Supplement maker Natural Alternatives International (NAI), reported that it had cut last year's losses to record a net income of $686,000, up $1.3 million on the first six months of 2002.
Net sales of $26.1 million, up 16 per cent on last year, came primarily from a 12.4 per cent increase in contract manufacturing sales and a 34 per cent increase in direct to consumer (DTC) sales.
Second quarter net income increased $85,000 to $149,000 from $64,000 for the comparable quarter last year. Revenues increased 3 per cent to $13.0 million, driven largely by the 40 per cent increase in DTC sales during the quarter.
The first six months of 2003 also included receipt of the previously disclosed final litigation settlement payment of $225,000. Net income excluding the settlement payment was $461,000, said NAI.
Cash and working capital has also risen significantly, to $4.0 million and $11.4 million, respectively, compared to $640,000 and $8.7 million, respectively, at June 30, 2002.
CEO Mark LeDoux said: "We are delighted with our continued progress and the strengthening of NAI's financial position especially considering the difficulties facing some competitors in our industry."
"Looking ahead, we are committing to increased investments in regulatory compliance and quality assurance,"added newly promoted president Randell Weaver.
The company also announced an increase in marketing and productdevelopment expenses to cultivate additional DTC and contract manufacturing opportunities.
Increased investment in these areas will restrict growth in operating income, warned the San Marcos, California-based company.