<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 DECEMBER 31, 1996
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 (I.R.S. Employer
incorporation or organization) Identification No.)
1185 LINDA VISTA DRIVE, SAN MARCOS, CALIFORNIA 92069
(Address of principal executive offices)
(Zip Code)
(619) 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
----- -----
5,394,375
(Number of shares of common stock of the registrant outstanding as of
January 31, 1997)
1
<PAGE> 2
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31
1996 June 30
(Unaudited) 1996
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 3,483,474 $ 1,887,427
Accounts receivable - less allowance for doubtful
accounts of $408,000 at December 31, 1996
and $319,000 at June 30, 1996 5,290,419 5,026,204
Accounts receivable - affiliated company 660,490 932,490
Inventory 6,924,523 6,399,592
Notes receivable - current portion 139,185 157,155
Prepaid income taxes 159,601 -0-
Deferred income taxes 520,000 425,000
Deposits 276,164 100,513
Other current assets 625,723 781,754
----------- -----------
TOTAL CURRENT ASSETS 18,079,579 15,710,135
----------- -----------
PROPERTY AND EQUIPMENT, at cost, less accumulated
depreciation and amortization of $5,229,348 at
December 31, 1996 and $4,641,640 at June 30, 1996 7,685,308 7,278,078
----------- -----------
OTHER ASSETS:
Investment in affiliated company 200,000 -0-
Other investments 48,737 74,890
Notes receivable, less current portion 337,153 285,470
Other non-current assets 291,824 212,618
----------- -----------
TOTAL OTHER ASSETS 877,714 572,978
----------- -----------
TOTAL ASSETS $26,642,601 $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>
December 31
1996 June 30
(Unaudited) 1996
----------- -----------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 4,906,973 $ 3,658,897
Current installments of long-term debt 230,200 234,736
Current installments of capital lease obligations 24,202 22,860
Accrued compensation and employee benefits 327,578 280,340
Line of credit 443,959 -0-
Income taxes payable -0- 520,246
Customer deposits 2,606 2,606
----------- -----------
TOTAL CURRENT LIABILITIES
5,935,518 4,719,685
Deferred income taxes 357,000 357,000
Long-term debt, less current installments 1,177,748 1,276,118
Capital lease obligations, less current installments 36,612 48,802
----------- -----------
TOTAL LIABILITIES
7,506,878 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 5,391,875 at
December 31, 1996 and 5,351,875 at June 30, 1996 53,919 53,519
Additional paid-in capital 6,472,421 6,220,196
Retained earnings 12,650,758 10,901,093
Net unrealized losses on investments (41,375) (15,222)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 19,135,723 17,159,586
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $26,642,601 $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
December 31
-----------
1996 1995
---- ----
<S> <C> <C>
Net sales $12,630,234 $11,753,954
Cost of goods sold 9,414,280 8,853,416
----------- -----------
GROSS PROFIT 3,215,954 2,900,538
Selling, general & administrative expenses 1,823,613 1,685,162
----------- -----------
OPERATING INCOME 1,392,341 1,215,376
----------- -----------
Other income (expense):
Interest income 37,860 20,893
Interest expense (34,560) (39,373)
Other, net (10,349) 2,500
------------ -----------
(7,049) (5,980)
------------ -----------
EARNINGS BEFORE INCOME TAXES 1,385,292 1,209,396
Income taxes 536,000 474,000
----------- -----------
NET EARNINGS $ 849,292 $ 735,396
==========- ===========
NET EARNINGS PER COMMON SHARE:
Primary and fully diluted $ .15 $ .11
======= =======
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE> 5
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended
December 31,
-----------------------------------
(Unaudited)
1996 1995
----------- -----------
<S> <C> <C>
Net sales $24,067,255 $22,107,755
Cost of goods sold 17,590,661 16,513,002
----------- -----------
GROSS PROFIT 6,476,594 5,594,753
Selling, general & administrative expenses 3,571,529 3,402,707
----------- -----------
OPERATING INCOME 2,905,065 2,192,046
----------- -----------
Other income (expense):
Interest income 84,551 47,682
Interest expense (77,102) (67,652)
Other, net (8,849) 15,210
----------- -----------
(1,400) (4,760)
----------- -----------
EARNINGS BEFORE INCOME TAXES 2,903,665 2,187,286
Income taxes 1,154,000 863,000
----------- -----------
NET EARNINGS $ 1,749,665 $ 1,324,286
=========== ===========
NET EARNINGS PER COMMON SHARE:
Primary and fully diluted $ .31 $ .24
</TABLE>
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 40,000 400 191,425 --- --- 191,825
Income tax benefit from
stock options --- --- 60,800 --- --- 60,800
exercised
Net unrealized
gains (losses) on --- --- --- --- (26,153) (26,153)
investments
Net Earnings --- --- 1,749,665 --- 1,749,665
--------- -------- ----------- ------------ --------- -----------
Balance at
