CARLSBAD, Calif., Nov. 14, 2019 /PRNewswire/ — Natural Alternatives International, Inc. (“NAI”) (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $96,000, or $0.01 per diluted share, on net sales of $29.2 million for the quarter ended September 30, 2019.

Net sales during the three months ended September 30, 2019 decreased $7.3 million, or 20.1%, from $36.5 million recorded in the comparable prior year period.  During the same period, private-label contract manufacturing sales decreased $5.1 million, or 16.3%, from the comparable quarter last year. Sales to our largest private-label contract manufacturing customer declined over 33%, while sales to all other private-label contract manufacturing customers increased more than 23%, including sales of new products to new and existing customers.

CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue decreased 41.5% to $3.2 million during the first quarter of fiscal 2020, as compared to $5.4 million for the first quarter of fiscal 2019.  We believe this decline was impacted by certain of our customers discontinuing the use of our CarnoSyn® beta-alanine in favor of generic beta-alanine and lower overall consumer demand for our customers’ CarnoSyn® products.  We expect the recent ruling from the U.S. Court of Appeals for the Federal Circuit in favor of NAI’s CarnoSyn® beta-alanine patents, along with our CarnoSyn® beta-alanine New Dietary Ingredient (NDI) status from the FDA, will help motivate buyers to purchase CarnoSyn® in the future.  Additionally, we will continue to vigorously pursue all legal avenues to protect our CarnoSyn® brand, intellectual property portfolio, and regulatory compliance status, we have already brought some legal actions, and anticipate there will be others.

We currently expect annualized fiscal 2020 private-label manufacturing sales to be flat to slightly down as compared to fiscal 2019.  This estimate includes expectations of lower sales revenue from our largest private-label contract manufacturing customer.

Additionally, we currently expect CarnoSyn® and SR CarnoSyn® beta-alanine revenue growth in the mid-to high single digit percentage range during fiscal year 2020.  However, based on our strategy to defend our patents, trademarks, and NDI status for our CarnoSyn® brands, expand the Japanese marketplace for our CarnoSyn® brands, and increase marketing, advertising and promotion costs for our launch into the Wellness and Healthy Aging markets for SR CarnoSyn®, we anticipate operating income will be flat to slightly down in fiscal year 2020 as compared to fiscal year 2019.

As of September 30, 2019, NAI had cash of $28.5 million and working capital of $58.1 million compared to $25.0 million and $57.1 million, respectively, as of June 30, 2019.  As of September 30, 2019, we had $10.0 million available under our line of credit agreement.

Mark A. LeDoux, Chairman and Chief Executive Officer stated, “The sales cycle to generate new relationships in this industry is not brief, so the fact that we are generating new customers is a testament to our continued commitment to quality and partnership with our esteemed clientele.

“We intend to launch our new sustained release CarnoSyn® powder product, which is suitable for various finished product presentations, to the marketplace and we expect positive results from this introduction. We also continue to work with applicable government agencies to prevent introduction of adulterated goods into the marketplace that have not demonstrated profiles of safety.

“While the last several months have proved challenging, our balance sheet remains strong, with no debt and ample cash reserves allowing us to aggressively pursue new customers as we seek to continue to diversify our client and channel concentrations. Our team remains committed to overcoming these short-term challenges and increasing profitability.”

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://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, our ability to introduce products in new sales channels, 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://nai-online.com