Natural Alternatives International (NAI), the nutritional supplements manufacturer, saw its second quarter sales rise by 28 per cent to $12.7 million (€14.6m) compared to the first quarter of the year when sales were $9.9 million.
Net profits for the second quarter were $64,000, up by $722,000 compared to the losses of $658,000 in the first quarter.
Randell Weaver, the company's chief financial officer, said that the improved results showed NAI's continuing efforts to demonstrate sustained profitability. "We experienced a number of challenges in the quarter including margin pressure in our core business and increased costs in our DTC product line related to the inadequate performance of an outsourced service provider who was replaced. In spite of these challenges, we experienced sustainable growth and posted a small profit," he said.
Sales also improved compared to the same quarter a year earlier, although net profits were down substantially from $443,000.
NAI also reported that it received additional settlement proceeds of approximately $1.0 million from pending litigation in January 2002, although this sum was not included in the current figures.
The company recently completed a number of management changes and cost reductions which are expected to generate annual savings in excess of $1.0 million.
"I believe we have made progress thus far and are working toward continued improvement in our financial results, but we are cautious. During the third quarter we will incur additional separation costs related to the management restructuring. We may also experience increased costs in our DTC product line as we complete our transition to a new outsourced service provider," Weaver said.