10-Q

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the Quarterly Period Ended March 31, 2013

Commission file number 000-23731

NUTRACEUTICAL INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)

Delaware (State of incorporation)	87-0515089 (IRS Employer Identification No.)
1400 Kearns Boulevard, 2nd Floor, Park City, Utah	84060
(Address of principal executive office)	(Zip code)

(435) 655-6106
(Registrant's telephone number, including area code)

        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.

YES ý    NO o

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES ý    NO o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer o Accelerated filer ý Non-accelerated filer o
(Do not check if a
smaller reporting company) Smaller reporting company o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES o    NO ý

        At April 24, 2013, the registrant had 9,710,065 shares of common stock outstanding.

NUTRACEUTICAL INTERNATIONAL CORPORATION

INDEX

Description			Page No.
Part I.	Financial Information		3
	Item 1.	Financial Statements (unaudited)	3
		Condensed Consolidated Balance Sheets—March 31, 2013 and September 30, 2012	3
		Condensed Consolidated Statements of Operations and Comprehensive Income—Three Months and Six Months Ended March 31, 2013 and 2012	4
		Condensed Consolidated Statements of Cash Flows—Six Months Ended March 31, 2013 and 2012	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21
	Item 4.	Controls and Procedures	21
Part II.	Other Information		22
	Item 1.	Legal Proceedings	22
	Item 1A.	Risk Factors	22
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
	Item 6.	Exhibits	23

2

PART I—FINANCIAL INFORMATION

Item 1.    Financial Statements

NUTRACEUTICAL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(dollars in thousands)

	March 31, 2013		September 30, 2012(1)
ASSETS
Current assets
Cash	$	5,501	$	4,824
Accounts receivable, net		15,410		13,590
Inventories		42,421		46,073
Prepaid expenses and other current assets		1,740		2,295
Deferred income taxes		1,504		1,486
Total current assets		66,576		68,268
Property, plant and equipment, net		75,646		75,454
Goodwill		14,752		14,752
Intangible assets, net		18,752		19,874
Other non-current assets		1,512		1,617
Deferred income taxes, net		5,368		5,953
Total assets	$	182,606	$	185,918
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	12,332	$	12,838
Accrued expenses		6,616		7,832
Total current liabilities		18,948		20,670
Long-term debt		35,000		34,000
Other non-current liabilities		163		192
Total liabilities		54,111		54,862
Stockholders' equity
Common stock		97		98
Additional paid-in capital		13,737		15,400
Retained earnings		114,480		115,235
Accumulated other comprehensive income		181		338
Treasury stock		—		(15	)
Total stockholders' equity		128,495		131,056
Total liabilities and stockholders' equity	$	182,606	$	185,918

(1)

The condensed consolidated balance sheet as of September 30, 2012 has been prepared using information from the audited financial statements at that date.

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

NUTRACEUTICAL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME

(unaudited)

(dollars in thousands, except per share data)

	Three months ended March 31,					Six months ended March 31,
	2013			2012		2013			2012
Net sales	$	56,583		$	53,871	$	106,327		$	100,499
Cost of sales		28,433			26,883		54,036			50,253
Gross profit		28,150			26,988		52,291			50,246
Operating expenses
Selling, general and administrative		18,664			18,656		36,428			35,796
Amortization of intangible assets		573			471		1,145			945
Income from operations		8,913			7,861		14,718			13,505
Interest and other expense, net		377			377		688			736
Income before provision for income taxes		8,536			7,484		14,030			12,769
Provision for income taxes		3,000			2,654		5,000			4,528
Net income	$	5,536		$	4,830	$	9,030		$	8,241
Other comprehensive income (loss)
Foreign currency translation adjustment, net of tax		(162	)		96		(157	)		45
Comprehensive income	$	5,374		$	4,926	$	8,873		$	8,286
Net income per common share
Basic	$	0.57		$	0.49	$	0.92		$	0.82
Diluted		0.57			0.49		0.92			0.82
Weighted average common shares outstanding
Basic		9,741,866			9,938,593		9,766,843			9,992,200
Dilutive effect of stock options		30,671			8,419		28,911			11,651
Diluted		9,772,537			9,947,012		9,795,754			10,003,851

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

NUTRACEUTICAL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(dollars in thousands)

	Six months ended March 31,
	2013			2012
Cash flows from operating activities:
Net income	$	9,030		$	8,241
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,839			4,208
Amortization of deferred financing fees		92			92
Losses on disposals of property, plant and equipment		1			—
Tax benefit from stock option exercises		(43	)		(195	)
Deferred income taxes		567			787
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net		(1,820	)		(335	)
Inventories		3,652			558
Prepaid expenses and other current assets		555			2,449
Other non-current assets		(10	)		(57	)
Accounts payable		(506	)		2,380
Accrued expenses		(1,264	)		(979	)
Other non-current liabilities		(29	)		102
Net cash provided by operating activities		15,064			17,251
Cash flows from investing activities:
Acquisitions of businesses		—			(6,490	)
Purchases of property, plant and equipment		(3,887	)		(4,746	)
Net cash used in investing activities		(3,887	)		(11,236	)
Cash flows from financing activities:
Proceeds from debt		10,000			4,000
Payments on debt		(9,000	)		(4,000	)
Proceeds from issuances of common stock		464			342
Purchases of common stock for treasury		(2,156	)		(3,761	)
Dividends paid on common stock		(9,785	)		—
Tax benefit from stock option exercises		43			195
Net cash used in financing activities		(10,434	)		(3,224	)
Effect of exchange rate changes on cash		(66	)		10
Net increase in cash		677			2,801
Cash at beginning of period		4,824			2,441
Cash at end of period	$	5,501		$	5,242

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share data)

1. BASIS OF PRESENTATION

        Nutraceutical International Corporation and its subsidiaries (the "Company") is an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores. Internationally, the Company markets and distributes branded nutritional supplements and other natural products to and through health and natural product distributors and retailers. The Company's core business strategy is to acquire, integrate and operate businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements. The Company believes that the consolidation and integration of these acquired businesses provide ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships.

        The Company manufactures and sells nutritional supplements and other natural products under numerous brands including Solaray®, KAL®, Nature's Life®, LifeTime®, Natural Balance®, bioAllers®, Herbs for Kids®, NaturalCare®, Health from the Sun®, Life-flo®, Organix South®, Pioneer® and Monarch Nutraceuticals™.

        The Company owns neighborhood natural food markets, which operate under the trade names The Real Food Company™, Thom's Natural Foods™ and Cornucopia Community Market™. The Company also owns health food stores, which operate under the trade names Fresh Vitamins™, Granola's™, Nature's Discount® and Warehouse Vitamins™.

        In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all necessary adjustments, consisting of normal recurring adjustments, to state fairly the consolidated financial position of the Company as of March 31, 2013, the results of its operations for the three and six months ended March 31, 2013 and 2012 and its cash flows for the six months ended March 31, 2013 and 2012, in conformity with accounting principles generally accepted in the United States of America for interim financial information applied on a consistent basis. Results for the three and six months ended March 31, 2013 are not necessarily indicative of the results to be expected for the full fiscal year.

        Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. Accordingly, these financial statements should be read in conjunction with the Company's Form 10-K for the fiscal year ended September 30, 2012, which was filed with the Securities and Exchange Commission on November 21, 2012.

Use of Estimates

        The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America required management to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Significant estimates included values and lives assigned to acquired intangible assets, reserves for customer returns and allowances, uncollectible accounts receivable, valuation adjustments for slow moving, obsolete and/or damaged inventory and valuation and recoverability of long-lived assets. Actual results may differ from these estimates.

6

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

1. BASIS OF PRESENTATION (Continued)

New Accounting Standards

        In June 2011, the Financial Accounting Standards Board ("FASB") issued authoritative guidance, which is included in Accounting Standards Codification ("ASC") 220, "Comprehensive Income." This guidance no longer allows comprehensive income to be presented as a component of the statement of stockholders' equity but instead requires comprehensive income to be presented either in a continuous statement of comprehensive income or in two separate but consecutive statements. This guidance was effective for the Company as of October 1, 2012 and did not have an impact on the Company's consolidated results of operations.

        In September 2011, the FASB issued authoritative guidance, which is included in ASC 350, "Intangibles—Goodwill and Other." This guidance simplifies how goodwill is tested for impairment by first allowing an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. This guidance was effective for the Company as of October 1, 2012 and did not have a material impact on the Company's consolidated financial statements.

        In July 2012, the FASB issued further authoritative guidance, which is also included in ASC 350. This guidance allows a Company to first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset, other than goodwill, is impaired. This guidance was effective for the Company as of October 1, 2012 and did not have a material impact on the Company's consolidated financial statements.

        The Company reviews new accounting standards as they are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that the Company believes merit further discussion, and the Company expects that none would have a significant impact on the Company's consolidated financial statements.

