<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-15701
NATURAL ALTERNATIVES INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 84-1007839
(State of other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification No.)
1185 LINDA VISTA DRIVE, SAN MARCOS, CALIFORNIA 92069
(Address of principal executive offices)
(Zip Code)
(760) 744-7340
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
5,429,764
(Number of shares of common stock of the registrant outstanding as of
April 30, 1997)
1
<PAGE> 2
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31
1997 June 30
(Unaudited) 1996
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 3,280,994 $ 1,887,427
Accounts receivable - less allowance for doubtful
accounts of $436,000 at March 31, 1997
and $319,000 at June 30, 1996 4,237,826 5,026,204
Accounts receivable - affiliated company 580,490 932,490
Inventory 8,963,616 6,399,592
Notes receivable - current portion 126,213 157,155
Deferred income taxes 520,000 425,000
Deposits 252,854 100,513
Other current assets 827,283 781,754
----------- -----------
TOTAL CURRENT ASSETS 18,789,276 15,710,135
----------- -----------
PROPERTY AND EQUIPMENT, at cost, less accumulated
depreciation and amortization of $5,547,040 at
March 31, 1997 and $4,641,640 at June 30, 1996 7,940,856 7,278,078
----------- -----------
OTHER ASSETS:
Receivable from affiliated company 200,000 -0-
Other investments 68,737 74,890
Notes receivable, less current portion 277,062 285,470
Other non-current assets 357,058 212,618
----------- -----------
TOTAL OTHER ASSETS
902,857 572,978
----------- -----------
TOTAL ASSETS $27,632,989 $23,561,191
=========== ===========
</TABLE>
(continued)
2
<PAGE> 3
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS (continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31
1997 June 30
(Unaudited) 1996
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 5,330,429 $ 3,658,897
Current installments of long-term debt 210,533 234,736
Current installments of capital lease obligations 24,392 22,860
Accrued compensation and employee benefits 246,465 280,340
Line of credit 350,000 -0-
Income taxes payable 139,599 520,246
Customer deposits 2,606 2,606
----------- -----------
TOTAL CURRENT LIABILITIES
6,304,024 4,719,685
Deferred income taxes 357,000 357,000
Long-term debt, less current installments 1,139,633 1,276,118
Capital lease obligations, less current installments 29,422 48,802
----------- -----------
TOTAL LIABILITIES
7,830,079 6,401,605
----------- -----------
STOCKHOLDERS' EQUITY:
Preferred stock; $.01 par value; 500,000 shares
authorized; none issued or outstanding -- --
Common stock; $.01 par value; 8,000,000 shares
authorized; issued and outstanding 5,408,875 at
March 31, 1997 and 5,351,875 at June 30, 1996 54,089 53,519
Additional paid-in capital 6,578,801 6,220,196
Retained earnings 13,211,395 10,901,093
Net unrealized losses on investments (41,375) (15,222)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 19,802,910 17,159,586
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $27,632,989 $23,561,191
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE> 4
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31
1997 1996
----------- -----------
<S> <C> <C>
Net sales $11,406,325 $12,782,137
Cost of goods sold 8,540,258 9,329,320
----------- -----------
GROSS PROFIT 2,866,067 3,452,817
Selling, general & administrative expenses 1,937,328 1,763,861
----------- -----------
OPERATING INCOME 928,739 1,688,956
----------- -----------
Other income (expense):
Interest income 42,788 21,090
Interest expense (34,890) (48,861)
Other, net -- 17,217
----------- -----------
7,898 (10,554)
----------- -----------
EARNINGS BEFORE INCOME TAXES 936,637 1,678,402
Income taxes 376,000 673,000
----------- -----------
NET EARNINGS $ 560,637 $ 1,005,402
=========== ===========
NET EARNINGS PER COMMON SHARE:
Primary and fully diluted $ .10 $ .18
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE> 5
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Nine Months Ended
March 31
-----------------------------
(Unaudited)
1997 1996
----------- -----------
Net sales $35,473,581 $34,889,892
Cost of goods sold 26,130,920 25,842,322
----------- -----------
GROSS PROFIT 9,342,661 9,047,570
Selling, general & administrative expenses 5,508,856 5,166,568
----------- -----------
OPERATING INCOME 3,833,805 3,881,002
----------- -----------
Other income (expense):
Interest income 127,334 68,771
