Natural Alternatives International, Inc. Announces Fiscal 2010 Q4 and Full Year Results

SAN MARCOS, Calif., Sept. 17 /PRNewswire-FirstCall/ -- Natural Alternatives International, Inc. ("NAI") (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $4.1 million or $0.58 per share on net sales from continuing operations of $65.6 million for the fiscal year ended June 30, 2010.  The fiscal 2010 results include net income from discontinued operations of $157,000 or $0.02 per share.

Fiscal 2010 net sales from continuing operations decreased $8.4 million from $73.9 million for fiscal 2009. This decrease included a decline in contract manufacturing sales of $7.9 million due primarily to lower volumes of existing products in existing markets sold to our two largest customers. These sales decreases were partially offset by increased sales volumes from other existing customers, new customer sales and increased royalty income related to a license agreement for the distribution of Beta-Alanine from within our patent estate. Royalty income from Beta-Alanine sales increased 86% to $958,000 during fiscal 2010 as compared to $515,000 for fiscal 2009. Net sales from our branded products declined $470,000 during fiscal 2010 as compared to the prior fiscal year associated with the continued softening of the Pathway to Healing® product line. Net income from continuing operations for fiscal 2010 was $4.0 million or $0.56 per share as compared to a net loss of $220,000 for fiscal 2009 or $0.03 per share. Net income from continuing operations in fiscal 2010 included a tax benefit of $943,000 or $0.13 per share associated with the tax loss recognized as a result of the write-off of our tax basis in the stock of Real Health Laboratories, Inc. during fiscal 2010. This tax benefit was partially offset by tax expense of $193,000 related to our Swiss subsidiary.

Net sales from continuing operations for the fourth quarter ended June 30, 2010 totaled $14.4 million and represented a decrease of $5.1 million as compared to net sales of $19.4 million in the fourth quarter of fiscal 2009. Net income from continuing operations in the fourth quarter of fiscal 2010 was $218,000 or $0.03 per share as compared to net income of $1.2 million or $0.17 per diluted share in the fourth quarter of fiscal 2009. The decrease in net income from continuing operations was attributable primarily to lower sales of existing products to our two largest customers along with higher per unit manufacturing costs associated with lower production levels and increased foreign currency exchange losses. During fiscal 2010, our cost reduction program resulted in operating expense savings of approximately $2.9 million as compared to fiscal 2009.

There was no net income from discontinued operations in the fourth quarter of fiscal 2010 compared to a net loss of $115,000 or $0.02 per share in the fourth quarter of fiscal 2009. Overall, net income for the fourth quarter was $218,000 or $0.03 per share as compared to net income of $1.1 million or $0.16 per share in the comparable quarter last fiscal year.

As of June 30, 2010 NAI had cash and certificates of deposit of $8.5 million and working capital of $18.4 million compared to $4.7 million and $13.9 million, respectively, as of June 30, 2009. As of June 30, 2010, we had no debt outstanding and $3.9 million available under our working capital line of credit.

Mark A. LeDoux, Chairman and Chief Executive Officer, stated, "Our fiscal 2010 results marked a significant departure from recent years, and demonstrate a renewed focus on providing value to new and existing customers, both foreign and domestic.  In fiscal 2011, we expect to generate additional revenues through increased efforts to commercialize our international patent estate by us and others, as well as improved efficiencies from better inventory management and quality systems.  I am grateful for the level of dedication shown by all stakeholders in the company, and pledge continued efforts to help secure a bright future for our company even in the midst of economic challenges."

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 reduce operating costs and improve efficiencies, provide value to our customers, generate revenues from the commercialization of our patent estate, 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 – Kenneth Wolf, Chief Operating and Chief Financial Officer, Natural Alternatives International, Inc., at 760-736-7700 or [email protected]

SOURCE Natural Alternatives International, Inc.