INBP Net Income Halves Amidst Sales and Profitability Decline

TL;DR

**INBP's latest quarter is a red flag; sales and profits are tanking, making it a risky bet right now.**

AI Summary

INTEGRATED BIOPHARMA INC (INBP) reported a significant decline in net income for the three months ended September 30, 2025, falling to $123,000 from $259,000 in the prior year, a decrease of 52.5%. Net sales also decreased by 6.8% to $12.689 million from $13.617 million in the same period. Gross profit saw a substantial drop of 25.7% to $1.019 million from $1.371 million. Operating income was severely impacted, plummeting 66.7% to $163,000 from $490,000. Despite these declines, the company increased its cash position to $4.732 million as of September 30, 2025, up from $3.615 million on June 30, 2025, primarily driven by $1.301 million in cash provided by operating activities. Accounts receivable decreased by $1.447 million, contributing positively to cash flow, while inventories increased by $1.107 million. The company continues to operate in contract manufacturing and other business lines, including warehousing and distribution, and raw material distribution.

Why It Matters

INBP's sharp decline in net income and sales signals potential operational challenges and increased competitive pressures within the vitamin and nutritional supplement market. For investors, this indicates a weakening financial performance that could impact future stock valuation and dividend potential. Employees might face uncertainty if the downward trend continues, potentially leading to cost-cutting measures. Customers could see changes in product offerings or pricing as the company adjusts to market conditions. The broader market for nutraceuticals is highly competitive, and INBP's struggles could reflect wider industry headwinds or specific company-level issues, making it crucial for stakeholders to monitor its strategic responses.

Risk Assessment

Risk Level: high — The company's net income decreased by 52.5% from $259,000 to $123,000, and operating income fell by 66.7% from $490,000 to $163,000 for the three months ended September 30, 2025, compared to the prior year. This significant decline in profitability, coupled with a 6.8% drop in net sales, indicates substantial operational and financial risk.

Analyst Insight

Investors should exercise extreme caution and consider reducing exposure to INBP given the significant decline in sales and profitability. A deeper dive into the underlying causes of the revenue and gross profit erosion is warranted before considering any new positions.

Financial Highlights

debt To Equity

0.25

revenue

$12.689M

operating Margin

1.28%

total Assets

$25.540M

total Debt

$1.208M

net Income

$123K

eps

$0.00

gross Margin

7.99%

cash Position

$4.732M

revenue Growth

-6.8%

Revenue Breakdown

Key Numbers

• $12.689M — Net Sales (Decreased by 6.8% from $13.617M in Q3 2024)
• $123K — Net Income (Decreased by 52.5% from $259K in Q3 2024)
• $1.019M — Gross Profit (Decreased by 25.7% from $1.371M in Q3 2024)
• $163K — Operating Income (Decreased by 66.7% from $490K in Q3 2024)
• $4.732M — Cash at End of Period (Increased from $3.615M at June 30, 2025)
• $1.301M — Net Cash Provided by Operating Activities (Increased from $657K in Q3 2024)
• 31,059,610 — Common Shares Outstanding (As of November 10, 2025)
• $0.00 — Basic Net Income Per Common Share (Decreased from $0.01 in Q3 2024)

Key Players & Entities

• INTEGRATED BIOPHARMA INC (company) — registrant
• Manhattan Drug Company, Inc. (company) — contract manufacturing segment
• MDC Warehousing and Distribution, Inc. (company) — warehousing and fulfillment services segment
• Chem International, Inc. (company) — distributor of raw materials and holding entity
• DSM Nutritional Products LLC (company) — supplier of raw materials
• SEC (regulator) — Securities and Exchange Commission
• Delaware (other) — state of incorporation
• Luxembourg (other) — customer location
• United States (other) — customer location