Interest expense (111,992) (116,514)
Other, net (8,845) 32,429
----------- -----------
6,497 (15,314)
----------- -----------
EARNINGS BEFORE INCOME TAXES 3,840,302 3,865,688
Income taxes 1,530,000 1,536,000
----------- -----------
NET EARNINGS $ 2,310,302 $ 2,329,688
=========== ===========
NET EARNINGS PER COMMON SHARE:
Primary and fully diluted $ .41 $ .42
=========== ===========
See accompanying notes to consolidated financial statements
5
<PAGE> 6
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Net
Common Stock Additional Unrealized
---------------------------- Paid-In Retained Gains
Shares Amount Capital Earnings (Losses) Total
----------- ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at
June 30, 1996 5,351,875 $53,519 $6,220,196 $10,901,093 $(15,222) $17,159,586
Issuance of common
stock upon exercise of
employee stock options 57,000 570 273,005 -- -- 273,575
Income tax benefit from
stock options -- -- 85,600 -- -- 85,600
exercised
Net unrealized
gains (losses) on -- -- -- -- (26,153) (26,153)
investments
-- -- -- 2,310,302 -- 2,310,302
---------- -------- ---------- ----------- --------- -----------
Net earnings
Balance at 5,408,875 $54,089 $6,578,801 $13,211,395 $(41,375) $19,802,910
========== ======== ========== =========== ======== ===========
March 31, 1997
</TABLE>
See accompanying notes to consolidated financial statements
6
<PAGE> 7
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months
Ended March 31
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 2,310,302 $ 2,329,688
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Bad debt expense 141,621 292,203
Tax benefit on option exercise 85,600 92,000
Depreciation and amortization 942,429 775,783
Deferred income taxes (95,000) 140,000
(Gain) loss on disposal of assets (9,099) 11,038
(Gain) loss on disposal of investments (19,713) (39,120)
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable 1,038,821 31,185
Inventory (2,564,024) (2,912,831)
Deposits (152,341) 25,086
Other assets (159,838) 109,628
(Decrease) increase in:
Accounts payable 1,671,532 (126,388)
Accrued compensation and employee benefits (33,875) (360,043)
Income taxes payable (380,647) (211,054)
Other current liabilities -0- 19,484
----------- -----------
2,775,768 176,659
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment -0- 55,337
Proceeds from sale of investments -0- 50,120
Receivable from affiliated company (200,000) --
Capital expenditures (1,586,063) (1,129,852)
---------- ----------
Other investments (20,000) (35,582)
Issuance of notes receivable (82,409) (65,489)
Repayment of notes receivable 88,948 94,580
Other (27,716) --
----------- -----------
NET CASH (USED IN) INVESTING ACTIVITIES (1,827,240) (1,030,886)
----------- -----------
</TABLE>
(continued)
7
<PAGE> 8
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months
Ended March 31
--------------------------
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt and capital leases $ (178,536) $ (176,455)
Proceeds from issuance of common stock 273,575 197,397
Borrowings on line of credit, net 350,000 --
---------- ----------
Net Cash Provided by Financing Activities 445,039 20,942
---------- ----------
Net Increase (Decrease) in Cash and Cash
Equivalents 1,393,567 (833,285)
Cash and Cash Equivalents at Beginning of Period 1,887,427 2,526,839
---------- ----------
Cash and Cash Equivalents at End of Period $3,280,994 $1,693,554
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
8
<PAGE> 9
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments, consisting
of a normal recurring nature considered necessary for a fair presentation, have
been included. It is suggested that these consolidated financial statements be
read in conjunction with the financial statements and notes thereto included in
the Company's annual report on Form 10-K for the year ended June 30, 1996. The
results of operations for the periods ended March 31, 1997 and 1996 are not
necessarily indicative of the operating results for the full year.
Certain amounts in prior period financial statements have been reclassified to
conform to the current period financial statements.
NOTE 2 - PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries, Millennium Health International, Inc. (formerly
Pro-Lean, Inc. and prior to that Sonergy, Inc.), CellLife International, Inc.
and CellLife Pharmaceuticals International, Inc. All significant intercompany
accounts and transactions have been eliminated.
