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, 2015

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 (Address of principal executive offices)	84060 (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 27, 2015, the registrant had 9,561,236 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, 2015 and September 30, 2014		3
		Condensed Consolidated Statements of Operations and Comprehensive Income—Three Months and Six Months Ended March 31, 2015 and 2014		4
		Condensed Consolidated Statements of Cash Flows—Six Months Ended March 31, 2015 and 2014		5
		Notes to Condensed Consolidated Financial Statements		6
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		14
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		22
	Item 4.	Controls and Procedures		22
Part II.	Other Information			23
	Item 1.	Legal Proceedings		23
	Item 1A.	Risk Factors		23
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		23
	Item 6.	Exhibits		24

2

PART I—FINANCIAL INFORMATION

Item 1.    Financial Statements

NUTRACEUTICAL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(dollars in thousands)

	March 31, 2015			September 30, 2014(1)
ASSETS
Current assets:
Cash	$	5,216		$	6,232
Accounts receivable, net		16,829			15,118
Inventories		56,806			57,914
Prepaid expenses and other current assets		2,854			3,364
Deferred income taxes		1,260			1,222
Total current assets		82,965			83,850
Property, plant and equipment, net		78,673			79,244
Goodwill		23,622			23,622
Intangible assets, net		20,464			21,965
Other non-current assets		1,556			1,203
Deferred income taxes, net		4,933			4,894
Total assets	$	212,213		$	214,778
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	14,004		$	14,874
Accrued expenses		5,101			6,835
Total current liabilities		19,105			21,709
Long-term debt		38,000			43,000
Other non-current liabilities		162			456
Total liabilities		57,267			65,165
Stockholders' equity:
Common stock		96			97
Additional paid-in capital		9,345			11,112
Retained earnings		145,794			138,347
Accumulated other comprehensive income		(251	)		79
Treasury stock		(38	)		(22	)
Total stockholders' equity		154,946			149,613
Total liabilities and stockholders' equity	$	212,213		$	214,778

(1)

The condensed consolidated balance sheet as of September 30, 2014 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,
	2015			2014		2015			2014
Net sales	$	55,404		$	54,859	$	108,448		$	106,409
Cost of sales		28,149			27,699		55,338			53,187
Gross profit		27,255			27,160		53,110			53,222
Operating expenses
Selling, general and administrative		19,789			19,282		39,343			37,863
Amortization of intangible assets		728			652		1,460			1,236
Income from operations		6,738			7,226		12,307			14,123
Interest and other expense, net		273			350		570			668
Income before provision for income taxes		6,465			6,876		11,737			13,455
Provision for income taxes		2,369			2,552		4,290			4,996
Net income	$	4,096		$	4,324	$	7,447		$	8,459
Other comprehensive income (loss)
Foreign currency translation adjustment, net of tax		(109	)		36		(330	)		48
Comprehensive income	$	3,987		$	4,360	$	7,117		$	8,507
Net income per common share
Basic	$	0.43		$	0.44	$	0.77		$	0.86
Diluted		0.43			0.44		0.77			0.86
Weighted average common shares outstanding
Basic		9,622,051			9,843,590		9,637,753			9,840,578
Dilutive effect of stock options		4,874			9,021		5,884			9,524
Diluted		9,626,925			9,852,611		9,643,637			9,850,102

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,
	2015			2014
Cash flows from operating activities:
Net income	$	7,447		$	8,459
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,507			5,415
Amortization of deferred financing fees		67			92
Losses on disposals of property, plant and equipment		7			2
Tax benefit from stock option exercises		(1	)		(51	)
Deferred income taxes, net		(77	)		478
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net		(1,706	)		(751	)
Inventories		1,137			(3,167	)
Prepaid expenses and other current assets		517			356
Other non-current assets		81			(102	)
Accounts payable		(1,136	)		574
Accrued expenses		(1,685	)		(494	)
Other non-current liabilities		10			(10	)
Net cash provided by operating activities		11,168			10,801
Cash flows from investing activities:
Acquisitions of businesses		(81	)		(9,139	)
Purchases of property, plant and equipment		(4,217	)		(6,437	)
Net cash used in investing activities		(4,298	)		(15,576	)
Cash flows from financing activities:
Proceeds from debt		2,000			12,000
Payments on debt		(7,000	)		(8,000	)
Payments of deferred financing fees		(420	)		—
Proceeds from issuances of common stock		64			179
Purchases of common stock for treasury		(2,352	)		(1,430	)
Tax benefit from stock option exercises		1			51
Net cash provided by (used in) financing activities		(7,707	)		2,800
Effect of exchange rate changes on cash		(179	)		24
Net decrease in cash		(1,016	)		(1,951	)
Cash at beginning of period		6,232			8,235
Cash at end of period	$	5,216		$	6,284

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®, NaturalCare®, Health from the Sun®, Pioneer®, Nutra BioGenesis™, Life-flo®, Organix South®, Heritage Store® 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 various trade names, including Fresh Vitamins™, Granola's™ and Peachtree Natural Foods®.

        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, 2015, the results of its operations for the three and six months ended March 31, 2015 and 2014 and its cash flows for the six months ended March 31, 2015 and 2014, in conformity with accounting principles generally accepted in the United States of America ("US GAAP") for interim financial information applied on a consistent basis. Results for the three and six months ended March 31, 2015 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 US GAAP 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, 2014, which was filed with the Securities and Exchange Commission on November 20, 2014.

Use of Estimates

        The preparation of these financial statements in conformity with US GAAP 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 May 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance, which is included in Accounting Standards Codification ("ASC") 606, "Revenue from Contracts with Customers." This guidance provides a single, comprehensive revenue recognition model for all contracts with customers and requires that a company recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This guidance is effective for the Company as of October 1, 2017. The Company is currently evaluating the impact this standard may have on its consolidated financial statements.

        In April 2015, the FASB issued authoritative guidance, which is included in ASC 835, "Simplifying the Presentation of Debt Issuance Costs." This guidance requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt. This guidance is effective for the Company as of October 1, 2016. The Company is currently evaluating the impact this standard may have on its consolidated financial statements.

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

2. ACCOUNTS RECEIVABLE

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

	March 31, 2015			September 30, 2014
Accounts receivable	$	17,897		$	16,352
Less allowances		(1,068	)		(1,234	)
	$	16,829		$	15,118

3. INVENTORIES

        Inventories were comprised of the following:

	March 31, 2015		September 30, 2014
Raw materials	$	21,166	$	20,559
Work-in-process		7,907		6,909
Finished goods		27,733		30,446
	$	56,806	$	57,914

7

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

4. ACQUISITIONS

        During the six months ended March 31, 2015, the Company made one acquisition of a business. On November 18, 2014, the Company acquired certain operating assets of Agape Health Products for $81 in cash.

        During the six months ended March 31, 2014, the Company made four acquisitions of businesses. On October 16, 2013, the Company acquired certain operating assets of TCCD International, Inc. On November 25, 2013, the Company acquired certain operating assets of Green Luxury Brands, Inc. On December 19, 2013, the Company acquired certain operating assets of Twinlab Corporation. On January 15, 2014, the Company acquired certain operating assets of Peachtree Natural Foods, Inc. The aggregate purchase price of these acquisitions was $9,139 in cash.

