We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Natural Alternatives Q4 Loss Widens Y/Y on Margin Pressure
Read MoreHide Full Article
Shares of Natural Alternatives International, Inc. (NAII - Free Report) have lost 2.9% since reporting results for the fourth quarter of fiscal 2026. This compares with the S&P 500 index’s 0.8% decline over the same time frame. Over the past month, the stock has fallen 19.4% against the S&P 500’s 0.9% return.
Earnings & Sales Performance
Natural Alternatives reported fourth-quarter fiscal 2026 net sales of $34.5 million, up 1.9% from $33.9 million a year earlier. The company posted a net loss of $13.5 million, or $2.23 per share, compared with a net loss of $7.2 million, or $1.20 per share, in the prior-year quarter. The latest quarter included a $10.4-million non-recurring, non-cash impairment charge tied to the underutilized Carlsbad, CA, manufacturing facility. Excluding that charge, the quarter’s net loss would have been $3.1 million, or 52 cents per share. Gross profit fell to $1.7 million from $3.5 million, while the gross margin contracted to 5% from 10.4%.
Natural Alternatives International, Inc. Price, Consensus and EPS Surprise
Private-label contract manufacturing sales increased 0.6% year over year to $31.9 million, primarily due to higher orders from one of the company’s larger customers, partly offset by lower orders from other existing customers. CarnoSyn beta-alanine royalty, licensing and raw material sales rose 22% to $2.6 million from $2.1 million, driven mainly by increased raw material sales to existing customers and higher royalty income.
For fiscal 2026, net sales increased 10% to $142.5 million from $129.9 million. Private-label contract manufacturing sales rose 11% to $134.6 million, while CarnoSyn royalty, licensing and raw material sales declined 2% to $7.9 million. The presentation shows private-label contract manufacturing accounted for 94.5% of fiscal 2026 revenues, with patent and trademark licensing contributing 5.5%. Adjusted EBITDA was negative $3.4 million in fiscal 2026 versus negative $2.1 million in fiscal 2025.
Liquidity weakened year over year. Cash and cash equivalents declined to $7.4 million as of June 30, 2026, from $12.3 million a year earlier, while working capital fell to $27.7 million from $30.5 million. The company had $17.7 million of borrowing capacity under its credit facility, with $7.7 million outstanding.
Management Commentary
Chairman and CEO Mark A. LeDoux said that the company is taking steps to strengthen its financial position and better align operations with current demand. Management expects the planned sales of the Carlsbad headquarters building and manufacturing facility to add liquidity, reduce debt and remove significant excess manufacturing capacity. The company also believes that production can be consolidated into its Vista, CA, facility without disrupting customers, while it continues to focus on revenue growth, deeper customer relationships and lower costs.
The company also highlighted potential growth avenues, including expanding existing customer products, broadening the customer base and sales channels, growing in-house brands and pursuing complementary acquisitions. Management said that available global capacity should be about 65% after the U.S. consolidation, which is expected to create a more efficient and cost-effective footprint.
Factors Influencing Headline Numbers
The quarter’s higher sales did not translate into improved profitability. Management attributed the net loss primarily to underutilization of available factory capacity and the $10.4-million impairment charge on the Carlsbad manufacturing facility. Cost of goods sold increased to $32.8 million from $30.3 million and represented 95% of sales compared with 89.6% a year earlier, pressuring the gross margin.
Selling, general and administrative expenses declined year over year to $4.5 million from $5.5 million, partly because the prior-year quarter included $1.4 million of legal settlement and related expenses versus only $32,000 in the latest quarter.
Other Developments
Natural Alternatives initiated the consolidation of its U.S. manufacturing operations into the Vista facility and expects to sell the Carlsbad manufacturing site. The company has also begun a comprehensive review of strategic alternatives aimed at maximizing shareholder value. Potential paths under consideration include strategic growth initiatives, mergers, acquisitions, joint ventures or a sale of the company. The company also states that a U.S. headquarters building sale and plant consolidation are expected as management focuses on improving profitability.
