Natural Alternatives International, Inc. Announces Second Quarter Results

Natural Alternatives International, Inc.

Announces Second Quarter Results

SAN MARCOS, CALIF, February 14, 2006 /PRNewswire/

Natural Alternatives International, Inc. ( NAI ) (Nasdaq: NAII), a leading formulator, manufacturer and marketer of customized nutritional supplements, today announced net income of $461,000 or $0.07 per diluted share on net sales of

$19.9 million for the second quarter ended December 31, 2005.

Second quarter net sales decreased 8% to $19.9 million from $21.5 million for the

comparable quarter last year. The reduction in net sales resulted primarily from a decrease in private label contract manufacturing sales. Income from operations was $843,000 compared to $882,000 in the comparable quarter last year. Net income

decreased to $461,000 or $0.07 per diluted share from $785,000 or $0.12 per diluted share for the comparable quarter last year.

2005, NAI had cash and working capital of $2.2 million and $12.3 million, compared to $1.9 million and $14.4 million at June 30, 2005, respectively. Cash flows from operating activities for the first six months of fiscal 2006 were $3.6 million.

An additional $3.8 million of term debt was obtained on December 5, 2005 to fund part of the $5.6 million of net cash used in the recent acquisition of Real Health Laboratories, Inc. (RHL).

CEO Mark LeDoux commented, During the second quarter we made progress towards the long-term growth and diversification of our revenue, customer base and channels

of distribution. Our recent acquisition of Real Health Laboratories provides us with a tremendous opportunity to market our own branded products in new distribution channels. We expect to realize strategic, operational and financial benefits

beginning with the integration of certain NAI outsourced activities into RHL s existing operation and anticipated elimination of certain redundant costs.

President Randell Weaver added, During the second quarter, we aggressively reduced costs in response to the net

sales decline. We are pleased with our progress related to the integration of the RHL acquisition and do not expect a significant impact on profitability in the third quarter. As previously announced, we received initial purchase orders from two new

contract manufacturing customers and have since received additional orders. We expect net sales from these two new customers to exceed $10 million in the remainder of the fiscal year.

NAI, headquartered in San Marcos, California, is a leading formulator, manufacturer and marketer of nutritional supplements and provides strategic partnering services to

its customers. Our comprehensive partnership approach offers a wide range of innovative nutritional products and services to the client including: scientific research, clinical studies, proprietary ingredients, customer-specific nutritional product

formulation, product testing and evaluation, marketing management and support, packaging and delivery system design, regulatory review and international product registration assistance. For more information about NAI, please see our website at

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934

that are not historical facts and information. These statements represent our intentions, expectations and beliefs concerning future events, including, among other things, our expectations and beliefs with respect to future financial and operating

results, our ability to successfully integrate RHL s operations and the impact on profitability of such integration, our ability to realize strategic, operational and financial benefits from the acquisition of RHL, to continue to implement our

strategic plans, to increase branded product sales, to develop distribution channels, and to develop and increase sales to new customers. We wish to caution readers these statements involve risks and uncertainties that could cause actual results and

outcomes for future periods to differ materially from any forward-looking statement or views expressed herein. NAI s financial performance and the forward-looking statements contained herein are further qualified by other risks including those

set forth from time to time in the documents filed by us with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

SOURCE Natural Alternatives International, Inc.

CONTACT John R. Reaves, Chief Financial Officer, Natural Alternatives International, Inc.,

760-736-7700 or investor@nai-online.com.

NATURAL ALTERNATIVES INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

NATURAL ALTERNATIVES INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share data)