-----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, VmbEBb8k5wQRvAE6wXjTPi7iMPq39cu9yLWNU2g13yArbVx2lHd1euilcBX8tAQB Z12jqr77lf5EW+Zw0kTEJw== 0000910647-97-000171.txt : 19970806 0000910647-97-000171.hdr.sgml : 19970806 ACCESSION NUMBER: 0000910647-97-000171 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970805 SROS: NASD 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10666 FILM NUMBER: 97651426 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 10-Q 1 BODY OF 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the period ended June 30, 1997 Commission File Number: 0-10666 ------------- NBTY, Inc. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 11-2228617 - ------------------------------------- --------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 90 Orville Drive, Bohemia, NY 11716 - ---------------------------------------- ------------------------------------ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (516) 567-9500 ---------------- 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 and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registration was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Shares of Common Stock as of June 30, 1997: 18,628,491 ------------ NBTY, INC. and SUBSIDIARIES INDEX PART I Financial Information Condensed Consolidated Balance Sheets - June 30, 1997 and September 30, 1996 1 - 2 Condensed Consolidated Statements of Operations - Three Months Ended June 30, 1997 and 1996 3 Condensed Consolidated Statements of Operations - Nine months Ended June 30, 1997 and 1996 4 Condensed Consolidated Statements of Cash Flows - Nine months Ended June 30, 1997 and 1996 5 - 6 Notes to Condensed Consolidated Financial Statements 7 - 9 Management's Discussion and Analysis of Financial Condition and Results of Operations 10 - 13 PART II Other Information 14 Signature 15 NBTY, INC. and SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS
June 30, September 30, 1997 1996 ------------- ------------- (Unaudited) Current assets: Cash and cash equivalents $ 2,915,318 $ 9,292,374 Short-term investments 15,540,808 11,024,624 Accounts receivable, less allowance for doubtful accounts of $996,491 in 1997 and $793,669 in 1996 13,012,095 11,625,112 Inventories 58,682,289 38,070,071 Deferred income taxes 3,155,163 3,155,163 Prepaid catalog costs and other current assets 7,648,111 5,682,874 ------------------------------ Total current assets 100,953,784 78,850,218 Property, plant and equipment 99,846,582 89,082,883 less accumulated depreciation and amortization 31,398,648 27,351,258 ------------------------------ 68,447,934 61,731,625 Intangible assets, net 3,748,030 3,974,573 Other assets 514,845 993,785 ------------------------------ Total assets $ 173,664,593 $ 145,550,201 ==============================
See notes to condensed consolidated financial statements. 1 NBTY, INC. and SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, September 30, 1997 1996 ------------- ------------- (Unaudited) Current liabilities: Current portion of long-term debt and capital lease obligations $ 995,225 $ 934,887 Accounts payable 22,807,676 10,943,228 Accrued expenses 15,258,867 14,704,507 ------------------------------ Total current liabilities 39,061,768 26,582,622 Long-term debt 14,782,083 15,178,412 Obligations under capital leases 2,863,638 3,219,127 Deferred income taxes 2,827,198 2,827,198 Other liabilities 792,985 792,985 ------------------------------ Total liabilities 60,327,672 48,600,344 Commitments and contingencies Stockholders' equity: Common stock, $.008 par; authorized 25,000,000 shares; issued 20,116,676 shares in 1997 and 20,079,676 in 1996 and outstanding 18,628,491 shares in 1997 and 18,592,119 shares in 1996 160,934 160,638 Capital in excess of par 56,303,677 56,012,910 Retained earnings 60,061,732 44,008,465 ------------------------------ 116,526,343 100,182,013 Less 1,488,185 and 1,487,557 treasury shares at cost, in 1997 and 1996, respectively 2,663,167 2,648,256 Stock subscriptions receivable 526,255 583,900 ------------------------------ Total stockholders' equity 113,336,921 96,949,857 ------------------------------ Total liabilities and stockholders' equity $ 173,664,593 $ 145,550,201 ==============================
