10-Q

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TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2012
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                        to

Commission File Number: 001-31788

NBTY, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 11-2228617
(I.R.S. Employer
Identification No.)

2100 Smithtown Avenue,
Ronkonkoma, New York 11779
(Address of principal executive offices) (Zip Code)

(631) 567-9500
(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 o    NO ý

        Note:    The registrant was subject to the reporting requirements of Section 15(d) of the Exchange Act from June 16, 2011 through September 30, 2011. As of October 1, 2011, the registrant is a voluntary filer not subject to these filing requirements. However, the registrant has filed all reports required pursuant to Section 13 or 15(d) as if the registrant was subject to such filing requirements since June 16, 2011.

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 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 o Non-accelerated filer ý
(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

        The number of shares of common stock outstanding as of July 30, 2012 was 1,000.

NBTY, Inc.
INDEX

		Page
PART I
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets		3
	Consolidated Statements of Operations		4
	Consolidated Statements of Cash Flows		5
	Notes to Consolidated Financial Statements		6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		49
Item 4.	Controls and Procedures		50
PART II
Item 1.	Legal Proceedings		51
Item 1A.	Risk Factors		53
Item 6.	Exhibits		54
Signatures			55
Exhibits

PART I
Item 1. Financial Statements

NBTY, Inc.

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share amounts)

	June 30, 2012			September 30, 2011
Assets
Current assets:
Cash and cash equivalents	$	259,689		$	394,406
Accounts receivable, net		156,140			138,644
Inventories		712,729			675,369
Deferred income taxes		24,849			24,340
Other current assets		55,950			59,492
Total current assets		1,209,357			1,292,251
Property, plant and equipment, net		486,581			479,273
Goodwill		1,209,993			1,212,199
Intangible assets, net		1,953,566			2,005,153
Other assets		87,638			106,680
Total assets	$	4,947,135		$	5,095,556
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	—		$	17,500
Accounts payable		210,006			186,511
Accrued expenses and other current liabilities		152,783			188,542
Total current liabilities		362,789			392,553
Long-term debt, net of current portion		2,157,500			2,369,375
Deferred income taxes		736,219			748,878
Other liabilities		52,931			47,855
Total liabilities		3,309,439			3,558,661
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par; one thousand shares authorized, issued and outstanding		—			—
Capital in excess of par		1,554,582			1,552,188
Retained earnings		124,987			22,472
Accumulated other comprehensive loss		(41,873	)		(37,765	)
Total stockholders' equity		1,637,696			1,536,895
Total liabilities and stockholders' equity	$	4,947,135		$	5,095,556

The accompanying notes are an integral part of these consolidated financial statements.

3

NBTY, Inc.

Consolidated Statements of Operations

(Unaudited)

(in thousands)

	Three months ended June 30, 2012			Three months ended June 30, 2011			Nine months ended June 30, 2012			Nine months ended June 30, 2011
Net sales	$	799,479		$	763,338		$	2,308,547		$	2,212,043
Costs and expenses:
Cost of sales		421,497			396,873			1,232,710			1,284,930
Advertising, promotion and catalog		41,440			36,471			130,282			116,523
Selling, general and administrative		222,203			211,322			654,207			622,385
Impairments of Julian Graves assets		20,106			—			20,106
Merger expenses		—			614			—			44,479
Total costs and expenses		705,246			645,280			2,037,305			2,068,317
Income from operations		94,233			118,058			271,242			143,726
Other income (expense):
Interest		(36,577	)		(38,500	)		(122,473	)		(155,288	)
Miscellaneous, net		(202	)		491			141			2,749
Total other expense		(36,779	)		(38,009	)		(122,332	)		(152,539	)
Income (loss) before income taxes		57,454			80,049			148,910			(8,813	)
Provision (benefit) for income taxes		16,214			4,421			46,395			(843	)
Net income (loss)	$	41,240		$	75,628		$	102,515		$	(7,970	)

The accompanying notes are an integral part of these consolidated financial statements.

4

NBTY, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

	Nine months ended June 30, 2012			Nine months ended June 30, 2011
Cash flows from operating activities:
Net income (loss)	$	102,515		$	(7,970	)
Adjustments to reconcile net income (loss) to net cash and cash equivalents provided by (used in) operating activities:
Impairments and disposals of assets		629			2,039
Impairments on Julian Graves assets		20,106			—
Depreciation of property, plant and equipment		44,748			42,917
Amortization of intangible assets		33,734			33,655
Foreign currency transaction gain		(1,440	)		(1,519	)
Amortization of deferred financing fees		10,865			11,247
Write-off of deferred financing fees		9,289			20,824
Stock-based compensation		2,379			798
Allowance for doubtful accounts		331			5,458
Amortization of incremental inventory fair value		—			122,104
Inventory reserves		(1,183	)		23,086
Deferred income taxes		(12,518	)		(42,059	)
Changes in operating assets and liabilities:
Accounts receivable		(17,264	)		(10,472	)
Inventories		(35,642	)		(23,460	)
Other assets		8,454			17,009
Accounts payable		4,265			(15,944	)
Accrued expenses and other liabilities		(31,411	)		(7,472	)
Net cash provided by operating activities		137,857			170,241
Cash flows from investing activities:
Purchase of property, plant and equipment		(41,575	)		(35,481	)
Cash paid for acquisitions		—			(3,986,074	)
Net cash used in investing activities		(41,575	)		(4,021,555	)
Cash flows from financing activities:
Principal payments under long-term debt agreements		(229,375	)		(9,569	)
Proceeds from stock options exercised		15			—
Payments for financing fees		—			(138,227	)
Proceeds from borrowings		—			2,400,000
Capital contribution		—			1,550,400
Net cash (used in) provided by financing activities		(229,360	)		3,802,604
Effect of exchange rate changes on cash and cash equivalents		(1,639	)		2,602
Net decrease in cash and cash equivalents		(134,717	)		(46,108	)
Cash and cash equivalents at beginning of period		394,406			346,483
Cash and cash equivalents at end of period	$	259,689		$	300,375
Non-cash investing information:
Property, plant and equipment additions included in accounts payable	$	18,608		$	1,302

The accompanying notes are an integral part of these consolidated financial statements.

5

NBTY, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

(in thousands)

1. Basis of Presentation

        NBTY, Inc. ("NBTY", and together with its subsidiaries, the "Company," "we," or "us") has prepared these financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") applicable to interim financial information and on a basis that is consistent with the accounting principles applied in our audited financial statements for the fiscal year ended September 30, 2011, including the notes thereto (our "2011 Financial Statements") included in our Annual Report on Form 10-K ("2011 Annual Report"). In our opinion, these financial statements reflect all adjustments (including normal recurring items) necessary for a fair presentation of our results for the interim periods presented. These financial statements do not include all information or notes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with GAAP. Accordingly, these financial statements should be read in conjunction with the 2011 Financial Statements. Results for interim periods are not necessarily indicative of results which may be achieved for a full year.

        On October 1, 2010, pursuant to an Agreement and Plan of Merger dated as of July 15, 2010, among NBTY, Alphabet Holding Company, Inc., a Delaware corporation ("Holdings") formed by an affiliate of TC Group, L.L.C. (d/b/a The Carlyle Group ("Carlyle")), and Alphabet Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Holdings ("Merger Sub"), formed solely for the purpose of entering into the Merger, Merger Sub merged with and into NBTY with NBTY as the surviving corporation (also referred to herein as the "Merger" or the "Acquisition"). As a result of the Merger, NBTY became a wholly owned subsidiary of Holdings.

        Merger Sub was deemed to be the acquirer for accounting purposes and therefore, the Acquisition was accounted for using the acquisition method of accounting in accordance with the accounting guidance for business combinations and non-controlling interests. Accordingly, the purchase price of the Acquisition has been allocated to the Company's assets and liabilities based upon their estimated fair values at the acquisition date. For accounting purposes, the purchase price allocation was applied on October 1, 2010.

        For the nine months ended June 30, 2011, Merger expenses consisted of $15,660 in costs associated with an unused bridge loan, $14,324 for a portion of the transaction fee paid to Carlyle, $6,929 for an employment agreement termination payment to a former executive officer and $7,566 of other merger related costs. There were no Merger expenses for the nine months ended June 30, 2012.

Julian Graves Limited Administration

        On July 2, 2012, in accordance with the provisions of the United Kingdom Insolvency Act of 1986 and pursuant to a resolution of the board of directors of Julian Graves Limited, a company organized under the laws of the United Kingdom and Wales (the "UK Debtor") and an indirect, wholly-owned subsidiary of the Company, representatives from Deloitte LLP (the "Administrators") were appointed as administrators in respect of the UK Debtor (the "UK Administration"). The UK Administration, which was limited to the UK Debtor, was initiated in response to continuing operating losses of the UK Debtor and their related impact on the Company's cash flows. In connection with the UK Administration, the UK Debtor, which has retail stores in various locations in the United Kingdom, is expected to be marketed for sale or wound down. The effect of the UK Debtor's entry into

6

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

1. Basis of Presentation (Continued)

administration was to place the management, affairs, business and property of the UK Debtor under the direct control of the Administrators.

        As of June 30, 2012, the carrying value of all assets relating to the UK Debtor were evaluated and an impairment of $20,106, primarily relating to the Julian Graves Tradename, was recorded. As of July 2, 2012, concurrent with the transfer of control of the UK debtor to the Administrator, a deconsolidation loss of approximately $4,000 was recorded.

        Contingent liabilities for potential claims under the UK Administration, which may result from (i) negotiations; (ii) actions of the Administrators; (iii) resolution of contractual arrangements, including unexpired leases; and (iv) material adverse developments or other events, may be recorded in future periods. No assurance can be provided that we will not be subject to future litigation and/or liabilities related to the UK Administration. Additional liabilities, if any, will be recorded when they become probable and estimable and could materially affect our future results of operations, financial condition and cash flows.

Estimates

        The preparation of financial statements in conformity with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and reported amounts of revenues and expenses during the reporting periods. These judgments can be subjective and complex, and consequently actual results could differ materially from those estimates and assumptions. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our most significant estimates include: sales returns, promotions and other allowances; inventory valuation and obsolescence; valuation and recoverability of long-lived assets; stock-based compensation; income taxes; and accruals for the outcome of current litigation.

Accounts Receivable Reserves

        Accounts receivable are presented net of the following reserves:

	June 30, 2012		September 30, 2011
Allowance for sales returns	$	10,464	$	10,793
Promotional programs incentive allowance		80,872		74,593
Allowance for doubtful accounts		5,219		5,468
	$	96,555	$	90,854

7

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

1. Basis of Presentation (Continued)

Recent Accounting Developments

        In June 2011, the Financial Accounting Standards Board ("FASB") amended its guidance on the presentation of comprehensive income in financial statements to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items that are recorded in other comprehensive income. The new accounting guidance requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The provisions of this new guidance are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. However, the requirement to present items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income has been temporarily delayed by the FASB until further evaluation can be done on the impact of its implementation. We are currently evaluating the impact of adopting this guidance on our financial statements.

        In September 2011, the FASB issued guidance to allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If after assessing the totality of events or circumstances, an entity determines it is not likely that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is not required. This new guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of the guidance is not expected to have a material impact on our financial position, results of operations or cash flows.

        In July 2012, the FASB issued guidance to allow an entity to make a qualitative assessment of whether it is more likely than not that an indefinite-lived intangible asset's fair value is less than its carrying value before applying the two-step quantitative impairment test. If it is determined through the qualitative assessment that an indefinite-lived intangible asset's fair value is more likely than not greater than its carrying value, the remaining impairment steps would be unnecessary. The qualitative assessment is optional, allowing entities to directly apply the quantitative assessment. This new guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of the guidance is not expected to have a material impact on our financial position, results of operations or cash flows.

2. Inventories

        The components of inventories are as follows:

	June 30, 2012		September 30, 2011
Raw materials	$	166,298	$	148,206
Work-in-process		20,572		15,521
Finished goods		525,859		511,642
Total	$	712,729	$	675,369

8

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

3. Long-Term Debt

        The components of long-term debt are as follows:

	June 30, 2012		September 30, 2011
Senior Credit Facilities:
Term loan B-1	$	1,507,500	$	1,736,875
Revolving credit facility		—		—
Notes		650,000		650,000
		2,157,500		2,386,875
Less: current portion		—		17,500
Total	$	2,157,500	$	2,369,375

Senior credit facilities

        On October 1, 2010 (the "Closing Date"), we entered into our senior credit facilities (the "Credit Agreement") consisting of a $250,000 revolving credit facility, a $250,000 term loan A and a $1,500,000 term loan B. The term loan facilities were used to fund, in part, the Acquisition.

        On March 1, 2011 (the "Refinancing Date"), NBTY, Holdings, Barclays Bank PLC, as administrative agent, and several other lenders entered into the First Amendment and Refinancing Agreement to the Credit Agreement (the "Refinancing") pursuant to which we repriced our loans and amended certain other terms under our then existing credit agreement. Under the terms of the Refinancing, the original $250,000 term loan A and $1,500,000 term loan B were replaced with a new $1,750,000 term loan B-1 and the $250,000 revolving credit facility was modified to $200,000. Borrowings under term loan B-1 bear interest at a floating rate which can be, at our option, either (i) Eurodollar (LIBOR) rate plus an applicable margin, or (ii) base rate plus an applicable margin, in each case, subject to a Eurodollar (LIBOR) rate floor of 1.00% or a base rate floor of 2.00%, as applicable. The applicable margin for term loan B-1 and the revolving credit facility is 3.25% per annum for Eurodollar (LIBOR) loans and 2.25% per annum for base rate loans, with a step-down in rate for the revolving credit facility upon the achievement of a certain total senior secured leverage ratio. Substantially all other terms are consistent with the original term loan B, including the amortization schedule of term loan B-1 and maturity dates. As a result of the Refinancing, $20,824 of previously capitalized deferred financing costs were expensed. In addition, $2,394 of the call premium on term loan B and termination costs on interest rate swap contracts of $1,525 were expensed.

        On December 30, 2011, we prepaid $225,000 of our future principal payments on our term loan B-1. As a result of this prepayment, $9,289 of deferred financing costs were charged to interest expense. In accordance with the prepayment provisions of the Refinancing, future scheduled payments of principal will not be required until the final balloon payment is due in October 2017.

        The following fees are applicable under the revolving credit facility: (i) an unused line fee of 0.50% per annum, based on the unused portion of the revolving credit facility; (ii) a letter of credit participation fee on the aggregate stated amount of each letter of credit available to be drawn equal to

9

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

3. Long-Term Debt (Continued)

the applicable margin for Eurodollar rate loans; (iii) a letter of credit fronting fee equal to 0.25% per annum on the daily amount of each letter of credit available to be drawn; and (iv) certain other customary fees and expenses of our letter of credit issuers.

        The revolving credit facility matures in October 2015 and term loan B-1 matures in October 2017.

        We may voluntarily prepay loans or reduce commitments under our Credit Agreement, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty.

        We must make additional prepayments on term loan B-1 with the net cash proceeds of asset sales, casualty and condemnation events, the incurrence or issuance of indebtedness (other than indebtedness permitted to be incurred under our Credit Agreement unless specifically incurred to refinance a portion of our Credit Agreement) and 50% of excess cash flow (such percentage subject to reduction based on achievement of a certain total senior secured leverage ratio), in each case, subject to certain reinvestment rights and other exceptions. We are also required to make prepayments under our revolving credit facility at any time when, and to the extent that, the aggregate amount of the outstanding loans and letters of credit under the revolving credit facility exceeds the aggregate amount of commitments in respect of the revolving credit facility.

        Our obligations under our Credit Agreement are guaranteed by Holdings and each of our current and future direct and indirect subsidiaries other than (i) foreign subsidiaries, (ii) unrestricted subsidiaries, (iii) non-wholly owned subsidiaries, (iv) certain receivables financing subsidiaries, (v) certain immaterial subsidiaries and (vi) certain holding companies of foreign subsidiaries, and are secured by a first lien on substantially all of their assets, including capital stock of subsidiaries (subject to certain exceptions).

        Our Credit Agreement contains customary negative covenants, including, but not limited to, restrictions on our and our restricted subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, prepay or modify terms of certain junior indebtedness, enter into transactions with affiliates, amend organizational documents, or change our line of business or fiscal year. We were in compliance with all covenants under the Credit Agreement at June 30, 2012. In addition, our Credit Agreement requires the maintenance of a maximum total senior secured leverage ratio on a quarterly basis, calculated with respect to Consolidated EBITDA, as defined therein, if at any time amounts are outstanding under the revolving credit facility, including swingline loans and letters of credit. Since the inception of this revolving credit facility, we have not drawn any funds down on this facility. All other financial covenants in the original senior credit facility were removed as part of the Refinancing.

        Our Credit Agreement provides that, upon the occurrence of certain events of default, our obligations thereunder may be accelerated and the lending commitments terminated. Such events of default include payment defaults to the lenders, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy proceedings, material money judgments, material ERISA/pension plan events, certain change of control events and other customary events of default.

10

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

3. Long-Term Debt (Continued)

Notes

        On October 1, 2010, NBTY issued $650,000 outstanding notes bearing interest at 9% in a private placement. On August 2, 2011, these privately placed notes were exchanged for substantially identical notes that were registered under the Securities Act of 1933, as amended (the privately placed notes and such registered notes exchanged therefore, the "Notes"). The Notes are senior unsecured obligations and mature on October 1, 2018. Interest on the Notes is paid on April 1 and October 1 of each year, and commenced on April 1, 2011.

        On and after October 1, 2014, we may redeem the Notes, at our option, in whole at any time or in part from time to time, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and additional interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on October 1 of the years set forth below:

Period	Redemption Price
2014		104.50	%
2015		102.25	%
2016 and thereafter		100.00	%

        In addition, at any time prior to October 1, 2014, we may redeem the Notes at our option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium (as defined in the indenture governing the Notes) as of, and accrued and unpaid interest and additional interest, if any, to the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

        The Notes are jointly and severally irrevocably and unconditionally guaranteed by each of our subsidiaries that is a guarantor under the Credit Agreement. The Notes are uncollateralized and rank senior in right of payment to existing and future indebtedness that is expressly subordinated to the Notes, rank equally in right of payment to our and our subsidiary guarantors' senior unsecured debt, and are effectively junior to any of our or our subsidiary guarantors' secured debt, to the extent of the value of the collateral securing such debt. The Notes contain certain customary covenants including, but not limited to, restrictions on our and our restricted subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, or pay dividends. We were in compliance with all covenants under the Notes at June 30, 2012.

4. Litigation Summary

Stock Purchases

        On May 11, 2010, a putative class-action, captioned John F. Hutchins v. NBTY, Inc., et al, was filed in the United States District Court, Eastern District of New York, against NBTY and certain current

11

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

4. Litigation Summary (Continued)

and former officers, claiming that the defendants made false material statements, or concealed adverse material facts, for the purpose of causing members of the class to purchase NBTY stock at allegedly artificially inflated prices. An amended complaint, seeking unspecified compensatory damages, attorneys' fees and costs, was served on February 1, 2011. The Company moved to dismiss the amended complaint on March 18, 2011 and that motion was denied on March 6, 2012. Discovery is ongoing. We believe the claims are without merit and we intend to vigorously defend this action. At this time, however, no determination can be made as to the ultimate outcome of the litigation or the amount of liability, if any, on the part of any of the defendants.

Employment Class Actions

        On or about July 7, 2010, a putative class action captioned Hamilton and Taylor v. Vitamin World, Inc. was filed against one of our subsidiaries in the Alameda Superior Court, California. Plaintiffs seek to represent a class of employees in connection with several causes of action alleging, among other things, wage and hour violations. Plaintiffs describe the class as all non-exempt current and former employees of Vitamin World Stores in California. The complaint seeks compensatory damages, statutory penalties, restitution, disgorgement of profits, and attorneys' fees and costs in unidentified amounts. Vitamin World, Inc. has agreed upon a proposed settlement with the plaintiffs, and the parties have submitted settlement documentation to the court for approval, which would provide for payments to the class. Until such settlement is approved and entered by the court, however, no determination can be made as to the ultimate outcome of the litigation or the amount of liability, if any, on the part of the defendant. This proposed settlement is not material.

