-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IxeX+F9ed21SzDhFUTNoVTioKND9E1y3sCoweS0yv1ndhRrN3TTQSyHWgKBgKWfN ZWs+CES/UXHYSdk+23EjdA== 0000936392-98-000814.txt : 19980515 0000936392-98-000814.hdr.sgml : 19980515 ACCESSION NUMBER: 0000936392-98-000814 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATURAL ALTERNATIVES INTERNATIONAL INC CENTRAL INDEX KEY: 0000787253 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 841007839 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15701 FILM NUMBER: 98621618 BUSINESS ADDRESS: STREET 1: 1185 LINDA VISTA DR CITY: SAN MARCOS STATE: CA ZIP: 92069 BUSINESS PHONE: 6197447340 MAIL ADDRESS: STREET 1: 1185 LINDA VISTA DRIVE CITY: SAN MARCOS STATE: CA ZIP: 92069 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN ACQUISITIONS INC DATE OF NAME CHANGE: 19860929 10-Q 1 10-Q 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, 1998 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 (I.R.S. Employer of incorporation or 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 [ ] 5,724,542 (Number of shares of common stock of the registrant outstanding as of April 30,1998) 1 2 NATURAL ALTERNATIVES INTERNATIONAL, INC. PART I - FINANCIAL INFORMATION CONSOLIDATED BALANCE SHEETS ASSETS
March 31 June 30 1998 1997 ----------- ----------- (unaudited) Current Assets: Cash and cash equivalents $ 3,399,360 $ 3,469,739 Accounts receivable - less allowance for doubtful accounts of $1,234,000 at March 31, 1998 and $1,006,000 at June 30, 1997 10,010,074 6,990,121 Inventories 8,724,835 5,690,850 Tax refund receivable -- 842,209 Notes receivable - current portion 392,573 235,613 Prepaid expenses 599,995 404,899 Deferred income taxes 1,616,000 851,000 Deposits 273,371 322,269 Other current assets 243,794 51,279 ----------- ----------- Total Current Assets 25,260,002 18,857,979 ----------- ----------- Property and equipment, net 9,844,611 8,259,705 ----------- ----------- Other Assets: Investments 58,862 58,862 Notes receivable, less current portion 77,348 261,697 Other noncurrent assets, net 349,062 290,932 ----------- ----------- Total Other Assets 485,272 611,491 ----------- ----------- TOTAL ASSETS $35,589,885 $27,729,175 =========== ===========
2 3 NATURAL ALTERNATIVES INTERNATIONAL, INC. PART I - FINANCIAL INFORMATION CONSOLIDATED BALANCE SHEETS (continued) LIABILITIES AND STOCKHOLDERS' EQUITY
March 31 June 30 1998 1997 ------------ ------------ (unaudited) Current Liabilities: Accounts payable $ 8,292,952 $ 6,907,998 Current installments of long-term debt 45,705 164,266 Current installments of capital lease obligations 7,583 25,189 Income taxes payable 323,749 -- Accrued compensation and employee benefits 316,646 321,337 ------------ ------------ Total Current Liabilities 8,986,635 7,418,790 Deferred income taxes 431,000 487,000 Long-term debt, less current installments 1,011,842 1,100,285 Capital lease obligations, less current installments -- 23,613 ------------ ------------ Total Liabilities 10,429,477 9,029,688 ------------ ------------ 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 5,723,986 at March 31, 1998 and 5,429,764 at June 30, 1997 57,240 54,298 Additional paid-in capital 9,348,233 6,675,426 Retained earnings 15,806,185 12,021,013 Net unrealized losses on investments (51,250) (51,250) ------------ ------------ Total Stockholders' Equity 25,160,408 18,699,487 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 35,589,885 $ 27,729,175 ============ ============
3 4 NATURAL ALTERNATIVES INTERNATIONAL, INC. PART I - FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
For the Nine Months Ended For the Three Months Ended March 31 March 31 --------------------------------- --------------------------------- 1998 1997 1998 1997 ------------ ------------ ------------ ------------ Net sales $ 47,290,172 $ 35,473,581 $ 18,960,255 $ 11,406,325 Cost of goods sold 34,463,007 26,130,920 13,737,005 8,540,258 ------------ ------------ ------------ ------------ GROSS PROFIT 12,827,165 9,342,661 5,223,250 2,866,067 Selling, general & administrative expenses 6,638,910 5,508,856 2,246,932 1,937,328 ------------ ------------ ------------ ------------ INCOME FROM OPERATIONS 6,188,255 3,833,805 2,976,318 928,739 ------------ ------------ ------------ ------------ Other income (expense): Interest income 141,693 127,334 50,625 42,788 Interest expense (85,347) (111,992) (26,961) (34,890) Other, net (44,429) (8,845) 7,747 -- ------------ ------------ ------------ ------------ 11,917 6,497 31,411 7,898 ------------ ------------ ------------ ------------ EARNINGS BEFORE INCOME TAXES 6,200,172 3,840,302 3,007,729 936,637 Income taxes 2,415,000 1,530,000 1,184,000 376,000 ------------ ------------ ------------ ------------ NET EARNINGS $ 3,785,172 $ 2,310,302 $ 1,823,729 $ 560,637 ============ ============ ============ ============ NET EARNINGS PER COMMON SHARE: Basic $ 0.69 $ 0.43 $ 0.33 $ 0.10 ============ ============ ============ ============ Diluted $ 0.66 $ 0.41 $ 0.31 $ 0.10 ============ ============ ============ ============
