-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OuLwHES3I7dsURuobujb+l0Da+F0eJCPVbPgFoCz1HExWpWcOw/nCIVoVsHu0h5X x3b51Em5eJHdsBRhvsE+Hw== 0000910647-03-000170.txt : 20030425 0000910647-03-000170.hdr.sgml : 20030425 20030425105117 ACCESSION NUMBER: 0000910647-03-000170 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030423 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030425 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NBTY INC CENTRAL INDEX KEY: 0000070793 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 112228617 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-10666 FILM NUMBER: 03663736 BUSINESS ADDRESS: STREET 1: 90 ORVILLE DR CITY: BOHEMIA STATE: NY ZIP: 11716 BUSINESS PHONE: 5165679500 MAIL ADDRESS: STREET 1: 90 ORVILLE DRIVE CITY: BOHEMIA STATE: NY ZIP: 11716 FORMER COMPANY: FORMER CONFORMED NAME: NATURES BOUNTY INC DATE OF NAME CHANGE: 19920703 8-K 1 nbty-8k1.txt BODY OF FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 23, 2003 NBTY, INC. (Exact name of registrant as specified in charter) 0-10666 (Commission file number) DELAWARE 11-2228617 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 90 Orville Drive 11716 Bohemia, New York (Zip Code) (Address of principal executive offices) (631) 567-9500 (Registrant's telephone number, including area code) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits. 99.1 Press release issued by NBTY, Inc. dated April 23, 2003 ITEM 9. REGULATION FD DISCLOSURE This information, furnished under this "Item 9. Regulation FD Disclosure," is also being furnished under "Item 12. Disclosure of Results of Operations and Financial Condition" in accordance with SEC Release Nos. 33-8216 and 34-47583. This Form 8-K and the attached Exhibit are furnished to comply with Item 9 and Item 12 of Form 8-K. Neither this Form 8-K nor the attached Exhibit are to be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall either of them be deemed incorporated by reference in any filing under the Securities Act of 1933 (except as shall be expressly set forth by specific reference in such filing). On April 23, 2003, NBTY, Inc. issued a press release announcing its fiscal second quarter earnings results. A copy of the press release, including financial statements, is attached as Exhibit 99.1. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: April 24, 2003 NBTY, INC. By: /s/ Harvey Kamil -------------------------------- Harvey Kamil President and Chief Financial Officer EX-99 3 nbt8k199.txt PRESS RELEASE Exhibit 99.1 FOR IMMEDIATE RELEASE - --------------------- Contact: Harvey Kamil Carl Hymans NBTY, Inc. G.S. Schwartz & Co. President and CFO 212-725-4500 631-244-2020 carlh@schwartz.com NBTY REPORTS SECOND QUARTER RESULTS BOHEMIA, N.Y. - April 23, 2003 - NBTY, Inc. (Nasdaq: NBTY) (www.NBTY.com), a leading manufacturer and marketer of nutritional supplements, today announced results for the fiscal second quarter and six months ended March 31, 2003. For the fiscal second quarter ended March 31, 2003, net sales increased 10% to $278 million compared to net sales of $252 million for the fiscal second quarter last year. Excluding one-time events, earnings per diluted share for the fiscal second quarter of 2003 and 2002 were $0.34 and $0.33, respectively. Net income for the fiscal second quarter was $20 million, or $0.29 per diluted share, compared to net income of $26 million or $0.38 per diluted share for the fiscal second quarter last year. Results for the fiscal second quarter of 2003 were affected by a previously announced one- time charge of $6 million reflecting NBTY's March 15, 2003 voluntary discontinuance of sales of products containing ephedra. Without this one- time discontinued product charge, net income and earnings per diluted share for the fiscal second quarter of 2003 would have been $24 million and $0.34, respectively. Included in the pre-tax results for the fiscal second quarter of 2002 was a $5.5 million payment received by NBTY in partial settlement of on-going price fixing litigation in which the Company was a plaintiff. Without this payment, net income and earnings per diluted share for the fiscal second quarter of 2002 would have been $22 million and $0.33, respectively. For the six months ended March 31, 2003, net sales increased 11% to $519 million compared to $467 million for the same period last fiscal year. Excluding one-time events, earnings per diluted share for the first six months of 2003 and 2002 were $0.59 and $0.49, respectively. Net income for the six-month period was $36 million, or $0.53 per diluted share, compared with net income of $37 million, or $0.54 per diluted share for the comparable period last year. Without the aforementioned one-time $6 million charge, net income and earnings per diluted share for the first six months of fiscal 2003 would have been $40 million and $0.59, respectively. Pre-tax results for the first six months of fiscal 2002 included the previously mentioned $5.5 million payment received by NBTY in a partial settlement of on-going price fixing litigation in which the Company was a plaintiff. Without this payment, net income and earnings per diluted share for the first six months of fiscal 2002 would have been $33 million and $0.49, respectively. NBTY's belief that its ephedra products were safe when used as directed has been supported by scientific evidence, and the Company has not been a defendant in any lawsuit for any of its ephedra products. However, in light of adverse publicity surrounding ephedra and the current environment in the U.S., NBTY believes it was in the best interest of the Company to cease selling ephedra products which represent an insignificant portion of the Company's overall business. NBTY continues to enhance its financial strength. At March 31, 2003, total assets were $792 million and working capital was $194 million compared to total assets of $692 million and working capital of $149 million at March 31, 2002. During the fiscal second quarter ended March 31, 2003 total bank debt was reduced by $6 million to $20 million. OPERATIONS FOR THE FISCAL SECOND QUARTER ENDED MARCH 31, 2003 Sales for the Nature's Bounty wholesale division increased 18% to $85 million from $72 million for the comparable period of fiscal 2002. NBTY remains focused on increasing market share in the wholesale arena and expanding its presence in the nutritional supplement marketplace. NBTY recently added the Marc's store chain to its growing wholesale customer base. Headquartered in Cleveland, Ohio, Marc's owns and operates 54 stores located throughout Northern Ohio. Marc's stores will carry over 180 SKUs of Nature's Bounty brand products. The Nature's Bounty brand continues to be recognized for its ability to generate greater sales than competing brands. By utilizing consumer sales information received from its Vitamin World and direct-response/e-commerce operations, the Company has been able to provide its mass-market customers with tools to drive sales. The Company continues to respond to consumer preferences and to monitor the market for trends and ideas, and these efforts have translated into increased sales. The Company will be introducing a new line of low carbohydrate nutritional products. CarbWise(TM) will be sold through food, drug and mass-market channels. Shipments are anticipated in July 2003. Vitamin World second quarter sales were $54 million compared to $51 million a year ago, an increase of 5%. Same store sales increased 4% for the quarter. Vitamin World operations were profitable with pre-tax income of $1 million compared to a loss of $2.3 million for the comparable quarter last year. Vitamin World currently has 541 stores in operation nationwide. Holland & Barrett sales increased 20% to $87 million from $73 million for the comparable prior period. Holland & Barrett continues to be a leader in the United Kingdom with same store sales increasing 14% for the fiscal second quarter. Holland & Barrett's retail business has been strategically enhanced with the recent acquisitions of Health & Diet Group Ltd., with a total of 56 GNC stores, and the FSC wholesale business purchased from Royal Numico. In addition, the planned acquisition of the De Tuinen chain of health food stores, which operates 63 stores in the Netherlands, is expected to be completed by the end of May 2003. Holland & Barrett currently operates 525 stores in the UK, Ireland and Germany. Revenues from Puritan's Pride direct response/e-commerce operations for the fiscal second quarter decreased 7% to $52 million from $56 million for the comparable prior period. The timing of promotional catalog mailings was not comparable to the second quarter a year ago. The three-for-one sales catalog which ran from January through March last year will be running from March through May this year and is expected to generate a comparable increase in sales for the third quarter. Puritan Pride's advertising expenses for the fiscal second quarter of 2003 increased by $3 million. These investments in additional advertising, sales promotions and efforts