2. ACCOUNTS RECEIVABLE

        Accounts receivable, net of allowances for sales returns and doubtful accounts, consisted of the following:

	March 31, 2013			September 30, 2012
Accounts receivable	$	17,245		$	15,478
Less allowances		(1,835	)		(1,888	)
	$	15,410		$	13,590

7

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

3. INVENTORIES

        Inventories were comprised of the following:

	March 31, 2013		September 30, 2012
Raw materials	$	16,186	$	16,394
Work-in-process		4,615		5,152
Finished goods		21,620		24,527
	$	42,421	$	46,073

4. GOODWILL AND INTANGIBLE ASSETS

        The carrying amounts of intangible assets at March 31, 2013 and September 30, 2012 were as follows:

	March 31, 2013							September 30, 2012
															Weighted- Average Amortization Period (Years)
	Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount		Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount
Intangible assets subject to amortization:
Trademarks/tradenames/patents	$	2,706	$	(913	)	$	1,793	$	2,674	$	(778	)	$	1,896		13
Customer relationships/distribution rights/ non-compete agreements		12,200		(6,488	)		5,712		12,239		(5,519	)		6,720		6
Developed software and technology		772		(772	)		—		772		(772	)		—		5
		15,678		(8,173	)		7,505		15,685		(7,069	)		8,616
Intangible assets not subject to amortization:
Trademarks/tradenames/licenses		11,247		—			11,247		11,258		—			11,258
	$	26,925	$	(8,173	)	$	18,752	$	26,943	$	(7,069	)	$	19,874

(1)

Amounts include the impact of foreign currency translation adjustments.

8

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

4. GOODWILL AND INTANGIBLE ASSETS (Continued)

        Estimated future amortization expense related to the March 31, 2013 net carrying amount of $7,505 for intangible assets subject to amortization is as follows:

Year Ending September 30,	Estimated Amortization Expense
2013(1)	$	984
2014		1,838
2015		1,656
2016		1,032
2017		687
Thereafter		1,308
	$	7,505

(1)

Estimated amortization expense for the year ending September 30, 2013 includes only amortization to be recorded after March 31, 2013.

        The ongoing uncertainty in general and economic conditions may continue to impact retail and consumer demand, as well as the market price of the Company's common stock, and could negatively impact the Company's future operating performance, cash flow and/or stock price and could result in goodwill and/or intangible asset impairment charges being recorded in future periods. Also, the Company periodically reviews its brands to achieve marketing, sales and operational synergies. These reviews could result in brands being consolidated or discontinued and could result in intangible asset impairment charges being recorded in future periods. Goodwill and/or intangible asset impairment charges could materially impact the Company's consolidated financial statements. The valuation of goodwill and intangible assets is subject to a high degree of judgment, uncertainty and complexity.

5. DEBT

        Debt was comprised of the following:

	March 31, 2013		September 30, 2012
Long-term debt—revolving credit facility	$	35,000	$	34,000

        The Company's debt is stated at book value which approximated its fair value at March 31, 2013 and September 30, 2012. Estimated fair values for debt have been determined based on borrowing rates currently available to the Company for bank loans with similar terms and maturities and are classified as Level 2 (significant observable inputs other than quoted prices) in the FASB's fair value hierarchy.

        On December 17, 2010, the Company amended and restated its revolving credit facility (the "Restated Credit Agreement"). The Restated Credit Agreement extends the term of the credit facility to December 2015, resets the available credit borrowings to $90,000 with no automatic reductions and provides an accordion feature that can increase the available credit borrowings to $120,000 subject to

9

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

5. DEBT (Continued)

approval by the lenders and compliance with certain covenants and conditions. The lenders under the Restated Credit Agreement are Rabobank International and Wells Fargo. To date, the Company has not experienced any difficulties in accessing the available funds under the Restated Credit Agreement. Deferred financing fees of $878 related to the Restated Credit Agreement are being amortized over the term of the Restated Credit Agreement.

        At March 31, 2013, the Company had outstanding revolving credit borrowings of $35,000 under the Restated Credit Agreement. Borrowings under the Restated Credit Agreement are collateralized by substantially all assets of the Company. At the Company's election, borrowings bear interest at the applicable Eurodollar Rate plus a variable margin or at a base rate, which is the higher of the Federal Funds Rate plus 0.5% or the Prime Lending Rate, plus a variable margin. At March 31, 2013, the applicable weighted-average interest rate for outstanding borrowings was 2.54%. The Company is also required to pay a quarterly fee of 0.50% on the unused balance under the Restated Credit Agreement. Accrued interest on Eurodollar Rate borrowings is payable based on elected intervals of one, two or three months. Accrued interest on base rate borrowings is payable quarterly. The Restated Credit Agreement matures on December 15, 2015, and the Company is required to repay all principal and interest outstanding under the Restated Credit Agreement on such date.

        The Restated Credit Agreement contains restrictive covenants, including limitations on incurring other indebtedness and requirements that the Company maintain certain financial ratios. As of March 31, 2013, the Company was in compliance with the restrictive covenants. Upon the occurrence of a default, the lender has various remedies or rights, which may include proceeding against the collateral or requiring the Company to repay all amounts outstanding under the Restated Credit Agreement.

6. SHARE PURCHASES

        During the three and six months ended March 31, 2013, the Company purchased 53,600 and 132,003 shares of common stock for an aggregate price of $913 and $2,156, respectively. During the three and six months ended March 31, 2012, the Company purchased 128,547 and 296,163 shares of common stock for an aggregate price of $1,587 and $3,761, respectively. All shares of common stock held in treasury were retired prior to March 31 of the respective fiscal year except at March 31, 2012 the Company held 10,112 shares of common stock in treasury. As of March 31, 2013, the Company was permitted to purchase up to 994,882 additional shares under its approved purchase plan. The Company accounts for treasury shares using the cost method.

10

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

7. STOCK OPTIONS

        The following table summarizes stock option activity during the six months ended March 31, 2013:

	Number of Options			Weighted-Average Exercise Price
Options outstanding and exercisable at September 30, 2012		218,000		$	12.66
Exercised		(25,370	)		12.32
Options outstanding and exercisable at March 31, 2013		192,630			12.71

        No options to purchase shares of common stock for the three and six months ended March 31, 2013 were excluded from the computation of diluted earnings per share because the exercise prices of all stock options were less than the average share price of the Company's common stock. Options to purchase 52,500 shares of common stock for both the three and six months ended March 31, 2012 were excluded from the computation of diluted earnings per share because the exercise prices of these stock options were greater than the average share price of the Company's common stock and, therefore, the effect would have been antidilutive.

        During the six months ended March 31, 2013, the Company received proceeds of $313 related to the exercise of stock options. During this same period, the Company recorded a tax benefit of $43 and optionees realized an aggregate pre-tax gain of $109 from these stock option exercises. During the six months ended March 31, 2012, the Company received proceeds of $216 related to the exercise of stock options. During this same period, the Company recorded a tax benefit of $195 and optionees realized an aggregate pre-tax gain of $506 from these stock option exercises.

        On January 28, 2013, stockholders approved the Nutraceutical International Corporation 2013 Long-Term Equity Incentive Plan (the "2013 Plan") and the reservation of 800,000 shares of the Company's common stock for issuance under the 2013 Plan. Equity awards available under the 2013 Plan include stock options, stock appreciation rights and restricted stock awards. The 2013 Plan provides a means through which the Company may attract and retain key personnel, including non-executive directors, and provide a means for directors, officers, employees, consultants and advisors to acquire and maintain an equity interest in the Company. The 2013 Plan will be administered by the Compensation Committee of the Board of Directors of the Company, which has the authority to determine the terms of the awards, determine the number of shares of the Company's common stock to be covered by the awards and make such other determinations as necessary in administering the 2013 Plan. The 2013 Plan will terminate on the tenth anniversary of its effective date.

8. DIVIDENDS

        In December 2012, the Company's board of directors declared a special cash dividend of $1.00 per share for all shares of common stock. This special cash dividend totaled $9,785 and was paid on December 28, 2012 to stockholders of record on December 21, 2012.

11

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

9. SEGMENTS

        Segment identification and selection is consistent with the management structure used by the Company to evaluate performance and make decisions regarding resource allocation, as well as the materiality of financial results consistent with that structure. Based on the Company's management structure and method of internal reporting, the Company has one operating segment. The Company does not review operating results on a disaggregated basis; rather, management reviews operating results on an aggregate basis.

        Net sales attributed to customers in the United States and foreign countries for the three and six months ended March 31, 2013 and 2012 were as follows:

	Three months ended March 31,				Six months ended March 31,
	2013		2012		2013		2012
United States	$	48,743	$	47,207	$	92,124	$	88,634
Foreign countries		7,840		6,664		14,203		11,865
	$	56,583	$	53,871	$	106,327	$	100,499

        Certain net sales attributed to customers in the United States are sold to customers who in turn may sell such products to customers in foreign countries while certain net sales attributed to customers in foreign countries are sold to customers who in turn may sell such products to customers in the United States.

        The Company's net sales by product group for the three and six months ended March 31, 2013 and 2012 were as follows:

	Three months ended March 31,				Six months ended March 31,
	2013		2012		2013		2012
Branded nutritional supplements and other natural products	$	51,516	$	49,591	$	96,520	$	93,125
Other(1)		5,067		4,280		9,807		7,374
	$	56,583	$	53,871	$	106,327	$	100,499

(1)

Net sales for any other product or group of similar products are less than 10% of consolidated net sales.

12

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

General

        The following discussion and analysis should be read in conjunction with the other sections of this report on Form 10-Q, including Part I, Item 1.

        We are an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores. Internationally, we market and distribute branded nutritional supplements and other natural products to and through health and natural product distributors and retailers. Our core business strategy is to acquire, integrate and operate businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements. We believe that the consolidation and integration of these acquired businesses provide ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships.

        We manufacture and sell nutritional supplements and other natural products under numerous brands including Solaray®, KAL®, Nature's Life®, LifeTime®, Natural Balance®, bioAllers®, Herbs for Kids®, NaturalCare®, Health from the Sun®, Life-flo®, Organix South®, Pioneer® and Monarch Nutraceuticals™.

