Natural Alternatives International, Inc. reports 40.1% EBITDA decline in 2020 and 2.1 pp EBITDA Margin decline from 6.8% to 4.8%
09/21/2020 • About Natural Alternatives International, Inc. (
$NAII) • By InTwits
Natural Alternatives International, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 4.8% in FY2020 vs. 6.8% in FY2019 vs. 12.3% in FY2016
- Natural Alternatives International, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.9%. At the same time it's a lot of higher than industry average of 2.1%.
- CAPEX is quite volatile: $5m in FY2020, $5m in FY2019, $4m in FY2018, $5m in FY2017, $10m in FY2016
- The company has unprofitable business model: ROIC is -1.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Natural Alternatives International, Inc.'s Revenue dropped on 14.0%. Annual revenue decline showed slowdown in FY20Q4 - revenue jumped on 16.0%. Revenue decline was accelerating on average at -11.8 pp per annum in FY2016-FY2020. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.4 pp from 3.3% to 12.7% in FY2020. EBITDA Margin followed a declining trend at -1.8 pp per annum in the last 5 years.
Gross Margin decreased slightly on 1.2 pp from 17.0% to 15.9% in FY2020. Gross Margin stuck to a declining trend at -1.7 pp per annum in the last 5 years. SG&A as a % of Revenue increased slightly on 1.6 pp from 12.7% to 14.4% in FY2020.
Net Income margin decreased on 6.1 pp from 4.7% to -1.4% in FY2020. Net Income margin followed a declining trend at -2.1 pp per annum in FY2016-FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 3.8%. Natural Alternatives International, Inc.'s CAPEX/Revenue decreased slightly on 0.57 pp from 4.4% in FY2017 to 3.8% in FY2020. Average CAPEX/Revenue for the last three years was 3.6%. Natural Alternatives International, Inc. invested a big chunk of EBITDA (80.4%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-1.7%) and ROE (-2.2%). ROIC decreased on 9.7 pp from 8.1% to -1.7% in FY2020. ROE dropped on 11.3 pp from 9.1% to -2.2% in FY2020. ROIC followed a declining trend at -6.1 pp per annum in the last 5 years. ROE declined at -4.7 pp per annum in FY2016-FY2020.
Leverage (Debt)
Debt level is -0.3x Net Debt / EBITDA and 5.1x Debt / EBITDA. Debt surged while cash surged on 21.7%.
Natural Alternatives International, Inc. has no short term refinancing risk: cash is higher than short term debt (231.3%).
Management team
Mark A Ledoux is a the company's CEO. Mark A Ledoux has spent 35 years with the company. Michael E Fortin is a the company's CFO. Michael E Fortin has spent 5 years at the company.
Financial and operational results
FY ended 06/30/2020
Natural Alternatives International, Inc. ($NAII) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 114.2 | 121.9 | 132.4 | 138.3 | 118.9 | -14.0% |
| Gross Profit | 25.3 | 26.2 | 26.3 | 23.6 | 18.9 | -20.0% |
| SG&A | 11.9 | 16.5 | 16.8 | 17.6 | 17.1 | -2.9% |
| EBITDA | 14.0 | 12.1 | 12.4 | 9.4 | 5.7 | -40.1% |
| Net Income | 9.5 | 7.2 | 5.1 | 6.5 | -1.6 | -125.1% |
Balance Sheet
|
|---|
| Cash | 19.7 | 27.8 | 23.6 | 25.0 | 30.5 | 21.7% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 13.2 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 15.6 | |
Cash flow
|
|---|
| Capex | 10.4 | 5.4 | 4.1 | 5.3 | 4.5 | -14.8% |
Ratios
|