NOTE 3 - INVENTORIES
Inventories are comprised of:
<TABLE>
<CAPTION>
March 31 June 30
1997 1996
---------- ----------
<S> <C> <C>
Raw materials $4,493,131 $2,865,438
Work in process 4,133,841 2,911,778
Finished goods 336,644 622,376
---------- ----------
$8,963,616 $6,399,592
========== ==========
</TABLE>
9
<PAGE> 10
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 - NET EARNINGS PER SHARE
Primary earnings per share is computed based upon the weighted average number of
shares outstanding during the period plus the dilutive effects of common shares
contingently issuable from stock options. Fully diluted earnings per share
reflect additional dilution related to common stock equivalents due to the use
of the market price at the end of the period, when higher than the average price
for the period. Common stock options and common stock purchase warrants are
excluded from the computation of net earnings per share if their effect is
anti-dilutive.
The weighted average number of shares outstanding and common stock equivalents
are as follows:
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended March 31 Ended March 31
-------------- --------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Primary and fully diluted 5,666,313 5,607,120 5,644,542 5,586,692
</TABLE>
NOTE 5 - STOCKHOLDERS' EQUITY
Effective June 5, 1992, the Company adopted the 1992 Incentive Stock Option Plan
(Plan) and reserved a total of 200,000 common shares for issuance to key
employees of the Company. The Plan provides that no option may be granted at an
exercise price less than the fair market value of the common share of the
Company on the date of grant. On September 9, 1993, 200,000 shares were granted
at the fair market value price of $4.875 per share. Effective December 9, 1994,
the Shareholders approved an amendment to the Plan, increasing the number of
common shares that may be granted thereunder from 200,000 to 500,000, to enable
additional officers, directors, and employees to participate in the Plan.
Also effective June 5, 1992, the Company adopted the 1992 Nonqualified Stock
Option Plan and reserved a total of 250,000 common shares for issuance to
officers, employees, and consultants of the Company. On September 9, 1993,
250,000 options were granted at the fair market value price of $4.875 per share.
Effective December 9, 1994, the Board of Directors approved the 1994
Nonqualified Stock Option Plan and reserved a total of 500,000 common shares for
issuance to officers, employees, and consultants of the Company. On January 24,
1995, 500,000 options were granted at the fair market value price of $4.625 per
share.
(continued)
10
<PAGE> 11
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - STOCKHOLDERS' EQUITY (continued)
Effective January 24, 1995, 100,000 options were granted pursuant to a
consulting agreement at the fair market value price of $4.625 per share. On
September 20, 1996, 45,000 options were granted pursuant to a consulting
agreement at prices ranging from $9.00 to $15.00 per share. None of these
options had been exercised as of March 31, 1997.
Information regarding the Company's stock option plans is summarized below:
<TABLE>
<CAPTION>
1992 1992 1994
Incentive Nonqualified Nonqualified
Plan Plan Plan
------- ------- -------
<S> <C> <C> <C>
Outstanding at June 30, 1996 124,002 233,498 489,000
For the six months ended
December 31, 1996- 22,222 4,778 13,000
Exercised
For the three months ended
March 31, 1997- 4,722 2,778 4,500
------- ------- -------
Exercised
97,058 225,942 471,500
======= ======= =======
Outstanding at March 31, 1997
97,058 225,942 471,500
======= ======= =======
Exercisable at March 31, 1997
300,000 -0- -0-
Available for grant at March 31, 1997 ======= ======= =======
</TABLE>
NOTE 6 - PENSION PLAN
Effective January 1, 1997, the Company adopted a defined benefit pension plan
(the "Plan") covering substantially all of its employees. The benefits are based
on years of service and the employee's compensation during the five years before
retirement. The Company will make annual contributions to the Plan equal to the
maximum amount that can be deducted for income tax purposes. For the three
months ended March 31, 1997, the estimated current service cost (normal cost) is
$44,000 and the amortized portion of the unfunded estimated accrued liability
for prior service cost, using a 30-year funding period, is $23,000. Such amounts
have been accrued in the current period.
