Natural Alternatives International, Inc. Announces 2024 Q1 Results

Rhea-AI Summary

NAII: Natural Alternatives International Reports Q1 Fiscal 2024 Net Loss of $0.7M on $34.0M Sales. CarnoSyn® beta-alanine royalty revenue up 31.8%. Loss from operations due to private-label contract manufacturing slowdown.

Positive

• Net sales decreased by 21.2% compared to the prior fiscal year.
• CarnoSyn® beta-alanine royalty, licensing, and raw material sales revenue increased by 31.8%.
• The company has a cash balance of $16.7 million and working capital of $42.3 million as of September 30, 2023.
• The company anticipates a net loss in the first half of fiscal 2024, net income in the second half, and an overall net loss for the fiscal year.

Negative

• Private-label contract manufacturing sales decreased by 22.9%.
• The company experienced a loss from operations during the first quarter of fiscal year 2024.
• The temporary closure of the high-speed powder processing facility in Carlsbad, California due to excess inventory may impact operations in the first half of fiscal 2024.

CARLSBAD, Calif., Nov. 9, 2023 /PRNewswire/ -- Natural Alternatives International, Inc. ("NAI") (Nasdaq: NAII), a leading formulator, manufacturer, and marketer of customized nutritional supplements, today announced a net loss of $0.7 million, or $0.12 per diluted share, on net sales of $34.0 million for the first quarter of fiscal year 2024 compared to net income of $1.1 million, or $0.18 per diluted share, in the first quarter of the prior fiscal year. 

Net sales during the three months ended September 30, 2023, decreased $9.2 million, or 21.2%, to $34.0 million as compared to $43.1 million recorded in the comparable prior year period.  During the same period, private-label contract manufacturing sales decreased $9.6 million, a 22.9% decrease from the comparable quarter last year. Private-label contract manufacturing sales decreased primarily due to reduced orders from several of our larger customers associated with their efforts to reduce excess on-hand inventories.

CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue increased 31.8% to $1.8 million during the first quarter of fiscal year 2024, as compared to $1.4 million for the first quarter of fiscal year 2023. The increase in patent and trademark licensing revenue during the first quarter of fiscal 2023 was primarily due to an increase in orders from existing customers and increased royalty income, partially offset by increased volume rebates.

We experienced a loss from operations during the three months ended September 30, 2023. This was primarily due to a slowdown in sales across our private label contract manufacturing segment. We previously announced the temporary closure of our high-speed powder processing facility in Carlsbad, California due to excess inventory on hand at one of our largest customers and their efforts to rebalance supply and demand. We now expect this facility will re-open and our prior level of operations will resume in our fourth fiscal quarter of 2024. Subject to this uncertainty, and our overall sales forecast, we currently anticipate we will experience a net loss in the first half of fiscal 2024, net income in the second half and an overall net loss in fiscal 2024.

As of September 30, 2023, we had cash of $16.7 million and working capital of $42.3 million compared to $13.6 million and $41.1 million respectively, as of June 30, 2023. As of September 30, 2023, we had $20.0 million available under our line of credit agreement.

Mark A. Le Doux, Chairman and Chief Executive Officer of NAI stated, "While economic headwinds continue to persist both in our business and our industry, we continue to foster our existing relationships and pursue new customer opportunities to bolster our sales pipeline. While the new customer and product acquisition cycle can be long, we believe our investments in relationship development and product innovation will yield significant future growth."

An updated investor presentation will be posted to the investor relations page on our website later today (https://www.nai-online.com/our-company/investors/).

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

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that are not historical facts and information.  These statements represent our intentions, expectations and beliefs concerning future events, including, among other things, our ability to develop, maintain or increase sales to new and existing customers, potential re-opening of our Carlsbad powder processing facility and its future level of operations, our future revenue profits and financial condition, as well as future economic conditions and the impact of such conditions on our business. We wish to caution readers these statements involve risks and uncertainties that could cause actual results and outcomes for future periods to differ materially from any forward-looking statement or views expressed herein.  NAI's financial performance and the forward-looking statements contained herein are further qualified by other risks, including those set forth from time to time in the documents filed by us with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K.

SOURCE - Natural Alternatives International, Inc.

CONTACT – Michael Fortin, Chief Financial Officer, Natural Alternatives International, Inc., at 760-736-7700 or investor@nai-online.com.

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

 

NATURAL ALTERNATIVES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
	(Unaudited)
	Three Months Ended
	September 30,
	2023				2022
NET SALES	$     33,969		100.0 %		$     43,127		100.0 %
Cost of goods sold	30,832		90.8 %		37,756		87.5 %
Gross profit	3,137		9.2 %		5,371		12.5 %
Selling, general & administrative expenses	3,681		10.8 %		3,829		8.9 %
INCOME FROM OPERATIONS	(544)		-1.6 %		1,542		3.6 %
Other loss, net	(340)		-1.0 %		(224)		-0.5 %
INCOME BEFORE TAXES	(884)		-2.6 %		1,318		3.1 %
Income tax expense	(189)				265
NET INCOME	$        (695)				$       1,053
NET INCOME PER COMMON SHARE:
Basic:	($0.12)				$0.18
Diluted:	($0.12)				$0.18
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic	5,850				5,920
Diluted	5,850				5,943

 

NATURAL ALTERNATIVES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
	September 30,		June 30,
	2023		2023
	(Unaudited)
ASSETS
Cash and cash equivalents	$16,749		$13,604
Accounts receivable, net	9,751		7,022
Inventories, net	23,304		29,694
Other current assets	7,950		6,690
Total current assets	57,754		57,010
Property and equipment, net	53,971		53,841
Operating lease right-of-use assets	45,651		20,369
Other noncurrent assets, net	2,876		2,932
Total Assets	$160,252		$134,152
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities	15,085		14,450
Line of Credit	-		-
Mortgage note payable	9,444		9,517
Operating lease liability	46,908		21,413
Total Liabilities	71,437		45,380
Stockholders' Equity	88,815		88,772
Total Liabilities and Stockholders' Equity	$160,252		$134,152

 

View original content:https://www.prnewswire.com/news-releases/natural-alternatives-international-inc-announces-2024-q1-results-301984063.html

SOURCE Natural Alternatives International, Inc.

FAQ

What were NAI's net sales for the first quarter of fiscal year 2024?

NAII reported net sales of $34.0 million for the first quarter of fiscal year 2024, representing a decrease of 21.2% compared to the prior fiscal year.

What is the financial outlook for NAI in fiscal year 2024?

NAII anticipates a net loss in the first half of fiscal 2024, net income in the second half, and an overall net loss for the fiscal year.

How did CarnoSyn® beta-alanine royalty revenue perform in the first quarter of fiscal year 2024?

CarnoSyn® beta-alanine royalty, licensing, and raw material sales revenue increased by 31.8% during the first quarter of fiscal year 2024.

What is the current cash balance and working capital of NAI?

As of September 30, 2023, NAI had a cash balance of $16.7 million and working capital of $42.3 million.