Segment Information

9 Months Ended

Jun. 30, 2011

Segment Information

Segment Information

18. Segment Information

        We are organized by sales segments on a worldwide basis. We evaluate performance based on a number of factors; however, the primary measures of performance are the net sales and income or loss from operations (before corporate allocations) of each segment, as these are the key performance indicators that we review. Operating income or loss for each segment does not include the impact of any intercompany transfer pricing mark-up, corporate general and administrative expenses, interest expense and other miscellaneous income/expense items. Corporate general and administrative expenses include, but are not limited to, human resources, legal, finance, and various other corporate level activity related expenses. Such unallocated expenses remain within Corporate.

        All our products fall into one or more of these four segments:

• •

  Wholesale/U.S. Nutrition—This segment sells products under various brand names and third-party private labels, each targeting specific market groups which include virtually all major mass merchandisers, club stores, drug store chains and supermarkets. This segment also sells products to independent pharmacies, health food stores, the military and other retailers.

  •

  European Retail—This segment generates revenue through its 643 Holland & Barrett stores (including six franchised stores in Singapore, one franchised store in each of South Africa, Malta, Hungary and United Arab Emirates and four franchised stores in Cyprus), 247 Julian Graves stores and 47 GNC (UK) stores in the U.K., 101 De Tuinen stores (including 10 franchised locations) in the Netherlands and 39 Nature's Way stores in Ireland. Such revenue consists of sales of proprietary brand and third-party products as well as franchise fees.

  •

  Direct Response/E-Commerce—This segment generates revenue through the sale of proprietary brand and third-party products primarily through mail order catalog and internet. Catalogs are strategically mailed to customers who order by mail, internet, or by phone.

  •

  North American Retail—This segment generates revenue through its 444 owned and operated Vitamin World stores selling proprietary brand and third-party products and through its Canadian operation of 80 owned and operated Le Naturiste stores.

        The following table represents key financial information of our business segments:

		Wholesale / U.S. Nutrition		European Retail		Direct Response/ E-Commerce		North American Retail		Corporate/ Manufacturing			Consolidated
Successor
Three months ended June 30, 2011:
	Net sales	$	458,460	$	179,970	$	67,853	$	57,055	$	—		$	763,338
	Income (loss) from operations		86,589		31,185		16,880		4,910		(21,506	)		118,058
	Depreciation and amortization		10,251		4,039		2,661		823		7,985			25,759
	Capital expenditures		81		3,058		—		114		3,465			6,718
Nine months ended June 30, 2011:
	Net sales	$	1,319,527	$	530,526	$	193,576	$	168,414	$	—		$	2,212,043
	Income (loss) from operations		223,213		88,797		45,936		8,823		(223,043	)		143,726
	Depreciation and amortization		28,888		11,906		7,987		2,481		25,310			76,572
	Capital expenditures		422		15,044		27		895		19,093			35,481
Predecessor
Three months ended June 30, 2010:
	Net sales	$	434,592	$	152,051	$	56,670	$	52,543	$	—		$	695,856
	Income (loss) from operations		82,537		20,401		15,440		3,955		(18,953	)		103,380
	Depreciation and amortization		3,642		3,316		1,143		613		7,598			16,312
	Capital expenditures		236		11,454		—		1,046		3,185			15,921
Nine months ended June 30, 2010:
	Net sales	$	1,332,280	$	487,059	$	174,058	$	158,770	$	—		$	2,152,167
	Income (loss) from operations		224,229		80,924		49,841		6,479		(56,901	)		304,572
	Depreciation and amortization		10,973		10,400		3,555		1,944		23,199			50,071
	Capital expenditures		1,322		24,835		36		2,140		12,025			40,358

        Net sales by location of customer:

		Successor		Predecessor		Successor		Predecessor
		Three months ended June 30, 2011		Three months ended June 30, 2010		Nine months ended June 30, 2011		Nine months ended June 30, 2010
United States		$	498,444	$	474,814	$	1,428,550	$	1,434,952
United Kingdom			170,956		146,952		501,171		465,474
Canada			30,478		20,796		83,090		75,280
Netherlands			19,926		14,817		60,119		49,678
Ireland			8,472		5,938		24,925		18,241
Other foreign countries			35,062		32,539		114,188		108,542
	Consolidated net sales	$	763,338	$	695,856	$	2,212,043	$	2,152,167

        Total assets by segment:

		Successor		Predecessor
		June 30, 2011		September 30, 2010
Wholesale / U.S. Nutrition		$	2,547,275	$	917,026
European Retail			769,491		424,065
Direct Response / E-Commerce			783,208		54,404
North American Retail			207,508		32,782
Corporate / Manufacturing			738,677		772,491
	Consolidated assets	$	5,046,159	$	2,200,768

        Approximately 31% and 29% of our net sales during the nine months ended June 30, 2011 and 2010, respectively, were denominated in currencies other than U.S. dollars, principally the British pound, the euro and the Canadian dollar. A significant weakening of such currencies versus the U.S. dollar could have a material adverse effect on our results of operations.

        Foreign subsidiaries accounted for the following percentages of total assets and total liabilities:

	Successor			Predecessor
	June 30, 2011			September 30, 2010
Total Assets		25	%		26	%
Total Liabilities		3	%		16	%