        We own neighborhood natural food markets, which operate under the trade names The Real Food Company™, Thom's Natural Foods™ and Cornucopia Community Market™. We also own health food stores, which operate under the trade names Fresh Vitamins™, Granola's™, Nature's Discount® and Warehouse Vitamins™.

        We were formed in 1993 to effect a consolidation strategy in the fragmented vitamin, mineral, herbal and other nutritional supplements industry (the "VMS Industry"). Since our formation, we have completed numerous acquisitions of assets or stock. As a result of acquisitions, internal growth and cost management, we believe that we are well positioned to continue to capitalize on acquisition opportunities that arise in the VMS Industry.

Critical Accounting Policies

        The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America required us to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Significant estimates included values and lives assigned to acquired intangible assets, reserves for customer returns and allowances, uncollectible accounts receivable, valuation adjustments for slow moving, obsolete and/or damaged inventory and valuation and recoverability of long-lived assets. Actual results may differ from these estimates. Our critical accounting policies include the following:

        Accounts Receivable—Provision is made for estimated bad debts based on periodic analysis of individual customer balances, including an evaluation of days sales outstanding, payment history, recent payment trends and perceived credit worthiness. If general economic conditions and/or customer financial condition were to change, additional provisions for bad debts may be required, which could have a material impact on the consolidated financial statements.

        Inventories—Valuation adjustments are made for slow moving, obsolete and/or damaged inventory based on periodic analysis of individual inventory items, including an evaluation of historical usage and/or movement, age, expiration date and general condition. If market demand and/or consumer preferences are less favorable than historical trends or future expectations, additional valuation

13

adjustments for slow moving, obsolete and/or damaged inventory may be required, which could have a material impact on the consolidated financial statements.

        Property, Plant and Equipment—Depreciation and amortization expense is impacted by our judgments regarding the estimated useful lives of assets placed in service. If the actual lives of assets are significantly less than expected, depreciation and amortization expense would be accelerated, which could have a material impact on the consolidated financial statements.

        We evaluate the recoverability of our property, plant and equipment which are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of an asset group may not be recoverable. We measure recoverability of the asset group by comparison of its carrying amount to the future undiscounted cash flows we expect the asset group to generate. If we consider the asset group to be impaired, we measure the amount of any impairment as the difference between the carrying amount and the fair value of the impaired asset group.

        Goodwill and Intangible Assets—Goodwill and intangible assets require estimates and a high degree of judgment in determining the initial recognition and measurement of goodwill and intangible assets, including factors and assumptions used in determining fair values and useful lives. The excess of purchase price over fair value of assets acquired in purchase transactions was classified as goodwill. Intangible assets with finite useful lives are amortized, while intangible assets with indefinite useful lives are not amortized. Amortizable intangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill and indefinite-lived intangible assets are tested annually for impairment and are tested for impairment between annual tests if an event occurs that would cause us to believe that value is impaired. The appropriateness of the indefinite-life classification of non-amortizable intangible assets is also reviewed as part of the annual testing or when circumstances warrant a change to a finite life. We perform our annual impairment testing as of September 30 each year, which is the last day of our fiscal year.

        A two step process is used to test for goodwill impairment. The first step is to determine if there is an indication of impairment by comparing the estimated fair value of each reporting unit to its carrying value, including existing goodwill. Reporting unit fair values are estimated using discounted cash flow models as well as considering market and other factors. Goodwill is considered impaired if the carrying value of a reporting unit exceeds the estimated fair value. Upon an indication of impairment, a second step is performed to measure the amount of the impairment by comparing the implied fair value of the reporting unit's goodwill with its carrying value.

        Intangible assets with indefinite useful lives are tested for impairment at the individual tradename level by comparing the fair value of the indefinite-lived intangible asset to its carrying amount. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment charge is recognized. Fair values of indefinite-lived intangible assets are determined based on discounted cash flows.

        Amortizable intangible assets are reviewed for recoverability by comparing an asset group's carrying amount to the future undiscounted cash flows the asset group is expected to generate. If the asset group is considered to be impaired, the difference between the carrying amount and the fair value of the impaired asset group is recorded.

        The ongoing uncertainty in general and economic conditions may continue to impact retail and consumer demand, as well as the market price of our common stock, and could negatively impact our future operating performance, cash flow and/or stock price and could result in goodwill and/or intangible asset impairment charges being recorded in future periods. Also, we periodically review our brands to achieve marketing, sales and operational synergies. These reviews could result in brands being consolidated or discontinued and could result in intangible asset impairment charges being recorded in future periods. Goodwill and/or intangible asset impairment charges could materially

14

impact our consolidated financial statements. The valuation of goodwill and intangible assets is subject to a high degree of judgment, uncertainty and complexity.

        Revenue Recognition—Revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the product has been shipped and the customer takes ownership and assumes the risk of loss; (3) the selling price is fixed or determinable; and (4) collection of the resulting receivable is reasonably assured. We believe that these criteria are satisfied upon shipment from our facilities or, in the case of our neighborhood natural food markets and health food stores, at the point of sale within these stores. Revenue is reduced by provisions for estimated returns and allowances, which are based on historical averages that have not varied significantly for the periods presented, as well as specific known claims, if any. No other significant deductions from revenue must be estimated at the point in time that revenue is recognized.

        Our estimates and judgments related to our critical accounting policies, including factors and assumptions considered in making these estimates and judgments, did not vary significantly for the periods presented and had no material impact on the consolidated financial statements as reported.

New Accounting Standards

        See Note 1 to the Condensed Consolidated Financial Statements for information regarding new accounting standards.

Results of Operations

        The following table sets forth certain consolidated statements of operations data as a percentage of net sales for the periods indicated:

	Three Months Ended March 31,						Six Months Ended March 31,
	2013			2012			2013			2012
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales		50.2	%		49.9	%		50.8	%		50.0	%
Gross profit		49.8	%		50.1	%		49.2	%		50.0	%
Selling, general and administrative		33.0	%		34.6	%		34.3	%		35.6	%
Amortization of intangible assets		1.0	%		0.9	%		1.1	%		0.9	%
Income from operations		15.8	%		14.6	%		13.8	%		13.5	%
Interest and other expense, net		0.7	%		0.7	%		0.6	%		0.8	%
Income before provision for income taxes		15.1	%		13.9	%		13.2	%		12.7	%
Provision for income taxes		5.3	%		4.9	%		4.7	%		4.5	%
Net income		9.8	%		9.0	%		8.5	%		8.2	%
EBITDA(1)		20.1	%		18.5	%		18.4	%		17.6	%

(1)

See "—EBITDA."

Comparison of the Three Months Ended March 31, 2013 to the Three Months Ended March 31, 2012

        Net Sales.    Net sales increased by $2.7 million, or 5.0%, to $56.6 million for the three months ended March 31, 2013 ("second quarter of fiscal 2013") from $53.9 million for the three months ended March 31, 2012 ("second quarter of fiscal 2012"). Net sales of branded nutritional supplements and other natural products increased by $1.9 million, or 3.9%, to $51.5 million for the second quarter of fiscal 2013 compared to $49.6 million for the second quarter of fiscal 2012. The increase in net sales of

15

branded nutritional supplements and other natural products was primarily related to price changes of approximately $1.3 million and the net sales contributions of the fiscal 2012 acquisitions. Other net sales increased $0.8 million, or 18.4%, to $5.1 million for the second quarter of fiscal 2013 from $4.3 million for the second quarter of fiscal 2012. The increase in other net sales was primarily related to the net sales contributions of the fiscal 2012 acquisitions.

        Gross Profit.    Gross profit increased by $1.2 million, or 4.3%, to $28.2 million for the second quarter of fiscal 2013 from $27.0 million for the second quarter of fiscal 2012. This increase in gross profit was primarily related to the increase in net sales. As a percentage of net sales, gross profit was 49.8% for the second quarter of fiscal 2013 and 50.1% for the second quarter of fiscal 2012.

        Selling, General and Administrative.    Selling, general and administrative expenses were $18.7 million for both the second quarter of fiscal 2013 and the second quarter of fiscal 2012. As a percentage of net sales, selling, general and administrative expenses decreased to 33.0% for the second quarter of fiscal 2013 compared to 34.6% for the second quarter of fiscal 2012. This decrease in selling, general and administrative expenses as a percentage of net sales was primarily due to the increase in net sales, which allowed us to better leverage our cost structure.

        Amortization of Intangible Assets.    Amortization of intangible assets was $0.6 million for the second quarter of fiscal 2013 and $0.5 million for the second quarter of fiscal 2012. For each period, amortization expense was primarily related to intangible assets recorded in connection with acquisitions.

        Interest and Other Expense, Net.    Net interest and other expense was $0.4 million for both the second quarter of fiscal 2013 and the second quarter of fiscal 2012 and consisted primarily of interest expense on indebtedness under our revolving credit facility.

        Provision for Income Taxes.    Our effective tax rate was 35.1% for the second quarter of fiscal 2013 and 35.5% for the second quarter of fiscal 2012. In each period, our effective tax rate was higher than the federal statutory rate primarily due to state taxes.