        On or about April 8, 2010, a putative class action captioned Dirickson v. NBTY Acquisition, LLC, NBTY Manufacturing, LLC, NBTY, Inc., and Volt Management Corporation ("Volt") was filed against the Company and certain subsidiaries in the Superior Court of California, County of Los Angeles. Volt is not related to the Company. Plaintiff seeks to represent a class of employees in connection with several causes of action alleging, among other things, wage and hour violations. The complaint seeks damages on behalf of all non-exempt employees within the State of California who worked for Volt or any of the NBTY entities between April 8, 2006 and April 8, 2010, including compensatory damages, unpaid wages, statutory penalties, restitution, unspecified injunctive relief, unjust enrichment and attorneys' fees and costs in unidentified amounts. The parties submitted to the court a settlement agreement providing for potential payments to the class and the court preliminarily approved the settlement agreement on or about May 9, 2012. No determination can be made as to the ultimate outcome of the litigation or the amount of liability, if any, until such settlement is approved and entered by the court. The estimated settlement value is not material.

Glucosamine-Based Dietary Supplements

        Beginning in June 2011, certain putative class actions have been filed in various jurisdictions against the Company, its subsidiary Rexall Sundown, Inc. ("Rexall"), and/or other companies as to which there may be a duty to defend and indemnify, challenging the marketing of glucosamine-based dietary supplements, under various states' consumer protection statutes. The lawsuits against the Company and its subsidiaries are: Cardenas v. NBTY, Inc. and Rexall Sundown, Inc. (filed June 14, 2011

12

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

4. Litigation Summary (Continued)

in the United States District Court for the Eastern District of California, on behalf of a putative class of California consumers seeking unspecified compensatory damages based on theories of restitution and disgorgement, plus punitive damages and injunctive relief); and Jennings v. Rexall Sundown, Inc. (filed August 22, 2011 in the United States District Court for the District of Massachusetts, on behalf of a putative class of Massachusetts consumers seeking unspecified trebled compensatory damages), as well as other cases in California and Illinois against certain wholesale customers as to which the Company may have certain indemnification obligations. Motions to dismiss have been filed in all of these cases. On April 10, 2012, the motion to dismiss was granted in part and denied in part in the Jennings case and discovery has commenced; all other cases currently remain at the pleading stage. The Company disputes the allegations and intends to vigorously defend these actions. At this time, however, no determination can be made as to the ultimate outcome of the litigation or the amount of liability, if any, on the part of any of the defendants.

Claims in the Ordinary Course

        In addition to the foregoing, other regulatory inquiries, claims, suits and complaints (including product liability, false advertising, intellectual property and Proposition 65 claims) arise from time to time in the ordinary course of our business. We believe that such other inquiries, claims, suits and complaints would not have a material adverse effect on our consolidated financial condition, results of operations or cash flows, if adversely determined against us.

5. Income Taxes

        Our provision for income taxes is impacted by a number of factors, including federal taxes, our international tax structure, state tax rates in the jurisdictions where we conduct business, and our ability to utilize state tax credits that expire between 2013 and 2016. Therefore, our overall effective income tax rate could vary as a result of these factors.

        The effective income tax rate for the three months ended June 30, 2012 was 28.2%. The effective income tax rate for the nine months ended June 30, 2012 was 31.2%. Our effective income tax rates for the three and nine months ended June 30, 2012 were higher than the prior comparable periods primarily due to certain foreign benefits and other deductions that were higher in proportion to the net tax expense and thus decreased the effective tax rate for the three and nine months ended June 30, 2011.

        We accrue interest and penalties related to unrecognized tax benefits in income tax expense. This methodology is consistent with previous periods. At June 30, 2012, we had $1,550 and $635 accrued for the potential payment of interest and penalties, respectively. As of June 30, 2012, we were subject to U.S. federal income tax examinations for the tax years 2007-2011, and to foreign examinations for the tax years of 2005-2011. In addition, we are generally subject to state and local examinations for fiscal years 2007-2011.

        We are under an Internal Revenue Service ("IRS") examination for the tax years 2007-2009. Among other issues, the IRS has questioned the values used by the Company to transfer product and provide services to an international subsidiary. We believe we have appropriately valued such product transfers and services and intend to continue to support this position.

13

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

5. Income Taxes (Continued)

        At June 30, 2012, we had a liability of $11,112 for unrecognized tax benefits, the recognition of which would have an effect of $8,620 on income tax expense and the effective income tax rate. We do not believe that the amount will change significantly in the next 12 months. At this time, we are unable to make a reasonably reliable estimate of the timing of payments in years beyond 12 months due to uncertainties in the timing of various tax audit outcomes.

6. Comprehensive Income (Loss)

	Three months ended June 30, 2012			Three months ended June 30, 2011			Nine months ended June 30, 2012			Nine months ended June 30, 2011
Net income (loss), as reported	$	41,240		$	75,628		$	102,515		$	(7,970	)
Foreign currency translation adjustments, net of taxes		(26,733	)		(164	)		(5,517	)		15,836
Change in fair value of swaps, net of taxes		4,351			(4,736	)		1,409			(14,732	)
Total comprehensive income (loss)	$	18,858		$	70,728		$	98,407		$	(6,866	)

7. Fair Value of Financial Instruments

        GAAP establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. GAAP also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

•

Level 1—Quoted prices in active markets for identical assets or liabilities.

•

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

14

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

7. Fair Value of Financial Instruments (Continued)

        The following table summarizes liabilities measured at fair value on a recurring basis at June 30, 2012:

	Level 1		Level 2			Level 3
Liabilities:
Current:
Interest rate swaps (included in other current liabilities)	$	—	$	(8,182	)	$	—
Cross currency swaps (included in other current liabilities)	$	—	$	—		$	(3,300	)
Non-current:
Interest rate swaps (included in other liabilities)	$	—	$	(6,804	)	$	—
Cross currency swaps (included in other liabilities)	$	—	$	—		$	(10,550	)

        The following table summarizes liabilities measured at fair value on a recurring basis at September 30, 2011:

	Level 1		Level 2			Level 3
Liabilities:
Current:
Interest rate swaps (included in other current liabilities)	$	—	$	(9,102	)	$	—
Cross currency swaps (included in other current liabilities)	$	—	$	—		$	(2,160	)
Non-current:
Interest rate swaps (included in other liabilities)	$	—	$	(8,386	)	$	—
Cross currency swaps (included in other liabilities)	$	—	$	—		$	(8,966	)

        Our swap contracts are measured at fair value based on a market approach valuation technique. With the market approach, fair value is derived using prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Although non-performance risk of the Company and the counterparty is present in all swap contracts and is a component of the estimated fair values, we do not view non-performance risk to be a significant input to the fair value for the interest rate swap contracts. However, with respect to our cross currency swap contracts, we believe that non-performance risk is higher; therefore we classify these swap contracts as "Level 3" in the fair value hierarchy and, accordingly, records estimated fair value adjustments based on internal projections and views of those contracts. The performance risk for the cross currency swap contracts as a percentage of the unadjusted liabilities ranged from 16.5% to 24.4% (18.7% weighted average).

15

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

7. Fair Value of Financial Instruments (Continued)

        The following table shows the Level 3 activity related to cross currency swaps for the three and nine months ended June 30, 2012 and 2011:

	Three months ended June 30, 2012			Three months ended June 30, 2011			Nine months ended June 30, 2012			Nine months ended June 30, 2011
Beginning balance:	$	(18,859	)	$	(16,337	)	$	(11,126	)	$	—
Realized / unrealized gain (loss) on cross currency swaps		5,009			1,948			(2,724	)		(14,389	)
Ending balance:	$	(13,850	)	$	(14,389	)	$	(13,850	)	$	(14,389	)

Interest Rate Swaps

        To manage the potential risk arising from changing interest rates and their impact on long-term debt, our policy is to maintain a combination of available fixed and variable rate financial instruments. During December 2010, we entered into three interest rate swap contracts that were subsequently terminated in connection with the Refinancing, resulting in a termination payment of $1,525. During March 2011, we entered into three interest rate swap contracts to fix the LIBOR indexed interest rates on a portion of our senior credit facilities until the indicated expiration dates of these swap contracts. Each swap contract has an initial notional amount of $333,333 (for a total of one billion dollars), with a fixed interest rate of 1.92% for a four-year term. The notional amount of each swap decreases to $266,666 in December 2012, decreases to $166,666 in December 2013 and has a maturity date of December 2014. Under the terms of the swap contracts, variable interest payments for a portion of our senior credit facilities are swapped for fixed interest payments. These interest rate swap contracts were designated as a cash flow hedge of the variable interest payments on a portion of our term loan debt. We assess hedge effectiveness based on the overall changes in the fair value of the interest rate swap contracts. We measure any potential ineffectiveness using the hypothetical derivative method, and any ineffectiveness will be recognized in current earnings. Hedge ineffectiveness from inception to June 30, 2012 was insignificant.

Cross Currency Swaps

        To manage the potential exposure from adverse changes in currency exchange rates, specifically the British pound, arising from our net investment in British pound denominated operations, we entered into three cross currency swap contracts in December 2010. The aggregate notional amount of the swap contracts is £194,200 (approximately $305,000), with a forward rate of 1.565, and a termination date of September 30, 2017.

        These cross currency contracts were designated as a net investment hedge to the net investment in our British pound denominated operations. We assess hedge effectiveness based on the overall changes in the fair value of the cross currency swap contracts. We measure potential hedge ineffectiveness using the hypothetical derivative method and is recognized in miscellaneous, net in the accompanying statements of operations. Hedge ineffectiveness for the three and nine months ended June 30, 2012

16

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

7. Fair Value of Financial Instruments (Continued)

resulted in an expense of $1,524 and $2,516, respectively, and for the three and nine months ended June 30, 2011, hedge ineffectiveness was insignificant.

        The following table shows the effect of our derivative instruments designated as cash flow and net investment hedging instruments for the three and nine months ended June 30, 2012:

	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income
	Three months ended June 30, 2012			Three months ended June 30, 2012			Nine months ended June 30, 2012			Nine months ended June 30, 2012
Cash Flow Hedges:
Interest rate swaps	$	(1,814	)	$	(2,319	)	$	(5,445	)	$	(6,982	)
Net Investment Hedges:
Cross currency swaps	$	3,845		$	—		$	(128	)	$	—
Total	$	2,031		$	(2,319	)	$	(5,573	)	$	(6,982	)

Notes

        The fair value of the Notes, based on then quoted market prices, was approximately $717,000 on June 30, 2012, which is considered to be a Level 2 fair value.

Assets Re-measured at Fair Value on a Non-recurring Basis

        In connection with the UK Administration (See note 1), we re-measured the Julian Graves Tradename and certain fixed assets using Level 3 inputs, which resulted in an impairment of $20,106.

8. Business and Credit Concentration

Financial Instruments

        Financial instruments that potentially subject us to credit risk consist primarily of cash and cash equivalents (the amounts of which may, at times, exceed Federal Deposit Insurance Corporation limits on insurable amounts), investments and trade accounts receivable. We mitigate our risk by investing in or through major financial institutions.

Customers

        We perform on-going credit evaluations of our customers and adjust credit limits based upon payment history and the customers' current creditworthiness, as determined by review of their current credit information. Customers' account activity is continuously monitored. As a result of this review process, we record bad debt expense, which is based upon historical experience as well as specific customer collection issues that have been identified, in order to adjust the carrying amount of the related receivable to its estimated realizable value. While such bad debt expenses historically have been

17

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

8. Business and Credit Concentration (Continued)

within expectations and the allowances established, if the financial condition of one or more of our customers were to deteriorate, additional bad debt provisions may be required.

        One customer represented 21% and 25% of the Wholesale segment's net sales for the three months ended June 30, 2012 and 2011, respectively. It also represented 13% and 15% of our consolidated net sales for the three months ended June 30, 2012 and 2011, respectively. This customer also represented 23% and 25% of the Wholesale segment's net sales for the nine months ended June 30, 2012 and 2011, respectively. It also represented 14% and 15% of our consolidated net sales for the three months ended June 30, 2012 and 2011, respectively. The loss of this customer, or any one of our other major customers, would have a material adverse effect on our results of operations if we were unable to replace that customer.

        The following customers accounted for the following percentages of the Wholesale segment's gross accounts receivable as of June 30, 2012 and September 30, 2011, respectively:

	June 30, 2012			September 30, 2011
Customer A		16	%		18	%
Customer B		10	%		11	%
Customer C		12	%		10	%

9. Related Party Transactions

Consulting Agreement—Carlyle

        In connection with the Acquisition, we entered into a consulting agreement with Carlyle under which we pay Carlyle a fee for consulting services Carlyle provides to us and our subsidiaries. Under this agreement, subject to certain conditions, we expect to pay an annual consulting fee to Carlyle of $3,000; we reimburse them for their out-of-pocket expenses, and we pay them additional fees associated with other future transactions. For the nine months ended June 30, 2012 and 2011, these fees totaled $2,250 and are recorded in selling, general and administrative expenses. Carlyle also received a one-time transaction fee of $30,000 upon effectiveness of the Merger. Of this amount, $14,324 was recorded in Merger expenses and $15,676 was included with deferred financing costs.

10. 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.

18

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

10. Segment Information (Continued)

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

•

Wholesale—This segment sells products worldwide 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 676 Holland & Barrett stores (including 10 franchised stores in Singapore, six franchised stores in Cyprus, three franchised stores in both Malta and United Arab Emirates and one franchised store in Hungary), 189 Julian Graves stores, which have subsequently been placed into UK Administration (See Note 1), and 51 GNC (UK) stores in the U.K., 106 De Tuinen stores (including 10 franchised locations) in the Netherlands and 42 Nature's Way stores in Ireland. Our revenue generated from this segment 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 430 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.

19

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

10. Segment Information (Continued)

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

	Wholesale		European Retail(2)		Direct Response/ E-Commerce		North American Retail		Corporate/ Manufacturing(1)			Consolidated
Three months ended June 30, 2012:
Net sales	$	480,137	$	182,876	$	76,198	$	60,268	$	—		$	799,479
Income (loss) from operations		74,043		19,297		16,339		6,092		(21,538	)		94,233
Depreciation and amortization		9,911		4,051		2,674		816		8,711			26,163
Capital expenditures		131		6,955		81		215		12,518			19,900
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, 2012:
Net sales	$	1,373,560	$	548,870	$	207,976	$	178,141	$	—		$	2,308,547
Income (loss) from operations		180,355		92,269		43,291		14,576		(59,249	)		271,242
Depreciation and amortization		29,726		12,027		8,024		2,745		25,960			78,482
Capital expenditures		632		16,228		81		503		24,131			41,575
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

(1)

Income from operations for the nine months ended June 30, 2011 included a fair value adjustment to our inventory of $122,104, as well as Merger expenses relating to the Acquisition of $614 and $44,479 for the three and nine months ended June 30, 2011, respectively. There were no Merger expenses recorded following our fiscal year end September 30, 2011.

(2)

Income from operations for the three and nine months ended June 30, 2012 included an impairment charge of $20,106 relating to Julian Graves Limited (See note 1).

20

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

10. Segment Information (Continued)

Total assets by segment:

	June 30, 2012		September 30, 2011
Wholesale	$	2,519,623	$	2,527,402
European Retail		904,660		883,892
Direct Response / E-Commerce		773,700		781,464
North American Retail		96,866		99,466
Corporate / Manufacturing(1)		652,286		803,332
Consolidated assets	$	4,947,135	$	5,095,556

(1)

Total assets decreased for the Corporate / Manufacturing segment as a result of the $225,000 prepayment of the term loan B-1.

11. Condensed Consolidating Financial Statements of Guarantors

        The 9% senior notes due 2018 were issued by NBTY and are guaranteed by each of its current and future direct and indirect subsidiaries, subject to certain exceptions. These guarantees are full, unconditional and joint and several. The following condensed consolidating financial information presents:

1.

Condensed consolidating financial statements as of June 30, 2012 and September 30, 2011 and for the three and nine months ended June 30, 2012 and 2011 of (a) NBTY, the parent and issuer, (b) the guarantor subsidiaries, (c) the non-guarantor subsidiaries and (d) the Company on a consolidated basis; and



2.

Elimination entries necessary to consolidate NBTY, the parent, with guarantor and non-guarantor subsidiaries.

        The condensed consolidating financial statements are presented using the equity method of accounting for investments in wholly owned subsidiaries. Under this method, the investments in subsidiaries are recorded at cost and adjusted for our share of the subsidiaries' cumulative results of operations, capital contributions, distributions and other equity changes. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. This financial information should be read in conjunction with the financial statements and other notes related thereto.

21

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

11. Condensed Consolidating Financial Statements of Guarantors (Continued)

Condensed Consolidating Balance Sheet
As of June 30, 2012

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	75,815		$	1,068	$	182,806		$	—		$	259,689
Accounts receivable, net		—			128,791		27,349			—			156,140
Intercompany		1,251,454			—		132,482			(1,383,936	)		—
Inventories		—			543,582		169,147			—			712,729
Deferred income taxes		—			24,234		615			—			24,849
Other current assets		—			30,353		25,597			—			55,950
Total current assets		1,327,269			728,028		537,996			(1,383,936	)		1,209,357
Property, plant and equipment, net		59,717			282,090		144,774			—			486,581
Goodwill		—			813,188		396,805			—			1,209,993
Intangible assets, net		—			1,615,460		338,106			—			1,953,566
Other assets		—			87,554		84			—			87,638
Intercompany loan receivable		349,809			40,733		—			(390,542	)		—
Investments in subsidiaries		2,819,405			—		—			(2,819,405	)		—
Total assets	$	4,556,200		$	3,567,053	$	1,417,765		$	(4,593,883	)	$	4,947,135
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	—		$	—	$	—		$	—		$	—
Accounts payable		—			162,098		47,908			—			210,006
Intercompany		—			1,383,936		—			(1,383,936	)		—
Accrued expenses and other current liabilities		8,180			112,570		32,033			—			152,783
Total current liabilities		8,180			1,658,604		79,941			(1,383,936	)		362,789
Intercompany loan payable		—			—		390,542			(390,542	)		—
Long-term debt, net of current portion		2,157,500			—		—			—			2,157,500
Deferred income taxes		730,376			—		5,843			—			736,219
Other liabilities		22,448			10,053		20,430			—			52,931
Total liabilities		2,918,504			1,668,657		496,756			(1,774,478	)		3,309,439
Commitments and contingencies
Stockholders' Equity:
Common stock		—			—		—			—			—
Capital in excess of par		1,554,582			352,018		301,271			(653,289	)		1,554,582
Retained earnings		124,987			1,546,378		639,568			(2,185,946	)		124,987
Accumulated other comprehensive income (loss)		(41,873	)		—		(19,830	)		19,830			(41,873	)
Total stockholders' equity		1,637,696			1,898,396		921,009			(2,819,405	)		1,637,696
Total liabilities and stockholders' equity	$	4,556,200		$	3,567,053	$	1,417,765		$	(4,593,883	)	$	4,947,135

