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Natural Alternatives Q4 Sales Rise 15% Y/Y, Loss Widens for FY25
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Natural Alternatives International, Inc. (NAII - Free Report) reported fourth-quarter fiscal 2025 results that showed higher sales but wider losses from the prior-year period. The company posted a net loss of $7.2 million, or $1.20 per diluted share, versus a net loss of $1.9 million, or 32 cents per share, a year earlier.
The latest quarter included non-recurring charges totaling $6.2 million related to a litigation settlement and a deferred tax asset valuation allowance. Excluding these items, the net loss would have been narrower by $1 million. Quarterly sales rose 15% year over year to $33.9 million, led by gains in private-label contract manufacturing, and CarnoSyn beta-alanine royalty and licensing revenues.
Other Key Business Metrics
Private-label contract manufacturing sales grew 15% year over year in the quarter to $31.8 million, driven by new customer orders and expanded demand from existing accounts, though partly offset by reduced orders from a large client. CarnoSyn-related revenues advanced 14% to $2.1 million in the quarter, aided by increased raw material sales and royalty income.
For fiscal 2025, net sales increased 14% year over year to $129.9 million, with contract manufacturing contributing $121.8 million, up 16%. However, CarnoSyn revenues for the year slipped 4% to $8.1 million. The gross profit margin improved modestly to 10.4% in the quarter from 4.8% a year earlier, supported by higher sales volumes, though annual operating results remained pressured, with full-year adjusted EBITDA at a negative $2.1 million.
Balance sheet metrics indicated relative stability despite the losses. As of June 30, 2025, NAI held $12.3 million in cash and $30.5 million in working capital, though both were slightly lower than the prior year. Stockholders’ equity fell to $68.4 million from $82.6 million in 2024, reflecting accumulated losses.
Management Commentary
Chairman and CEO Mark A. Le Doux acknowledged that the quarter’s results were affected by non-cash charges but highlighted encouraging trends in customer growth and diversification. He emphasized “green shoots” in renewed relationships and business development, coupled with efforts to enhance channel diversity and operational efficiency.
Le Doux reiterated the company’s focus on profitability restoration, noting particular optimism around TriBsyn, a proprietary form of CarnoSyn beta-alanine aimed at healthy aging and sports performance markets.
Factors Influencing the Results
Despite revenue growth, the underutilization of expanded production capacity weighed on profitability. NAI had invested in increasing blending and powder manufacturing capacity, including a new high-volume facility completed in April 2023. While these facilities raised available global production capacity by an estimated 75%, the company has yet to achieve sufficient utilization levels to offset fixed costs. This underutilization, along with litigation-related expenses and the deferred tax asset adjustment, contributed to the fiscal 2025 loss.
Guidance
NAI projected increased sales for fiscal 2026 from fiscal 2025. Management, however, cautioned that the first half of fiscal 2026 will likely remain loss-making, with profitability expected in the second half and for the full year. The company aims to leverage its enhanced capacity and broadened customer base to improve margins as utilization rises.
Other Developments
NAI underscored its ongoing investment in proprietary products, especially TriBsyn, which combines beta-alanine with patent-pending technology to improve absorption and eliminate side effects like paresthesia. Management believes this innovation creates opportunities in the wellness and aging markets. The company also reiterated its strategy of pursuing complementary acquisitions to expand its customer base, product channels and in-house brands.
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Natural Alternatives Q4 Sales Rise 15% Y/Y, Loss Widens for FY25
Natural Alternatives International, Inc. (NAII - Free Report) reported fourth-quarter fiscal 2025 results that showed higher sales but wider losses from the prior-year period. The company posted a net loss of $7.2 million, or $1.20 per diluted share, versus a net loss of $1.9 million, or 32 cents per share, a year earlier.
The latest quarter included non-recurring charges totaling $6.2 million related to a litigation settlement and a deferred tax asset valuation allowance. Excluding these items, the net loss would have been narrower by $1 million. Quarterly sales rose 15% year over year to $33.9 million, led by gains in private-label contract manufacturing, and CarnoSyn beta-alanine royalty and licensing revenues.
Other Key Business Metrics
Private-label contract manufacturing sales grew 15% year over year in the quarter to $31.8 million, driven by new customer orders and expanded demand from existing accounts, though partly offset by reduced orders from a large client. CarnoSyn-related revenues advanced 14% to $2.1 million in the quarter, aided by increased raw material sales and royalty income.
For fiscal 2025, net sales increased 14% year over year to $129.9 million, with contract manufacturing contributing $121.8 million, up 16%. However, CarnoSyn revenues for the year slipped 4% to $8.1 million. The gross profit margin improved modestly to 10.4% in the quarter from 4.8% a year earlier, supported by higher sales volumes, though annual operating results remained pressured, with full-year adjusted EBITDA at a negative $2.1 million.
Balance sheet metrics indicated relative stability despite the losses. As of June 30, 2025, NAI held $12.3 million in cash and $30.5 million in working capital, though both were slightly lower than the prior year. Stockholders’ equity fell to $68.4 million from $82.6 million in 2024, reflecting accumulated losses.
Management Commentary
Chairman and CEO Mark A. Le Doux acknowledged that the quarter’s results were affected by non-cash charges but highlighted encouraging trends in customer growth and diversification. He emphasized “green shoots” in renewed relationships and business development, coupled with efforts to enhance channel diversity and operational efficiency.
Le Doux reiterated the company’s focus on profitability restoration, noting particular optimism around TriBsyn, a proprietary form of CarnoSyn beta-alanine aimed at healthy aging and sports performance markets.
Factors Influencing the Results
Despite revenue growth, the underutilization of expanded production capacity weighed on profitability. NAI had invested in increasing blending and powder manufacturing capacity, including a new high-volume facility completed in April 2023. While these facilities raised available global production capacity by an estimated 75%, the company has yet to achieve sufficient utilization levels to offset fixed costs. This underutilization, along with litigation-related expenses and the deferred tax asset adjustment, contributed to the fiscal 2025 loss.
Guidance
NAI projected increased sales for fiscal 2026 from fiscal 2025. Management, however, cautioned that the first half of fiscal 2026 will likely remain loss-making, with profitability expected in the second half and for the full year. The company aims to leverage its enhanced capacity and broadened customer base to improve margins as utilization rises.
Other Developments
NAI underscored its ongoing investment in proprietary products, especially TriBsyn, which combines beta-alanine with patent-pending technology to improve absorption and eliminate side effects like paresthesia. Management believes this innovation creates opportunities in the wellness and aging markets. The company also reiterated its strategy of pursuing complementary acquisitions to expand its customer base, product channels and in-house brands.