-----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, V7x3t4ST9gNOGWufHjPj/3WVY6MrOuoz6P6Ox0ehYElkma1jvvoLYvLcZPqEja/B Lk/IqucynHxvKMNtxWnylQ== 0001047469-04-037282.txt : 20041215 0001047469-04-037282.hdr.sgml : 20041215 20041215140309 ACCESSION NUMBER: 0001047469-04-037282 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041214 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041215 DATE AS OF CHANGE: 20041215 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: 001-31788 FILM NUMBER: 041204248 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 a2148676z8-k.htm 8-K
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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): December 14, 2004

NBTY, INC.

(Exact Name of Registrant as Specified in Charter)

001-31788
(Commission File Number)

DELAWARE
(State or Other Jurisdiction of Incorporation)
  11-2228617
(I.R.S. Employer Identification No.)
     
90 Orville Drive
Bohemia, New York

(
Address of Principal Executive Offices)
  11716
(Zip Code)
     
(631) 567-9500
(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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

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

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

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




ITEM 2.02.    RESULTS OF OPERATIONS AND FINANCIAL CONDITION

        On December 14, 2004, NBTY, Inc. issued a press release announcing fourth quarter and 2004 year-end results. A copy of the press release is attached as Exhibit 99.1.

ITEM 9.01.    FINANCIAL STATEMENTS AND EXHIBITS

(c)
Exhibits.

99.1
Press release issued by NBTY, Inc., dated December 14, 2004.

This Form 8-K and the attached Exhibit are furnished to comply with Item 2.02 and Item 9.01 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 this Form 8-K nor the attached Exhibit 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).

2



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: December 15, 2004

    NBTY, INC.

 

 

By:

/s/  
HARVEY KAMIL      
Harvey Kamil
President and Chief Financial Officer

3




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SIGNATURES
EX-99.1 2 a2148676zex-99_1.htm EXHIBIT 99.1
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Exhibit 99.1

FOR IMMEDIATE RELEASE
Contact: Harvey Kamil
              NBTY, Inc.
              President and Chief Financial Officer
              631-244-2020
  Carl Hymans
G.S. Schwartz & Co.
212-725-4500
carlh@schwartz.com

NBTY REPORTS FOURTH QUARTER AND YEAR-END RESULTS

        BOHEMIA, N.Y.—December 14, 2004—NBTY, Inc. (NYSE: NTY) (www.NBTY.com), a leading manufacturer and marketer of nutritional supplements, today announced results for the fiscal fourth quarter and fiscal year ended September 30, 2004.

        For the fiscal fourth quarter ended September 30, 2004, net sales increased 17% to $427 million, compared to net sales of $365 million for the fiscal fourth quarter ended September 30, 2003. Net income for the fiscal fourth quarter of 2004 was $21 million, or $0.30 per diluted share, compared to net income of $16 million, or $0.23 per diluted share for the fiscal fourth quarter of 2003.

        Results for the fiscal fourth quarter of 2003 included certain net non-recurring charges and foreign tax credits which resulted in a net decrease of $0.02 per diluted share.

        For fiscal 2004, net sales increased 39% to $1.65 billion compared to $1.19 billion for fiscal 2003. Net income for fiscal 2004 was $112 million, or $1.62 per diluted share, compared with net income of $82 million, or $1.19 per diluted share, for fiscal 2003. Net income results for fiscal 2003 reflect the aforementioned items, which resulted in a net decrease of $0.02 per diluted share.

        At September 30, 2004, the Company's total assets were $1.2 billion and its working capital was $360 million.

OPERATIONS FOR THE FISCAL FOURTH QUARTER ENDED SEPTEMBER 30, 2004

        The US Nutrition wholesale division, which operates Nature's Bounty and Rexall brands, increased net sales 19% to $194 million from $164 million for the comparable prior period of fiscal 2003.

        NBTY continues to expand its dominant presence in the wholesale nutritional supplement marketplace and has increased its product distribution to current accounts, as well as new customers.

        The Company's utilization of consumer sales information from its Vitamin World retail stores and Puritan's Pride direct-response/e-commerce operations provides mass-market customers with timely and vital data to drive their sales. The Company continues to adjust shelf space allocation between the Nature's Bounty and Rexall brands to provide the best overall product mix and to respond to changing market conditions. While these efforts have further strengthened US Nutrition's position in the mass market, the returns associated with this reallocation are a contributing factor to an overall decrease in gross margins in this channel. Gross margins were also affected by the slowdown in the low carb category.