See notes to condensed consolidated financial statements. 2 NBTY, INC. and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the three months ended June 30, 1997 1996 ------------ ------------ Net sales $ 61,760,959 $ 47,899,663 ---------------------------- Costs and expenses: Cost of sales 29,957,848 23,446,374 Catalog printing, postage and promotion 4,639,025 3,690,819 Selling, general and administrative 18,476,018 14,165,346 ---------------------------- 53,072,891 41,302,539 ---------------------------- Income from operations 8,688,068 6,597,124 ---------------------------- Other income (charges): Interest expense (425,312) (378,980) Miscellaneous, net 285,644 284,545 ---------------------------- (139,668) (94,435) ---------------------------- Income before income taxes 8,548,400 6,502,689 Income taxes 3,419,360 2,740,042 ---------------------------- Net income $ 5,129,040 $ 3,762,647 ============================ Earnings per common share and common share equivalents $ 0.26 $ 0.19 ============================ Weighted average common shares and common share equivalents 20,057,856 19,922,954 ============================
See notes to condensed consolidated financial statements. 3 NBTY, INC. and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the nine months ended June 30, 1997 1996 ------------- ------------- Net sales $ 184,107,656 $ 142,093,552 ------------------------------ Costs and expenses: Cost of sales 88,205,269 72,101,151 Catalog printing, postage and promotion 14,580,501 13,240,001 Selling, general and administrative 53,884,692 42,782,415 ------------------------------ 156,670,462 128,123,567 ------------------------------ Income from operations 27,437,194 13,969,985 ------------------------------ Other income (charges): Interest expense (1,294,232) (1,017,497) Miscellaneous, net 612,483 640,730 ------------------------------ (681,749) (376,767) ------------------------------ Income before income taxes 26,755,445 13,593,218 Income taxes 10,702,178 5,505,398 ------------------------------ Net income $ 16,053,267 $ 8,087,820 ============================== Earnings per common share and common share equivalents $ 0.80 $ 0.41 ============================== Weighted average common shares and common share equivalents 20,052,391 19,939,042 ==============================
See notes to condensed consolidated financial statements. 4 NBTY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine month ended June 30, 1997 1996 ------------ ------------ Net income $ 16,053,267 $ 8,087,820 Adjustments to reconcile net income to cash provided by operating activities: (Gain), Loss on sale of property, plant and equipment 25,526 (2,250) Depreciation and amortization 4,582,566 4,003,164 Provision for allowance for doubtful accounts 202,822 169,481 Changes in assets and liabilities, net of acquistions: (Increase) decrease in accounts receivable (2,636,906) 797,534 (Increase) decrease in inventories (20,612,218) 229,671 Increase in prepaid catalog costs and other current assets (1,965,237) (4,499,475) Decrease other assets 453,343 2,547,275 Increase (decrease) in accounts payable 11,864,448 (5,083,382) Increase in accrued expenses 880,193 2,298,094 ---------------------------- Net cash provided by operating activities 8,847,804 8,547,932 ---------------------------- Cash flow from investing activities: Increase in intangible assets (40,047) Purchase of property, plant and equipment (11,092,412) (11,494,483) Proceeds from sale of property, plant and equipment 20,150 2,250 Purchase of short-term investments (4,516,184) Proceeds from sale of direct-mail cosmetics business 350,000 Receipt of payments from direct-mail cosmetics business 1,047,101 499,670 ---------------------------- Net cash used in investing activities (14,541,345) (10,682,610) ---------------------------- Cash flows from financing activities: Borrowings under long term debt agreements 6,000,000 Principal payments under long-term debt agreements and capital leases (691,479) (368,248) Purchase of treasury stock (14,911) (302,247) Proceeds from stock options exercised 22,875 10,980 ---------------------------- Net cash (used in) provided by financing activities (683,515) 5,340,485 ---------------------------- Net (decrease) increase in cash and cash equivalents (6,377,056) 3,205,807 Cash and cash equivalents at beginning of year 9,292,374 10,378,476 ---------------------------- Cash and cash equivalents at end of quarter $ 2,915,318 $ 13,584,283 ============================ Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $ 1,294,232 $ 1,012,622 Cash paid during the period for taxes $ 11,067,626 $ 2,178,025 ============================