11
<PAGE> 12
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 - MAJOR CUSTOMERS
The Company had substantial sales to five separate customers during one or more
of the periods shown in the following table. The loss of any of these customers
could have an adverse impact on the Company's revenues and earnings in the
short-term. Sales to these customers, by industry segment, were as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------------- -------------------------------------
March 31, 1997 March 31, 1996 March 31, 1997 March 31, 1996
----------- ---- ----------- ---- ----------- --- ----------- ----
Industry Sales by Sales by Sales by Sales by
Segment Customer %(1) Customer %(1) Customer %(1) Customer %(1)
- ----------- ----------- ---- ----------- ---- ----------- --- ----------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Multi-level
Distribution:
Customer 1 $ 5,527,135 49% $ 3,686,737 29% $12,873,152 36% $10,891,634 31%
Customer 2 1,280,611 11% 4,421,224 35% 6,158,760 18% 10,125,883 29%
Customer 3 1,708,915 15% NA NA NA NA NA
Customer 4 NA NA NA NA 3,581,245 10% NA NA
----------- ---- ----------- ---- ----------- --- ----------- ----
$ 8,516,661 75% $ 8,107,961 64% $22,613,157 64% $21,017,517 60%
=========== ==== =========== ==== =========== === =========== ====
Weight Loss:
Customer 5 NA NA $ 1,744,896 14% NA NA NA NA
=========== ==== =========== ==== =========== === =========== ====
</TABLE>
(1) Percent of total sales.
12
<PAGE> 13
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THIRD QUARTER OF FISCAL 1997 AND 1996
The Company's consolidated net sales for the quarter ending March 31, 1997,
amounted to $11.4 million, a decrease of $1.4 million from the $12.8 million
generated during the quarter ending March 31, 1996. The 11% decrease in revenue
is primarily attributable to a build-up of inventory by a major client in the
prior quarter followed by a decline in the same client's demand for products
purchased from the Company in the current quarter.
International sales for the quarter ending March 31, 1997, amounted to $.5
million compared to $.8 million for the quarter ending March 31, 1996. The
decrease is the result of a major client restructuring its European operations
coupled with a declining demand for the same client's products in Europe.
Gross profit margins were 25.1% for the quarter ending March 31, 1997, compared
to 27.0% for the quarter ending March 31, 1996. The marginal decrease in margins
was due to product mix skewed more to price sensitive bulk sales.
Selling, general and administrative expenses increased as a percentage of
revenues to 17.0% for the quarter ending March 31, 1997 from 13.8% for the
quarter ending March 31, 1996. The increase ($173,000 in real dollars) was
primarily due to expenses associated with conducting new clinical studies
combined with the establishment of a new tablet manufacturing facility.
Net earnings for the quarter ending March 31, 1997, amounted to $.6 million, a
$.4 million decrease from the $1.0 million in net income produced for the
quarter ending March 31, 1996. The decrease in net earnings was due primarily to
a decline in sales, reduced margins and expenses associated with the
installation of a new tablet manufacturing facility.
Earnings per share for the quarter ending March 31, 1997, was $.10 compared to
$.18 for the quarter ending March 31, 1996. The decrease was due to the reasons
discussed above and was only slightly impacted by the increase in the Company's
weighted average number of shares outstanding and the dilutive effect of common
stock equivalents.
NINE MONTHS ENDING MARCH 31, 1997 AND 1996
The Company's consolidated net sales for the nine months ending March 31, 1997,
amounted to $35.5 million, an increase of $.6 million from the $34.9 million
generated during the nine months ending March 31, 1996. The increase was due,
primarily, to increased sales to existing customers.
International sales for the nine months ending March 31, 1997, amounted to $1.3
million compared to $2.6 million for the nine months ending March 31, 1996. The
decrease is the result of a major client restructuring its European operations
coupled with a declining demand for the same client's products in Europe.
13
<PAGE> 14
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
NINE MONTHS ENDING MARCH 31, 1997 AND 1996 (Continued)
Gross profit margins were 26.3% for the nine months ending March 31, 1997,
compared to 25.9% for the nine months ending March 31, 1996. The increase in
margins was due to a change in sales mix for the current period. Gross profits
increased by $295,000, or 3.3% as a result of the 1.7% increase in sales and the
increase in gross margins.
Selling, general and administrative expenses increased moderately as a
percentage of revenues to 15.5% for the nine months ending March 31, 1997 from
14.8% for the nine months ending March 31, 1996. Selling, general and
administrative expenses for the nine months ending March 31, 1997 increased
$342,000 or 6.6% over the nine months ending March 31, 1996.
