Natural Alternatives International, Inc. (NASDAQ: NAII) reported a net loss of $2.6 million, or $0.42 per diluted share, on net sales of $34.8 million for its fiscal second quarter. Private‑label contract manufacturing sales rose 2% to $32.8 million, while CarnoSyn beta‑alanine licensing and raw‑material sales increased 13% to $2.0 million. Gross margin improved to 7.2% from 4.9% in the same quarter last year, reflecting a more favorable product mix and higher utilization of manufacturing capacity.
The company’s six‑month results to December 31, 2025, showed a net loss of $2.8 million, or $0.47 per diluted share, on $72.5 million in sales—an 8% increase from the prior year. Private‑label sales for the first half of the year were $68.9 million, up 9%, while CarnoSyn revenue fell 15% to $3.7 million. These figures illustrate a steady growth in core manufacturing services, offset by a decline in the legacy CarnoSyn segment.
Management guided that the company will post a net loss in the second half of fiscal 2026 and for the full year, citing reduced forecasted sales from several customers and delayed new product launches. The company’s cash balance fell to $3.8 million and working capital to $28.7 million as of December 31, 2025, down from $12.3 million and $30.5 million at June 30, 2025. NAII has a $10.0 million credit facility with $5.8 million outstanding and is currently non‑compliant with the facility’s financial covenants, a risk highlighted by management.
CEO Mark A. Le Doux said, "NAI is experiencing some disappointments in the ability to accurately forecast demand from several clients engaged in the multi‑level marketing and direct selling channels of commerce, in China, Europe and in some cases North America." He added, "We remain committed to expanding the adoption of this scientifically revolutionary molecule." The company is focusing on the TriBsyn beta‑alanine product, which it positions as a treatment for muscle wasting associated with GLP‑1 medications and age‑related sarcopenia, and is monitoring geopolitical tensions that could affect raw‑material sourcing from Israel.
Investors reacted modestly to the results, with the stock trading slightly higher in after‑hours trading. The market appeared to weigh the revenue growth and margin improvement against the negative full‑year guidance and the credit‑covenant non‑compliance, indicating a cautious but not entirely pessimistic view of the company’s near‑term prospects.
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