# Chairman's Letter

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-defensive-packaged-foods/NASDAQ_NAII_2019/NASDAQ_NAII_2019.mmd` · pages 2-8_

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Chairman's Letter to the Stockholders

Dear Stockholders,

The conclusion of our Fiscal Year on June 30, 2019 presented some challenging circumstances as we navigated some customer and regional softening of demand, primarily in Europe. We were able to limit these negative impacts while focusing on new opportunities and expanding our penetration of other regional growth markets. The industry is experiencing deleterious impacts of international supply chain tariffs, regional regulatory demands which are often arbitrary or capricious, and uncertainties about potentially arduous new standards for products. With that said, fiscal 2019 yielded some positive outcomes for the year, including growth in sales, and we believe the challenges faced in the fourth quarter of 2019 are short term in nature. Our reputation for quality processes and products continues to attract new customers to our state-of-the-art manufacturing facilities in both the USA and Switzerland. In fiscal 2019 one of our largest customers experienced some challenges, predominantly in Europe. We think that over the next year we should see a return to historical sales levels to this client.

We recently celebrated the 20 \( ^{th} \)  anniversary of our plant in Lugano, Switzerland. During that time our facility has grown from five employees at inception to approximately 100 currently and our sights set on further growth in the future. With the addition of new multi-national customers, we believe we are setting the table for sales growth in fiscal 2020 and beyond and we will be able to continue to moderate customer concentration. Our facilities have undergone upgrades, equipment has been deployed, and we remain a debt-free enterprise with significant cash reserves. Having these facilities, resources, and a lack of debt allows us to meet service demands of new and existing customers. Our international supply chain has been negatively impacted by tariff impositions, but has also grown to include qualified suppliers worldwide.

While we wrote down almost $700,000 of obsolete inventory during our fourth quarter of fiscal 2019, we are on target to release an extraordinary new version of our patent-protected sustained release SR CarnoSyn \( ^{®} \)  beta-alanine into the burgeoning healthy aging and wellness marketplace. We believe this market could dwarf the size and scope of the sports nutrition channel where our instant release CarnoSyn \( ^{®} \)  beta-alanine has been so successful.

Concluding our 39 \( ^{th} \)  year of operation, and embarking on our fourth decade, we are pleased with our internal identification and deployment of the next generation of leaders in various disciplines, including management, quality control and oversight, product development, research, material management, acquisition and sales.

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

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

Sincerely,

![](images/2_0.jpg)

Mark A. LeDoux

Chairman of the Board

Chief Executive Officer

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