Comparison of the Six Months Ended March 31, 2013 to the Six Months Ended March 31, 2012

        Net Sales.    Net sales increased by $5.8 million, or 5.8%, to $106.3 million for the six months ended March 31, 2013 from $100.5 million for the six months ended March 31, 2012. Net sales of branded nutritional supplements and other natural products increased by $3.4 million, or 3.6%, to $96.5 million for the six months ended March 31, 2013 compared to $93.1 million for the six months ended March 31, 2012. The increase in net sales of branded nutritional supplements and other natural products was primarily related to the net sales contributions of the fiscal 2012 acquisitions, price changes of approximately $1.1 million and an increase in sales volume of branded products to certain customers. Other net sales increased $2.4 million, or 33.0%, to $9.8 million for the six months ended March 31, 2013 compared to $7.4 million for the six months ended March 31, 2012. The increase in other net sales was primarily related to the net sales contributions of the fiscal 2012 acquisitions.

        Gross Profit.    Gross profit increased $2.1 million, or 4.1%, to $52.3 million for the six months ended March 31, 2013 from $50.2 million for the six months ended March 31, 2012. The increase in gross profit was primarily attributable to the increase in net sales. As a percentage of net sales, gross profit decreased to 49.2% for the six months ended March 31, 2013 from 50.0% for the six months ended March 31, 2012. This decrease in gross profit percentage was primarily attributable to increased material costs due to vendor price increases and, to a lesser extent, changes in sales mix.

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        Selling, General and Administrative.    Selling, general and administrative expenses increased by $0.6 million, or 1.8%, to $36.4 million for the six months ended March 31, 2013 from $35.8 million for the six months ended March 31, 2012. This increase in selling, general and administrative expenses was primarily attributable to operational and transition costs related to the fiscal 2012 acquisitions. As a percentage of net sales, selling, general and administrative expenses decreased to 34.3% for the six months ended March 31, 2013 compared to 35.6% for the six months ended March 31, 2012. This decrease in selling, general and administrative expenses as a percentage of net sales was primarily attributable to the increase in net sales, which allowed us to better leverage our cost structure.

        Amortization of Intangible Assets.    Amortization of intangibles was $1.1 million for the six months ended March 31, 2013 and $0.9 million for the six months ended March 31, 2012. For each period, amortization expense was primarily related to intangible assets recorded in connection with acquisitions.

        Interest and Other Expense, Net.    Net interest and other expense was $0.7 million for both the six months ended March 31, 2013 and the six months ended March 31, 2012 and primarily consisted of interest expense on indebtedness under our revolving credit facility.

        Provision for Income Taxes.    Our effective tax rate was 35.6% for the six months ended March 31, 2013 and 35.5% for the six months ended March 31, 2012. In each period, our effective tax rate was higher than the federal statutory rate primarily due to state taxes.

EBITDA

        EBITDA (a non-GAAP measure) is defined in our debt covenants and performance measures as earnings before net interest and other expense, taxes, depreciation and amortization. EBITDA has some inherent limitations in measuring operating performance due to the exclusion of certain financial elements such as depreciation and amortization and is not necessarily comparable to other similarly-titled captions of other companies due to potential inconsistencies in the method of calculation. Furthermore, EBITDA is not intended to be a substitute for cash flows from operating activities, as a measure of liquidity, or an alternative to net income in determining our operating performance in accordance with generally accepted accounting principles. Our use of an EBITDA-based metric should be considered within the following context:

•

We acknowledge that plant and equipment (while less important in our line of business due to outsourcing alternatives) are necessary to earn revenue based on our current business model.

•

Our use of an EBITDA-based measure of operating performance is not based on any belief about the reasonableness of excluding depreciation and amortization when measuring financial performance.

•

Our use of an EBITDA-based measure is supported by its importance to the following key stakeholders:

•

Analysts—who estimate our projected EBITDA and other EBITDA-based metrics in their independently-developed financial models for investors;

•

Creditors—who evaluate our operating performance based on compliance with certain EBITDA-based debt covenants;

•

Investment Bankers—who use EBITDA-based metrics in their written evaluations and comparisons of companies within our industry; and

•

Board of Directors and Executive Management—who use EBITDA-based metrics for evaluating management performance relative to our operating budget and bank covenant compliance, as well as our ability to service debt and raise capital for growth opportunities, including acquisitions, which are a critical component of our stated strategy. Historically, we

17

have recorded a monthly accrual for incentive compensation as a percentage of EBITDA, which has been paid out to executive management, as well as other employees, upon completion of our annual audit.

        The following table sets forth a reconciliation of net income to EBITDA for each period included herein:

	Three Months Ended March 31,				Six Months Ended March 31,
	2013		2012		2013		2012
	(dollars in thousands)
Net income	$	5,536	$	4,830	$	9,030	$	8,241
Provision for income taxes		3,000		2,654		5,000		4,528
Interest and other expense, net(1)		377		377		688		736
Depreciation and amortization		2,437		2,123		4,839		4,208
EBITDA	$	11,350	$	9,984	$	19,557	$	17,713

(1)

Includes amortization of deferred financing fees.

        Our EBITDA increased to $11.4 million for the second quarter of fiscal 2013 from $10.0 million for the second quarter of fiscal 2012. EBITDA as a percentage of net sales increased to 20.1% for the second quarter of fiscal 2013 from 18.5% for the second quarter of fiscal 2012.

        Our EBITDA increased to $19.6 million for the six months ended March 31, 2013 from $17.7 million for the six months ended March 31, 2012. EBITDA as a percentage of net sales increased to 18.4% for the six months ended March 31, 2013 from 17.6% for the six months ended March 31, 2012.

Seasonality

        We believe that our business is characterized by minor seasonality. However, sales to any particular customer or sales of any particular product can vary substantially from one quarter to the next based on such factors as industry trends, timing of promotional discounts, domestic and international economic conditions and acquisition-related activities. Excluding the effect of acquisitions, we have historically recorded higher branded products sales volume during the second fiscal quarter (January through March) due to increased interest in health-related products among consumers following the holiday season.

Liquidity and Capital Resources

        We had working capital of $47.6 million both as of March 31, 2013 and as of September 30, 2012.

        Net cash provided by operating activities for the six months ended March 31, 2013 was $15.1 million compared to $17.3 million for the comparable period in fiscal 2012. This decrease in net cash provided by operating activities for the six months ended March 31, 2013 was primarily attributable to changes in operating assets and liabilities.

        Net cash used in investing activities was $3.9 million for the six months ended March 31, 2013 compared to $11.2 million for the comparable period in fiscal 2012. Our investing activities consisted of acquisitions of businesses and capital expenditures. The capital expenditures primarily related to buildings, building improvements related to facility consolidation efforts, distribution and manufacturing equipment and information systems.

        We made no acquisitions of businesses during the six months ended March 31, 2013. During the six months ended March 31, 2012, we acquired five businesses for $6.5 million in cash. On October 27,

18

2011, we acquired certain operating assets of Mia Rose Products, Inc. On November 22, 2011, we acquired certain operating assets of Collective Wellbeing, LLC. On January 16, 2012, we acquired certain operating assets of Nature's Discount, Inc. and Top Health. On January 27, 2012, we acquired certain operating assets of Your Crown and Glory, LLC. On March 2, 2012, we acquired certain operating assets of Treehouse Vitamins, LLC.

        Net cash used in financing activities was $10.4 million for the six months ended March 31, 2013 compared to $3.2 million for the comparable period in fiscal 2012. During these periods, financing activities primarily related to borrowings and repayments under our revolving credit facility, purchases of common stock for treasury and proceeds from the issuance of common stock related to stock option exercises and the direct stock purchase plan. Also, in December 2012, our board of directors declared a special cash dividend of $1.00 per share for all shares of common stock. This special cash dividend totaled $9.8 million and was paid on December 28, 2012 to stockholders of record on December 21, 2012.

        In October 2007, we registered a direct stock purchase plan with the Securities and Exchange Commission. The purpose of this direct stock purchase plan is to provide a convenient way for existing stockholders, as well as new investors, to purchase shares of our common stock. A total of 1,500,000 shares of our common stock were registered under the plan with 8,880 shares purchased during the six months ended March 31, 2013. As of March 31, 2013, there were 1,388,302 shares of common stock available for purchase.

        On December 17, 2010, we amended and restated our revolving credit facility (the "Restated Credit Agreement"). The Restated Credit Agreement extends the term of the credit facility to December 2015, resets the available credit borrowings to $90.0 million with no automatic reductions and provides an accordion feature which can increase the available credit borrowings to $120.0 million subject to approval by the lenders and compliance with certain covenants and conditions. The lenders under the Restated Credit Agreement are Rabobank International and Wells Fargo. To date, we have not experienced any difficulties in accessing the available funds under the Restated Credit Agreement. Deferred financing fees of $0.9 million related to the Restated Credit Agreement are being amortized over the term of the Restated Credit Agreement.

        At March 31, 2013, we had outstanding revolving credit borrowings of $35.0 million under the Restated Credit Agreement. Borrowings under the Restated Credit Agreement are collateralized by substantially all of our assets. At our election, borrowings bear interest at the applicable Eurodollar Rate plus a variable margin or at a base rate, which is the higher of the Federal Funds Rate plus 0.5% or the Prime Lending Rate, plus a variable margin. At March 31, 2013, the applicable weighted-average interest rate for outstanding borrowings was 2.54%. We are also required to pay a quarterly fee of 0.50% on the unused balance under the Restated Credit Agreement. Accrued interest on Eurodollar Rate borrowings is payable based on elected intervals of one, two or three months. Accrued interest on base rate borrowings is payable quarterly. The Restated Credit Agreement matures on December 15, 2015, and we are required to repay all principal and interest outstanding under the Restated Credit Agreement on such date.

