Natural Alternatives International, Inc. ("NAI"), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced a net loss of $504,000 or $0.07 per share on net sales from continuing operations of $17.3 million for the third quarter ended March 31, 2009. The third quarter results include a net loss from discontinued operations of $1.9 million or $0.28 per share primarily related to the write-down of substantially all of the remaining goodwill and intangible assets of the company's discontinued operations.
The third quarter net sales from continuing operations represented a decrease of $1.6 million from $18.9 million in the comparable prior year quarter. For the quarter ended March 31, 2009, contract manufacturing sales declined $1.2 million or 7% from the comparable quarter last year. The decrease in net sales resulted primarily from the impact of the current economic conditions and unfavorable foreign currency fluctuations. These sales decreases were partially offset by increased sales volumes from other existing customers and new customer sales and royalty income related to a sublicense agreement for the distribution of Beta Alanine. Net sales from our branded products declined $334,000 or 35% in the third quarter of fiscal 2009 compared to the comparable period in fiscal 2008 due primarily to the continued softening of our Pathway to Healing(R) product line.
Net income from continuing operations in the third quarter of fiscal 2009 was $1.4 million or $0.21 per diluted share compared to net income of $22,000 or $0.00 per diluted share in the third quarter of fiscal 2008. The increase in net income from continuing operations was attributable to an improved sales mix, reduced labor and other manufacturing costs, lower selling, general and administrative expenses associated with our organizational consolidation and a decrease in insurance, investor relations, professional fees and employee compensation expenses.
The net loss from discontinued operations of $1.9 million or $0.28 per share in the third quarter of fiscal 2009 compared to a net loss of $468,000 or $0.07 per share in the third quarter of fiscal 2008. The increase in the net loss from discontinued operations was primarily attributable to a non-cash impairment charge related to management's conclusion that the carrying values of intangible assets related to discontinued operations were less than their current fair value. Overall, the net loss for the third quarter was $504,000 or $0.07 per share compared to a net loss of $446,000 or $0.06 per share in the comparable quarter last year.
As of March 31, 2009 NAI had cash and certificates of deposit of $3.4 million and working capital of $12.0 million compared to $3.5 million and $18.4 million, respectively, as of June 30, 2008. As of March 31, 2009, we had $4.5 million available under our working capital line of credit.
Chairman and Chief Executive Officer Mark LeDoux stated, "While the current economic conditions continue to challenge the economy at large, it is clear that working hard to partner with our customers to develop innovative products and continue to push initiatives for intelligent cost management is beginning to be reflective in our financial performance. We also believe we have positioned the company for profitable performance for the remainder of fiscal 2009 and remain optimistic about our future growth opportunities and intend to continue to leverage our certified manufacturing facilities and excellent customer service reputation to expand our distribution and customer base."
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 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 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 reduce operating costs, expand our contract manufacturing business, 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.