        The Condensed Consolidated Statements of Operations and Comprehensive Income and the Condensed Consolidated Statements of Cash Flows presented herein include the activities of these acquired businesses from their respective dates of acquisition. The expected long-term sales and expense synergies of acquired businesses generally are not realized immediately following acquisition, as certain transition and integration matters must be completed.

        These acquisitions are in keeping with the Company's business strategy of consolidating the fragmented industry in which it competes. These acquisitions were accounted for using the acquisition method of accounting. Accordingly, the aggregate purchase price was assigned to the assets acquired based on their fair values at their respective dates of acquisition. The excess of aggregate purchase price over the fair values of the assets acquired was classified as goodwill. The goodwill relates to expected synergies from these acquisitions. The following reflects the final allocation of the aggregate purchase price for these acquisitions to the aggregate assets acquired:

	Fiscal 2015 Acquisition		Fiscal 2014 Acquisitions
Aggregate assets acquired:
Current assets	$	41	$	1,857
Goodwill		—		4,399
Intangible assets		40		2,883
	$	81	$	9,139

        The fiscal 2015 and fiscal 2014 acquired intangible assets totaling $40 and $2,883, respectively, related to trademarks, tradenames and customer relationships, and are being amortized over periods of two to twelve years for financial statement purposes. The fiscal 2015 and fiscal 2014 acquired intangible assets are expected to be deductible for tax purposes over fifteen years. Goodwill, which is not subject to amortization for financial statement purposes, of $4,399 for fiscal 2014, is expected to be deductible for tax purposes over fifteen years.

8

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

5. GOODWILL AND INTANGIBLE ASSETS

        During the six months ended March 31, 2015, there was no change in the carrying value of goodwill.

        The carrying amounts of intangible assets at March 31, 2015 and September 30, 2014 were as follows:

	March 31, 2015							September 30, 2014
	Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount		Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount		Weighted- Average Amortization Period (Years)
Intangible assets subject to amortization:
Trademarks/tradenames/patents	$	5,448	$	(1,721	)	$	3,727	$	5,418	$	(1,480	)	$	3,938		11
Customer relationships/distribution rights/ non-compete agreements		16,557		(8,609	)		7,948		16,517		(7,390	)		9,127		7
Developed software and technology		772		(772	)		—		772		(772	)		—		5
		22,777		(11,102	)		11,675		22,707		(9,642	)		13,065
Intangible assets not subject to amortization:
Trademarks/tradenames/licenses		8,789		—			8,789		8,900		—			8,900
	$	31,566	$	(11,102	)	$	20,464	$	31,607	$	(9,642	)	$	21,965

(1)

Amounts include the impact of foreign currency translation adjustments.

        Estimated future amortization expense related to the March 31, 2015 net carrying amount of $11,675 for intangible assets subject to amortization is as follows:

Year Ending September 30,	Estimated Amortization Expense
2015(1)	$	1,391
2016		2,174
2017		1,800
2018		1,610
2019		1,182
Thereafter		3,518
	$	11,675

(1)

Estimated amortization expense for the year ending September 30, 2015 includes only amortization to be recorded after March 31, 2015.

9

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

5. GOODWILL AND INTANGIBLE ASSETS (Continued)

        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 additional 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. Such 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.

6. DEBT

        Debt was comprised of the following:

	March 31, 2015		September 30, 2014
Long-term debt—revolving credit facility	$	38,000	$	43,000

        The carrying value of the Company's debt approximates fair value at March 31, 2015 and September 30, 2014. 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 November 4, 2014, the Company amended its revolving credit facility (the "Credit Agreement"). The Credit Agreement extends the term of the credit facility to November 2019, increases the available credit borrowings to $100,000 with no automatic reductions and provides an accordion feature that can increase the available credit borrowings to $130,000, subject to approval by the lenders and compliance with certain covenants and conditions. The lenders under the Credit Agreement continue to be Rabobank International and Wells Fargo. To date, the Company has not experienced any difficulties in accessing the available funds under the Credit Agreement. Deferred financing fees of $420 related to the Credit Agreement are being amortized over the term of the Credit Agreement.

        At March 31, 2015, the Company had outstanding revolving credit borrowings of $38,000 under the Credit Agreement. Borrowings under the 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 plus a variable margin. Base Rate is the higher of: (i) the Prime Lending Rate, (ii) the Federal Funds Rate plus 0.5% or (iii) the one-month Eurodollar Rate multiplied by the Statutory Reserve Rate plus 1.0% (capitalized terms are defined in the Credit Agreement, a copy of which was filed with the Securities and Exchange Commission on November 5, 2014). At March 31, 2015, the applicable weighted-average interest rate for outstanding borrowings was 1.77%. The Company is also required to pay a variable quarterly fee on the unused balance under the Credit Agreement. At March 31, 2015, the applicable rate was 0.25%. Accrued interest on Eurodollar Rate borrowings is payable based on elected intervals of one, two or three months. Accrued interest on

10

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

6. DEBT (Continued)

Base Rate borrowings is payable quarterly. The Credit Agreement matures on November 4, 2019, and the Company is required to repay all principal and interest outstanding under the Credit Agreement on such date.

        The Credit Agreement contains restrictive covenants, including limitations on incurring other indebtedness and requirements that the Company maintain certain financial ratios. As of March 31, 2015, 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 Credit Agreement.

7. SHARE PURCHASES

        During the three and six months ended March 31, 2015, the Company purchased 68,463 and 117,025 shares of common stock for an aggregate price of $1,278 and $2,352, respectively. During the three and six months ended March 31, 2014, the Company purchased 35,415 and 57,120 shares of common stock for an aggregate price of $909 and $1,430, respectively. All of these shares of common stock held in treasury were retired prior to March 31 in the respective quarter of purchase, except at March 31, 2015 and 2014, the Company held 2,000 and 1,681 shares of common stock in treasury, respectively. As of March 31, 2015, the Company was permitted to purchase up to 614,999 additional shares under its approved purchase plan, with no expiration date or restrictions. The Company accounts for treasury shares using the cost method.

8. STOCK OPTIONS AND OTHER EQUITY AWARDS

        The following table summarizes stock option activity during the six months ended March 31, 2015:

	Number of Options			Weighted- Average Exercise Price
Options outstanding and exercisable at September 30, 2014		32,500		$	14.22
Exercised		(600	)		14.22
Options outstanding and exercisable at March 31, 2015		31,900			14.22

        All stock options outstanding at March 31, 2015 expire on September 30, 2015.

        No options to purchase shares of common stock for the three and six months ended March 31, 2015 and 2014 were excluded from the computation of diluted earnings per share because none of the stock options were anti-dilutive.

        During the six months ended March 31, 2015, the Company received proceeds of $9 related to the exercise of stock options. During this same period, the Company recorded a tax benefit of $1 and optionees realized an aggregate pre-tax gain of $3 from these stock option exercises. During the six months ended March 31, 2014, the Company received proceeds of $115 related to the exercise of stock options. During this same period, the Company recorded a tax benefit of $51 and optionees realized an aggregate pre-tax gain of $133 from these stock option exercises.

