Core Viewpoint - Natural Alternatives International, Inc. reported a net loss of $2.6 million for Q2 FY 2026, with net sales of $34.8 million, reflecting a slight increase in sales but a larger loss compared to the previous year [1][4]. Financial Performance - Net sales for the three months ended December 31, 2025, increased by $0.7 million, or 2%, to $34.8 million compared to $34.1 million in the same period last year [2]. - For the six months ended December 31, 2025, net sales rose by $5.3 million, or 8%, to $72.5 million from $67.2 million in the prior year [5]. - Private-label contract manufacturing sales increased by 2% to $32.8 million in Q2 FY 2026 and by 9% to $68.9 million for the six months ended December 31, 2025 [2][5]. Profitability Metrics - Gross profit for Q2 FY 2026 was $2.5 million, representing a gross margin of 7.2%, compared to 4.9% in the same quarter of the previous year [14]. - The loss from operations for the first six months of FY 2026 was $1.6 million, an improvement from a loss of $4.6 million in the same period last year [14]. Cash and Working Capital - As of December 31, 2025, the company had cash of $3.8 million and working capital of $28.7 million, down from $12.3 million and $30.5 million respectively as of June 30, 2025 [7]. Market Challenges and Opportunities - The company is facing challenges in accurately forecasting demand from clients in multi-level marketing and direct selling channels, particularly in China and Europe [8]. - Despite these challenges, there is growth in other sales channels, including large retailers and online sales [8]. - The introduction of the TriBsyn molecule, which enhances the effectiveness of beta-alanine, is seen as a significant opportunity for the company, especially in the context of weight loss and nutritional supplementation for the elderly [9].