Natural Alternatives International, Inc. Announces Fiscal 2011 Results

SAN MARCOS, Calif., Sept. 22, 2011 /PRNewswire/ -- Natural Alternatives International, Inc. ("NAI") (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $5.1 million or $0.72 per share on net sales from continuing operations of $55.9 million for the fiscal year ended June 30, 2011.  The fiscal 2011 results include net income from discontinued operations of $71,000 or $0.01 per share compared to $157,000 or $0.02 per share for the prior year period.

Fiscal 2011 net sales from continuing operations decreased $9.7 million from $65.6 million for fiscal 2010. This decrease included a decline in contract manufacturing sales of $9.3 million due primarily to lower volumes of existing products 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 license agreements for the use of our beta-alanine related patents and trademarks. Royalty and licensing income from beta-alanine sales and supply agreements increased 82% to $1.7 million during fiscal 2011 as compared to $958,000 for fiscal 2010. Net sales from our branded products declined $382,000 during fiscal 2011 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 2011 was $5.0 million or $0.71 per share as compared to net income of $4.0 million for fiscal 2010 or $0.56 per share. Net income from continuing operations for fiscal 2011 included a net tax benefit of $2.7 million or $0.38 per share associated with the reduction of a valuation allowance on our net deferred tax assets. Net income from continuing operations for fiscal 2010 included a net 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.

Net sales from continuing operations for the fourth quarter ended June 30, 2011 and June 30, 2010 totaled $14.4 million. Net income from continuing operations in the fourth quarter of fiscal 2011 was $3.1 million or $0.43 per share as compared to net income of $218,000 or $0.03 per share in the fourth quarter of fiscal 2010. The increase in net income from continuing operations was attributable primarily to a net tax benefit of $3.1 million associated with the reduction in a valuation reserve on our net deferred tax assets.

Income from discontinued operations in the fourth quarter of fiscal 2011 totaled $71,000 or $0.01 per share as compared to zero in the fourth quarter of fiscal 2010. Overall, net income for the fourth quarter of fiscal 2011 was $3.1 million or $0.44 per share as compared to net income of $218,000 or $0.03 per share in the comparable prior year quarter.

As of June 30, 2011, NAI had cash and cash equivalents of $15.5 million and working capital of $22.9 million compared to $8.5 million and $18.1 million, respectively, as of June 30, 2010. As of June 30, 2011, we had no debt outstanding and $5.8 million available under our working capital lines of credit.

Mark A. LeDoux, Chairman and Chief Executive Officer, stated,  "With the implementation of Good Manufacturing Practices for Dietary Supplement manufacturing under U.S. law, NAI has enjoyed greater opportunities to partner with domestic and international clients.  We look forward to expanding our business interests with existing customers, as well as adding new customers in the year ahead.  As the supply interruption to our CarnoSyn® beta-alanine appears to have come to an end, we anticipate continued growth of this business and securing even more compliance with our intellectual property rights. I am pleased with the results of the past fiscal year and look forward to even greater opportunities for NAI in the year ahead."

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 future financial and operating results, including the amount of our future revenue and profits and our future financial condition, our ability to 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 the availability of beta-alanine, 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]

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

SOURCE Natural Alternatives International, Inc.