4 5 NATURAL ALTERNATIVES INTERNATIONAL, INC. PART I - FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
Net Unrealized Additional Gains Common Stock Paid-in Retained (Losses) on Shares Amount Capital Earnings Investments Total ----------- ----------- ----------- ----------- ----------- ----------- Balance at June 30, 1997 5,429,764 $ 54,298 $ 6,675,426 $12,021,013 ($ 51,250) $18,699,487 Issuance of common stock upon exercise of employee stock options 294,222 2,942 1,432,307 -- -- 1,435,249 Income tax benefit from stock options -- -- 1,240,500 -- -- 1,240,500 Net earnings -- -- -- 3,785,172 -- 3,785,172 ----------- ----------- ----------- ----------- ----------- ----------- Balance at March 31, 1998 5,723,986 $ 57,240 $ 9,348,233 $15,806,185 ($ 51,250) $25,160,408 =========== =========== =========== =========== =========== ===========
5 6 NATURAL ALTERNATIVES INTERNATIONAL, INC. PART I - FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Nine Months Ended March 31 1998 1997 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 3,785,172 $ 2,310,302 Adjustments to reconcile net earnings to net cash provided by operating activities: Bad debt expense 270,000 141,621 Tax benefit on option exercise 1,240,500 85,600 Depreciation and amortization 1,117,273 942,429 Deferred income taxes (821,000) (95,000) (Gain) Loss on disposal of assets 52,177 (9,099) Other (20,943) (19,713) Changes in operating assets and liabilities: (Increase) decrease in: Accounts receivable (3,289,953) 1,038,821 Inventories (3,033,985) (2,564,024) Prepaid expenses (195,096) 0 Deposits 48,898 (152,341) Tax refund receivable 842,209 -- Prepaid income taxes (51,845) 0 Other assets (198,799) (159,838) (Decrease) increase in: Accounts payable 1,325,245 1,671,532 Accrued compensation and employee benefits (4,691) (33,875) Income taxes payable 323,749 (380,647) ----------- ----------- Net Cash Provided by Operating Activities 1,440,756 2,775,768 ----------- -----------
6 7 NATURAL ALTERNATIVES INTERNATIONAL, INC. PART 1 - FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (Unaudited)
For the Nine Months Ended March 31 1998 1997 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property and equipment $ 65,000 $ -- Receivable from affiliated company -- (200,000) Capital expenditures (2,819,355) (1,586,063) Issuance of notes receivable (4,625) (82,409) Repayment of notes receivable 55,942 88,948 Other 4,879 (47,716) ----------- ----------- Net Cash Used in Investing Activities (2,698,159) (1,827,240) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Payments on long-term debt and capital leases (248,225) (178,536) Issuance of common stock 1,435,249 273,575 Borrowings on line of credit -- 350,000 ----------- ----------- Net Cash Provided by Financing Activities 1,187,024 445,039 ----------- ----------- Net Increase (Decrease) in Cash and Cash Equivalents (70,379) 1,393,567 Cash and Cash Equivalents at Beginning of Period 3,469,739 1,887,427 ----------- ----------- Cash and Cash Equivalents at End of Period $ 3,399,360 $ 3,280,994 =========== ===========
7 8 NATURAL ALTERNATIVES INTERNATIONAL, INC. PART I - FINANCIAL INFORMATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION The 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, 1997. The results of operations for the periods ended March 31, 1998 and 1997 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 of which had been administered and operated out of the Company's facilities. During fiscal 1997, the assets and liabilities of each of the subsidiaries were transferred to the Company and the Company assumed their operations. All significant intercompany accounts and transactions have been eliminated. NOTE 3 - INVENTORIES
March 31 June 30 1998 1997 ---------- ---------- Raw materials $3,901,218 $2,747,451 Work in progress 4,427,071 2,598,430 Finished goods 396,546 344,969 ---------- ---------- $8,724,835 $5,690,850 ========== ==========
