Natural Alternatives International, Inc. announced a temporary closure of its new facility in Carlsbad, California, opened earlier this year to expand NAI's production and add high-speed powder blending and packaging to its manufacturing capabilities, with an initial objective of handling current and estimated orders from one of its largest customers. Due to this customer's efforts to rebalance supply and demand, it is temporarily ceasing purchases from Natural Alternatives. As a result, NAI has determined to temporarily close its new high-speed powder blending and packaging facility and has provided sixty days advance notice to most of the staff at that facility, who will be furloughed starting in early October and lasting until approximately December 31, 2023.

NAI currently expects these economic factors will be short lived, and in order to influence furloughed employees to return, NAI will pay for the health insurance costs of all furloughed employees during the employee's furlough period, through December 31, 2023. NAI expects to begin shipping new orders to this customer during the first quarter of calendar 2024. Reduction of these anticipated orders and the closure of the facility is anticipated to have an adverse effect on results of operations and financial condition primarily during the last calendar quarter of this year, and possibly into the early part of 2024.