Natural Alternatives International Reports Third Quarter Results
Financial Performance Overview
Natural Alternatives International, Inc. (NASDAQ: NAII), a frontrunner in developing and marketing customized nutritional supplements, has released its financial results for the third quarter of the fiscal year 2025. Despite achieving net sales of $28.8 million, the company faced a net loss of $2.2 million for the quarter, which translates to a loss of $0.37 per diluted share. This compares to a net loss of $1.6 million, or $0.27 per diluted share, reported in the same quarter of the previous fiscal year.
Analyzing Sales Growth
Quarterly Sales Performance
In the three-month period ending March 31, 2025, the company experienced a notable increase in net sales of $3.6 million, marking a 14% rise compared to $25.1 million during the prior year. A substantial contributor to this growth was the private-label contract manufacturing segment, which surged by 20% to reach $27.1 million. This boost mainly stemmed from higher order volumes from existing customers alongside new customer acquisitions.
Revenue from CarnoSyn® Beta-Alanine
However, the revenue from CarnoSyn® beta-alanine, including royalties and licensing, saw a decline of 36%, falling to $1.7 million from the $2.7 million reported in Q3 of fiscal year 2024. This drop was largely attributed to reduced orders from existing clients.
Year-to-Date Financial Results
For the nine months concluding on March 31, 2025, Natural Alternatives recorded a net loss of $6.4 million, or $1.07 per diluted share, in contrast to a net loss of $5.3 million, or $0.91 per diluted share, from the same timeframe in the previous year. Total net sales improved by $11.7 million, equivalent to a 14% increase, reaching $96.0 million compared to $84.3 million during the same nine-month period last year. The growth in private-label contract manufacturing sales also continued, rising 16% to $90.0 million.
Operational Challenges
Despite the sales growth in both the quarterly and year-to-date periods, the company continued to face operational losses. The challenges primarily stemmed from underutilized factory capacities, decreased royalty revenue from beta-alanine products, and increasing operational expenses. These rising costs include legal fees, general and administrative expenses, and salaries, coupled with heightened manufacturing costs due to the escalation of labor rates, currency fluctuations, and other operating overheads.
Looking ahead, while the forecast for Q4 of fiscal 2025 anticipates sales growth compared to the previous year, the company projects an overall net loss for the entire fiscal year.
Current Financial Position
As of March 31, 2025, Natural Alternatives had cash and cash equivalents totaling $10.6 million, alongside working capital of $35.2 million. This represents a decrease from $12.0 million in cash and $38.1 million in working capital as of June 30, 2024. The company’s borrowing capacity on its credit facility was $8.5 million, with outstanding borrowings of $2.0 million.
CEO's Insights
Mark A. Le Doux, Chairman and CEO of Natural Alternatives, expressed optimism regarding the continued increase in top-line revenue. He emphasized that this growth reflects the hard work of the sales team in building new customer relationships and fostering organic growth from existing partnerships. Despite supply chain issues and fluctuating currency valuations presenting ongoing challenges, there is optimism surrounding their new TriBsyn™ product line, with plans to launch new products containing this innovative ingredient soon.
Future Outlook
The company plans to provide an updated investor presentation on its website's investor relations page, highlighting current developments and strategic plans moving forward. This preview showcases Natural Alternatives' commitment to enhancing its positioning within the nutritional supplements market.
Contact Information
For media inquiries, you can contact Michael Fortin, Chief Financial Officer, at 760-736-7700 or reach out via email at investor@nai-online.com.
Frequently Asked Questions
What were Natural Alternatives' net sales for Q3 2025?
The net sales reached $28.8 million for the third quarter of 2025, showing a growth of 14% compared to the previous year.
What was the net loss for Q3 2025?
The company reported a net loss of $2.2 million or $0.37 per diluted share for the third quarter.
How did the company's private-label contract manufacturing perform?
This segment saw a significant increase of 20%, amounting to $27.1 million in sales during Q3 2025.
What are the projections for the next quarter?
While an increase in sales is anticipated for Q4 2025, a net loss for the entire fiscal year is expected.
Who can I contact for more information on Natural Alternatives?
For further inquiries, Michael Fortin, Chief Financial Officer, is available at 760-736-7700 or via email.
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