CARLSBAD, Calif., May 15, 2017 /PRNewswire/ -- Natural Alternatives International, Inc. ("NAI") (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $745,000, or $0.11 per diluted share, on net sales of $25.1 million for the quarter ended March 31, 2017.

Net sales during the three months ended March 31, 2017 decreased $4.9 million, or 16.2%, from $30.0 million recorded in the comparable prior year period.  For the quarter ended March 31, 2017, private label contract manufacturing sales decreased $5.9 million, or 24.3%, from the comparable quarter last year.  Our third quarter fiscal 2017 contract manufacturing sales were unfavorably impacted due to reductions in orders related to the Asian and European markets. CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue increased 19.6% to $6.6 million during the third quarter of fiscal 2017 as compared to $5.5 million for the third quarter of fiscal 2016.  The increase in CarnoSyn® beta-alanine revenue was primarily due to growth in our customer base and increased material shipments. 

Net sales during the nine months ended March 31, 2017 increased $11.2 million, or 14.3%, from $78.5 million recorded in the comparable prior year period.  For the nine months ended March 31, 2017, private label contract manufacturing sales increased $7.4 million, or 11.9%, from the comparable period last year.  The increase is due to higher volumes of existing products to existing customers and new product sales to existing customers.  CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue increased 23.9% to $20.0 million during the first three quarters of fiscal 2017 as compared to $16.1 million for the comparable prior year period.  The increase in CarnoSyn® beta-alanine revenue was primarily due to growth in our customer base and increased material shipments. 

On an annualized basis, we continue to expect our consolidated fiscal 2017 revenue growth percentage to be approximately 5% to 10% due to reductions in contract manufacturing orders and customer forecasts from Australia, Asia, and Europe.  A majority of this expected decline occurred in our third fiscal quarter ending March 31, 2017.  We expect a smaller decline in our fourth fiscal quarter. We believe this international revenue decline will reverse during fiscal 2018.  With respect to our CarnoSyn® beta-alanine business, we expect our current sales levels to continue for the balance of this fiscal year and the foreseeable future as we continue to expand our research, our patent estate and our client base.

Net income for the first nine months of fiscal 2017 was $5.7 million, or $0.86 per diluted share, compared to net income of $6.1 million, or $0.92 per diluted share, in the comparable prior year period. The comparable results in fiscal 2016 were favorably impacted by the sale of our domestic corporate headquarters in San Marcos, CA, resulting in a one-time gain on the sale, net of tax, equal to $1.0 million, or $0.15 per diluted share.  Excluding this transaction, our net income from recurring business during the first nine months of fiscal 2016 was $5.1 million, or $0.77 per diluted share. The increase in net income in the first nine months of fiscal 2017 compared to the first nine months of fiscal 2016 excluding the one-time gain on sale in fiscal 2016, was primarily attributable to favorable foreign currency activity related to our private label contract manufacturing segment and increased product margin from CarnoSyn® beta-alanine sales due to increased sales and lower supply chain costs. These increases were partially offset by increased legal costs associated with our efforts to enforce compliance with our patents related to instant release CarnoSyn® and to protect our CarnoSyn® trade name in the market place against parties who are using it without our consent.

As of March 31, 2017, NAI had cash of $22.6 million and working capital of $40.6 million compared to $19.7 million and $36.7 million, respectively, as of June 30, 2016.  As of March 31, 2017, we had $10.0 million available under our line of credit agreements.

Mark A. Le Doux, Chairman and Chief Executive Officer stated, "The reduction in contract manufacturing requirements for the third fiscal quarter, primarily from the Asian and European markets was largely anticipated.  Continued growth in other contract manufacturing markets, and in our CarnoSyn® division helped offset the decline. Our current quarter sales have seen a resurgence in demand from many of these areas, and our near-term growth expectations remain unchanged.

"The notice of allowance of an additional CarnoSyn® patent and the filing of an additional patent application announced earlier in the quarter has helped to bolster our intellectual property portfolio and CarnoSyn® beta-alanine sales in this expanding market.  With the installation of new equipment both in the USA and Lugano, we are well positioned to handle future expected increases in contract manufacturing demand. We anticipate the next fiscal year will provide greater growth and enhanced visibility globally for both our contract manufacturing and CarnoSyn® business segments."

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, our future 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 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.