FAQ

Risk Factors

• Declining Profitability [high — financial]: Net income decreased by 52.5% to $123,000 from $259,000 year-over-year. Gross profit fell 25.7% and operating income dropped 66.7%, indicating significant pressure on margins and operational efficiency.
• Inventory Build-up [medium — operational]: Inventories increased by $1.107 million to $10.469 million, which could signal slower sales or production inefficiencies. This ties up working capital and increases the risk of obsolescence.
• Competitive Pressures [medium — market]: The company operates in contract manufacturing, warehousing, distribution, and raw material distribution, all of which are competitive sectors. Declining sales suggest potential market share erosion or broader industry headwinds.
• Dependence on Operating Cash Flow [medium — financial]: While operating cash flow increased to $1.301 million, the significant drop in profitability raises concerns about the sustainability of cash generation if revenue and margins continue to decline.
• Regulatory Compliance [medium — regulatory]: As a biopharmaceutical company, INBP is subject to stringent regulatory oversight. Changes in regulations or failure to comply could lead to significant penalties, product recalls, or operational disruptions.

Industry Context

Integrated Biopharma operates within the highly competitive pharmaceutical services sector, encompassing contract manufacturing, warehousing, distribution, and raw material supply. This industry is characterized by significant R&D investment, stringent regulatory requirements, and evolving market demands for specialized services. Companies often face pressure on pricing and margins due to the presence of numerous players and the need for continuous technological upgrades.

Regulatory Implications

As a biopharmaceutical entity, INBP is subject to rigorous oversight from bodies like the FDA. Compliance with manufacturing standards (cGMP), drug safety regulations, and environmental policies is critical. Any lapse in compliance can lead to severe penalties, product recalls, and reputational damage, impacting operations and financial performance.

What Investors Should Do

1. Monitor inventory levels closely.
2. Analyze drivers of margin compression.
3. Evaluate the sustainability of cash flow generation.
4. Assess competitive positioning.

Key Dates

• 2025-09-30: End of Third Quarter — Financial results for the period show significant declines in revenue and profitability, though cash position improved.
• 2025-11-10: Common Shares Outstanding Recorded — Indicates the total number of shares available to the public, relevant for per-share calculations and market capitalization.

Glossary

Operating lease right-of-use assets

Assets recognized under lease accounting standards representing the right to use an asset for the lease term. (Shows the company's long-term rental commitments, with a portion ($278K and $485K) involving related parties.)

Accumulated deficit

The total net losses of a company since its inception that have not been offset by net income. (Indicates the company has historically incurred more losses than profits, standing at ($31.296M) as of Sept 30, 2025.)

Weighted average common shares outstanding - diluted

The average number of shares outstanding during a period, adjusted for the dilutive effect of stock options and other potential common shares. (Used to calculate diluted earnings per share, showing a slight increase from 30,649,977 in Q3 2024 to 31,421,338 in Q3 2025.)

Cost of sales

The direct costs attributable to the production or purchase of the goods sold by a company. (Increased to $11.670M from $12.246M, but at a slower rate than sales, contributing to the gross profit decline.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, Integrated Biopharma Inc. has experienced a significant downturn. Net sales decreased by 6.8% to $12.689 million, while net income plummeted by 52.5% to $123,000. Gross profit saw a substantial 25.7% decline, and operating income was severely impacted, dropping 66.7%. This indicates a challenging operating environment with deteriorating profitability metrics, despite an increase in cash generated from operations.

Key Financial Figures

• $0.002 — were 31,059,610 shares of common stock, $0.002 par value per share, of the registrant

Filing Documents

• inbp20250930_10q.htm (10-Q) — 761KB
• ex_867679.htm (EX-31.1) — 13KB
• ex_867680.htm (EX-31.2) — 15KB
• ex_867681.htm (EX-32.1) — 9KB
• ex_867682.htm (EX-32.2) — 7KB
• 0001437749-25-034076.txt ( ) — 4507KB
• inbp-20250930.xsd (EX-101.SCH) — 42KB
• inbp-20250930_cal.xml (EX-101.CAL) — 36KB
• inbp-20250930_def.xml (EX-101.DEF) — 264KB
• inbp-20250930_lab.xml (EX-101.LAB) — 235KB
• inbp-20250930_pre.xml (EX-101.PRE) — 288KB
• inbp20250930_10q_htm.xml (XML) — 739KB

