Natural Alternatives International, Inc. · NASDAQ:NAII
Natural Alternatives International — Investor Presentation (February 2021)
31 slides from Natural Alternatives International's investor presentation, February 2021
Slide 1: Natural Alternatives International, Inc. Investor Presentation
Custom Contract Manufacturing Since 1980. Enriching the World Through the Best of Nutrition. Natural Alternatives International, Inc. Investor Presentation February 2021 Nasdaq: NAII
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. These statements reflect Natural Alternatives International, Inc.’s (the Company’s) current views about future events and financial performance b
Slide 3: Regulation G
Regulation G In addition, in order to assist you with period -over-period comparisons on a consistent and comparable basis, our presentation includes certain non-US GAAP information. This information excludes certain non-cash expenses, certain cash income and expense items related to our foreign cur
Slide 4: Company Snapshot
Company Snapshot NAII is the only pure-play public company that offers global formulation and manufacturing of customized nutritional supplements along with marketing branded and patented products Contract Manufacturing We provide private-label contract manufacturing services to companies that Headq
Slide 5: Company Strengths
Company Strengths Multi-Continent Contract Manufacturing Facilities • Custom product formulation • State-of-the-art manufacturing facilities • Broad material acquisition & analysis • Certified in-house laboratory capabilities • Multiple packaging configuration capabilities In-House Brand Leveraging
Slide 6: Company Strengths
Company Strengths Growth Drivers From Organic Initiatives And Complementary Acquisitions • Expand existing customer products, base and channels • Expand in-house brands • Complementary acquisitions Solid Cash Flows And Strong Balance Sheet To Support Growth Objectives • TTM net sales of $148.4 milli
Slide 7: Executive Management Team
Executive Management Team Mark A. LeDoux CEO and Chairman of the Board of Directors Mr. LeDoux founded Natural Alternatives International (NAI) in 1980. With over 45 years of experience since joining the nutritional supplements industry in 1975, Mr. LeDoux is considered a highly regarded leader and
Slide 8: Executive Management Team
Executive Management Team Kenneth E. Wolf President and Chief Operating Officer Mr. Wolf joined NAI in February 2008 as Chief Financial Officer, was promoted to Chief Operating Officer in June 2010 and has served as NAI’s President since October 2015. Mr. Wolf is responsible for design and implement
Slide 9: Overview – Capabilities
Overview – Capabilities Global Production • Up to 20 million capsules and 14 million tablets daily capacity • Up to 500,000 bottles finished product daily capacity • Highly sophisticated in-house laboratories Packaging • Warehousing – 5,600+ pallet capacity • HDPE/PP Bottles Regulatory • Full Label
Slide 10: Overview – Contract Manufacturing
Overview – Contract Manufacturing Product Formulation • Custom formulations • In-house science teams • Clinical study design and support • In-house product stability testing capabilities Material Acquisition and Analysis • Global raw material sourcing expertise • Transparency and tracking of materia
Slide 11: Overview – Patent & Trademark Licensing
Overview – Patent & Trademark Licensing In-house brand expansion leveraging Sports Nutrition our proprietary ingredients: CarnoSyn® • Enhance athletic performance and SR CarnoSyn® beta-alanine. • Build muscle and reach peak sustainable performance • New sustained release form of CarnoSyn® remains in
Slide 12: Worldwide Operations and Market Reach
Worldwide Operations and Market Reach NAI’s global footprint and scope facilitates greater opportunities and more dynamic client engagement Manno, Switzerland Carlsbad, CA Vista, CA NAI Offices and Operating Centers Primary Markets 12
Slide 13: NAI US Facilities Tour
NAI US Facilities Tour we ex eo ternatives SNALY N] WW nal, Inc. Ya ae a &
Slide 14: Accreditations
Accreditations Industry leading accreditations and certification demonstrate our commitment to quality and are a strong barrier to entry Domestic (NAI) International (NAIE) Good Manufacturing Practices (cGMPs) (21 CFR 111) SwissMedic GMP certified – site registered and licensed compliant – FDA Inspe
Slide 15: Industry Trends
Industry Trends We will benefit from growing consumer interest in health and wellness of consumers say of consumers take 76% of baby boomers supplements are part supplements daily 2 take supplements 2 of a healthy lifestyle 1 Growing vitamin, mineral, & supplement (“VMS”) industries: • USA Dietary s