December 31, 1996 5,391,875 $ 53,919 $ 6,472,421 $ 12,650,758 $ (41,375) $19,135,723
========= ======== =========== ============ ========= ===========
</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 Six Months
Ended December 31
-----------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 1,749,665 $ 1,324,286
Adjustments to reconcile net earnings to net cash provided by
(used in) operating activities:
Bad debt expense 126,621 199,203
Tax benefit on option exercise 60,800 92,000
Depreciation and amortization 615,323 501,263
Deferred income taxes (95,000) 167,000
Gain (loss) on disposal of assets (9,099) (11,161)
Other (14,006) -0-
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable (64,954) 1,171,530
Inventory (524,931) (1,629,501)
Prepaid income taxes (159,601) -0-
Deposits (175,651) -0-
Other assets 48,451 7,439
(Decrease) increase in:
Accounts payable 1,246,073 (73,763)
Accrued compensation and employee benefits 47,238 (298,209)
Income taxes payable (520,246) (712,000)
Other current liabilities -0- 15,069
------------ -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 2,330,683 753,156
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment -0- 55,338
Proceeds from sale of investments -0- 30,375
Investment in affiliated company (200,000) -0-
Capital expenditures (1,012,823) (920,103)
Other investments -0- (15,838)
Issuance of notes receivable (72,184) (61,689)
Repayment of notes receivable 30,368 58,663
Other (2,027) -0-
------------ ----------
NET CASH (USED IN) INVESTING ACTIVITIES (1,256,666) (853,254)
------------ -----------
</TABLE>
(continued)
7
<PAGE> 8
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months
Ended December 31
-----------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt and capital leases $ (113,754) $ (148,063)
Proceeds from issuance of common stock 191,825 192,517
Borrowings on line of credit 443,959 -0-
----------- ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 522,030 44,454
----------- ------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 1,596,047 (55,644)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,887,427 2,526,839
----------- ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,483,474 $ 2,471,195
=========== ============
</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 December 31, 1996 and 1995 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>
December 31 June 30
1996 1996
---- ----
<S> <C> <C>
Raw materials $ 2,912,159 $ 2,865,438
Work in process 3,783,793 2,911,778
Finished goods 228,571 622,376
----------- -----------
$ 6,924,523 $ 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 Six Months
Ended December 31 Ended December 31
----------------- -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary and fully diluted 5,626,514 5,616,895 5,641,592 5,576,927
</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. 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. On September 9,
1993, 200,000 shares were granted at the fair market value price of $4.875 per
share. As of December 31, 1996, 98,220 options had been exercised and 101,780
options are exercisable.
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. As of December 31, 1996, 21,280 options had been exercised and 228,720
options are exercisable.
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. As of December 31, 1996, 24,000 options had been exercised and
476,000 options are exercisable.
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. No
options had been exercised as of December 31, 1996.
10
<PAGE> 11
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - MAJOR CUSTOMERS
The Company had substantial sales to three customers for the three months and
six months ended December 31, 1996 and 1995. The loss of any of these customers
would have an adverse impact on the Company's revenues and earnings in the
short-term. Sales to these customers were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ----------------------------
December 31, 1996 December 31, 1995 December 31, 1996 December 31, 1995
----------------- ----------------- ----------------- -----------------
Industry
Segment Revenue %(1) Revenue %(1) Revenue %(1) Revenue %(1)
------- ------- ---- ------- ---- ------- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Multi-level
Distribution $8,595,437 68% $8,998,785 77% $15,325,263 64% $15,150,985 69%
========== === ========== === =========== === =========== ===
</TABLE>
(1) Percent of total revenue.
11
<PAGE> 12
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
SECOND QUARTER OF FISCAL 1997 AND 1996
The Company's consolidated revenues for the quarter ending December 31, 1996,
amounted to $12.6 million, an increase of $.9 million from the $11.8 million
generated during the quarter ending December 31, 1995. The 7% increase in
revenue is primarily attributable to moderate increases in sales primarily from
existing customers.