See notes to consolidated condensed financial statements. 5 NBTY, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended June 30, 1997 and 1996 Supplemental non-cash investing and financing information: The Company entered into capital leases for machinery and equipment aggregating $2,635,412 for the nine months ended June 30, 1996. During the first nine months of 1997, options were exercised with 37,000 shares of common stock issued to certain officers for $22,875 and a note for $10,980. As a result of the exercise of those options, the Company received a compensation deduction for tax purposes of approximately $643,000 and a tax benefit of approximately $257,200. An additional 628 NBTY common shares were surrendered to the Company, at market price, in payment of a stock subscription receivable and interest in 1997. The average cost of shares was $22.50 in 1997. During the first nine months of fiscal 1996, options were exercised with 872,000 shares of common stock issued to certain officers for $10,980 and interest bearing notes in the amount of $583,900. As a result of the exercise of those options, the Company received a compensation deduction for tax purposes of approximately $3,150,000 and a tax benefit of approximately $1,230,000. On October 9, 1995, the Company sold certain assets of its direct- mail cosmetics business for approximately $2,495,000. The Company received $350,000 in cash and non-interest bearing notes aggregating approximately $2,145,000 for inventory, a customer list and other intangible assets. The inventory note was repaid in full in October 1996. In April 1997, the Company received $725,000 as a final payment of the customer list note. See notes to condensed consolidated financial statements. 6 NBTY, INC. and SUBSIDIARIES NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly its financial position as of June 30, 1997 and results of operations for the three and nine months ended June 30, 1997 and 1996 and statements of cash flows for the nine months ended June 30, 1997 and 1996. The consolidated condensed balance sheet as of September 30, 1996 has been derived from the audited balance sheet as of that date. This report should be read in conjunction with the Company's annual report filed on Form 10-K for the fiscal year ended September 30, 1996. 2. The results of operations and cash flows for the nine months ended June 30, 1997 are not necessarily indicative of the results to be expected for the full year. 3. Sale of Direct-Mail Cosmetic Business: On October 9, 1995, the Company sold certain assets of its direct-mail cosmetics business for approximately $2,495,000. The Company received $350,000 in cash and non-interest bearing notes aggregating approximately $2,145,000 for inventory, a customer list and other intangible assets. The inventory note was repaid in full in October 1996. In April 1997, the Company received $725,000 as a final payment of the customer list note. 4. Inventories have been estimated by using the gross profit method for the interim periods. The components of the inventories are as follows:
June 30, September 30, 1997 1996 ------------ ------------- (UNAUDITED) Raw materials and work-in-process $ 35,023,137 $ 18,654,335 Finished goods 23,659,152 19,415,736 ---------------------------- $ 58,682,289 $ 38,070,071 ============================
5. Intangible assets, at cost, acquired at various dates are as follows:
June 30, September 30, 1997 1996 ------------ ------------- (UNAUDITED) Goodwill $ 469,400 $ 469,400 Customer lists 8,783,475 8,783,475 Trademark and licenses 1,201,205 1,201,205 Covenants not to compete 1,304,538 1,304,538 ---------------------------- 11,758,618 11,758,618 Less, accumulated amortization 8,010,588 7,784,045 ---------------------------- $ 3,748,030 $ 3,974,573 ============================
7 NBTY, INC. and SUBSIDIARIES NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued 6. Accrued expenses:
June 30, September 30, 1997 1996 ------------ ------------- (UNAUDITED) Payroll and related payroll taxes $ 3,286,118 $ 2,730,453 Customer deposits 2,499,656 1,862,837 Accrued purchases 935,110 1,765,420 Income taxes payable 2,115,214 2,670,270 Other 6,422,769 5,675,527 ---------------------------- $ 15,258,867 $ 14,704,507 ============================