11

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

8. STOCK OPTIONS AND OTHER EQUITY AWARDS (Continued)

        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 stock awards. In conjunction with the Company's fiscal 2014 and fiscal 2013 incentive compensation (bonus) payments, 24,827 and 31,788 shares of the Company's common stock were issued, respectively. These non-cash stock awards were granted on December 11, 2014 and December 11, 2013 at an aggregate fair value of $504 and $775, respectively, with fair value being determined by the closing price of the Company's common stock on the grant date. These stock awards were registered, unrestricted and fully vested on the grant date. As of March 31, 2015, 743,385 shares of the Company's common stock were available for issuance under the 2013 Plan.

9. SEGMENTS

        Segment identification and selection is consistent with the management structure used by the Company's chief operating decision maker 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's chief operating decision maker does not review operating results on a disaggregated basis; rather, the chief operating decision maker 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, 2015 and 2014 were as follows:

	Three months ended March 31,				Six months ended March 31,
	2015		2014		2015		2014
United States	$	48,807	$	46,962	$	95,532	$	92,285
Foreign countries		6,597		7,897		12,916		14,124
	$	55,404	$	54,859	$	108,448	$	106,409

        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.

12

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

9. SEGMENTS (Continued)

        The Company's net sales by product group for the three and six months ended March 31, 2015 and 2014 were as follows:

	Three months ended March 31,				Six months ended March 31,
	2015		2014		2015		2014
Branded nutritional supplements and other natural products	$	49,883	$	49,503	$	97,760	$	96,475
Other(1)		5,521		5,356		10,688		9,934
	$	55,404	$	54,859	$	108,448	$	106,409

(1)

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

13

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®, NaturalCare®, Health from the Sun®, Pioneer®, Nutra BioGenesis™, Life-flo®, Organix South®, Heritage Store® 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 various trade names, including Fresh Vitamins™, Granola's™ and Peachtree Natural Foods®.

        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 businesses in the VMS Industry. 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 creditworthiness. If general economic conditions and/or customer financial conditions 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 a 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

14

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 estimated 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 property, plant and equipment whenever events or circumstances indicate that the carrying amount of an asset group may not be recoverable. We measure recoverability of an asset group by comparison of its carrying amount to the future undiscounted cash flows the asset group is expected to generate. If an asset group is considered to be impaired, the difference between the carrying amount and the fair value of the impaired asset group is recognized as an impairment charge.

        Goodwill and Intangible Assets—Goodwill and intangible assets require estimates and judgments in determining the initial recognition and measurement, including factors and assumptions used in determining fair values and useful lives. 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 when events or changes in circumstances indicate the carrying value may not be recoverable. 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 market data as well as 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 estimated using discounted cash flow models.

        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 an asset group is considered to be impaired, the difference between the carrying amount and the fair value of the impaired asset group is recorded.

        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 additional 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 additional brands being consolidated or discontinued and could result in additional intangible asset impairment charges being recorded in future periods. Such goodwill and/or intangible asset impairment charges could materially impact our 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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        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 customer 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,
	2015			2014			2015			2014
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales		50.8	%		50.5	%		51.0	%		50.0	%
Gross profit		49.2	%		49.5	%		49.0	%		50.0	%
Selling, general and administrative		35.7	%		35.1	%		36.3	%		35.6	%
Amortization of intangible assets		1.3	%		1.2	%		1.3	%		1.2	%
Income from operations		12.2	%		13.2	%		11.4	%		13.2	%
Interest and other expense, net		0.5	%		0.6	%		0.5	%		0.6	%
Income before provision for income taxes		11.7	%		12.6	%		10.9	%		12.6	%
Provision for income taxes		4.3	%		4.7	%		4.0	%		4.7	%
Net income		7.4	%		7.9	%		6.9	%		7.9	%
Adjusted EBITDA(1)		18.1	%		18.2	%		17.3	%		18.4	%

(1)

See "—Adjusted EBITDA."

Comparison of the Three Months Ended March 31, 2015 to the Three Months Ended March 31, 2014

        Net Sales.    Net sales increased by $0.5 million, or 1.0%, to $55.4 million for the three months ended March 31, 2015 (the "second quarter of fiscal 2015") from $54.9 million for the three months ended March 31, 2014 (the "second quarter of fiscal 2014"). Net sales of branded nutritional supplements and other natural products increased by $0.4 million, or 0.8%, to $49.9 million for the second quarter of fiscal 2015 compared to $49.5 million for the second quarter of fiscal 2014. The increase in net sales of branded nutritional supplements and other natural products was primarily related to the net sales contributions of the fiscal 2014 and fiscal 2015 acquisitions and price increases

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of $1.1 million, partially offset by a decrease in sales volume of branded products to certain customers. Other net sales were $5.5 million for the second quarter of fiscal 2015 and $5.4 million for the second quarter of fiscal 2014.

        Gross Profit.    Gross profit was $27.3 million for the second quarter of fiscal 2015 and $27.2 million for the second quarter of fiscal 2014. As a percentage of net sales, gross profit was 49.2% for the second quarter of fiscal 2015 and 49.5% for the second quarter of fiscal 2014.

        Selling, General and Administrative.    Selling, general and administrative expenses increased by $0.5 million, or 2.6%, to $19.8 million for the second quarter of fiscal 2015 from $19.3 million for the second quarter of fiscal 2014. As a percentage of net sales, selling, general and administrative expenses were 35.7% for the second quarter of fiscal 2015 and 35.1% for the second quarter of fiscal 2014. This increase in selling, general and administrative expenses was primarily attributable to operational and transition costs related to the fiscal 2014 acquisitions.

        Amortization of Intangible Assets.    Amortization of intangible assets was $0.7 million for both the second quarter of fiscal 2015 and the second quarter of fiscal 2014. 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 $0.3 million for the second quarter of fiscal 2015 and $0.4 million for the second quarter of fiscal 2014 and primarily consisted of interest expense on indebtedness under our revolving credit facility.

        Provision for Income Taxes.    Our effective tax rate was 36.6% for the second quarter of fiscal 2015 and 37.1% for the second quarter of fiscal 2014. 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, 2015 to the Six Months Ended March 31, 2014

        Net Sales.    Net sales increased $2.0 million, or 1.9%, to $108.4 million for the six months ended March 31, 2015 from $106.4 million for the six months ended March 31, 2014. Net sales of branded nutritional supplements and other natural products increased by $1.3 million, or 1.3%, to $97.8 million for the six months ended March 31, 2015 from $96.5 million for the six months ended March 31, 2014. The increase in net sales of branded nutritional supplements and other natural products was primarily related to the net sales contributions of the fiscal 2014 and fiscal 2015 acquisitions and, to a lesser extent, price increases of $0.8 million, partially offset by a decrease in sales volume of branded products to certain customers. Other net sales increased $0.7 million, or 7.6%, to $10.6 million for the six months ended March 31, 2015, compared to $9.9 million for the six months ended March 31, 2014. The increase in other net sales was primarily related to the net sales contributions of the fiscal 2014 acquisitions.

