Natural Alternatives International, Inc. Announces 2025 Q3 and YTD Results

Rhea-AI Summary

Natural Alternatives International (NAII) reported its Q3 2025 financial results with mixed performance. The company posted a net loss of $2.2 million ($0.37 per share) on net sales of $28.8 million, compared to a loss of $1.6 million in Q3 2024. While total sales increased 14% year-over-year, driven by a 20% growth in private-label contract manufacturing to $27.1 million, CarnoSyn® beta-alanine revenue declined 36% to $1.7 million. For the nine months ended March 31, 2025, net sales grew 14% to $96.0 million, but net losses widened to $6.4 million. The company faced challenges from factory underutilization, increased operating expenses, and higher manufacturing costs. As of March 31, 2025, NAII had $10.6 million in cash and working capital of $35.2 million, with $8.5 million available on its credit facility.

Positive

• Net sales increased 14% YoY to $28.8 million in Q3 2025
• Private-label contract manufacturing sales grew 20% to $27.1 million
• Nine-month net sales rose 14% to $96.0 million
• Strong working capital position of $35.2 million
• New product TriBsyn™ showing promising market interest

Negative

• Net loss widened to $2.2 million in Q3 2025 from $1.6 million in Q3 2024
• CarnoSyn® beta-alanine revenue decreased 36% to $1.7 million
• Nine-month net loss increased to $6.4 million from $5.3 million
• Factory underutilization affecting operational efficiency
• Increased operating expenses and higher manufacturing costs
• Management anticipates overall net loss for fiscal 2025

Insights

Financial Analyst

NAII reports widening losses despite 14% revenue growth due to underutilized manufacturing capacity and declining high-margin CarnoSyn sales.

Natural Alternatives International has delivered a mixed Q3 2025 financial performance that warrants careful scrutiny. While the company achieved 14% year-over-year revenue growth to $28.8 million, its net loss deepened to $2.2 million ($0.37 per share) compared to a $1.6 million loss in Q3 2024.

Looking at segment performance reveals concerning trends. Private-label contract manufacturing revenue increased by a robust 20% to $27.1 million, driven by both existing and new customer orders. However, the higher-margin CarnoSyn® beta-alanine business declined significantly by 36% to $1.7 million from $2.7 million in the prior year period. This product mix shift toward lower-margin manufacturing partially explains the profitability challenges.

The company's gross margin deteriorated to 6.3% from 7.6% in the prior year period, reflecting manufacturing inefficiencies from underutilized factory capacity. Operating expenses remained elevated at 13.6% of sales, driven by increased legal costs and higher labor expenses. These factors combined to produce an operating loss of $2.1 million.

From a balance sheet perspective, NAII's liquidity position has weakened, with cash declining to $10.6 million from $12.0 million as of June 2024, and working capital decreasing to $35.2 million from $38.1 million. The company has drawn $2.0 million against its credit facility, leaving $8.5 million in available borrowing capacity.

The nine-month results show similar patterns: 14% revenue growth to $96.0 million, but a widening net loss of $6.4 million compared to $5.3 million in the prior period. Management's outlook acknowledges continued losses for fiscal 2025 despite anticipated Q4 sales growth, suggesting structural profitability challenges beyond temporary headwinds.

CARLSBAD, Calif., May 14, 2025 (GLOBE NEWSWIRE) -- Natural Alternatives International, Inc. ("NAI") (Nasdaq: NAII), a leading formulator, manufacturer, and marketer of customized nutritional supplements, today announced a net loss of $2.2 million, or $0.37 per diluted share, on net sales of $28.8 million for the third quarter of fiscal year 2025 compared to a net loss of $1.6 million, or $0.27 per diluted share, in the third quarter of the prior fiscal year.

Net sales during the three months ended March 31, 2025, increased $3.6 million, or 14%, to $28.8 million as compared to $25.1 million recorded in the comparable prior year period. During the same period, private-label contract manufacturing sales increased 20% to $27.1 million, primarily due to increased orders from several of our larger customers and shipments to new customers.

CarnoSyn^® beta-alanine royalty, licensing and raw material sales revenue decreased 36% to $1.7 million during the third quarter of fiscal year 2025, as compared to $2.7 million for the third quarter of fiscal year 2024, primarily due to a decrease in orders from existing customers.

Our net loss for the nine months ended March 31, 2025, was $6.4 million, or $1.07 per diluted share, compared to a net loss of $5.3 million, or $0.91 per diluted share, for the nine months ended March 31, 2024.

Net sales during the nine months ended March 31, 2025, increased $11.7 million, or 14%, to $96.0 million as compared to $84.3 million recorded in the comparable prior year period. During the nine months ended March 31, 2025, private-label contract manufacturing sales increased 16% to $90.0 million, as compared to $77.7 million in the comparable prior period. CarnoSyn^® beta-alanine royalty, licensing and raw material sales revenue decreased 9% to $6.0 million during the first nine months of fiscal 2025, as compared to $6.6 million for the first nine months of fiscal 2024.

