-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 QZkZa9SxKbuad7XmKv7LxJnTqfWsiV9o8PrVwKf2fMy9MisRRTstbc6xQPooa1KM
 NuhxyK27NBzVTmZ2QE6VmQ==

<SEC-DOCUMENT>0000898430-02-004135.txt : 20021114
<SEC-HEADER>0000898430-02-004135.hdr.sgml : 20021114
<ACCEPTANCE-DATETIME>20021113200554
ACCESSION NUMBER:		0000898430-02-004135
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20020930
FILED AS OF DATE:		20021114

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATURAL ALTERNATIVES INTERNATIONAL INC
		CENTRAL INDEX KEY:			0000787253
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				841007839
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-15701
		FILM NUMBER:		02821635

	BUSINESS ADDRESS:	
		STREET 1:		1185 LINDA VISTA DR
		CITY:			SAN MARCOS
		STATE:			CA
		ZIP:			92069
		BUSINESS PHONE:		6197447340

	MAIL ADDRESS:	
		STREET 1:		1185 LINDA VISTA DRIVE
		CITY:			SAN MARCOS
		STATE:			CA
		ZIP:			92069

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERICAN ACQUISITIONS INC
		DATE OF NAME CHANGE:	19860929
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d10q.htm
<DESCRIPTION>FORM 10-Q
<TEXT>
<HTML><HEAD>
<TITLE>Form 10-Q</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF"> <hr size=4 width="100%" noshade color=black align=center> <p align=center><font size=5 face="Times New Roman"><b>UNITED STATES<br> SECURITIES AND EXCHANGE COMMISSION<br></b></font><font size=3><b>Washington, D.C.
20549</b></font></p> <p align=center><font size=5 face="Times New Roman"><b>FORM 10-Q</b></font></p> <p align=center><font size=3 face="Times New Roman"><b>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934</b></font></p> <p align=center><font size=2 face="Times New Roman"><b>For the quarterly period ended September 30, 2002</b></font></p> <p align=center><font size=2 face="Times New Roman"><b>Commission file number 0-15701</b></font></p> <p
align=center><font size=6 face="Times New Roman"><b>NATURAL ALTERNATIVES INTERNATIONAL, INC.<br></b></font><font size=1><b>(Exact name of registrant as specified in its charter)</b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="49%" valign=bottom> <p align=center><font size=2 face="Times New Roman"><b>Delaware</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="49%" valign=bottom> <p align=center><font size=2 face="Times New Roman"><b>84-1007839</b></font></p> </td> </tr>
<tr>
<td width="49%" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>(State or other jurisdiction of incorporation or organization)</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="49%" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>(I.R.S. Employer Identification No.)</b></font></p> </td> </tr>
<tr>
<td width="49%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="49%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="49%" valign=bottom> <p align=center><font size=2 face="Times New Roman"><b>1185 Linda Vista Drive</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="49%" valign=bottom> <p align=center><font size=2 face="Times New Roman"><b>(760) 744-7340</b></font></p> </td> </tr>
<tr>
<td width="49%" valign=bottom> <p align=center><font size=2 face="Times New Roman"><b>San Marcos, California 92069</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="49%" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>(Registrant&#146;s telephone number, including area code)</b></font></p> </td> </tr>
<tr>
<td width="49%" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>(Address of principal executive offices, including zip code)</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="49%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr> </table> <p><font size=2 face="Times New Roman">Indicate by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days.</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="13%">
<tr>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">Yes</font></p> </td>
<td width="3%" valign=top> <p><font size=2 face=Wingdings>x</font></p> </td>
<td width="3%" valign=top> <p><font size=2 face="Times New Roman">No</font></p> </td>
<td width="3%" valign=top> <p><font size=2 face=Wingdings>o</font></p> </td> </tr> </table> <p><font size=2 face="Times New Roman">At November 1, 2002, the registrant had 5,804,267 outstanding shares of common stock, $.01 par value, net of 272,400
treasury shares.</font></p> <hr size=4 width="100%" noshade color=black align=center> <font size=2 face="Times New Roman"><BR>
<a name="toc"> </a> </font>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <BR> <p><font size=2 face="Times New Roman"><b>Part I. Financial Information<br> Item 1. Financial Statements</b></font></p> <p align=center><font size=2 face="Times New Roman"><b>Natural Alternatives International,
Inc.<br> Consolidated Balance Sheets<br> (Dollars in thousands, except share data)</b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="69%" colspan="3" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>September 30,<br> 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>June 30,<br> 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>(Unaudited)</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman"><b>Assets</b></font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Current assets:</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Cash and cash equivalents</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">2,824</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">640</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Restricted cash</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">1,500</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">1,500</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Accounts receivable, net of allowance for doubtful accounts of $82 at September 30, 2002 and $105 at June 30, 2002</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">3,698</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">3,536</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Inventories, net</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">7,521</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">7,871</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Income tax refund receivable</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">701</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">701</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Prepaid expenses</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">875</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">271</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Deposits</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">155</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">168</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Other current assets</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">175</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">165</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="60%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total current assets</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">17,449</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">14,852</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Property and equipment, net</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">11,996</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">12,439</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Other assets:</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Related parties notes receivable</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">116</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">118</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Other noncurrent assets, net</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">101</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">101</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="60%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total other assets</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">217</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">219</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="60%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="60%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total assets</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">29,662</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">27,510</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="60%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman"><b>Liabilities and Stockholders&#146; Equity</b></font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Current liabilities:</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Accounts payable and accrued liabilities</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">5,096</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">4,927</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Accrued compensation and employee benefits</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">670</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">482</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Line of credit</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">1,386</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Income taxes payable</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">138</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">131</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Current portion of long-term debt and capital lease</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">601</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">587</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="60%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total current liabilities</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">7,891</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">6,127</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Long-term debt and capital lease, less current portion</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">1,421</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">1,576</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Long-term pension liability</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">172</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">199</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="60%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total liabilities</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">9,484</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">7,902</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Commitments and contingencies</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Stockholders&#146; equity:</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Preferred stock; $.01 par value; 500,000 shares authorized; none issued or outstanding</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Common stock; $.01 par value; 8,000,000 shares authorized; issued and outstanding 6,076,667 shares at September 30, 2002 and 6,073,179 shares at June 30,
2002</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">61</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">61</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Additional paid-in capital</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">11,395</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">11,362</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Retained earnings</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">10,025</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">9,488</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Treasury stock, at cost, 272,400 shares at September 30, 2002 and June 30, 2002</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(1,303</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(1,303</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="5%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="60%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total stockholders&#146; equity</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">20,178</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">19,608</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="60%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="60%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total liabilities and stockholders&#146; equity</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">29,662</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">27,510</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="60%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width=40></td>
<td width=20></td>
<td width=441></td>
<td width=12></td>
<td width=7></td>
<td width=87></td>