        Gross Profit.    Gross profit was $53.1 million for the six months ended March 31, 2015 and $53.2 million for the six months ended March 31, 2014. As a percentage of net sales, gross profit decreased to 49.0% for the six months ended March 31, 2015 from 50.0% for the six months ended March 31, 2014. This decrease in gross profit percentage was primarily related to an increase in manufacturing overhead costs.

        Selling, General and Administrative.    Selling, general and administrative expenses increased by $1.4 million, or 3.9%, to $39.3 million for the six months ended March 31, 2015 from $37.9 million for the six months ended March 31, 2014. As a percentage of net sales, selling, general and administrative expenses increased to 36.3% for the six months ended March 31, 2015, compared to 35.6% for the six months ended March 31, 2014. This increase in selling, general and administrative expenses was primarily attributable to operational and transition costs related to the fiscal 2014 acquisitions.

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        Amortization of Intangible Assets.    Amortization of intangible assets was $1.5 million for the six months ended March 31, 2015 and $1.2 million for the six months ended March 31, 2014. 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 $0.6 million for the six months ended March 31, 2015 and $0.7 million for the six months ended March 31, 2014 and primarily consisted of interest expense on indebtedness under our revolving credit facility.

        Provision for Income Taxes.    Our effective tax rate was 36.6% for the six months ended March 31, 2015 and 37.1% for the six months ended March 31, 2014. In each period, our effective tax rate was higher than the federal statutory rate primarily due to state taxes.

Adjusted EBITDA

        Adjusted EBITDA (a non-GAAP measure) is defined in our performance measures as earnings before net interest and other expense, taxes, depreciation, amortization and goodwill and intangible asset impairments. Adjusted 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, Adjusted 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 Adjusted 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. Generally, we have recorded a monthly accrual for incentive compensation as a percentage of Adjusted EBITDA, which has been paid out to executive management, as well as other employees, upon completion of our annual audit.

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

	Three Months Ended March 31,				Six Months Ended March 31,
	2015		2014		2015		2014
	(dollars in thousands)
Net income	$	4,096	$	4,324	$	7,447	$	8,459
Provision for income taxes		2,369		2,552		4,290		4,996
Interest and other expense, net(1)		273		350		570		668
Depreciation and amortization		3,268		2,777		6,507		5,415
Adjusted EBITDA	$	10,006	$	10,003	$	18,814	$	19,538

(1)

Includes amortization of deferred financing fees.

        Our Adjusted EBITDA was $10.0 million for both the second quarter of fiscal 2015 and the second quarter of fiscal 2014. Adjusted EBITDA as a percentage of net sales was 18.1% for the second quarter of fiscal 2015 and 18.2% for the second quarter of fiscal 2014.

        Our Adjusted EBITDA decreased to $18.8 million for the six months ended March 31, 2015 from $19.5 million for the six months ended March 31, 2014. Adjusted EBITDA as a percentage of net sales decreased to 17.3% for the six months ended March 31, 2015 from 18.4% for the six months ended March 31, 2014.

Seasonality

        We believe that our business is characterized by minor seasonality. However, sales to any particular customer or 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 $63.9 million as of March 31, 2015, compared to $62.1 million as of September 30, 2014. The increase in working capital was primarily the result of an increase in accounts receivable and a decrease in accrued expenses, partially offset by decreases in cash and inventories.

        Net cash provided by operating activities for the six months ended March 31, 2015 was $11.2 million, compared to $10.8 million for the comparable period in fiscal 2014. This increase in net cash provided by operating activities for the six months ended March 31, 2015 was primarily attributable to changes in operating assets and liabilities.

        Net cash used in investing activities was $4.3 million for the six months ended March 31, 2015, compared to $15.6 million for the comparable period in fiscal 2014. Our investing activities consisted of acquisitions of businesses and capital expenditures. The capital expenditures primarily related to buildings, building improvements, distribution and manufacturing equipment and information systems.

        During the six months ended March 31, 2015, we made one acquisition of a business. On November 18, 2014, we acquired certain operating assets of Agape Health Products for $0.1 million in cash.

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        During the six months ended March 31, 2014, we made four acquisitions of businesses. On October 16, 2013, we acquired certain operating assets of TCCD International, Inc. On November 25, 2013, we acquired certain operating assets of Green Luxury Brands, Inc. On December 19, 2013, we acquired certain operating assets of Twinlab Corporation. On January 15, 2014, we acquired certain operating assets of Peachtree Natural Foods, Inc. The aggregate purchase price of these acquisitions was $9.1 million in cash.

        Net cash used in financing activities was $7.7 million for the six months ended March 31, 2015 and net cash provided by financing activities was $2.8 million for the comparable period in fiscal 2014. During these periods, financing activities primarily related to borrowings and repayments under our revolving credit facility, payments of deferred financing fees, 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.

        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 2,667 shares purchased during the six months ended March 31, 2015. As of March 31, 2015, there were 1,379,068 shares of common stock available for purchase.

        On November 4, 2014, we amended our revolving credit facility (the "Credit Agreement"). The Credit Agreement extends the term of the credit facility to November 2019, resets the available credit borrowings to $100.0 million with no automatic reductions and provides an accordion feature that can increase the available credit borrowings to $130.0 million, subject to approval by the lenders and compliance with certain covenants and conditions. The lenders under the Credit Agreement continue to be Rabobank International and Wells Fargo. To date, we have not experienced any difficulties in accessing the available funds under the Credit Agreement. Deferred financing fees of $0.4 million related to the Credit Agreement are being amortized over the term of the Credit Agreement.

        At March 31, 2015, we had outstanding revolving credit borrowings of $38.0 million under the Credit Agreement. Borrowings under the 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 plus a variable margin. Base Rate is the higher of: (i) the Prime Lending Rate, (ii) the Federal Funds Rate plus 0.5% or (iii) the one-month Eurodollar Rate multiplied by the Statutory Reserve Rate plus 1.0% (capitalized terms are defined in the Credit Agreement, a copy of which was filed with the Securities and Exchange Commission on November 5, 2014). At March 31, 2015, the applicable weighted-average interest rate for outstanding borrowings was 1.77%. We are also required to pay a quarterly fee on the unused balance under the Credit Agreement. At March 31, 2015, the applicable rate was 0.25%. 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 Credit Agreement matures on November 4, 2019, and we are required to repay all principal and interest outstanding under the Credit Agreement on such date.

        The Credit Agreement contains restrictive covenants, including limitations on incurring certain other indebtedness and requirements that we maintain certain financial ratios. As of March 31, 2015, 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 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

20

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, 2015 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	$	38,000	$	—	$	—	$	38,000	$	—
Interest on revolving credit facility(a)		3,949		858		1,717		1,374		—
Operating leases		6,977		3,885		2,748		339		5
Total	$	48,926	$	4,743	$	4,465	$	39,713	$	5

(a)

Represents estimated interest obligations associated with our outstanding revolving credit facility balance of $38.0 million at March 31, 2015, assuming no principal payments are made before maturity, a weighted-average interest rate of 1.77% and an underutilization fee rate of 0.25%.

Off-Balance Sheet Arrangements

        Our operating lease commitments are disclosed in the Contractual Obligations and Other Commitments table above. As of March 31, 2015, we had no other off-balance sheet arrangements that have had, or are reasonably likely to have, a material effect on our consolidated financial statements.

