Natural Alternatives International Reports Q2 Fiscal 2026 Results with Increased Revenue but Net Loss

Natural Alternatives International, Inc. (NAI) reported its financial results for the second quarter of fiscal 2026, revealing a net loss of $2.6 million for the three months ended December 31, 2025, compared to a loss of $2.2 million in the same period last year. Revenue for the quarter increased by 2% to $34.8 million, up from $34.1 million in the prior year. For the six months ended December 31, 2025, net sales reached $72.5 million, an 8% increase from $67.2 million in the same period of the previous year. The growth was primarily driven by a 9% increase in private-label contract manufacturing sales, attributed to higher orders from existing customers and new customer acquisitions.

The company experienced a notable improvement in gross profit, which rose to $2.5 million for the quarter, a 49% increase from $1.7 million in the prior year. This increase in gross profit margin was primarily due to enhanced factory utilization and increased sales. However, selling, general, and administrative expenses slightly decreased to $4.3 million from $4.4 million year-over-year, reflecting reduced legal fees and credit loss provisions. Despite these improvements, NAI reported a loss from operations of $1.8 million, an improvement from a loss of $2.8 million in the same quarter last year.

In terms of operational developments, NAI continues to focus on expanding its product offerings, particularly with the introduction of its new TriBsyn™ product, which aims to enhance beta-alanine bioavailability. The company is also investing in research and development to further diversify its product line and improve market penetration. As of December 31, 2025, NAI had 6,176,778 shares of common stock outstanding, with a treasury stock of 3,328,128 shares.

The company’s liquidity position remains a concern, as it reported cash and cash equivalents of $3.8 million, down from $12.3 million at the end of the previous fiscal year. NAI utilized $10.4 million in cash for operating activities during the first half of fiscal 2026, compared to $3.4 million in the same period last year. The increase in cash outflow was primarily due to changes in accounts receivable and inventory levels. NAI has a credit facility with a borrowing capacity of $10 million, of which $5.8 million was outstanding as of December 31, 2025.

Looking ahead, NAI anticipates continued challenges in achieving profitability due to expected declines in customer sales forecasts and delays in new product launches. The company is actively seeking to negotiate a new asset-based lending facility to enhance its financial flexibility and support anticipated business growth. Despite the current challenges, NAI remains committed to leveraging its manufacturing capabilities and expanding its market presence in the nutritional supplement industry.