|---|
| Revenue growth | 43.6% | 6.8% | 8.6% | 4.4% | -14.0% | |
| EBITDA growth | 112.9% | -13.9% | 2.9% | -24.2% | -40.1% | |
|
|---|
| Gross Margin | 22.1% | 21.5% | 19.9% | 17.0% | 15.9% | -1.2% |
| EBITDA Margin | 12.3% | 9.9% | 9.4% | 6.8% | 4.8% | -2.1% |
| SG&A, % of revenue | 10.4% | 13.5% | 12.7% | 12.7% | 14.4% | 1.6% |
| Net Income Margin | 8.4% | 5.9% | 3.8% | 4.7% | -1.4% | -6.1% |
| CAPEX, % of revenue | 9.1% | 4.4% | 3.1% | 3.9% | 3.8% | -0.0% |
|
|---|
| ROIC | 24.6% | 16.5% | 14.4% | 8.1% | -1.7% | -9.7% |
| ROE | 19.6% | 12.6% | 7.8% | 9.1% | -2.2% | -11.3% |
| Net Debt/EBITDA | -1.4x | -2.3x | -1.9x | -2.7x | -0.3x | 2.4x |
Natural Alternatives International, Inc. ($NAII) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 29 | 29 | 25 | 35 | | -20.1% | -19.3% | -28.1% | 16.0% |
| EBITDA | 1 | 2 | -3 | 3 | | -73.9% | -43.8% | -216.2% | 2,232.1% |
| Net Income | 0 | 0 | -4 | 2 | | -96.2% | -78.2% | -301.4% | - |
Balance Sheet
|
|---|
| Cash | 29 | 27 | 33 | 30 | | 3.2% | -11.1% | 20.4% | 21.7% |
| Short Term Debt | 0 | 0 | 10 | 13 | | - | - | - | - |
| Long Term Debt | 20 | 20 | 19 | 16 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 15.0% | 17.4% | 11.4% | 18.6% | | -4.6% | -0.5% | -6.5% | 6.6% |
| EBITDA Margin | 3.1% | 5.8% | -12.6% | 8.7% | | -6.5% | -2.5% | -20.4% | 8.3% |
| Net Income Margin | 0.3% | 1.6% | -15.8% | 5.1% | | -6.7% | -4.4% | -21.4% | 5.8% |
Peers in Personal Products
Below we provide Natural Alternatives International, Inc. benchmarking against other companies in Personal Products industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Integrated BioPharma Inc ($INBP) | - | 11.2% | -6.9% | 14.3% | 5.6% |
| |
|---|
| Median (1 company) | - | 11.2% | -6.9% | 14.3% | 5.6% |
|---|
| Natural Alternatives International, Inc. ($NAII) | - | 6.8% | 8.6% | 4.4% | -14.0% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Integrated BioPharma Inc ($INBP) | 13.0% | 14.2% | 11.4% | 12.4% | 12.7% |
| |
|---|
| Median (1 company) | 13.0% | 14.2% | 11.4% | 12.4% | 12.7% |
|---|
| Natural Alternatives International, Inc. ($NAII) | 22.1% | 21.5% | 19.9% | 17.0% | 15.9% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Integrated BioPharma Inc ($INBP) | 5.8% | 7.6% | 4.7% | 7.4% | 8.0% |
| |
|---|
| Median (1 company) | 5.8% | 7.6% | 4.7% | 7.4% | 8.0% |
|---|
| Natural Alternatives International, Inc. ($NAII) | 12.3% | 9.9% | 9.4% | 6.8% | 4.8% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Integrated BioPharma Inc ($INBP) | 0.3% | 0.7% | 0.6% | 0.8% | 0.4% |
| |
|---|
| Median (1 company) | 0.3% | 0.7% | 0.6% | 0.8% | 0.4% |
|---|
| Natural Alternatives International, Inc. ($NAII) | 9.1% | 4.4% | 3.1% | 3.9% | 3.8% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Integrated BioPharma Inc ($INBP) | - | 38.1% | 25.1% | 28.7% | 21.7% |
| |
|---|
| Median (1 company) | - | 38.1% | 25.1% | 28.7% | 21.7% |
|---|
| Natural Alternatives International, Inc. ($NAII) | 24.6% | 16.5% | 14.4% | 8.1% | -1.7% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Integrated BioPharma Inc ($INBP) | 6.1x | 4.2x | 4.4x | 3.4x | 2.5x |
| |
|---|
| Median (1 company) | 6.1x | 4.2x | 4.4x | 3.4x | 2.5x |
|---|
| Natural Alternatives International, Inc. ($NAII) | -1.4x | -2.3x | -1.9x | -2.7x | -0.3x |