Inflation

        Inflation affects the cost of raw materials, goods and services we use. 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, inability to complete them or inability to integrate 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

21

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 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 bear interest at the applicable Eurodollar Rate plus a variable margin or at a Base Rate plus a variable margin. Base Rate is the higher of: (i) the Prime Lending Rate, (ii) the Federal Funds Rate plus 0.5% or (iii) the one-month Eurodollar Rate multiplied by the Statutory Reserve Rate plus 1.0%. At March 31, 2015, the applicable weighted-average interest rate for borrowings was 1.77% and we had total borrowings outstanding of $38.0 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, 2015 and 2014.

        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 or results of operations because the majority of our net sales to foreign customers are transacted in U.S. dollars. Net sales to foreign customers not transacted in U.S. dollars include sales to customers in Barbados, Canada, Dominica, Japan, the Netherlands, Norway, St. Kitts, St. Lucia, Sweden and the United Kingdom. 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, 2015. 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, 2015.

        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 the opinion of management, 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, none of the regulatory and legal matters in which we are involved are individually 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 or future 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 2014 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, 2015.

        Prior to fiscal 2015, 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, 2015, there were 614,999 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, 2015 occurred in January, February and March 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, 2015		23,166	$	19.62		23,166
February 1 - 28, 2015		13,297		19.78		13,297
March 1 - 31, 2015		32,000		17.51		32,000
		68,463		18.67		68,463		614,999

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Item 6.    Exhibits

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(1)
101.SCH	XBRL Taxonomy Extension Schema Document(1)
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document(1)
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document(1)
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document(1)
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document(1)

(1)

Filed herewith.

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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 30, 2015	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 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 most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) 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 30, 2015 /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 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 most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) 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 30, 2015 /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, 2015 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 30, 2015

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, 2015 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 30, 2015

        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.

QuickLinks

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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DEBT (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended	0 Months Ended
	Mar. 31, 2015	Nov. 04, 2014	Sep. 30, 2014
DEBT
Long-term debt-revolving credit facility	38,000		$ 43,000
Statutory Reserve Rate
DEBT
Reference rate	one-month Eurodollar Rate
Margin over reference rate (as a percent)	1.00%
Restated Credit Agreement
DEBT
Available credit borrowings		100,000
Amount of automatic reduction		0
Deferred financing cost		420
Outstanding revolving credit borrowings	38,000
Weighted-average interest rate (as a percent)	1.77%
Quarterly fee on the unused balance (as a percent)	0.25%
Restated Credit Agreement | Federal Funds Rate
DEBT
Reference rate	the Federal Funds Rate
Margin over reference rate (as a percent)	0.50%
Restated Credit Agreement | Eurodollar Rate
DEBT
Reference rate	Eurodollar Rate
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
Restated Credit Agreement | Prime Lending Rate
DEBT
Reference rate	the Prime Lending Rate
Credit Agreement, accordion feature
DEBT
Available credit borrowings		$ 130,000

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GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Mar. 31, 2015

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

5. GOODWILL AND INTANGIBLE ASSETS

        During the six months ended March 31, 2015, there was no change in the carrying value of goodwill.

        The carrying amounts of intangible assets at March 31, 2015 and September 30, 2014 were as follows:

	March 31, 2015							September 30, 2014
	Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount		Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount		Weighted- Average Amortization Period (Years)
Intangible assets subject to amortization:
Trademarks/tradenames/patents	$	5,448	$	(1,721	)	$	3,727	$	5,418	$	(1,480	)	$	3,938		11
Customer relationships/distribution rights/ non-compete agreements		16,557		(8,609	)		7,948		16,517		(7,390	)		9,127		7
Developed software and technology		772		(772	)		—		772		(772	)		—		5
		22,777		(11,102	)		11,675		22,707		(9,642	)		13,065
Intangible assets not subject to amortization:
Trademarks/tradenames/licenses		8,789		—			8,789		8,900		—			8,900
	$	31,566	$	(11,102	)	$	20,464	$	31,607	$	(9,642	)	$	21,965

(1) Amounts include the impact of foreign currency translation adjustments.

        Estimated future amortization expense related to the March 31, 2015 net carrying amount of $11,675 for intangible assets subject to amortization is as follows:

Year Ending September 30,	Estimated Amortization Expense
2015(1)	$	1,391
2016		2,174
2017		1,800
2018		1,610
2019		1,182
Thereafter		3,518
	$	11,675

(1) Estimated amortization expense for the year ending September 30, 2015 includes only amortization to be recorded after March 31, 2015.

        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 additional 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. Such 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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STOCK OPTIONS AND OTHER EQUITY AWARDS (Details 3) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
STOCK OPTIONS AND OTHER EQUITY AWARDS
Proceeds from exercise of stock options	$ 9	$ 115
Tax benefit from stock option exercises	1	51
Pre-tax gain from exercise of stock options	$ 3	$ 133

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STOCK OPTIONS AND OTHER EQUITY AWARDS (Details 2) (Stock options)	3 Months Ended		6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Stock options
Antidilutive securities
Options to purchase shares of common stock excluded from the computation of diluted earnings per share (in shares)	0	0	0	0

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STOCK OPTIONS AND OTHER EQUITY AWARDS (Details 4) (2013 Plan, USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended		12 Months Ended
	Dec. 11, 2014	Dec. 11, 2013	Sep. 30, 2014	Sep. 30, 2013	Mar. 31, 2015	Jan. 28, 2013
2013 Plan
STOCK OPTIONS AND OTHER EQUITY AWARDS
Shares of common stock reserved for issuance						800,000
Equity compensation payments (in shares)			24,827	31,788
Equity compensation payments	$ 504	$ 775
Shares of common stock available for issuance					743,385

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SEGMENTS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2015 segment	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
SEGMENTS
Number of operating segments	1
SEGMENTS
Net sales	$ 55,404	$ 54,859	$ 108,448	$ 106,409
Branded nutritional supplements and other natural products
SEGMENTS
Net sales	49,883	49,503	97,760	96,475
Other
SEGMENTS
Net sales	5,521	5,356	10,688	9,934
United States
SEGMENTS
Net sales	48,807	46,962	95,532	92,285
Foreign countries
SEGMENTS
Net sales	$ 6,597	$ 7,897	$ 12,916	$ 14,124

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ACQUISITIONS

6 Months Ended

Mar. 31, 2015

ACQUISITIONS.

ACQUISITIONS

4. ACQUISITIONS

        During the six months ended March 31, 2015, the Company made one acquisition of a business. On November 18, 2014, the Company acquired certain operating assets of Agape Health Products for $81 in cash.

        During the six months ended March 31, 2014, the Company made four acquisitions of businesses. On October 16, 2013, the Company acquired certain operating assets of TCCD International, Inc. On November 25, 2013, the Company acquired certain operating assets of Green Luxury Brands, Inc. On December 19, 2013, the Company acquired certain operating assets of Twinlab Corporation. On January 15, 2014, the Company acquired certain operating assets of Peachtree Natural Foods, Inc. The aggregate purchase price of these acquisitions was $9,139 in cash.

