was shown to increase muscle carnosine content and improve the physical capacity of aging adults.12

Supplementing with beta-alanine may offer significant benefits for female athletes, from improving physical performance to gaining comprehensive wellness support.

Mark A. LeDoux is founder, chairman and CEO of Natural Alternatives International Inc. (NAI), an organization established in 1980 with facilities in the U.S. and Switzerland engaged in the research, design and manufacture of nutritional supplement programs and products for multinational clients. He is a proud member and leader of many industry organizations.

References
1 Maughan RJ et al. “IOC consensus statement: dietary supplements and the high-performance athlete.” Br J Sports Med. 2018;52:439-455.

2 Peeling P et al. “Evidence-Based Supplements for the Enhancement of Athletic Performance.” Int J Sport Nutr Exerc Metab. 2018;28(2):178-187.

3 Hoffman JR, Varanoske A, Stout JR. “Effects of β-Alanine Supplementation on Carnosine Elevation and Physiological Performance.” Adv Food Nutr Res. 2018;84:183-206.

4 Trexler ET et al. “International society of sports nutrition position stand: Beta-Alanine.” J Int Soc Sports Nutr. 2015;12:30.

5 Glenn JM et al. “Incremental effects of 28 days of beta-alanine supplementation on high-intensity cycling performance and blood lactate in masters female cyclists.” Amino Acids. 2015;47(12):2593-2600.

6 Glenn JM et al. “Effects of 28-Day Beta-Alanine Supplementation on Isokinetic Exercise Performance and Body Composition in Female Masters Athletes.” J Strength Cond Res. 2016;30(1):200-207.

7 Stout JR et al. “Effects of beta-alanine supplementation on the onset of neuromuscular fatigue and ventilatory threshold in women.” Amino Acids. 2007;32(3):381-386.

8 Smith AE et al. “Exercise-induced oxidative stress: the effects of β-alanine supplementation in women.” Amino Acids. 2012;43(1):77-90.

9 Outlaw JJ et al. “Effects of β-Alanine on Body Composition and Performance Measures in Collegiate Women.” J Strength Cond Res. 2016;30(9):2627-2637.

10 Hipkiss AR. “Carnosine and its possible roles in nutrition and health.” Adv Food Nutr Res. 2009;57:87-154.

11 Furst T et al. “β-Alanine supplementation increased physical performance and improved executive function following endurance exercise in middle aged individuals.” J Int Soc Sports Nutr. 2018;15:32.

12 Del Favero S et al. “Beta-alanine (Carnosyn) supplementation in elderly subjects (60-80 years): effects on muscle carnosine content and physical capacity.” Amino Acids. 2012;43(1):49-56.

13 Stout JR et al. “The effect of beta-alanine supplementation on neuromuscular fatigue in elderly (55-92 Years): a double-blind randomized study.” J Int Soc Sports Nutr. 2008;5:21.

14 McCormack WP. “Oral nutritional supplement fortified with beta-alanine improves physical working capacity in older adults: a randomized, placebo-controlled study.” Exp Gerontol. 2013;48(9):933-939.

Source: Natural Products Insider