        In the fiscal fourth quarter, US Nutrition launched a bonus program for its Sundown brand products as part of on-going efforts to deliver greater value to consumers and increase sales and gain market share in this highly competitive channel. The Company expects this on-going initiative will continue to effect wholesale gross margins.

        NBTY recently launched a new $6.5 million national print advertising campaign featuring television talk show host and media personality Regis Philbin. Beginning in January 2005, Regis Philbin will be featured in a national campaign for NBTY's Osteo Bi-Flex, the number one Doctor Recommended Brand for joint care. The ads will appear in leading adult lifestyle publications including O, The Oprah Magazine; Better Homes and Gardens; Family Circle; and Prevention and have already appeared in AARP's Modern Maturity magazine.



        US Retail-Vitamin World fiscal fourth quarter net sales were $53 million compared to $54 million a year ago, a decrease of 1%. For the fiscal fourth quarter, Vitamin World operations reported a pre-tax loss of less than $400,000. However, Vitamin World's EBITDA (as defined in non-GAAP financial measures below) for the same period was a positive $2 million.

        During the fiscal fourth quarter Vitamin World opened 8 new stores, closed 3 stores and at the end of the quarter operated 557 stores nationwide. For the fiscal fourth quarter, same store sales decreased 4%, reflecting continued vulnerability in this specialty retail market. For fiscal 2004, same store sales increased 1%.

        As NBTY introduces more new products directly to the mass market, the specialty retail market's ability to capitalize on market trends and new products remains hampered. The Company expects this trend to continue in the near future.

        NBTY's European retail net sales for the fiscal fourth quarter increased 41% to $133 million from $95 million for the fiscal fourth quarter a year ago. Net sales generated by GNC (UK) and DeTuinen totaled $15 million for the fiscal fourth quarter. GNC (UK) remained profitable, while DeTuinen incurred a pre-tax loss of $1 million in the fiscal fourth quarter. The Company's European retail division opened 3 new stores, and at the end of the quarter operated 602 stores in the UK, Ireland and the Netherlands.

        Holland & Barrett continues to be a leader in the United Kingdom. Same store sales in the UK increased 36% in US dollars for the fiscal fourth quarter, reflecting in part the positive effect of the strong British pound. Without the effect of foreign exchange, Holland & Barrett same store sales increased 21%.

        Net sales from Puritan's Pride direct response/e-commerce operations for the fiscal fourth quarter decreased 10% to $47 million from $52 million for the comparable prior period, reflecting the continued change in the timing of the promotional catalogues as well as the cyclical nature of this business.

        NBTY remains the leader in the direct response and e-commerce sector and continues to increase the number of products available via its catalog and websites. Puritan's Pride continues to make investments in advertising and sales promotions and focus on a high level of customer service.

OPERATIONS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004

        Net sales by segment for fiscal 2004 as compared to fiscal 2003 were as follows: Wholesale net sales were $734 million, an increase of 76%; US Retail net sales were $216 million, an increase of 2%; European Retail net sales were $496 million, an increase of 36%; and Direct Response net sales were $205 million, an increase of 3%.

SALES FOR THE TWO MONTHS ENDED NOVEMBER 2004

        Preliminary unaudited net sales by segment for the two months ended November 2004 compared to the prior like period were as follows: Wholesale net sales were $124 million, a decrease of 2%; US Retail net sales were $34 million, a decrease of 2%; European Retail net sales were $92 million, an increase of 19%; and Direct Response net sales were $37 million, an increase of 49%.

        NBTY Chairman and CEO, Scott Rudolph, said: "We are encouraged by NBTY's overall performance for fiscal 2004 which was achieved despite a general industry weakness and highly competitive market environment. While we expect industry weakness to continue in the near-term, we are confident in our ability to quickly adapt to cyclical changes in industry segments and remain optimistic for the long-term."

2



ABOUT NBTY

        NBTY is a leading vertically integrated 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 approximately 1,500 products under several brands, including Nature's Bounty®, Vitamin World®, Puritan's Pride®, Holland & Barrett®, Rexall®, Sundown®, MET-Rx®, WORLDWIDE Sport Nutrition®, American Health®, GNC (UK)® and DeTuinen®.

