CARLSBAD, Calif., Feb. 11, 2020 /PRNewswire/ -- Natural
Alternatives International, Inc. ("NAI") (Nasdaq: NAII), a leading
formulator, manufacturer and marketer of customized nutritional
supplements, today announced net income of $476,000, or $0.07
per diluted share.
Net sales during the three months ended December 31, 2019 decreased $6.9 million, or 19.3%, from $36.0 million recorded in the comparable prior
year period. During the same period, private-label contract
manufacturing sales decreased $6.8
million, or 21.6%, from the comparable quarter last year.
Second quarter contract manufacturing sales decreased primarily due
to lower sales to our largest contract manufacturing customer.
CarnoSyn® beta-alanine royalty, licensing and raw material sales
revenue decreased 2.5% to $4.3
million during the second quarter of fiscal 2020, as
compared to $4.4 million for the
second quarter of fiscal 2019.
Net income for the three months ended December 31, 2019 was $476,000, or $0.07
per diluted share as compared to net income of $2.2 million, or $0.31 per diluted share in the second quarter of
fiscal 2019.
Net income for the six months ended December 31, 2019 was $572,000, or $0.08
per diluted share, compared to net income of $4.7 million, or $0.68 per diluted share, for the six months ended
December 31, 2018.
Net sales during the six months ended December 31, 2019 decreased $14.3 million, or 19.7%, from $72.6 million recorded in the comparable prior
year period. For the six months ended December 31, 2019, private label contract
manufacturing sales decreased $11.9
million, or 19.0%, from the comparable period last year.
Contract manufacturing sales for the first six months of fiscal
2020 decreased primarily due to lower sales to our largest customer
partially offset by increased sales to other new and existing
customers. Sales to our largest contract manufacturing
customer declined over 31%.
CarnoSyn® beta-alanine royalty, licensing and raw material sales
revenue during the six months ended December
31, 2019 decreased $2.4
million, or 24.1%, from $9.8
million during the comparable period last year. We believe
this decline was impacted by certain 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. We
continue to vigorously pursue all legal avenues to protect our
CarnoSyn® brands, intellectual property portfolios, and regulatory
compliance status.
For the second half of fiscal 2020, as compared to the same
period in the prior year, we expect sales levels to our largest
contract manufacturing customer to decline 20% to 25% and our
CarnoSyn® beta-alanine revenue to be comparable to the prior year.
As a result, on an annualized basis, we now expect our consolidated
fiscal 2020 revenue to decline approximately 10% to 15% as compared
to the prior fiscal year.
As of December 31, 2019, NAI had
cash of $26.9 million and working
capital of $57.3 million compared to
$25.0 million and $57.1 million, respectively, as of June 30, 2019. As of December 31, 2019, we had $10.0 million available under our line of credit
agreement.
Mark A. Le Doux, Chairman and
Chief Executive Officer of NAI stated, "The second quarter remained
challenging, but our sales team and management continue to work
diligently to secure additional opportunities given the continued
right-sizing of inventory by our largest customer."
"The marketplace has been challenging due to several factors,
but we see signs of normalization appearing on the horizon as
evidenced by renewed purchases from many of our customers who have
been cautiously monitoring their inventory levels."
"While sales to our largest contract manufacturing customer
contracted in the past several quarters due to a variety of
factors, we believe their sales will stabilize later this fiscal
year and we will continue to expand our customer base through new
customer acquisition and new product launches with existing
customers."
"We continue to seek to expand our footprint of CarnoSyn® and SR
CarnoSyn® patented supplements, in addition to working with
regulators to monitor and fully implement provisions leading to
better consumer protections under applicable laws and
regulations."
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, 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 investor@nai-online.com.
Web site: http://www.nai-online.com
NATURAL
ALTERNATIVES INTERNATIONAL, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(In thousands, except
per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2019
|
|
|
|
2018
|
|
|
NET
SALES
|
29,103
|
|
100.0%
|
|
36,043
|
|
100.0%
|
|
58,298
|
|
100.0%
|
|
72,575
|
|
100.0%
|
Cost of goods
sold
|
24,042
|
|
82.6%
|
|
29,607
|
|
82.1%
|
|
48,853
|
|
83.8%
|
|
58,976
|
|
81.3%
|
Gross
profit
|
5,061
|
|
17.4%
|
|
6,436
|
|
17.9%
|
|
9,445
|
|
16.2%
|
|
13,599
|
|
18.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general
& administrative expenses
|
4,363
|
|
15.0%
|
|
4,229
|
|
11.7%
|
|
8,802
|
|
15.1%
|
|
8,668
|
|
11.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
698
|
|
2.4%
|
|
2,207
|
|
6.1%
|
|
643
|
|
1.1%
|
|
4,931
|
|
6.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (loss) income,
net
|
-124
|
|
-0.4%
|
|
543
|
|
1.5%
|
|
53
|
|
0.1%
|
|
1,040
|
|
1.4%
|
INCOME BEFORE
TAXES
|
574
|
|
2.0%
|
|
2,750
|
|
7.6%
|
|
696
|
|
1.2%
|
|
5,971
|
|
8.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
98
|
|
|
|
569
|
|
|
|
124
|
|
|
|
1,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
$ 476
|
|
|
|
$2,181
|
|
|
|
$ 572
|
|
|
|
$4,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME PER
COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
$0.07
|
|
|
|
$0.32
|
|
|
|
$0.08
|
|
|
|
$0.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted:
|
$0.07
|
|
|
|
$0.31
|
|
|
|
$0.08
|
|
|
|
$0.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
6,795
|
|
|
|
6,808
|
|
|
|
6,818
|
|
|
|
6,786
|
|
|
Diluted
|
6,886
|
|
|
|
6,999
|
|
|
|
6,936
|
|
|
|
6,982
|
|
|
NATURAL
ALTERNATIVES INTERNATIONAL, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
December
31,
|
|
June
30,
|
|
2019
|
|
2019
|
|
|
|
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$26,900
|
|
$25,040
|
Accounts receivable,
net
|
14,227
|
|
15,964
|
Inventories,
net
|
22,650
|
|
26,003
|
Other current
assets
|
4,745
|
|
4,379
|
Total current assets
|
68,522
|
|
71,386
|
Property and
equipment, net
|
20,613
|
|
21,085
|
Operating lease
right-of-use assets
|
19,523
|
|
-
|
Other noncurrent
assets, net
|
863
|
|
1,019
|
Total Assets
|
$109,521
|
|
$93,490
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Accounts payable and
accrued liabilities
|
13,659
|
|
16,863
|
Long-term liability -
operating leases
|
19,742
|
|
-
|
Deferred
rent
|
-
|
|
543
|
Total Liabilities
|
33,401
|
|
17,406
|
Stockholders'
Equity
|
76,120
|
|
76,084
|
Total Liabilities and Stockholders' Equity
|
$109,521
|
|
$93,490
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/natural-alternatives-international-inc-announces-2020-q2-and-ytd-results-301003152.html
SOURCE Natural Alternatives International, Inc.