8 9 NATURAL ALTERNATIVES INTERNATIONAL, INC. PART I - FINANCIAL INFORMATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 - NET EARNINGS PER SHARE Pursuant to Statement of Financial Accounting Standards No. 128 ("SFAS No. 128"), financial statements for periods ending after December 15, 1997 must reflect basic earnings per share and diluted earnings per share as defined. Accordingly, basic earnings per share has been computed based upon the weighted average number of shares outstanding during the period and diluted earnings per share has been 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. Prior period amounts have been restated to conform to SFAS No. 128. Common stock options are excluded from the computation of net earnings per share if their effect is anti-dilutive. Basic and diluted earnings per share have been calculated as follows:
For the three months ended For the nine months ended March 31, 1998 March 31, 1998 -------------------------------------- --------------------------------------- Weighted Weighted Average Per Average Per Earnings Shares Share Earnings Shares Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount ----------- ------------- ---------- ----------- ------------- ---------- BASIC EARNINGS PER SHARE Net earnings $1,823,729 5,566,956 $ 0.33 $3,785,172 5,481,539 $ 0.69 EFFECT OF DILUTIVE SECURITIES Stock options 352,963 270,877 ---------- ---------- ---------- ---------- ---------- ---------- DILUTED EARNINGS PER SHARE $1,823,729 5,919,919 $ 0.31 $3,785,172 5,752,416 $ 0.66 ========== ========== ========== ========== ========== ==========
For the three months ended For the nine months ended March 31, 1997 March 31, 1997 -------------------------------------- --------------------------------------- Weighted Weighted Average Per Average Per Earnings Shares Share Earnings Shares Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount ----------- ------------- ---------- ----------- ------------- ---------- BASIC EARNINGS PER SHARE Net earnings $ 560,637 5,398,925 $ 0.10 $2,310,302 5,385,224 $ 0.43 EFFECT OF DILUTIVE SECURITIES Stock options 267,388 260,882 ---------- ---------- ---------- ---------- ---------- ---------- DILUTED EARNINGS PER SHARE $ 560,637 5,666,313 $ 0.10 $2,310,302 5,646,106 $ 0.41 ========== ========== ========== ========== ========== ==========
9 10 NATURAL ALTERNATIVES INTERNATIONAL, INC. PART I - FINANCIAL INFORMATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 5 - STOCKHOLDERS' EQUITY Effective June 5, 1992, the Company adopted the 1992 Incentive Stock Option Plan for which 500,000 common shares have been reserved for issuance to officers, directors, and 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 stock of the Company on the date of grant. On September 9, 1993, 200,000 options were granted at the fair market value price of $4.875 per share. On March 10, 1998, 300,000 options were granted at the fair market value price of $10.50 per share. 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 for which 500,000 common shares were reserved 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. All stock options under each of the plans have five-year terms and all options became fully vested one year after their grant date. On March 10, 1998, the Board of Directors extended the term within which to exercise options under the 1992 Incentive Stock Option Plan by two years. Stock option activity during the periods indicated is summarized below:
1992 1992 1994 Incentive Nonqualified Nonqualified Plan Plan Plan ------------- ------------- ------------- Outstanding and exercisable at June 30, 1997 96,169 220,942 451,500 Granted 300,000 -- -- Exercised 38,332 139,556 116,334 ------- ------- ------- Outstanding and exercisable at March 31, 1998 357,837 81,386 335,166 ======= ======= ======= Weighted-average exercise price- June 30, 1997 $ 4.875 $ 4.875 $ 4.625 March 31, 1998 $ 9.591 $ 4.875 $ 4.625 Weighted-average remaining contractual life Five Years One Year Three Years Available for grant at March 31, 1998 -- -- -- ======= ======= =======
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, 1998. 10 11 NATURAL ALTERNATIVES INTERNATIONAL, INC. PART I - FINANCIAL INFORMATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 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 and nine months ended March 31, 1998, the estimated current service cost (normal cost) and the amortized portion of the unfunded estimated accrued liability for prior service cost, using a 30-year funding period, amounted to $78,000 and $312,000, respectively. This amount has been accrued in the current period. 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 by customer, representing 10% or more of the respective period's total sales, are shown below by industry segment.
Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997 ------------------------- ------------------------- -------------------------- ------------------------- Industry Segment Sales by Customer %(a) Sales by Customer %(a) Sales by Customer %(a) Sales by Customer %(a) - ------------------------- ----------------- ------ ----------------- ------ ----------------- ------ ----------------- ------ Multi-level Distribution: Customer 1 $7,667,015 40% $5,527,135 48% $18,634,260 39% $12,873,152 36% Customer 2 2,575,031 14% 1,280,611 11% 8,001,753 17% 6,158,760 17% Customer 3 (b) 1,708,915 15% (b) (b) Customer 4 (b) (b) (b) 3,581,245 10% ---------------- ------ ---------------- ------- ---------------- ------- ---------------- ------- 10,242,046 54% 8,516,661 74% 26,636,013 56% 22,613,157 63% Retail: Customer 5 2,127,283 11% (b) (b) (b) ---------------- ------ ---------------- ------- ---------------- ------- ---------------- ------- $12,369,329 65% $8,516,661 74% $26,636,013 56% $22,613,157 63% ================ ====== ================ ======= ================ ======= ================ =======
(a) Percent of total sales (b) Sales for the period were less than 10% of total sales. 11 12 NATURAL ALTERNATIVES INTERNATIONAL, INC. PART I - FINANCIAL INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Except for the historical information contained herein, the following discussion contains forward-looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those projected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this section and those discussed in the Company's Annual Report on Form 10-K. RESULTS OF OPERATIONS THIRD QUARTER OF FISCAL 1998 AND 1997 The Company's consolidated net sales for the quarter ended March 31, 1998, amounted to $19.0 million, an increase of $7.6 million over the $11.4 million generated during the quarter ended March 31, 1997. Approximately two-thirds of the 66% increase in sales came from sales to new customers and the balance from existing customers. International sales for the quarter ended March 31, 1998, amounted to $2.6 million compared to $.5 million for the quarter ended March 31, 1997. The increase in international sales is primarily from expansion into foreign markets by existing customers. Gross profit margins were 27.5% for the quarter ended March 31, 1998, compared to 25.1% for the quarter ended March 31, 1997. The increase in margins was due to purchasing cost efficiencies. Selling, general and administrative expenses decreased as a percentage of revenues to 11.9% for the quarter ended March 31, 1998 from 17.0% for the quarter ended March 31, 1997. This decrease is due to the 66% increase in sales noted above while selling, general and administrative expenses, which for the most part, are fixed, increased by 16% from $1.9 million in 1997 to $2.2 million in 1998. Net earnings for the quarter ended March 31, 1998, amounted to $1.8 million, a $1.2 million increase from the $.6 million in net earnings produced for the quarter ended March 31, 1997. The increase in net earnings was due primarily to increased sales and improved gross profit margins partially offset by the increase in selling, general and administrative expenses discussed above. Diluted earnings per share for the quarter ended March 31, 1998, was $.31 compared to $.10 for the quarter ended March 31, 1997. The increase was due to the reasons discussed above. NINE MONTHS ENDED MARCH 31, 1998 AND 1997 The Company's consolidated net sales for the nine months ended March 31, 1998, amounted to $47.3 million, an increase of $11.8 million over the $35.5 million generated during the nine months ended March 31, 1997. Approximately three-fourths of the 33% increase in sales came from sales to new customers and the balance from existing customers. International sales for the nine months ended March 31, 1998, amounted to $10.6 million compared to $1.3 million for the nine months ended March 31, 1997. The increase in international sales is primarily from expansion into foreign markets by existing customers. Gross profit margins were 27.1% for the nine months ended March 31, 1998, compared to 26.3% for the nine months ended March 31, 1997. The increase in margins was due to manufacturing cost efficiencies. 