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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 9, 2022

 

NATURAL ALTERNATIVES INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

Commission File Number:  000-15701

 

Delaware	84-1007839
(State or other jurisdiction of	(IRS Employer
incorporation)	Identification No.)

 

 

1535 Faraday Avenue, Carlsbad, CA 92008

(Address of principal executive offices, including zip code)

 

760-736-7700

(Registrant’s telephone number, including area code)

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common	NAII	NASDAQ

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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ITEM 7.01 REGULATION FD DISCLOSURE.

 

The Company has updated its investor presentation on its website. The presentation can be found on the investor relations tab of the website at https://www.nai-online.com/our-company/investors/. A copy of the Investor Presentation is attached hereto as Exhibit 99.1 and incorporated by reference herein.

 

On February 9, 2022, NAI issued a press release announcing its second quarter financial results, and the addition of an updated investor presentation to its website. A copy of the press release is attached hereto as Exhibit 99.2 and incorporated by reference herein.

 

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

 

(d) Exhibits.

 

99.3         Investor Presentation February 2022

 

99.4          NAI Press Release issued on February 9, 2022.

 

104           Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

		Natural Alternatives International, Inc. a Delaware corporation
Date: February 9, 2022	By:	/s/ Mike Fortin
		Mike Fortin, Chief Financial Officer

 

- 2 -

Exhibit 99.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.4

 

 

Natural Alternatives International, Inc.

 

Announces 2022 Q2 and YTD Results

 

●

$37.7 million Net Sales, $1.8 million Net Income, $0.30 diluted EPS

 

CARLSBAD, CALIF, February 9, 2022 /PRNewswire/ --Natural Alternatives International, Inc. ("NAI") (Nasdaq: NAII), a leading formulator, manufacturer, and marketer of customized nutritional supplements, today announced net income of $1.8 million, or $0.30 per diluted share, on net sales of $37.7 million for the second quarter of fiscal year 2022 compared to net income of $3.6 million, or $0.57 per diluted share, in the second quarter of the prior fiscal year.

 

Net sales during the three months ended December 31, 2021, decreased $10.4 million, or 21.5%, to $37.7 million as compared to $48.1 million recorded in the comparable prior year period. During the same period, private-label contract manufacturing sales decreased 25.7% to $33.7 million. Private-label contract manufacturing sales decreased primarily due to a 48% reduction in sales to our largest customer, combined with supply chain and labor constraints that negatively affected our production capacity during the quarter. Sales backlog for the quarter ended December 31, 2021 exceeded $12.0 million primarily related to supply chain, labor shortages, and logistical constraints.

 

CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue increased 46.9% to $4.1 million during the second quarter of fiscal year 2022, as compared to $2.8 million for the second quarter of fiscal year 2021. The increase in patent and trademark licensing revenue during the second quarter of fiscal 2022 was primarily due to increased shipments to existing customers, combined with sales to new customers, and higher average sales prices. We believe increased sales are largely related to athletic activities and gyms reopening in accordance with easing COVID-19 restrictions across the USA as compared to significant restrictions in such activities in the first and second quarters of fiscal 2021.

 

 

Net income for the six months ended December 31, 2021 was $5.1 million, or $0.81 per diluted share, compared to net income of $5.9 million, or $0.91 per diluted share, for the six months ended December 31, 2020.

 

Net sales during the six months ended December 31, 2021 decreased $11.7 million, or 13.4%, from $87.8 million recorded in the comparable prior year period. For the six months ended December 31, 2021, private-label contract manufacturing sales decreased $15.1 million, or 18.3%, from the comparable period last year. CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue increased 61.8% to $8.8 million during the first six months of fiscal 2022, as compared to $5.4 million for the first six months of fiscal 2021.

 

Based on our current sales order volumes and forecasts we have received from our customers, along with the continued challenges with supply chain and staffing shortages, including challenges from COVID-19 absences, we now anticipate our fiscal 2022 consolidated net sales will be flat to slightly up as compared to fiscal 2021. We also anticipate we will generate operating income between 8.0% and 11.0% of net sales for our fiscal year ending June 30, 2022. As we previously estimated it would, sales and profitability during the first half of fiscal 2022 declined when compared to the same period of fiscal 2021 primarily related to lower sales to our largest contract manufacturing customer. During the second half of fiscal 2022, we expect net sales to increase 10.0% to 13.0% as compared to the same period in fiscal 2021, and operating income to increase to between 8.0% and 11.0% of net sales. The improvement in net sales and operating profitability is expected to be generated from continued growth from sales and improved sales mix and staffing levels.