        The Restated Credit Agreement contains restrictive covenants, including limitations on incurring certain other indebtedness and requirements that we maintain certain financial ratios. As of March 31, 2013, we were in compliance with the restrictive covenants. Upon the occurrence of a default, the lender has various remedies or rights, which may include proceeding against the collateral or requiring us to repay all amounts outstanding under the Restated Credit Agreement.

        A key component of our business strategy is to seek to make additional acquisitions, which may require that we obtain additional financing, which could include the incurrence of substantial additional indebtedness or the issuance of additional stock. We believe that borrowings under our current revolving credit facility or a replacement credit facility, together with cash flows from operations, will

19

be sufficient to make required payments under the current credit facility or any such replacement facility, and to make anticipated capital expenditures and fund working capital needs for the next twelve months.

Contractual Obligations and Other Commitments

        Our significant non-cancelable contractual obligations and other commitments as of March 31, 2013 were as follows:

	Payments Due By Period
Contractual Obligations and Other Commitments	Total		Less Than 1 Year		1 - 3 Years		4 - 5 Years		After 5 Years
	(dollars in thousands)
Revolving credit facility	$	35,000	$	—	$	35,000	$	—	$	—
Interest on revolving credit facility(a)		3,232		1,193		2,039		—		—
Operating leases		4,673		3,111		1,347		215		—
Total	$	42,905	$	4,304	$	38,386	$	215	$	—

(a)

Represents estimated interest obligations associated with our outstanding revolving credit facility balance of $35.0 million at March 31, 2013, assuming no principal payments are made before maturity, a weighted-average interest rate of 2.54% and an underutilization fee rate of 0.50%.

Inflation

        Inflation affects the cost of raw materials, goods and services used by us. In recent years, inflation has been modest. The competitive environment somewhat limits our ability to recover higher costs resulting from inflation by raising prices. We seek to mitigate the adverse effects of inflation primarily through improved productivity and cost containment programs. We do not believe that inflation has had a material impact on our results of operations for the periods presented, except with respect to increased costs in manufacturing, packaging and distribution resulting from increased fuel and other petrochemical costs, as well as payroll-related costs, insurance premiums and other costs arising from or related to government imposed regulations.

Forward-Looking Statements

        This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations and business. These forward-looking statements can be identified by the use of terms such as "believe," "expects," "plan," "intend," "may," "will," "should," "can," or "anticipates," or the negative thereof, or variations thereon, or comparable terminology, or by discussions of strategy. These statements involve known and unknown risks, uncertainties and other factors that may cause industry trends or our actual results to be materially different from any future results expressed or implied by these statements. Important factors that may cause our results to differ from these forward-looking statements include, but are not limited to: (i) changes in or new government regulations or increased enforcement of the same, (ii) unavailability of desirable acquisitions or inability to complete them, (iii) increased costs, including from increased raw material or energy prices, (iv) changes in general worldwide economic or political conditions, (v) adverse publicity or negative consumer perception regarding nutritional supplements, (vi) issues with obtaining raw materials of adequate quality or quantity, (vii) litigation and claims, including product liability, intellectual property and other types, (viii) disruptions from or following acquisitions including the loss of customers, (ix) increased competition, (x) slow or negative growth in the nutritional supplement industry or the healthy foods channel, (xi) the loss of key personnel or the inability to manage our operations efficiently, (xii) problems with information

20

management systems, manufacturing efficiencies and operations, (xiii) insurance coverage issues, (xiv) the volatility of the stock market generally and of our stock specifically, (xv) increases in the cost of borrowings or unavailability of additional debt or equity capital, or both, or fluctuations in foreign currencies, and (xvi) interruption of business or negative impact on sales and earnings due to acts of God, acts of war, terrorism, bio-terrorism, civil unrest and other factors outside of our control.

        We undertake no obligation to update or revise publicly any forward-looking statements to reflect new information, events or circumstances occurring after the date of this Form 10-Q.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

        At our election, borrowings under the Restated Credit Agreement bear interest at the applicable Eurodollar Rate plus a variable margin or at a base rate, which is the higher of the Federal Funds Rate plus 0.5% or the Prime Lending Rate, plus a variable margin. At March 31, 2013, the applicable weighted-average interest rate for borrowings was 2.54% and we had total borrowings outstanding of $35.0 million. A hypothetical 100 basis point change in interest rates would not have had a material impact on our reported net income or cash flows for the six months ended March 31, 2013 and 2012.

        With respect to our international operations, we are subject to currency fluctuations; however, we do not believe that these fluctuations would have a material adverse impact on our financial position because the majority of our net sales to foreign countries are transacted in U.S. dollars. Net sales to foreign countries not transacted in U.S. dollars include sales to customers in Norway, Sweden, the United Kingdom, the Netherlands, Japan, Barbados, St. Lucia and Dominica. To date, we have not hedged any of our potential foreign currency exposures.

Item 4.    Controls and Procedures

        Evaluation of Disclosure Controls and Procedures.    We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate, to allow for timely decisions regarding required disclosure.

        In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and we are required to apply our judgment in evaluating the cost-benefit relationship of possible controls and procedures.

        As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision of and with the participation of our management, including our principal executive and principal financial officers, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2013. Based on the foregoing, our principal executive and principal financial officers have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2013.

        Changes in Internal Control Over Financial Reporting.    There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1.    Legal Proceedings

        As discussed in our other filings, we are subject to regulation by a number of federal, state and foreign agencies and are involved in various legal matters arising in the ordinary course of business.

        We carry insurance coverage in the types and amounts that we consider reasonably adequate to cover the risks we face in the industry in which we compete.

        In our opinion, the losses related to individual regulatory and legal matters in which we are presently involved are not probable and no estimate can be made of the range of potential gains or losses. While incapable of estimation, in the opinion of management, the individual regulatory and legal matters in which we are involved are not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows. However, our aggregate liability arising from regulatory and legal proceedings related to these matters could have a material effect on our financial position, results of operations or cash flows.

Item 1A.    Risk Factors

        There have been no material changes in our risk factors from those disclosed in our 2012 Annual Report on Form 10-K.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

        We did not sell any unregistered equity securities during the quarterly period ended March 31, 2013.

        Prior to fiscal 2013, our Board of Directors approved a share purchase program authorizing us to buy up to 4,500,000 shares of our common stock. As of March 31, 2013, there were 994,882 shares available for purchase under this program. The shares available for purchase under this program have no expiration date. Purchases under this program during the three months ended March 31, 2013 occurred in January and February as follows:

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan		Maximum Number of Shares that May Yet Be Purchased Under the Plan
January 1 - 31, 2013		47,600	$	16.95		47,600
February 1 - 28, 2013		6,000		17.54		6,000
		53,600		17.02		53,600		994,882

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Item 6.    Exhibits

10.1	Nutraceutical International Corporation 2013 Long-Term Equity Incentive Plan(1)
31.1	Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document(2)
101.SCH	XBRL Taxonomy Extension Schema Document(2)
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document(2)
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document(2)
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document(2)
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document(2)

(1)

File as an exhibit to our Form 8-K filed on January 31, 2013 and incorporated herein by reference.

(2)

XBRL information will be considered to be furnished, not filed, for the first two years of a company's submission of XBRL information.

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SIGNATURE

        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.

	NUTRACEUTICAL INTERNATIONAL CORPORATION (Registrant)
Date: April 25, 2013	By:	/s/ CORY J. MCQUEEN Cory J. McQueen Vice President and Chief Financial Officer (Principal Financial and Accounting Officer and Duly Authorized Officer)

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EX-31.1

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Exhibit 31.1

CERTIFICATIONS

I, Frank W. Gay II, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Nutraceutical International Corporation;

2.

Based on my knowledge, this 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 circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4.

The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)

designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's second fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.

The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date: April 25, 2013 /s/ FRANK W. GAY II
Frank W. Gay II
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

CERTIFICATIONS

I, Cory J. McQueen, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Nutraceutical International Corporation;

2.

Based on my knowledge, this 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 circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4.

The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)

designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's second fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.

The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date: April 25, 2013 /s/ CORY J. MCQUEEN
Cory J. McQueen
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

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Exhibit 31.1

CERTIFICATIONS
CERTIFICATIONS

EX-32.1

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Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the quarterly report on Form 10-Q of Nutraceutical International Corporation ("Nutraceutical") for the period ended March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Frank W. Gay II, Chairman of the Board and Chief Executive Officer of Nutraceutical, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)

the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Nutraceutical.

/s/ FRANK W. GAY II
Frank W. Gay II
Chairman of the Board and Chief Executive Officer

Date: April 25, 2013

CERTIFICATION PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the quarterly report on Form 10-Q of Nutraceutical International Corporation ("Nutraceutical") for the period ended March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Cory J. McQueen, Vice President and Chief Financial Officer of Nutraceutical, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)

the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Nutraceutical.

/s/ CORY J. MCQUEEN
Cory J. McQueen
Vice President and Chief Financial Officer

Date: April 25, 2013

        Signed originals of these written statements required by Section 906 have been provided to Nutraceutical and will be retained by Nutraceutical and furnished to the Securities and Exchange Commission or its staff upon request.

