CARLSBAD, Calif., May 9, 2019 /PRNewswire/ -- Natural Alternatives International, Inc. ("NAI") (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $6.7 million, or $0.95 per diluted share, on net sales of $108.0 million for the nine months ended March 31, 2019.

Net income for the nine months ended March 31, 2019 was $6.7 million, or $0.95 per diluted share, compared to net income of $2.2 million, or $0.32 per diluted share, for the nine months ended March 31, 2018. The previous period's results were unfavorably impacted by one-time discrete tax expense amounts recorded in connection with the 2017 U.S. Tax Act.  These one-time charges totaled $3.3 million, or approximately $0.47 per diluted share.  Excluding these discrete tax items, our adjusted net income during the nine months ended March 31, 2018 was $5.4 million, or $0.79 per diluted share.

Net sales during the nine months ended March 31, 2019 increased $14.8 million, or 16%, from $93.2 million recorded in the comparable prior year period.  For the nine months ended March 31, 2019, private label contract manufacturing sales increased $17.3 million, or 22%, from the comparable period last year. Third quarter contract manufacturing sales increased primarily due to the sale of new products to new and existing customers and higher volumes of current products to existing customers. 

CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue during the first nine months of fiscal 2019 were $13.5 million which decreased 15%, from $16.0 million recorded in the comparable prior year period. Our CarnoSyn® beta-alanine business has experienced a slowdown in sales during fiscal 2019 primarily as a result of various brands electing to switch their CarnoSyn® beta-alanine purchases to generic beta-alanine. We expect the recent ruling from the U.S. Court of Appeals for the Federal Circuit in favor of NAI's CarnoSyn® beta-alanine patents, concluding "patent eligibility" under existing law, along with our CarnoSyn® beta-alanine New Dietary Ingredient (NDI) status from the FDA, will help motivate departed brands and contract manufacturers to purchase CarnoSyn® in the future.

Net income for our third quarter of fiscal 2019 was $2.0 million, or $0.27 per diluted share, compared to a net income of $2.1 million, or $0.30 per diluted share, in the third quarter of fiscal 2018.

Net sales during the three months ended March 31, 2019 increased $3.6 million, or 11%, from $31.8 million recorded in the comparable prior year period.  For the quarter ended March 31, 2019, private label contract manufacturing sales increased $6.1 million, or 24%, from the comparable quarter last year. Third quarter contract manufacturing sales increased primarily due to the sale of new products to new and existing customers and higher volumes of current products to existing customers. 

CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue decreased 40% to $3.7 million during the third quarter of fiscal 2019, as compared to $6.2 million for the third quarter of fiscal 2018.  The decrease in CarnoSyn® revenue was primarily due to decreased material shipments and lower average sales prices.

As of March 31, 2019, we had cash of $27.7 million and working capital of $58.1 million compared to $23.6 million and $50.9 million, respectively, as of June 30, 2018.  As of March 31, 2019, we had $10.0 million available under our line of credit agreement.

Mark A. LeDoux, Chairman and Chief Executive Officer stated, "Our contract manufacturing business continues to grow through renewed interest from a variety of large companies and this bodes well for our continued strategy to achieve growth in sales and profitability in the years ahead.

Additionally, we also expect to generate new CarnoSyn® beta-alanine sales during our fourth quarter as we enter the recently opened Japanese market and launch SR CarnoSyn® in the Healthy Aging and Wellness distribution channels during early fiscal 2020."

Reconciliation of Non-GAAP Information

The GAAP results contained in this press release and the financial statement schedules attached to this press release have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP").  In addition to the Company's results prepared in accordance with GAAP, the Company provided information on a non-GAAP basis. The manner in which this non-GAAP information is derived is discussed below, and the Company has provided in the tables to this release a reconciliation of the non-GAAP information to the most directly comparable GAAP information. 

Net Income and EPS Adjusted for Non-Recurring Tax Expense. In order to make the fiscal year 2018 results comparable to fiscal year 2019, we have presented net income and EPS for the three and nine months ended March 31, 2018 on a non-GAAP basis by excluding discrete tax items of $3.3 million related to the 2017 U.S. Tax Act for both the three and nine month periods.  The following is a schedule reconciling our Adjusted Net Income and EPS to our GAAP Net Income and EPS.

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, future acquisitions, revenue profits and financial condition, our ability to 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

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SOURCE Natural Alternatives International, Inc.