to generate faster product delivery to customers are part of NBTY's strategic efforts to increase long-term growth. The operations have already witnessed the success of these initiatives as advertising for new customers in the fiscal second quarter generated over 500,000 responses. NBTY Chairman and CEO, Scott Rudolph, said: "We are very pleased with the addition of Marc's stores to our wholesale operation's growing customer base. The addition of Marc's stores, combined with our purchase of the FSC wholesale business from Royal Numico, bolsters the expansion of our wholesale operation. We have also significantly enhanced our United Kingdom retail business with the recent acquisition of GNC UK." "Acquisitions and the expansion of our wholesale customer base are part of our strategic plan to enhance wholesale operations and further our position as the dominant force in the worldwide nutritional supplement market. We are confident in our ability to further capitalize on market opportunities, complement our operations through strategic acquisitions and enhance our financial strength," concluded Mr. Rudolph. ABOUT NBTY NBTY is a leading vertically integrated U.S. manufacturer and distributor of a broad line of high-quality, value-priced nutritional supplements in the United States and throughout the world. The Company markets more than 1,100 products under several brands, including Nature's Bounty(R), Vitamin World(R), Puritan's Pride(R), Holland & Barrett(R), Nutrition Headquarters(R), American Health(R), Nutrition Warehouse(R) and Dynamic Essentials(R). This release contains certain 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. All of these forward-looking statements, which can be identified by the use of terminology such as "subject to," "believe," "expects," "may," "will," "should," "can," or "anticipates," or the negative thereof, or variations thereon, or comparable terminology, or by discussions of strategy which, although believed to be reasonable, are inherently uncertain. Factors which may materially affect such forward-looking statements include: (i) slow or negative growth in the nutritional supplement industry; (ii) interruption of business or negative impact on sales and earnings due to acts of war, terrorism, bio-terrorism, civil unrest or disruption of mail service; (iii) adverse publicity regarding the consumption of nutritional supplements; (iv) inability to retain customers of companies (or mailing lists) recently acquired; (v) increased competition; (vi) increased costs; (vii) loss or retirement of key members of management; (viii) increases in the cost of borrowings and unavailability of additional debt or equity capital; (ix) unavailability of, or inability to consummate, advantageous acquisitions in the future, including those that may be subject to bankruptcy approval or the inability of the Company (as defined below) to integrate acquisitions into the mainstream of its business; (x) changes in general worldwide economic and political conditions in the markets in which the Company may compete from time to time; (xi) the inability of the Company to gain and/or hold market share of its wholesale and retail customers; (xii) loss or reduction in ephedra sales; (xiii) unavailability of electricity in certain geographical areas; (xiv) exposure to and expense of defending and resolving, product liability claims and other litigation; (xv) the ability of the Company to successfully implement its business strategy; (xvi) the inability of the Company to manage its retail, wholesale, manufacturing and other operations efficiently; (xvii) consumer acceptance of the Company's products; (xviii) the inability of the Company to renew leases on its retail locations; (xix) inability of the Company's retail stores to attain or maintain profitability; (xx) the absence of clinical trials for many of the Company's products; (xxi) sales and earnings volatility and/or trends; (xxii) the effect on Company sales of the rapidly changing nature of the Internet and on-line commerce; (xxiii) fluctuations in foreign currencies, and more particularly the British Pound; (xxiv) import-export controls on sales to foreign countries; (xxv) the inability of the Company to secure favorable new sites for, and delays in opening, new retail locations; (xxvi) introduction of new federal, state, local or foreign legislation or regulation or adverse determinations by regulators, and more particularly the Food Supplements Directive and the Traditional Herbal Medicinal Products