<td width=12></td>
<td width=7></td>
<td width=87></td>
<td width=7></td> </tr> </table> <p align=center><font size=2 face="Times New Roman"><i>See accompanying notes to consolidated financial statements.</i></font></p> <p align=center><font size=2 face="Times New Roman">2</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><b><BR> </b></font> <p align=center><font size=2 face="Times New Roman"><b>Natural Alternatives International, Inc.<br> Consolidated Statements Of Operations And Comprehensive
Income (Loss)<br> For the Three Months Ended September 30<br> (Dollars in thousands, except share data)<br> (Unaudited)</b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="69%" colspan="2" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>2001</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net sales</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">13,136</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">9,887</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Cost of goods sold</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">9,941</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">7,863</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Gross profit</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">3,195</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">2,024</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Selling, general &amp; administrative expenses</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">2,792</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">2,454</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Income (loss) from operations</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">403</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(430</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Other income (expense):</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" valign=bottom> <p><font size=2 face="Times New Roman">Interest income</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">7</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">3</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Interest expense</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(82</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(158</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" valign=bottom> <p><font size=2 face="Times New Roman">Foreign exchange loss</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(6</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(64</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Proceeds from vitamin antitrust litigation</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">225</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" valign=bottom> <p><font size=2 face="Times New Roman">Other, net</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(2</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">5</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">142</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(214</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Income (loss) before income taxes</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">545</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(644</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Provision for income taxes</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">8</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">14</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net income (loss)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">537</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(658</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Unrealized loss on investments</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(1</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Comprehensive income (loss)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">537</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(659</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net income (loss) per common share:</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" valign=bottom> <p><font size=2 face="Times New Roman">Basic</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">0.09</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(0.11</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Diluted</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">0.09</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(0.11</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Weighted average common shares outstanding:</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" valign=bottom> <p><font size=2 face="Times New Roman">Basic shares</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">5,804,267</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">5,785,606</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Diluted shares</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">5,928,884</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">5,785,606</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p align=center><font size=2 face="Times New Roman"><i>See accompanying notes to consolidated financial
statements.</i></font></p> <p align=center><font size=2 face="Times New Roman">3</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><b><BR> </b></font> <p align=center><font size=2 face="Times New Roman"><b>Natural Alternatives International, Inc.<br> Consolidated Statements of Cash Flows<br> For the Three
Months Ended September 30<br> (Dollars in thousands, except share data)<br> (Unaudited)</b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="69%" colspan="3" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>2001</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman"><b>Cash flows from operating activities</b></font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net income (loss)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">537</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(658</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Provision for uncollectible accounts receivable</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(10</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(54</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Increase in inventory reserve</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">77</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Depreciation and amortization</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">615</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">593</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Stock based compensation</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">30</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">3</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Pension expense, net of contributions</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(27</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">5</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Loss on disposal of asset</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">3</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Foreign exchange gains on foreign debt</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">36</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Other</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(1</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Changes in operating assets and liabilities:</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" valign=bottom> <p><font size=2 face="Times New Roman">Accounts receivable</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(152</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(10</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="5%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Inventories</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">273</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(858</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="5%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" valign=bottom> <p><font size=2 face="Times New Roman">Prepaid expenses</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(604</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(147</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="5%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Deposits</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">13</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" valign=bottom> <p><font size=2 face="Times New Roman">Other assets</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(10</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(77</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="5%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Accounts payable and accrued liabilities</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">169</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">468</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" valign=bottom> <p><font size=2 face="Times New Roman">Income taxes payable</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">7</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">14</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Accrued compensation and employee benefits</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">188</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">212</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="63%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net cash provided by (used in) operating activities</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">1,109</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(474</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman"><b>Cash flows from investing activities</b></font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Proceeds from sale of property and equipment</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">95</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Capital expenditures</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(270</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(266</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Repayment of notes receivable</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">2</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net cash used in investing activities</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(173</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(266</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman"><b>Cash flows from financing activities</b></font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Net borrowing on lines of credit</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">1,386</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">1,251</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Payments on long-term debt</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(141</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(218</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Proceeds from issuance of common stock</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">3</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net cash provided by financing activities</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">1,248</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">1,033</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net increase in cash and cash equivalents</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">2,184</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">293</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Cash and cash equivalents at beginning of quarter</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">640</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">499</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Cash and cash equivalents at end of quarter</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">2,824</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">792</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman"><b>Supplemental disclosures of cash flow information</b></font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Cash paid during the year for interest</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">83</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">158</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width=20></td>
<td width=20></td>
<td width=458></td>
<td width=12></td>
<td width=7></td>
<td width=87></td>
<td width=12></td>
<td width=7></td>
<td width=87></td>
