Financial Performance - Consolidated net sales for fiscal 2024 decreased by 26% to 154.0 million in fiscal 2023[125]. - The company experienced a net loss of 2.5 million in fiscal 2023[133]. - Net sales for the year ended June 30, 2024, were 154,015,000 in 2023[161]. - Gross profit for 2024 was 18,158,000 in 2023, reflecting a gross margin decline[161]. - The company reported a loss from operations of 4.7 million in fiscal 2023[279]. - The total loss before income taxes for fiscal 2024 was 3.555 million in fiscal 2023[228]. Revenue Sources - Private-label contract manufacturing sales fell by 27% primarily due to reduced orders from larger customers, with revenue concentration from the largest customer increasing to 42% in fiscal 2024 from 40% in fiscal 2023[125][135]. - Patent and trademark licensing revenue decreased by 3% to 8.7 million in fiscal 2023[126]. - Revenue recognized from beta-alanine raw material sales and royalty income was 8.7 million in fiscal 2023[196]. - The company’s private-label contract manufacturing segment generated 145.3 million in fiscal 2023[279]. Expenses and Costs - Selling, general, and administrative expenses increased by 15% to 13.5 million in fiscal 2023[138]. - Gross profit margin for private-label contract manufacturing decreased by 6.9 percentage points in fiscal 2024, primarily due to unfavorable sales mix and increased per unit manufacturing costs[136]. - Operating expenses increased to 14,869,000 in 2023, indicating a rise in selling, general, and administrative costs[161]. - Research and development expenses were 2.1 million in fiscal 2023[199]. - Advertising costs incurred were 0.7 million in fiscal 2023[200]. Cash Flow and Liquidity - Net cash used in operating activities was 7.0 million in fiscal 2023[141]. - Cash used in investing activities decreased to 13.5 million in fiscal 2023 due to reduced capital expenditures[143]. - Cash provided in financing activities increased to 1.8 million used in fiscal 2023, driven by 12.0 million in cash and cash equivalents, down from 61.6 million in 2024 from 162.3 million from 23.5 million in 2024 from 12.7 million[159]. - The company reported a decrease in retained earnings to 80.18 million in 2023[159]. - The company had no significant off-balance sheet debt or obligations as of June 30, 2024[146]. Debt and Financing - As of June 30, 2024, the company had 9.2 million on its term loan, compared to no balance on the line of credit and 12.5 million and increased the interest rate on borrowings to 2.25% above the daily simple SOFR rate[223]. - The company is negotiating a potential revised credit facility or waiver due to anticipated non-compliance with covenants in the first half of fiscal 2025[226]. Taxation - The company recorded a U.S.-based domestic tax benefit of 0.8 million in fiscal 2023[228]. - The effective tax rate for fiscal 2024 was approximately (23.7)%, compared to 29.1% in fiscal 2023[237]. - The company had net deferred tax assets of 0.355 million in 2023[230]. Pension and Employee Benefits - The defined benefit pension plan's benefit obligation at the end of the year increased to 1,364,000 in 2023, reflecting a change of 0.74%[245]. - The fair value of plan assets at the end of the year rose to 1,025,000 in 2023, representing an increase of 20.18%[245]. - The net periodic benefit expense decreased to 81,000 in 2023, a reduction of 43.21%[246]. - The company contributed $0.1 million to the defined benefit pension plan in 2024, compared to no contributions in 2023[246]. Operational Challenges - Inflationary pressures have led to increased costs for raw materials and operations, which are expected to continue impacting fiscal 2025[147]. - The company is monitoring the impact of the Israel-Hamas conflict on its operations and is evaluating alternative sources for raw materials sourced from the region[277]. Future Plans - The company plans to focus on expanding commercialization of its beta-alanine patent estate and developing new sales distribution channels in fiscal 2025[130]. - The company expects to adopt ASU 2023-07 on segment reporting in fiscal 2025, with no material impact anticipated on consolidated financial statements[171].
NAI(NAII) - 2024 Q4 - Annual Report