CARLSBAD, Calif., May 14,
2020 /PRNewswire/ -- Natural Alternatives
International, Inc. ("NAI") (Nasdaq: NAII), a leading formulator,
manufacturer and marketer of customized nutritional supplements,
today announced a net loss of $4.0
million, or $0.61 per diluted
share, for the quarter ended March
31, 2020.
Net sales during the three months ended March 31, 2020 decreased $10.0 million, or 28.1%, from $35.5 million recorded in the comparable prior
year period. During the same period, private-label contract
manufacturing sales decreased $9.1
million, or 28.7%, from the comparable quarter last year.
Third quarter contract manufacturing sales decreased primarily due
to lower sales to our largest contract manufacturing customer.
CarnoSyn® beta-alanine royalty, licensing and raw material sales
revenue decreased 23.3% to $2.8
million during the third quarter of fiscal 2020, as compared
to $3.7 million for the third quarter
of fiscal 2019.
We recorded a net loss of $4.0
million, or $0.61 per diluted
share, for the three months ended March 31,
2020 as compared to net income of $2.0 million, or $0.27 per diluted share in the third quarter of
fiscal 2019. Our results for the third quarter of fiscal 2020
were negatively impacted by a non-cash $4.3
million accounts receivable and inventory reserve related to
a former customer.
Net sales during the nine months ended March 31, 2020 decreased $24.3 million, or 22.4%, from $108.0 million recorded in the comparable prior
year period. For the nine months ended March 31, 2020, private-label contract
manufacturing sales decreased $21.0
million, or 22.2%, from the comparable period last year.
Sales to our largest customer declined $22.3
million or 38.3% for the nine months ended March 31, 2020. This sales decline was partially
offset by increased sales to other new and existing
customers.
CarnoSyn® beta-alanine royalty, licensing and raw material sales
revenue during the nine months ended March
31, 2020 decreased $3.2
million, or 23.9%, from $13.5
million during the comparable period last year. We believe
this decline was impacted by certain customers discontinuing the
use of our CarnoSyn® beta-alanine in favor of generic beta-alanine
and lower overall consumer demand for our customers' CarnoSyn®
products. These sales declines were further compounded by the
challenges to point of sale transactions with many locations
effectively closed due to 'stay-at-home' orders imposed by various
governors starting in mid-March 2020.
Net loss for the nine months ended March
31, 2020 was $3.4 million, or
$0.51 per diluted share, compared to
net income of $6.7 million, or
$0.95 per diluted share, for the nine
months ended March 31, 2019.
On March 11, 2020, the World
Health Organization classified the novel coronavirus, or COVID-19,
as a pandemic. The COVID-19 pandemic has resulted, and is
likely to continue to result, in significant economic disruption
and has and will likely affect our business. To date, the Company's
facilities, located both in the United
States and Europe continue
to operate as an essential and critical manufacturer in accordance
with federal, state, and local regulations.
As a measure to provide our business with added liquidity, and
out of an abundance of caution, we withdrew $10.0 million from our credit facility with Wells
Fargo Bank. We will continue to actively monitor the situation and
may take further actions that alter our business operations as may
be required by federal, state or local authorities or that we
determine are in the best interests of our employees, customers,
suppliers and shareholders. While we are unable to determine or
predict the nature, duration, or scope of the overall impact the
COVID-19 pandemic will have on our business, results of operations,
liquidity or capital resources, we believe we will be able to
remain operational and that our working capital will be sufficient
for us to remain operational as the longer term consequences of
this pandemic become known.
As of March 31, 2020, NAI had cash
of $33.3 million and working capital
of $51.2 million compared to
$25.0 million and $57.1 million, respectively, as of June 30, 2019. As of March 31, 2020, we did not have any remaining
availability under our credit facilities.
Mark A. LeDoux, Chairman and
Chief Executive Officer of NAI stated, "The third quarter brought
several unforeseen challenges, including the loss of a former
customer and the COVID-19 global pandemic. While the loss of
a former customer negatively impacted our results and the future
remains unknown due to COVID-19, our balance sheet remains strong
and we remain focused on growing our business."
"Several components of the retail marketplace have been
significantly impacted by the closure of gyms and challenges within
other points of retail commerce for sports nutrition
products. This reality brought on by multiple stay-at-home
orders and a surge in unemployment claims has had a negative impact
on sales of sports nutrition products including
CarnoSyn®, and it is unclear at this time when this
will change. At the same time, several of our contract
manufacturing customers are experiencing various levels of sales
improvements related to their health and immune support product
offerings."