<td width=11></td> </tr> </table> <p align=center><font size=2 face="Times New Roman"><i>See accompanying notes to consolidated financial statements.</i></font></p> <p align=center><font size=2 face="Times New Roman">4</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><BR> </font> <p align=center><font size=2 face="Times New Roman"><b>NATURAL ALTERNATIVES INTERNATIONAL, INC.<br> NOTES TO UNAUDITED FINANCIAL STATEMENTS</b></font></p> <p><font
size=2 face="Times New Roman"><b>Note 1&nbsp;&nbsp;&#150;&nbsp;&nbsp;Basis of Presentation and Summary of Significant Accounting Policies</b></font></p> <p><font size=2 face="Times New Roman">The consolidated financial statements include the
accounts of Natural Alternatives International, Inc. and its wholly owned subsidiary, Natural Alternatives International Europe (&#147;NAIE&#148;), (the &#147;Company&#148;) and have been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission.&#160; Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have
been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures herein are adequate to make the information presented not misleading.&#160; The Company suggests that these unaudited consolidated
financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company&#146;s latest Annual Report on Form 10-K.&#160; In preparing the consolidated financial statements, management is
required to make certain estimates and assumptions that may affect the reported amounts of assets, liabilities, revenues and expenses during the reporting periods.&#160; Actual results may differ from such estimates.&#160; In the opinion of the
Company, all adjustments necessary to present fairly the information in the following unaudited consolidated financial statements of the Company have been included.&#160; The results of operations for such interim periods are not necessarily
indicative of the results for the full year. </font></p> <p><font size=2 face="Times New Roman"><b>Inventories</b></font></p> <p><font size=2 face="Times New Roman">Inventories are recorded at the lower of cost (first in, first out) or market (net
realizable value).&#160; Inventories were as follows (dollars in thousands):</font></p>
<table border=0 cellspacing=0 cellpadding=0 width="85%">
<tr>
<td width="69%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>September 30,<br> 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>June 30,<br> 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Raw materials</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">3,994</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">4,631</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom> <p><font size=2 face="Times New Roman">Work in progress</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">1,954</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">1,754</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Finished goods</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">1,573</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">1,486</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">7,521</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">7,871</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p><font size=2 face="Times New Roman"><b>Property and Equipment</b></font></p> <p><font size=2 face="Times New Roman">Property and
equipment are stated at cost less accumulated depreciation.&#160; Property and equipment were as follows (dollars in thousands):</font></p>
<table border=0 cellspacing=0 cellpadding=0 width="95%">
<tr>
<td width="45%" colspan="2" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="16%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Life Used for<br> Depreciation</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="16%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>September 30,<br> 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="16%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>June 30,<br> 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="45%" colspan="2" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="16%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="16%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="16%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="45%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Land</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">NA</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">393</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">393</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="45%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Building and building improvements</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right><font size=2 face="Times New Roman">5 - 39 years</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right><font size=2 face="Times New Roman">3,279</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right><font size=2 face="Times New Roman">3,279</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="45%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Machinery and equipment</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">3 - 15 years</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">15,552</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">15,517</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="45%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Office equipment and furniture</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right><font size=2 face="Times New Roman">5 - 7 years</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right><font size=2 face="Times New Roman">4,081</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right><font size=2 face="Times New Roman">4,054</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="45%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Vehicles</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">3 years</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">197</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">197</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="45%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Leasehold improvements</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right><font size=2 face="Times New Roman">5 - 39 years</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right><font size=2 face="Times New Roman">4,249</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right><font size=2 face="Times New Roman">4,230</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="45%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="45%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total property and equipment</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">27,751</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">27,670</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="45%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Less accumulated depreciation and amortization</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(15,755</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(15,231</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="45%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="42%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Property and equipment, net</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">11,996</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">12,439</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="42%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p align=center><font size=2 face="Times New Roman">5</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><b><br clear=all> </b></font> <p align=center><font size=2 face="Times New Roman"><b>NATURAL ALTERNATIVES INTERNATIONAL, INC.<br> NOTES TO UNAUDITED FINANCIAL
STATEMENTS</b></font></p> <p><font size=2 face="Times New Roman"><b>Net Income (Loss) Per Share</b></font></p> <p><font size=2 face="Times New Roman">The Company computes net income (loss) per share in accordance with Statement of Financial
Accounting Standards (&#147;SFAS&#148;) No. 128, &#147;Earnings Per Share.&#148;&#160; This statement requires the presentation of basic net income (loss) per share, using the weighted average number of shares outstanding during the period, and
diluted net income (loss) per share, using the additional dilutive effect of all dilutive securities. The dilutive impact of stock options account for the additional weighted average shares of common stock outstanding for the Company&#146;s diluted
net income (loss) per share computation. Basic and diluted net income (loss) per share are calculated as follows (dollars in thousands, except per share amounts):</font></p>
<table border=0 cellspacing=0 cellpadding=0 width="90%">
<tr>
<td width="63%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="33%" colspan="5" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>For the Three Months Ended<br> September 30,</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="33%" colspan="5" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="16%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="16%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>2001</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="16%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="16%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p><font size=2 face="Times New Roman"><b>Numerator</b></font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net income (loss)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">537</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(658</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p><font size=2 face="Times New Roman"><b>Denominator</b></font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Basic weighted average common shares outstanding</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">5,804,267</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">5,785,606</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p><font size=2 face="Times New Roman">Dilutive effect of stock options</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right><font size=2 face="Times New Roman">124,617</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Diluted weighted average common shares outstanding</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">5,928,884</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">5,785,606</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Basic net income (loss) per share</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">0.09</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(0.11</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Diluted net income (loss) per share</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">0.09</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="15%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(0.11</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="15%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p><font size=2 face="Times New Roman">For the three months ended September 30, 2002 and 2001, there were outstanding options to purchase
110,000 and 615,400 shares, respectively, of common stock, that were not included in the computation of diluted net income (loss) per share as their effect would have been anti-dilutive. </font></p> <p><font size=2 face="Times New Roman"><b>Recent
Accounting Pronouncements</b></font></p> <p><font size=2 face="Times New Roman">In August 2001, the Financial Accounting Standards Board (the &#147;FASB&#148;) issued SFAS No. 143, &#147;Accounting for Asset Retirement Obligations.&#148;&#160; This
statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs.&#160; It applies to (a) all entities and (b) legal obligations associated
with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal operation of long-lived assets, except for certain obligations of lessees.&#160; This statement is effective for financial statements
issued for fiscal years beginning after June 15, 2002.&#160; The adoption of SFAS No. 143 had no impact on the Company&#146;s financial position or results of operations.</font></p> <p><font size=2 face="Times New Roman">Also in August 2001, the
FASB issued SFAS No. 144, &#147;Accounting for the Impairment or Disposal of Long-Lived Assets,&#148; which establishes one accounting model to be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued
operations to include more disposal transactions.&#160; SFAS No. 144 supersedes SFAS No. 121, &#147;Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of&#148; and the accounting and reporting provisions of
APB Opinion No. 30, &#147;Reporting the Results of Operations&#151;Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions&#148; for the disposal of a segment of a
business (as previously defined in that Opinion).&#160; The provisions of SFAS No. 144 are effective for financial statements issued for fiscal years beginning after December 15, 2001.&#160; The adoption of SFAS No. 144 had no impact on the