        The Condensed Consolidated Statements of Operations and Comprehensive Income and the Condensed Consolidated Statements of Cash Flows presented herein include the activities of these acquired businesses from their respective dates of acquisition. The expected long-term sales and expense synergies of acquired businesses generally are not realized immediately following acquisition, as certain transition and integration matters must be completed.

        These acquisitions are in keeping with the Company's business strategy of consolidating the fragmented industry in which it competes. These acquisitions were accounted for using the acquisition method of accounting. Accordingly, the aggregate purchase price was assigned to the assets acquired based on their fair values at their respective dates of acquisition. The excess of aggregate purchase price over the fair values of the assets acquired was classified as goodwill. The goodwill relates to expected synergies from these acquisitions. The following reflects the final allocation of the aggregate purchase price for these acquisitions to the aggregate assets acquired:

	Fiscal 2015 Acquisition		Fiscal 2014 Acquisitions
Aggregate assets acquired:
Current assets	$	41	$	1,857
Goodwill		—		4,399
Intangible assets		40		2,883
	$	81	$	9,139

        The fiscal 2015 and fiscal 2014 acquired intangible assets totaling $40 and $2,883, respectively, related to trademarks, tradenames and customer relationships, and are being amortized over periods of two to twelve years for financial statement purposes. The fiscal 2015 and fiscal 2014 acquired intangible assets are expected to be deductible for tax purposes over fifteen years. Goodwill, which is not subject to amortization for financial statement purposes, of $4,399 for fiscal 2014, is expected to be deductible for tax purposes over fifteen years.

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Sep. 30, 2014
Current assets:
Cash	$ 5,216	$ 6,232
Accounts receivable, net	16,829	15,118
Inventories	56,806	57,914
Prepaid expenses and other current assets	2,854	3,364
Deferred income taxes	1,260	1,222
Total current assets	82,965	83,850
Property, plant and equipment, net	78,673	79,244
Goodwill	23,622	23,622
Intangible assets, net	20,464	21,965
Other non-current assets	1,556	1,203
Deferred income taxes, net	4,933	4,894
Total assets	212,213	214,778
Current liabilities:
Accounts payable	14,004	14,874
Accrued expenses	5,101	6,835
Total current liabilities	19,105	21,709
Long-term debt	38,000	43,000
Other non-current liabilities	162	456
Total liabilities	57,267	65,165
Stockholders' equity:
Common stock	96	97
Additional paid-in capital	9,345	11,112
Retained earnings	145,794	138,347
Accumulated other comprehensive income	(251)	79
Treasury stock	(38)	(22)
Total stockholders' equity	154,946	149,613
Total liabilities and stockholders' equity	$ 212,213	$ 214,778

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ACCOUNTS RECEIVABLE

6 Months Ended

Mar. 31, 2015

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE

2. ACCOUNTS RECEIVABLE

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

	March 31, 2015			September 30, 2014
Accounts receivable	$	17,897		$	16,352
Less allowances		(1,068	)		(1,234	)
	$	16,829		$	15,118

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INVENTORIES (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Sep. 30, 2014
INVENTORIES
Raw materials	$ 21,166	$ 20,559
Work-in-process	7,907	6,909
Finished goods	27,733	30,446
Inventories	$ 56,806	$ 57,914

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GOODWILL AND INTANGIBLE ASSETS (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2015	Sep. 30, 2014
Intangible assets subject to amortization:
Gross Carrying Amount	22,777	$ 22,707
Accumulated Amortization	(11,102)	(9,642)
Net Carrying Amount	11,675	13,065
Total intangible assets
Gross Carrying Amount	31,566	31,607
Net Carrying Amount	20,464	21,965
Estimated future amortization expense related to intangible assets
2015	1,391
2016	2,174
2017	1,800
2018	1,610
2019	1,182
Thereafter	3,518
Net Carrying Amount	11,675	13,065
Trademarks/tradenames/licenses
Intangible assets not subject to amortization:
Carrying Amount	8,789	8,900
Trademarks/tradenames/patents
Intangible assets subject to amortization:
Gross Carrying Amount	5,448	5,418
Accumulated Amortization	(1,721)	(1,480)
Net Carrying Amount	3,727	3,938
Estimated future amortization expense related to intangible assets
Net Carrying Amount	3,727	3,938
Trademarks/tradenames/patents | Weighted average
Intangible assets subject to amortization:
Weighted-Average Amortization Period	11 years
Customer relationships/distribution rights/ non-compete agreements
Intangible assets subject to amortization:
Gross Carrying Amount	16,557	16,517
Accumulated Amortization	(8,609)	(7,390)
Net Carrying Amount	7,948	9,127
Estimated future amortization expense related to intangible assets
Net Carrying Amount	7,948	9,127
Customer relationships/distribution rights/ non-compete agreements | Weighted average
Intangible assets subject to amortization:
Weighted-Average Amortization Period	7 years
Developed software and technology
Intangible assets subject to amortization:
Gross Carrying Amount	772	772
Accumulated Amortization	(772)	$ (772)
Developed software and technology | Weighted average
Intangible assets subject to amortization:
Weighted-Average Amortization Period	5 years

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INVENTORIES

6 Months Ended

Mar. 31, 2015

INVENTORIES

INVENTORIES

3. INVENTORIES

        Inventories were comprised of the following:

	March 31, 2015		September 30, 2014
Raw materials	$	21,166	$	20,559
Work-in-process		7,907		6,909
Finished goods		27,733		30,446
	$	56,806	$	57,914

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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, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Net sales	$ 55,404	$ 54,859	$ 108,448	$ 106,409
Cost of sales	28,149	27,699	55,338	53,187
Gross profit	27,255	27,160	53,110	53,222
Operating expenses
Selling, general and administrative	19,789	19,282	39,343	37,863
Amortization of intangible assets	728	652	1,460	1,236
Income from operations	6,738	7,226	12,307	14,123
Interest and other expense, net	273	350	570	668
Income before provision for income taxes	6,465	6,876	11,737	13,455
Provision for income taxes	2,369	2,552	4,290	4,996
Net income	4,096	4,324	7,447	8,459
Other comprehensive income (loss)
Foreign currency translation adjustment, net of tax	(109)	36	(330)	48
Comprehensive income	$ 3,987	$ 4,360	$ 7,117	$ 8,507
Net income per common share
Basic (in dollars per share)	$ 0.43	$ 0.44	$ 0.77	$ 0.86
Diluted (in dollars per share)	$ 0.43	$ 0.44	$ 0.77	$ 0.86
Weighted average common shares outstanding
Basic (in shares)	9,622,051	9,843,590	9,637,753	9,840,578
Dilutive effect of stock options (in shares)	4,874	9,021	5,884	9,524
Diluted (in shares)	9,626,925	9,852,611	9,643,637	9,850,102

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GOODWILL AND INTANGIBLE ASSETS (Tables)

6 Months Ended

Mar. 31, 2015

GOODWILL AND INTANGIBLE ASSETS

Schedule of carrying amounts of intangible assets

	March 31, 2015							September 30, 2014
	Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount		Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount		Weighted- Average Amortization Period (Years)
Intangible assets subject to amortization:
Trademarks/tradenames/patents	$	5,448	$	(1,721	)	$	3,727	$	5,418	$	(1,480	)	$	3,938		11
Customer relationships/distribution rights/ non-compete agreements		16,557		(8,609	)		7,948		16,517		(7,390	)		9,127		7
Developed software and technology		772		(772	)		—		772		(772	)		—		5
		22,777		(11,102	)		11,675		22,707		(9,642	)		13,065
Intangible assets not subject to amortization:
Trademarks/tradenames/licenses		8,789		—			8,789		8,900		—			8,900
	$	31,566	$	(11,102	)	$	20,464	$	31,607	$	(9,642	)	$	21,965

(1) Amounts include the impact of foreign currency translation adjustments.