22

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

11. Condensed Consolidating Financial Statements of Guarantors (Continued)

Condensed Consolidating Balance Sheet
As of September 30, 2011

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	261,098		$	3,288	$	130,020		$	—		$	394,406
Accounts receivable, net		—			112,841		25,803			—			138,644
Intercompany		1,454,068			—		111,471			(1,565,539	)		—
Inventories		—			517,121		158,248			—			675,369
Deferred income taxes		—			23,706		634			—			24,340
Other current assets		—			31,615		27,877			—			59,492
Total current assets		1,715,166			688,571		454,053			(1,565,539	)		1,292,251
Property, plant and equipment, net		46,507			287,356		145,410			—			479,273
Goodwill		—			813,315		398,884			—			1,212,199
Intangible assets, net		—			1,645,970		359,183			—			2,005,153
Other assets		—			106,622		58			—			106,680
Intercompany loan receivable		325,985			40,734		—			(366,719	)		—
Investments in subsidiaries		2,609,651			—		—			(2,609,651	)		—
Total assets	$	4,697,309		$	3,582,568	$	1,357,588		$	(4,541,909	)	$	5,095,556
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	17,500		$	—	$	—		$	—		$	17,500
Accounts payable		—			131,307		55,204			—			186,511
Intercompany		—			1,565,539		—			(1,565,539	)		—
Accrued expenses and other current liabilities		11,262			123,242		54,038			—			188,542
Total current liabilities		28,762			1,820,088		109,242			(1,565,539	)		392,553
Intercompany loan payable		—			—		366,718			(366,718	)		—
Long-term debt, net of current portion		2,369,375			—		—			—			2,369,375
Deferred income taxes		742,968			—		5,910			—			748,878
Other liabilities		19,309			12,936		15,610			—			47,855
Total liabilities		3,160,414			1,833,024		497,480			(1,932,257	)		3,558,661
Commitments and contingencies
Stockholders' Equity:
Common stock		—			—		—			—			—
Capital in excess of par		1,552,188			352,020		301,271			(653,291	)		1,552,188
Retained earnings		22,472			1,397,524		572,993			(1,970,517	)		22,472
Accumulated other comprehensive income (loss)		(37,765	)		—		(14,156	)		14,156			(37,765	)
Total stockholders' equity		1,536,895			1,749,544		860,108			(2,609,652	)		1,536,895
Total liabilities and stockholders' equity	$	4,697,309		$	3,582,568	$	1,357,588		$	(4,541,909	)	$	5,095,556

23

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

11. Condensed Consolidating Financial Statements of Guarantors (Continued)

Condensed Consolidating Statement of Income
Three Months Ended June 30, 2012

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	571,522	$	258,028		$	(30,071	)	$	799,479
Costs and expenses:
Cost of sales		—			334,807		116,761			(30,071	)		421,497
Advertising, promotion and catalog		—			33,068		8,372			—			41,440
Selling, general and administrative		21,316			109,398		91,489			—			222,203
Impairments of Julian Graves		—			—		20,106			—			20,106
Total costs and expenses		21,316			477,273		236,728			(30,071	)		705,246
(Loss) income from operations		(21,316	)		94,249		21,300			—			94,233
Other income (expense):
Equity in income of subsidiaries		74,331			—		—			(74,331	)		—
Intercompany interest		2,933			—		(2,933	)		—			—
Interest		(36,577	)		—		—			—			(36,577	)
Miscellaneous, net		—			145		(347	)		—			(202	)
Total other income (expense)		40,687			145		(3,280	)		(74,331	)		(36,779	)
Income (loss) before income taxes		19,371			94,394		18,020			(74,331	)		57,454
(Benefit) provision for income taxes		(21,869	)		33,037		5,046			—			16,214
Net income (loss)	$	41,240		$	61,357	$	12,974		$	(74,331	)	$	41,240

24

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

11. Condensed Consolidating Financial Statements of Guarantors (Continued)

Condensed Consolidating Statement of Income
Three Months Ended June 30, 2011

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	550,140	$	240,038		$	(26,840	)	$	763,338
Costs and expenses:
Cost of sales		—			322,854		100,859			(26,840	)		396,873
Advertising, promotion and catalog		—			27,974		8,497			—			36,471
Selling, general and administrative		21,418			97,691		92,213			—			211,322
Merger expenses		—			—		614			—			614
Total costs and expenses		21,418			448,519		202,183			(26,840	)		645,280
(Loss) income from operations		(21,418	)		101,621		37,855			—			118,058
Other income (expense):
Equity in income of subsidiaries		91,546			—		—			(91,546	)		—
Intercompany interest		2,765			—		(2,765	)		—			—
Interest		(38,482	)		—		(18	)		—			(38,500	)
Miscellaneous, net		(16	)		1,763		(1,256	)		—			491
Total other income (expense)		55,813			1,763		(4,039	)		(91,546	)		(38,009	)
(Loss) income before income taxes		34,395			103,384		33,816			(91,546	)		80,049
(Benefit) provision for income taxes		(41,233	)		36,185		9,469			—			4,421
Net (loss) income	$	75,628		$	67,199	$	24,347		$	(91,546	)	$	75,628

25

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

11. Condensed Consolidating Financial Statements of Guarantors (Continued)

Condensed Consolidating Statement of Income
Nine Months Ended June 30, 2012

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	1,637,221	$	765,563		$	(94,237	)	$	2,308,547
Costs and expenses:
Cost of sales		—			982,346		344,601			(94,237	)		1,232,710
Advertising, promotion and catalog		—			107,068		23,214			—			130,282
Selling, general and administrative		58,849			320,848		274,510			—			654,207
Impairments of Julian Graves		—			—		20,106			—			20,106
Total costs and expenses		58,849			1,410,262		662,431			(94,237	)		2,037,305
(Loss) income from operations		(58,849	)		226,959		103,132			—			271,242
Other income (expense):
Equity in income of subsidiaries		215,429			—		—			(215,429	)		—
Intercompany interest		8,538			—		(8,538	)		—			—
Interest		(122,473	)		—		—			—			(122,473	)
Miscellaneous, net		222			2,047		(2,128	)		—			141
Total other income (expense)		101,716			2,047		(10,666	)		(215,429	)		(122,332	)
Income (loss) before income taxes		42,867			229,006		92,466			(215,429	)		148,910
(Benefit) provision for income taxes		(59,648	)		80,152		25,891			—			46,395
Net income (loss)	$	102,515		$	148,854	$	66,575		$	(215,429	)	$	102,515

26

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

11. Condensed Consolidating Financial Statements of Guarantors (Continued)

Condensed Consolidating Statement of Income
Nine Months Ended June 30, 2011

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	1,599,156	$	696,431		$	(83,544	)	$	2,212,043
Costs and expenses:
Cost of sales		—			1,029,956		338,518			(83,544	)		1,284,930
Advertising, promotion and catalog		—			93,186		23,337			—			116,523
Selling, general and administrative		56,941			296,212		269,232			—			622,385
Merger expenses		43,857			—		622			—			44,479
Total costs and expenses		100,798			1,419,354		631,709			(83,544	)		2,068,317
(Loss) income from operations		(100,798	)		179,802		64,722			—			143,726
Other income (expense):
Equity in income of subsidiaries		159,322			—		—			(159,322	)		—
Intercompany interest		7,908			—		(7,908	)		—			—
Interest		(155,255	)		—		(33	)		—			(155,288	)
Miscellaneous, net		49			5,348		(2,648	)		—			2,749
Total other income (expense)		12,024			5,348		(10,589	)		(159,322	)		(152,539	)
(Loss) income before income taxes		(88,774	)		185,150		54,133			(159,322	)		(8,813	)
(Benefit) provision for income taxes		(80,804	)		64,804		15,157			—			(843	)
Net (loss) income	$	(7,970	)	$	120,346	$	38,976		$	(159,322	)	$	(7,970	)

27

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

11. Condensed Consolidating Financial Statements of Guarantors (Continued)

Condensed Consolidating Statement of Cash Flows
Nine Months Ended June 30, 2012

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash (used in) provided by operating activities	$	60,979		$	7,886		$	68,992		$	—	$	137,857
Cash flows from investing activities:
Purchase of property, plant and equipment		(16,902	)		(10,106	)		(14,567	)		—		(41,575	)
Net cash used in investing activities		(16,902	)		(10,106	)		(14,567	)		—		(41,575	)
Cash flows from financing activities:
Principal payments under long-term debt agreements		(229,375	)										(229,375	)
Proceeds from stock options exercised		15											15
Net cash used in financing activities		(229,360	)		—			—			—		(229,360	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(1,639	)		—		(1,639	)
Net decrease in cash and cash equivalents		(185,283	)		(2,220	)		52,786			—		(134,717	)
Cash and cash equivalents at beginning of period		261,098			3,288			130,020			—		394,406
Cash and cash equivalents at end of period	$	75,815		$	1,068		$	182,806		$	—	$	259,689

28

NBTY, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

11. Condensed Consolidating Financial Statements of Guarantors (Continued)

Condensed Consolidating Statement of Cash Flows
Nine Months Ended June 30, 2011

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash provided by operating activities	$	86,239		$	20,992		$	63,010		$	—	$	170,241
Cash flows from investing activities:
Purchase of property, plant and equipment		(1,467	)		(17,701	)		(16,313	)		—		(35,481	)
Cash paid for acquisitions, net of cash acquired		(3,982,431	)		(3,197	)		(446	)				(3,986,074	)
Net cash used in investing activities		(3,983,898	)		(20,898	)		(16,759	)		—		(4,021,555	)
Cash flows from financing activities:
Principal payments under long-term debt agreements		(8,750	)		(429	)		(390	)		—		(9,569	)
Payments for financing fees		(138,227	)		—			—			—		(138,227	)
Proceeds from borrowings		2,400,000			—			—			—		2,400,000
Capital contribution		1,550,400			—			—			—		1,550,400
Net cash provided by (used in) financing activities		3,803,423			(429	)		(390	)		—		3,802,604
Effect of exchange rate changes on cash and cash equivalents		—			335			2,267			—		2,602
Net (decrease) increase in cash and cash equivalents		(94,236	)		—			48,128			—		(46,108	)
Cash and cash equivalents at beginning of period		281,457			—			65,026			—		346,483
Cash and cash equivalents at end of period	$	187,221		$	—		$	113,154		$	—	$	300,375

29

NBTY, Inc.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
(Dollar amounts in thousands)

Forward-Looking Statements

        This Quarterly Report (this "Report") contains "forward-looking statements" within the meaning of the securities laws. You should not place undue reliance on these statements. Forward-looking statements include information concerning our liquidity and our possible or assumed future results of operations, including descriptions of our business strategies. These statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," or similar expressions. These statements are based on certain assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. As you read and consider this Report, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions. Many factors could affect our actual financial results and could cause actual results to differ materially from those expressed in the forward-looking statements. Some important factors include:

•

potential slow or negative growth in the global vitamin, mineral and supplement market;

•

consumer perception of our products due to adverse scientific research or findings, regulatory investigations, litigation, national media attention and other publicity regarding nutritional supplements;

•

loss of significant customers;

•

compliance with new and existing federal, state, local or foreign legislation or regulation including, in particular, Good Manufacturing Practices in the United States, the Food Supplements Directive and Traditional Herbal Medicinal Products Directive in Europe, as well as greater enforcement by federal, state, local or foreign governmental entities, and/or adverse determinations by regulators anywhere in the world (including the banning of products);

•

increases in the cost of borrowings or unavailability of additional debt or equity capital, or both;

•

prolonged economic downturn or recession;

•

instability in financial markets;

•

dependency on retail stores for sales;

•

costs and expenses, including reputational damage, relating to product recalls or removals;

•

our inability to obtain or renew adequate insurance coverage, or to manage insurance costs;

•

international market exposure;

•

failure to comply with anti-corruption laws and regulations of the U.S. and foreign governments in the jurisdictions in which we do business;

•

legal proceedings initiated by regulators in the United States or abroad;

•

unavailability of, or our inability to consummate, advantageous acquisitions in the future, or our inability to integrate acquisitions into the mainstream of our business;

•

difficulty entering new international markets;

•

loss of executive officers and other key personnel;

30

•

the availability and dependency on third-party suppliers of raw materials;

•

disruptions in manufacturing operations that produce nutritional supplements and/or loss of manufacturing certifications;

•

increased competition and failure to compete effectively;

•

our inability to respond to changing consumer preferences;

•

interruption of business or negative impact on sales and earnings due to acts of God, acts of war, sabotage, terrorism, bio-terrorism, civil unrest or disruption of delivery service;

•

work stoppages at our facilities;

•

increased raw material, utility or fuel costs;

•

fluctuations in foreign currencies, including the British pound, the euro, the Canadian dollar and the Chinese yuan;

•

interruptions in information processing systems and management information technology, including system interruptions, security and/or privacy breaches;

•

our inability to protect our intellectual property rights;

•

our exposure to, and the expense of defending and resolving, product liability claims, intellectual property claims and other litigation;

•

our inability to maintain effective internal controls over financial reporting;

•

adverse tax determinations;

•

other factors disclosed in this Report; and

•

other factors beyond our control.

        In light of these risks, uncertainties and assumptions, the forward-looking statements contained in this Report might not prove accurate. You should not place undue reliance upon them. All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date of this Report, and we undertake no obligation to, and specifically will not, update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

The statements in the following discussion and analysis regarding industry outlook, our expectations regarding the performance of our business and the forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under the heading, "Risk Factors," in our 2011 Annual Report. Our actual results may differ materially from those contained in or implied by any forward-looking statements. You should read the following discussion together with the condensed consolidated financial statements, including the related notes, contained elsewhere herein and with the 2011 Annual Report. All references to years, unless otherwise noted, refer to our fiscal years, which end on September 30. All dollar values in this section, unless otherwise noted, are denoted in thousands. Numerical figures have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.

Executive Summary

        We are the leading global vertically integrated manufacturer, distributor and retailer of a broad line of high-quality vitamins, nutritional supplements and related products in the United States, with operations worldwide. We currently market approximately 25,000 SKUs, including numerous private-label and owned brands, such as Nature's Bounty®, Ester-C®, Solgar®, MET-Rx®, American Health®,

31

Osteo Bi-Flex®, Flex-A-Min®, SISU®, Knox®, Sundown®, Rexall®, Pure Protein®, Body Fortress®, Worldwide Sport Nutrition®, Natural Wealth®, Puritan's Pride®, Holland & Barrett®, GNC (UK)®, Physiologics®, Le Naturiste®, De Tuinen® and Vitamin World®. Our vertical integration includes purchasing raw materials and formulating and manufacturing products, which we then market through the following four channels of distribution:

•

Wholesale—This segment sells products worldwide 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 676 Holland & Barrett stores (including 10 franchised stores in Singapore, six franchised stores in Cyprus, three franchised stores in both Malta and United Arab Emirates and one franchised store in Hungary), 189 Julian Graves stores, which have subsequently been placed into UK Administration, and 51 GNC (UK) stores in the U.K., 106 De Tuinen stores (including 10 franchised locations) in the Netherlands and 42 Nature's Way stores in Ireland. Our revenue generated from this segment 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 the internet. Catalogs are strategically mailed to customers who order by mail, internet, or phone.

•

North American Retail—This segment generates revenue through its 430 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.

        Operating data for each of the four distribution channels 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, the following: human resources, legal, finance and various other corporate-level activity related expenses. We attribute such unallocated expenses to corporate.

Julian Graves Limited Administration

        On July 2, 2012, in accordance with the provisions of the United Kingdom Insolvency Act of 1986 and pursuant to a resolution of the board of directors of Julian Graves Limited, a company organized under the laws of the United Kingdom and Wales (the "UK Debtor") and an indirect, wholly-owned subsidiary of the Company, representatives from Deloitte LLP (the "Administrators") were appointed as administrators in respect of the UK Debtor (the "UK Administration"). The UK Administration, which was limited to the UK Debtor, was initiated in response to continuing operating losses of the UK Debtor and their related impact on our cash flows, and does not include the Company or any of our other subsidiaries. In connection with the UK Administration, the UK Debtor, which has retail stores in various locations in the United Kingdom, is expected to be marketed for sale or wound down. The effect of the UK Debtor's entry into administration was to place the management, affairs, business and property of the UK Debtor under the direct control of the Administrators.

        As of June 30, 2012, the carrying value of all assets relating to the UK Debtor were evaluated and an impairment of $20,106, primarily relating to the Julian Graves Tradename was recorded. As of July 2, 2012, concurrent with the transfer of control of the UK debtor to the Administrator, a deconsolidation loss of approximately $4,000 was recorded. Net sales of the UK Debtor were $12,611 and $17,701 for the three months ended June 30, 2012 and 2011, respectively and $43,732 and $59,152 for the nine months ended June 30, 2012 and 2011, respectively.

32

        Contingent liabilities for potential claims under the UK Administration, which may result from (i) negotiations; (ii) actions of the Administrators; (iii) resolution of contractual arrangements, including unexpired leases; and (iv) material adverse developments or other events, may be recorded in future periods. No assurance can be provided that we will not be subject to future litigation and/or liabilities related to the UK Administration. Additional liabilities, if any, will be recorded when they become probable and estimable and could materially affect our future results of operations, financial condition and cash flows.

Carlyle Transaction

        On October 1, 2010, NBTY consummated the Merger with an affiliate of Carlyle under which the Carlyle affiliate acquired 100% of NBTY for a net purchase price of $3,635,949. The purchase price was funded through the net proceeds of our $1,750,000 senior credit facilities, the issuance of $650,000 Notes and a cash equity contribution of $1,550,000 from an affiliate of Carlyle. We also refer to the Merger or the Acquisition together with the Refinancing as the "Transactions."

        As a result of the Acquisition and the application of purchase accounting, our assets and liabilities were adjusted to their fair market values as of October 1, 2010, the Closing Date, which impacts the comparability of our results. Specifically, our cost of sales increased due to the increased carrying value of our inventory. In addition, we incurred certain Acquisition related expenses during the nine months ended June 30, 2011.

Results of Operations

Three Months Ended June 30, 2012 Compared to the Three Months Ended June 30, 2011:

Net Sales

        Net sales by segment for the three months ended June 30, 2012 as compared with the prior comparable period were as follows:

	Three months ended June 30, 2012					Three months ended June 30, 2011
	Net Sales		% of total			Net Sales		% of total			$ change		% change
Wholesale	$	480,137		60.1	%	$	458,460		60.1	%	$	21,677		4.7	%
European Retail		182,876		22.9	%		179,970		23.6	%		2,906		1.6	%
Direct Response / E-Commerce		76,198		9.5	%		67,853		8.9	%		8,345		12.3	%
North American Retail		60,268		7.5	%		57,055		7.4	%		3,213		5.6	%
Net sales	$	799,479		100.0	%	$	763,338		100.0	%	$	36,141		4.7	%

Wholesale

        Net sales for the Wholesale segment increased $21,677, or 4.7%, to $480,137 for the three months ended June 30, 2012, as compared to the prior comparable period. This increase is due to higher net sales of our branded products of $37,020 for the three months ended June 30, 2012, as compared to the prior comparable period. This increase is partially offset by $15,343 lower net sales of private label and contract manufacturing products as a result of the highly competitive environment in the private label business.

        We use targeted promotions to grow overall sales. Promotional programs and rebates were 12.8% of sales for the three months ended June 30, 2012, as compared to 13.0% of sales for the prior comparable period. We expect promotional programs and rebates as a percentage of sales to fluctuate on a quarterly basis.

33

        Product returns were 1.0% and 1.1% of sales for the three months ended June 30, 2012 and 2011, respectively. Product returns for the three months ended June 30, 2012 and 2011 are primarily attributable to returns in the ordinary course of business. We expect returns relating to normal operations to trend between 1% to 2% of Wholesale sales in future quarters.

        One customer represented 21% and 25% of the Wholesale segment's net sales for the three months ended June 30, 2012 and 2011, respectively. It also represented 13% and 15% of our consolidated net sales for the three months ended June 30, 2012 and 2011, respectively. The loss of this customer, or any one of our other major customers, would have a material adverse effect on our results of operations if we were unable to replace that customer.

European Retail

        Net sales for the European Retail segment increased $2,906, or 1.6%, to $182,876 for the three months ended June 30, 2012, as compared to the prior comparable period. This increase is attributable to increased prices and successful store promotions. However these increases were partially offset by the average exchange rate in the British pound decreasing 3.0% as compared to the prior comparable period. In local currency, net sales increased 4.7% and sales for stores open more than one year (same store sales) increased 2.8% as compared to the prior comparable period.