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Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

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SHARE PURCHASES (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Share purchases
Additional number of shares authorized to be repurchased	994,882		994,882
Common Stock
Share purchases
Shares of common stock purchased	53,600	128,547	132,003	296,163
Aggregate price at which shares of common stock purchased (in dollars)	$ 913	$ 1,587	$ 2,156	$ 3,761
Number of shares held in treasury		10,112		10,112

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DEBT

6 Months Ended

Mar. 31, 2013

DEBT

DEBT

5. DEBT

        Debt was comprised of the following:

	March 31, 2013		September 30, 2012
Long-term debt—revolving credit facility	$	35,000	$	34,000

        The Company's debt is stated at book value which approximated its fair value at March 31, 2013 and September 30, 2012. Estimated fair values for debt have been determined based on borrowing rates currently available to the Company for bank loans with similar terms and maturities and are classified as Level 2 (significant observable inputs other than quoted prices) in the FASB's fair value hierarchy.

        On December 17, 2010, the Company amended and restated its revolving credit facility (the "Restated Credit Agreement"). The Restated Credit Agreement extends the term of the credit facility to December 2015, resets the available credit borrowings to $90,000 with no automatic reductions and provides an accordion feature that can increase the available credit borrowings to $120,000 subject to approval by the lenders and compliance with certain covenants and conditions. The lenders under the Restated Credit Agreement are Rabobank International and Wells Fargo. To date, the Company has not experienced any difficulties in accessing the available funds under the Restated Credit Agreement. Deferred financing fees of $878 related to the Restated Credit Agreement are being amortized over the term of the Restated Credit Agreement.

        At March 31, 2013, the Company had outstanding revolving credit borrowings of $35,000 under the Restated Credit Agreement. Borrowings under the Restated Credit Agreement are collateralized by substantially all assets of the Company. At the Company's election, borrowings bear interest at the applicable Eurodollar Rate plus a variable margin or at a base rate, which is the higher of the Federal Funds Rate plus 0.5% or the Prime Lending Rate, plus a variable margin. At March 31, 2013, the applicable weighted-average interest rate for outstanding borrowings was 2.54%. The Company is also required to pay a quarterly fee of 0.50% on the unused balance under the Restated Credit Agreement. Accrued interest on Eurodollar Rate borrowings is payable based on elected intervals of one, two or three months. Accrued interest on base rate borrowings is payable quarterly. The Restated Credit Agreement matures on December 15, 2015, and the Company is required to repay all principal and interest outstanding under the Restated Credit Agreement on such date.

        The Restated Credit Agreement contains restrictive covenants, including limitations on incurring other indebtedness and requirements that the Company maintain certain financial ratios. As of March 31, 2013, the Company was in compliance with the restrictive covenants. Upon the occurrence of a default, the lender has various remedies or rights, which may include proceeding against the collateral or requiring the Company to repay all amounts outstanding under the Restated Credit Agreement.

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DIVIDENDS (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	0 Months Ended	1 Months Ended	6 Months Ended
	Dec. 28, 2012	Dec. 31, 2012	Mar. 31, 2013
DIVIDENDS
Special cash dividend (in dollars per share)		$ 1.00
Special cash dividend paid (in dollars)	$ 9,785		$ 9,785

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STOCK OPTIONS (Details 3) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Jan. 28, 2013
STOCK OPTIONS
Proceeds from exercise of stock options	$ 313	$ 216
Tax benefit from stock option exercises	43	195
Pre-tax gain from exercise of stock options	$ 109	$ 506
Shares of common stock reserved for issuance under the 2013 plan			800,000

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SEGMENTS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013 segment	Mar. 31, 2012
SEGMENTS
Number of operating segments			1
SEGMENTS
Net sales attributed to customers in the United States	$ 48,743	$ 47,207	$ 92,124	$ 88,634
Net sales attributed to customers in Foreign countries	7,840	6,664	14,203	11,865
Net sales	56,583	53,871	106,327	100,499
Branded nutritional supplements and other natural products
SEGMENTS
Net sales	51,516	49,591	96,520	93,125
Other
SEGMENTS
Net sales	$ 5,067	$ 4,280	$ 9,807	$ 7,374

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GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Mar. 31, 2013

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

4. GOODWILL AND INTANGIBLE ASSETS

        The carrying amounts of intangible assets at March 31, 2013 and September 30, 2012 were as follows:

	March 31, 2013							September 30, 2012
															Weighted- Average Amortization Period (Years)
	Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount		Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount
Intangible assets subject to amortization:
Trademarks/tradenames/patents	$	2,706	$	(913	)	$	1,793	$	2,674	$	(778	)	$	1,896		13
Customer relationships/distribution rights/ non-compete agreements		12,200		(6,488	)		5,712		12,239		(5,519	)		6,720		6
Developed software and technology		772		(772	)		—		772		(772	)		—		5
		15,678		(8,173	)		7,505		15,685		(7,069	)		8,616
Intangible assets not subject to amortization:
Trademarks/tradenames/licenses		11,247		—			11,247		11,258		—			11,258
	$	26,925	$	(8,173	)	$	18,752	$	26,943	$	(7,069	)	$	19,874

(1)

Amounts include the impact of foreign currency translation adjustments.

        Estimated future amortization expense related to the March 31, 2013 net carrying amount of $7,505 for intangible assets subject to amortization is as follows:

Year Ending September 30,	Estimated Amortization Expense
2013(1)	$	984
2014		1,838
2015		1,656
2016		1,032
2017		687
Thereafter		1,308
	$	7,505

(1)

Estimated amortization expense for the year ending September 30, 2013 includes only amortization to be recorded after March 31, 2013.

        The ongoing uncertainty in general and economic conditions may continue to impact retail and consumer demand, as well as the market price of the Company's common stock, and could negatively impact the Company's future operating performance, cash flow and/or stock price and could result in goodwill and/or intangible asset impairment charges being recorded in future periods. Also, the Company periodically reviews its brands to achieve marketing, sales and operational synergies. These reviews could result in brands being consolidated or discontinued and could result in intangible asset impairment charges being recorded in future periods. Goodwill and/or intangible asset impairment charges could materially impact the Company's consolidated financial statements. The valuation of goodwill and intangible assets is subject to a high degree of judgment, uncertainty and complexity.

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Current assets
Cash	$ 5,501	$ 4,824
Accounts receivable, net	15,410	13,590
Inventories	42,421	46,073
Prepaid expenses and other current assets	1,740	2,295
Deferred income taxes	1,504	1,486
Total current assets	66,576	68,268
Property, plant and equipment, net	75,646	75,454
Goodwill	14,752	14,752
Intangible assets, net	18,752	19,874
Other non-current assets	1,512	1,617
Deferred income taxes, net	5,368	5,953
Total assets	182,606	185,918
Current liabilities
Accounts payable	12,332	12,838
Accrued expenses	6,616	7,832
Total current liabilities	18,948	20,670
Long-term debt	35,000	34,000
Other non-current liabilities	163	192
Total liabilities	54,111	54,862
Stockholders' equity
Common stock	97	98
Additional paid-in capital	13,737	15,400
Retained earnings	114,480	115,235
Accumulated other comprehensive income	181	338
Treasury stock		(15)
Total stockholders' equity	128,495	131,056
Total liabilities and stockholders' equity	$ 182,606	$ 185,918

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ACCOUNTS RECEIVABLE

6 Months Ended

Mar. 31, 2013

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE

2. ACCOUNTS RECEIVABLE

        Accounts receivable, net of allowances for sales returns and doubtful accounts, consisted of the following:

	March 31, 2013			September 30, 2012
Accounts receivable	$	17,245		$	15,478
Less allowances		(1,835	)		(1,888	)
	$	15,410		$	13,590

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INVENTORIES (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
INVENTORIES
Raw materials	$ 16,186	$ 16,394
Work-in-process	4,615	5,152
Finished goods	21,620	24,527
Inventories	$ 42,421	$ 46,073

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DEBT (Details) (USD $)			6 Months Ended		6 Months Ended
	Mar. 31, 2013	Sep. 30, 2012	Mar. 31, 2013 Restated Credit Agreement	Dec. 17, 2010 Restated Credit Agreement	Mar. 31, 2013 Restated Credit Agreement Federal Funds Rate	Mar. 31, 2013 Restated Credit Agreement Eurodollar Rate	Mar. 31, 2013 Restated Credit Agreement Prime Lending Rate	Mar. 31, 2013 Restated Credit Agreement, accordion feature
DEBT
Long-term debt-revolving credit facility	$ 35,000,000	$ 34,000,000
Available credit borrowings			90,000,000					120,000,000
Amount of automatic reduction			0
Deferred financing cost				878,000
Outstanding revolving credit borrowings			$ 35,000,000
Reference rate					Federal Funds Rate	Eurodollar Rate	Prime Lending Rate
Margin over reference rate (as a percent)					0.50%
Weighted-average interest rate (as a percent)			2.54%
Quarterly fee on the unused balance (as a percent)			0.50%
Interval for payment of accrued interest under option one						1 month
Interval for payment of accrued interest under option two						2 months
Interval for payment of accrued interest under option three						3 months

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INVENTORIES

6 Months Ended

Mar. 31, 2013

INVENTORIES

INVENTORIES

3. INVENTORIES

        Inventories were comprised of the following:

	March 31, 2013		September 30, 2012
Raw materials	$	16,186	$	16,394
Work-in-process		4,615		5,152
Finished goods		21,620		24,527
	$	42,421	$	46,073