Directive in Europe; (xxvii) the mix of the Company's products and the profit margins thereon; (xxviii) the availability and pricing of raw materials; (xxix) risk factors discussed in the Company's filings with the U.S. Securities and Exchange Commission (the "SEC"); and (xxx) other factors beyond the Company's control. Readers are cautioned not to place undue reliance on forward-looking statements. The Company cannot guarantee future results, trends, events, levels of activity, performance or achievements. The Company does not undertake and specifically declines any obligation to update, republish or revise forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrences of unanticipated events. NBTY, INC. and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars and shares in thousands, except per share amounts)
For the three months ended March 31, 2003 2002 ---- ---- Net sales $277,824 $251,544 Cost and expenses: Cost of sales 124,679 112,989 Discontinued product charge 6,000 Catalog printing, postage and promotion 16,782 12,731 Selling, general and administrative 99,170 86,636 Recovery of raw material costs (5,467) -------- -------- 246,631 206,889 -------- -------- Income from operations 31,193 44,655 Other income (expense): Interest (3,774) (4,226) Miscellaneous, net 2,274 1,152 -------- -------- (1,500) (3,074) -------- -------- Income before income taxes 29,693 41,581 Provision for income taxes 10,082 16,010 -------- -------- Net income $ 19,611 $ 25,571 ======== ======== Net income per share: Basic $ 0.30 $ 0.39 ======== ======== Diluted $ 0.29 $ 0.38 ======== ======== Weighted average common shares outstanding: Basic 66,261 65,883 ======== ======== Diluted 68,323 67,755 ======== ========
NBTY, INC. and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars and shares in thousands, except per share amounts)
For the six months ended March 31, 2003 2002 ---- ---- Net sales $519,228 $466,634 Cost and expenses: Cost of sales 231,359 213,899 Discontinued product charge 6,000 Catalog printing, postage and promotion 30,637 21,741 Selling, general and administrative 192,546 168,549 Recovery of raw material costs (5,467) -------- -------- 460,542 398,722 -------- -------- Income from operations 58,686 67,912 -------- -------- Other income (expense): Interest (7,820) (10,234) Miscellaneous, net 3,513 2,055 -------- -------- (4,307) (8,179) -------- -------- Income before income taxes 54,379 59,733 Provision for income taxes 18,145 22,998 -------- -------- Net income $ 36,234 $ 36,735 ======== ======== Net income per share: Basic $ 0.55 $ 0.56 ======== ======== Diluted $ 0.53 $ 0.54 ======== ======== Weighted average common shares outstanding: Basic 66,216 65,814 ======== ======== Diluted 68,205 67,536 ======== ========
SALES (Thousands) (Unaudited) THREE MONTHS ENDED SIX MONTHS ENDED MARCH 31, MARCH 31, % Increase % Increase 2003 2002 (% Decrease) 2003 2002 (% Decrease) ---- ---- ------------ ---- ---- ------------ Wholesale $ 84,850 $ 71,889 18% $158,967 $137,525 16% US Retail / Vitamin World 53,556 50,850 5% 103,819 95,061 9% UK Retail / Holland & Barrett / GNC 87,089 72,714 20% 169,702 145,318 17% Direct Response / Puritan's Pride 52,329 56,091 -7% 86,740 88,730 -2% -------------------------------- -------------------------------- Total $277,824 $251,544 10% $519,228 $466,634 11% ================================ ================================ GROSS PROFIT PERCENTAGES (Unaudited) THREE MONTHS ENDED SIX MONTHS ENDED MARCH 31, MARCH 31, % Increase % Increase 2003 2002 (% Decrease) 2003 2002 (% Decrease) ---- ---- ------------ ---- ---- ------------ Wholesale 41% 40% 1% 42% 37% 5% US Retail / Vitamin World 59% 57% 2% 59% 58% 1% UK Retail / Holland & Barrett / GNC 63% 64% -1% 63% 63% 0% Direct Response / Puritan's Pride 61% 61% 0% 62% 63% -1% ------------------------------ ------------------------------ Total (without discontinued product charge) 55% 55% 0% 55% 54% 1% Discontinued product charge -2% -1% ------------------------------ ------------------------------ Total 53% 55% -2% 54% 54% 0% ============================== ==============================
INCOME FROM OPERATIONS BY SEGMENT (Thousands) (Unaudited) THREE MONTHS ENDED SIX MONTHS ENDED MARCH 31, MARCH 31, 2003 2002 2003 2002 ---- ---- ---- ---- Wholesale $ 17,950 $ 14,063 $ 32,154 $ 23,652 US Retail / Vitamin World 1,093 (2,290) (562) (4,940) UK Retail / Holland & Barrett / GNC 23,069 20,444 45,360 40,508 Direct Response / Puritan's Pride 13,958 22,404 24,973 34,229 --------------------- --------------------- Segment Results 56,070 54,621 101,925 93,449 Corporate Expenses (18,877) (15,433) (37,239) (31,004) Discontinued Product Charge (6,000) (6,000) Recovery of Raw Material Costs 5,467 5,467 --------------------- --------------------- Income from Operations $ 31,193 $ 44,655 $ 58,686 $ 67,912 ===================== =====================