"We remain encouraged at emerging signs of demand improvement
from our current and new customers as evidenced by our improving
backlog of contract manufacturing orders."
"I'm extremely proud of how our US and European management teams
have navigated through this ongoing global crisis and we remain
committed to offering the highest level of service and quality to
our customers."
NAI, headquartered in Carlsbad,
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, the impact
of COVID-19 and our ability to remain operational, our future
revenue profits and financial condition, our ability to introduce
products in new sales channels, maintain our patents, generate
revenues from the commercialization of our patents and trademarks,
secure compliance with our intellectual property rights, 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 that 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.
CONTACT – Michael Fortin, Chief
Financial Officer, Natural Alternatives International, Inc., at
760-736-7700 or investor@nai-online.com.
Web site: http://www.nai-online.com
NATURAL
ALTERNATIVES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except
per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
March
31,
|
|
|
|
March
31,
|
|
|
|
2020
|
|
|
|
2019
|
|
|
|
2020
|
|
|
|
2019
|
|
|
NET
SALES
|
25,482
|
|
100.0%
|
|
35,455
|
|
100.0%
|
|
83,780
|
|
100.0%
|
|
108,030
|
|
100.0%
|
Cost of goods
sold
|
22,588
|
|
88.6%
|
|
29,128
|
|
82.2%
|
|
71,441
|
|
85.3%
|
|
88,104
|
|
81.6%
|
Gross
profit
|
2,894
|
|
11.4%
|
|
6,327
|
|
17.8%
|
|
12,339
|
|
14.7%
|
|
19,926
|
|
18.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general
& administrative expenses
|
7,117
|
|
27.9%
|
|
4,492
|
|
12.7%
|
|
15,919
|
|
19.0%
|
|
13,160
|
|
12.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(LOSS) INCOME FROM
OPERATIONS
|
(4,223)
|
|
-16.6%
|
|
1,835
|
|
5.2%
|
|
(3,580)
|
|
-4.3%
|
|
6,766
|
|
6.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (loss) income,
net
|
(48)
|
|
-0.2%
|
|
622
|
|
1.8%
|
|
5
|
|
0.0%
|
|
1,662
|
|
1.5%
|
(LOSS) INCOME
BEFORE TAXES
|
(4,271)
|
|
-16.8%
|
|
2,457
|
|
6.9%
|
|
(3,575)
|
|
-4.3%
|
|
8,428
|
|
7.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
provision
|
(256)
|
|
|
|
463
|
|
|
|
(132)
|
|
|
|
1,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS)
INCOME
|
$(4,015)
|
|
|
|
$1,994
|
|
|
|
$(3,443)
|
|
|
|
$6,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS) INCOME
PER COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
($0.61)
|
|
|
|
$0.29
|
|
|
|
($0.51)
|
|
|
|
$0.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted:
|
($0.61)
|
|
|
|
$0.27
|
|
|
|
($0.51)
|
|
|
|
$0.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
6,565
|
|
|
|
6,800
|
|
|
|
6,734
|
|
|
|
6,791
|
|
|
Diluted
|
6,565
|
|
|
|
7,395
|
|
|
|
6,734
|
|
|
|
7,120
|
|
|
NATURAL
ALTERNATIVES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
March
31,
|
|
June
30,
|
|
2020
|
|
2019
|
|
|
|
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$33,315
|
|
$25,040
|
Accounts receivable,
net
|
12,379
|
|
15,964
|
Inventories,
net
|
26,111
|
|
26,003
|
Other current
assets
|
5,183
|
|
4,379
|
Total current assets
|
76,988
|
|
71,386
|
Property and
equipment, net
|
21,398
|
|
21,085
|
Operating lease
right-of-use assets
|
18,881
|
|
-
|
Other noncurrent
assets, net
|
1,088
|
|
1,019
|
Total Assets
|
$118,355
|
|
$93,490
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Accounts payable and
accrued liabilities
|
18,376
|
|
16,863
|
Line of
credit
|
10,000
|
|
-
|
Long-term liability -
operating leases
|
19,230
|
|
-
|
Deferred
rent
|
-
|
|
543
|
Total Liabilities
|
47,606
|
|
17,406
|
Stockholders'
Equity
|
70,749
|
|
76,084
|
Total Liabilities and Stockholders' Equity
|
$118,355
|
|
$93,490
|
View original
content:http://www.prnewswire.com/news-releases/natural-alternatives-international-inc-announces-2020-q3-and-ytd-results-301059665.html
SOURCE Natural Alternatives International, Inc.