Natural Alternatives International Reports 14% Net Sales Increase, Net Loss Reduces

Natural Alternatives International, Inc. (NAI) reported a net sales increase of 14% for the three months ended September 30, 2025, reaching $37.7 million compared to $33.2 million in the same period last year. The growth was primarily driven by an 18% rise in private-label contract manufacturing sales, attributed to increased orders from existing customers and new customer acquisitions. However, the company experienced a 34% decline in patent and trademark licensing revenue, which fell to $1.7 million from $2.5 million, mainly due to reduced raw material sales, although this was partially offset by sales of the new TriBsyn™ product.

In terms of profitability, NAI reported a gross profit of $4.4 million, a significant increase from $2.3 million in the prior year, resulting in a gross profit margin of 11.7%, up from 6.8%. The company recorded an income from operations of $284,000, a turnaround from a loss of $1.8 million in the same quarter of the previous year. Despite this operational improvement, NAI reported a net loss of $291,000, a notable reduction from a net loss of $1.98 million in the prior year, primarily due to increased interest expenses and unfavorable foreign exchange activity.

Operationally, NAI's total assets increased to $156.9 million as of September 30, 2025, up from $151.9 million at the end of the previous quarter. The company’s cash and cash equivalents decreased to $7.7 million, down from $12.3 million, reflecting cash used in operating activities. The company’s accounts receivable rose significantly, indicating a potential delay in collections, while inventory levels also increased, suggesting preparations for anticipated sales growth.

Strategically, NAI is focusing on expanding its product offerings and market reach. The company has invested in research and development, particularly for its CarnoSyn® product line, and launched the TriBsyn™ product, which aims to penetrate the Wellness and Healthy Aging markets. NAI is also negotiating with its lender regarding potential revisions to its credit agreement, as it anticipates challenges in meeting certain financial covenants in the upcoming quarters.

Looking ahead, NAI expects to continue its focus on leveraging its manufacturing capabilities and expanding its customer base. The company anticipates experiencing a net loss in the first half of fiscal 2026 but projects a return to profitability in the second half of the year. NAI remains committed to improving operational efficiencies and managing costs to enhance profitability while navigating the challenges posed by market conditions and regulatory changes.