Natural Alternatives International Reports $4.3 Million Net Loss Despite 23% Revenue Growth

Natural Alternatives International, Inc. (NAI) reported a net loss of $4.3 million for the three months ended March 31, 2026, compared to a loss of $2.2 million in the same period last year. Revenue for the quarter increased by 23% to $35.5 million, up from $28.8 million in the prior year, driven primarily by a 25% increase in private-label contract manufacturing sales. For the nine months ended March 31, 2026, net sales reached $108 million, a 13% increase from $96 million in the same period of the previous year. However, the company experienced a gross profit decline, with gross profit for the quarter falling to $383,000 from $1.8 million, reflecting increased costs associated with goods sold.

The financial performance reflects significant changes compared to the previous fiscal period, particularly in the private-label contract manufacturing segment, which saw a 14% increase in sales. This growth was attributed to increased orders from existing customers and new customer acquisitions. However, patent and trademark licensing revenue decreased by 11% to $5.3 million, primarily due to lower sales of instant release CarnoSyn® raw materials. The company noted that its largest customer accounted for 27% of total net sales in the nine months ended March 31, 2026, down from 35% in the prior year, indicating a diversification in its customer base.

Operationally, NAI has focused on expanding its product offerings, launching new products such as CarnoSyn® 4X and TriBsyn®, which are designed to enhance beta-alanine bioavailability without the side effects typically associated with traditional formulations. The company has also invested in research and development to support these new products. As of March 31, 2026, NAI reported a total of 6,275,229 shares of common stock outstanding, reflecting a slight increase from the previous fiscal period.

The company’s liquidity position has been impacted, with cash and cash equivalents decreasing to $9.2 million from $12.3 million as of June 30, 2025. NAI reported net cash used in operating activities of $7.9 million for the nine months ended March 31, 2026, compared to cash provided of $2.6 million in the prior year. The increase in cash outflow was primarily due to changes in accounts receivable and inventory levels. In response to its financial challenges, NAI has entered into a new Loan and Security Agreement with Legacy Corporate Lending, LLC, which includes a term loan of $11 million and a working capital line of credit of up to $20 million.

Looking ahead, NAI anticipates continued revenue growth in the fourth quarter of fiscal 2026, although it expects to incur a net loss for the full year. The company plans to leverage its manufacturing capabilities to attract new customers and expand its market presence in the sports nutrition and wellness sectors. Management remains focused on improving operational efficiencies and managing costs to enhance profitability while navigating the challenges posed by market conditions and customer demand fluctuations.