Natural Alternatives International, Inc Announces 2023 Q3 and YTD Results.

CARLSBAD, Calif: Natural Alternatives International, Inc. ("NAI") (Nasdaq: NAII), a leading formulator, manufacturer, and marketer of customized nutritional supplements, today announced a net loss of $2.4 million, or $0.41 per diluted share, on net sales of $32.7 million for the third quarter of fiscal year 2023 compared to net income of $2.5 million, or $0.41 per diluted share, in the third quarter of the prior fiscal year.

Net sales during the three months ended March 31, 2023, decreased $9.7 million, or 22.8%, to $32.7 million as compared to $42.4 million recorded in the comparable prior year period. During the same period, private-label contract manufacturing sales decreased 19.3% to $30.4 million. Private-label contract manufacturing sales decreased for most of our customers including two key customers, partially offset by increased sales to our largest customer. The primary driver for our sales decline relates to our customers' excess on-hand inventory levels associated with softening consumer demand. In addition, many of our customers maintained larger inventory balances during the previous twelve months related to supply constraints and have now begun to release these excess inventory positions associated with improving supply chain conditions. Sales were also negatively impacted by lower average exchange rates applied to sales denominated in Euro as compared to the prior year period.

CarnoSyn(r) beta-alanine royalty, licensing and raw material sales revenue decreased 50.6% to $2.3 million during the third quarter of fiscal year 2023, as compared to $4.8 million for the third quarter of fiscal year 2022. This decrease was primarily due to fewer orders from existing customers as a result of market and inflationary factors along with a general slowdown in the Sports Nutrition sales channel. In addition, the three months ended March 31, 2022, included an unusual ramp up of Sports Nutrition sales activity due to easing COVID restrictions on athletic activities with no corresponding factors in the three months ended March 31, 2023.

Net income for the nine months ended March 31, 2023, was $0.5 million, or $0.08 per diluted share, compared to net income of $7.6 million, or $1.22 per diluted share, for the nine months ended March 31, 2022.

Net sales during the nine months ended March 31, 2023, decreased $0.3 million, or 0.3%, to $118.1 million as compared to $118.4 million recorded in the comparable prior year period. During the nine months...