Natural Alternatives International Reports Increased Sales but Higher Net Loss for Quarter Ended March 31, 2025

Natural Alternatives International, Inc. (NAI) reported its financial results for the three and nine months ended March 31, 2025, revealing a net loss of $2.2 million for the quarter, compared to a loss of $1.6 million in the same period last year. For the nine-month period, the net loss increased to $6.4 million from $5.3 million. The company's net sales for the third quarter reached $28.8 million, a 14% increase from $25.1 million in the prior year, while year-to-date sales totaled $96.0 million, up 14% from $84.3 million. The growth was primarily driven by a 20% increase in private-label contract manufacturing sales, attributed to higher orders from existing customers and new customer acquisitions.

Despite the increase in sales, NAI's gross profit margin declined slightly, with gross profit for the quarter at $1.8 million, down from $1.9 million a year earlier. The gross profit margin fell to 6.3% from 7.6%, reflecting rising costs in manufacturing, including labor and materials. Selling, general, and administrative expenses increased to $3.9 million for the quarter, up from $3.9 million in the previous year, primarily due to higher compensation and legal expenses. The company reported a loss from operations of $2.1 million for the quarter, compared to a loss of $2.0 million in the same period last year.

In terms of strategic developments, NAI has focused on expanding its product offerings, particularly in the wellness and healthy aging markets. The company launched a new product, TriBsyn™, which aims to enhance the bioavailability of beta-alanine, a key ingredient in its product line. This product is expected to appeal to a broader customer base, including older adults and those following vegetarian or vegan diets. NAI continues to invest in research and development to refine its formulations and explore additional patentable products.

Operationally, NAI reported a decrease in accounts receivable, which provided $5.2 million in cash during the nine months ended March 31, 2025, compared to a cash outflow of $4.2 million in the prior year. The company also experienced a cash outflow of $2.7 million related to inventory changes, contrasting with a cash inflow of $8.6 million in the previous year. As of March 31, 2025, NAI had $10.6 million in cash and cash equivalents, with $8.5 million of borrowing capacity available on its credit facility.

Looking ahead, NAI anticipates continued challenges in achieving profitability due to ongoing operational costs and market conditions. The company is working on finalizing an amended credit agreement with Wells Fargo to address compliance issues related to financial covenants. NAI's management remains focused on leveraging its manufacturing capabilities, expanding its customer base, and enhancing its product offerings to drive future growth.