8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES AND EXCHANGE ACT OF 1934

March 11, 2010

Date of Report (Date of earliest event reported)

Schiff Nutrition International, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-14608	87-0563574
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)
2002 South 5070 West Salt Lake City, Utah		84104-4726
(Address of principal executive offices)		(Zip Code)

(801) 975-5000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

q Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

q Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

q Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

q Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On March 17, 2010, the Company announced its financial results for its fiscal 2010 third quarter, which ended on February 28, 2010. A copy of the press release announcing the earnings is attached hereto as Exhibit 99.1.

Item 8.01. Other Events

On March 11, 2010, the  Board of Directors (the “Board”) approved a special cash dividend of $0.50 per share (the “Special Dividend”) payable on April 14, 2010 (the “Dividend Payment Date”) to shareholders of record of the Company’s Class A Common Stock and Class B Common Stock as of the close of business on March 31, 2010 (the “Dividend Record Date”).  The Company’s Class A Common Stock will start trading on an ex-dividend basis beginning March 29, 2010 (the “Ex-Dividend Date”), in accordance with New York Stock Exchange rules. Shareholders who sell their shares on or before the Ex-Dividend Date will also be selling their right to receive the Special Dividend.  The aggregate amount of payments to be made in connection with the Special Dividend, the dividend equivalent rights described below and all other dividend equivalents provided under currently outstanding equity awards (assuming 100% vesting of equity awards) will be approximately $15 million.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Also on March 11, 2010, the Compensation Committee of the Board (the “Compensation Committee”) and the Board approved dividend equivalent rights with respect to the Special Dividend for all stock options to purchase shares of the Company’s Class A Common Stock held by the Company’s employees and non-employee directors (the “Special Dividend Equivalent Rights”), which provide for a cash payment in an amount equal to the Special Dividend for each share of Class A Common Stock underlying each outstanding stock option held on the Dividend Record Date.

With respect to stock options vested on the Dividend Record Date, the Special Dividend Equivalent Rights will be paid on the Dividend Payment Date.  With respect to stock options that are not vested as of the Dividend Record Date that subsequently vest, the Special Dividend Equivalent Rights will be paid on the first day of the next fiscal quarter following the date of vesting of the stock options.

Additionally, the Compensation Committee and the Board provided and clarified that the dividend equivalents previously granted in connection with certain vested performance-based restricted stock units held by the Company’s employees and the restricted stock units held by the Company’s non-employee directors shall include and be payable with respect to the Special Dividend. Payment of the dividend equivalents with respect to the Special Dividend will occur on the terms provided for in the existing award agreements evidencing the restricted stock units and related dividend equivalents, but only to the extent that the shares underlying the restricted stock units vest.

The effect of the Special Dividend Equivalent Rights and the dividend equivalents is to provide the holders of outstanding stock options or such restricted stock units with the same economic value immediately after the time the Company’s common stock begins trading ex-dividend as such holder had immediately prior to such time. The outstanding dollar-denominated, performance-based restricted stock units that will be earned based on the Company’s performance for the three-year period ending May 31, 2011 do not have dividend equivalent rights.

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Item 8.01. Other Events

The Company manufactures and distributes private label (store brand) products for certain retail customers where it sells branded products.  There has recently been a significant increase in bidding activity for the manufacture of private label dietary supplements distributed in mass market retail accounts.  The increasingly competitive bidding activity began in January 2010 and is expected to continue throughout the year.  As a result of a recent bidding process, beginning in May 2010 the Company will no longer manufacture a product that represented a significant portion of its private label business.  The Company expects to continue to participate in the bidding processes for products it believes will contribute to the success of its business.  The Company cannot predict at th is time how many new products it will win, how many existing products it will lose or the net effect on the Company’s sales and profit margins.  The Company believes that the bidding processes could negatively impact sales and profit margins, potentially significantly, though it cannot at this time quantify the magnitude of this impact.

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are based on management’s beliefs and assumptions, current expectations, estimates, and projections.  These statements are subject to known and unknown risks and uncertainties, certain of which are beyond the Company’s ability to control or predict, and, therefore, actual results may differ materially.  Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date hereof. The Company disclaims any obligation to update any forward-looking statements whether as a result of new infor mation, future events or otherwise.  You are cautioned not to place undue reliance on these forward-looking statements.

Item 9.01. Financial Statements and Exhibits

(d)          Exhibits

99.1  Press Release dated March 17, 2010

The information in Item 2.02 of this report (including exhibits relating thereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or the Securities and Exchange Commission’s rules and regulations, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 (except as shall be expressly set forth by specific reference in such filing).

SIGNATURES

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 hereunto duly authorized.

 SCHIFF NUTRITION INTERNATIONAL, INC.

