SAN MARCOS, Calif., Feb. 12, 2013 /PRNewswire/ -- Natural Alternatives International, Inc. ("NAI") (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $102,000 or $0.01 per diluted share on net sales of $13.7 million for the quarter ended December 31, 2012.

Net sales for the three months ended December 31, 2012 decreased by $2.5 million or 15.3% from $16.2 million recorded in the comparable prior year period. For the quarter ended December 31, 2012, contract manufacturing sales decreased $2.5 million or 16.7% from the comparable quarter last year due primarily to lower sales of established products associated with lower consumer demand, delayed customer product launches and customer inventory reduction programs. Patent royalty and trademark licensing revenue increased 14.4% to $824,000 during the quarter ended December 31, 2012 as compared to the prior year period. Royalty and licensing revenue was derived through the sale and licensing of the ingredient known as beta-alanine sold under our CarnoSyn® trade name. Our branded products sales totaled $338,000 for the second quarter of fiscal 2013 as compared to $403,000 for the comparable prior year period.

Net sales for the six months ended December 31, 2012 decreased 12.6% to $30.1 million from $34.5 million recorded in the comparable prior year period. Contract manufacturing sales during the first six months of fiscal 2013 decreased $4.4 million or 13.8% from the comparable prior year period and patent and trademark licensing revenue increased $144,000 or 7% during this same period. Our branded products sales decreased $124,000 or 15.4% for the first six months of fiscal 2013.

Net income for the first six months of fiscal 2013 totaled $799,000 or $0.12 per diluted share compared to net income of $2.3 million or $0.33 per diluted share in the comparable prior year period. The decline in net income was primarily attributable to decreased contract manufacturing sales, increased raw material and manufacturing production costs, unfavorable foreign currency exchange rates and increased patent litigation and prosecution expenses which totaled $1.4 million for the first six months of fiscal 2013.

As of December 31, 2012, we had cash of $17.0 million and working capital of $27.9 million compared to $14.5 million and $27.7 million, respectively, as of June 30, 2012. As of December 31, 2012, we had $5.5 million available under our line of credit agreements.

Mark A. LeDoux, Chairman and Chief Executive Officer commented, "The quarter ending December 2012 was clearly disappointing in terms of revenue and profitability. The trend for the current period remains difficult as well given the uncertainty of the timing of sales associated with our current customers' new product launches and planned initial sales of new customer products."

"We were however, very pleased to recently receive notice of a positive ruling by the Chief Judge of the Delaware Federal District Court, which granted NAI's motion to dismiss a declaratory judgment patent case filed against it in Delaware in favor of the action properly brought by NAI in Houston, TX. With this recent development, we believe we are well positioned to move forward with our allegations in the Texas case against a significant infringer of our beta-alanine patent estate."

"On December 11, 2012 we received our newest patent in the USA related to sustained release CarnoSyn® beta-alanine, US Patent Number 8329207, and are happy to announce that we received a notice of allowance on December 13, 2012 that a second sustained release CarnoSyn® beta-alanine patent has been approved for issuance by the US Patent Office." 

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, our ability to expand our contract manufacturing business and patent estate, comply with Good Manufacturing Practices and other applicable regulations and standards, improve stockholder value, remain debt free, develop, maintain or increase sales to new and existing customers, and successfully maintain and enforce our intellectual property rights, 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.

CONTACT – Kenneth Wolf, Chief Operating and Chief Financial Officer, Natural Alternatives International, Inc., at 760-736-7700 or investor@nai-online.com.

Web site: http://www.nai-online.com

SOURCE Natural Alternatives International, Inc.