# Chairman's Letter

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-defensive-packaged-foods/NASDAQ_NAII_2020/NASDAQ_NAII_2020.mmd` · pages 2-8_

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Chairman's Letter to the Shareholders

Dear Shareholders,

Our Fiscal Year ended June 30, 2020 presented some challenging circumstances as we navigated the ongoing global COVID-19 pandemic (COVID-19). Our facilities, located in both the United States and Europe, have been able to, and continue to, operate as essential businesses providing our customers with products that aid in the health and wellbeing of their customers, which is even more important now than ever before. We experienced a decline in sales and profitability during fiscal 2020. Despite the challenges presented to us by COVID-19, we finished fiscal 2020 strong and saw year over year sales and profitability growth in the fourth quarter. The positive momentum in the fourth quarter of fiscal 2020 came mostly from our private-label contract manufacturing business and from both existing and new customer relationships. In the beginning of fiscal 2020 one of our largest customers continued to experience softness in their sales but that trend reversed during the fourth quarter of fiscal 2020 and was a major contributor to our sales growth in the fourth quarter. We believe our reputation for quality, and our financial capability will continue to enhance our ability to attract and retain customers to our state-of-the-art manufacturing facilities in both the USA and Switzerland, especially in light of the current pandemic.

We began fiscal 2021 -our 41 \( ^{st} \)  year of operation- with plenty of momentum generated from the addition of new multi-national customers and new customer products added during the prior year. As a result, we believe we are setting the table for significant sales growth in fiscal 2021 and beyond, which should also assist in reducing customer concentration factors. Moreover, we continue to have a strong balance sheet that allows us to meet the dynamic service demands of new and existing customers.

Our CarnoSyn \( ^{®} \)  beta-alanine sports nutrition business continues to experience challenges associated with competition from generic beta-alanine and the unfortunate impact of COVID-19 on the sports nutrition industry. We still believe strongly in the potential for our patent-protected sustained release SR CarnoSyn \( ^{®} \)  beta-alanine. We believe there is ample opportunity for this product in the burgeoning healthy aging and wellness marketplace. We believe this market could be larger in size and scope than the sports nutrition channel where our instant release CarnoSyn \( ^{®} \)  beta-alanine has been so successful.

Concluding our 40 \( ^{th} \)  year of operation, and embarking on our fifth decade, we are pleased with our internal identification and deployment of our next generation of leaders in various disciplines, including management, quality control, product development, research, material management, acquisition and sales.

We find more and more people globally embracing dietary supplementation with natural products. We remain committed to leading the responsible members of our industry and enriching the world with the best of nutrition.

We thank you for your continued support of our worthy endeavors.

Sincerely,

Mark A. LeDoux

Chairman of the Board

Chief Executive Officer

Chief Executive Officer