Net earnings for the nine months ending March 31, 1997 and 1996, amounted to
$2.3 million. The increase in gross profit was offset by the increase in
selling, general and administrative expenses.
Earnings per share for the nine months ending March 31, 1997, was $.41 compared
to $.42 for the nine months ending March 31, 1996. The decrease was due to the
reasons discussed above and the slight impact from the increase in the Company's
weighted average number of shares outstanding and the dilutive effect of common
stock equivalents.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1997, the Company had working capital of $12,485,000 compared to
$10,990,000 as of June 30, 1996. The working capital items which represented the
most significant changes were inventory, which increased by $2.6 million and
accounts payable, which increased by $1.7 million. Inventory levels at March 31,
1997, compared to sales, increased moderately relative to historical levels, due
principally to forward purchase buys of raw materials.
The Company has purchase commitments approximating $300,000 for additional
production equipment which is expected to be placed in service in the fourth
quarter. The Company will also be expending approximately $400,000 in the fourth
quarter, primarily for leasehold improvements. These expenditures are expected
to be funded from a combination of cash flow from operating activities and draws
on the Company's lines of credit.
The Company believes it has sufficient sources of funds to finance its ongoing
operations and meet its capital asset purchases, as well as future growth
through a combination of internally generated cash flow, revolving lines of
credit and equipment financing. The Company has revolving line of credit
agreements permitting borrowings up to $3,000,000, which are secured by the
Company's receivables, inventory, equipment, and vehicles and bear interest at
the bank's prime rate. The bank's prime rate at March 31, 1997 was 8.5%. The
lines of credit expire on December 5, 1997; however, management expects such
lines to be renewed in the normal course of business. The company had borrowings
of $350,000 as of March 31, 1997, and no borrowings at June 30, 1996, under
these credit lines.
14
<PAGE> 15
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, based in part on the
advice of counsel, the ultimate disposition of these matters will not have a
material adverse impact on the Company's consolidated financial position,
operations or cash flows.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS BY THE COMPANY ON ITS SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: The following exhibits are filed herewith:
11.0. Computation of weighted average number common shares outstanding.
27.0. Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended March 31, 1997.
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NATURAL ALTERNATIVES INTERNATIONAL, INC.
MARK A. LE DOUX Date: May 14, 1997
- --------------------
Mark A. Le Doux
Chief Executive Officer
WILLIAM P. SPENCER Date: May 14, 1997
- --------------------
William P. Spencer
President
16
<PAGE> 1
EXHIBIT 11
NATURAL ALTERNATIVES INTERNATIONAL, INC.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(unaudited)
For the Three Months Ended March 31, 1997
<TABLE>
<CAPTION>
Primary
and Fully
Diluted
Days Weighted
Outstanding Out- Average
------------------ stand- Shares
From To ing Shares Outstanding
---- -- --- ------ -----------
<S> <C> <C> <C> <C> <C>
Beginning shares 1/01/97 3/31/97 90 5,391,875 5,391,875
--------- ---------
Dilutive effect of common
stock equivalents:
889,500 stock options at
average price per share 267,388
Exercise of employee stock options:
01/06/97 3/31/97 84 2,500 2,333
02/07/97 3/31/97 52 2,000 1,156
2/20/97 3/31/97 39 5,000 2,167
03/06/97 3/31/97 25 3,000 833
03/14/97 3/31/97 17 1,000 189
03/18/97 3/31/97 13 1,500 216
03/24/97 3/31/97 7 2,000 156
--------- ---------
Ending shares 5,408,875 5,666,313