Slide 16: COVID-19 Spikes USA Supplement Growth
COVID-19 Spikes USA Supplement Growth COVID accelerated the supplement growth trend. Supplements projected to be $1.4B larger in 2023 than pre-COVID est. 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 2015 2016 2017 2018 2019 2020e 2021e 2022e 2023e Current Sales Projections Pre-COVID Sales Proj
Slide 17: US Supplement Market Forecast
US Supplement Market Forecast A new level of demand has been established; Supplement industry on track to pass $55B in 2020 and grow to $60B+ by 2023 70,000 60,000 Vitamins 50,000 6% 40,000 12% Herbs & 30,000 30% Botanicals 20,000 Specialty/Other 10,000 14% 0 Sports Nutrition 18% 20% Meal Supplement
Slide 18: Global Supplement Market Forecast
Global Supplement Market Forecast Global trend is matching US trend Global market spike of 9.5% growth to $150B in 2020. 200,000 Other Asian Australia and New Other 180,000 Countries Zealand 5% 5% 2% 160,000 Eastern 140,000 Europe and Russia 120,000 6% United 100,000 States 37% 80,000 Latin America
Slide 19: Financial Performance and Growth Objectives
Financial Performance and Growth Objectives 19
Slide 20: Historical Revenue and EBITDA
Historical Revenue and EBITDA The majority of the FY 2020 sales decline related to a single customer. This customer’s sales have returned to historical levels in FY 2021. Revenue Adjusted EBITDA and EBITDA Margin (in $M's) (Non-US GAAP)* (in $M's) $160.0 $148.4 18.0% $138.3 $16.0 $14.7 $14.8 $140.0
Slide 21: Historical Sales By Channel
Historical Sales By Channel $160 Millions 7% $140 5% 12% $120 16% 10% 11% 22% 19% 10% $100 8% 5% 10% $80 12% 6% 88% $60 78% 74% 81% 76% 68% $40 82% $20 $- FY15 FY16 FY17 FY18 FY19 FY20 Trailing 12 Months* Direct Sales Retail Patent & Trademark Licensing *Trailing 12 Months – Includes January 2020 th
Slide 22: Objectives & Growth Drivers
Objectives & Growth Drivers • Fiscal 2021 Outlook: 30-50% increase in Net Sales Operating Income of 5-7% of Net Sales • Fiscal 2022 and Beyond Targeted Growth Objectives: Achieve $250 million revenue run-rate in the next 2-3 years with double digit Adjusted EBITDA margins Target sales growth
Slide 23: Acquisition Strategy
Acquisition Strategy Channels Verticals Health Care Practitioner Wellness Brands Multi-Level Marketer High Value Ingredient Suppliers Direct-to-Consumer Contract Manufacturers Specialty Retail Value-Add Distributors Drug Store Mass Markets Forms Vitamins, Minerals, Supplements Capsules/Tablets, Powd
Slide 24: Investment Thesis
Investment Thesis • Current capacity utilization of ~50% • As utilization increases, fixed costs remain relatively flat and profit margins improve • Solid financial condition and ability to generate strong cash flow will allow us to increase capacity and or seek acquisition opportunities • As of Dec
Slide 25: Investor Information
Investor Information Stock Symbol: NASDAQ: NAII Company website: http://www.nai-online.com Company Headquarters: 1535 Faraday Avenue Carlsbad, CA 92008 Investor Relations Contacts Michael Fortin Chief Financial Office 760-736-7700 investor@nai-online.com 25
Slide 26: Appendix
Appendix Investor Relations Info 26
Slide 27: Historical Segment Performance
Historical Segment Performance Trailing 12 Fiscal Year ended June 30, Months* 2018 2019 2020 (Unaudited) Revenue Private Label Contract Manufacturing $ 110,992 $ 121,598 $ 106,291 $ 137,824 Patent & Trademark Licensing 21,445 16,692 12,585 10,563 Total Revenue $ 132,437 $ 138,290 $ 118,876 $ 148,387
Slide 28: Condensed Consolidated Statements of Income
Condensed Consolidated Statements of Income (In thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended December 31, December 31, 2020 2019 2020 2019 NET SALES 48,083 100.0% 29,103 100.0% 87,809 100.0% 58,298 100.0% Cost of goods sold 38,409 79.9% 24,042 82.6% 72,130 82.1%
Slide 29: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (In thousands) December 31, June 30, 2020 2020 (Unaudited) ASSETS Cash and cash equivalents $28,629 $30,478 Accounts receivable, net 17,062 17,001 Inventories, net 34,466 27,972 Other current assets 3,260 3,573 Total current assets 83,417 79,024 Property and equ
Slide 30: Adjusted EBITDA Reconciliation (Non-US GAAP)
Adjusted EBITDA Reconciliation (Non-US GAAP) *Trailing 12 Months – Includes January 2020 through December 2020 **Represents an inventory and accounts receivable reserve related to a former customer. Due to the nature of our business and the underlying circumstances of this charge, we consider this a
Slide 31: Thank You
Custom Contract Manufacturing Since 1980. Enriching the World Through the Best of Nutrition. Thank You www.nai-online.com Nasdaq: NAII
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