Company&#146;s financial position or results of operations.</font></p> <p align=center><font size=2 face="Times New Roman">6</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><b><BR> </b></font> <p align=center><font size=2 face="Times New Roman"><b>NATURAL ALTERNATIVES INTERNATIONAL, INC.<br> NOTES TO UNAUDITED FINANCIAL STATEMENTS</b></font></p>
<p><font size=2 face="Times New Roman">In April 2002, the FASB issued SFAS No. 145, &#147;Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections,&#148; which rescinds SFAS No. 4,
&#147;Reporting Gains and Losses from Extinguishment of Debt&#148; and an amendment of that Statement, and SFAS No. 64, &#147;Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.&#148;&#160; SFAS No. 145 also rescinds SFAS No. 44,
&#147;Accounting for Intangible Assets of Motor Carriers.&#148;&#160; SFAS No. 145 amends SFAS No. 13, &#147;Accounting for Leases,&#148; to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required
accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions.&#160; SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify
meanings, or describe their applicability under changed conditions.&#160; SFAS No. 145 is effective for fiscal years beginning after May 15, 2002. &#160;The adoption of SFAS No. 145 had no impact on the Company&#146;s financial position or results
of operations.</font></p> <p><font size=2 face="Times New Roman">In June 2002, the FASB issued SFAS No. 146, &#147;Accounting for Costs Associated with Exit or Disposal Activities,&#148; which addresses significant issues regarding the recognition,
measurement, and reporting of costs associated with exit and disposal activities, including restructuring activities.&#160; This statement requires that costs associated with exit or disposal activities be recognized when they are incurred rather
than at the date of a commitment to an exit or disposal plan.&#160; SFAS No. 146 is effective for all exit or disposal activities initiated after December 31, 2002.&#160; We do not expect the adoption of this statement will have a material impact on
our results of operations or financial position.</font></p> <p><font size=2 face="Times New Roman"><b>Note 2&nbsp;&nbsp;&#150;&nbsp;&nbsp;Economic Dependency</b></font></p> <p><font size=2 face="Times New Roman">The Company had substantial sales to
two separate customers during the periods shown in the following table. The loss of either of these customers could have a material adverse impact on the Company&#146;s sales and earnings.&#160; Net sales by customer, representing 10% or more of the
respective quarter&#146;s total net sales, are shown below (dollars in thousands):</font></p>
<table border=0 cellspacing=0 cellpadding=0 width="85%">
<tr>
<td width="39%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Three Months Ended<br> September 30, 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Three Months Ended<br> September 30, 2001</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Net Sales by<br> Customer</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>% (a)</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Net Sales by<br> Customer</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>% (a)</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Customer 1</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">5,619</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">43</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">%</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">4,973</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">50</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">%</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p><font size=2 face="Times New Roman">Customer 2</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">2,814</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">21</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">%</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">1,030</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">10</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">%</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">8,433</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">64</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">%</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">6,003</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">60</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">%</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p><font size=2 face="Times New Roman">(a) Percent of total net sales</font></p> <p><font size=2 face="Times New Roman">Accounts receivable
from these customers totaled $3.0 million and $2.5 million at September 30, 2002 and June 30, 2002, respectively.</font></p> <p><font size=2 face="Times New Roman">Direct-to-consumer sales were approximately $2.6 million and $2.0 million for the
three months ended September 30, 2002 and 2001, respectively.</font></p> <p><font size=2 face="Times New Roman">The Company purchases certain products it does not manufacture from a limited number of raw material suppliers.&#160; The Company had
substantial purchases from three separate suppliers during the periods shown in the following table.&#160; The loss of any of these suppliers could have a material adverse impact on the Company&#146;s sales and earnings.</font></p> <p
align=center><font size=2 face="Times New Roman">7</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><BR> </font> <p align=center><font size=2 face="Times New Roman"><b>NATURAL ALTERNATIVES INTERNATIONAL, INC.<br> NOTES TO UNAUDITED FINANCIAL STATEMENTS</b></font></p> <p><font
size=2 face="Times New Roman">Raw material purchases, representing 10% or more of the respective quarter&#146;s raw material purchases, are shown below (dollars in thousands):</font></p>
<table border=0 cellspacing=0 cellpadding=0 width="85%">
<tr>
<td width="39%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Three Months Ended<br> September 30, 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Three Months Ended<br> September 30, 2001</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Purchases<br> by Supplier</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>% (a)</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Purchases<br> by Supplier</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>% (a)</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Supplier 1</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">1,204</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">23</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">%</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(b</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(b</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p><font size=2 face="Times New Roman">Supplier 2</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">689</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">13</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">%</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">471</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">11</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">%</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Supplier 3</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">552</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">11</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">%</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">533</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">12</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">%</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p><font size=2 face="Times New Roman">Supplier 4</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(b</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">938</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">21</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">%</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">2,445</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">47</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">%</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">1,942</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">44</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">%</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Percent of total raw material
purchases<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases were less than 10% of total raw material purchases</font></p> <p><font size=2
face="Times New Roman">Accounts payable to suppliers representing 10% or more of raw material purchases for the quarter ended September 30, 2002, was $519,000 and $721,000 at September 30, 2002 and June 30, 2002, respectively.</font></p> <p><font
size=2 face="Times New Roman"><b>Note 3&nbsp;&nbsp;&#150;&nbsp;&nbsp;Segment Information</b></font></p> <p><font size=2 face="Times New Roman">The Company&#146;s segment information by geographic area was as follows (dollars in
thousands):</font></p>
<table border=0 cellspacing=0 cellpadding=0 width="70%">
<tr>
<td width="69%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Net Sales for the<br> Three Months Ended<br> September 30,</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>2001</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">United States</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">9,970</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">7,098</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom> <p><font size=2 face="Times New Roman">International</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">3,166</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">2,789</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">13,136</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">9,887</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="69%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <BR>
<table border=0 cellspacing=0 cellpadding=0 width="90%">
<tr>
<td width="39%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Long Lived Assets</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Total Assets</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="27%" colspan="5" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>September 30,<br> 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>June 30,<br> 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>September 30,<br> 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>June 30,<br> 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">United States</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">10,986</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">11,450</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">26,197</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">24,290</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p><font size=2 face="Times New Roman">International</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">1,549</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">1,527</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">3,465</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">3,220</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">12,535</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">12,977</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">29,662</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">27,510</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="39%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p><font size=2 face="Times New Roman"><b>Note 4-&nbsp;&nbsp;Financial Condition</b></font></p> <p><font size=2
face="Times New Roman">Effective July 1, 2002, the Company and a lender amended the working capital line of credit agreement.&#160; Under the terms of the amended agreement, maximum borrowings remained at $2.5 million, the interest rate was
decreased to prime plus 0.5% and existing financial covenants were removed.&#160; The amended agreement required the Company to maintain a minimum cash balance of $1.5 million with the secured creditor.&#160; The minimum cash balance requirement was
reflected as restricted cash in the accompanying balance sheet as of September 30, 2002.&#160; The amount outstanding under the amended working capital line of credit agreement was due upon expiration of the agreement on October 31, 2002.</font></p>
<p align=center><font size=2 face="Times New Roman">8</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><b><BR> </b></font> <p align=center><font size=2 face="Times New Roman"><b>NATURAL ALTERNATIVES INTERNATIONAL, INC.<br>NOTES TO UNAUDITED FINANCIAL STATEMENTS</b></font></p>
