CARLSBAD, Calif., May 14, 2018 /PRNewswire/ — Natural Alternatives International, Inc. (“NAI”) (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $2.1 million, or $0.30 per diluted share, on net sales of $31.8 million for the quarter ended March 31, 2018.

Net income for the third quarter of fiscal 2018 was $2.1 million, or $0.30 per diluted share, compared to net income of $0.7 million, or $0.11 per diluted share, in the comparable prior year period.  This increase was primarily attributable to growth in net sales associated with our private label contract manufacturing business.

Net sales during the three months ended March 31, 2018 increased $6.7 million, or 26.6%, from $25.1 million recorded in the comparable prior year period.  For the quarter ended March 31, 2018, private label contract manufacturing sales increased $7.1 million, or 38.3%, from the comparable quarter last year. Third quarter contract manufacturing sales increased primarily due to sales to Asian and European markets returning to historical levels and an increase in sales to our largest customer including shipment of new products under our previously announced expanded relationship.

CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue decreased 6.4% to $6.2 million during the third quarter of fiscal 2018 as compared to $6.6 million for the third quarter of fiscal 2017.  On a trailing quarter basis, CarnoSyn® beta-alanine royalty, licensing and raw material sales increased 55.0%, or $2.2 million, during the third quarter of fiscal 2018 as compared to the second quarter of fiscal 2018.  During our third quarter ending March 31, 2018, re-order rates improved for many of our customer brands. Additionally, our SR CarnoSyn® raw material sales continued to increase during the third quarter of fiscal 2018 as more brands adopted product offerings using our proprietary and effective sustained release delivery system.

Net sales during the nine months ended March 31, 2018 increased $3.5 million to $93.2 million, or 3.9%, from $89.8 million recorded in the comparable prior year period.  For the nine months ended March 31, 2018, private label contract manufacturing sales increased $7.4 million, or 10.7%, from the comparable period last year. The increase was primarily due to higher volumes of current products to existing customers located in Asian and European markets and shipment of new products under our previously announced expanded relationship with our largest customer.

CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue decreased 19.9% to $16.0 million during the first nine months of fiscal 2018 as compared to $20.0 million for the comparable prior year period.

Net income for the first nine months of fiscal 2018 was $2.2 million, or $0.32 per diluted share, compared to net income of $5.7 million, or $0.86 per diluted share, in the comparable prior year period. Our year-to-date fiscal 2018 results were unfavorably impacted by one-time tax expense recorded in connection with the revised U.S. tax code.  These one-time charges totaled $3.3 million, or approximately $0.47 per diluted share.  Excluding these one-time tax items, our adjusted net income during the first nine months of fiscal 2018 was $5.4 million, or $0.79 per diluted share.  Other than the one time tax expense the decrease in adjusted net income was primarily attributable to increased selling, general & administrative expenses from our patent and trademark licensing segment and increased marketing, advertising, and research and development costs supporting our CarnoSyn® and SR CarnoSyn® brands. These cost increases were partially offset by a reduction in patent litigation costs and increased gross profit from increased sales.

As of March 31, 2018, NAI had cash of $27.6 million and working capital of $45.3 million compared to $27.8 million and $41.4 million, respectively, as of June 30, 2017.  As of March 31, 2018, we had $10.0 million available under our line of credit agreement.

Mark A. Le Doux, Chairman and Chief Executive Officer stated, “Our investment in the expansion of market awareness of CarnoSyn® in addition to our commitment to ongoing research has born the anticipated positive results with a return to a more normal level of sales for this remarkable product. The recent success of our ‘team’ of supported athletes with four of the five sponsored athletes developing relationships with NFL teams during the NFL Draft demonstrates the intrinsic value of the correct supplementation of CarnoSyn®. The enhanced performance metrics achieved with this safe and legal supplement speaks volumes to athletes of all ages and aspirations.

“Equally gratifying was the growth experienced in our custom contract manufacturing business both in the US and in Switzerland. Continued expansion of customer needs in Australasia, Europe and North America have engendered revenue growth.  We expect this trend to continue with the normal potential for some seasonality to emerge in later periods. The larger progression we believe is occurring in our industry is a shift by quality conscious consumer brands to highly qualified and financially stable producer partners with the types of domestic and international quality certifications and capability uniquely found at NAI.  Our inventories increased in the period as these materials will be necessary to meet expanded demand in our system.”

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 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 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