NAI Cuts Costs as Private Label Contract Sales Falter

NAI Cuts Costs as Private Label Contract Sales Falter

SAN MARCOS, Calif.Second quarter net sales slowed at NaturalAlternatives International Inc. (NASDAQ:NAII), which attributed the reduction todecreased private label contract manufacturing sales. Revenues slid 8 percent to $19.9 million, compared to the year prior. Net income also fell, settling at $461,000 or $0.07 per share from $785,000or $0.12 per share. The company (www.nai-online.com) credited controlled costsfor keeping earnings positive.

During the second quarter, we aggressively reduced costs in response tothe net sales decline, said Randell Weaver, president, who also noted achanging tide in contract sales. We received initial purchase orders from twonew contract manufacturing costumers and have since received additionalorders.We expect net sales from these two new customers to exceed $10 million inthe remainder of the fiscal year.

Management also reported satisfactory progress in the ongoing integration ofits recent acquisition, Real Health Laboratories, which is not expected toimpact third quarter profitability. We expect to realize strategic,operational and financial benefits beginning with the integration of certain NAIoutsourced activities into Real Healths existing operation and anticipatedelimination of certain redundant assets, added Mark LeDoux, chief executiveofficer (CEO).