Natural Alternatives International, Inc. Announces Fiscal 2013 Q2 Results

  Natural Alternatives International, Inc. Announces Fiscal 2013 Q2 Results

PR Newswire

SAN MARCOS, Calif., Feb. 12, 2013

SAN MARCOS, Calif., Feb. 12, 2013 /PRNewswire/ -- Natural Alternatives
International, Inc. ("NAI") (Nasdaq: NAII), a leading formulator, manufacturer
and marketer of customized nutritional supplements, today announced net income
of $102,000 or $0.01 per diluted share on net sales of $13.7 million for the
quarter ended December 31, 2012.

Net sales for the three months ended December 31, 2012 decreased by $2.5
million or 15.3% from $16.2 million recorded in the comparable prior year
period. For the quarter ended December 31, 2012, contract manufacturing sales
decreased $2.5 million or 16.7% from the comparable quarter last year due
primarily to lower sales of established productsassociated withlower
consumer demand, delayed customer product launches and customer inventory
reduction programs. Patent royalty and trademark licensing revenue increased
14.4% to $824,000 during the quarter ended December 31, 2012 as compared to
the prior year period. Royalty and licensing revenue was derived through the
sale and licensing of the ingredient known as beta-alanine sold under our
CarnoSyn® trade name. Our branded products sales totaled $338,000 for the
second quarter of fiscal 2013 as compared to $403,000 for the comparable prior
year period.

Net sales for the six months ended December 31, 2012 decreased 12.6% to $30.1
million from $34.5 million recorded in the comparable prior year period.
Contract manufacturing sales during the first six months of fiscal 2013
decreased $4.4 million or 13.8% from the comparable prior year period and
patent and trademark licensing revenue increased $144,000 or 7% during this
same period. Our branded products sales decreased $124,000 or 15.4% for the
first six months of fiscal 2013.

Net income for the first six months of fiscal 2013 totaled $799,000 or $0.12
per diluted share compared to net income of $2.3 million or $0.33 per diluted
share in the comparable prior year period. The decline in net income was
primarily attributable to decreased contract manufacturing sales, increased
raw material and manufacturing production costs, unfavorable foreign currency
exchange rates and increased patent litigation and prosecution expenses which
totaled $1.4 million for the first six months of fiscal 2013.

As of December 31, 2012, we had cash of $17.0 million and working capital of
$27.9 million compared to $14.5 million and $27.7 million, respectively, as of
June 30, 2012. As of December 31, 2012, we had $5.5 million available under
our line of credit agreements.

Mark A. LeDoux, Chairman and Chief Executive Officer commented, "The quarter
ending December 2012 was clearly disappointing in terms of revenue and
profitability. The trend for the current period remains difficult as well
given the uncertainty of the timing of sales associated with our current
customers' new product launches and planned initial sales of new customer

"We were however, very pleased to recently receive notice of a positive ruling
by the Chief Judge of the Delaware Federal District Court, which granted NAI's
motion to dismiss a declaratory judgment patent case filed against it in
Delaware in favor of the action properly brought by NAI in Houston, TX. With
this recent development, we believe we are well positioned to move forward
with our allegations in the Texas case against a significant infringer of our
beta-alanine patent estate."

"On December 11, 2012 we received our newest patent in the USA related to
sustained release CarnoSyn® beta-alanine, US Patent Number 8329207, and are
happy to announce that we received a notice of allowance on December 13, 2012
that a second sustained release CarnoSyn® beta-alanine patent has been
approved for issuance by the US Patent Office."

NAI, headquartered in San Marcos, 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

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
expectations and beliefs with respect to our future financial and operating
results, including the amount of our future revenue and profits and our future
financial condition, our ability to expand our contract manufacturing business
and patent estate, comply with Good Manufacturing Practices and other
applicable regulations and standards, improve stockholder value, remain debt
free, develop, maintain or increase sales to new and existing customers, and
successfully maintain and enforce our intellectual property rights, 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 and Quarterly Report on
Form 10-Q.

CONTACT – Kenneth Wolf, Chief Operating and Chief Financial Officer, Natural
Alternatives International, Inc., at 760-736-7700 or

Web site:

(In thousands, except per share data)
               Three Months Ended                Six Months Ended
               December 31,                      December 31,
               2012             2011             2012             2011
NET SALES      $13,686  100.0%  $16,161  100.0%  $30,146  100.0%  $34,502  100.0%
Cost of goods  11,767   86.0%   12,808   79.3%   24,643   81.7%   26,466   76.7%
Gross profit   1,919    14.0%   3,353    20.7%   5,503    18.3%   8,036    23.3%
general &      2,192    16.0%   2,127    13.2%   4,747    15.7%   4,463    12.9%
FROM           (273)    -2.0%   1,226    7.6%    756      2.5%    3,573    10.4%
Other income   7        0.1%    (27)     -0.2%   (5)      0.0%    56       0.2%
(expense), net
(LOSS) INCOME  (266)    -1.9%   1,199    7.4%    751      2.5%    3,629    10.5%
Income tax
(benefit)      (368)            414              (48)             1,316
NET INCOME     $              $              $              $ 
               102             785             799             2,313
Basic:         $0.01            $0.11            $0.12            $0.33
Diluted:       $0.01            $0.11            $0.12            $0.33
Basic          6,891            6,971            6,905            6,992
Diluted        6,900            6,985            6,915            7,000

(In thousands)
                                               December 31  June 30
                                               2012         2012
Cash and cash equivalents                      $16,996      $14,478
Accounts receivable, net                       3,313        8,751
Inventories, net                               9,433        8,355
Deferred income taxes                          699          699
Other current assets                           1,964        2,236
 Total current assets                       32,405       34,519
Property and equipment, net                    10,271       10,647
Deferred income taxes                          1,471        1,471
Other noncurrent assets, net                   434          560
 Total Assets                               $44,581      $47,197
Accounts payable and accrued liabilities      $4,558       $6,836
Deferred rent                                  364          493
 Total Liabilities                          4,922        7,329
Stockholders' Equity                           39,659       39,868
 Total Liabilities and Stockholders' Equity $44,581      $47,197

SOURCE Natural Alternatives International, Inc.

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