Natural Alternatives International, Inc. Announces Fiscal 2010 Q1 Results

SAN MARCOS, Calif., Nov 11, 2009 /PRNewswire-FirstCall via COMTEX/ -- Natural Alternatives International, Inc. ("NAI") , a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $1.3 million or $0.19 per diluted share on net sales from continuing operations of $17.0 million for the quarter ended September 30, 2009.

Net sales from continuing operations during the three months ended September 30, 2009 decreased $2.5 million from $19.5 million recorded in the comparable prior year period. For the quarter ended September 30, 2009, contract manufacturing sales declined $2.4 million or 12.6% from the comparable quarter last year due primarily to lower sales volumes to one of our largest customers and the discontinuance of a customer relationship during the first quarter of fiscal 2010. These sales declines were partially offset by royalty income associated with our CarnoSyn(R) Beta-Alanine sub-license program. Net sales from our branded products totaled $588,000 for the first quarter of fiscal 2010 compared to $784,000 for the prior year period. This decrease is associated with the continued softening of our Pathway to Healing(R) product line. During late fiscal 2009 we revamped our Dr. Cherry website and increased our direct-to-consumer marketing and advertising efforts which helped reduce the historical sales decline for these products. During fiscal 2010 we intend to further increase our Dr. Cherry marketing and advertising efforts and plan to re-launch the product line in late fiscal 2010 with new formulations, labeling and packaging in an effort to expand our future sales opportunities.

Net income from continuing operations in the first quarter of fiscal 2010 was $1.2 million or $0.18 per diluted share compared to a net loss of $349,000 or $0.05 per share in the first quarter of fiscal 2009. The improvement was primarily attributable to lower material costs as a percentage of sales, and decreased labor, overhead and other operating expenses as a result of our cost reduction programs implemented during fiscal 2009.

During the first quarter of fiscal 2010 we also generated net income from discontinued operations of $95,000 or $0.01 per diluted share as compared to a net loss of $1.0 million or $0.15 per share in the first quarter of fiscal 2009. The net loss from discontinued operations in the prior year quarter was primarily attributable to employee termination costs, facility closure costs and the loss on the sale of the As We Change(R) catalog. On July 31, 2009, we sold substantially all of the remaining assets of Real Health Laboratories (RHL) and anticipate the remaining wind-down business activity of RHL will terminate during the second half of fiscal 2010.

As of September 30, 2009, NAI had cash and certificates of deposit of $5.2 million and working capital of $14.9 million compared to $4.7 million and $13.9 million, respectively, as of June 30, 2009. As of September 30, 2009, we had $4.6 million available under our working capital line of credit.

Mark LeDoux, Chief Executive Officer, stated, "We are very pleased with our continued operational improvements during our first quarter, especially given the current economic landscape. Our cost reduction programs and business improvement initiatives instituted late last year continued to help focus our efforts to intelligently grow our future top line sales and operating profits." Mr. LeDoux continued, "Looking forward, we expect our cost reduction programs will further reduce our remaining fiscal 2010 operating overhead by approximately $2.1 million as compared to fiscal 2009. Additionally, we currently expect net sales during the second quarter of fiscal 2010 to be relatively consistent with the comparable prior year period and expect to generate net operating income from continuing operations during the second quarter of fiscal 2010, although at a reduced level from our first quarter 2010 results given our anticipated product sales mix and working capital initiatives."

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, and our ability to further reduce operating costs, expand our contract manufacturing business, grow our Dr. Cherry business and the timing of the re-launch of this product line 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 and Quarterly Report on Form 10-Q.

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