        The following is a summary of European Retail store activity for the three months ended June 30, 2012 and 2011:

European Retail stores:	Three months ended June 30, 2012			Three months ended June 30, 2011
Company-owned stores
Open at beginning of the period		1,039			1,052
Opened during the period		3			5
Acquired during the period		—			1
Closed during the period		(11	)		(5	)
Open at end of the period		1,031			1,053
Franchised stores
Open at beginning of the period		28			26
Opened during the period		6			—
Closed during the period		(1	)		(2	)
Open at end of the period		33			24
Total company-owned and franchised stores
Open at beginning of the period		1,067			1,078
Opened during the period		9			5
Acquired during the period		—			1
Closed during the period		(12	)		(7	)
Open at end of the period		1,064			1,077

Direct Response / E-Commerce

        Net sales for the Direct Response/E-Commerce segment increased $8,345, or 12.3%, for the three months ended June 30, 2012 as compared to the prior comparable period. E-Commerce net sales comprised 66% of total Direct Response/E-Commerce net sales for the three months ended June 30, 2012 as compared to 62% in the prior comparable period. We believe that we remain the vitamin and nutritional supplements leader in the direct response and e-commerce sectors. We continue to increase the number of products available via our catalog and websites.

34

        This segment continues to vary its promotional strategy throughout the fiscal year, utilizing highly promotional catalogs which are not offered in every quarter. Historical results reflect this pattern and therefore we believe this division should be analyzed on an annual, and not a quarterly, basis.

North American Retail

        Net sales for the North American Retail segment increased $3,213, or 5.6%, to $60,268 for the three months ended June 30, 2012 as compared to the prior comparable period. Same store sales growth was 6.7% due to the increases in weight management and sports nutrition products as well as the continued benefit from price increases and store promotions.

        The following is a summary of North American Retail store activity for the three months ended June 30, 2012 and 2011:

North American Retail stores:	Three months ended June 30, 2012			Three months ended June 30, 2011
Vitamin World
Open at beginning of the period		434			446
Opened during the period		—			—
Closed during the period		(4	)		(2	)
Open at end of the period		430			444
Le Naturiste
Open at beginning of the period		80			81
Opened during the period		—			—
Closed during the period		—			(1	)
Open at end of the period		80			80
Total North American Retail
Open at beginning of the period		514			527
Opened during the period		—			—
Closed during the period		(4	)		(3	)
Open at end of the period		510			524

Cost of Sales

        Cost of sales for the three months ended June 30, 2012, as compared with the prior comparable period, was as follows:

	Three months ended June 30, 2012			Three months ended June 30, 2011			$ change		% change
Cost of sales	$	421,497		$	396,873		$	24,624		6.2	%
Percentage of net sales		52.7	%		52.0	%

        The cost of sales as a percentage of net sales for the three months ended June 30, 2012 compared to the prior comparable period increased by 0.7 percentage points. Cost of sales as a percentage of net sales has fluctuated in the past, in part due to competitive pressures in the private label business, product mix and fluctuations in the costs of certain raw materials. To address these matters, we continuously seek to implement improvements in our supply chain, and are also increasing our focus on branded sales.

35

Advertising, Promotion and Catalog Expenses

        Total advertising, promotion and catalog expenses for the three months ended June 30, 2012, as compared with the prior comparable period, were as follows:

	Three months ended June 30, 2012			Three months ended June 30, 2011			$ change		% change
Advertising, promotion and catalog	$	41,440		$	36,471		$	4,969		13.6	%
Percentage of net sales		5.2	%		4.8	%

        Advertising, promotion and catalog expense increased $4,969 or 13.6% as compared to the prior comparable period, as we continue to increase brand awareness across various platforms such as television, print media and website and internet search engine advertising.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses ("SG&A") for the three months ended June 30, 2012, as compared with the prior comparable period were as follows:

	Three months ended June 30, 2012			Three months ended June 30, 2011			$ change		% change
Selling, general and administrative	$	222,203		$	211,322		$	10,881		5.1	%
Percentage of net sales		27.8	%		27.7	%

        The SG&A increase of $10,881 for the three months ended June 30, 2012, as compared to the prior comparable period, is due to $3,249 of increased employee compensation costs primarily due to higher benefit costs to associates; $1,239 of increased freight costs primarily due to higher volume as well as increased fuel surcharges; and a $4,668 increase in legal and consulting fees.

Merger Expenses

        Merger expenses for the three months ended June 30, 2011 of $614 related to the completion of the Acquisition. There were no Merger expenses for the three months ended June 30, 2012.

Impairment of Julian Graves Limited Assets

        During the three months ended June 30, 2012, the board of directors of Julian Graves Limited decided to place the company into U.K. Administration and an impairment charge of $20,106 was recorded.

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Income from Operations

        Income from operations for the three months ended June 30, 2012 as compared to the prior comparable period were as follows:

	Three months ended June 30, 2012			Three months ended June 30, 2011			$ change			% change
Wholesale	$	74,043		$	86,589		$	(12,546	)		(14.5	)%
European Retail		19,297			31,185			(11,888	)		(38.1	)%
Direct Response/E-Commerce		16,339			16,880			(541	)		(3.2	)%
North American Retail		6,092			4,910			1,182			24.1	%
Corporate		(21,538	)		(21,506	)		(32	)		(0.1	)%
Total	$	94,233		$	118,058		$	(23,825	)		(20.2	)%
Percentage of net sales		11.8	%		15.5	%

        The decrease in the Wholesale segment's income from operations was primarily due to lower margins on private label business, the increase in advertising and increased professional fees. The decrease in the European Retail segment's income from operations was the result of the impairment of certain assets of Julian Graves Limited offset by higher sales volume resulting from additional promotions and higher profit margins due to increased prices and improved product procurement. In addition, the European Retail segment's income from operations was adversely impacted by a 3.0% decrease in the average currency exchange rate (British pound to the U.S. dollar) as compared to the prior comparable period. The Direct Response/E-Commerce segment's income from operations decreased due to increased advertising and freight costs partially offset by higher sales as a result of greater promotional activity. The increase in the North American Retail segment's income from operations reflects the continued benefit from higher sales volume.

Interest Expense

        Interest expense for the three months ended June 30, 2012 decreased from the prior comparable period due to lower balances outstanding resulting from the prepayment of $225,000 of our term loan B-1 on December 30, 2011.

Provision for Income Taxes

        Our provision for income taxes is impacted by a number of factors, including federal taxes, our international tax structure, state tax rates in the jurisdictions where we conduct business, and our ability to utilize state tax credits that expire between 2013 and 2016. Therefore, our overall effective income tax rate could vary as a result of these factors. The effective income tax rate for the three months ended June 30, 2012 was 28.2%. The effective income tax rate was higher for the three months ended June 30, 2012 primarily due to certain foreign benefits and other deductions that were higher in proportion to the net tax expense and thus decreased the effective tax rate for the three months ended June 30, 2011.

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Nine Months Ended June 30, 2012 Compared to the Nine Months Ended June 30, 2011:

Net Sales

        Net sales by segment for the nine months ended June 30, 2012, as compared with the prior comparable period were as follows:

	Nine months ended June 30, 2012					Nine months ended June 30, 2011
	Net Sales		% of total			Net Sales		% of total			$ change		% change
Wholesale	$	1,373,560		59.5	%	$	1,319,527		59.6	%	$	54,033		4.1	%
European Retail		548,870		23.8	%		530,526		24.0	%		18,344		3.5	%
Direct Response/E-Commerce		207,976		9.0	%		193,576		8.8	%		14,400		7.4	%
North American Retail		178,141		7.7	%		168,414		7.6	%		9,727		5.8	%
Net sales	$	2,308,547		100.0	%	$	2,212,043		100.0	%	$	96,504		4.4	%

Wholesale

        Net sales for the Wholesale segment increased $54,033, or 4.1%, to $1,373,560 for the nine months ended June 30, 2012, as compared to the prior comparable period. This increase is due to higher net sales of our branded products of $115,899 for the nine months ended June 30, 2012, as compared to the prior comparable period. This increase was partially offset by $61,866 lower net sales of private label and contract manufacturing products as a result of the highly competitive environment in the private label business and from the loss of certain contract manufacturing agreements.

        We use targeted promotions to grow overall sales. Promotional programs and rebates were 14.0% of sales for the nine months ended June 30, 2012, as compared to 13.4% of sales for the prior comparable period. We expect promotional programs and rebates as a percentage of sales to fluctuate on a quarterly basis.

        Product returns were 1.3% and 1.5% of sales for the nine months ended June 30, 2012 and 2011, respectively. Product returns for the nine months ended June 30, 2012 and 2011 are primarily attributable to returns in the ordinary course of business. We expect returns relating to normal operations to trend between 1% to 2% of Wholesale sales in future quarters.

        One customer represented 23% and 25% of the Wholesale segment's net sales for the nine months ended June 30, 2012 and 2011, respectively. It also represented 14% and 15% of our consolidated net sales for the nine months ended June 30, 2012 and 2011, respectively. The loss of this customer, or any one of our other major customers, would have a material adverse effect on our results of operations if we were unable to replace that customer.

European Retail

        Net sales for the European Retail segment increased $18,344, or 3.5%, to $548,870 for the nine months ended June 30, 2012, as compared to the prior comparable period. This increase is attributable to increased prices and successful store promotions. In addition, the average exchange rate in the British pound decreased 1.8%, as compared to the prior comparable period. In local currency, net sales increased 5.4% and sales for stores open more than one year (same store sales) increased 3.5% as compared to the prior comparable period.

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        The following is a summary of European Retail store activity for the nine months ended June 30, 2012 and 2011:

European Retail stores:	Nine months ended June 30, 2012			Nine months ended June 30, 2011
Company-owned stores
Open at beginning of the period		1,040			1,035
Opened during the period		14			29
Closed during the period		(23	)		(11	)
Open at end of the period		1,031			1,053
Franchised stores
Open at beginning of the period		28			22
Opened during the period		6			6
Closed during the period		(1	)		(4	)
Open at end of the period		33			24
Total company-owned and franchised stores
Open at beginning of the period		1,068			1,057
Opened during the period		20			35
Closed during the period		(24	)		(15	)
Open at end of the period		1,064			1,077

Direct Response / E-Commerce

        Net sales in the Direct Response/E-Commerce segment increased $14,400, or 7.4%, to $207,976 for the nine months ended June 30, 2012 as compared to the prior comparable period. E-Commerce net sales comprised 65% of total segment net sales for the nine months ended June 30, 2012 as compared to 60% in the prior comparable period. We believe that we remain the vitamin and nutritional supplements leader in the direct response and e-commerce sectors, and we continue to increase the number of products available via our catalog and websites.

        This segment continues to vary its promotional strategy throughout the fiscal year, utilizing highly promotional catalogs which are not offered in every quarter. Historical results reflect this pattern and therefore we believe this division should be analyzed on an annual, and not a quarterly, basis.

North American Retail

        Net sales for the North American Retail segment increased $9,727, or 5.8%, to $178,141 for the nine months ended June 30, 2012 as compared to the prior comparable period. Same store sales growth was 7.7% due to the increases in weight management and sports nutrition products as well as the continued benefit from price increases and store promotions.

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        The following is a summary of North American Retail store activity for the nine months ended June 30, 2012 and 2011:

North American Retail stores:	Nine months ended June 30, 2012			Nine months ended June 30, 2011
Vitamin World
Open at beginning of the period		443			457
Opened during the period		—			2
Closed during the period		(13	)		(15	)
Open at end of the period		430			444
Le Naturiste
Open at beginning of the period		80			81
Opened during the period		—			—
Closed during the period		—			(1	)
Open at end of the period		80			80
Total North American Retail
Open at beginning of the period		523			538
Opened during the period		—			2
Closed during the period		(13	)		(16	)
Open at end of the period		510			524

Cost of Sales

        Cost of sales for the nine months ended June 30, 2012 as compared with the prior comparable period was as follows:

	Nine months ended June 30,			Nine months ended June 30,
	2012			2011			$ change			% change
Cost of sales	$	1,232,710		$	1,284,930		$	(52,220	)		(4.1	)%
Percentage of net sales		53.4	%		58.1	%

        The decrease in cost of sales as a percentage of net sales is primarily attributable to an adjustment in the quarter ended December 31, 2011 of $122,104 to acquired inventory to its fair value as required under purchase accounting in connection with the Merger. Excluding the impact of this adjustment, cost of sales as a percentage of net sales is up 0.8 percentage points. This increase is due to higher costs of certain raw materials, partially offset by the impact of having a greater proportion of higher margin branded product sales in the current period than in the prior comparable period.

        Cost of sales as a percentage of net sales has fluctuated in the past, in part due to competitive pressures in the private label business, product mix and fluctuations in the cost of certain raw materials. To address these matters, we continuously seek to implement improvements in our supply chain, and are also increasing our focus on branded sales.

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Advertising, Promotion and Catalog Expenses

        Total advertising, promotion and catalog expenses for the nine months ended June 30, 2012, as compared with the prior comparable period were as follows:

	Nine months ended June 30,			Nine months ended June 30,
	2012			2011			$ change		% change
Advertising, promotion and catalog	$	130,282		$	116,523		$	13,759		11.8	%
Percentage of net sales		5.6	%		5.3	%

        The $13,759, or 11.8%, increase in advertising, promotion and catalog expense as compared to the prior comparable period is a result of our efforts to increase our brand awareness across various platforms such as television, print media and website and internet search engine advertising.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses ("SG&A") for the nine months ended June 30, 2012, as compared with the prior comparable period were as follows:

	Nine months ended June 30,			Nine months ended June 30,
	2012			2011			$ change		% change
Selling, general and administrative	$	654,207		$	622,385		$	31,822		5.1	%
Percentage of net sales		28.3	%		28.1	%

        The SG&A increase of $31,821 for the nine months ended June 30, 2012, as compared to the prior comparable period, is due to $10,934 of increased employee compensation costs primarily due to higher salaries and benefit costs to existing associates; $4,718 of increased freight costs primarily due to higher volume as well as increased fuel surcharges; and a $8,375 increase in legal and professional fees, partially offset by lower insurance costs of $2,132.

Merger Expenses

        Merger expenses for the nine months ended June 30, 2011 consisted of $15,660 in bank costs associated with an unused bridge loan, $14,324 for a portion of the transaction fee paid to Carlyle, $6,929 for an employment agreement termination payment due to a former executive officer and $7,566 of merger related costs. There were no Merger expenses for the nine months ended June 30, 2012.

Impairment of Julian Graves Limited Assets

        During the nine months ended June 30, 2012, the board of directors of Julian Graves Limited decided to place the company into U.K. Administration and an impairment charge of $20,106 was recorded.

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Income from Operations

        Income from operations for the nine months ended June 30, 2012 as compared to the prior comparable period was as follows:

	Nine months ended June 30,			Nine months ended June 30,
	2012			2011			$ change			% change
Wholesale/U.S. Nutrition	$	180,355		$	223,213		$	(42,858	)		(19.2	)%
European Retail		92,269			88,797			3,472			3.9	%
Direct Response/E-Commerce		43,291			45,936			(2,645	)		(5.8	)%
North American Retail		14,576			8,823			5,753			65.2	%
Corporate		(59,249	)		(223,043	)		163,794			73.4	%
Total	$	271,242		$	143,726		$	127,516			88.7	%
Percentage of net sales		11.7	%		6.5	%

        The decrease in the Wholesale segment's income from operations was primarily due to lower margins on private label business as well as an increase in certain raw material costs, increased advertising expense to increase brand awareness, as well as increased SG&A costs. The increase in the European Retail segment's income from operations was the result of higher sales volume and higher profit margins due to increased prices and improved product procurement, offset by the impairment of certain assets of Julian Graves Limited and a 1.8% decrease in the average currency exchange rate (British pound to the U.S. dollar) as compared to the prior comparable period. The decrease in the Direct Response/E-Commerce segment's income from operations was primarily due to greater use of promotions as well as higher advertising and freight costs. The increase in the North American Retail segment's income from operations reflects the continued benefit from higher sales volume. The decrease in the Corporate segment loss from operations was primarily caused by non-recurring costs in the prior period as a result of the Merger relating to an inventory adjustment to fair value, as well as certain non-recurring legal and other professional advisory fees.

Interest Expense

        Interest expense for the nine months ended June 30, 2012 decreased from the prior comparable period due to the prepayment of $225,000 of our term loan B-1 as well as the refinancing of our senior credit facilities in the prior comparable period which resulted in a write-off of deferred financing costs of $20,824. In addition, $2,394 of the call premium on the term loan B and termination costs on the interest rate swap contracts of $1,525 were expensed in the prior comparable period. This was partially offset by the write-off of deferred financing costs of $9,289 associated with the prepayment of $225,000 of our term loan B-1.

Provision for Income Taxes

        Our provision for income taxes is impacted by a number of factors, including federal taxes, our international tax structure, state tax rates in the jurisdictions where we conduct business, and our ability to utilize state tax credits that expire between 2013 and 2016. Therefore, our overall effective income tax rate could vary as a result of these factors. The effective income tax rate for the nine months ended June 30, 2012 was 31.2%. The effective income tax rate was higher for the nine months ended June 30, 2012 primarily due to certain foreign benefits and other deductions that were higher in proportion to the net tax expense and thus decreased the effective tax rate for the nine months ended June 30, 2011.

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Liquidity and Capital Resources

        Our primary sources of liquidity and capital resources are cash generated from operations and funds available under our revolving credit facility. We expect that ongoing requirements for debt service and capital expenditures will be funded from these sources of funds.

        On the Closing Date, we entered into senior credit facilities totaling $2,000,000, consisting of $1,750,000 term loan facilities and a $250,000 revolving credit facility. In addition, we issued $650,000 of Notes with an interest rate of 9% and a maturity date of October 1, 2018.

        On the Refinancing Date, NBTY, Holdings, Barclays Bank PLC, as administrative agent and several other lenders entered into the Refinancing pursuant to which we repriced our loans and amended certain other terms under our existing Credit Agreement. Under the terms of the Refinancing, the original $250,000 term loan A and $1,500,000 term loan B were replaced with a new $1,750,000 term loan B-1 and the $250,000 revolving credit facility was modified to $200,000. Borrowings under term loan B-1 bear interest at a floating rate which can be, at our option, either (i) Eurodollar rate plus an applicable margin or, (ii) base rate plus an applicable margin, in each case, subject to a Eurodollar rate floor of 1.00% or a base rate floor of 2.00%, as applicable. The applicable margin for term loan B-1 and the revolving credit facility is 3.25% per annum for Eurodollar loans and 2.25% per annum for base rate loans, with a step-down in rate for the revolving credit facility upon the achievement of a certain total senior secured leverage ratio. Substantially all other terms are consistent with the original term loan B, including the amortization schedule of term loan B-1 and maturity dates. As a result of the Refinancing, $20,824 of previously capitalized deferred financing costs were expensed. In addition, $2,394 of the call premium on term loan B and termination costs on interest rate swap contracts of $1,525 were expensed.

        On December 30, 2011, we prepaid $225,000 of principal on our term loan B-1. As a result of this prepayment, $9,289 of deferred financing costs were written off. In accordance with the prepayment provisions of the Refinancing, no scheduled payments of principal will be required until October 2017.

        We must make prepayments on term loan B-1 with the net cash proceeds of certain asset sales, casualty and condemnation events, the incurrence or issuance of indebtedness (other than indebtedness permitted to be incurred under our senior credit facilities unless specifically incurred to refinance a portion of our senior credit facilities) and 50% of excess cash flow (such percentage subject to reduction based on achievement of specified total senior secured leverage ratios), in each case, subject to certain reinvestment rights and other exceptions. We are also required to make prepayments under our revolving credit facility at any time when, and to the extent that, the aggregate amount of the outstanding loans and letters of credit under the revolving credit facility exceeds the aggregate amount of commitments in respect of the revolving credit facility.

        In addition, the terms of the Refinancing require the maintenance of a maximum total senior secured leverage ratio on a quarterly basis, calculated with respect to Consolidated EBITDA, as defined therein, if at any time amounts are outstanding under the revolving credit facility (including swingline loans and letters of credit). We were in compliance with all covenants under the Credit Agreement at June 30, 2012. During the nine months ended June 30, 2012, no amounts were outstanding under the revolving credit facility. All other financial covenants required by the senior secured credit facilities were removed as part of the Refinancing.