International sales for the quarter ending December 31, 1996, amounted to $.5
million compared to $.9 million for the quarter ending December 31, 1995. The
decrease is the result of a customer build-up of inventories prior to the start
of the current fiscal year coupled with a restructuring of European ownership
for the same customer.
Gross profit margins were 25.4% for the quarter ending December 31, 1996,
compared to 24.7% for the quarter ending December 31, 1995. The increase in
margins was due to a change in sales mix for the quarter ending December 31,
1996.
Selling, general and administrative expenses increased moderately as a
percentage of revenues to 14.4% for the quarter ending December 31, 1996 from
14.3% for the quarter ending December 31, 1995.
Net earnings for the quarter ending December 31, 1996, amounted to $.8 million,
a $.1 million increase from the $.7 million in net income produced for the
quarter ending December 31, 1995. The increase in net earnings was due
primarily to the slight increase in gross profit margins, noted above.
Earnings per share for the quarter ending December 31, 1996, was $.15 compared
to $.13 for the quarter ending December 31, 1995. The increase 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 on the current quarter.
FIRST AND SECOND QUARTERS OF FISCAL 1997 AND 1996
The Company's consolidated revenues for the six months ending December 31,
1996, amounted to $24.1 million, an increase of $2.0 million from the $22.1
million generated during the six months ending December 31, 1995. The increase
was due, primarily, to increased sales to existing customers.
International sales for the six months ending December 31, 1996, amounted to
$.8 million compared to $1.8 million for the six months ending December 31,
1995. The decrease is the result of a customer build-up of inventories prior to
the start of the current fiscal year coupled with a restructuring of European
ownership for the same customer.
12
<PAGE> 13
NATURAL ALTERNATIVES INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
FIRST AND SECOND QUARTERS OF FISCAL 1997 AND 1996 (Continued)
Gross profit margins were 26.9% for the six months ending December 31, 1996,
compared to 25.3% for the six months ending December 31, 1995. The increase in
margins was due to a change in sales mix for the current period. Gross profits
increased in real dollars by $882,000, or 15.8% as a result of the 9% increase
in sales and the increase in gross margins.
Selling, general and administrative expenses decreased moderately as a
percentage of revenues to 14.8% for the six months ending December 31, 1996
from 15.4% for the six months ending December 31, 1995. In terms of real
dollars, selling, general and administrative expenses for the six months ending
December 31, 1996 increased $168,000 or 4.96% over the six months ending
December 31, 1995.
Net earnings for the six months ending December 31, 1996, amounted to $1.7
million, a $.4 million increase from the $1.3 million in net income produced
for the six months ending December 31, 1995. The increase in net earnings was
due primarily to the 15.8% increase in gross profit, noted above, partially
offset by the increase in selling, general and administrative expenses.
Earnings per share for the six months ending December 31, 1996, was $.31
compared to $.24 for the six months ending December 31, 1995. The increase 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 for the current period.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1996, the Company had working capital of $12,144,000 compared
to $10,990,000 as of June 30, 1996. The working capital items which represented
the most significant increases were inventory, which increased by $.5 million
and accounts payable, which increased by $1.2 million. Inventory levels at
December 31, 1996, compared to sales, decreased moderately relative to
historical levels, due principally to working off build-ups at the beginning of
the fiscal year in anticipation of price increases.
The Company has purchase commitments approximating $500,000 for additional
production equipment which is expected to be placed in service in the third
quarter. The Company will also be expending approximately $200,000 in the third
quarter, primarily for laboratory expansion and 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 December 31, 1996 was 8.25%.
The lines of credit expire on December 5, 1997; management expects such lines
to be renewed in the normal course of business. The company had borrowings of
$444,000 as of December 31, 1996, and no borrowings at June 30, 1996, under
these credit lines.
13
<PAGE> 14
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 December 31,
1996.
14
<PAGE> 15
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.