        This release refers to non-GAAP financial measures, such as EBITDA. "EBITDA" is defined as earnings before interest, taxes, depreciation and amortization. This non-GAAP financial measure is not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation of the non-GAAP measure to the comparable GAAP measure is included in the attached financial tables. Management believes the presentation of EBITDA is relevant and useful because EBITDA is a measurement industry analysts utilize when evaluating NBTY's operating performance. Management also believes EBITDA enhances an investor's understanding of NBTY's results of operations because it measures NBTY's operating performance exclusive of interest and non-cash charges for depreciation and amortization.

        Management also provides this non-GAAP measurement as a way to help investors better understand its core operating performance, enhance comparisons of NBTY's core operating performance from period to period and to allow better comparisons of NBTY's operating performance to that of its competitors.

        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 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/or 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 NBTY to integrate acquisitions into the mainstream of its business; (x) changes in general worldwide economic and political conditions in the markets in which NBTY may compete from time to time; (xi) the inability of NBTY to gain and/or hold market share of its wholesale and/or retail customers anywhere in the world; (xii) unavailability of electricity in certain geographical areas; (xiii) the inability of NBTY to obtain and/or renew insurance and/or the costs of the same; (xiv) exposure to and expense of defending and resolving, product liability claims and other litigation; (xv) the ability of NBTY to successfully implement its business strategy; (xvi) the inability of NBTY to manage its retail, wholesale, manufacturing and other operations efficiently; (xvii) consumer acceptance of NBTY's products; (xviii) the inability of NBTY to renew leases for its retail locations; (xix) inability of NBTY's retail stores to attain or maintain profitability; (xx) the absence of clinical trials for many of NBTY's products; (xxi) sales and earnings volatility and/or trends for the Company and its market segments; (xxii) the efficacy of NBTY's Internet and on-line sales and marketing; (xxiii) fluctuations in foreign currencies, including the British Pound; (xxiv) import-export controls on sales to foreign countries; (xxv) the inability of NBTY to secure favorable new sites for, and delays in opening, new retail

3



locations; (xxvi) introduction of new federal, state, local or foreign legislation or regulation or adverse determinations by regulators anywhere in the world (including the banning of products) and more particularly proposed Good Manufacturing Practices in the United States and the Food Supplements Directive and Traditional Herbal Medicinal Products Directive in Europe; (xxvii) the mix of NBTY's products and the profit margins thereon; (xxviii) the availability and pricing of raw materials; (xxix) risk factors discussed in NBTY's filings with the U.S. Securities and Exchange Commission; (xxx) adverse effects on NBTY as a result of increased gasoline prices and potentially reduced traffic flow to NBTY's retail locations; and (xxxi) other factors beyond NBTY's control.

        Readers are cautioned not to place undue reliance on forward-looking statements. NBTY cannot guarantee future results, trends, events, levels of activity, performance or achievements. NBTY 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.

-Tables Follow-

4



NBTY, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars and shares in thousands, except per share amounts)

 
  For the three months
ended September 30,

 
 
  2004
  2003
 
Net sales   $ 427,471   $ 364,847  

Costs and expenses:

 

 

 

 

 

 

 
  Cost of sales     219,051     182,249  
  Discontinued product charge (credit)         (1,500 )
  Catalog printing, postage and promotion     24,129     20,439  
  Selling, general and administrative     146,267     132,281  
   
 
 
      389,447     333,469  
   
 
 
Income from operations     38,024     31,378  
   
 
 

Other income (expense):

 

 

 

 

 

 

 
  Interest     (5,530 )   (5,674 )
  Bond investment write down         (4,084 )
  Miscellaneous, net     982     (112 )
   
 
 
      (4,548 )   (9,870 )
   
 
 
Income before provision for income taxes     33,476     21,508  
Provision for income taxes     12,431     5,626  
   
 
 
Net income   $ 21,045   $ 15,882  
   
 
 

Net income per share:

 

 

 

 

 

 

 
  Basic   $ 0.31   $ 0.24  
   
 
 
  Diluted   $ 0.30   $ 0.23  
   
 
 

Weighted average common shares outstanding:

 

 

 

 

 

 