        The indenture governing the Notes and the Credit Agreement contain a number of covenants imposing significant restrictions on our business. These restrictions may affect our ability to operate our business and may limit our ability to take advantage of potential business opportunities as they arise. The restrictions these covenants place on us include limitations on our ability to:

•

incur or guarantee additional indebtedness;

43

•

make certain investments;

•

pay dividends or make distributions on our capital stock;

•

sell assets, including capital stock of restricted subsidiaries;

•

agree to payment restrictions affecting our restricted subsidiaries;

•

consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

•

enter into transactions with our affiliates;

•

incur liens; and

•

designate any of our subsidiaries as unrestricted subsidiaries.

        Our ability to make payments on and to refinance our indebtedness, including the Notes, will depend on our ability to generate cash in the future. We believe that our cash on hand, together with cash from operations and, if required, borrowings under the revolving portion of our senior credit facilities, will be sufficient for our cash requirements for the next twelve months.

        We or our affiliates, at any time and from time to time, may purchase Notes or other indebtedness. Any such purchases may be made through open market or privately negotiated transactions with third parties or pursuant to one or more tender or exchange offers or otherwise, upon such terms and at such prices, as well as with such consideration, as we, or any of our affiliates, may determine.

        We expect our fiscal 2012 capital expenditures to be in excess of recent periods due to our increased investments in our business.

        The following table sets forth, for the periods indicated, cash balances and working capital:

	As of June 30, 2012		As of September 30, 2011
Cash and cash equivalents	$	259,689	$	394,406
Working capital (including cash and cash equivalents)	$	846,568	$	899,698

        The following table sets forth, for the periods indicated, net cash flows provided by (used in) operating, investing and financing activities and other operating measures:

	For the nine months ended June 30, 2012			For the nine months ended June 30, 2011
Cash flow provided by operating activities	$	137,857		$	170,241
Cash flow used in investing activities	$	(41,575	)	$	(4,021,555	)
Cash flow (used in) / provided by financing activities	$	(229,360	)	$	3,802,604
Inventory turnover		2.4			2.3
Days sales (Wholesale) outstanding in accounts receivable		31			31

        We monitor current and anticipated future levels of cash and cash equivalents in relation to anticipated operating, financing and investing requirements. Cash and cash equivalents held by our foreign subsidiaries are subject to U.S. income taxes upon repatriation to the U.S. We generally repatriate all earnings from our foreign subsidiaries where permitted under local law. However, during fiscal 2012, we plan to indefinitely reinvest $25,000 of our foreign earnings outside of the U.S. for capital expenditures.

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        The decrease in working capital of $53,130 at June 30, 2012 as compared to September 30, 2011 was primarily due to the debt prepayment of $225,000 partially offset by cash flows from operations.

        Cash provided by operating activities during the nine months ended June 30, 2012 and 2011 was mainly attributable to income from operations and increased accounts payable, partially offset by increases in inventory and accounts receivable and decreases in accrued expenses and other liabilities.

        During the nine months ended June 30, 2012, cash flows used in investing activities consisted of cash paid for the purchases of property, plant and equipment. During the nine months ended June 30, 2011, cash flows used in investing activities consisted of cash paid for the purchases of property, plant and equipment and the impact of the Transactions.

        For the nine months ended June 30, 2012, cash flows used in financing activities related to prepayment of principal payments on term loan B-1. During the nine months ended June 30, 2011, cash flows provided by financing activities included the impact of the Transactions.

Consolidated EBITDA

        EBITDA consists of earnings before interest expense, taxes, depreciation and amortization. Consolidated EBITDA, as defined in our senior credit facilities, as amended, eliminates the impact of a number of items we do not consider indicative of our ongoing operating performance. You are encouraged to evaluate each adjustment and the reasons we consider it appropriate for supplemental analysis. Consolidated EBITDA is a component of certain covenants under our senior credit facilities. We present EBITDA and Consolidated EBITDA because we consider these items to be important supplemental measures of our performance and believe these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industries with similar capital structures. We believe issuers of debt securities also present EBITDA and Consolidated EBITDA because investors, analysts and rating agencies consider it useful in measuring the ability of those issuers to meet debt service obligations. We believe that these items are appropriate supplemental measures of debt service capacity, because cash expenditures for interest are, by definition, available to pay interest, and tax expense is inversely correlated to interest expense because tax expense goes down as deductible interest expense goes up; and depreciation and amortization are non-cash charges.

        EBITDA and Consolidated EBITDA have limitations as analytical tools, and you should not consider these items in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

•

EBITDA and Consolidated EBITDA:

•

exclude certain tax payments that may represent a reduction in cash available to us;

•

do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

•

do not reflect changes in, or cash requirements for, our working capital needs; and

•

do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments on our debt, including the Notes;

•

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Consolidated EBITDA do not reflect any cash requirements for such replacements; and

•

other companies in our industry may calculate EBITDA and Consolidated EBITDA differently than we do, limiting their usefulness as comparative measures.

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        Because of these limitations, EBITDA and Consolidated EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business.

        In addition, in calculating Consolidated EBITDA, we make certain adjustments that are based on assumptions and estimates that may prove to be inaccurate.

        In evaluating Consolidated EBITDA, it should be noted that in the future we may incur expenses similar to those eliminated in this presentation. Our presentation of Consolidated EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

        The following table reconciles net income (loss) to EBITDA and Consolidated EBITDA (as defined in our senior credit facilities) for the three and nine months ended June 30, 2012 and 2011:

	Three months ended June 30, 2012			Three months ended June 30, 2011		Nine months ended June 30, 2012			Nine months ended June 30, 2011
Net income (loss)	$	41,240		$	75,628	$	102,515		$	(7,970	)
Interest expense		36,577			38,500		122,473			155,288
Income tax		16,214			4,421		46,395			(843	)
Depreciation and amortization		26,163			25,759		78,482			76,572
EBITDA		120,194			144,308		349,865			223,047
Severance costs(a)		744			3,106		2,192			4,713
Stock-based compensation(b)		881			112		2,380			798
Management fee(c)		750			750		2,250			2,250
Merger related costs(d)		—			614		—			44,479
Inventory fair value adjustment(e)		—			—		—			122,104
Pro forma cost savings(f)		8,485			1,980		25,455			5,940
Impairments(g)		20,224			1,384		21,794			2,025
Other non-recurring items(h)		7,987			4,109		18,931			6,387
Limitation on certain EBITDA adjustments		(1,677	)		—		(5,031	)		—
Consolidated EBITDA	$	157,588		$	156,363	$	417,836		$	411,743

(a)

Reflects the exclusion of severance costs incurred at various subsidiaries of the Company.

(b)

Reflects the exclusion of non-cash expenses related to stock options.

(c)

Reflects the exclusion of the Carlyle management fee.

(d)

Reflects the exclusion of costs incurred in connection with the Merger.

(e)

Reflects the exclusion of the sell-through of the increased fair value of opening inventory at acquisition required under purchase accounting.

(f)

Reflects three and nine months, respectively of prospective savings in accordance with the Credit Agreement; specifically, the amount of cost savings expected to be realized from operating expense reductions and other operating improvements as a result of specified actions taken or initiated, less the amount of any actual cost savings realized during the period.

(g)

Reflects the impairment of certain assets, including the Julian Graves Limited impairment of $20,106 for the three and nine months ended June 30, 3012.

(h)

Reflects the exclusion of non-recurring items including recruitment fees and consulting fees.

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Off-Balance Sheet Arrangements

        We have no off-balance sheet arrangements.

Seasonality

        We believe that our business is not seasonal in nature. However, we have historically experienced, and expect to continue to experience, a substantial variation in our net sales and operating results from quarter to quarter. The factors that influence this variability of quarterly results include general economic and industry conditions affecting consumer spending, changing consumer demands and current news on nutritional supplements, the timing of our introduction of new products, promotional program incentives offered to customers, the timing of catalog promotions, the level of consumer acceptance of new products and actions of competitors. Accordingly, a comparison of our results of operations from consecutive periods is not necessarily meaningful, and our results of operations for any period are not necessarily indicative of future performance.

Foreign Currency

        Approximately 32% and 31% of our net sales during the nine months ended June 30, 2012 and 2011, respectively, were denominated in currencies other than U.S. dollars, principally British pounds and to a lesser extent euros, Canadian dollars and Chinese yuan. A significant weakening of such currencies versus the U.S. dollar could have a material adverse effect on us, as this would result in a decrease in our consolidated operating results.

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

	June 30, 2012			September 30, 2011
Total Assets		26	%		24	%
Total Liabilities		3	%		4	%

        In preparing the consolidated financial statements, the financial statements of the foreign subsidiaries are translated from the functional currency, generally the local currency, into U.S. dollars. This process results in exchange rate gains and losses, which are included as a separate component of stockholders' equity under the caption "Accumulated other comprehensive loss."

        During the nine months ended June 30, 2012 and 2011, translation (losses) gains of $5,517 and $15,836, respectively, were included in determining other comprehensive income. Cumulative translation (losses) gains of approximately $25,713 and $20,196 were included as part of accumulated other comprehensive income within the consolidated balance sheet at June 30, 2012 and September 30, 2011, respectively.

        The magnitude of these gains or losses is dependent upon movements in the exchange rates of the foreign currencies against the U.S. dollar. These currencies include the British pound, the euro, the Canadian dollar and the Chinese yuan. Any future translation gains or losses could be significantly different than those noted in each of these years.

Recent Accounting Developments

        In June 2011, the FASB amended its guidance on the presentation of comprehensive income in financial statements to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items that are recorded in other comprehensive income. The new accounting guidance requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The provisions of this new guidance are effective for fiscal years, and interim periods within those years,

47

beginning after December 15, 2011. However the requirement to present items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income has been temporarily delayed by the FASB until further evaluation can be done on the impact of its implementation. We are currently evaluating the impact of adopting this guidance on our financial statements.

        In September 2011, the FASB issued guidance to allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is not required. This new guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of the guidance is not expected to have a material impact on our financial position, results of operations or cash flows.

        In July 2012, the FASB issued guidance to allow an entity to make a qualitative assessment of whether it is more likely than not that an indefinite-lived intangible asset's fair value is less than its carrying value before applying the two-step quantitative impairment test. If it is determined through the qualitative assessment that an indefinite-lived intangible asset's fair value is more likely than not greater than its carrying value, the remaining impairment steps would be unnecessary. The qualitative assessment is optional, allowing entities to directly apply the quantitative assessment. This new guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of the guidance is not expected to have a material impact on our financial position, results of operations or cash flows.

Critical Accounting Policies and Estimates

        We describe our significant accounting policies in Note 2 of the Notes to Consolidated Financial Statements included in our 2011 Annual Report. We discuss our critical accounting estimates in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the same 2011 Annual Report. There have been no significant changes in our significant accounting policies or critical accounting estimates since September 30, 2011.

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NBTY, Inc.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
(in thousands)

Quantitative and Qualitative Disclosures About Market Risk

        We are subject to currency fluctuations, primarily with respect to the British pound, the euro, the Canadian dollar and the Chinese yuan, and interest rate risks that arise from normal business operations. We regularly assess these risks.

        We have subsidiaries whose operations are denominated in foreign currencies (primarily the British pound, the euro, the Canadian dollar and the Chinese yuan). We consolidate the earnings of our international subsidiaries by translating them into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar weakens against foreign currencies, the remeasurement of these foreign currency denominated transactions results in increased net sales, operating expenses and net income. Similarly, our net sales, operating expenses and net income would decrease if the U.S. dollar strengthens against foreign currencies.

        To manage the potential exposure from adverse changes in currency exchange rates, specifically the British pound, arising from our net investment in British pound denominated operations, on December 16, 2010, we entered into three cross currency swap contracts. The aggregate notional amount of the swap contracts is £194,200 (approximately $305,000), with a forward rate of 1.565, and a termination date of September 30, 2017.

        Net sales denominated in foreign currencies were approximately $741,836, or 32.1% of total net sales, for the nine months ended June 30, 2012. A majority of our foreign currency exposure is denominated in British pounds and Canadian dollars. For the nine months ended June 30, 2012, as compared to the prior comparable period, the British pound decreased 1.82% as compared to the U.S. dollar and the Canadian dollar decreased 2.27% as compared to the U.S. dollar. The combined effect of the changes in these currency rates resulted in a decrease of $11,900 in net sales and a decrease of $1,632 in operating income.

        We are exposed to changes in interest rates on our senior credit facilities. During December 2010, we entered into three interest rate swap contracts that we subsequently terminated in connection with the Refinancing, resulting in a termination payment of $1,525. During March 2011, we entered into three interest rate swap contracts to fix the LIBOR indexed interest rates on a portion of our senior credit facilities until the indicated expiration dates of these swap contracts. Each swap contract has an initial notional amount of $333,333 (for a total of $1 billion), with a fixed interest rate of 1.92% for a four-year term. The notional amount of each swap decreases to $266,666 in December 2012, decreases to $166,666 in December 2013 and has a maturity date of December 2014. Under the terms of the swap contracts, variable interest payments for a portion of our senior credit facilities are swapped for fixed interest payments.

        To manage the potential risk arising from changing interest rates and their impact on long-term debt, our policy is to maintain a combination of available fixed and variable rate financial instruments. Assuming our senior credit facilities are fully drawn, each one-eighth percentage point increase or decrease in the applicable interest rates would correspondingly change our interest expense on our senior credit facilities by approximately $884 per year.

49

NBTY, Inc.
Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

        Our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We designed our disclosure controls and procedures to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, to allow timely decisions regarding required disclosure. Our chief executive officer and chief financial officer, with assistance from other members of our management, have reviewed the effectiveness of our disclosure controls and procedures as of June 30, 2012, and, based on their evaluation, have concluded that our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

        There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended June 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

50

NBTY, Inc.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
(Dollar amounts in thousands)

Stock Purchases

        On May 11, 2010, a putative class-action, captioned John F. Hutchins v. NBTY, Inc., et al, was filed in the United States District Court, Eastern District of New York, against NBTY and certain current and former officers, claiming that the defendants made false material statements, or concealed adverse material facts, for the purpose of causing members of the class to purchase NBTY stock at allegedly artificially inflated prices. An amended complaint, seeking unspecified compensatory damages, attorneys' fees and costs, was served on February 1, 2011. The Company moved to dismiss the amended complaint on March 18, 2011 and that motion was denied on March 6, 2012. Discovery is ongoing. We believe the claims to be without merit and intend to vigorously defend this action. At this time, however, no determination can be made as to the ultimate outcome of the litigation or the amount of liability, if any, on the part of any of the defendants.

Employment Class Actions

        On or about July 7, 2010, a putative class action captioned Hamilton and Taylor v. Vitamin World, Inc. was filed against one of our subsidiaries in the Alameda Superior Court, California. Plaintiffs seek to represent a class of employees in connection with several causes of action alleging, among other things, wage and hour violations. Plaintiffs describe the class as all non-exempt current and former employees of Vitamin World Stores in California. The complaint seeks compensatory damages, statutory penalties, restitution, disgorgement of profits, and attorneys' fees and costs in unidentified amounts. Vitamin World, Inc. has agreed upon a proposed settlement with the plaintiffs, and the parties have submitted settlement documentation to the court for approval, which would provide for payments to the class. Until such settlement is approved and entered by the court, however, no determination can be made as to the ultimate outcome of the litigation or the amount of liability, if any, on the part of the defendant. This proposed settlement is not material.

        On or about April 8, 2010, a putative class action captioned Dirickson v. NBTY Acquisition, LLC, NBTY Manufacturing, LLC, NBTY, Inc., and Volt Management Corporation ("Volt") was filed against the Company and certain subsidiaries in the Superior Court of California, County of Los Angeles. Volt is not related to the Company. Plaintiff seeks to represent a class of employees in connection with several causes of action alleging, among other things, wage and hour violations. The complaint seeks damages on behalf of all non-exempt employees within the State of California who worked for Volt or any of the NBTY entities between April 8, 2006 and April 8, 2010, including compensatory damages, unpaid wages, statutory penalties, restitution, unspecified injunctive relief, unjust enrichment and attorneys' fees and costs in unidentified amounts. The parties submitted to the court a settlement agreement providing for potential payments to the class and the court preliminarily approved the settlement agreement on or about May 9, 2012. . No determination can be made as to the ultimate outcome of the litigation or the amount of liability, if any, until such settlement is approved and entered by the court. The estimated settlement value is not material.

Glucosamine-Based Dietary Supplements

        Beginning in June 2011, certain putative class actions have been filed in various jurisdictions against the Company, its subsidiary Rexall Sundown, Inc. ("Rexall"), and/or other companies as to which there may be a duty to defend and indemnify, challenging the marketing of glucosamine-based dietary supplements, under various states' consumer protection statutes. The lawsuits against the Company and its subsidiaries are: Cardenas v. NBTY, Inc. and Rexall Sundown, Inc. (filed June 14, 2011

51

in the United States District Court for the Eastern District of California, on behalf of a putative class of California consumers seeking unspecified compensatory damages based on theories of restitution and disgorgement, plus punitive damages and injunctive relief); and Jennings v. Rexall Sundown, Inc. (filed August 22, 2011 in the United States District Court for the District of Massachusetts, on behalf of a putative class of Massachusetts consumers seeking unspecified trebled compensatory damages), as well as other cases in California and Illinois against certain wholesale customers as to which the Company may have certain indemnification obligations. Motions to dismiss have been filed in all of these cases. On April 10, 2012, the motion to dismiss was granted in part and denied in part in the Jennings case and discovery has commenced; all other cases currently remain at the pleading stage. The Company disputes the allegations and intends to vigorously defend these actions. At this time, however, no determination can be made as to the ultimate outcome of the litigation or the amount of liability, if any, on the part of any of the defendants.

Claims in the Ordinary Course

        In addition to the foregoing, other regulatory inquiries, claims, suits and complaints (including product liability, false advertising, intellectual property and Proposition 65 claims) arise from time to time in the ordinary course of our business. We believe that such other inquiries, claims, suits and complaints would not have a material adverse effect on our consolidated financial condition or results of operations, if adversely determined against us.

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NBTY, Inc.
Item 1A. Risk Factors

Risk Factors

        In addition to the other information set forth in this Report, you should carefully consider the risk factors disclosed under the caption "Risk Factors" in our 2011 Annual Report. These factors could materially adversely affect our business, financial condition, operating results and cash flows. The risks and uncertainties described in our 2011 Annual Report are not the only ones we face. Risks and uncertainties not currently known to us or that we currently deem immaterial also may materially adversely affect our business, financial condition, operating results or cash flows. Since September 30, 2011, there have been no significant changes relating to risk factors.

53

NBTY, Inc.
Item 6. Exhibits

Exhibit No.		Description
	3.1	Amended and Restated Certificate of Incorporation of NBTY, Inc.(1)
	3.2	Second Amended and Restated By-Laws of NBTY, Inc.(2)
	4.1	Indenture, dated as of October 1, 2010, among NBTY, Inc., certain of its guarantor subsidiaries named therein, and The Bank of New York Mellon, as trustee, governing the 9% Senior Notes due 2018.(3)
	4.2	First Supplemental Indenture, dated May 3, 2011, among NBTY, Inc., NBTY Florida, Inc. and The Bank of New York Mellon.(4)
	4.3	Second Supplemental Indenture, dated June 29, 2012 among NBTY, Inc., NBTY Manufacturing Texas, LLC and The Bank of New York Mellon.*
	4.4	Form of 9% Senior Notes due 2018 (included as Exhibit A to Exhibit 4.1).
	10.1	Employment Agreement, dated August 6, 2012, by and among NBTY, Inc., Alphabet Holding Company, Inc. and Glenn Schneider.*
	31.1	Rule 13a-14(a) Certification of Principal Executive Officer.*
	31.2	Rule 13a-14(a) Certification of Principal Financial Officer.*
	32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
	32.2	Certification of Chief Financial Officer 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***
	101.SCH	XBRL Taxonomy Extension Schema Document***
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document***
	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document***
	101.LAB	XBRL Taxonomy Extension Label Linkbase Document***
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document***

*

Filed herewith

**

Furnished, not filed

***

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

(1)

Incorporated by reference to Exhibit 3.1 to NBTY, Inc.'s Registration Statement on Form S-4, filed March 21, 2011. (File No. 333-172973) (the "Registration Statement").