By:	/s/           JOSEPH W. BATY
	Name:        Joseph W. Baty
	Title:           Executive Vice President and Chief Financial Officer
Date: March 17, 2010

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INDEX TO EXHIBITS

Item Number	Exhibit
99.1	Press Release dated March 17, 2010

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EX-99.1

Exhibit 99.1

Company Contact:	Agency Contact:
Joseph W. Baty, Chief Financial Officer	Keith Lippert / Kirsten Chapman
(801) 975-5186	Lippert / Heilshorn & Associates
email: joeb@schiffnutrition.com	(212) 838-3777 / (415) 433-3777
www.schiffnutrition.com	email: KChapman@lhai.com

SCHIFF NUTRITION INTERNATIONAL, INC. ANNOUNCES

FISCAL 2010 THIRD QUARTER RESULTS AND DECLARES SPECIAL

CASH DIVIDEND OF $0.50 PER SHARE

Salt Lake City, Utah, March 17, 2010: Schiff Nutrition International, Inc., (NYSE: WNI), today announced results for the fiscal 2010 third quarter and nine months ended February 28, 2010.  The company also announced plans to return $0.50 per share to shareholders through a special cash dividend payable on April 14, 2010 to shareholders of record at the close of business on March 31, 2010.

Financial Results

For the third quarter, Schiff Nutrition’s net sales were $53.3 million, compared to $49.9 million for the same period in fiscal 2009.  For its fiscal 2010 third quarter, Schiff Nutrition reported net income of $5.7 million, or $0.20 per diluted share; this compares to fiscal 2009 third quarter net income of $3.6 million, or $0.13 per diluted share.

For the nine months ended February 28, 2010, Schiff Nutrition’s net sales were $155.6 million, compared to $145.0 million for the same period in fiscal 2009.  For the first nine months of fiscal 2010, Schiff Nutrition reported net income of $16.0 million, or $0.55 per diluted share, compared to $9.8 million, or $0.34 per diluted share, for the same period a year ago.

Bruce Wood, President and Chief Executive Officer, stated,  “Overall net sales for the third quarter increased almost 7% versus the prior year period, driven by a strong performance on our branded business, partially offset by a decline in private label sales.  We also recorded significant third quarter over third quarter improvement in our gross profit and operating margins, and added to our strong cash position.”

“Our MegaRed® krill oil product delivered particularly strong growth, and we continue to invest in the development of new branded growth initiatives.   At the same time, our private label business is being impacted by recent competitive bidding activity.  Bidding processes are ongoing, but we expect, at a minimum, the private label business will become much more price competitive.  However, based on our high quality standards, excellent customer service, and strong financial position, we believe we can compete effectively in this increasingly competitive environment.”

Wood concluded, “We are pleased to announce a $0.50 per share special cash dividend to our shareholders.  The company has continued to generate positive cash flows and as of February 28, 2010 has available approximately $58.8 million in cash and short-term investments.  The dividend reflects our ongoing confidence the company will continue to generate positive cash flows from operations.  We believe our cash position after the dividend payment provides us with the financial flexibility to continue investing in our business, funding growth initiatives, and exploring acquisition opportunities.”

Special Dividend

Schiff Nutrition’s Board of Directors approved a $0.50 per share special cash dividend, payable on April 14, 2010 to shareholders of record at the close of business on March 31, 2010.  Schiff’s Class A common stock will begin trading on an ex-dividend basis on March 29, 2010, in accordance with NYSE rules.  Shareholders who sell their shares on or before the March 29, 2010 ex-dividend date will also be selling their right to receive the $0.50 per share cash dividend.  Shareholders are advised to contact their financial advisor before selling their shares. 

In connection with the declaration of the special dividend, the Board of Directors approved certain dividend equivalent rights, clarifying that holders of other Schiff equity awards, including stock options and certain restricted stock units, will receive dividend equivalents in the form of cash on each share underlying the stock options and restricted stock units.  In aggregate, at March 31, 2010, the record date, the company expects approximately 29.8 million potential common shares to be outstanding, including approximately 27.8 million shares of outstanding Class A and Class B common stock, approximately 1.0 million shares of Class A common stock underlying outstanding stock options and approximately 1.0 million shares of Class A common stock underlying outstanding restricted stock units.  The aggregate amount of the special dividend is approximately $14.9 million, presuming 100 percent vesting of shares underlying equity awards.  To the extent at March 31, 2010, outstanding stock options, restricted shares and restricted stock units are unvested, or for which the issuance of shares underlying vested restricted stock units have been deferred, the $0.50 per share dividend equivalents will not be distributed until after such equity awards vest and/or as the deferred shares are issued.

For U.S. federal income tax purposes, it is expected that the special dividend will primarily represent dividend income to shareholders.  Shareholders are encouraged to consult with their own tax and financial advisors regarding the implications of the special dividend.