7. The Company purchased 46,000 shares of its common stock for $302,247 for the nine months ended June 30, 1996 in open market transactions. The average price per share was $6.57. An additional 628 NBTY common shares were surrendered to the Company at market price in payment of a stock subscription receivable and interest in 1997. The average cost of shares was $22.50 in 1997. 8. Earnings per share are based on the weighted average number of common shares and common equivalent shares outstanding during the three and nine month periods ended June 30, 1997 and 1996. The calculation of earnings per share include 1,429,365 and 1,393,347 common stock equivalent shares for the three months periods ended June 30, 1997 and 1996, respectively. The calculation of earnings per share include 1,441,560 and 1,501,084 common stock equivalent shares for the nine month periods ended June 30, 1997 and 1996, respectively. 9. During the first nine months of 1997, options were exercised with 37,000 shares of common stock issued to certain officers and a director for $22,875 and a note for $10,980. As a result of the exercise of those options, the Company received a compensation deduction for tax purposes of approximately $643,000 and a tax benefit of approximately $257,200. An additional 628 NBTY common shares were surrendered to the Company, at market price, in payment of a stock subscription receivable and interest in 1997. The average cost of shares was $22.50 in 1997. During the first nine months of 1996, options were exercised with 872,000 shares of common stock issued to certain officers for $10,980 and interest bearing notes in the amount of $583,900. As a result of the exercise of those options, the Company received a compensation deduction for tax purposes of approximately $3,150,000 and a tax benefit of approximately $1,230,000. In November 1995, options were exercised with shares of common stock issued to certain officers for an interest bearing note in the amount of $437,500. As a result of the exercise of those options, the Company received a compensation deduction for tax purposes of approximately $2,362,500 and a tax benefit of approximately $920,000. 8 NBTY, INC. and SUBSIDIARIES NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued 9. Stock options (continued): The following is a summary of changes in outstanding options for the Company's Stock Option Plans for the nine month period ended June 30, 1997:
Exercise Price -------------- Shares under option, September 30, 1996 (fully exercisable) 1,523,000 $.63 - $.92 Options exercised (37,000) $.92 --------- Shares exercisable, June 30, 1997 (fully exercisable) 1,486,000 $.63 - $.92 =========
10. Subsequent event: The Company has entered into negotiations to acquire a vitamin and health food retailer that operates 410 stores in the United Kingdom. The Company would finance the purchase with bonds and borrowings through a U.S. bank. The Company has not reached an agreement in principle in connection with this potential transaction. 9 NBTY, INC. and SUBSIDIARIES MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION and RESULTS of OPERATIONS Results of Operations: The following table sets forth income statement data of the Company as a percentage of net sales for the periods indicated:
Three months Nine months ended ended June 30, June 30, ---------------- ---------------- 1997 1996 1997 1996 ------ ------ ------ ------ Net sales . . . . . . . . . . . . . . . . . . 100.0% 100.0% 100.0% 100.0% Cost and expenses: Cost of sales . . . . . . . . . . . . . . . 48.5 48.9 47.9 50.7 Catalog printing, postage and promotion . . 7.5 7.7 7.9 9.3 Selling, general and administrative . . . . 29.9 29.6 29.3 30.1 ----------------------------------- 85.9 86.2 85.1 90.1 ----------------------------------- Income from operations . . . . . . . . . . . . 14.1 13.8 14.9 9.9 Other income (expenses), net . . . . . . . . . (0.3) (0.2) (0.4) (0.3) ----------------------------------- Income before income taxes . . . . . . . . . . 13.8 13.6 14.5 9.6 Income taxes . . . . . . . . . . . . . . . . 5.5 5.7 5.8 3.9 ----------------------------------- Net income . . . . . . . . . . . . . . . . . . 8.3% 7.9% 8.7% 5.7% ===================================
Results of Operations - --------------------- For the three months ended June 30, 1997 compared to the three months ended June 30, 1996: Net sales. Net sales in the third quarter ended June 30, 1997 were $61,760,959 compared with $47,899,663 for the prior comparable period, an increase of $13,861,296 or 28.9%. Sales increases were across all channels of distribution. Mail order sales were $25.5 million, compared to $21.4 for the prior comparable period (increase of $4.1 million or 19.1%), wholesale sales were $25.4 million compared to $21.2 million (increase of $4.2 million or 20.1%) and retail operations were $10.8 million compared to $5.3 million (increase of $5.5 million or 103.1%) due to an increase in the number of retail stores over the comparable period. Comparable store sales for stores open for more than one year were up $1,318,023 (or 27.8%) over the quarter ended June 30, 1996. Costs and expenses. Cost of sales as a percentage of sales was 48.5% for 1997 and 48.9% for 1996. The decrease was associated with changes in product mix. Catalog printing, postage, and promotion expenses were $4,639,025 in 1997, an increase of $948,206 (25.7% increase), from $3,690,819 in 1996. The increase was primarily attributable to national television advertising for the mail order division. As a percentage of sales, expenses were 7.5% for the current quarter and 7.7% for the prior comparable quarter. 