(2)

Incorporated by reference to Exhibit 3.2 to the Registration Statement.

(3)

Incorporated by reference to Exhibit 4.1 to the Registration Statement.

(4)

Incorporated by reference to Exhibit 4.2 to NBTY, Inc.'s Form 10-Q filed August 10, 2011 (File No. 333-172973)

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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 thereunto duly authorized.

	NBTY, INC.
	(Registrant)
Date: August 7, 2012	By:	/s/ JEFFREY NAGEL Jeffrey Nagel Chief Executive Officer
Date: August 7, 2012	By:	/s/ MICHAEL D. COLLINS Michael D. Collins Chief Financial Officer

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EX-4.3

Exhibit 4.3

SECOND SUPPLEMENTAL INDENTURE

SECOND SUPPLEMENTAL INDENTURE (this “Second Supplemental Indenture”), dated as of June 29, 2012, among NBTY, Inc., a Delaware corporation (the “Company”), NBTY Manufacturing Texas, LLC, a Delaware limited liability company and a subsidiary of the Company (the “Guaranteeing Subsidiary”), and The Bank of New York Mellon, as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture, dated as of October 1, 2010, as amended and supplemented through the date of this Second Supplemental Indenture (the “Indenture”), providing for the issuance of 9% Senior Notes due 2018 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall, jointly and severally, unconditionally and irrevocably guarantee with each other Guarantor to the extent lawful all of the Guarantor Obligations on the terms and conditions set forth herein and in the Indenture (the “Guarantee”); and

WHEREAS, pursuant to Section 9.5 of the Indenture, the Trustee is authorized to execute and deliver this Second Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

Section 1.  RATIFICATION OF INDENTURE.   Except as specifically modified herein, the Indenture is in all respects ratified and confirmed and shall remain in full force and effect in accordance with its terms.

Section 2.  CAPITALIZED TERMS.  Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture, unless the context otherwise requires.

Section 3.  AGREEMENT TO GUARANTEE.  The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Guarantee and in the Indenture including but not limited to Article X thereof.

Section 4. NO RECOURSE AGAINST OTHERS.  An incorporator, director, officer, employee, stockholder or controlling person, as such, of the Company or any Guarantor shall not have any liability for any obligations of the Company or any Guarantor under the Notes, the Guarantees or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.  By accepting a Note, each Holder shall waive and release all such liability.  The waiver and release shall be part of the consideration for the issue of the Notes.

Section 5.  GOVERNING LAW.  THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

1

Section 6.  WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE GUARANTEEING SUBSIDIARY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SECOND SUPPLEMENTAL INDENTURE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 7.  COUNTERPARTS.  The parties may sign any number of copies of this Second Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  Delivery of an executed counterpart of a signature page to this Second Supplemental Indenture by telecopier, facsimile or other electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart thereof.

Section 8.  EFFECT OF HEADINGS.  The Section headings herein are for convenience only and shall not affect the construction hereof.

Section 9.  RECITALS; TRUSTEE.  The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Second Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.  In acting hereunder, the Trustee shall be entitled to the rights, protections and immunities given to it under the Indenture.

2

IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed and attested, all as of the date first above written.

NBTY, INC.
By:	/s/ Hans Lindgren
	Name: Hans Lindgren
	Title:   Senior Vice President
NBTY MANUFACTURING TEXAS, LLC
By:	/s/ Michael Collins
	Name: Michael Collins
	Title:   President

[Signature Page to Second Supplemental Indenture]

THE BANK OF NEW YORK MELLON,   as Trustee
By:	/s/ Sherma Thomas
	Name: Sherma Thomas
	Title:   Senior Associate

[Signature Page to Second Supplemental Indenture]

EX-10.1

Exhibit 10.1

Employment Agreement

This Employment Agreement (this “Agreement”), dated as of August 6, 2012 (the “Effective Date”), is made by and among Alphabet Holding Company, Inc., a Delaware corporation (“Parent”), Parent’s wholly-owned subsidiary, NBTY, Inc., a Delaware corporation (together with any successor thereto, the “Company”), and Glenn Schneider (“Executive”) (collectively referred to herein as the “Parties”).

RECITALS

A.It is the desire of the Company to assure itself of the services of Executive to the Company by entering into this Agreement.

B.Executive and the Company mutually desire that Executive provide services to the Company on the terms herein provided.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below, the Parties hereto agree as follows:

1.Employment.

(a)General.  The Company shall continue to employ Executive and Executive shall continue in the employ of the Company, for the period and in the position set forth in this Section 1, and upon the other terms and conditions herein provided.

(b)Employment Term.  The initial term of employment under this Agreement (the “Term”) shall be for the period beginning on the Effective Date and ending on the fifth anniversary thereof, subject to earlier termination as provided in Section 3.  The Term shall automatically renew for additional one (1) year periods unless no later than sixty (60) days prior to the end of the otherwise applicable Term, either party gives written notice of non-renewal (“Notice of Non-Renewal”) to the other, in which case Executive’s employment will terminate at the end of the then-applicable Term or any earlier date set by the Company in accordance with Section 3 and subject to earlier termination as provided in Section 3.

(c)Position and Duties.

(i)Executive shall serve as President, Global Wholesale of the Company and Parent with the responsibilities, duties and authority customarily associated with such position in a company the size and nature of the Company and such other responsibilities, duties and authority commensurate with such position, as may from time to time be assigned to Executive by the Chief Executive Officer of the Company (“CEO”) or the Board of Directors of Parent (the “Board”).  Executive shall report to the CEO, the Board, the Board of Directors of the Company or any committee of any such board.  Executive shall devote substantially all of his working time and efforts to the business and affairs of the Company, and Executive shall not serve on any corporate, industry or civic boards or committees without the prior consent of the Board; provided that

Executive shall be permitted to serve on charitable boards, be involved in charitable activities and manage his passive personal and family investments so long as such activities do not materially interfere with Executive’s duties hereunder or violate any covenant contained in Section 5, 6 or 7.

(ii)Executive’s principal place of employment shall be the offices of the Company in Ronkonkoma, New York.

2.Compensation and Related Matters.

(a)Annual Base Salary.  During the Term, Executive shall receive a base salary at a rate of $525,000 per annum (as increased from time to time, the “Annual Base Salary”), which shall be paid in accordance with the customary payroll practices of the Company.  Such Annual Base Salary shall be reviewed (and may be increased, but not decreased) from time to time by the Board or an authorized committee of the Board.

(b)Annual Bonus Opportunity. For the fiscal year ending September 30, 2012 and for each full fiscal year of the Company that begins thereafter during the Term, Executive will be eligible to participate in an annual bonus program established by the Board (the “Annual Bonus”).  Executive’s Annual Bonus compensation under such bonus program shall be targeted at 75% of his Annual Base Salary, subject to adjustments between the range of 50% to 200% for under or over performance, as determined by the Board (or an authorized committee of the Board).  Unless determined otherwise by the Board (or another committee of the Board), the bonus awards payable under the incentive program shall be based on the achievement of EBITDA based performance goals to be determined by the Board (or an authorized committee of the Board).  The Annual Bonus shall be paid as soon as reasonably practicable following the end of the applicable fiscal year, but in no event shall it be paid after March 15th of the calendar year following the calendar year in which the fiscal year to which the Annual Bonus relates.

(c)Benefits.  During the Term, Executive (and his eligible dependents) shall be eligible to participate in employee benefit plans, programs and arrangements of the Company applicable to senior-level executives (including, without limitation, retirement, health insurance, sick leave and other benefits) and consistent with the terms thereof, as in effect from time to time.

(d)Vacation.  During the Term, Executive shall be entitled to paid vacation in accordance with the Company’s vacation policies applicable to senior executives of the Company, as it may be amended from time to time; provided, however, that, in no event shall Executive be entitled to more than four (4) weeks of paid vacation annually.  Any vacation shall be taken at the reasonable and mutual convenience of the Company and Executive.

(e)Expenses.  During the Term, the Company shall reimburse Executive for all reasonable travel and other business expenses incurred by Executive in the performance of Executive’s duties to the Company in accordance with the Company’s expense reimbursement policy.

(f)Key Person Insurance.  At any time during the Term, the Company shall have the right (but not the obligation) to insure the life of Executive for the Company’s sole benefit.  The

2

Company shall have the right to determine the amount of insurance and the type of policy.  Executive shall reasonably cooperate with the Company in obtaining such insurance by submitting to reasonable physical examinations, by supplying all information reasonably required by any insurance carrier, and by executing all necessary documents reasonably required by any insurance carrier.  Executive shall incur no financial obligation by executing any required document, and shall have no interest in any such policy.

3.Termination.

Executive’s employment hereunder may be terminated by the Company or Executive, as applicable, without any breach of this Agreement under the following circumstances:

(a)Circumstances.

(i)Death.  Executive’s employment hereunder shall terminate upon Executive’s death.

(ii)Disability.  If Executive has incurred a Disability, as defined below, the Company may terminate Executive’s employment while the Executive remains Disabled, provided that a Disability termination shall occur automatically in the event of a Disability pursuant to the second sentence of the definition thereof.

(iii)Termination for Cause.  The Company may terminate Executive’s employment for Cause, as defined below.

(iv)Termination without Cause.  The Company may terminate Executive’s employment without Cause.

(v)Resignation from the Company for Good Reason.  Executive may resign Executive’s employment with the Company for Good Reason, as defined below.

(vi)Resignation from the Company Without Good Reason.  Executive may resign Executive’s employment with the Company for any reason other than Good Reason or for no reason.

(vii)Non-extension of Term by the Company.  The Company may give notice of non-extension to Executive pursuant to Section 1.

(viii)Non-extension of Term by Executive.  Executive may give notice of non-extension to the Company pursuant to Section 1.

(b)Notice of Termination.  Any termination of Executive’s employment by the Company or by Executive under this Section 3 (other than termination pursuant to paragraph (a)(i)) shall be communicated by a written notice to the other party hereto (i) indicating the specific termination provision in this Agreement relied upon, (ii) setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) specifying a Date of Termination which, if submitted by Executive, shall be at least thirty (30) days following the date of such notice (a

3

“Notice of Termination”); provided, however, that in the event that Executive delivers a Notice of Termination to the Company, the Company may, in its sole discretion, change the Date of Termination to any date that occurs following the date of Company’s receipt of such Notice of Termination and is prior to the date specified in such Notice of Termination.  A Notice of Termination submitted by the Company may provide for a Date of Termination on the date Executive receives the Notice of Termination, or any date thereafter elected by the Company in its sole discretion, but not more than thirty (30) days after the giving of the notice without the Executive’s prior written consent.  The failure by either Party hereunder to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason (as applicable) shall not waive any right of such Party or preclude such Party from asserting such fact or circumstance in enforcing such Party’s rights hereunder.

(c)Company Obligations upon Termination (including due to death and Disability).  Upon termination of Executive’s employment pursuant to any of the circumstances listed in Section 3, Executive (or Executive’s estate) shall be entitled to receive the sum of:  (i) the portion of Executive’s Annual Base Salary earned through the Date of Termination, but not yet paid to Executive within thirty (30) days of termination; (ii) any accrued vacation owed to Executive under the Company’s vacation policy within thirty (30) days of termination; (iii) any expenses owed to Executive pursuant to Section 2(g) in accordance with such section; (iv) except in the case of a termination by the Company for Cause, the bonus earned for any completed fiscal year at the time it would otherwise have been paid if Executive continued to be employed (including as to any deferrals); and (v) any amount accrued and arising from Executive’s participation in, or benefits accrued under any employee benefit plans, programs or arrangements, which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements (collectively, the “Company Arrangements”).  Except as otherwise expressly required by law (e.g., COBRA) or as specifically provided herein, all of Executive’s rights to salary, severance, benefits, bonuses and other amounts hereunder (if any) shall cease upon the termination of Executive’s employment hereunder.  In the event that Executive’s employment is terminated by the Company for any reason, Executive’s sole and exclusive remedy with regard to the nonequity compensation for services shall be to receive the severance payments and benefits described in this Section 3(c) or Section 4, as applicable.  The foregoing shall not limit any of Executive’s rights with regard to equity (which shall be controlled by the relevant plan and grants) or any rights to indemnification, advancement of legal fees, and coverage under directors and officers liability insurance.

(d)Deemed Resignation.  Upon termination of Executive’s employment for any reason, Executive shall be deemed to have resigned from all offices and directorships, if any, then held with the Company or any of its Affiliates.

4.Severance Payments.

(a)Termination for Cause, or Termination Upon Death, Disability, Resignation from the Company Without Good Reason, or Non-extension of Term by Executive.  If Executive’s employment shall terminate as a result of Executive’s death pursuant to Section 3(a)(i) or Disability pursuant to Section 3(a)(ii), pursuant to Section 3(a)(iii) for Cause, pursuant to Section 3(a)(vi) for Executive’s resignation from the Company without Good Reason, or for no reason,

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or pursuant to Section 3(a)(viii) due to non-extension of the Term by Executive, Executive shall not be entitled to any severance payments or benefits, except as provided in Section 3(c).

(b)Termination without Cause, Resignation from the Company With Good Reason or Termination upon Non-Extension of the Term by the Company.  If Executive’s employment shall terminate without Cause pursuant to Section 3(a)(iv), pursuant to Section 3(a)(v) due to Executive’s resignation for Good Reason, or pursuant to Section 3(a)(vii) due to non-extension of the Term by the Company, then, subject to Executive signing on or before the 50th day following Executive’s Separation from Service (as defined below), and not revoking, a release of claims in the form attached as Exhibit A to this Agreement, and Executive’s continued compliance with Sections 5 and 6 up to the date of any such payment, subject to Section 11(l) hereof, Executive shall receive, in addition to payments and benefits set forth in Section 3(c), (1) an amount in cash equal to the Annual Base Salary of Executive as of the Date of Termination, payable in the form of salary continuation payments in regular installments over the twelve (12) month period following the date of Executive’s Date of Termination in accordance with the Company’s normal payroll practices, and (2) provided that any termination of Executive’s employment occurs on or after April 1st of the fiscal year of employment termination, a pro rata bonus for such fiscal year of employment termination based on the terms of the management bonus plan for such fiscal year and paid when it would otherwise have been paid if the Executive continued to be employed (including as to any deferrals) but in no event shall it be paid later than March 15th of the fiscal year immediately following such fiscal year of employment termination.

(c)Survival.  Notwithstanding anything to the contrary in this Agreement, the provisions of Sections 5 through 9 and Section 11 will survive the termination of Executive’s employment and the expiration or termination of the Term.

5.Competition.Executive acknowledges that the Company will provide Executive with access to its Confidential Information (as defined below). In consideration for the rights provided to Executive as set forth in this Agreement and the Company’s provision of Confidential Information to Executive, the Company and Executive agree to the following provisions against unfair competition, which Executive acknowledges represent a fair balance of the Company’s rights to protect its business and Executive’s right to pursue employment:

(a)Executive shall not, at any time during the Restriction Period, directly or indirectly engage in, have any equity interest in or manage or operate any person, firm, corporation, partnership or business (whether as director, officer, employee, agent, representative, partner, security holder, consultant or otherwise) that engages in any business which competes with any part of any material portion of the Business (as defined below) of the Company.  Nothing herein shall prohibit Executive from being a passive owner of not more than 2% of the outstanding equity interest in any entity that is publicly traded, so long as Executive has no active participation in the business of such entity.  The parties acknowledge that retail outlet companies shall not be deemed competitive with the Company unless their primary business is selling products competitive with those of the Company.  “Materiality” for purposes of this paragraph will be measured only at the time of Executive’s Date of Termination, provided that, if it is intended at such time for the Company to (i) acquire another entity, such target entity shall also be considered in the determination, or (ii) to enter into any other business, such other

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business shall also be considered in the determination so long as the Company has taken any substantial steps in furtherance of such business during the Term.

(b)Executive shall not, at any time during the Restriction Period, except in the good faith performance of his duties with the Company, directly or indirectly, recruit or otherwise solicit or induce any employee, customer, other than a customer with regard to matters that are not competitive under Section 5(a), or supplier of the Company (i) to terminate its employment or arrangement with the Company, or (ii) to otherwise change its relationship with the Company. Executive shall not, at any time during the Restriction Period, directly or indirectly, either for Executive or for any other person or entity, (x) solicit any employee of the Company to terminate his or her employment with the Company, (y) employ any such individual during his or her employment with the Company and for a period of six months after such individual terminates his or her employment with the Company or (z) solicit any vendor or business affiliate of the Company to cease to do business with the Company.  The foregoing shall not be violated by general advertising not specifically targeted at the prohibited group or by providing upon request of an employee or a former employee a reference to any entity with which Executive is not affiliated so long as Executive is not initially identifying the individual to said entity.

(c)In the event the terms of this Section 5 shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action.

(d)As used in this Section 5, (i) the term “Company” shall include the Parent, the Company and the Company’s direct and indirect subsidiaries, (ii) the term “Business” shall mean the business of the Company and shall include, without limitation, the manufacturing, marketing and/or retailing of vitamins, minerals and health supplements throughout the world as such business may be expanded or altered by the Company during the Term, provided, however, that the term “Business” shall not include any business of the Company materially entered into after the Executive’s termination of employment so long as the Company has not taken any substantial steps in furtherance of such business during the Term; and (iii) the term “Restriction Period” shall mean the period beginning on the Effective Date and ending on the date that is twelve (12) months following the Date of Termination.

(e)Each of the Parties hereto agrees that at no time during Executive’s employment by the Company or at any time within the twelve-month period thereafter shall such Party (which, in the case of the Company and Parent, shall mean their officers and the members of the Board and Board of Directors of the Company) make, or cause or assist any other person to make, with intent to damage, any public statement or other public communication which impugns or attacks, or is otherwise critical, in any material respect, of, the reputation, business or character of the other party (including, in the case of Parent, any of its directors or officers).Notwithstanding the foregoing, nothing in this paragraph shall prevent the Company, Parent, Executive or any other person from (i) responding to incorrect, disparaging or derogatory public statements to the extent necessary to correct or refute such public statements, or (ii) making any

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truthful statement (A) to the extent necessary in connection with any litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement, (B) to the extent required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction or authority to order or require such person to disclose or make accessible such information, or (C) that is a normal comparative statement in the context of advertising, promotion or solicitation of customers, without reference to Executive’s prior relationship with the Company or Parent.

(f)Executive represents that Executive’s employment by the Company does not and will not breach any agreement with any former employer, including any non-compete agreement or any agreement to keep in confidence or refrain from using information acquired by Executive prior to Executive’s employment by the Company.  During Executive’s employment by the Company, Executive agrees that Executive will not violate any non-solicitation agreements Executive entered into with any former employer or improperly make use of, or disclose, any information or trade secrets of any former employer or other third party, nor will Executive bring onto the premises of the Company or use any unpublished documents or any property belonging to any former employer or other third party, in violation of any lawful agreements with that former employer or third party.  The Company represents that it will not require or request Executive to breach any agreement with any former employer as to non-competition, non-solicitation, confidentiality or restrictions of similar nature that it is made aware of by Executive.

6.Nondisclosure of Proprietary Information.