Schedule of estimated amortization expense related to intangible assets subject to amortization

Year Ending September 30,	Estimated Amortization Expense
2015(1)	$	1,391
2016		2,174
2017		1,800
2018		1,610
2019		1,182
Thereafter		3,518
	$	11,675

(1) Estimated amortization expense for the year ending September 30, 2015 includes only amortization to be recorded after March 31, 2015.

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Document and Entity Information	6 Months Ended
	Mar. 31, 2015	Apr. 27, 2015
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, 2015
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		9,561,236
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2

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DEBT (Tables)

6 Months Ended

Mar. 31, 2015

DEBT

Schedule of debt

	March 31, 2015		September 30, 2014
Long-term debt—revolving credit facility	$	38,000	$	43,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net income	$ 7,447	$ 8,459
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,507	5,415
Amortization of deferred financing fees	67	92
Losses on disposals of property, plant and equipment	7	2
Tax benefit from stock option exercises	(1)	(51)
Deferred income taxes, net	(77)	478
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net	(1,706)	(751)
Inventories	1,137	(3,167)
Prepaid expenses and other current assets	517	356
Other non-current assets	81	(102)
Accounts payable	(1,136)	574
Accrued expenses	(1,685)	(494)
Other non-current liabilities	10	(10)
Net cash provided by operating activities	11,168	10,801
Cash flows from investing activities:
Acquisitions of businesses	(81)	(9,139)
Purchases of property, plant and equipment	(4,217)	(6,437)
Net cash used in investing activities	(4,298)	(15,576)
Cash flows from financing activities:
Proceeds from debt	2,000	12,000
Payments on debt	(7,000)	(8,000)
Payments of deferred financing fees	(420)
Proceeds from issuances of common stock	64	179
Purchases of common stock for treasury	(2,352)	(1,430)
Tax benefit from stock option exercises	1	51
Net cash provided by (used in) financing activities	(7,707)	2,800
Effect of exchange rate changes on cash	(179)	24
Net increase (decrease) in cash	(1,016)	(1,951)
Cash at beginning of year	6,232	8,235
Cash at end of year	$ 5,216	$ 6,284

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STOCK OPTIONS AND OTHER EQUITY AWARDS

3 Months Ended

Mar. 31, 2015

STOCK OPTIONS AND OTHER EQUITY AWARDS

STOCK OPTIONS AND OTHER EQUITY AWARDS

8. STOCK OPTIONS AND OTHER EQUITY AWARDS

        The following table summarizes stock option activity during the six months ended March 31, 2015:

	Number of Options			Weighted- Average Exercise Price
Options outstanding and exercisable at September 30, 2014		32,500		$	14.22
Exercised		(600	)		14.22
Options outstanding and exercisable at March 31, 2015		31,900			14.22

        All stock options outstanding at March 31, 2015 expire on September 30, 2015.

        No options to purchase shares of common stock for the three and six months ended March 31, 2015 and 2014 were excluded from the computation of diluted earnings per share because none of the stock options were anti-dilutive.

        During the six months ended March 31, 2015, the Company received proceeds of $9 related to the exercise of stock options. During this same period, the Company recorded a tax benefit of $1 and optionees realized an aggregate pre-tax gain of $3 from these stock option exercises. During the six months ended March 31, 2014, the Company received proceeds of $115 related to the exercise of stock options. During this same period, the Company recorded a tax benefit of $51 and optionees realized an aggregate pre-tax gain of $133 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 stock awards. In conjunction with the Company's fiscal 2014 and fiscal 2013 incentive compensation (bonus) payments, 24,827 and 31,788 shares of the Company's common stock were issued, respectively. These non-cash stock awards were granted on December 11, 2014 and December 11, 2013 at an aggregate fair value of $504 and $775, respectively, with fair value being determined by the closing price of the Company's common stock on the grant date. These stock awards were registered, unrestricted and fully vested on the grant date. As of March 31, 2015, 743,385 shares of the Company's common stock were available for issuance under the 2013 Plan.

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SHARE PURCHASES

6 Months Ended

Mar. 31, 2015

SHARE PURCHASES

SHARE PURCHASES

7. SHARE PURCHASES

        During the three and six months ended March 31, 2015, the Company purchased 68,463 and 117,025 shares of common stock for an aggregate price of $1,278 and $2,352, respectively. During the three and six months ended March 31, 2014, the Company purchased 35,415 and 57,120 shares of common stock for an aggregate price of $909 and $1,430, respectively. All of these shares of common stock held in treasury were retired prior to March 31 in the respective quarter of purchase, except at March 31, 2015 and 2014, the Company held 2,000 and 1,681 shares of common stock in treasury, respectively. As of March 31, 2015, the Company was permitted to purchase up to 614,999 additional shares under its approved purchase plan, with no expiration date or restrictions. The Company accounts for treasury shares using the cost method.

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ACQUISITIONS (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended		0 Months Ended
	Mar. 31, 2015 item	Mar. 31, 2014 item	Nov. 18, 2014	Jan. 15, 2014	Sep. 30, 2014
ACQUISITIONS.
Number of business acquisitions	1	4
Aggregate assets acquired:
Goodwill	$ 23,622				$ 23,622
Minimum
Aggregate assets acquired:
Amortization period	2 years
Maximum
Aggregate assets acquired:
Amortization period	12 years
Acquisitions
ACQUISITIONS
Aggregate purchase price in cash			81	9,139
Aggregate assets acquired:
Current assets	41	1,857
Goodwill		4,399
Intangible assets	40	2,883
Aggregate purchase price	81	9,139
Acquired intangible assets expected to be deductible for tax purposes	40	2,883
Goodwill expected to be deductible for tax purposes	$ 4,399
Expected period for deduction of acquired intangible assets for tax purposes	15 years
Expected period for deduction of acquired goodwill for tax purposes	15 years

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STOCK OPTIONS AND OTHER EQUITY AWARDS (Tables)

3 Months Ended

Mar. 31, 2015

STOCK OPTIONS AND OTHER EQUITY AWARDS

Schedule of stock option activity

	Number of Options			Weighted- Average Exercise Price
Options outstanding and exercisable at September 30, 2014		32,500		$	14.22
Exercised		(600	)		14.22
Options outstanding and exercisable at March 31, 2015		31,900			14.22

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INVENTORIES (Tables)

6 Months Ended

Mar. 31, 2015

INVENTORIES

Schedule of inventories

	March 31, 2015		September 30, 2014
Raw materials	$	21,166	$	20,559
Work-in-process		7,907		6,909
Finished goods		27,733		30,446
	$	56,806	$	57,914

