UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2002
Commission file number 0-15701
NATURAL ALTERNATIVES
INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
| Delaware (State or other jurisdiction of incorporation or organization) |
84-1007839 (I.R.S. Employer Identification No.) | |
| 1185 Linda Vista Drive San Marcos, California 92069 (Address of principal executive offices, including 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 ¨
At February 3, 2003, the registrant had 5,812,421 outstanding shares of common stock, $.01 par value, net of 272,400 treasury shares.
Part I. Financial Information
Item 1. Financial Statements
Natural Alternatives International, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except share data)
| December 31, 2002 |
June 30, 2002 |
|||||||
| (Unaudited) |
||||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
4,037 |
|
$ |
640 |
| ||
| Restricted cash |
|
— |
|
|
1,500 |
| ||
| Accounts receivable, net of allowance for doubtful accounts of $25 at September 30, 2002 and $105 at June 30, 2002 |
|
3,958 |
|
|
3,536 |
| ||
| Inventories, net |
|
7,318 |
|
|
7,871 |
| ||
| Income tax refund receivable |
|
715 |
|
|
701 |
| ||
| Prepaid expenses |
|
761 |
|
|
271 |
| ||
| Deposits |
|
106 |
|
|
168 |
| ||
| Other current assets |
|
189 |
|
|
165 |
| ||
| Total current assets |
|
17,084 |
|
|
14,852 |
| ||
| Property and equipment, net |
|
11,630 |
|
|
12,439 |
| ||
| Other assets: |
||||||||
| Related parties notes receivable |
|
50 |
|
|
118 |
| ||
| Other noncurrent assets, net |
|
101 |
|
|
101 |
| ||
| Total other assets |
|
151 |
|
|
219 |
| ||
| Total assets |
$ |
28,865 |
|
$ |
27,510 |
| ||
| Liabilities and Stockholders’ Equity |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
3,563 |
|
$ |
4,112 |
| ||
| Accrued liabilities |
|
858 |
|
|
815 |
| ||
| Accrued compensation and employee benefits |
|
533 |
|
|
482 |
| ||
| Income taxes payable |
|
145 |
|
|
131 |
| ||
| Current portion of long-term debt |
|
567 |
|
|
587 |
| ||
| Total current liabilities |
|
5,666 |
|
|
6,127 |
| ||
| Long-term debt, less current portion |
|
2,672 |
|
|
1,576 |
| ||
| Long-term pension liability |
|
158 |
|
|
199 |
| ||
| Total liabilities |
|
8,496 |
|
|
7,902 |
| ||
| Commitments and contingencies |
||||||||
| 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 6,084,821 shares at December 31, 2002 and 6,073,179 shares at June 30, 2002 |
|
61 |
|
|
61 |
| ||
| Additional paid-in capital |
|
11,437 |
|
|
11,362 |
| ||
| Retained earnings |
|
10,174 |
|
|
9,488 |
| ||
| Treasury stock, at cost, 272,400 shares at December 31, 2002 and June 30, 2002 |
|
(1,303 |
) |
|
(1,303 |
) | ||
| Total stockholders’ equity |
|
20,369 |
|
|
19,608 |
| ||
| Total liabilities and stockholders’ equity |
$ |
28,865 |
|
$ |
27,510 |
| ||
See accompanying notes to consolidated financial statements.
2
Natural Alternatives International, Inc.
Consolidated Statements Of Operations And Comprehensive Income (Loss)
(Dollars in thousands, except share data)
(Unaudited)
| Three months ended December 31, |
Six months ended December 31, |
|||||||||||||||
| 2002 |
2001 |
2002 |
2001 |
|||||||||||||
| Net sales |
$ |
13,010 |
|
$ |
12,655 |
|
$ |
26,146 |
|
$ |
22,542 |
| ||||
| Cost of goods sold |
|
9,958 |
|
|
9,949 |
|
|
19,899 |
|
|
17,812 |
| ||||
| Gross profit |
|
3,052 |
|
|
2,706 |
|
|
6,247 |
|
|
4,730 |
| ||||
| Selling, general & administrative expenses |
|
2,797 |
|
|
2,461 |
|
|
5,589 |
|
|
4,915 |
| ||||
| Income (loss) from operations |
|
255 |
|
|
245 |
|
|
658 |
|
|
(185 |
) | ||||
| Other income (expense): |
||||||||||||||||
| Interest income |
|
21 |
|
|
4 |
|
|
28 |
|
|
7 |
| ||||
| Interest expense |
|
(70 |
) |
|
(193 |
) |
|
(153 |
) |
|
(351 |
) | ||||
| Foreign exchange loss |
|
(11 |
) |
|
27 |
|
|
(17 |
) |
|
(37 |
) | ||||
| Proceeds from vitamin antitrust litigation |
|
— |
|
|
— |
|
|
225 |
|
|
— |
| ||||
| Other, net |
|
(39 |
) |
|
9 |
|
|
(40 |
) |
|
14 |
| ||||
|
|
(99 |
) |
|
(153 |
) |
|
43 |
|
|
(367 |
) | |||||
| Income (loss) before income taxes |
|
156 |
|
|
92 |
|
|
701 |
|
|
(552 |
) | ||||
| Provision for income taxes |
|
7 |
|
|
28 |
|
|
15 |
|
|
42 |
| ||||
| Net income (loss) |
$ |
149 |
|
$ |
64 |
|
$ |
686 |
|
$ |
(594 |
) | ||||
| Net income (loss) per common share: |
||||||||||||||||
| Basic |
$ |
0.03 |
|
$ |
0.01 |
|
$ |
0.12 |
|
$ |
(0.10 |
) | ||||
| Diluted |
$ |
0.02 |
|
$ |
0.01 |
|
$ |
0.11 |
|
$ |
(0.10 |
) | ||||
| Weighted average common shares outstanding: |
||||||||||||||||
| Basic shares |
|
5,804,267 |
|
|
5,785,606 |
|
|
5,803,566 |
|
|
5,785,606 |
| ||||
| Diluted shares |
|
6,021,919 |
|
|
5,785,606 |
|
|
5,975,742 |
|
|
5,785,606 |
| ||||
See accompanying notes to consolidated financial statements.
3
Natural Alternatives International, Inc.
Consolidated Statements of Cash Flows
For the Six Months Ended December 31,
(Dollars in thousands)
(Unaudited)
| 2002 |
2001 |
|||||||
| Cash flows from operating activities |
||||||||
| Net income (loss) |
$ |
686 |
|
$ |
(594 |
) | ||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
| Provision for uncollectible accounts receivable |
|
(80 |
) |
|
(133 |
) | ||
| Depreciation and amortization |
|
1,222 |
|
|
1,188 |
| ||