(a)Except in connection with the good faith performance of Executive’s duties hereunder or pursuant to Sections 6(c) and (e), Executive shall, in perpetuity, maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose or publish, or use for Executive’s benefit or the benefit of any person, firm, corporation or other entity any confidential or proprietary information or trade secrets of or relating to the Company (including, without limitation, business plans, business strategies and methods, acquisition targets, intellectual property in the form of patents, trademarks and copyrights and applications therefor, ideas, inventions, works, discoveries, improvements, information, documents, formulae, practices, processes, methods, developments, source code, modifications, technology, techniques, data, programs, other know-how or materials, owned, developed or possessed by the Company, whether in tangible or intangible form, information with respect to the Company’s operations, processes, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships, regulatory status, prospects and compensation paid to employees or other terms of employment) (collectively, the “Confidential Information”), or deliver to any person, firm, corporation or other entity any document, record, notebook, computer program or similar repository of or containing any such Confidential Information.  The Parties hereby stipulate and agree that, as between them, any item of Confidential Information is important, material and confidential and affects the successful conduct of the businesses of the Company (and any successor or assignee of the Company).  Notwithstanding the foregoing, Confidential Information shall not include any information that has been published in a form generally available to the public prior to the date Executive proposes to disclose or use such information, provided, that such publishing of the Confidential Information shall not have resulted from Executive directly or indirectly breaching Executive’s obligations under this Section 6(a) or any

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other similar provision by which Executive is bound.  For the purposes of the previous sentence, Confidential Information will not be deemed to have been published or otherwise disclosed merely because individual portions of the information have been separately published, but only if all material features comprising such information have been published in combination.

(b)Upon termination of Executive’s employment with the Company for any reason, Executive will promptly deliver to the Company all correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents or property of the Company or concerning the Company’s customers, business plans, marketing strategies, products, property or processes.  Executive may retain and utilize his rolodex and similar address books (hard copy or electronic) containing only contact information.

(c)Executive may respond to a lawful and valid subpoena or other legal process but (i) shall give the Company prompt notice thereof, (ii) upon request of the Company, shall make available to the Company and its counsel the documents and other information sought, as much in advance of the due date thereof as reasonably possible, and (iii) shall reasonably assist such counsel at the Company’s expense in resisting or otherwise responding to such process.

(d)As used in this Section 6 and Section 7, the term “Company” shall include the Company and its direct and indirect subsidiaries and the Parent.

(e)Nothing in this Agreement shall prohibit Executive from (i) disclosing information and documents when required by law, subpoena or court order (subject to the requirements of Section 6(c) above), (ii) disclosing information and documents to Executive’s attorney or tax adviser for the purpose of securing legal or tax advice or to governmental taxing authorities, (iii) disclosing Executive’s post-employment restrictions in this Agreement or elsewhere in confidence to any potential new employer, or (iv) retaining, at any time, Executive’s personal correspondence, Executive’s personal contacts and documents related to Executive’s own personal benefits, entitlements and obligations.

(f)No equity plan or grant or other arrangement shall have any restrictive covenants or forfeiture provisions applicable to Executive that relate to the same type of limitations that are covered by Sections 5 and 6 hereof that are any broader than the related provisions in Sections 5 and 6.

7.Inventions.

All rights to discoveries, inventions, improvements and innovations (including all data and records pertaining thereto) related to the business of the Company, whether or not patentable, copyrightable, registrable as a trademark, or reduced to writing, that Executive may discover, invent or originate during the Term, either alone or with others and whether or not during working hours or by the use of the facilities of the Company (“Inventions”), shall be the exclusive property of the Company.  Executive shall promptly disclose all Inventions to the Company, shall execute at the request of the Company, and at its expense, any assignments or other documents the Company may deem reasonably necessary to protect or perfect its rights therein, and shall reasonably assist the Company, upon reasonable request and at the Company’s expense, in obtaining, defending and enforcing the Company’s rights therein. Executive hereby

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appoints the Company as Executive’s attorney-in-fact to execute on Executive’s behalf any assignments or other documents reasonably deemed necessary by the Company to protect or perfect its rights to any Inventions.

8.Injunctive Relief.

It is recognized and acknowledged by Executive that a breach of the covenants contained in Sections 5, 6 and 7 will cause irreparable damage to the Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate.  Accordingly, Executive agrees that in the event of a breach of any of the covenants contained in Sections 5, 6 and 7, in addition to any other remedy which may be available at law or in equity, the Company will be entitled to specific performance and injunctive relief.

9.Assignment and Successors.

The Company may assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise), and may assign or encumber this Agreement and its rights hereunder as security for indebtedness of the Company and its Affiliates, provided that the assignee delivers to Executive a written assumption of the obligations hereunder.  The Company’s rights and obligations may not otherwise be assigned hereunder.  This Agreement shall be binding upon and inure to the benefit of the Company, Parent, Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable.  None of Executive’s rights or obligations may be assigned or transferred by Executive, other than Executive’s rights to payments hereunder, which may be transferred only by will or operation of law.  Notwithstanding the foregoing, Executive shall be entitled, to the extent permitted under applicable law and applicable Company Arrangements, to select and change a beneficiary or beneficiaries to receive compensation hereunder following Executive’s death by giving written notice thereof to the Company.

10.Certain Definitions.

(a)Affiliate.  “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person where “control” shall have the meaning given such term under Rule 405 of the Securities Act of 1933, as amended; provided, that, with respect to the Company, “Affiliate” shall not include any Principal Stockholder or any portfolio companies of the relevant Principal Stockholder.

(b)Cause.  The Company shall have “Cause” to terminate Executive’s employment hereunder upon:

(i)The Executive’s willful misconduct with regard to the Company that results in a significant adverse impact on the Company; provided that no act or failure to act on Executive’s part will be considered “willful” unless done, or omitted to be done, by Executive not in good faith or without reasonable belief that his action or omission was in the best interests of the Company;

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(ii)The Executive being indicted for, convicted of, or pleading nolo contendere to, a felony or intentional crime involving material dishonesty other than, in any case, vicarious liability or traffic violations;

(iii)The Executive’s conduct involving the use of illegal drugs;

(iv)The Executive’s failure to attempt in good faith (other than when absent because of physical or mental incapacity) to follow a lawful directive of the Board within ten (10) days after written notice of such failure; and/or

(v)The Executive’s breach of any provision contained in Sections 5 through 7, which continues beyond ten (10) days after written demand for substantial performance is delivered to Executive by the Company (to the extent that, in the reasonable judgment of the Board, such breach can be cured by Executive), so long as the breach (which shall be deemed to refer to all breaches in this paragraph) is (A) material and (B) results in a significant adverse impact on the Company.

The Executive shall not be terminated for “Cause” unless reasonable notice is provided to Executive and Executive is given an opportunity, together with counsel, to be heard before the Board, and thereafter whether or not an event giving rise to “Cause” has occurred will be determined by the Board reasonably and in good faith; provided that any such determination by the Board shall be subject to de novo review by the arbitrator pursuant to Section 11(i) based on the facts thereof.

(c)Common Stock.  “Common Stock” shall mean the non-voting common stock of Parent.

(d)Date of Termination.  “Date of Termination” shall mean (i) if Executive’s employment is terminated by Executive’s death, the date of Executive’s death; (ii) if Executive’s employment is terminated pursuant to Section 3(a)(ii) — (vi) either the date indicated in the Notice of Termination or the date specified by the Company pursuant to Section 3(b), whichever is earlier; (iii) if Executive’s employment is terminated pursuant to Section 3(a)(vii) or Section 3(a)(viii), the expiration of the then-applicable Term.

(e)Disability.  “Disability” shall have occurred when the Executive has been unable to perform his material duties because of physical or mental incapacity for a period of at least 180 days in any 365 day period, as determined by a physician selected by the Company or its insurers and acceptable to Executive or Executive’s legal representative, with such agreement as to acceptability not to be unreasonably withheld or delayed.  Notwithstanding the foregoing, a Disability termination shall be deemed to occur earlier if, as a result of physical or mental incapacity, Executive experiences a “separation from service” within the meaning of Section 409A.

(f)Good Reason.  Executive shall have “Good Reason” to resign his employment within ninety (90) days after the occurrence of any of the following without his prior written consent:

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(i)A material diminution in the nature or scope of Executive’s responsibilities, duties or authority;

(ii)The Company’s or Parent’s material breach of this Agreement or other agreements with Executive which results in a significant adverse impact upon Executive;

(iii)The relocation by the Company of Executive’s primary place of employment with the Company by more than 50 miles from Ronkonkoma, New York;

(iv)The failure of the Company to obtain the assumption in writing delivered to Executive of its obligation to perform this Agreement by any successor to all or substantially all of the assets of the Company; or

(v)The failure of the Company to timely pay to Executive any significant amounts due under the terms of this Agreement;

in any case of the foregoing, that remains uncured after ten (10) business days after Executive has provided the Company written notice that Executive believes in good faith that such event giving rise to such claim of Good Reason has occurred.

(g)Person.  “Person” shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature.

(h)Principal Stockholders.  “Principal Stockholders” shall mean (i) Carlyle Partners V, L.P., a Delaware limited partnership, Carlyle Partners V-A, L.P., a Delaware limited partnership, CP V Coinvestment A, L.P., a Delaware limited partnership, CP V Coinvestment B, L.P., a Delaware limited partnership, and CEP III Participations, SARL SICAR, and (ii) any of their Affiliates to which (a) any of the Principal Stockholders transfers Common Stock or (b) Parent issues Common Stock.

11.Miscellaneous Provisions.

(a)Governing Law.  This Agreement shall be governed, construed, interpreted and enforced in accordance with its express terms, and otherwise in accordance with the substantive laws of the State of New York without reference to the principles of conflicts of law of the State of New York or any other jurisdiction, and where applicable, the laws of the United States.

(b)Validity.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

(c)Notices.  Any notice, request, claim, demand, document and other communication hereunder to any Party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by facsimile or certified or registered mail, postage prepaid, as follows:

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(i)If to the Company:

NBTY, Inc.

2100 Smithtown Avenue

Ronkonkoma, NY 11779

Attention:  General Counsel

Facsimile: (631) 567-7148

and copies to:

The Carlyle Group

520 Madison Avenue

New York, NY 10022

Attention: Sandra Horbach

Elliot Wagner

Facsimile: (212) 813-4901

and:

Latham & Watkins LLP

555 Eleventh Street, N.W.

10th Floor

Washington, DC  20004

Fax:  (202) 637-2201

Attn:  David T. Della Rocca

(ii)If to Executive, at the last address that the Company has in its personnel records for Executive;

or at any other address as any Party shall have specified by notice in writing to the other Parties hereto.

(d)Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.  Signatures delivered by facsimile shall be deemed effective for all purposes.

(e)Entire Agreement.  The terms of this Agreement are intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior understandings and agreements, whether written or oral.  The Parties further intend that this Agreement shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement.

(f)Amendments; Waivers.  This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by Executive, a duly authorized officer of the Company and a duly authorized officer of Parent.  By an instrument in writing similarly executed, Executive, a duly authorized officer of the Company, or a duly authorized officer of

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Parent may waive compliance by the other Parties hereto with any specifically identified provision of this Agreement that each such other Party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure.  No failure to exercise and no delay in exercising any right, remedy, or power hereunder preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.

(g)No Inconsistent Actions.  The Parties hereto shall not voluntarily undertake or fail to undertake any action or course of action inconsistent with the provisions or essential intent of this Agreement.  Furthermore, it is the intent of the Parties hereto to act in a fair and reasonable manner with respect to the interpretation and application of the provisions of this Agreement.

(h)Construction.  This Agreement shall be deemed drafted equally by all the Parties. Its language shall be construed as a whole and according to its fair meaning.  Any presumption or principle that the language is to be construed against any Party shall not apply.  The headings in this Agreement are only for convenience and are not intended to affect construction or interpretation.  Any references to paragraphs, subparagraphs, sections or subsections are to those parts of this Agreement, unless the context clearly indicates to the contrary.  Also, unless the context clearly indicates to the contrary, (a) the plural includes the singular and the singular includes the plural; (b) “and” and “or” are each used both conjunctively and disjunctively; (c) “any,” “all,” “each,” or “every” means “any and all,” and “each and every”; (d) “includes” and “including” are each “without limitation”; (e) “herein,” “hereof,” “hereunder” and other similar compounds of the word “here” refer to the entire Agreement and not to any particular paragraph, subparagraph, section or subsection; and (f) all pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the entities or persons referred to may require.

(i)Arbitration.  Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before an arbitrator in New York, New York, in accordance with the rules of the American Arbitration Association then in effect.  Judgment may be entered on the arbitration award in any court having jurisdiction; provided, however, that the Company or Executive shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of the provisions of Section 5, 6 or 7 of the Agreement, as applicable, and the Company, Parent and Executive hereby consent that such restraining order or injunction may be granted without requiring the Company to post a bond.  Only individuals who are (a) lawyers engaged full-time in the practice of law, as in-house counsel, as a judge or as a professor of law; and (b) on the AAA register of arbitrators shall be selected as an arbitrator.  Within twenty (20) days of the conclusion of the arbitration hearing, the arbitrator shall prepare written findings of fact and conclusions of law.  It is mutually agreed that the written decision of the arbitrator shall be valid, binding, final and non-appealable; provided however, that the Parties hereto agree that the arbitrator shall not be empowered to award punitive damages against any party to such arbitration.  In the event that an action is brought to enforce the provisions of this Agreement pursuant to this paragraph, (x) if the arbitrator determines that Executive is the prevailing party in such action, the Company shall be required to pay the arbitrator’s full fees and expenses (but not the Executive’s legal fees), (y) if the Company (or Parent) prevails in such action, Executive shall be required to pay the arbitrator’s full fees and expenses (but not the Company’s or the

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Parent’s legal fees) and (z) if, in the opinion of the arbitrator deciding such action, there is no prevailing party, each party shall pay his or its own attorney’s fees and expenses and the arbitrator’s fees and expenses will be borne equally by the Parties thereto.

(j)Enforcement.  If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the Term, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

(k)Withholding.  The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local or foreign withholding or other taxes or charges which the Company is required to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.

(l)Section 409A.

(i)General.  The intent of the Parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, (the “Code”) and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.

(ii)Separation from Service.  Notwithstanding anything in this Agreement to the contrary, any compensation or benefits payable under this Agreement that is designated under this Agreement as payable upon Executive’s termination of employment shall be payable only upon Executive’s “separation from service” with the Company within the meaning of Section 409A (a “Separation from Service”) and, except as provided below, any such compensation or benefits shall not be paid, or, in the case of installments, shall not commence payment, until the sixtieth (60th) day following Executive’s Separation from Service.  Any installment payments that would have been made to Executive during the sixty (60) day period immediately following Executive’s Separation from Service but for the preceding sentence shall be paid to Executive on the sixtieth (60th) day following Executive’s Separation from Service and the remaining payments shall be made as provided in this Agreement.

(iii)Specified Employee.  Notwithstanding anything in this Agreement to the contrary, if Executive is deemed by the Company at the time of Executive’s Separation from Service to be a “specified employee” for purposes of Section 409A, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A, such portion of Executive’s benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of Executive’s

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Separation from Service with the Company or (ii) the date of Executive’s death.  Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to Executive (or to Executive’s estate or beneficiaries), and any remaining payments due to Executive under this Agreement shall be paid as otherwise provided herein.  Any tax gross up payment, within the meaning of Section 409A, provided for in this Agreement shall be made by the end of the Executive’s taxable year next following the Executive’s taxable year in which the Executive remits the related taxes, provided that, Executive provides the Company with a reimbursement request reasonably promptly following the date such tax is due.

(iv)Expense Reimbursements.  To the extent that any reimbursements under this Agreement are subject to Section 409A, any such reimbursements payable to Executive shall be paid to Executive no later than December 31 of the year following the year in which the expense was incurred; provided, that Executive submits Executive’s reimbursement request reasonably promptly following the date the expense is incurred, the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during one taxable year shall not affect the amount eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; provided however, that the foregoing shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect.  Executive’s right to reimbursement, or in-kind benefits, under this Agreement will not be subject to liquidation or exchange for another benefit.

(v)Installments.  Executive’s right to receive any installment payments under this Agreement, including without limitation any salary continuation payments that are payable on Company payroll dates, shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment as permitted under Section 409A.  To the extent any deferred compensation is intended to comply with and be subject to Section 409A (as opposed to any exception thereto), the Company may accelerate any such deferred compensation as long as such acceleration would not result in additional tax or interest pursuant to Section 409A and as long as such acceleration is permitted by Section 409A.  The decision as to when to make any payment within any specified time period shall solely be that of the Company.

(m)Indemnification.  Executive shall receive indemnification protection pursuant to the indemnification agreements attached hereto as Exhibits B and C.

(n)No Mitigation; No Offset.  The Executive shall not be required to seek other employment or otherwise mitigate the amount of any payments to be made by the Company pursuant to this Agreement. The payments provided pursuant to this Agreement shall not be reduced by any compensation earned by the Executive as the result of employment by another employer after the Date of Termination or otherwise. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder

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shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others.

(o)Joint and Several Liability.  The Company and the Parent shall be jointly and severally liable for all obligations of each hereunder.

12.Section 280G

(a)So long as the Company is described in Section 280G(b)(5)(A)(ii)(I) of the Code, if any payment or benefit (within the meaning of Section 280G(b)(2) of the Code), to the Executive or for the Executive’s benefit paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, the Executive’s employment with the Company or a change in ownership or effective control of the Company or of a substantial portion of its assets, would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, to the extent, if any, Executive elects to waive the right to receive such payments or benefits unless shareholder approval is obtained in accordance with Section 280G(b)(5)(B) of the Code, the Company shall use its commercially reasonable best efforts to prepare and deliver to its stockholders the disclosure required by Section 280G(b)(5)(B) of the Code with respect to the Payments and to obtain the approval of the Company’s stockholders in accordance with Section 280G(b)(5)(B) of the Code and the regulation codified at 26 C.F.R. §1.280G-1.

(b)In the event that (i) the Executive is entitled to receive any payments or benefits, whether payable, distributed or distributable pursuant to the terms of this Agreement or otherwise, that constitute “excess parachute payments” within the meaning of Section 280G of the Code, and (ii) the net after tax amount of such payments, after the Executive has paid all taxes due thereon (including, without limitation, taxes due under Section 4999 of the Code) is less than the net after-tax amount of all such payments and benefits otherwise due to the Executive in the aggregate, if such aggregate payments and benefits were reduced to an amount equal to 2.99 times the Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code), then the aggregate amount of such payments and benefits payable to Executive shall be reduced to an amount that will equal 2.99 times the Executive’s base amount.  To the extent such aggregate parachute payment amounts are required to be so reduced, the parachute payment amounts due to the Executive (but no non -parachute payment amounts) shall be reduced in the following order: (i) payments and benefits due under Section 4 of this Agreement shall be reduced (if necessary, to zero) with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity fully valued (or only reduced by a present value factor) for purpose of the calculation to be made under Section 280G calculation of the Code for purposes of this Section 12 (the “280G Calculation”) in reverse order of when payable; and (iii) payments and benefits due in respect of any options or stock appreciation rights with regard to Common Stock or equity securities valued under the 280G Calculation based on time of vesting shall be reduced in an order that is most beneficial to the Executive.

(c)The determinations to be made with respect to this Section 12 shall be made by a certified public accounting firm designated by the Company and reasonably acceptable to the Executive.  The Company shall be responsible for all charges of the Accountant.

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(d)In the event that the Internal Revenue Service or court ultimately makes a determination that the excess parachute payments or the base amount is an amount other than as determined initially, an appropriate adjustment shall be made with regard to Section 12(a) or (b) above, as applicable to reflect the final determination and the resulting impact.

(e)The provisions of Sections 12(b), (c) and (d) shall override provisions as to cutback below the 2.99 level in any equity plan or grant or any other arrangement.

13.Employee Acknowledgement.

Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executive’s own judgment.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date and year first above written.

COMPANY
By:	/s/ Jeffrey Nagel
	Jeffrey Nagel
	Chief Executive Officer
PARENT
By:	/s/ Jeffrey Nagel
	Name: Jeffrey Nagel
	Title: Chief Executive Officer
EXECUTIVE
By:	/s/ Glenn Scheider
	Glenn Schneider

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EXHIBIT A

Form of Release

This Agreement and Release (“Agreement”) is made by and among Alphabet Holding Company, Inc., a Delaware corporation (“Parent”), Parent’s wholly-owned subsidiary, NBTY, Inc., a Delaware corporation (together with any successor thereto, the “Company”), and Glenn Schneider (the “Employee”) (collectively, referred to as the “Parties” or individually referred to as a “Party”).  Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the Employment Agreement (as defined below).

