Natural Alternatives International, Inc. Announces Fiscal 2025 Q4 and YTD Results

Rhea-AI Summary

Natural Alternatives International (NASDAQ: NAII), a nutritional supplements manufacturer, reported a challenging Q4 fiscal 2025 with a net loss of $7.2 million ($1.20 per share), compared to a $1.9 million loss in Q4 2024. The quarter included non-recurring charges of $1.4 million for litigation settlement and a $4.8 million tax asset valuation allowance.

Despite challenges, Q4 net sales increased 15% to $33.9 million, with private-label manufacturing up 15% to $31.8 million and CarnoSyn® revenue up 14% to $2.1 million. For full fiscal 2025, net sales grew 14% to $129.9 million, though the company recorded a net loss of $13.6 million.

Looking ahead, management forecasts significant sales growth and expects to achieve profitability in the second half of fiscal 2026. As of June 30, 2025, NAII maintained $12.3 million in cash and $30.5 million in working capital.

Positive

• Net sales increased 15% to $33.9 million in Q4 2025
• Private-label contract manufacturing sales grew 15% to $31.8 million
• CarnoSyn® beta-alanine revenue increased 14% to $2.1 million in Q4
• Management forecasts significant sales growth for fiscal 2026
• Strong liquidity with $12.3 million cash and $30.5 million working capital

Negative

• Q4 2025 net loss of $7.2 million ($1.20 per share), significantly worse than Q4 2024
• Full-year fiscal 2025 net loss of $13.6 million, nearly double the 2024 loss
• $4.8 million valuation allowance against deferred tax assets
• $1.4 million charge for litigation settlement
• Factory capacity underutilization affecting profitability
• Expected continued losses in first half of fiscal 2026

Insights

Financial Analyst

NAII reported wider losses despite revenue growth, with non-cash charges significantly impacting Q4, but expects profitability in fiscal 2026.

Natural Alternatives International's Q4 2025 results reveal a complex financial picture. Net sales increased 15% to $33.9 million compared to the prior year, but the company reported a substantial net loss of $7.2 million ($1.20 per share) versus $1.9 million loss in Q4 2024. However, this headline figure requires context - the loss includes $6.2 million in non-recurring non-cash charges ($1.4 million litigation settlement and $4.8 million tax asset valuation allowance).

Without these one-time charges, the adjusted net loss would be approximately $1 million, showing operational improvement despite continuing challenges. Private-label contract manufacturing, representing 94% of total revenue, grew 15% to $31.8 million. CarnoSyn® beta-alanine sales increased 14% to $2.1 million.

For full fiscal 2025, revenue increased 14% to $129.9 million, but the company posted a $13.6 million loss ($2.28 per share) compared to $7.2 million loss in 2024. The primary challenges were underutilization of factory capacity, tax valuation allowances, and litigation costs.

The company's liquidity position remains stable with $12.3 million cash (slightly up from 2024), though working capital decreased from $38.1 million to $30.5 million. NAII maintains $8 million in unused borrowing capacity.

Gross margin improved to 10.4% in Q4 2025 from 4.8% in Q4 2024, indicating better operational efficiency despite ongoing challenges. Management's guidance is cautiously optimistic, projecting continued losses in first half of fiscal 2026 but returning to profitability in the second half and for the full year, driven by anticipated significant sales growth and improved capacity utilization.

CARLSBAD, Calif., Sept. 23, 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 $7.2 million, or ($1.20) per diluted share, on net sales of $33.9 million for the fourth quarter of fiscal year 2025 compared to a net loss of $1.9 million, or ($0.32) per diluted share, in the fourth quarter of the prior fiscal year. Our net loss for the fourth quarter of fiscal 2025 included non-recurring non-cash charges of $1.4 million related to the settlement of a litigation matter and a $4.8 million valuation allowance against our net deferred tax assets. Excluding these charges, our net loss for the fourth quarter of fiscal 2025 would have been $1.0 million.

Net sales during the three months ended June 30, 2025, increased $4.4 million, or 15%, to $33.9 million compared to $29.5 million recorded in the comparable prior year period. During the same period, private-label contract manufacturing sales increased 15% to $31.8 million. Private-label contract manufacturing sales increased primarily due to increased orders from several of our existing customers and orders from new customers, partially offset by reduced orders from one of our larger customers.

CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue increased 14% to $2.1 million during the fourth quarter of fiscal year 2025, as compared to $1.8 million for the fourth quarter of fiscal year 2024. The increase in CarnoSyn® beta-alanine royalty, licensing, and raw material sales revenue during the fourth quarter of fiscal 2025 was primarily due to increased raw material sales to existing customers and royalty income.

Our net loss for fiscal year 2025 was $13.6 million, or ($2.28) per diluted share, compared to a net loss of $7.2 million, or ($1.23) per diluted share, for fiscal year 2024. Our net loss for fiscal 2025 included non-recurring non-cash charges of $1.4 million related to the settlement of a litigation matter and a $4.8 million valuation allowance against our net deferred tax assets. Excluding these charges, our net loss for fiscal 2025 would have been $7.4 million.

Net sales during the year ended June 30, 2025, increased $16.1 million, or 14%, to $129.9 million as compared to $113.8 million recorded in the comparable prior year period. During the year ended June 30, 2025, private-label contract manufacturing sales increased 16% to $121.8 million, as compared to $105.4 million in the comparable prior period. CarnoSyn® beta-alanine royalty, licensing and raw material sales revenue decreased 4% to $8.1 million during the fiscal 2025, as compared to $8.4 million for fiscal 2024.