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SEGMENTS

6 Months Ended

Mar. 31, 2015

SEGMENTS

SEGMENTS

9. SEGMENTS

        Segment identification and selection is consistent with the management structure used by the Company's chief operating decision maker 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's chief operating decision maker does not review operating results on a disaggregated basis; rather, the chief operating decision maker 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, 2015 and 2014 were as follows:

	Three months ended March 31,				Six months ended March 31,
	2015		2014		2015		2014
United States	$	48,807	$	46,962	$	95,532	$	92,285
Foreign countries		6,597		7,897		12,916		14,124
	$	55,404	$	54,859	$	108,448	$	106,409

        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, 2015 and 2014 were as follows:

	Three months ended March 31,				Six months ended March 31,
	2015		2014		2015		2014
Branded nutritional supplements and other natural products	$	49,883	$	49,503	$	97,760	$	96,475
Other(1)		5,521		5,356		10,688		9,934
	$	55,404	$	54,859	$	108,448	$	106,409

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

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ACCOUNTS RECEIVABLE (Tables)

6 Months Ended

Mar. 31, 2015

ACCOUNTS RECEIVABLE

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

	March 31, 2015			September 30, 2014
Accounts receivable	$	17,897		$	16,352
Less allowances		(1,068	)		(1,234	)
	$	16,829		$	15,118

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ACQUISITIONS (Tables)

6 Months Ended

Mar. 31, 2015

ACQUISITIONS.

Schedule of final allocation of the aggregate purchase price for the acquisitions to the aggregate assets acquired

	Fiscal 2015 Acquisition		Fiscal 2014 Acquisitions
Aggregate assets acquired:
Current assets	$	41	$	1,857
Goodwill		—		4,399
Intangible assets		40		2,883
	$	81	$	9,139

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ACCOUNTS RECEIVABLE (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Sep. 30, 2014
ACCOUNTS RECEIVABLE
Accounts receivable	$ 17,897	$ 16,352
Less allowances	(1,068)	(1,234)
Accounts receivable, net	$ 16,829	$ 15,118

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SHARE PURCHASES (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Share purchases
Number of shares of common stock held in treasury	2,000	1,681	2,000	1,681
Additional number of shares authorized to be repurchased	614,999		614,999
Common Stock
Share purchases
Shares of common stock purchased	68,463	35,415	117,025	57,120
Aggregate price at which shares of common stock purchased (in dollars)	$ 1,278	$ 909	$ 2,352	$ 1,430

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BASIS OF PRESENTATION

6 Months Ended

Mar. 31, 2015

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®, NaturalCare®, Health from the Sun®, Pioneer®, Nutra BioGenesis™, Life-flo®, Organix South®, Heritage Store® 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 various trade names, including Fresh Vitamins™, Granola's™ and Peachtree Natural Foods®.

        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, 2015, the results of its operations for the three and six months ended March 31, 2015 and 2014 and its cash flows for the six months ended March 31, 2015 and 2014, in conformity with accounting principles generally accepted in the United States of America ("US GAAP") for interim financial information applied on a consistent basis. Results for the three and six months ended March 31, 2015 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 US GAAP 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, 2014, which was filed with the Securities and Exchange Commission on November 20, 2014.

Use of Estimates

        The preparation of these financial statements in conformity with US GAAP 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 May 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance, which is included in Accounting Standards Codification ("ASC") 606, "Revenue from Contracts with Customers." This guidance provides a single, comprehensive revenue recognition model for all contracts with customers and requires that a company recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This guidance is effective for the Company as of October 1, 2017. The Company is currently evaluating the impact this standard may have on its consolidated financial statements.

        In April 2015, the FASB issued authoritative guidance, which is included in ASC 835, "Simplifying the Presentation of Debt Issuance Costs." This guidance requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt. This guidance is effective for the Company as of October 1, 2016. The Company is currently evaluating the impact this standard may have on its consolidated financial statements.

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

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DEBT

6 Months Ended

Mar. 31, 2015

DEBT

DEBT

6. DEBT

        Debt was comprised of the following:

	March 31, 2015		September 30, 2014
Long-term debt—revolving credit facility	$	38,000	$	43,000

        The carrying value of the Company's debt approximates fair value at March 31, 2015 and September 30, 2014. 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 November 4, 2014, the Company amended its revolving credit facility (the "Credit Agreement"). The Credit Agreement extends the term of the credit facility to November 2019, increases the available credit borrowings to $100,000 with no automatic reductions and provides an accordion feature that can increase the available credit borrowings to $130,000, subject to approval by the lenders and compliance with certain covenants and conditions. The lenders under the Credit Agreement continue to be Rabobank International and Wells Fargo. To date, the Company has not experienced any difficulties in accessing the available funds under the Credit Agreement. Deferred financing fees of $420 related to the Credit Agreement are being amortized over the term of the Credit Agreement.

        At March 31, 2015, the Company had outstanding revolving credit borrowings of $38,000 under the Credit Agreement. Borrowings under the 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 plus a variable margin. Base Rate is the higher of: (i) the Prime Lending Rate, (ii) the Federal Funds Rate plus 0.5% or (iii) the one-month Eurodollar Rate multiplied by the Statutory Reserve Rate plus 1.0% (capitalized terms are defined in the Credit Agreement, a copy of which was filed with the Securities and Exchange Commission on November 5, 2014). At March 31, 2015, the applicable weighted-average interest rate for outstanding borrowings was 1.77%. The Company is also required to pay a variable quarterly fee on the unused balance under the Credit Agreement. At March 31, 2015, the applicable rate was 0.25%. 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 Credit Agreement matures on November 4, 2019, and the Company is required to repay all principal and interest outstanding under the Credit Agreement on such date.

        The Credit Agreement contains restrictive covenants, including limitations on incurring other indebtedness and requirements that the Company maintain certain financial ratios. As of March 31, 2015, 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 Credit Agreement.

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STOCK OPTIONS AND OTHER EQUITY AWARDS (Details) (USD $)	6 Months Ended
	Mar. 31, 2015
Number of Options
Options outstanding and exercisable at the beginning of the period (in shares)	32,500
Exercised (in shares)	(600)
Options outstanding and exercisable at the end of the period (in shares)	31,900
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Options outstanding and exercisable at the beginning of the period (in dollars per share)	$ 14.22
Exercised (in dollars per share)	$ 14.22
Options outstanding and exercisable at the ending of the period (in dollars per share)	$ 14.22

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SEGMENTS (Tables)

6 Months Ended

Mar. 31, 2015

SEGMENTS

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

	Three months ended March 31,				Six months ended March 31,
	2015		2014		2015		2014
United States	$	48,807	$	46,962	$	95,532	$	92,285
Foreign countries		6,597		7,897		12,916		14,124
	$	55,404	$	54,859	$	108,448	$	106,409

Schedule of net sales by product group

	Three months ended March 31,				Six months ended March 31,
	2015		2014		2015		2014
Branded nutritional supplements and other natural products	$	49,883	$	49,503	$	97,760	$	96,475
Other(1)		5,521		5,356		10,688		9,934
	$	55,404	$	54,859	$	108,448	$	106,409

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