12 13 NATURAL ALTERNATIVES INTERNATIONAL, INC. PART I - FINANCIAL INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) NINE MONTHS ENDED MARCH 31, 1998 AND 1997 (continued) Selling, general and administrative expenses decreased as a percentage of revenues to 14.0% for the nine months ended March 31, 1998 from 15.5% for the nine months ended March 31, 1997. Selling, general and administrative expenses increased to $6.6 million in 1998 from $5.5 million in 1997. The increase was primarily due to expenses associated with the employee pension plan, which was adopted on January 1, 1997, and increased costs for research and development and clinical studies. Net earnings for the nine months ended March 31, 1998, amounted to $3.8 million, a $1.5 million increase from the $2.3 million in net earnings produced for the nine months ended March 31, 1997. The increase in net earnings was due primarily to increased sales and improved gross profit margins partially offset by the increase in selling, general and administrative expenses discussed above. Diluted earnings per share for the nine months ended March 31, 1998, was $.66 compared to $.41 for the nine months ended March 31, 1997. The increase was due to the reasons discussed above. LIQUIDITY AND CAPITAL RESOURCES At March 31, 1998, the Company had working capital of $16,273,000 compared to $11,439,000 as of June 30, 1997. An increase in inventories and accounts receivable was offset by an increase in accounts payable. Inventory levels at March 31, 1998, compared to sales, are in line with historic levels. The Company has purchase commitments approximating $450,000 for additional production equipment that is expected to be placed in service in the fourth quarter. These expenditures are expected to be funded from cash flow from operating activities. 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, 1998 was 8.5%. The lines of credit expire in January 1999. The company had no borrowings at March 31, 1998, or at June 30, 1997, under these credit lines. 13 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 During the quarter ending March 31, 1998, 294,222 common shares were issued pursuant to employee stock option exercises. 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: 27.0. Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter ended March 31, 1998. 14 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. MARK A. LE DOUX Date: May 13, 1998 - ------------------------ Mark A. Le Doux Chief Executive Officer WILLIAM P. SPENCER Date: May 13, 1998 - ------------------------ William P. Spencer President 15 EX-27.01 2 EX-27.01
5 1 3-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 3,399,360 0 10,010,074 1,056,000 8,724,835 25,260,002 16,666,914 6,822,303 35,589,885 8,986,635 1,011,842 0 0 57,240 25,103,168 35,589,885 47,290,172 47,290,172 34,463,007 41,101,917 0 270,000 85,347 6,200,172 2,415,000 3,785,172 0 0 0 3,785,172 0.69 0.66
EX-27.02 3 EX-27.02
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS JUN-30-1998 JUL-01-1997 SEP-30-1997 2,006,149 0 6,669,922 1,007,000 7,071,082 16,892,123 15,312,236 6,191,773 26,617,931 5,760,709 1,047,565 0 0 54,318 19,253,339 26,617,931 12,032,576 12,032,576 8,871,222 11,077,866 0 90,000 30,090 960,420 362,000 598,420 0 0 0 598,420 0.11 0.11
EX-27.03 4 EX-27.03
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. YEAR JUN-30-1997 JUL-01-1996 JUN-30-1997 3,469,739 0 6,990,121 1,006,000 5,690,850 18,857,979 14,105,243 5,845,538 27,729,175 7,418,790 1,100,285 0 0 54,298 18,699,487 27,729,175 49,444,221 49,444,221 39,019,224 8,609,925 0 725,000 147,373 1,839,920 720,000 1,119,920 0 0 0 1,119,920 0.21 0.20
EX-27.04 5 EXHIBIT 27.04
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED MARCH 31, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS JUN-30-1997 JUL-01-1996 MAR-31-1997 3,280,994 0 5,254,316 436,000 8,963,616 18,789,276 13,487,896 5,547,040 27,632,989 6,304,024 1,139,633 0 0 54,089 19,748,821 27,632,989 35,473,581 35,473,581 26,130,920 5,508,856 0 15,000 127,334 3,840,302 1,530,000 2,310,302 0 0 0 2,310,302 0.43 0.41
EX-27.05 6 EXHIBIT 27.05
5 THIS 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. 6-MOS JUN-30-1997 JUL-01-1996 DEC-31-1996 3,483,474 0 5,950,909 408,000 6,924,523 18,079,579 12,914,656 5,229,348 26,642,601 5,935,518 1,177,748 0 0 53,919 19,081,804 26,642,601 24,067,255 24,067,255 17,590,661 3,571,529 0 30,000 77,102 2,903,665 1,154,000 1,749,665 0 0 0 1,749,665 0.33 0.31
EX-27.06 7 EXHIBIT 27.06
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS JUN-30-1997 JUL-01-1996 SEP-30-1996 1,935,533 0 5,681,327 410,000 8,347,449 18,109,685 12,149,685 4,928,000 25,887,634 6,056,517 1,208,953 0 0 53,759 18,168,600 25,887,634 11,437,022 11,437,022 8,176,382 1,747,915 0 90,000 42,543 1,518,373 618,000 900,373 0 0 0 900,373 0.17 0.16
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