 
  Basic     66,999     66,547  
   
 
 
  Diluted     69,011     68,796  
   
 
 

5


 
  For the fiscal years
ended September 30,

 
 
  2004
  2003
 
Net sales   $ 1,652,031   $ 1,192,548  

Costs and expenses:

 

 

 

 

 

 

 
  Cost of sales     822,412     554,804  
  Discontinued product charge         4,500  
  Catalog printing, postage and promotion     85,238     66,455  
  Selling, general and administrative     554,838     435,748  
   
 
 
      1,462,488     1,061,507  
   
 
 
Income from operations     189,543     131,041  
   
 
 
Other income (expense):              
  Interest     (24,663 )   (17,384 )
  Bond investment write down         (4,084 )
  Miscellaneous, net     4,125     5,424  
   
 
 
      (20,538 )   (16,044 )
   
 
 
Income before provision for income taxes     169,005     114,997  
Provision for income taxes     57,156     33,412  
   
 
 
Net income   $ 111,849   $ 81,585  
   
 
 

Net income per share:

 

 

 

 

 

 

 
  Basic   $ 1.67   $ 1.23  
   
 
 
  Diluted   $ 1.62   $ 1.19  
   
 
 
Weighted average common shares outstanding:              
  Basic     66,793     66,452  
   
 
 
  Diluted     69,069     68,538  
   
 
 

6


 
  SALES
 
 
  Three Months Ended
September 30,

  Fiscal Years Ended
September 30,

 
 
  2004
  2003
  % Increase
(% Decrease)

  2004
  2003
  % Increase
 
 
  (Thousands)

 
Wholesale   $ 194,075   $ 163,721   19 % $ 734,293   $ 416,627   76 %
US Retail/Vitamin World     53,469     54,138   -1 %   216,431     212,380   2 %
European Retail/Holland & Barrett/GNC (UK)     133,021     94,694   41 %   495,808     363,597   36 %
Direct Response/Puritan's Pride     46,906     52,294   -10 %   205,499     199,944   3 %
   
 
 
 
 
 
 
Total   $ 427,471   $ 364,847   17 % $ 1,652,031   $ 1,192,548   39 %
   
 
 
 
 
 
 

           

 
  GROSS PROFIT
PERCENTAGES

 
 
  Three Months Ended
September 30,

  Fiscal Years Ended
September 30,

 
 
  2004
  2003
  % Increase
(% Decrease)

  2004
  2003
  % Increase
 
Wholesale   32 % 39 % -7 % 36 % 40 % -4 %
US Retail/Vitamin World   58 % 60 % -2 % 59 % 60 % -1 %
European Retail/Holland & Barrett/GNC (UK)   63 % 59 % 4 % 62 % 61 % 1 %
Direct Response / Puritan's Pride   65 % 60 % 5 % 62 % 62 % 0 %
   
 
 
 
 
 
 
Total (without discontinued product charge (credit))   49 % 50 % -1 % 50 % 54 % -4 %
Discontinued product charge (credit)   0 % 1 % -1 % 0 % -1 % 1 %
   
 
 
 
 
 
 
Total   49 % 51 % -2 % 50 % 53 % -3 %
   
 
 
 
 
 
 

7



RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(Thousands)

 
  Three Months Ended September 30, 2004
 
 
  Pretax
Income
(Loss)

  Depreciation
and
amortization

  Interest
  EBITDA
 
Wholesale   $ 14,298   $ 2,538   $   $ 16,836  
US Retail/Vitamin World     (364 )   2,339           1,975  
European Retail/Holland & Barrett/GNC (UK)     36,094     2,489           38,583  
Direct Response/Puritan's Pride     16,285     1,301           17,586  
   
 
 
 
 
Segment Results     66,313     8,667           74,980  
Corporate     (32,837 )   6,165     5,530     (21,142 )
   
 
 
 
 
Total   $ 33,476   $ 14,832   $ 5,530   $ 53,838  
   
 
 
 
 
 
  Three Months Ended September 30, 2003
 
 
  Pretax
Income
(Loss)

  Depreciation
and
amortization

  Interest
  EBITDA
 
Wholesale   $ 23,149   $ 1,443   $   $ 24,592  
US Retail/Vitamin World     (1,983 )   4,157           2,174  
European Retail/Holland & Barrett/GNC (UK)     18,802     2,624           21,426  
Direct Response/Puritan's Pride     17,440     1,429           18,869  
   