Conference Call Information

Schiff Nutrition International will hold a conference call today, March 17 at 11 a.m. ET.  The U.S. domestic access number is 800-299-8538.  International participants should dial 617-786-2902.  The participant pass code is 19552759.  Please call in approximately ten minutes in advance.  The conference call will be broadcast live over the Internet at http://www.schiffnutrition.com/press_conference_calls.asp, and the webcast will be available through April 13, 2010.  A replay of the call will be available by dialing 888-286-8010 for domestic callers and 617-801-6888 for international callers; enter access code 36259380.  The telephone replay will be available through March 22, 2010.

About Schiff Nutrition

Schiff Nutrition International, Inc. develops, manufactures, markets and distributes branded and private label vitamins, nutritional supplements and nutrition bars in the United States and throughout the world.  To learn more about Schiff, please visit the web site www.schiffnutrition.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are based on management’s beliefs and assumptions, current expectations, estimates, and projections.  These statements are subject to known and unknown risks and uncertainties, certain of which are beyond the company’s ability to control or predict, and, therefore, actual results may differ materially.  Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date hereof. Schiff Nutrition disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.  You are cautioned not to place undue reliance on these forward-looking statements.

Important factors that may cause these forward-looking statements to be false include, but are not limited to: the level of customer and consumer acceptance of Move Free® Advanced and MegaRed, the inability to gain or maintain market distribution for MegaRed, the entry of new branded or private label krill oil products into the market, the inability to successfully implement marketing and spending programs behind our Move Free, MegaRed and other branded products, the impact of raw material pricing (particularly relative to joint care products), availability (particularly relating to the limited number of krill oil suppliers) and quality (particularly relating to joint care products and ingredients from suppliers outside the United States, including China), the mix between branded and private label products, the inability to grow and/or maintain branded and private label sales in an increasingly competitive environment, the inability to successfully bid on new and existing private label business, the inability to enforce or protect our intellectual property rights against infringement, the inability to achieve cost savings and operational efficiencies, the inability to increase operating margins and increase revenues, dependence on individual products,

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dependence on individual customers, the impact of competitive products and pricing (including private label), market and industry conditions (including pricing, demand for products and level of trade inventories), the impact of clinical studies regarding our products or other nutritional supplements, particularly relating to the joint care category, the success of product development, the inability to obtain customer acceptance of new product introductions, changes in laws and regulations, litigation and government or administrative regulatory action in the United States and internationally, including FDA enforcement and challenges to marketing, advertising or product claims, the inability or increased cost to comply with or maintain new good manufacturing practices for the dietary supplement industry, the inability or increased cost to obtain product liability and general insurance, the uncertainty of market acceptance of new products, adverse publicity regarding our nutritional supplements and/or their ingredients or the dietary supplement industry generally, the inability to find strategic transaction opportunities or the inability to successfully consummate or integrate a strategic transaction, changes in accounting standards, and other factors indicated from time to time in the company’s SEC reports, copies of which are available upon request from the company’s investor relations department or may be obtained at the SEC's web site (www.sec.gov).  These risks and uncertainties should be carefully considered before making an investment decision with respect to shares of our common stock.

– Tables to Follow –

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SCHIFF NUTRITION INTERNATIONAL, INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended February 28,					Nine Months Ended February 28,
	2010			2009		2010			2009
Net sales	$	53,318		$	49,872	$	155,637		$	144,955
Cost of goods sold		31,137			32,563		90,059			92,165
Gross profit		22,181			17,309		65,578			52,790
Operating expenses:
Selling and marketing		8,436			8,227		23,896			24,772
Other operating expenses		5,261			3,871		16,702			13,326
Total operating expenses		13,697			12,098		40,598			38,098
Income from operations		8,484			5,211		24,980			14,692
Other income (expense), net		(72	)		117		(117	)		656
Income before income taxes		8,412			5,328		24,863			15,348
Income tax expense		2,679			1,712		8,856			5,571
Net income	$	5,733		$	3,616	$	16,007		$	9,777
Weighted average common shares outstanding - diluted		29,044			28,657		28,871			28,645
Net income per share - diluted	$	0.20		$	0.13	$	0.55		$	0.34

— More —

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SCHIFF NUTRITION INTERNATIONAL, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands)

	February 28,		May 31,
	2010		2009
	(unaudited)
Cash and cash equivalents	$	46,105	$	52,648
Available-for-sale securities		12,709		4,241
Receivables, net		24,681		20,716
Inventories		32,326		30,024
Other current assets		4,469		3,620
Total current assets		120,290		111,249
Property and equipment, net		13,451		13,920
Other assets, net		7,919		5,028
Total assets	$	141,660	$	130,197
Current liabilities	$	25,892	$	19,034
Long-term liabilities		3,603		1,470
Stockholders’ equity		112,165		109,693
Total liabilities & stockholders’ equity	$	141,660	$	130,197

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