10 NBTY, INC. and SUBSIDIARIES MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION and RESULTS of OPERATIONS Results of Operations (continued) - --------------------------------- For the three months ended June 30, 1997 compared to the three months ended June 30, 1996: Selling, general and administrative expenses were $18,476,018 for the quarter, or 29.9% as a percentage of sales, compared with $14,165,346, or 29.6% as a percentage of sales, an increase of $4,310,672 (30.4% increase). The largest segments are indirect salaries and payroll fringe benefits, freight and building. Increases were primarily in indirect salaries, building, freight and outside services. These expenses increased due to the retail store expansion and the opening of the international mail order operations. Other income includes rental income of $57,401 and $135,663 in 1997 and 1996, respectively. Income before income taxes was $8,548,400 for 1997 and $6,502,689 for 1996. After income taxes, the Company had a net profit of $5,129,040 (or earnings per share of $0.26) for the three month period ended June 30, 1997, and $3,762,647 (or earnings per share of $0.19) for the three months ended June 30, 1996. For the nine months ended June 30, 1997 compared to the nine months ended June 30, 1996: Net sales. Net sales in the nine months ended June 30, 1997 were $184,107,656 compared with $142,093,552 for the prior comparable period, an increase of $42,014,104 or 29.6%. Sales increases were across all channels of distribution. Mail order sales were $78.0 million, compared to $62.9 for the prior comparable period (increase of $15.1 million or 24.0%), wholesale sales were $77.4 million compared to $64.4 million (increase of $13.0 million or 20.1%) and retail operations were $28.7 million compared to $14.7 million (increase of $14.0 million or 95.8%) due to an increase in the number of retail stores over the comparable periods. Comparable store sales for stores open for more than one year were up $1,845,553 (or 15.1%) over the nine months ended June 30, 1996. Approximately 70 new products were introduced over the past nine months. Sales for the Company's new mail order operation in the United Kingdom were $1.6 million in 1997 and $0.5 in 1996. Costs and expenses. Cost of sales as a percentage of sales was 47.9% for 1997 and 50.7% for 1996. The decrease was associated with lower raw material costs, manufacturing efficiencies and changes in product mix. Catalog printing, postage, and promotion expenses were $14,580,501 in 1997, an increase of $1,340,500 (10.1% increase), from $13,240,001 in 1996. As a percentage of sales, expenses were 7.9% for the current nine months and 9.3% for the prior comparable nine months. The increase in expenditures was primarily attributable to national television advertising and number of catalogs mailed for the mail order division. 11 NBTY, INC. and SUBSIDIARIES MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION and RESULTS of OPERATIONS Results of Operations (continued) - --------------------------------- For the nine months ended June 30, 1997 compared to the nine months ended June 30, 1996: Selling, general and administrative expenses were $53,884,692, or 29.3% as a percentage of sales, compared with $42,782,415, or 30.1% as a percentage of sales, an increase of $11,102,277 (or 26.0%). The largest segments are legal, indirect salaries, fringe benefits, freight and building. Increases were primarily in indirect salaries, building, freight and outside services. These expenses increased due to the retail store expansion and the opening of the international mail order operations. Other income includes rental income of $291,302 and $406,988 in 1997 and 1996, respectively. Income before income taxes was $26,755,445 for 1997 and $13,593,218 for 1996. After income taxes, the Company had a net profit of $16,053,267 (or earnings per share of $0.80) for the nine month period ended June 30, 