Natural Alternatives International, Inc. Announces Fiscal 2012 Q2 Results
SAN MARCOS, Calif., Feb. 13, 2012 /PRNewswire/ — Natural Alternatives International, Inc. (“NAI”) (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $785,000 or $0.11 per diluted share on net sales of $16.2 million for the quarter ended December 31, 2011. These results included a full effective tax rate in the second quarter of fiscal 2012 as compared to a lower rate in the prior year period.
Net sales for the three months ended December 31, 2011 increased $1.4 million or 9.5% from $14.8 million recorded in the comparable prior year period. For the quarter ended December 31, 2011, contract manufacturing sales increased $1.1 million or 7.5% from the comparable quarter last year due primarily to higher sales to existing customers. Patent and trademark licensing revenue increased to $720,000 or 139% during the quarter ended December 31, 2011 as compared to $301,000 for the prior year period. This licensing revenue was derived through the sale of the ingredient known as beta-alanine sold under our CarnoSyn® trade name. These increases were partially offset by a decline in our branded products sales, which totaled $403,000 for the second quarter of fiscal 2012 as compared to $466,000 for the comparable prior year period.
Net sales for the six months ended December 31, 2011 increased to $34.5 million or 22.7% from $28.1 million recorded in the comparable prior year period. Contract manufacturing sales during the first six months of fiscal 2012 increased $5.1 million or 19.3% from the comparable prior year period and patent and trademark licensing revenue increased $1.4 million or 233% during this same period. These increases were partially offset by a decline in our branded products sales, which totaled $804,000 for the first six months of fiscal 2012 as compared to $959,000 for the comparable prior year period.
Net income for the first six months of fiscal 2012 totaled $2.3 million or $0.33 per diluted share compared to net income of $1.8 million or $0.25 per diluted share in the comparable prior year period. The increase was primarily attributable to increased contract manufacturing sales and patent and trademark licensing revenue partially offset by increased income tax expense related to the full utilization of our federal net operating loss carryforward during the first quarter of fiscal 2012.
As of December 31, 2011, we had cash of $11.2 million and working capital of $26.2 million compared to $15.5 million and $22.9 million, respectively, as of June 30, 2011. As of December 31, 2011, we had $5.5 million available under our line of credit agreements.
Mark A. LeDoux, Chairman and Chief Executive Officer commented, “We are pleased to recognize our twelfth consecutive quarter of operational earnings, while remaining debt free since June 2010. We believe we remain poised to secure additional meaningful customer relationships through this fiscal year especially given challenges faced by some of our competitors. The U.S. Food and Drug Administration has expanded its efforts to enforce its federal regulations and standards, and we believe many companies are discovering that they are not adequately prepared to comply with current regulations.
“With the addition of our newest U.S. patent in late November 2011, we believe we have also strengthened and expanded our intellectual property estate involving CarnoSyn® beta-alanine. As we seek to expand the value of the estate, we will also continue to actively enforce our patent rights against willful violators. We have every reason to believe the legal system will affirm our patents, and we intend to continue to enforce our patent rights against those persons or firms who infringe upon them.”
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 expand our contract manufacturing business and patent estate, comply with Good Manufacturing Practices and other applicable regulations and standards, improve stockholder value, remain debt free, develop, maintain or increase sales to new and existing customers, and successfully maintain and enforce our intellectual property rights, 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 and Quarterly Report on Form 10-Q.
CONTACT – Kenneth Wolf, Chief Operating and 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)
Three Months Ended Six Months Ended
December 31, December 31,
------------ ------------
2011 2010 2011 2010
---- ---- ---- ----
NET SALES $16,161 100.0% $14,754 100.0% $34,502 100.0% $28,109 100.0%
Cost of goods sold 12,808 79.3% 11,905 80.7% 26,466 76.7% 22,585 80.3%
------ ---- ------ ---- ------ ---- ------ ----
Gross profit 3,353 20.7% 2,849 19.3% 8,036 23.3% 5,524 19.7%
Selling, general &
administrative expenses 2,127 13.2% 1,735 11.8% 4,463 12.9% 3,475 12.4%
----- ----- ----- -----
INCOME FROM OPERATIONS 1,226 7.6% 1,114 7.6% 3,573 10.4% 2,049 7.3%
Other (expense) income,
net (27) -0.2% (46) -0.3% 56 0.2% 2 0.0%
--- ---- --- ---- --- --- --- ---
INCOME BEFORE TAXES 1,199 7.4% 1,068 7.2% 3,629 10.5% 2,051 7.3%
Income tax expense 414 214 1,316 285
--- --- ----- ---
NET INCOME $785 $854 $2,313 $1,766
==== ==== ====== ======
NET INCOME PER COMMON
SHARE:
Basic: $0.11 $0.12 $0.33 $0.25
===== ===== ===== =====
Diluted: $0.11 $0.12 $0.33 $0.25
===== ===== ===== =====
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 6,971 7,110 6,992 7,110
===== ===== ===== =====
Diluted 6,985 7,120 7,000 7,121
===== ===== ===== =====
NATURAL ALTERNATIVES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, June 30,
2011 2011
---- ----
ASSETS
Cash and cash equivalents $11,193 $15,461
Accounts receivable, net 4,888 3,287
Inventories, net 12,693 6,499
Deferred income taxes 1,639 1,639
Other current assets 1,935 942
----- ---
Total current assets 32,348 27,828
Property and equipment, net 10,826 11,411
Deferred income taxes 1,388 1,388
Other noncurrent assets, net 700 517
--- ---
Total Assets $45,262 $41,144
======= =======
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable and accrued
liabilities $6,118 $4,947
Deferred rent 611 719
--- ---
Total Liabilities 6,729 5,666
----- -----
Stockholders' Equity 38,533 35,478
------ ------
Total Liabilities and
Stockholders' Equity $45,262 $41,144
======= =======
SOURCE Natural Alternatives International, Inc.