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Net sales	$ 56,583	$ 53,871	$ 106,327	$ 100,499
Cost of sales	28,433	26,883	54,036	50,253
Gross profit	28,150	26,988	52,291	50,246
Operating expenses
Selling, general and administrative	18,664	18,656	36,428	35,796
Amortization of intangible assets	573	471	1,145	945
Income from operations	8,913	7,861	14,718	13,505
Interest and other expense, net	377	377	688	736
Income before provision for income taxes	8,536	7,484	14,030	12,769
Provision for income taxes	3,000	2,654	5,000	4,528
Net income	5,536	4,830	9,030	8,241
Other comprehensive income (loss)
Foreign currency translation adjustment, net of tax	(162)	96	(157)	45
Comprehensive income	$ 5,374	$ 4,926	$ 8,873	$ 8,286
Net income per common share
Basic (in dollars per share)	$ 0.57	$ 0.49	$ 0.92	$ 0.82
Diluted (in dollars per share)	$ 0.57	$ 0.49	$ 0.92	$ 0.82
Weighted average common shares outstanding
Basic (in shares)	9,741,866	9,938,593	9,766,843	9,992,200
Dilutive effect of stock options (in shares)	30,671	8,419	28,911	11,651
Diluted (in shares)	9,772,537	9,947,012	9,795,754	10,003,851

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GOODWILL AND INTANGIBLE ASSETS (Tables)

6 Months Ended

Mar. 31, 2013

GOODWILL AND INTANGIBLE ASSETS

Schedule of carrying amounts of intangible assets

	March 31, 2013							September 30, 2012
															Weighted- Average Amortization Period (Years)
	Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount		Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount
Intangible assets subject to amortization:
Trademarks/tradenames/patents	$	2,706	$	(913	)	$	1,793	$	2,674	$	(778	)	$	1,896		13
Customer relationships/distribution rights/ non-compete agreements		12,200		(6,488	)		5,712		12,239		(5,519	)		6,720		6
Developed software and technology		772		(772	)		—		772		(772	)		—		5
		15,678		(8,173	)		7,505		15,685		(7,069	)		8,616
Intangible assets not subject to amortization:
Trademarks/tradenames/licenses		11,247		—			11,247		11,258		—			11,258
	$	26,925	$	(8,173	)	$	18,752	$	26,943	$	(7,069	)	$	19,874

(1)

Amounts include the impact of foreign currency translation adjustments.

Schedule of estimated future amortization expense for intangible assets

Year Ending September 30,	Estimated Amortization Expense
2013(1)	$	984
2014		1,838
2015		1,656
2016		1,032
2017		687
Thereafter		1,308
	$	7,505

(1)

Estimated amortization expense for the year ending September 30, 2013 includes only amortization to be recorded after March 31, 2013.

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Document and Entity Information	6 Months Ended
	Mar. 31, 2013	Apr. 24, 2013
Document and Entity Information
Entity Registrant Name	NUTRACEUTICAL INTERNATIONAL CORP
Entity Central Index Key	0001050007
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		9,710,065
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2

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DEBT (Tables)

6 Months Ended

Mar. 31, 2013

DEBT

Schedule of debt

	March 31, 2013		September 30, 2012
Long-term debt—revolving credit facility	$	35,000	$	34,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net income	$ 9,030	$ 8,241
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,839	4,208
Amortization of deferred financing fees	92	92
Losses on disposals of property, plant and equipment	1
Tax benefit from stock option exercises	(43)	(195)
Deferred income taxes	567	787
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net	(1,820)	(335)
Inventories	3,652	558
Prepaid expenses and other current assets	555	2,449
Other non-current assets	(10)	(57)
Accounts payable	(506)	2,380
Accrued expenses	(1,264)	(979)
Other non-current liabilities	(29)	102
Net cash provided by operating activities	15,064	17,251
Cash flows from investing activities:
Acquisitions of businesses		(6,490)
Purchases of property, plant and equipment	(3,887)	(4,746)
Net cash used in investing activities	(3,887)	(11,236)
Cash flows from financing activities:
Proceeds from debt	10,000	4,000
Payments on debt	(9,000)	(4,000)
Proceeds from issuances of common stock	464	342
Purchases of common stock for treasury	(2,156)	(3,761)
Dividends paid on common stock	(9,785)
Tax benefit from stock option exercises	43	195
Net cash used in financing activities	(10,434)	(3,224)
Effect of exchange rate changes on cash	(66)	10
Net increase in cash	677	2,801
Cash at beginning of period	4,824	2,441
Cash at end of period	$ 5,501	$ 5,242

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DIVIDENDS

6 Months Ended

Mar. 31, 2013

DIVIDENDS

DIVIDENDS

8. DIVIDENDS

        In December 2012, the Company's board of directors declared a special cash dividend of $1.00 per share for all shares of common stock. This special cash dividend totaled $9,785 and was paid on December 28, 2012 to stockholders of record on December 21, 2012.

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STOCK OPTIONS

6 Months Ended

Mar. 31, 2013

STOCK OPTIONS

STOCK OPTIONS

7. STOCK OPTIONS

        The following table summarizes stock option activity during the six months ended March 31, 2013:

	Number of Options			Weighted-Average Exercise Price
Options outstanding and exercisable at September 30, 2012		218,000		$	12.66
Exercised		(25,370	)		12.32
Options outstanding and exercisable at March 31, 2013		192,630			12.71

        No options to purchase shares of common stock for the three and six months ended March 31, 2013 were excluded from the computation of diluted earnings per share because the exercise prices of all stock options were less than the average share price of the Company's common stock. Options to purchase 52,500 shares of common stock for both the three and six months ended March 31, 2012 were excluded from the computation of diluted earnings per share because the exercise prices of these stock options were greater than the average share price of the Company's common stock and, therefore, the effect would have been antidilutive.

        During the six months ended March 31, 2013, the Company received proceeds of $313 related to the exercise of stock options. During this same period, the Company recorded a tax benefit of $43 and optionees realized an aggregate pre-tax gain of $109 from these stock option exercises. During the six months ended March 31, 2012, the Company received proceeds of $216 related to the exercise of stock options. During this same period, the Company recorded a tax benefit of $195 and optionees realized an aggregate pre-tax gain of $506 from these stock option exercises.

        On January 28, 2013, stockholders approved the Nutraceutical International Corporation 2013 Long-Term Equity Incentive Plan (the "2013 Plan") and the reservation of 800,000 shares of the Company's common stock for issuance under the 2013 Plan. Equity awards available under the 2013 Plan include stock options, stock appreciation rights and restricted stock awards. The 2013 Plan provides a means through which the Company may attract and retain key personnel, including non-executive directors, and provide a means for directors, officers, employees, consultants and advisors to acquire and maintain an equity interest in the Company. The 2013 Plan will be administered by the Compensation Committee of the Board of Directors of the Company, which has the authority to determine the terms of the awards, determine the number of shares of the Company's common stock to be covered by the awards and make such other determinations as necessary in administering the 2013 Plan. The 2013 Plan will terminate on the tenth anniversary of its effective date.

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GOODWILL AND INTANGIBLE ASSETS (Details) (USD $) In Thousands, unless otherwise specified							6 Months Ended			6 Months Ended			6 Months Ended
	Mar. 31, 2013	Sep. 30, 2012	Mar. 31, 2013 Trademarks/tradenames/licenses	Sep. 30, 2012 Trademarks/tradenames/licenses	Mar. 31, 2013 Trademarks/tradenames/patents	Sep. 30, 2012 Trademarks/tradenames/patents	Mar. 31, 2013 Trademarks/tradenames/patents Weighted average	Mar. 31, 2013 Customer relationships/distribution rights/ non-compete agreements	Sep. 30, 2012 Customer relationships/distribution rights/ non-compete agreements	Mar. 31, 2013 Customer relationships/distribution rights/ non-compete agreements Weighted average	Mar. 31, 2013 Developed software and technology	Sep. 30, 2012 Developed software and technology	Mar. 31, 2013 Developed software and technology Weighted average
Intangible assets subject to amortization:
Gross Carrying Amount	$ 15,678	$ 15,685			$ 2,706	$ 2,674		$ 12,200	$ 12,239		$ 772	$ 772
Accumulated Amortization	(8,173)	(7,069)			(913)	(778)		(6,488)	(5,519)		(772)	(772)
Net Carrying Amount	7,505	8,616			1,793	1,896		5,712	6,720
Weighted-Average Amortization Period							13 years			6 years			5 years
Intangible assets not subject to amortization:
Carrying Amount			11,247	11,258
Total intangible assets
Gross Carrying Amount	26,925	26,943
Net Carrying Amount	18,752	19,874
Estimated future amortization expense related to intangible assets
2013	984
2014	1,838
2015	1,656
2016	1,032
2017	687
Thereafter	1,308
Net Carrying Amount	$ 7,505	$ 8,616			$ 1,793	$ 1,896		$ 5,712	$ 6,720

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STOCK OPTIONS (Tables)

6 Months Ended

Mar. 31, 2013

STOCK OPTIONS

Schedule of stock option activity

	Number of Options			Weighted-Average Exercise Price
Options outstanding and exercisable at September 30, 2012		218,000		$	12.66
Exercised		(25,370	)		12.32
Options outstanding and exercisable at March 31, 2013		192,630			12.71

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ACCOUNTS RECEIVABLE (Tables)

6 Months Ended

Mar. 31, 2013

ACCOUNTS RECEIVABLE

Schedule of accounts receivable, net of allowances for sales returns and doubtful accounts

	March 31, 2013			September 30, 2012
Accounts receivable	$	17,245		$	15,478
Less allowances		(1,835	)		(1,888	)
	$	15,410		$	13,590

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SEGMENTS

6 Months Ended

Mar. 31, 2013

SEGMENTS

SEGMENTS

9. SEGMENTS

        Segment identification and selection is consistent with the management structure used by the Company to evaluate performance and make decisions regarding resource allocation, as well as the materiality of financial results consistent with that structure. Based on the Company's management structure and method of internal reporting, the Company has one operating segment. The Company does not review operating results on a disaggregated basis; rather, management reviews operating results on an aggregate basis.

