# Chairman's Letter

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-defensive-packaged-foods/NASDAQ_NAII_2018/NASDAQ_NAII_2018.mmd` · pages 2-8_

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Chairman's Letter to the Shareholders

Dear Shareholder,

We have concluded one of the best years in our storied history, reaching sales levels never before attained by NAI. While our earnings per share were negatively impacted by one-time tax issues emanating from the historic tax reform act, the performance of the company was stellar, and I am very proud of my colleagues around the world who made it happen. As we enter our 39 \( ^{th} \)  year, we remain committed to executing on our core principle of enriching the world through the best of nutrition, while remaining dedicated to a world-class standard of excellence.

Our facilities were expanded, equipment upgraded, processes improved, and the result is that we are attracting more sales from international companies who have taken steps to upgrade their supply chain partnerships with best in class companies, especially those with healthy balance sheets and a paucity of debt. In the meantime, we are actively reviewing opportunities to expand our footprint, both domestically and internationally, as the consumers of our customer's products are increasingly seeking quality standards that are transparent and vigorous.

During this past year, the initial impact of our previously announced global partnership with Juice Plus+ included increased revenues generated at both of our contract manufacturing sites. With our facility and process upgrades now largely completed without borrowing, we are committed to expanding our strategic positioning in the global marketplace.

The recent announcement of new leadership for our CarnoSyn \( ^{®} \)  Brand's division positions us to embark on the launch of SR CarnoSyn \( ^{®} \)  product offerings in the Wellness and Healthy Aging markets. This business expansion should provide us with additional revenue sources as we enter what we believe will be an expansive new market. SR CarnoSyn \( ^{®} \)  is an advanced delivery form of our CarnoSyn \( ^{®} \)  product. SR CarnoSyn \( ^{®} \)  delivers higher dosing levels of beta-alanine, and has been proven to provide benefits for both brain health and muscle function and capacity. Additionally, with our SR CarnoSyn \( ^{®} \)  self-affirmed GRAS determination (Generally Recognized as Safe), we believe that NAI can now broaden our product offerings beyond the sports nutrition space and incorporate the broader food and beverage industries, including medical and other fortified food channels.

In my role as Chairman of the Board, I have worked with the Natural Products Association in Washington, D.C. (NPA), to actively engage the FDA, the FTC, and the members of both the House and Senate in helping identify regulatory review and streamlining the path to securing higher quality products for consumers that are seeking to improve their health and lifestyles with well-made dietary supplements. The ongoing work of the Supplement Safety Compliance Initiative, led by Wal-Mart and General Nutrition Centers and supported by industry leaders, is taking shape and is expected to launch soon. This new initiative will include benchmarking of the audit requirements and procedures for independent audit companies such as USP and

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Underwriters Laboratories to assure quality operations and procedures in the procurement, manufacturing, and testing of dietary supplements, including the rigorous requirements of the Federal Code of Regulations (21 CFR 111 and related components).

It is truly gratifying to know that our long history is replete with evidence of a commitment to standards of excellence across all components of our business efforts. We continue working on primary research, evaluating business opportunities for expansion, reviewing the science to support modifications to current products, and develop new ones with unequalled evidence of benefit, while advancing the areas of commerce with the benefit of intellectual property.

I am often reminded that the father of modern medicine, Hippocrates, remarked, "Let your food be your medicine." As we enter our 39 \( ^{th} \)  year, this principle continues to guide our efforts to grow this business in meaningful ways.

We thank you for your continued support.

Sincerely,

![](images/3_0.jpg)

Mark A. LeDoux

Chairman of the Board

Chief Executive Officer