While we grew sales during the three and twelve months ended June 30, 2025, we experienced a net loss primarily due to underutilization of our available factory capacities, a valuation allowance against our domestic net deferred income tax assets and the accrual of a litigation settlement. Although our overall sales forecast for fiscal 2026 includes a significant increase in sales as compared to fiscal 2025, we currently anticipate we will experience a net loss in the first half of fiscal 2026, net income in the second half of fiscal 2026, and net income for the full fiscal 2026 year.

As of June 30, 2025, we had cash of $12.3 million and working capital of $30.5 million, compared to $12.0 million and $38.1 million respectively, as of June 30, 2024. As of June 30, 2025, we had $9.9 million of borrowing capacity on our credit facility of which we had outstanding borrowings of $1.9 million.

Mark A. Le Doux, Chairman and Chief Executive Officer of NAI stated, “The results achieved in our final quarter of fiscal year 2025 were negatively impacted by non-cash charges associated with accounting treatment of deferred tax assets and a litigation settlement, however, the net results were still a disappointment. The fourth quarter and fiscal 2025 showed increases in revenues and our preliminary outlook for this next fiscal year shows some ‘green shoots’ emerging in renewed growth in current and new customer relationships. Our team remains focused on client expansion, channel diversity and process improvements to increase revenues and profitability. We remain hopeful we will emerge from fiscal year 2026 profitable with expanded client relationships and revenues. We continue to focus our attention on adoption of the remarkable benefits associated with our highly bio-available form of CarnoSyn® beta-alanine known as TriBsyn™ and continue our human research in various settings around the world to bolster scientific support for this remarkable molecule – especially in light of the concerns associated with the millions of global consumers utilizing pharmaceutical agents to control weight. This molecule also addresses key concerns for addressing good health in the aging demographics by addressing issues like sarcopenia, mental function, skeletal integrity, cardiovascular function and immune responses to external challenges. We remain committed to maintaining the integrity of our balance sheet in our renewed dedication to secure profits 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, 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. 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)
	Three Months Ended														Year Ended
	June 30,														June 30,
		2025							2024							2025							2024
NET SALES	$	33,866			100.0	%		$	29,489			100.0	%		$	129,860			100.0	%		$	113,796			100.0	%
Cost of goods sold		30,331			89.6	%			28,070			95.2	%			120,571			92.8	%			106,931			94.0	%
Gross profit		3,535			10.4	%			1,419			4.8	%			9,289			7.2	%			6,865			6.0	%
Other selling, general & administrative expenses		4,079			12.0	%			3,944			13.4	%			16,549			12.7	%			15,399			13.5	%
Settlement of legal proceedings & associated expense		1,400			4.1	%						0.0	%			1,400			1.1	%						0.0	%
Selling, general & administrative expenses		5,479							3,944							17,949							15,399
LOSS FROM OPERATIONS		(1,944	)		-5.7	%			(2,525	)		-8.6	%			(8,660	)		-6.7	%			(8,534	)		-7.5	%
Other (expense), net		(875	)		-2.6	%			(256	)		-0.9	%			(2,080	)		-1.6	%			(930	)		-0.8	%
LOSS BEFORE TAXES		(2,819	)		-8.3	%			(2,781	)		-9.4	%			(10,740	)		-8.3	%			(9,464	)		-8.3	%
Income tax expense (benefit)		4,397							(907	)						2,835							(2,247	)
NET LOSS	$	(7,216	)					$	(1,874	)					$	(13,575	)					$	(7,217	)
NET LOSS PER COMMON SHARE:
Basic:	$	(1.20	)					$	(0.32	)					$	(2.28	)					$	(1.23	)
Diluted:	$	(1.20	)					$	(0.32	)					$	(2.28	)					$	(1.23	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		6,003							5,916							5,947							5,871
Diluted		6,003							5,916							5,947							5,871

NATURAL ALTERNATIVES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
	June 30,			June 30,
		2025			2024
ASSETS
Cash and cash equivalents	$	12,325		$	11,981
Accounts receivable, net		14,644			16,891
Inventories, net		24,871			24,249
Other current assets		7,436			8,489
Total current assets		59,276			61,610
Property and equipment, net		50,890			52,211
Operating lease right-of-use assets		41,054			43,537
Other noncurrent assets, net		719			4,984
Total Assets	$	151,939		$	162,342
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued liabilities		24,483			19,456
Line of Credit		1,900			3,400
Mortgage note payable		8,933			9,229
Operating lease liability		48,197			47,662
Total Liabilities		83,513			79,747
Stockholders’ Equity		68,426			82,595
Total Liabilities and Stockholders’ Equity	$	151,939		$	162,342

FAQ

What were NAII's Q4 2025 earnings results?

NAII reported a net loss of $7.2 million ($1.20 per share) on net sales of $33.9 million. Excluding non-recurring charges, the adjusted net loss would have been $1.0 million.

How much did NAII's revenue grow in fiscal 2025?

NAII's net sales increased 14% to $129.9 million in fiscal 2025 compared to $113.8 million in fiscal 2024.

What caused NAII's increased losses in Q4 2025?

The increased losses were primarily due to $1.4 million in litigation settlement charges, a $4.8 million tax asset valuation allowance, and factory capacity underutilization.

What is NAII's financial outlook for fiscal 2026?

NAII expects continued losses in the first half of fiscal 2026, but projects profitability in the second half and for the full fiscal year, with significant sales growth compared to 2025.

How much cash does NAII have available?

As of June 30, 2025, NAII had $12.3 million in cash, $30.5 million in working capital, and $8 million available on its credit facility.