        Net sales attributed to customers in the United States and foreign countries for the three and six months ended March 31, 2013 and 2012 were as follows:

	Three months ended March 31,				Six months ended March 31,
	2013		2012		2013		2012
United States	$	48,743	$	47,207	$	92,124	$	88,634
Foreign countries		7,840		6,664		14,203		11,865
	$	56,583	$	53,871	$	106,327	$	100,499

        Certain net sales attributed to customers in the United States are sold to customers who in turn may sell such products to customers in foreign countries while certain net sales attributed to customers in foreign countries are sold to customers who in turn may sell such products to customers in the United States.

        The Company's net sales by product group for the three and six months ended March 31, 2013 and 2012 were as follows:

	Three months ended March 31,				Six months ended March 31,
	2013		2012		2013		2012
Branded nutritional supplements and other natural products	$	51,516	$	49,591	$	96,520	$	93,125
Other(1)		5,067		4,280		9,807		7,374
	$	56,583	$	53,871	$	106,327	$	100,499

(1)

Net sales for any other product or group of similar products are less than 10% of consolidated net sales.

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BASIS OF PRESENTATION (Policies)

6 Months Ended

Mar. 31, 2013

BASIS OF PRESENTATION

Use of Estimates

Use of Estimates

        The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America required management to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Significant estimates included values and lives assigned to acquired intangible assets, reserves for customer returns and allowances, uncollectible accounts receivable, valuation adjustments for slow moving, obsolete and/or damaged inventory and valuation and recoverability of long-lived assets. Actual results may differ from these estimates.

New Accounting Standards

New Accounting Standards

        In June 2011, the Financial Accounting Standards Board ("FASB") issued authoritative guidance, which is included in Accounting Standards Codification ("ASC") 220, "Comprehensive Income." This guidance no longer allows comprehensive income to be presented as a component of the statement of stockholders' equity but instead requires comprehensive income to be presented either in a continuous statement of comprehensive income or in two separate but consecutive statements. This guidance was effective for the Company as of October 1, 2012 and did not have an impact on the Company's consolidated results of operations.

        In September 2011, the FASB issued authoritative guidance, which is included in ASC 350, "Intangibles—Goodwill and Other." This guidance simplifies how goodwill is tested for impairment by first allowing an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. This guidance was effective for the Company as of October 1, 2012 and did not have a material impact on the Company's consolidated financial statements.

        In July 2012, the FASB issued further authoritative guidance, which is also included in ASC 350. This guidance allows a Company to first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset, other than goodwill, is impaired. This guidance was effective for the Company as of October 1, 2012 and did not have a material impact on the Company's consolidated financial statements.

        The Company reviews new accounting standards as they are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that the Company believes merit further discussion, and the Company expects that none would have a significant impact on the Company's consolidated financial statements.

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INVENTORIES (Tables)

6 Months Ended

Mar. 31, 2013

INVENTORIES

Schedule of inventories

	March 31, 2013		September 30, 2012
Raw materials	$	16,186	$	16,394
Work-in-process		4,615		5,152
Finished goods		21,620		24,527
	$	42,421	$	46,073

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ACCOUNTS RECEIVABLE (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
ACCOUNTS RECEIVABLE
Accounts receivable	$ 17,245	$ 15,478
Less allowances	(1,835)	(1,888)
Accounts receivable, net	$ 15,410	$ 13,590

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STOCK OPTIONS (Details) (USD $)	6 Months Ended
	Mar. 31, 2013	Jan. 28, 2013
Number of Options
Options outstanding and exercisable at the beginning of the period (in shares)	218,000
Exercised (in shares)	(25,370)
Options outstanding and exercisable at the end of the period (in shares)	192,630
Weighted-Average Exercise Price
Options outstanding and exercisable at the beginning of the period (in dollars per share)	$ 12.66
Exercised (in dollars per share)	$ 12.32
Options outstanding and exercisable at the ending of the period (in dollars per share)	$ 12.71
Capital Stock
Shares of common stock reserved for issuance		800,000

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BASIS OF PRESENTATION

6 Months Ended

Mar. 31, 2013

BASIS OF PRESENTATION

BASIS OF PRESENTATION

1. BASIS OF PRESENTATION

        Nutraceutical International Corporation and its subsidiaries (the "Company") is an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores. Internationally, the Company markets and distributes branded nutritional supplements and other natural products to and through health and natural product distributors and retailers. The Company's core business strategy is to acquire, integrate and operate businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements. The Company believes that the consolidation and integration of these acquired businesses provide ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships.

        The Company manufactures and sells nutritional supplements and other natural products under numerous brands including Solaray®, KAL®, Nature's Life®, LifeTime®, Natural Balance®, bioAllers®, Herbs for Kids®, NaturalCare®, Health from the Sun®, Life-flo®, Organix South®, Pioneer® and Monarch Nutraceuticals™.

        The Company owns neighborhood natural food markets, which operate under the trade names The Real Food Company™, Thom's Natural Foods™ and Cornucopia Community Market™. The Company also owns health food stores, which operate under the trade names Fresh Vitamins™, Granola's™, Nature's Discount® and Warehouse Vitamins™.

        In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all necessary adjustments, consisting of normal recurring adjustments, to state fairly the consolidated financial position of the Company as of March 31, 2013, the results of its operations for the three and six months ended March 31, 2013 and 2012 and its cash flows for the six months ended March 31, 2013 and 2012, in conformity with accounting principles generally accepted in the United States of America for interim financial information applied on a consistent basis. Results for the three and six months ended March 31, 2013 are not necessarily indicative of the results to be expected for the full fiscal year.

        Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. Accordingly, these financial statements should be read in conjunction with the Company's Form 10-K for the fiscal year ended September 30, 2012, which was filed with the Securities and Exchange Commission on November 21, 2012.

Use of Estimates

        The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America required management to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Significant estimates included values and lives assigned to acquired intangible assets, reserves for customer returns and allowances, uncollectible accounts receivable, valuation adjustments for slow moving, obsolete and/or damaged inventory and valuation and recoverability of long-lived assets. Actual results may differ from these estimates.

New Accounting Standards

        In June 2011, the Financial Accounting Standards Board ("FASB") issued authoritative guidance, which is included in Accounting Standards Codification ("ASC") 220, "Comprehensive Income." This guidance no longer allows comprehensive income to be presented as a component of the statement of stockholders' equity but instead requires comprehensive income to be presented either in a continuous statement of comprehensive income or in two separate but consecutive statements. This guidance was effective for the Company as of October 1, 2012 and did not have an impact on the Company's consolidated results of operations.

        In September 2011, the FASB issued authoritative guidance, which is included in ASC 350, "Intangibles—Goodwill and Other." This guidance simplifies how goodwill is tested for impairment by first allowing an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. This guidance was effective for the Company as of October 1, 2012 and did not have a material impact on the Company's consolidated financial statements.

        In July 2012, the FASB issued further authoritative guidance, which is also included in ASC 350. This guidance allows a Company to first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset, other than goodwill, is impaired. This guidance was effective for the Company as of October 1, 2012 and did not have a material impact on the Company's consolidated financial statements.

        The Company reviews new accounting standards as they are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that the Company believes merit further discussion, and the Company expects that none would have a significant impact on the Company's consolidated financial statements.

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SHARE PURCHASES

6 Months Ended

Mar. 31, 2013

SHARE PURCHASES

SHARE PURCHASES

6. SHARE PURCHASES

        During the three and six months ended March 31, 2013, the Company purchased 53,600 and 132,003 shares of common stock for an aggregate price of $913 and $2,156, respectively. During the three and six months ended March 31, 2012, the Company purchased 128,547 and 296,163 shares of common stock for an aggregate price of $1,587 and $3,761, respectively. All shares of common stock held in treasury were retired prior to March 31 of the respective fiscal year except at March 31, 2012 the Company held 10,112 shares of common stock in treasury. As of March 31, 2013, the Company was permitted to purchase up to 994,882 additional shares under its approved purchase plan. The Company accounts for treasury shares using the cost method.

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STOCK OPTIONS (Details 2) (Stock options)	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Stock options
Antidilutive securities
Options to purchase shares of common stock excluded from the computation of diluted earnings per share (in shares)	0	52,500	0	52,500

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SEGMENTS (Tables)

6 Months Ended

Mar. 31, 2013

SEGMENTS

Schedule of net sales attributed to customers in United States and foreign countries

	Three months ended March 31,				Six months ended March 31,
	2013		2012		2013		2012
United States	$	48,743	$	47,207	$	92,124	$	88,634
Foreign countries		7,840		6,664		14,203		11,865
	$	56,583	$	53,871	$	106,327	$	100,499

Schedule of net sales by product group

	Three months ended March 31,				Six months ended March 31,
	2013		2012		2013		2012
Branded nutritional supplements and other natural products	$	51,516	$	49,591	$	96,520	$	93,125
Other(1)		5,067		4,280		9,807		7,374
	$	56,583	$	53,871	$	106,327	$	100,499

(1)

Net sales for any other product or group of similar products are less than 10% of consolidated net sales.