 
 
 
 
Segment Results     57,408     9,653           67,061  
Corporate     (35,900 )   4,692     5,674     (25,534 )
   
 
 
 
 
Total   $ 21,508   $ 14,345   $ 5,674   $ 41,527  
   
 
 
 
 

8


 
  Fiscal Year Ended September 30, 2004
 
 
  Pretax Income (Loss)
  Depreciation and
amortization

  Interest
  EBITDA
 
Wholesale   $ 112,224   $ 10,474   $   $ 122,698  
US Retail/Vitamin World     (120 )   10,848           10,728  
European Retail/Holland & Barrett/GNC (UK)     120,323     12,370           132,693  
Direct Response/Puritan's Pride     65,265     5,403           70,668  
   
 
 
 
 
Segment Results     297,692     39,095           336,787  
Corporate     (128,687 )   22,585     24,663     (81,439 )
   
 
 
 
 
Total   $ 169,005   $ 61,680   $ 24,663   $ 255,348  
   
 
 
 
 
 
  Fiscal Year Ended September 30, 2003
 
 
  Pretax Income (Loss)
  Depreciation and
amortization

  Interest
  EBITDA
 
Wholesale   $ 76,933   $ 2,184   $   $ 79,117  
US Retail/Vitamin World     (1,643 )   12,733           11,090  
European Retail/Holland & Barrett/GNC (UK)     83,345     9,872           93,217  
Direct Response/Puritan's Pride     62,184     5,779           67,963  
   
 
 
 
 
Segment Results     220,819     30,568           251,387  
Corporate     (105,822 )   16,316     17,384     (72,122 )
   
 
 
 
 
Total   $ 114,997   $ 46,884   $ 17,384   $ 179,265  
   
 
 
 
 

9



NBTY, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS

(Dollars and shares in thousands)

 
  September 30,
2004

  September 30,
2003

Current assets:            
  Cash and cash equivalents   $ 21,751   $ 49,349
  Investment in bonds         4,158
  Accounts receivable, less allowance for doubtful accounts of $9,389 at September 30, 2004 and $7,100 at September 30, 2003     86,113     80,829
  Inventories     374,559     314,091

Deferred income taxes

 

 

32,062

 

 

37,021
Prepaid expenses and other current assets     62,835     44,736
   
 
    Total current assets     577,320     530,184

Property, plant and equipment, net

 

 

280,075

 

 

298,344

Goodwill

 

 

221,429

 

 

213,362

Intangible assets, net

 

 

136,541

 

 

137,469

Other assets

 

 

17,288

 

 

16,423
   
 
  Total assets   $ 1,232,653   $ 1,195,782
   
 

10



LIABILITIES AND STOCKHOLDERS' EQUITY

(Dollars and shares in thousands)

 
  September 30,
2004

  September 30,
2003

Current liabilities:            
 
Current portion of long-term debt

 

$

3,205

 

$

12,841
  Accounts payable     97,635     87,039
  Accrued expenses and other current liabilities     116,633     118,439
   
 
    Total current liabilities     217,473     218,319

Long-term debt

 

 

306,531

 

 

413,989
Deferred income taxes     64,675     40,213
Other liabilities     4,176     8,462
   
 
    Total liabilities     592,855     680,983
   
 

Commitments and contingencies

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 
Common stock, $.008 par; authorized 175,000 shares; issued and outstanding 67,060 shares at September 30, 2004 and 66,620 shares at September 30, 2003     536     533
 
Capital in excess of par

 

 

135,787

 

 

130,208
  Retained earnings     481,302     369,453
   
 
      617,625     500,194

Accumulated other comprehensive income

 

 

22,173

 

 

14,605
   
 
  Total stockholders' equity     639,798     514,799
   
 

Total liabilities and stockholders' equity

 

$

1,232,653

 

$

1,195,782
   
 