/s/ MARK A. LE DOUX Date: February 13, 1997
- -----------------------
Mark A. Le Doux
Chief Executive Officer
/s/ WILLIAM P. SPENCER Date: February 13, 1997
- -----------------------
William P. Spencer
President
15
<PAGE> 1
EXHIBIT 11
NATURAL ALTERNATIVES INTERNATIONAL, INC.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(unaudited)
For the Three Months Ended December 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 10/01/96 12/31/96 92 5,375,875 5,375,875
Dilutive effect of common
stock equivalents:
906,500 stock options at
average price per share 238,443
Exercise of employee stock
options 10/21/96 12/31/96 71 15,000 11,576
Exercise of employee stock
options 07/22/96 12/31/96 57 1,000 620
--------- ---------
Ending shares 5,391,875 5,626,514
Net Earnings $ 849,292
=========
Net Earnings Per Share $ .15
=====
</TABLE>
(Continued)
16
<PAGE> 2
EXHIBIT 11
NATURAL ALTERNATIVES INTERNATIONAL, INC.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (continued)
(unaudited)
For the Six Months Ended December 31, 1996
<TABLE>
<CAPTION>
Primary and
Days Fully Diluted
Outstanding Out- Weighted
----------- stand- Average
From To ing Shares Outstanding
---- -- --- ------ -----------
<S> <C> <C> <C> <C> <C>
Beginning shares 07/01/96 12/31/96 184 5,351,875 5,351,875
Dilutive effect of common
stock equivalents:
906,500 stock options at
average price per share 260,375
Exercise of employee stock
options 07/05/96 12/31/96 179 5,000 4,864
Exercise of employee stock
options 07/22/96 12/31/96 162 4,000 3,522
Exercise of employee stock
options 07/25/96 12/31/96 159 6,000 5,185
Exercise of employee stock
options 08/07/96 12/31/96 146 4,000 3,174
Exercise of employee stock
options 08/13/96 12/31/96 140 5,000 3,804
Exercise of employee stock
options 10/21/96 12/31/96 102 15,000 8,315
Exercise of employee stock
options 11/04/96 12/31/96 88 1,000 478
--------- -----------
Ending shares 5,391,875 5,641,592
Net Earnings $ 1,749,665
===========
Net Earnings Per Share $ .31
=====
</TABLE>
(Continued)
17
<PAGE> 3
EXHIBIT 11
NATURAL ALTERNATIVES INTERNATIONAL, INC.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (continued)
(unaudited)
For the Three Months Ended December 31, 1995
<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 10/01/95 12/31/95 92 5,279,875 5,279,875
Dilutive effect of common
stock equivalents:
1,001,000 stock options at
average price per share 326,966
Exercise of employee stock
options 11/09/95 12/31/95 53 15,000 8,641
Exercise of employee stock
options 11/10/95 12/31/95 52 2,500 1,413
--------- ---------
Ending shares 5,297,375 5,616,895
Net Earnings $ 735,396
=========
Net Earnings Per Share $ .13
=====
</TABLE>
(Continued)
18
<PAGE> 4
EXHIBIT 11
NATURAL ALTERNATIVES INTERNATIONAL, INC.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (continued)
(unaudited)
For the Six Months Ended December 31, 1995
<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 12/31/95 184 5,257,875 5,257,875
Dilutive effect of common
stock equivalents:
1,001,000 stock options at
average price per share 301,472
Exercise of employee stock
options 08/21/95 12/31/95 132 1,500 1,076
Exercise of employee stock
options 09/20/95 12/31/95 103 20,500 11,476
Exercise of employee stock
options 11/09/95 12/31/95 53 15,000 4,321
Exercise of employee stock
options 11/10/95 12/31/95 52 2,500 707
--------- -----------
Ending shares 5,297,375 5,576,927
Net Earnings $ 1,324,286
===========
Net Earnings Per Share $ .24
=====
</TABLE>
19
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the unaudited
consolidated financial statements for the six months ended December 31, 1996,
and is qualified in its entirety 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> DEC-31-1996
<CASH> 3,483,474
<SECURITIES> 0
<RECEIVABLES> 5,950,909
<ALLOWANCES> 408,000
<INVENTORY> 6,924,523
<CURRENT-ASSETS> 18,079,579
<PP&E> 12,914,656
<DEPRECIATION> 5,229,348
<TOTAL-ASSETS> 26,642,601
<CURRENT-LIABILITIES> 5,935,518
<BONDS> 1,177,748
0
0
<COMMON> 53,919
<OTHER-SE> 19,081,804
<TOTAL-LIABILITY-AND-EQUITY> 26,642,601
<SALES> 24,067,255
<TOTAL-REVENUES> 24,067,255
<CGS> 17,590,661
<TOTAL-COSTS> 3,571,529
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 30,000
<INTEREST-EXPENSE> 77,102
<INCOME-PRETAX> 2,903,665
<INCOME-TAX> 1,154,000
<INCOME-CONTINUING> 1,749,665
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,749,665
<EPS-PRIMARY> .31
<EPS-DILUTED> .31
</TABLE>