<p><font size=2 face="Times New Roman">On November 9, 1999, the Company entered into a term note agreement for $2.5 million, secured by equipment, at an annual interest rate of 9.2%. The note has a five-year term that provides for principal and
interest payable in monthly installments of $52,000. &#160;As of September 30, 2002 the outstanding amount was $1.2 million.&#160; </font></p> <p><font size=2 face="Times New Roman">Effective October 31, 2002, the Company entered into a new $6.5
million two-year credit facility.&#160; The new facility is comprised of a $4 million working capital line of credit and a $2.5 million term loan.&#160; The interest rate on the line of credit and term loan is prime plus 0.5%.&#160; The new facility
replaced the $2.5 million line of credit that expired on October 31, 2002 and refinanced the term note with $1.2 million outstanding.</font></p> <p><font size=2 face="Times New Roman">On May 2, 1996, the Company entered into a term note agreement
for $1.1 million, secured by a building, at an annual interest rate of 8.25%. The note is due in June 2011 and provides for principal and interest payable in monthly installments of $10,800.&#160; As of September 30, 2002 the outstanding amount was
$797,000.</font></p> <p><font size=2 face="Times New Roman">The composite interest rate on all outstanding debt at September 30, 2002 and 2001 was 7.37% and 7.51%, respectively.</font></p> <p><font size=2 face="Times New Roman"><b>Note
5-&nbsp;&nbsp;Contingencies</b></font></p> <p><font size=2 face="Times New Roman">The Company was a plaintiff in an antitrust lawsuit against several manufacturers of vitamins and other raw materials purchased by the Company.&#160; Other similarly
situated companies filed a number of similar lawsuits against some or all of the same manufacturers.&#160; The Company&#146;s lawsuit was consolidated with some of the others and captioned <i>In re: Vitamin Antitrust Litigation</i>, and was pending
in U.S. District Court in Washington D.C.&#160; A final settlement payment of $225,000 was received by the Company and is included in proceeds from vitamin antitrust litigation in the accompanying statement of operations for the three months ended
September 30, 2002.&#160; All of its claims under the <i>Vitamin Antitrust Litigation</i> were settled.</font></p> <p><font size=2 face="Times New Roman">The Company is involved in various claims and legal actions arising in the ordinary course of
business. In the opinion of management, after consultation with its legal counsel, the ultimate disposition of these matters will not have a material adverse effect on the Company&#146;s consolidated financial position, results of operations or
liquidity.</font></p> <p align=center><font size=2 face="Times New Roman">9</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><BR> </font> <p><font size=2 face="Times New Roman"><b>Item 2. Management&#146;s Discussion and Analysis of<br> Financial Condition and Results of Operations</b></font></p> <p><font
size=2 face="Times New Roman"><b>Certain Forward-Looking Information</b></font></p> <p><font size=2 face="Times New Roman">Information provided in this Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934 that are not historical facts and information. These statements represent the Company&#146;s expectations or beliefs, including, but not limited to, statements concerning future financial and
operating results, statements concerning industry performance, the Company&#146;s operations, economic performance, financial condition, margins and growth in sales of the Company&#146;s products, capital expenditures, financing needs, as well as
assumptions related to the foregoing. For this purpose, any statements contained in this Quarterly Report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing,
words such as &#147;may,&#148; &#147;will,&#148; &#147;expect,&#148; &#147;believe,&#148; &#147;anticipate,&#148; &#147;intend,&#148; &#147;could,&#148; &#147;estimate&#148; or &#147;continue&#148; or the negative or other variations thereof or
comparable terminology are intended to identify forward-looking statements. These forward-looking statements are based on current expectations and involve various risks and uncertainties that could cause actual results and outcomes for future
periods to differ materially from any forward-looking statement or views expressed herein. The Company&#146;s financial performance and the forward-looking statements contained herein are further qualified by other risks including but not limited to
those set forth herein and in the Company&#146;s most recent Form 10-K.</font></p> <p><font size=2 face="Times New Roman"><b>Critical Accounting Policies and Estimates</b></font></p> <p><font size=2 face="Times New Roman">The Company&#146;s
discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.&#160; The
preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.&#160; On an
on-going basis, the Company evaluates the estimates including those related to bad debts and inventories.&#160; The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.&#160; Actual results may differ from these estimates.</font></p> <p><font
size=2 face="Times New Roman">The Company believes the following critical accounting policies affect the more significant judgments and estimates used in the preparation of the consolidated financial statements:</font></p> <p><font size=2
face="Times New Roman">Allowance for Doubtful Accounts &#150; the Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments.&#160; If the financial condition of
the Company&#146;s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowance may be required.</font></p> <p><font size=2 face="Times New Roman">Reserve for Inventory &#150; the Company records
valuation reserves on its inventory for estimated excess and obsolete inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future product demand and market conditions.&#160; If
future product demand or market conditions are less favorable than those projected by management, additional inventory reserves may be required.</font></p> <p><font size=2 face="Times New Roman">Depreciation of Long-Lived Assets &#150; the Company
assigns useful lives for long-lived assets based on periodic studies of actual asset lives and the intended use for those assets.&#160; Any change in these asset lives would be reported in the statement of operations as soon as any change in
estimate is determined.</font></p> <p><font size=2 face="Times New Roman">Accounting for Income Taxes &#150; the Company is required to estimate income taxes in each of the jurisdictions in which it operates.&#160; This process involves estimating
actual current tax exposure for the Company together with assessing temporary differences resulting from differing treatment of items, such as property, plant and equipment depreciation, for tax and financial reporting purposes.&#160; Actual income
taxes could vary from these estimates due to future changes in income tax law or results from final tax exam</font></p> <p align=center><font size=2 face="Times New Roman">10</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><BR> </font> <p><font size=2 face="Times New Roman">reviews.&#160; At September 30, 2002, the Company assessed the need for a valuation allowance on its deferred tax assets.&#160; A
valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized.&#160; Based upon the historical operating losses and the uncertainty regarding sufficient near term taxable
income, management believes that this evidence creates sufficient uncertainty regarding the realizability of the net deferred tax assets.&#160; Therefore, a full valuation allowance&#160; is recorded at September 30, 2002.&#160; Should the Company
determine that it would be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax assets would be recorded to operations in the period such determination was made.</font></p> <p><font size=2
face="Times New Roman"><b>RESULTS OF OPERATIONS</b></font></p> <p><font size=2 face="Times New Roman"><b>First Quarter Fiscal 2003 (&#147;fiscal 2003&#148;) <br> versus First Quarter Fiscal 2002 (&#147;fiscal 2002&#148;)</b></font></p> <p><font
size=2 face="Times New Roman">Consolidated net sales increased 32% to $13.1 million for the first quarter of fiscal 2003 from $9.9 million for the first quarter of fiscal 2002.&#160; The consolidated net sales growth resulted primarily from a $2.6
million or 34% increase in contract manufacturing sales and a $582,000 or 29% growth in direct-to-consumer sales.&#160; The growth in contract manufacturing sales to $10.5 million for the first quarter of fiscal 2003 from $7.9 million for the first
quarter of fiscal 2002 is primarily due to new products sold to existing major contract manufacturing customers.&#160; The growth in direct-to-consumer sales to $2.6 million for the first quarter of fiscal 2003 from $2.0 million for the first
quarter of fiscal 2002 is primarily due to six additional product offerings.&#160; NAIE contract manufacturing net sales were $1.9 million for the first quarter of fiscal 2003 compared to $1.7 million for the first quarter of fiscal 2002.</font></p>
<p><font size=2 face="Times New Roman">Gross profit margin was 24.3% for the first quarter of fiscal 2003 compared to 20.5% for the first quarter of fiscal 2002.&#160; The increase in gross profit margin is primarily due to improvement in fixed cost
leverage resulting from additional sales volumes, offset partially by an increase in the material cost as a percent of net sales to 52% for the first quarter of fiscal 2003 from 48% for the first quarter of fiscal 2002.&#160; The increase in
material cost as a percent of net sales was primarily due to producing $1.8 million of new contract manufacturing products that have a higher material cost than in the comparable quarter last year.</font></p> <p><font size=2
face="Times New Roman">Selling, general and administrative expenses (&#147;SG&amp;A&#148;) increased 14% to $2.8 million for the first quarter of fiscal 2003 from $2.5 million for the first quarter of fiscal 2002.&#160; The increase of $300,000 is
primarily due to increases in direct-to-consumer fulfillment costs for incremental orders of $193,000, in strengthening sales and executive management teams of $120,000, in insurance premiums of $100,000, in information systems costs of $86,000, in
clinical study costs of $96,000, partially offset by a $297,000 reduction in legal costs.&#160; Overall, SG&amp;A decreased as a percentage of net sales to 21.3% for the first quarter of fiscal 2003 from 24.8% in the comparable quarter last
year.</font></p> <p><font size=2 face="Times New Roman">The Company recorded income from operations of $403,000 for the first quarter of fiscal 2003 compared to a loss from operations of ($430,000) for the first quarter of fiscal 2002.&#160; The
increase in income from operations of $833,000 was due primarily to improved gross margin on higher net sales, partially offset by the incremental SG&amp;A expenses discussed above. </font></p> <p><font size=2 face="Times New Roman">Proceeds from
vitamin antitrust litigation for the first quarter of fiscal 2003 includes receipt of the final settlement payment of $225,000 from the <i>Vitamin Antitrust Litigation</i>.</font></p> <p><font size=2 face="Times New Roman"><b>LIQUIDITY AND CAPITAL
RESOURCES</b></font></p> <p><font size=2 face="Times New Roman">The Company has historically financed its operations through cash flow from operations, its working capital line of credit facilities and equipment financing arrangements.&#160;
</font></p> <p><font size=2 face="Times New Roman">At September 30, 2002, the Company had cash and working capital of $2.8 million and $9.6 million, respectively, compared to $640,000 and $8.7 million, respectively, at June 30, 2002.&#160; The
improvement in working capital is primarily due to the $1.1 million of cash flow from operations generated during the first quarter of fiscal 2003.</font></p> <p align=center><font size=2 face="Times New Roman">11</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><BR> </font> <p><font size=2 face="Times New Roman">Effective October 31, 2002, the Company entered into a new $6.5 million two-year credit facility.&#160; The facility is comprised
of a $4 million working capital line of credit and a $2.5 million term loan.&#160; The working capital line of credit is subject to eligibility requirements for current accounts receivable and inventory balances.&#160; The interest rate on the line
of credit and term loan is prime plus 0.5%.&#160; The new facility replaced the $2.5 million line of credit that expired on October 31, 2002, and refinanced the $1.2 million outstanding term note.&#160; The new working capital line of credit
