NAI net sales up 30% in FY2012

NAI net sales up 30% in FY2012

Royalty and licensing income related to the use of CarnoSyn beta-alanine patents and trademarks increased 164 percent to $4.6 million during fiscal 2012.

Natural Alternatives International Inc., a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $4.2 million, or $0.59 per diluted share, on net sales of $72.8 million for the fiscal year ended June 30, 2012. The fiscal 2012 results represent a 30 percent growth in net sales and a 167 percent growth in income from operations as compared to fiscal 2011.

Fiscal 2012 net sales from contract manufacturing activities increased $11.0 million as compared to the prior fiscal year due primarily to higher sale volumes generated from our existing customers, new product sales, and sales associated with new customer products. Royalty and licensing income related to license agreements for the use of our CarnoSyn® beta-alanine related patents and trademarks increased 164 percent to $4.6 million during fiscal 2012 as compared to $1.7 million for fiscal 2011, and raw material sales of beta-alanine totaled $3.4 million during fiscal 2012 as compared to zero for fiscal 2011. The increase in beta-alanine royalty and licensing income during the current fiscal year was primarily related to an expanded customer base and increased raw material sales. Net sales from our branded products declined $261,000 to $1.6 million during fiscal 2012 as compared to the prior fiscal year.

The fiscal 2012 net sales increases, coupled with a 220 basis point gross margin improvement, contributed to a $3.9 million or 167 percent increase in income from operations during fiscal 2012 as compared to the prior fiscal year.

Net income for fiscal 2012 was $4.2 million, or $0.59 per diluted share, as compared to net income of $5.1 million for fiscal 2011, or $0.71 per diluted share. Our fiscal 2012 net income results included an income tax provision of $2.1 million while our fiscal 2011 net income results included a net tax benefit of $2.7 million, or $0.38 per diluted share, associated with the reduction of a valuation allowance on our net deferred tax assets.

Net sales for the fourth quarter ended June 30, 2012 increased to $20.9 million as compared to $14.4 million for the prior year period. The increase in net sales during the current quarter was primarily related to $3.0 million of beta-alanine raw material sales and increased contract manufacturing sales from new and existing customers. Net income in the fourth quarter of fiscal 2012 was $777,000, or $0.11 per diluted share, as compared to net income of $3.1 million, or $0.44 per diluted share, in the fourth quarter of fiscal 2011. The decrease in net income on a quarter over quarter basis was attributable primarily to the recognition of a $3.1 million tax benefit associated with the reduction in a valuation reserve on our net deferred tax assets during the fourth quarter of 2011, as compared to a $225,000 income tax provision recognized during the fourth quarter of 2012.

As of June 30, 2012, NAI had cash and cash equivalents of $14.5 million and working capital of $27.7 million compared to $15.5 million and $22.9 million, respectively, as of June 30, 2011. As of June 30, 2012, we had no debt outstanding and $5.5 million available under our working capital lines of credit.

Mark A. LeDoux, chairman and CEO, stated, "By staying focused on our core objectives, NAI experienced solid growth in both net sales and operating income during fiscal 2012. We continue to pursue the economic value expansion of our growing CarnoSyn beta-alanine patent estate, while prosecuting those who elect to violate our patent portfolio for their own benefit. We are also evaluating opportunities for expansion of our business footprint through accretive acquisitions given our growing cash position."

 

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