Based on the provided financial report article, the title of the article is: "Natural Alternatives International, Inc. (NAII) Reports Second Quarter 2025 Financial Results" Note that the title may not be exact, as the article is a financial report and may not have a specific title. However, based on the content provided, this is the most likely title.
Based on the provided financial report article, the title of the article is: "Natural Alternatives International, Inc. (NAII) Reports Second Quarter 2025 Financial Results" Note that the title may not be exact, as the article is a financial report and may not have a specific title. However, based on the content provided, this is the most likely title.
Natural Alternatives International, Inc. (NAII) reported its financial results for the second quarter of 2025. The company’s net sales increased 10.4% to $20 million compared to the same period last year. Gross profit margin was 25.9%, and operating income was $0.3 million. The company’s cash and cash equivalents decreased to $6.2 million, and its total debt increased to $20 million. NAII’s stockholders’ equity decreased to $6.2 million. The company’s interest rate swaps and foreign currency forward contracts had a fair value of $0.6 million and $0.3 million, respectively, as of December 31, 2024. The company’s property, plant, and equipment decreased to $3.3 million, and its accumulated depreciation and amortization increased to $2.8 million.
Overview of Financial Performance
Our operating results for the three and six months ended December 31, 2024 show a mixed performance across our two business segments:
Private Label Contract Manufacturing
- Net sales increased 14% for the six-month period compared to the prior year, primarily due to increased orders from one of our larger customers and shipments to new customers.
- However, this segment experienced an operating loss of $1.8 million for the six-month period, compared to a loss of $1.4 million in the prior year. This was due to a change in sales mix, as well as increased manufacturing costs related to labor, foreign currency exchange rates, supplies, rent, and freight.
Patent and Trademark Licensing
- Revenue from patent and trademark licensing increased 9% for the six-month period compared to the prior year, primarily due to decreased volume rebates partially offset by lower material sales.
- This segment generated operating income of $1.7 million for the six-month period, up from $1.4 million in the prior year.
Overall, our net sales grew 14% in the six-month period, but we experienced an operating loss of $4.6 million compared to a loss of $4.1 million in the prior year. The key factors contributing to the operating loss were:
- Change in sales mix in the private label segment
- Increased manufacturing and operating costs
- Higher legal costs associated with expanding our beta-alanine patent estate
Looking ahead, while we forecast an increase in sales for fiscal 2025 compared to 2024, we anticipate experiencing a net loss in the second half of fiscal 2025 and an overall net loss for the full fiscal year. This is due to continued pressure on margins and increased costs.
To drive future growth and profitability, we are focused on:
- Diversifying our private label customer base
- Commercializing our patent estate through sales of beta-alanine products and licensing agreements
- Investing in research and development for new CarnoSyn® product offerings
- Controlling costs and improving operational efficiency
Overall, our financial performance in the first half of fiscal 2025 was mixed, with top-line growth but profitability challenges. We remain focused on executing our strategy to achieve long-term growth and diversification.
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