Natural Alternatives International's Revenue Grows, Despite Losses
Financial Highlights of Natural Alternatives International, Inc.
Natural Alternatives International, Inc. (NASDAQ: NAII), a prominent player in the nutritional supplements sector, has recently shared its financial outcomes for the fourth quarter and year-to-date results. Despite a challenging year, the company reported a noticeable increase in revenue, marking achievements that showcase its market resilience.
Quarterly Performance Overview
For the fourth quarter, aligned with the fiscal year 2025, Natural Alternatives International noted a net loss of $7.2 million, equating to ($1.20) per diluted share, on total sales of $33.9 million. Comparatively, the fourth quarter of the preceding year reported a net loss of $1.9 million, or ($0.32) per share. A significant portion of the losses in this quarter stemmed from non-recurring charges totaling $6.2 million related to legal settlements and deferred tax assets. Excluding these charges, the adjusted net loss was reported as $1.0 million.
Revenue Growth Across Sectors
The reported net sales of $33.9 million reflect a substantial increase of $4.4 million, or 15%, compared to the last year's corresponding period. Much of this revenue was bolstered by private-label contract manufacturing, which also saw an uptick of 15% to reach $31.8 million. This growth was primarily driven by heightened orders from both existing and new customers, although it experienced slight offsets due to reduced orders from a major client.
Annual Sales Trends
On an annual basis, the fiscal year ending June 30, 2025, concluded with net sales soaring by $16.1 million—or 14%—to a total of $129.9 million, in contrast to the $113.8 million recorded in the previous fiscal year. The private-label segment particularly outperformed, increasing by 16% and amounting to $121.8 million. However, CarnoSyn® beta-alanine revenue faced a slight decline of 4%, totaling $8.1 million compared to the $8.4 million from fiscal year 2024.
Challenges Impacting Profitability
Despite experiencing notable revenue growth, Natural Alternatives International faced challenges in profitability primarily due to underutilization of factory capacity, tax liability adjustments, and impending legal settlement costs. While the outlook for fiscal 2026 indicates expectations for sales growth, the company anticipates enduring losses during the initial half of the year before potentially rebounding to profitability later on.
Balance Sheet Snapshot
As of the conclusion of the fourth quarter, the company reported a cash reserve of $12.3 million along with working capital totaling $30.5 million, compared to $12.0 million and $38.1 million from the previous year. Furthermore, Natural Alternatives' credit facility had an unused borrowing capacity of $9.9 million, with $1.9 million borrowed at the reporting date.
Insights from Leadership
Mark A. Le Doux, the Chairman and CEO, expressed optimism regarding future growth, despite the current setbacks, highlighting that essential initiatives are underway to enhance customer relationships and refine operational processes. The focus remains on promoting their notable product, CarnoSyn® beta-alanine, and expanding its distribution.
Strategic Future Directions
Looking ahead, Natural Alternatives International is committed to capitalizing on market opportunities within nutritional supplementation. The leadership team remains dedicated to engaging in extensive scientific research, enhancing product formulations, and ensuring regulatory compliance to fortify its market position and drive sustainable growth.
Frequently Asked Questions
What were the major financial highlights for NAII in the quarterly report?
NAII reported a net loss of $7.2 million for Q4 but achieved sales growth of 15%, reaching $33.9 million.
What factors contributed to NAII's revenue growth?
Increased orders from existing and new customers in private-label contract manufacturing drove the revenue growth significantly.
How did the company's annual sales perform?
For the fiscal year 2025, NAII's annual sales increased by 14% to $129.9 million, up from $113.8 million.
What are NAII's expectations for fiscal 2026?
NAII anticipates continued revenue growth but expects net losses in the first half of the year before possibly achieving profitability in the latter half.
What is the company's vision moving forward?
NAII aims to strengthen customer relationships, enhance product offerings, and continue research to promote its key supplements like CarnoSyn® beta-alanine.
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