provided a $1.3 million increase in the Company&#146;s cash position, freed up $1.5 million of cash previously restricted as collateral for the prior line of credit and provided an additional $1.5 million of borrowing capacity.</font></p> <p><font
size=2 face="Times New Roman">The Company believes that its available cash and existing credit facility should be sufficient to fund near-term operating activities. However, the Company&#146;s ability to fund future operations and meet capital
requirements will depend on many factors, including but not limited to: continued profitability from operations, maintaining adequate financing, the effectiveness of the Company&#146;s diversified growth strategy, the effectiveness of the expansion
of European operations, the ability to establish additional customers and changes to existing customers&#146; business.</font></p> <p><font size=2 face="Times New Roman"><b>RISK FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS</b></font></p>
<p><font size=2 face="Times New Roman"><i>In addition to the other information included in this Report, the following factors should be considered in evaluating the Company&#146;s business and future prospects. The Company&#146;s business and
results of operations could be seriously harmed by any of the following risks.&#160; In addition, the market price of our common stock could decline due to any of these risks.</i></font></p> <p><font size=2 face="Times New Roman"><b><u>Recent
Operating Income; Increasing Sales</u></b></font></p> <p><font size=2 face="Times New Roman">The Company&#146;s income from operations was $403,000 for the first quarter ended September 30, 2002, compared to a loss from operations of ($430,000) for
the quarter ended September 30, 2001.&#160; Sales for the first quarter of fiscal 2003 increased to $13.1 million, compared to $9.9 million for the first quarter of fiscal 2002.&#160; There can be no assurance that income from operations will
continue. The Company expects operating results may further fluctuate from period to period as a result of differences in when it incurs expenses and recognizes revenues from product sales.&#160; Some of these fluctuations may be
significant.</font></p> <p><font size=2 face="Times New Roman"><b><u>Reliance on Limited Number of Customers</u></b></font></p> <p><font size=2 face="Times New Roman">For the first quarter ended September 30, 2002, the Company had two major
customers, which together accounted for approximately 64% of the Company&#146;s net sales. The loss of either of these major customers, or any substantial reduction of their purchases from the Company, would have a material adverse impact on the
business, operations and financial condition of the Company.</font></p> <p><font size=2 face="Times New Roman"><b><u>Reliance on a Key Personality</u></b></font></p> <p><font size=2 face="Times New Roman">For the first quarter ended September 30,
2002, the Company&#146;s DTC product line was approximately 20% of the Company&#146;s net sales.&#160; DTC products are marketed with a key personality through a variety of distribution channels including weekly television programming, internet and
a monthly newsletter.&#160; The inability of the key personality to fulfill his current role, the reduction of television exposure or the reduction of internet or mailing capabilities would have a material adverse impact on the business, operations
and financial condition of the Company.</font></p> <p><font size=2 face="Times New Roman"><b><u>Potential for Increased Competition</u></b></font></p> <p><font size=2 face="Times New Roman">The market for the Company&#146;s products is highly
competitive.&#160; The Company competes with other dietary supplement products and over-the-counter pharmaceutical manufacturers. Among other factors, competition among these manufacturers is based upon price.&#160; If one or more manufacturers
significantly reduce their prices in an effort to gain market share, the Company&#146;s business, operations and financial condition could be adversely affected.&#160; Many of the Company&#146;s competitors, particularly manufacturers of nationally
advertised brand name products, are larger and have resources substantially greater than those of the Company.&#160; There has been speculation about the potential for increased participation in these markets by major international pharmaceutical
companies.&#160; In the future, if not already, one or more of these companies could seek to compete more directly with the Company by manufacturing and distributing</font></p> <p align=center><font size=2 face="Times New Roman">12</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><BR> </font> <p><font size=2 face="Times New Roman">their own or others&#146; products, or by significantly lowering the prices of existing national brand products. The Company
sells substantially all of its supplement products to customers who re-sell and distribute the products.&#160; Although the Company does not currently participate significantly in other channels such as health food stores, direct mail, and internet
sales, the Company is expanding its operations and its products, including direct mail and internet sales, and will likely face increased competition in such distribution and sales channels as more vendors and customers utilize them.</font></p>
<p><font size=2 face="Times New Roman"><b><u>Availability of Line of Credit</u></b></font></p> <p><font size=2 face="Times New Roman">Effective October 31, 2002, the Company entered into a new $6.5 million two-year credit facility.&#160; The
liquidity provided by a line of credit is an important component of a sound financial management plan.&#160; Failure to maintain the new line of credit could materially impair the Company&#146;s ability to fund growth in operations or meet other
working capital needs in the future.</font></p> <p><font size=2 face="Times New Roman"><b><u>Reliance on Limited Number of Suppliers; Availability and Cost of Purchased Materials</u></b></font></p> <p><font size=2 face="Times New Roman">The Company
purchases certain products it does not manufacture from a limited number of raw material suppliers.&#160; For the first quarter ended September 30, 2002, the Company had three major suppliers, which together accounted for 47% of raw material
purchases.&#160; No other supplier represented more than 10% of total raw material purchases for the first quarter ended September 30, 2002.&#160; Although the Company currently has supply arrangements with several suppliers of these raw materials,
and such materials are generally available from numerous sources, the termination of the supply relationship by any material supplier or an unexpected interruption of supply could materially adversely affect the Company&#146;s business, operations
and financial condition.</font></p> <p><font size=2 face="Times New Roman">The Company relies on a single supplier to process certain raw materials for a product line of the Company&#146;s largest customer. An unexpected interruption of supply of
this service would materially adversely affect the Company&#146;s business, operations and financial condition.</font></p> <p><font size=2 face="Times New Roman"><b><u>Decline in Stock Price </u></b></font></p> <p><font size=2
face="Times New Roman">The Company&#146;s stock price has experienced volatility, has generally declined during the past few years and is currently near historic lows.&#160; In view of the Company&#146;s recent results and the fact there can be no
assurances of future profitability, there can be no assurance that the stock price will not decline.&#160; Market conditions in the vitamin and nutritional supplement industry, such as increased price competition, consolidation, oversupply of
vitamin and supplement products, operating results of competitors, adverse publicity and other factors such as customer and product announcements by the Company and operating results which are lower than the expectations of analysts and our
investors, may have a continuing adverse effect on the price of the Company&#146;s stock.</font></p> <p><font size=2 face="Times New Roman"><b><u>Effect of Adverse Publicity</u></b></font></p> <p><font size=2 face="Times New Roman">The
Company&#146;s products consist primarily of dietary supplements (vitamins, minerals, herbs and other ingredients).&#160; The Company regards these products as safe when taken as suggested by the Company.&#160; In addition, various scientific
studies have suggested the ingredients in some of the Company&#146;s products may involve health benefits.&#160; The Company believes the growth in the dietary supplements business of the last several years may, in part, be based on significant
media attention and various scientific research suggesting potential health benefits from the consumption of certain vitamin products. The Company is indirectly dependent upon its customers&#146; perception of the overall integrity of its business,
as well as the safety and quality of its products and similar products distributed by other companies that may not adhere to the same quality standards as the Company.&#160; The business, operations, and financial condition of the Company could be
adversely affected if any of the Company&#146;s products or any similar products distributed by other companies should prove or be asserted to be harmful to consumers, or should scientific studies provide unfavorable findings regarding the effect of
products similar to those produced by the Company.</font></p> <p><font size=2 face="Times New Roman"><b><u>Exposure to Product Liability Claims</u></b></font></p> <p><font size=2 face="Times New Roman">The Company, like other retailers, distributors
and manufacturers of products that are ingested, faces a risk of exposure to product liability claims in the event that, among other things, the use of its products allegedly results in injury.&#160; The Company maintains product liability insurance
coverage, including primary product</font></p> <p align=center><font size=2 face="Times New Roman">13</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><BR> </font> <p><font size=2 face="Times New Roman">liability and excess liability coverage.&#160; The cost of such coverage has increased dramatically in the last year and the
availability of adequate insurance coverage has decreased.&#160; There can be no assurance that adequate product liability insurance will continue to be available at an economically reasonable cost or that the Company&#146;s insurance will be
adequate to cover any liability the Company incurs in respect to all possible product liability claims.&#160; In addition, some of the ingredients included in one or more of the products manufactured by the Company are subject to controversy
involving potential negative side effects or questionable health benefits.&#160; Some insurers, including some providing coverage to the Company, have recently excluded certain of these ingredients from their product liability coverage. Although the
Company&#146;s product liability insurance includes certain exclusions and limitations, the Company&#146;s insurer could expand such exclusions or limitations on coverage in the future.&#160; In such event, the Company may have to cease utilizing
the ingredients or may have to rely on indemnification or similar arrangements with its customers who wish to continue to include such ingredients in their products. In such an event, the consequential increase in product liability risk or the loss
of customers or product lines could have a material adverse impact on the Company&#146;s business, operations, and financial condition.</font></p> <p><font size=2 face="Times New Roman"><b><u>Risks Associated with International
Markets</u></b></font></p> <p><font size=2 face="Times New Roman">The Company&#146;s growth may be dependent in part upon its ability to expand its operations and those of its customers into new markets, including international markets.&#160; For
the first quarter ended September 30, 2002 and 2001, the percentage of the Company&#146;s net sales to customers in international markets was approximately 24% and 28%, respectively.&#160; NAIE operates a manufacturing facility in Switzerland, which
is intended to facilitate an increase in sales of the Company&#146;s products overseas and which contributed approximately 14.5% and 17.3% of the Company&#146;s net sales for the first quarter ended September 30, 2002 and 2001, respectively. The
Company may experience difficulty expanding in international markets due to regulatory barriers, the necessity of adapting to new regulatory systems, and problems related to entering new markets with different cultural bases and political systems.