Net Earnings $ 560,637
=========
Net Earnings Per Share $ .10
=========
</TABLE>
(Continued)
17
<PAGE> 2
EXHIBIT 11
NATURAL ALTERNATIVES INTERNATIONAL, INC.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (continued)
(unaudited)
For the Nine Months Ended March 31, 1997
<TABLE>
<CAPTION>
Primary
and Fully
Diluted
Days Weighted
Outstanding Out- Average
----------- stand- Shares
From To ing Shares Outstanding
---- -- --- ------ -----------
<S> <C> <C> <C> <C> <C>
Beginning shares 07/01/96 3/31/97 274 5,351,875 5,351,875
Dilutive effect of common
stock equivalents:
889,500 stock options at
average price per share 259,318
Exercise of employee stock options:
07/05/96 3/31/97 269 5,000 4,909
07/22/96 3/31/97 252 4,000 3,679
07/25/96 3/31/97 249 6,000 5,453
08/07/96 3/31/97 236 4,000 3,446
08/13/96 3/31/97 230 5,000 4,197
10/21/96 3/31/97 162 15,000 8,814
11/04/96 3/31/97 147 1,000 536
01/06/97 3/31/97 84 2,500 766
02/07/97 3/31/97 52 2,000 380
02/20/97 3/31/97 39 5,000 712
03/06/97 3/31/97 25 3,000 274
03/14/97 3/31/97 17 1,000 62
03/18/97 3/31/97 13 1,500 70
03/24/97 3/31/97 7 2,000 51
------ --------------
Ending shares 5,408,875 5,644,542
========= =========
Net Earnings $ 2,310,302
===========
Net Earnings Per Share $ .41
===========
</TABLE>
(Continued)
18
<PAGE> 3
EXHIBIT 11
NATURAL ALTERNATIVES INTERNATIONAL, INC.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (continued)
(unaudited)
For the Three Months Ended March 31, 1996
<TABLE>
<CAPTION>
Primary
and Fully
Diluted
Days Weighted
Outstanding Out- Average
----------- stand- Shares
From To ing Shares Outstanding
---- -- --- ------ -----------
<S> <C> <C> <C> <C> <C>
Beginning shares 1/01/96 3/31/96 91 5,297,375 5,297,375
Dilutive effect of common
stock equivalents:
1,000,000 stock options at
average price per share 309,679
Exercise of employee stock
options 3/25/96 3/31/96 6 1,000 66
---------- ----------
Ending shares 5,297,375 5,607,120
========== ==========
Net Earnings $1,005,402
==========
Net Earnings Per Share $ .18
==========
</TABLE>
(Continued)
19
<PAGE> 4
EXHIBIT 11
NATURAL ALTERNATIVES INTERNATIONAL, INC.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (continued)
(unaudited)
For the Nine Months Ended March 31, 1996
<TABLE>
<CAPTION>
Primary and
Fully Diluted
Days Weighted
Outstanding Out- Average
------------ stand- Shares
From To ing Shares Outstanding
---- -- --- ------ -----------
<S> <C> <C> <C> <C> <C>
Beginning shares 07/01/95 3/31/96 275 5,257,875 5,257,875
Dilutive effect of common
stock equivalents:
1,000,000 stock options at
average price per share 304,026
Exercise of employee stock
options 08/21/95 3/31/96 223 1,500 1,216
Exercise of employee stock
options 09/20/95 3/31/96 194 20,500 14,462
Exercise of employee stock
options 11/09/95 3/31/96 143 15,000 7,800
Exercise of employee stock
options 11/10/95 3/31/96 142 2,500 1,291
Exercise of employee stock
options 3/25/96 3/31/96 6 1,000 22
---------- ----------
Ending shares 5,298,375 5,586,692
========== ==========
Net Earnings $2,329,688
==========
Net Earnings Per Share $ .42
==========
</TABLE>
20
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANICIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED MARCH 31,
1997, AND IS QUALIFIED IN ITS ETIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 3,280,994
<SECURITIES> 0
<RECEIVABLES> 5,254,316
<ALLOWANCES> 436,000
<INVENTORY> 8,963,616
<CURRENT-ASSETS> 18,789,276
<PP&E> 13,487,896
<DEPRECIATION> 5,547,040
<TOTAL-ASSETS> 27,632,989
<CURRENT-LIABILITIES> 6,304,024
<BONDS> 1,139,633
0
0
<COMMON> 54,089
<OTHER-SE> 19,748,821
<TOTAL-LIABILITY-AND-EQUITY> 27,632,989
<SALES> 35,473,581
<TOTAL-REVENUES> 35,473,581
<CGS> 26,130,920
<TOTAL-COSTS> 5,508,856
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 15,000
<INTEREST-EXPENSE> 127,334
<INCOME-PRETAX> 3,840,302
<INCOME-TAX> 1,530,000
<INCOME-CONTINUING> 2,310,302
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,310,302
<EPS-PRIMARY> .41
<EPS-DILUTED> .41
</TABLE>