Financial Information

Part I. Financial Information Item 1. Condensed Consolidated Statements of Income for the Three Months Ended September 30, 2025 and 2024 (unaudited) 2 Condensed Consolidated Balance Sheets as of September 30, 2025 and June 30, 2025 (unaudited) 3 Condensed Consolidated Statement of Stockholders' Equity for the Three Months Ended September 30, 2025 and 2024 (unaudited) 4 Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2025 and 2024 (unaudited) 5 Notes to the Condensed Consolidated Financial Statements (unaudited) 6 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 16 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 21 Item 4.

Controls and Procedures

Controls and Procedures 21

Other Information

Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 21 Item 1A.

Risk Factors

Risk Factors 21 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21 Item 3. Defaults Upon Senior Securities 22 Item 4. Mine Safety Disclosure 22 Item 5. Other Information 22 Item 6. Exhibits 22 Other

Signatures

Signatures 23 Cautionary Statement Regarding Forward-Looking Statements Certain statements in this Quarterly Report on Form 10-Q may constitute "forward-looking" statements as defined in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the "PSLRA") or in releases made by the Securities and Exchange Commission ("SEC"), all as may be amended from time to time. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Integrated BioPharma, Inc. and its subsidiaries (collectively, the "Company") or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, changes in general economic and business conditions; loss of market share through competition; introduction of competing products by other companies; the timing of regulatory approval and the introduction of new products by the Company; changes in industry capacity; pressure on prices from competition or from purchasers of the Company's products; regulatory changes in the pharmaceutical manufacturing industry and nutraceutical industry; regulatory obstacles to the introduction of new technologies or products that are important to the Company; availability of qualified personnel; the loss of any significant customers or suppliers; inflation (including those caused by tariffs) and tightened labor markets; and other factors both referenced and not referenced in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2025 ("Form 10-K") as filed with the SEC. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except share and per share amounts) (Unaudited) Three months ended September 30, 2025 2024 Sales, net $ 12,689 $ 13,617 Cost of sales 11,670 12,246 Gross profit 1,019 1,371 Selling and administrative expenses 856 881 Operating income 163 490 Interest income, net 33 14 Income before income taxes 196 504 Income tax expense, net 73 245 Net income $ 123 $ 259 Basic net income per common share $ 0.00 $ 0.01 Diluted net income per common share $ 0.00 $ 0.01 Weighted average common shares outstanding - basic 31,059,610 30,099,610 Add: Equivalent shares outstanding - Stock Options 361,728 550,367 Weighted average common shares outstanding - diluted 31,421,338 30,649,977 See accompanying notes to unaudited condensed consolidated financial statements. -2- INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (in thousands, except share and per share amounts) (Unaudited) September 30, June 30, 2025 2025 Assets Current Assets: Cash $ 4,732 $ 3,615 Accounts receivable (less allowance of credit losses of $ 20 ) 3,983 5,430 Inventories 10,469 9,362 Other current assets 440 356 Total current assets 19,624 18,763 Property and equipment, net 1,819 1,723 Operating lease right-of-use assets (includes $ 278 and $ 485 with a related party) 612 855 Finance lease right-of-use assets 164 171 Deferred tax assets, net 3,269 3,337 Security deposits and other assets 52 52 Total Assets $ 25,540 $ 24,901 Liabilities and Stockholders' Equity: Current Liabilities: Accounts payable $ 2,800 $ 2,267 Accrued expenses and other current liabilities 1,490 1,302 Current portion of financed lease obligation 45 45 Current portion of operating lease liabilities (inclu

View Full Filing

View this 10-Q filing on SEC EDGAR