View the Zacks #1 Rank List
Image: Bigstock
Natural Alternatives Q4 Loss Widens Y/Y on Margin Pressure
Shares of Natural Alternatives International, Inc. (NAII - Free Report) have lost 2.9% since reporting results for the fourth quarter of fiscal 2026. This compares with the S&P 500 index’s 0.8% decline over the same time frame. Over the past month, the stock has fallen 19.4% against the S&P 500’s 0.9% return.
Earnings & Sales Performance
Natural Alternatives reported fourth-quarter fiscal 2026 net sales of $34.5 million, up 1.9% from $33.9 million a year earlier. The company posted a net loss of $13.5 million, or $2.23 per share, compared with a net loss of $7.2 million, or $1.20 per share, in the prior-year quarter. The latest quarter included a $10.4-million non-recurring, non-cash impairment charge tied to the underutilized Carlsbad, CA, manufacturing facility. Excluding that charge, the quarter’s net loss would have been $3.1 million, or 52 cents per share. Gross profit fell to $1.7 million from $3.5 million, while the gross margin contracted to 5% from 10.4%.
Natural Alternatives International, Inc. Price, Consensus and EPS Surprise
Natural Alternatives International, Inc. price-consensus-eps-surprise-chart | Natural Alternatives International, Inc. Quote
Other Key Business Metrics
Private-label contract manufacturing sales increased 0.6% year over year to $31.9 million, primarily due to higher orders from one of the company’s larger customers, partly offset by lower orders from other existing customers. CarnoSyn beta-alanine royalty, licensing and raw material sales rose 22% to $2.6 million from $2.1 million, driven mainly by increased raw material sales to existing customers and higher royalty income.
For fiscal 2026, net sales increased 10% to $142.5 million from $129.9 million. Private-label contract manufacturing sales rose 11% to $134.6 million, while CarnoSyn royalty, licensing and raw material sales declined 2% to $7.9 million. The presentation shows private-label contract manufacturing accounted for 94.5% of fiscal 2026 revenues, with patent and trademark licensing contributing 5.5%. Adjusted EBITDA was negative $3.4 million in fiscal 2026 versus negative $2.1 million in fiscal 2025.
Liquidity weakened year over year. Cash and cash equivalents declined to $7.4 million as of June 30, 2026, from $12.3 million a year earlier, while working capital fell to $27.7 million from $30.5 million. The company had $17.7 million of borrowing capacity under its credit facility, with $7.7 million outstanding.
Management Commentary
Chairman and CEO Mark A. LeDoux said that the company is taking steps to strengthen its financial position and better align operations with current demand. Management expects the planned sales of the Carlsbad headquarters building and manufacturing facility to add liquidity, reduce debt and remove significant excess manufacturing capacity. The company also believes that production can be consolidated into its Vista, CA, facility without disrupting customers, while it continues to focus on revenue growth, deeper customer relationships and lower costs.
The company also highlighted potential growth avenues, including expanding existing customer products, broadening the customer base and sales channels, growing in-house brands and pursuing complementary acquisitions. Management said that available global capacity should be about 65% after the U.S. consolidation, which is expected to create a more efficient and cost-effective footprint.
Factors Influencing Headline Numbers
The quarter’s higher sales did not translate into improved profitability. Management attributed the net loss primarily to underutilization of available factory capacity and the $10.4-million impairment charge on the Carlsbad manufacturing facility. Cost of goods sold increased to $32.8 million from $30.3 million and represented 95% of sales compared with 89.6% a year earlier, pressuring the gross margin.
Selling, general and administrative expenses declined year over year to $4.5 million from $5.5 million, partly because the prior-year quarter included $1.4 million of legal settlement and related expenses versus only $32,000 in the latest quarter.
Other Developments
Natural Alternatives initiated the consolidation of its U.S. manufacturing operations into the Vista facility and expects to sell the Carlsbad manufacturing site. The company has also begun a comprehensive review of strategic alternatives aimed at maximizing shareholder value. Potential paths under consideration include strategic growth initiatives, mergers, acquisitions, joint ventures or a sale of the company. The company also states that a U.S. headquarters building sale and plant consolidation are expected as management focuses on improving profitability.