1997, and $8,087,820 (or earnings per share of $0.41) for the nine months ended June 30, 1996. Liquidity and Capital Resources - ------------------------------- The Company believes it has adequate working capital to meet its obligations in the normal course of business. On April 3, 1996, the Company renewed a revolving credit agreement with two banks that provides for unsecured borrowings up to $15,000,000 which expires June 30, 1999. At June 30, 1997, there were no borrowings under this agreement. In April 1996, the Company obtained a $6,000,000 first mortgage with a fixed interest rate of 7.375%, collateralized by the underlying real estate. The mortgage has monthly principal and interest payments of $55,196 for fifteen years through 2011. The Company renewed a $10,000,000 capital lease facility and has approximately $7 million remaining available at June 30, 1997. The Company has entered into negotiations to acquire a vitamin and health food retailer that operates 410 stores in the United Kingdom. The Company would finance the purchase with bonds and borrowings through a U.S. bank. The Company has not reached an agreement in principle in connection with this potential transaction. Capital improvements: The Company has committed to a $4 million automated picking and packing system for its mail-order distribution which will be funded by lease financing. Net cash provided by operating activities was $8,847,804 and $8,547,932 in 1997 and 1996, respectively. Net cash used in investing activities was $14,541,345 and $10,682,610 in 1997 and 1996, respectively, primarily for purchases of property, plant and equipment in connection with the company's capital expansion program. Net cash used in financing activities was $683,515 in 1997, primarily due to principal payments on debt and provided by financing activities was $5,340,485 in 1996, due to borrowings under the revolving credit agreement. 12 NBTY, INC. and SUBSIDIARIES MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION and RESULTS of OPERATIONS Liquidity and Capital Resources (continued) - ------------------------------------------- On October 9, 1995, the Company sold certain assets of its direct-mail cosmetics business for approximately $2,495,000. The Company received $350,000 in cash and non-interest bearing notes aggregating approximately $2,145,000 for inventory, a customer list and other intangible assets. The inventory note was repaid in full in October 1996. In April 1997, the Company received $725,000 as a final payment of the customer list note. Management believes that inflation did not have a significant impact on operations. This filing contains certain forward-looking statements and information to the Company that are based on the beliefs of management, as well as assumptions made by and information currently available to the Company's management. When used in this document, the words "anticipate," "believe," "estimate," and "expect" and similar expressions, as they relate to the Company are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. The Company does not intend to update these forward-looking statements. 13 NBTY, INC. AND SUBSIDIARIES PART II OTHER INFORMATION Item 1. Legal Proceedings LITIGATION: There have been no material developments with respect to litigation that occurred during this reporting period. Reference is made to Item 3, Legal Proceedings in Form 10- K for the year ended September 30, 1996. Item 2. Changes in Securities Not applicable. Item 3. Defaults upon Senior Securities Not applicable. Not applicable. Item 4. Submission of Matters to a Vote of Security Holders Not applicable. Item 5. Other Information Not applicable Item 6. Exhibits and Reports on Form 8-K There was no Form 8-K filed during the third quarter of the fiscal year ending September 30, 1997. 14 NBTY, INC. and SUBSIDIARIES 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 there unto duly authorized. NBTY, INC. --------------------------------------- Date August 5, 1997 /s/ Harvey Kamil --------------------------------------- Harvey Kamil, Executive Vice President, Secretary (Principal Financial and Accounting Officer) 15 EX-27 2 ART. 5 FDS FOR 3RD QUARTER 10-Q
5 9-MOS SEP-30-1997 OCT-01-1996 JUN-30-1997 18,456,126 0 14,008,586 996,491 58,682,289 100,953,784 99,846,582 31,398,648 173,664,593 39,061,768 18,640,947 0 0 160,934 113,175,987 173,664,593 184,107,656 184,107,656 88,205,269 88,205,269 0 0 1,294,232 26,755,445 10,702,178 16,053,267 0 0 0 16,053,267 0.80 0.80
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