NBTY, INC. and SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) ASSETS (Dollars and shares in thousands)
March 31, September 30, 2003 2002 --------- ------------- Current assets: Cash and cash equivalents $ 33,774 $ 26,229 Investments in bonds 8,012 8,194 Accounts receivable, less allowance for doubtful accounts of $4,292 at March 31, 2003 and $4,194 at September 30, 2002 46,649 41,362 Inventories 220,894 204,402 Deferred income taxes 11,206 11,206 Prepaid expenses and other current assets 35,285 24,691 -------- -------- Total current assets 355,820 316,084 Property, plant and equipment 411,215 392,033 less accumulated depreciation and amortization 191,805 175,788 -------- -------- 219,410 216,245 Goodwill 163,911 144,999 Intangible assets, net 46,000 48,413 Other assets 6,634 8,936 -------- -------- Total assets $791,775 $734,677 ======== ========
NBTY, INC. and SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) LIABILITIES AND STOCKHOLDERS' EQUITY (Dollars and shares in thousands)
March 31, September 30, 2003 2002 --------- ------------- Current liabilities: Current portion of long-term debt and capital lease obligations $ 20,665 $ 23,044 Accounts payable 72,856 48,616 Accrued expenses and other current liabilities 68,498 58,714 -------- -------- Total current liabilities 162,019 130,374 Long-term debt 154,700 163,874 Deferred income taxes 16,612 16,928 Other liabilities 3,006 4,244 -------- -------- Total liabilities 336,337 315,420 -------- -------- Commitments and contingencies Stockholders' equity: Common stock, $0.008 par; authorized 175,000 shares; issued and outstanding 66,263 shares at March 31, 2003 and 66,133 shares at September 30, 2002 530 529 Capital in excess of par 128,282 126,283 Retained earnings 324,102 287,868 -------- -------- 452,914 414,680 Accumulated other comprehensive income 2,524 4,577 -------- -------- Total stockholders' equity 455,438 419,257 -------- -------- Total liabilities and stockholders' equity $791,775 $734,677 ======== ========
NBTY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands) For the six months ended March 31, 2003 2002 ---- ---- Cash flows from operating activities: Net income $ 36,234 $ 36,735 Adjustments to reconcile net income to net cash provided by operating activities: Gain on disposal/sale of property, plant and equipment (962) (69) Depreciation and amortization 21,752 21,554 Foreign currency exchange rate gain (906) (62) Amortization of deferred financing costs 394 388 Amortization of bond discount 62 62 Allowance for doubtful accounts (98) 1,002 Compensation expense for ESOP 855 Tax benefit from exercise of stock options 113 791 Changes in assets and liabilities, net of acquisitions: Accounts receivable (4,240) (7,435) Inventories (6,877) 22,856 Prepaid expenses and other current assets (7,251) (342) Other assets 59 1,120 Accounts payable 7,426 (13,411) Accrued expenses and other current liabilities 1,359 3,921 Other liabilities (1,239) 15 --------------------- Net cash provided by operating activities 46,681 67,125 --------------------- Cash flows from investing activities: Cash paid for acquisitions, net of cash acquired (14,786) (7,256) Release of cash held in escrow 2,403 4,600 Purchase of property, plant and equipment (17,686) (10,516) Proceeds from sale of property, plant and equipment 1,293 991 --------------------- Net cash used in investing activities (28,776) (12,181) --------------------- Cash flows from financing activities: Principal payments under long-term debt agreements and capital leases (11,616) (38,027) Proceeds from stock options exercised 176 557 --------------------- Net cash used in financing activities (11,440) (37,470) --------------------- Effect of exchange rate changes on cash and cash equivalents 1,080 (1,246) --------------------- Net increase in cash and cash equivalents 7,545 16,228 Cash and cash equivalents at beginning of period 26,229 34,434 --------------------- Cash and cash equivalents at end of period $ 33,774 $ 50,662 ===================== Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 8,218 $ 9,946 Cash paid during the period for income taxes $ 15,480 $ 17,065
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