Operating in international markets exposes the Company to certain risks, including, among other things, (1) changes in or interpretations of foreign import, currency transfer and other restrictions and regulations that among other things may limit
the Company&#146;s ability to sell certain products or repatriate profits to the United States, (2) exposure to currency fluctuations, (3) the potential imposition of trade or foreign exchange restrictions or increased tariffs, and (4) economic and
political instability.&#160; As the Company continues to expand its international operations, these and other risks associated with international operations are likely to increase.</font></p> <p><font size=2 face="Times New Roman"><b><u>Government
Regulation</u></b></font></p> <p><font size=2 face="Times New Roman">The manufacturing, processing, formulation, packaging, labeling and advertising of the Company&#146;s products are subject to regulation by one or more federal agencies, including
the United States Food and Drug Administration (&#147;FDA&#148;), the Federal Trade Commission (&#147;FTC&#148;), the Consumer Product Safety Commission, the United States Department of Agriculture, the United States Postal Service, the United
States Environmental Protection Agency, and the Occupational Safety and Health Administration.&#160; The Company&#146;s activities are also regulated by various agencies of the states and localities in which the Company&#146;s products are
sold.&#160; In particular, the FDA regulates the safety, labeling and distribution of dietary supplements, including vitamins, minerals, herbs, food, and over-the-counter and prescription drugs and cosmetics.&#160; In addition, the FTC has
overlapping jurisdiction with the FDA to regulate the labeling, promotion and advertising of vitamins, over-the-counter drugs, cosmetics and foods.</font></p> <p><font size=2 face="Times New Roman">The Dietary Supplement Health and Education Act of
1994 (&#147;DSHEA&#148;) was enacted on October 25, 1994.&#160; DSHEA amends the Federal Food, Drug and Cosmetic Act by defining dietary supplements, which include vitamins, minerals, nutritional supplements and herbs as a new category of food
separate from conventional food.&#160; DSHEA provides a regulatory framework to ensure safe, quality dietary supplements and the dissemination of accurate information about such products.&#160; Under DSHEA, the FDA is generally prohibited from
regulating the active ingredients in dietary supplements as drugs unless product claims, such as claims that a product may heal, mitigate, cure or prevent an illness, disease or malady, trigger drug status.</font></p> <p><font size=2
face="Times New Roman">DSHEA provides for specific nutritional labeling requirements for dietary supplements.&#160; DSHEA permits substantiated, truthful and non-misleading statements of nutritional support to be made in labeling, such as statements
describing general well being resulting from consumption of a dietary ingredient or the role of a nutrient or dietary ingredient in affecting or maintaining a structure or function of the body.&#160; The Company anticipates the FDA will finalize
manufacturing process regulations that are specific to dietary supplements</font></p> <p align=center><font size=2 face="Times New Roman">14</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><BR> </font> <p><font size=2 face="Times New Roman">and require at least some of the quality control provisions applicable to drugs.&#160; The Company currently manufactures its
vitamins and nutritional supplement products in compliance with the food good manufacturing processes.</font></p> <p><font size=2 face="Times New Roman">The FDA is developing additional regulations to implement DSHEA.&#160; Labeling regulations may
require expanded or different labeling for the Company&#146;s vitamin and nutritional products.&#160; The Company cannot determine what effect such regulations, when fully implemented, will have on its business in the future.&#160; Such regulations
could, among other things, require the recall, reformulation or discontinuance of certain products, additional record keeping, warnings, notification procedures and expanded documentation of the properties of certain products or scientific
substantiation regarding ingredients, product claims, safety or efficacy.&#160; Failure to comply with applicable FDA requirements could result in sanctions being imposed on the Company or the manufacturers of its products, including warning
letters, fines, product recalls and seizures.</font></p> <p><font size=2 face="Times New Roman">Governmental regulations in foreign countries where the Company plans to commence or expand sales may prevent or delay entry into a market or prevent or
delay the introduction, or require the reformulation of certain of the Company&#146;s products.&#160; In addition, the Company cannot predict whether new domestic or foreign legislation regulating its activities will be enacted.&#160; Such new
legislation could have a material adverse effect on the business, operations and financial condition of the Company.</font></p> <p><font size=2 face="Times New Roman"><b><u>Failure to Attract and Retain Management Could Harm Our Ability to Maintain
Profitability</u></b></font></p> <p><font size=2 face="Times New Roman">The Company&#146;s success is dependent in large part upon its continued ability to identify, hire, retain and motivate highly skilled management employees.&#160; Competition
for these employees is intense, and the Company may not be able to hire additional qualified personnel in a timely manner and on reasonable terms.&#160; The majority of the Company&#146;s current corporate officers began their employment with the
Company in fiscal years 2002 and 2001.&#160; The inability of the Company to retain competent professional management could adversely affect our ability to execute our business strategy.</font></p> <p><font size=2
face="Times New Roman"><b><u>Centralized Location of Manufacturing Operations</u></b></font></p> <p><font size=2 face="Times New Roman">The Company currently manufactures the vast majority of its products at its manufacturing facilities in Southern
California. Accordingly, any event resulting in the slowdown or stoppage of the Company&#146;s manufacturing operations or distribution facilities in Southern California could have a material adverse effect on the Company.&#160; The Company
maintains business interruption insurance. There can be no assurance, however, that such insurance will continue to be available at a reasonable cost or, if available, will be adequate to cover any losses that may be incurred from an interruption in
the Company&#146;s manufacturing and distribution operations.</font></p> <p><font size=2 face="Times New Roman"><b><u>Concentration of Ownership; Certain Anti-Takeover Considerations</u></b></font></p> <p><font size=2 face="Times New Roman">The
Company&#146;s directors and executive officers beneficially own in excess of 27.2% of the outstanding common stock as of September 30, 2002.&#160; Accordingly, these shareholders will continue to have the ability to substantially influence the
management, policies and business operations of the Company. The Company&#146;s Board of Directors has the authority to approve the issuance of 500,000 shares of preferred stock and to fix the rights, preferences, privileges and restrictions,
including voting rights, of those shares without any further vote or action by the Company&#146;s shareholders.&#160; The rights of the holders of Common Stock will be subject to, and may be adversely affected by, the rights of holders of any
preferred stock that may be issued in the future.&#160; Certain provisions of Delaware law, as well as the issuance of preferred stock, and other &#147;anti-takeover&#148; provisions in the Company&#146;s Articles and Bylaws, could delay or inhibit
the removal of incumbent directors and could delay, defer, make more difficult or prevent a merger, tender offer or proxy content, or any change in control involving the Company, as well as the removal of management, even if such events would be
beneficial to the interests of the Company&#146;s shareholders, and may limit the price certain investors may be willing to pay in the future for shares of common stock.</font></p> <p align=center><font size=2 face="Times New Roman">15</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><b><BR> </b></font> <p><font size=2 face="Times New Roman"><b>Item 3.&nbsp;&nbsp;&nbsp;Quantitative and Qualitative Disclosures About Market Risk</b></font></p> <p><font size=2
face="Times New Roman">The Company is exposed to market risks from adverse changes in interest rates, and foreign exchange rates affecting the return on our investments and the cost of our debt. The Company does not use derivative financial
instruments to reduce the impact of changes in interest or foreign exchange rates.</font></p> <p><font size=2 face="Times New Roman">At September 30, 2002 the Company&#146;s cash equivalents consisted of financial instruments with original
maturities of three months or less.&#160; </font></p> <p><font size=2 face="Times New Roman">The Company&#146;s debt as of September 30, 2002 totaled $3.4 million and was comprised of fixed rate loans of $2.0 million and variable rate loans of $1.4
million. The average composite interest rates at September 30, 2002 for fixed rate and variable rate loans were 8.8% and 5.25%, respectively.</font></p> <p><font size=2 face="Times New Roman"><b>Item 4.&nbsp;&nbsp;&nbsp;Controls and
Procedures</b></font></p> <p><font size=2 face="Times New Roman">The Company&#146;s Chief Executive Officer and Chief Financial Officer believe the Company&#146;s disclosure controls and procedures, as defined in Securities Exchange Act Rules 13a-14
and 15d-14, are effective.&#160; This conclusion was reached after an evaluation of these controls and procedures as of September 30, 2002.</font></p> <p><font size=2 face="Times New Roman">We are not aware of any significant changes in the
Company&#146;s internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses, or in other factors that could significantly affect these controls after September 30, 2002.</font></p> <p
align=center><font size=2 face="Times New Roman">16</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><b><BR> </b></font> <p><font size=2 face="Times New Roman"><b>Part II.&nbsp;&nbsp;&nbsp;Other Information</b></font></p> <p><font size=2 face="Times New Roman"><b>ITEM
1.&nbsp;&nbsp;&nbsp;LEGAL PROCEEDINGS</b></font></p> <p><font size=2 face="Times New Roman">The Company was a plaintiff in an antitrust lawsuit against several manufacturers of vitamins and other raw materials purchased by the Company.&#160; Other
similarly situated companies filed a number of similar lawsuits against some or all of the same manufacturers.&#160; The Company&#146;s lawsuit was consolidated with some of the others and captioned <i>In re: Vitamin Antitrust Litigation</i>, and
was pending in U.S. District Court in Washington D.C.&#160; A final settlement payment of $225,000 was received by the Company and is included in proceeds from vitamin antitrust litigation in the accompanying statement of operations for the three
months ended September 30, 2002.&#160; All of its claims under the <i>Vitamin Antitrust Litigation</i> were settled.</font></p> <p><font size=2 face="Times New Roman">The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, after consultation with its legal counsel, the ultimate disposition of these matters will not have a material adverse effect on the Company&#146;s consolidated financial position, results of
operations or liquidity.</font></p> <p><font size=2 face="Times New Roman"><b>ITEM 2.&nbsp;&nbsp;&nbsp;CHANGES IN SECURITIES</b></font></p> <p><font size=2 face="Times New Roman">None.</font></p> <p><font size=2 face="Times New Roman"><b>ITEM
3.&nbsp;&nbsp;&nbsp;DEFAULTS BY THE COMPANY ON ITS SENIOR SECURITIES</b></font></p> <p><font size=2 face="Times New Roman">None.</font></p> <p><font size=2 face="Times New Roman"><b>ITEM 4.&nbsp;&nbsp;&nbsp;SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS</b></font></p> <p><font size=2 face="Times New Roman">None.</font></p> <p><font size=2 face="Times New Roman"><b>ITEM 5.&nbsp;&nbsp;&nbsp;OTHER INFORMATION</b></font></p> <p><font size=2 face="Times New Roman">None.</font></p>
<p><font size=2 face="Times New Roman"><b>ITEM 6.&nbsp;&nbsp;&nbsp;EXHIBITS AND REPORTS ON FORM 8-K</b></font></p> <p><font size=2 face="Times New Roman">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits 99.1<b>&nbsp;&nbsp;&nbsp;</b>Certification of Chief