11



NBTY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

 
  For the fiscal years ended Sept. 30,
 
 
  2004
  2003
 
Cash flows from operating activities:              
Net income   $ 111,849   $ 81,585  
Adjustments to reconcile net income to net cash provided by operating activities:              
  Loss/(gain) on disposal/sale of property, plant and equipment     1,556     (711 )
  Depreciation and amortization     61,680     46,884  
  Foreign currency transaction gain     (1,253 )   (334 )
  Amortization of deferred financing costs     3,955     1,003  
  Amortization of bond discount     7     124  
  Allowance for doubtful accounts     3,074     2,970  
  Inventory reserve     16,070     2,108  
  Compensation expense for ESOP     4,090     1,711  
  Tax benefit from exercise of stock options     1,228     1,072  
  Deferred income taxes     8,767     5,227  
  Bond investment write down         4,084  
  Discontinued product charge         4,500  
  Changes in operating assets and liabilities, net of acquisitions:              
    Accounts receivable     (8,151 )   (222 )
    Inventories     (72,888 )   (30,487 )
    Prepaid expenses and other current assets     (4,095 )   (15,855 )
    Other assets     (1,937 )   616  
    Accounts payable     7,193     (2,773 )
    Accrued expenses and other liabilities     (11,209 )   10,030  
      Net cash provided by operating activities     119,936     111,532  
   
 
 
Cash flows from investing activities:              
  Purchase of property, plant and equipment     (42,700 )   (37,510 )
  Proceeds from sale of property, plant, and equipment     1,065     1,498  
  Proceeds from sale of bond investment     4,158      
  Cash paid for acquisitions, net of cash acquired         (289,676 )
  Release of cash held in escrow         2,403  
   
 
 
      Net cash used in investing activities     (37,477 )   (323,285 )
   
 
 
Cash flows from financing activities:              
  Principal payments under long-term debt agreements     (117,100 )   (35,211 )
  Proceeds from borrowings under long term debt agreements         275,000  
  Payments for financing fees     (500 )   (7,500 )
  Proceeds from stock options exercised     1,881     1,146  
   
 
 
      Net cash (used in) provided by financing activities     (115,719 )   233,435  
   
 
 
Effect of exchange rate changes on cash and cash equivalents     5,662     1,438  
   
 
 
Net (decrease) increase in cash and cash equivalents     (27,598 )   23,120  
Cash and cash equivalents at beginning of year     49,349     26,229  
   
 
 
Cash and cash equivalents at end of year   $ 21,751   $ 49,349  
   
 
 
Supplemental disclosure of cash flow information:              
  Cash paid during the year for interest   $ 21,156   $ 17,709  
  Cash paid during the year for income taxes   $ 39,490   $ 34,698  

12



NBTY, INC. & SUBSIDIARIES

NET SALES BY MARKET SEGMENT

PRELIMINARY/UNAUDITED

(Thousands)

 
  October
 
 
  2004
  2003
  %
Increase

 
Wholesale   71,553   65,751   8.8 %
US Retail/Vitamin World   18,375   17,640   4.2 %
European Retail/Holland & Barrett/GNC (UK)   46,537   38,432   21.1 %
Direct Response/Puritan's Pride   16,600   12,751   30.2 %
   
 
 
 
Total   153,065   134,574   13.7 %
   
 
 
 
 
  November
 
 
  2004
  2003
  %
Inc/(Dec)

 
Wholesale   52,872   61,313   -13.8 %
US Retail/Vitamin World   15,855   17,426   -9.0 %
European Retail/Holland & Barrett/GNC (UK)   45,886   39,239   16.9 %
Direct Response/Puritan's Pride   20,376   12,002   69.8 %
   
 
 
 
Total   134,989   129,980   3.9 %
   
 
 
 
 
  2 Months Ended November
 
 
  2004
  2003
  %
Inc/(Dec)

 
Wholesale   124,425   127,064   -2.1 %
US Retail/Vitamin World   34,230   35,066   -2.4 %
European Retail/Holland & Barrett/GNC (UK)   92,423   77,671   19.0 %
Direct Response/Puritan's Pride   36,976   24,753   49.4 %
   
 
 
 
Total   288,054   264,554   8.9 %
   
 
 
 

13




QuickLinks

NBTY, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Dollars and shares in thousands, except per share amounts)
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (Thousands)
NBTY, INC. and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (Dollars and shares in thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY (Dollars and shares in thousands)
NBTY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
NBTY, INC. & SUBSIDIARIES NET SALES BY MARKET SEGMENT PRELIMINARY/UNAUDITED (Thousands)
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