SAN MARCOS, Calif., Sept. 9 /PRNewswire/ --Natural Alternatives International, Inc. ("NAI") (Nasdaq: NAII), a leading formulator and manufacturer of customized nutritional supplements, reported net income of $1.1 million or $0.18 per diluted share on revenue of $56.0 million for its fiscal year ended June 30, 2003.

Fiscal 2003 revenue increased 12% to $56.0 million from $50.0 million in the prior fiscal year. The revenue growth resulted from a 22% increase in Direct-to-Consumer ("DTC") sales and a 10% increase in contract manufacturing sales. Income from operations increased $884,000 to $1.2 million from $285,000 in the prior fiscal year. Excluding the effects of litigation settlement proceeds and the income tax refund of $701,000 in the prior fiscal year, net income increased $1.1 million to $880,000 or $0.15 per diluted share from a net loss of ($232,000) or ($0.04) per share in the prior fiscal year. Net income as reported was $1.1 million or $0.18 per diluted share compared to $3.9 million or $0.67 per diluted share in the prior fiscal year. Fiscal 2003 and 2002 results included receipt of litigation settlement proceeds of $225,000 and $3.4 million, respectively.

Fourth quarter revenue increased 10% to $16.1 million from $14.7 million for the comparable quarter last year. The revenue growth resulted from an 11% increase in contract manufacturing sales and a 3% increase in DTC sales. Income from operations decreased $229,000 to $300,000 from $529,000 for the same period of the prior fiscal year. Excluding the effect of the prior year litigation settlement proceeds of $2.4 million and the income tax refund, fourth quarter net income decreased $356,000 to $247,000 or $0.04 per diluted share compared to $603,000 or $0.10 per diluted share for the same period of the prior fiscal year. Overall, fourth quarter net income as reported decreased $3.5 million to $247,000 or $0.04 per diluted share from $3.7 million or $0.64 per diluted share for the same period of the prior fiscal year.

As of June 30, 2003, NAI had cash and working capital of approximately $5.5 million and $12.3 million, respectively, compared to $640,000 and $8.7 million, respectively, at June 30, 2002.

Chairman and CEO Mark LeDoux commented, " We are encouraged as we conclude fiscal 2003 by recording our fifth consecutive quarter of sustained income from operations. Our efforts to develop relationships with new contract manufacturing customers while strengthening our position with existing contract manufacturing customers are beginning to produce results. We anticipate moderate net sales growth for the first quarter of fiscal 2004 from securing new customers, increasing our production for existing customers and growing our DTC business."

President Randell Weaver noted that, "During the fiscal fourth quarter we increased investment in marketing our DTC brands, strengthening our resources to insure regulatory compliance and conducting clinical studies to validate product efficacy. We are committing to continue these investments to provide long-term revenue growth while managing our costs to maintain profitability in the near term. Additionally, our operating results and capitalization allow us to begin evaluating expansion opportunities that could increase our product lines, enhance our manufacturing capabilities or reduce our risks associated with reliance on a limited number of customers."

NAI, headquartered in San Marcos, California, is a leading formulator and manufacturer of nutritional supplements that provides strategic partnering services to its customers. The Company's comprehensive partnership approach offers a wide range of innovative nutritional products and services to the client 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 the Company's intentions, expectations and beliefs concerning future events, including, among other things, expectations and beliefs with respect to future financial and operating results and the ability to sustain profitability, maintain adequate financing, improve liquidity, maintain revenue growth, and implement its strategic plan. The Company wishes 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. The Company'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 the Company with the Securities and Exchange Commission, including NAI's most recent Quarterly Report on Form 10Q and Annual Report on Form 10-K.

     CONTACT - John R. Reaves, Chief Financial Officer, Natural Alternatives
               International, Inc., 760-744-7340 or info@nai-online.com.



                   NATURAL ALTERNATIVES INTERNATIONAL, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In thousands)

                                                     June 30,        June 30,
                                                       2003            2002
                                                     ________        ________

    ASSETS
    Cash and cash equivalents                         $5,482           $640
    Restricted cash                                       --          1,500
    Accounts receivable, net                           5,668          3,536
    Inventories, net                                   7,845          7,871
    Income tax refund receivable                          --            701
    Other current assets                                 766            604
                                                     ________        ________

      Total current assets                            19,761         14,852
    Property and equipment, net                       10,820         12,439
    Related parties notes receivable                      29            118
    Other assets                                         114            101
                                                     ________        ________

      Total Assets                                   $30,724        $27,510
                                                     ========        ========

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities                               $7,440         $6,127
    Long-term debt, less current installments          2,386          1,576
    Long-term pension liability                          121            199
                                                     ________        ________
      Total Liabilities                                9,947          7,902
                                                     ________        ________
    Stockholders' Equity                              20,777         19,608
                                                     ________        ________

      Total Liabilities and Stockholders' Equity     $30,724        $27,510
                                                     ========        ========



               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except share and per share data)

                             Three months ended              Year ended
                                  June 30,                    June 30,
                           _______________________    _______________________
                             2003          2002         2003          2002
                         __________    __________    __________   __________
                                 (Unaudited)
    NET SALES              $16,061       $14,652      $55,962       $50,037
    Cost of goods sold      12,414        11,300       42,781        39,068
                         __________    __________    __________   __________
    Gross profit             3,647         3,352       13,181        10,969
    Selling, general &
     administrative
     expenses                3,347         2,823       12,012        10,684
                         __________    __________    __________   __________
    INCOME FROM OPERATIONS     300           529        1,169           285
    Other income (expense)     (27)        2,480          (17)        2,952
                         __________    __________    __________   __________
    INCOME BEFORE
     INCOME TAXES              273         3,009        1,152         3,237
    Provision for
     (benefit from)
     income taxes               26          (705)          47          (642)
                         __________    __________    __________   __________
    NET INCOME                $247        $3,714       $1,105        $3,879
                         ==========    ==========    ==========   ==========
    NET INCOME PER
     COMMON SHARE:
    Basic                    $0.04         $0.64        $0.19         $0.67
                         ==========    ==========    ==========   ==========
    Diluted                  $0.04         $0.64        $0.18         $0.67
                         ==========    ==========    ==========   ==========
    WEIGHTED AVERAGE
     COMMON SHARES OUTSTANDING:
    Basic shares         5,815,132     5,785,024    5,809,140     5,787,712
                         ==========    ==========    ==========   ==========
    Diluted shares       6,071,709     5,821,026    6,021,155     5,798,453
                         ==========    ==========    ==========   ==========

SOURCE Natural Alternatives International, Inc.