While we grew our net sales during the three and nine months ended March 31, 2025 as compared to the prior year periods, we continued to experience a loss from operations due primarily to the underutilization of our factory capacities, lower beta-alanine royalty and licensing revenue, and increased operating expenses primarily related to legal costs, selling, general and administrative, salaries and wages. Manufacturing costs were also negatively impacted by increased labor, foreign currency exchange rates, operating supplies, rent, and freight costs. Although our overall sales forecast for the fourth quarter of fiscal 2025 includes an increase in sales as compared to fiscal 2024, we anticipate we will experience an overall net loss for fiscal 2025.

As of March 31, 2025, we had cash of $10.6 million and working capital of $35.2 million, compared to $12.0 million and $38.1 million respectively, as of June 30, 2024. As of March 31, 2025, we had $8.5 million of borrowing capacity on our credit facility of which we had outstanding borrowings of $2.0 million.

Mark A. Le Doux, Chairman and Chief Executive Officer of NAI stated, “We are encouraged by our continued growth in top line revenue as it reflects the accomplishments our sales teams have garnered in cultivating new customer relationships along with organic sales growth from our current customer base. We believe these sales efforts will lead back to profitability in the year ahead. Supply chain, customer order flow, and currency valuations continue to provide significant headwinds that we are monitoring closely. We are also encouraged by the interest level of our new TriBsyn™ product offering, and we are optimistic new products containing this innovative ingredient will be launching commercially in retail channels in the near future.”

An updated investor presentation will be posted to the investor relations page on our website later today (https://www.nai-online.com/our-company/investors/).

NAI, headquartered in Carlsbad, 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 ability to develop, maintain or increase sales to new and existing customers, our future revenue, profits and financial condition, as well as current and 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.

SOURCE - Natural Alternatives International, Inc.

CONTACT – Michael Fortin, 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 OPERATIONS
(In thousands, except per share data)
	(Unaudited)														(Unaudited)
	Three Months Ended														Nine Months Ended
	March 31,														March 31,
		2025							2024							2025							2024
NET SALES	$	28,766			100.0	%		$	25,136			100.0	%		$	95,994			100.0	%		$	84,307			100.0	%
Cost of goods sold		26,940			93.7	%			23,214			92.4	%			90,240			94.0	%			78,861			93.5	%
Gross profit		1,826			6.3	%			1,922			7.6	%			5,754			6.0	%			5,446			6.5	%
Selling, general & administrative expenses		3,926			13.6	%			3,874			15.4	%			12,470			13.0	%			11,455			13.6	%
LOSS FROM OPERATIONS		(2,100	)		-7.3	%			(1,952	)		-7.8	%			(6,716	)		-7.0	%			(6,009	)		-7.1	%
Other expense, net		(542	)		-1.9	%			(16	)		-0.1	%			(1,205	)		-1.3	%			(674	)		-0.8	%
LOSS BEFORE TAXES		(2,642	)		-9.2	%			(1,968	)		-7.8	%			(7,921	)		-8.3	%			(6,683	)		-7.9	%
Income tax benefit		(456	)						(390	)						(1,562	)						(1,340	)
NET LOSS	$	(2,186	)					$	(1,578	)					$	(6,359	)					$	(5,343	)
NET LOSS PER COMMON SHARE:
Basic:	($0.37		)					($0.27		)					($1.07		)					($0.91		)
Diluted:	($0.37		)					($0.27		)					($1.07		)					($0.91		)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		5,943							5,868							5,928							5,856
Diluted		5,943							5,868							5,928							5,856

NATURAL ALTERNATIVES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
	(unaudited)
	March 31,			June 30,
	2025			2024
ASSETS
Cash and cash equivalents	$10,611			$11,981
Accounts receivable, net		11,650			16,891
Inventories, net		26,991			24,249
Other current assets		9,267			8,489
Total current assets		58,519			61,610
Property and equipment, net		50,564			52,211
Operating lease right-of-use assets		41,682			43,537
Other noncurrent assets, net		4,179			4,984
Total Assets	$154,944			$162,342
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued liabilities	$19,893			$19,456
Line of Credit		2,000			3,400
Mortgage note payable		9,007			9,229
Operating lease liability		47,425			47,662
Total Liabilities		78,325			79,747
Stockholders’ Equity		76,619			82,595
Total Liabilities and Stockholders’ Equity	$154,944			$162,342

FAQ

What were NAII's Q3 2025 earnings results?

NAII reported a net loss of $2.2 million ($0.37 per share) on net sales of $28.8 million in Q3 2025, compared to a net loss of $1.6 million ($0.27 per share) in Q3 2024.

How did NAII's private-label manufacturing perform in Q3 2025?

Private-label contract manufacturing sales increased 20% to $27.1 million due to increased orders from larger customers and new customer acquisitions.

What is NAII's current financial position as of March 2025?

NAII had $10.6 million in cash, working capital of $35.2 million, and $8.5 million of borrowing capacity with $2.0 million outstanding on its credit facility.

Why did NAII's losses increase in Q3 2025?

Losses increased due to factory underutilization, lower beta-alanine royalty revenue, increased operating expenses, higher legal costs, and increased manufacturing expenses including labor and freight costs.

What is the outlook for NAII in fiscal 2025?

Despite forecasting increased sales in Q4 2025 compared to 2024, management anticipates an overall net loss for fiscal 2025.