Executive Officer, Mark A. LeDoux and Chief Financial Officer, Randell Weaver.</font></p> <p><font size=2 face="Times New Roman">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No reports on Form 8-K were filed during the quarter for which this report is
filed.</font></p> <p><font size=2 face="Times New Roman"><b>SIGNATURES</b></font></p> <p><font size=2 face="Times New Roman">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.</font></p> <p><font size=2 face="Times New Roman"><b>NATURAL ALTERNATIVES INTERNATIONAL, INC.</b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="41%" valign=bottom> <p align=center><font size=2 face="Times New Roman">/s/&#160; RANDELL WEAVER</font></p> </td>
<td width="7%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="16%" valign=bottom> <p align=right><font size=2 face="Times New Roman">Date:</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="32%" valign=bottom> <p><font size=2 face="Times New Roman">November 13, 2002</font></p> </td> </tr>
<tr>
<td width="41%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="7%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="16%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="32%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="41%" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Randell Weaver<br> Chief Financial Officer</b></font></p> </td>
<td width="7%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="16%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="34%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p align=center><font size=2 face="Times New Roman">17</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><b><BR> </b></font> <p align=center><font size=2 face="Times New Roman"><b>Certifications</b></font></p> <p><font size=2 face="Times New Roman">I, Mark A. LeDoux, Chief Executive
Officer of Natural Alternatives International, Inc., certify that:</font></p> <p><font size=2 face="Times New Roman">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this quarterly report on Form 10-Q of Natural Alternatives International,
Inc.;</font></p> <p><font size=2 face="Times New Roman">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;</font></p> <p><font size=2 face="Times New Roman">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;</font></p> <p><font size=2 face="Times New Roman">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">a.</font></p> </td>
<td width="91%" valign=top> <p><font size=2 face="Times New Roman">Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others
within that entity, particularly during the period in which this quarterly report is being prepared;</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">b.</font></p> </td>
<td width="91%" valign=top> <p><font size=2 face="Times New Roman">Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the
&#147;Evaluation Date&#148;); and</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">c.</font></p> </td>
<td width="91%" valign=top> <p><font size=2 face="Times New Roman">Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation of the Evaluation Date;</font></p> </td>
</tr> </table> <p><font size=2 face="Times New Roman">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant&#146;s auditors and audit committee of
registrant&#146;s board of directors:</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">a.</font></p> </td>
<td width="91%" valign=top> <p><font size=2 face="Times New Roman">All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant&#146;s ability to record, process, summarize and report
financial data and have identified for the registrant&#146;s auditors any material weaknesses in internal controls; and</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">b.</font></p> </td>
<td width="91%" valign=top> <p><font size=2 face="Times New Roman">Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal controls; and</font></p> </td> </tr>
</table> <p><font size=2 face="Times New Roman">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant&#146;s other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Date:&#160; November 13, 2002</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="67%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="32%" valign=bottom> <p align=center><font size=2 face="Times New Roman">/s/&#160; MARK A. LEDOUX</font></p> </td> </tr>
<tr>
<td width="67%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="32%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td> </tr>
<tr>
<td width="67%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="32%" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Mark A. LeDoux<br> Chief Executive Officer</b></font></p> </td> </tr> </table> <p align=center><font size=2 face="Times New Roman">18</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER"> <font size=2 face="Times New Roman"><BR> </font> <p align=center><font size=2 face="Times New Roman"><b>Certifications</b></font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, Randell
Weaver, Chief Operating Officer of Natural Alternatives International, Inc., certify that:</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">1.</font></p> </td>
<td width="95%" colspan="5" valign=top> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this quarterly report on Form 10-Q of Natural Alternatives International, Inc.;</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" colspan="5" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">2.</font></p> </td>
<td width="95%" colspan="5" valign=top> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" colspan="5" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">3.</font></p> </td>
<td width="95%" colspan="5" valign=top> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" colspan="5" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">4.</font></p> </td>
<td width="95%" colspan="5" valign=top> <p><font size=2 face="Times New Roman">The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and have:</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" colspan="5" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><font size=2 face="Times New Roman">a.</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="87%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to
us by others within that entity, particularly during the period in which this quarterly report is being prepared;</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><font size=2 face="Times New Roman">b.</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="87%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the
&#147;Evaluation Date&#148;); and</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><font size=2 face="Times New Roman">c.</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="87%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation of the Evaluation
Date;</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="87%" colspan="2" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">5.</font></p> </td>
<td width="95%" colspan="5" valign=top> <p><font size=2 face="Times New Roman">The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant&#146;s auditors and audit committee of
registrant&#146;s board of directors:</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" colspan="5" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><font size=2 face="Times New Roman">a.</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="87%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant&#146;s ability to record, process, summarize and
report financial data and have identified for the registrant&#146;s auditors any material weaknesses in internal controls; and</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><font size=2 face="Times New Roman">b.</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="87%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal controls; and</font></p>
</td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="87%" colspan="2" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">6.</font></p> </td>
<td width="95%" colspan="5" valign=top> <p><font size=2 face="Times New Roman">The registrant&#146;s other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.</font></p> </td> </tr>
<tr>
<td width="4%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" colspan="5" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="6" valign=bottom> <p><font size=2 face="Times New Roman">Date:&#160; November 13, 2002</font></p> </td> </tr>
<tr>
<td width="100%" colspan="6" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="67%" colspan="5" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="32%" valign=bottom> <p align=center><font size=2 face="Times New Roman">/s/&#160; RANDELL WEAVER</font></p> </td> </tr>
<tr>
<td width="67%" colspan="5" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="32%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td> </tr>
<tr>
<td width="67%" colspan="5" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="32%" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Randell Weaver<br> Chief Financial Officer</b></font></p> </td> </tr>
<tr>
<td width=31></td>
<td width=20></td>
<td width=20></td>
<td width=20></td>
<td width=396></td>
<td width=234></td> </tr> </table> <p align=center><font size=2 face="Times New Roman">19</font></p>
</BODY></HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>dex991.htm
<DESCRIPTION>CERTIFICATION PURSUANT TO SECTION 906
<TEXT>
<HTML><HEAD>
<TITLE>Certification Pursuant to Section 906</TITLE>
</HEAD>
  <BODY BGCOLOR="WHITE">
 <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Exhibit 99.1 </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>CERTIFICATION PURSUANT TO </B></FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>18 U.S.C. SECTION 1350, </B></FONT></DIV> <DIV
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>AS ADOPTED PURSUANT TO </B></FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
</B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">In connection with the Quarterly Report of Natural Alternatives International, Inc. (the &#147;Company&#148;)
on Form 10-Q for the period ending September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the &#147;Report&#148;), the undersigned, Mark A. LeDoux, Chief Executive Officer of the Company, and Randell Weaver,
Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. &#167; 1350, as adopted pursuant to &#167; 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge: </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(1)</FONT></DIV></TD>
<TD WIDTH="1%" VALIGN="top"><DIV><FONT SIZE="1">&nbsp;</FONT></DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and </FONT></DIV> </TD></TR></TABLE>
<DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(2)</FONT></DIV></TD>
<TD WIDTH="1%" VALIGN="top"><DIV><FONT SIZE="1">&nbsp;</FONT></DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
</FONT></DIV> </TD></TR></TABLE> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD COLSPAN="3"> <FONT SIZE="1">&nbsp;</FONT></TD> </TR>
<TR>
<TD HEIGHT="16"> </TD> </TR>
<TR>
<TD> <FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="48%"> <DIV><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">/s/&nbsp;&nbsp;&nbsp;&nbsp;M<SMALL>ARK</SMALL>&nbsp;A.&nbsp;L<SMALL>E</SMALL>D<SMALL>OUX&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</SMALL></FONT></DIV> <HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD> </TR>
<TR>
<TD> <FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="48%"> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Mark A. LeDoux</FONT></DIV> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Chief Executive Officer</FONT></DIV> <DIV><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000">November 13, 2002</FONT></DIV> </TD> </TR>
 </TABLE> </DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD COLSPAN="3"> <FONT SIZE="1">&nbsp;</FONT></TD> </TR>
<TR>
<TD HEIGHT="16"> </TD> </TR>
<TR>
<TD> <FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="48%"> <DIV><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">/s/&nbsp;&nbsp;&nbsp;&nbsp;R<SMALL>ANDELL</SMALL>&nbsp;W<SMALL>EAVER&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</SMALL></FONT></DIV> <HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD> </TR>
<TR>
<TD> <FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="48%"> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Randell Weaver</FONT></DIV> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Chief Financial Officer</FONT></DIV> <DIV><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000">November 13, 2002</FONT></DIV> </TD> </TR>
 </TABLE> </DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
 <P></P>

 </BODY></HTML>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