 

As of December 31, 2021, we had cash of $19.4 million and working capital of $54.1 million, compared to $32.1 million and $58.3 million respectively, as of June 30, 2021. As of December 31, 2021, we had $20.0 million available under our line of credit agreement.

 

Mark A. Le Doux, Chairman and Chief Executive Officer of NAI stated, “Our results for the second quarter and first half of fiscal 2022 were in line with our expectations despite continuing supply chain and labor challenges in addition to a decline in sales to our largest customer. Our backlog going into the third quarter remains strong and we are working hard to add staff in order to support our anticipated sales growth in the second half of the year while also maneuvering the daily reality of COVID-19. We also brought online new blending capacity in our Vista, CA plant that will increase our operational throughput and is necessary to support current demand and future growth expectations.”

 

 

“We believe our balance sheet is still a significant strength for us and we will continue to utilize our recently increased stock buyback program as long as our stock trades at levels we believe are below the true value of our Company.”

 

“While our expected growth in the second half of the year is not as robust as we previously anticipated, we still see significant opportunities with both existing and new customers. Our team is working hard to navigate these near-term challenges and position the Company for long term growth and profitability.”

 

An updated investor presentation will be posted to the investor relations page on our website later today (https://www.nai-online.com/our-company/investors/).

 

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 ability to develop, maintain or increase sales to new and existing customers, our ability to attract and retain sufficient labor, COVID-19 and related impacts on the availability of raw materials, our future revenue profits and financial condition, 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.

 

SOURCE - Natural Alternatives International, Inc.

 

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)																(Unaudited)
		Three Months Ended																Six Months Ended
		December 31,																December 31,
		2021								2020								2021								2020
NET SALES		$	37,727				100.0	%			48,083				100.0	%			76,067				100.0	%			87,809				100.0	%
Cost of goods sold			31,181				82.6	%			38,409				79.9	%			61,240				80.5	%			72,130				82.1	%
Gross profit			6,546				17.4	%			9,674				20.1	%			14,827				19.5	%			15,679				17.9	%
Selling, general & administrative expenses			4,145				11.0	%			4,282				8.9	%			8,198				10.8	%			8,202				9.3	%
INCOME FROM OPERATIONS			2,401				6.4	%			5,392				11.2	%			6,629				8.7	%			7,477				8.5	%
Other expense, net			(9	)			0.0	%			(806	)			-1.7	%			(35	)			0.0	%			(1,127	)			-1.3	%
INCOME BEFORE TAXES			2,392				6.3	%			4,586				9.5	%			6,594				8.7	%			6,350				7.2	%
Income tax expense			545								954								1,491								460
NET INCOME		$	1,847							$	3,632							$	5,103							$	5,890
NET INCOME PER COMMON SHARE:
Basic:		$	0.30							$	0.58							$	0.82							$	0.93
Diluted:		$	0.30							$	0.57							$	0.81							$	0.91
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic			6,212								6,270								6,250								6,344
Diluted			6,256								6,405								6,304								6,438

 

 

NATURAL ALTERNATIVES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
		(unaudited)
		December 31,				June 30,
		2021				2021
ASSETS
Cash and cash equivalents		$	19,352			$	32,133
Accounts receivable, net			15,065				17,946
Inventories, net			31,828				27,006
Other current assets			4,316				3,263
Total current assets			70,561				80,348
Property and equipment, net			39,741				22,271
Operating lease right-of-use assets			14,542				15,877
Other noncurrent assets, net			2,514				1,785
Total Assets		$	127,358			$	120,281
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued liabilities			17,874				23,717
Mortgage note payable			9,932				-
Long-term liability - operating leases			15,151				16,481
Total Liabilities			42,957				40,198
Stockholders’ Equity			84,401				80,083
Total Liabilities and Stockholders’ Equity		$	127,358			$	120,281