WHEREAS, the Parties have previously entered into that certain Employment Agreement, dated as of                           , 2012 (the “Employment Agreement”); and

WHEREAS, in connection with Employee’s termination of employment with the Company or a subsidiary or affiliate of the Company effective                 , 20    , the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that Employee may have against the Company, Parent, and any of the Releasees as defined below, including, but not limited to, any and all claims arising out of or in any way related to Employee’s employment with or separation from the Company or its subsidiaries or affiliates.

NOW, THEREFORE, in consideration of the Severance Payments described in Section 4 of the Employment Agreement, which, pursuant to the Employment Agreement, are conditioned on Employee’s execution and non-revocation of this Agreement, and in consideration of the mutual promises made herein, the Company and Employee hereby agree as follows:

1.             Severance Payments; Salary and Benefits.  The Company agrees to provide Employee with the severance payments and benefits described in Section 4(b) of the Employment Agreement, payable at the times set forth in, and subject to the terms and conditions of, the Employment Agreement. In addition, to the extent not already paid, and subject to the terms and conditions of the Employment Agreement, the Company shall pay or provide to Employee all other payments or benefits described in Section 3(c) of the Employment Agreement, subject to and in accordance with the terms thereof.

2.             Release of Claims.  Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company, Parent, any of their direct or indirect subsidiaries and affiliates (including, without limitation, TC Group, L.L.C. and its affiliated entities), and, in their capacities related to the foregoing, any of their current and former officers, directors, equity holders, managers, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, trustees, divisions, and subsidiaries and predecessor and successor corporations and assigns (collectively, the “Releasees”).  Employee, on his own behalf and on behalf of any of Employee’s affiliated companies or entities and any of their respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess against any of the Releasees

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arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement (as defined in Section 7 below), including, without limitation:

(a)           any and all claims relating to or arising from Employee’s employment or service relationship with the Company or any of its direct or indirect subsidiaries or affiliates and the termination of that relationship;

(b)           any and all claims relating to, or arising from, Employee’s right to purchase, or actual purchase of any shares of stock or other equity interests of the Company or any of its affiliates, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

(c)           any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;

(d)           any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the New York City Human Rights Law;

(e)           any and all claims for violation of the federal or any state constitution;

(f)            any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

(g)           any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Employee as a result of this Agreement; and

(h)           any and all claims for attorneys’ fees and costs.

Employee agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released.  This release does not release claims that cannot be released as a matter of law, including, but not limited to, Employee’s right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company (with

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the understanding that Employee’s release of claims herein bars Employee from recovering such monetary relief from the Company or any Releasee), claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law, claims to continued participation in certain of the Company’s group benefit plans pursuant to the terms and conditions of COBRA, claims to any benefit entitlements vested as the date of separation of Employee’s employment, rights with regard to any vested equity (including under any stockholders agreement governing such equity and any side letter relating thereto), and any rights to indemnity and coverage under the Company’s directors and officers insurance policies.

3.             Acknowledgment of Waiver of Claims under ADEA.  Employee understands and acknowledges that he is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and release is knowing and voluntary.  Employee understands and agrees that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement.  Employee understands and acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Employee was already entitled.  Employee further understands and acknowledges that he has been advised by this writing that:  (a) he should consult with an attorney prior to executing this Agreement; (b) he has at least 21 days within which to consider this Agreement; (c) he has 7 days following his execution of this Agreement to revoke this Agreement; (d) this Agreement shall not be effective until after the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law.  In the event Employee signs this Agreement and returns it to the Company in less than the 21-day period identified above, Employee hereby acknowledges that he has freely and voluntarily chosen to waive the time period allotted for considering this Agreement.

4.             Severability.  In the event that any provision or any portion of any provision hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision or portion of provision.

5.             No Oral Modification.  This Agreement may only be amended in a writing signed by Employee, a duly authorized officer of the Company and a duly authorized officer of Parent.

6.             Governing Law; Dispute Resolution.  This Agreement shall be subject to the provisions of Sections 11(a) and 11(i) of the Employment Agreement.

7.             Effective Date.  If Employee has attained or is over the age of 40 as of the date of Employee’s termination of employment, then the Employee has seven days after he signs this Agreement to revoke it and this Agreement will become effective on the eighth day after Employee signed this Agreement, so long as it has been signed by the Parties and has not been revoked by the Employee before that date (the “Effective Date”).

8.             Voluntary Execution of Agreement.  Employee understands and agrees that he executed this Agreement voluntarily, without any duress or undue influence on the part or behalf

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of the Company, Parent or any third party, with the full intent of releasing all of his claims against the Company, Parent and any of the other Releasees.  Employee acknowledges that:  (a) he has read this Agreement; (b) he has not relied upon any representations or statements made by the Company or Parent that are not specifically set forth in this Agreement; (c) he has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of his own choice or has elected not to retain legal counsel; (d) he understands the terms and consequences of this Agreement and of the releases it contains; and (e) he is fully aware of the legal and binding effect of this Agreement.

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

Dated:	COMPANY (or any successor thereto)
	By:
	Name:
	Title:
Dated:	PARENT (or any successor thereto)
	By:
	Name:
	Title:
Dated:	EXECUTIVE
	By:
	Name:	Glenn Schneider

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EXHIBIT B

Form of Company Indemnification Agreement

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of [            ], 2012 by and between NBTY, Inc., a Delaware corporation (the “Company”), and Glenn Schneider (“Indemnitee”).

RECITALS:

WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;

WHEREAS, highly competent persons have become more reluctant to serve as officers or in other capacities unless they are provided with adequate protection through insurance and adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, (i) the Amended and Restated Certificate of Incorporation of the Company (as may be amended from time to time, the “Certificate of Incorporation”) and the Second Amended and Restated Bylaws of the Company (as may be amended from time to time, the “Bylaws”) require indemnification of the officers and directors of the Company, (ii) Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”) and (iii) the Certificate of Incorporation, the Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;

WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation and Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefore, nor to diminish or abrogate any rights of Indemnitee thereunder, and

WHEREAS, (i) Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, (ii) Indemnitee may not be willing to serve or continue to serve as an officer without adequate protection, (iii) the Company desires Indemnitee to serve in such capacity, and (iv) Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified.

AGREEMENT:

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1.Definitions.   (a) As used in this Agreement:

“Affiliate” of any specified Person shall mean any other Person controlling, controlled by or under common control with such specified Person.

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“Corporate Status” describes the Indemnitee’s past, present or future status as a director, officer, fiduciary, trustee, employee or agent of (i) the Company or (ii) any other corporation, limited liability company, partnership or joint venture, trust, employee benefit plan or other enterprise at which such person is or was serving at the request of the Company.

“Enterprise” shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent, fiduciary or trustee.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Expenses” shall mean all reasonable direct and indirect costs, expenses, fees and charges (including without limitation attorneys’ fees, retainers, court costs, transcript costs, fees and costs of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses) of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding.  Expenses also shall include, without limitation, (i) expenses incurred in connection with any appeal resulting from, incurred by Indemnitee in connection with, arising out of respect of or relating to, any Proceeding, including without limitation, the premium, security for, and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent, (ii) for purposes of Section 11(d) only, expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise, (iii) any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, and (iv) any interest, assessments or other charges in respect of the foregoing.

“Indemnity Obligations” shall mean all obligations of the Company to Indemnitee under this Agreement, including the Company’s obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.

“Independent Counsel” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent:  (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder; provided, however, that the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

“Liabilities” means (i) all claims, liabilities, damages, losses, judgments (including pre- and post-judgment interest), orders, fines, penalties and other amounts payable in connection with, arising out of, or in respect of or relating to any Proceeding, including, without limitation, amounts paid in settlement in any Proceeding and all costs and expenses in complying with any judgment, order or decree issued or entered in connection with any Proceeding or any settlement agreement, stipulation or consent decree entered into or issued in settlement of any Proceeding.

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“Person” shall mean any individual, corporation, partnership, limited partnership, limited liability company, trust, governmental agency or body or any other legal entity.

“Proceeding” shall mean any actual, threatened, pending or completed action, claim, suit, arbitration, alternate dispute resolution mechanism, formal or informal hearing, inquiry or investigation, litigation, inquiry, administrative hearing or any other actual, threatened, pending or completed judicial, administrative or arbitration proceeding (including, without limitation, any such proceeding under the Securities Act of 1933, as amended, or the Exchange Act or any other federal law, state law, statute or regulation), whether brought by or in the name or right of the Company or otherwise, and whether of a civil, criminal, administrative or investigative nature, in each case, in which Indemnitee was, is or will be, or is threatened to be, involved as a party, witness or otherwise by reason of Indemnitee’s Corporate Status or by reason of any actual or alleged action taken by Indemnitee or of any inaction on Indemnitee’s part while acting by reason of Indemnitee’s Corporate Status, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement.

“Sponsor Entities” means (i) Carlyle Partners V, L.P., a Delaware limited partnership, (ii) Carlyle Partners V-A, L.P., a Delaware limited partnership, (iii) CP V Coinvestment A, L.P., a Delaware limited partnership, (iv) CP V Coinvestment B, L.P., a Delaware limited partnership, (v) CEP III Participations, SARL SICAR, a Luxembourg SARL, and (vi) any other investment fund or related management company or general partner that is an Affiliate of the entities described in clauses (i)-(v) hereof, provided, however, that neither the Company nor any of its subsidiaries shall be considered Sponsor Entities hereunder.

(b) For the purpose hereof, references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, fiduciary, trustee, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, fiduciary, trustee, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a Person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner “not opposed to the best interests of the Company” as referred to in this Agreement.  Notwithstanding anything herein to the contrary, in no event shall the Indemnity Obligations arising hereunder, including without limitation, with respect to any Expenses or Liabilities, apply (or be construed so as to apply) to any taxes, fines, interest, penalties or other amounts, in any case, payable by Indemnitee in respect of any compensation or benefits paid or owed to the Indemnitee in respect of Indemnitee’s services (excluding, for the avoidance of doubt, any taxes that may arise in connection with the payment of Indemnity Obligations hereunder, if any).

Section 2.Indemnity in Third-Party Proceedings.  The Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding (other than any Proceeding brought by or in the name or right of the Company to procure a judgment in its favor), or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Company and, in the case of a criminal proceeding, had no reasonable cause to believe that Indemnitee’s conduct was unlawful.

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Section 3.Indemnity in Proceedings by or in the Right of the Company.   The Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding brought by or in the name or right of the Company to procure a judgment in its favor, or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company.  No indemnification for Liabilities and Expenses shall be made under this Section 3 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

Section 4.Indemnification for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provisions of this Agreement, and without limiting the rights of Indemnitee under any other provision hereof, to the fullest extent permitted by applicable law, to the extent that (i) Indemnitee is a party to (or a participant in) any Proceeding, (ii) the Company is not permitted by applicable law to indemnify Indemnitee with respect to any claim brought in such proceeding if such claim is asserted successfully against Indemnitee and (iii) Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise (including settlement thereof), as to one or more but less than all claims, issues or matters in such Proceeding, then the Company shall indemnify Indemnitee against all Liabilities and Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter.  For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by settlement, entry of a plea of nolo contendere or by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 5.Indemnification For Expenses as a Witness.  Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Liabilities and Expenses suffered or incurred by him or on his behalf in connection therewith.

Section 6.Additional Indemnification.  Notwithstanding any limitation in Sections 2, 3, or 4, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the name or right of the Company to procure a judgment in its favor) against all Liabilities and Expenses suffered or incurred by Indemnitee in connection with such Proceeding:

(a)to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and

(b)to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

Section 7.Advancement of Expenses.  In accordance with the pre-existing requirement of Article Tenth of the Certificate of Incorporation, and notwithstanding any provision of this Agreement to the contrary, the Company shall advance, to the extent not prohibited by law, the Expenses incurred by

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Indemnitee in connection with any Proceeding, and such advancement shall be made no later than ten (10) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.  Advances shall be unsecured and interest free.  Advances shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement.  Advances shall include any and all Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed.  The Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement, which shall constitute an undertaking providing that the Indemnitee undertakes to repay such advances if and to the extent that it is ultimately determined in a decision by a court of competent jurisdiction from which no appeal can be taken that Indemnitee is not entitled to be indemnified by the Company.

Section 8.Procedure for Notification and Defense of Claim.

(a)Indemnitee shall notify the Company in writing of any Proceeding with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof.  The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding.  To obtain indemnification and/or advancement of Expenses under this Agreement, Indemnitee shall submit to the Company a written request therefor, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such action, suit or proceeding.  Any delay or failure by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay or failure in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement.  The Secretary of the Company shall, promptly upon receipt of such a request for indemnification or advancement of Expenses, advise the Board in writing that Indemnitee has made such a request.

(b)In the event Indemnitee is entitled to indemnification and/or advancement of Expenses with respect to any Proceeding, Indemnitee may, at Indemnitee’s option, (i) retain counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld, conditioned or delayed) to represent Indemnitee with respect to such Proceeding, at the sole expense of the Company, or (ii) have the Company assume the defense of Indemnitee in such Proceeding, in which case the Company shall assume the defense of such Proceeding with counsel selected by the Company and approved by Indemnitee (which approval shall not be unreasonably withheld, conditioned or delayed) within ten (10) days of the Company’s receipt of written notice of Indemnitee’s election to cause the Company to do so.  If the Company is required to assume the defense of any such Proceeding, it shall engage legal counsel for such defense, and the Company shall be solely responsible for all fees and expenses of such legal counsel and otherwise of such defense.  Such legal counsel may represent both Indemnitee and the Company (and/or any other party or parties entitled to be indemnified by the Company with respect to such matter) unless, in the reasonable opinion of legal counsel to Indemnitee, there is an actual or potential conflict of interest between Indemnitee and the Company (or any other such party or parties) or there are legal defenses available to Indemnitee that are not available to the Company (or any such other party or parties).  Notwithstanding either party’s assumption of responsibility for defense of a Proceeding, each party shall have the right to engage separate counsel at its own expense.  The party having responsibility for defense of a Proceeding shall provide the other party and its counsel with all copies of pleadings and material correspondence relating to the Proceeding.  Indemnitee and the

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Company shall reasonably cooperate in the defense of any Proceeding with respect to which indemnification is sought hereunder, regardless of whether the Company or Indemnitee assumes the defense thereof.  Indemnitee may not settle or compromise any Proceeding without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.  The Company may not, without the prior written consent of Indemnitee, which consent shall not be unreasonably withheld, conditioned or delayed, effect any settlement of any Proceeding against Indemnitee or which potentially or actually imposes any cost, liability, exposure or burden on Indemnitee.

Section 9.Procedure Upon Application for Indemnification.

(a)Upon written request by Indemnitee for indemnification pursuant to Section 8(a), the Company shall advance all reasonable fees and expenses necessary to defend against a Claim pursuant to the undertaking set forth in Section 7 hereof.  If any determination by the Company is required by applicable law with respect to Indemnitee’s ultimate entitlement to indemnification, such determination shall be made (i) if Indemnitee shall request such determination be made by Independent Counsel, by Independent Counsel, and (ii) in all other circumstances, in any manner permitted by the DGCL, subject to Section 9(c).  Any decision that a determination is required by law, and any such determination, shall be made within forty-five (45) days after receipt of Indemnitee’s written request for indemnification pursuant to this Agreement.  Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any costs or Expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.  The Company will not deny any written request for indemnification hereunder by Indemnitee unless an adverse determination as to Indemnitee’s entitlement to such indemnification described in this Section 9(a) has been made.  The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.  The Company shall be bound by and shall have no right to challenge a favorable determination of Indemnitee’s entitlements.

(b)In the event any determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 9(a) hereof, (i) the Independent Counsel shall be selected by the Company within ten (10) days of the Submission Date (the cost of each such counsel to be paid by the Company), (ii) the Company shall give written notice to Indemnitee advising it of the identity of the Independent Counsel so selected and (iii) Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company Indemnitee’s written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 1 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  Absent a timely objection, the person so selected shall act as Independent Counsel.  If a written objection is so made by Indemnitee, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court of competent jurisdiction has determined that such objection is without merit.  If no Independent Counsel shall have been selected and not objected to before the later of (i) thirty (30) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 9(a) hereof (the “Submission Date”) and (ii) ten (10) days after the

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final disposition of the Proceeding, each of the Company and Indemnitee shall select a law firm or member of a law firm meeting the qualifications to serve as Independent Counsel, and such law firms or members of law firms shall select the Independent Counsel.  Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 11(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

(c)Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding; provided that, in absence of any such determination with respect to such Proceeding, the Company shall pay Liabilities and advance Expenses with respect to such Proceeding the Company had determined the Indemnitee to be entitled to indemnification and advancement of Expenses with respect to such Proceeding.

Section 10.Presumptions and Effect of Certain Proceedings.

(a)In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 8(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.  Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(b)If the person, persons or entity empowered or selected under Section 9 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefore, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent a prohibition of such indemnification under applicable law; provided, however, that such 30-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if (i) the determination is to be made by Independent Counsel and Indemnitee objects to the Company’s selection of Independent Counsel and (ii) the Independent Counsel ultimately selected requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.

(c)The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

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(d)Effect of Settlement.  To the greatest extent permitted by law, settlement of any Proceeding without any finding of responsibility, wrongdoing or guilt on the part of the Indemnitee with respect to claims asserted in such Proceeding shall constitute a conclusive determination that Indemnitee is entitled to indemnification hereunder with respect to such Proceeding.

(e)Reliance as Safe Harbor.  For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers, employees, boards (or committees thereof) of the Enterprise in the course of their duties, or on the advice of legal counsel or other advisors (including financial advisors and accountants) for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert or adviser selected with reasonable care by the Enterprise.  The provisions of this Section 10(e) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

(f)Actions of Others.  The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

Section 11.Remedies of Indemnitee.

(a)In the event that (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(a) of this Agreement within forty-five (45) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 4 or 5 or the second to last sentence of Section 9(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefore, (v) payment of indemnification pursuant to Section 2, 3 or 6 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of competent jurisdiction of Indemnitee’s entitlement to such indemnification and/or advancement of Expenses.  Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association.  The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b)In the event that a determination shall have been made pursuant to Section 9(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 11 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.  In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

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(c)If a determination shall have been made pursuant to Section 9(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a prohibition of such indemnification under applicable law.

(d)The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 11 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.  It is the intent of the Company that the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder.  The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement, any other agreement, the Certificate of Incorporation or Bylaws of the Company as now or hereafter in effect, or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

Section 12.Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(a)The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise.  No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal.  To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Certificate of Incorporation, the Bylaws and/or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b)The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement of Expenses and/or insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity).  The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Liability or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnification Obligations and any indemnification afforded to Indemnitee in respect of any Proceeding, Expense, Liability or matter that is the subject of Indemnity Obligations, whether created by law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any other Persons with whom or

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which Indemnitee may be associated (including, without limitation, any Sponsor Entity) to indemnify Indemnitee and/or advance Expenses to Indemnitee in respect of any proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any other Person with whom or which Indemnitee may be associated (including, any Sponsor Entity) or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases (1) any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) from any claim of contribution, subrogation, reimbursement, exoneration or indemnification, or any other recovery of any kind in respect of amounts paid by the Company hereunder; and (2) any right to participate in any claim or remedy of Indemnitee against any Sponsor Entity (or former Sponsor Entity), whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Sponsor Entity (or former Sponsor Entity), directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right.  In the event any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any insurance policy provided under this Agreement, the payor shall have a right of subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement.  In no event will payment of an Indemnity Obligation of the Company under this Agreement by any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) or their insurers affect the obligations of the Company hereunder or shift primary liability for any Indemnity Obligation to any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity).  Any indemnification and/or insurance or advancement of Expenses provided by any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) with respect to any liability arising as a result of Indemnitee’s Corporate Status or capacity as an officer or director of any Person is specifically in excess over any Indemnity Obligation of the Company or any valid and collectible insurance (including but not limited to any malpractice insurance or professional errors and omissions insurance) provided by the Company under this Agreement, and any obligation to provide indemnification and/or insurance or advance Expenses of any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) shall be reduced by any amount that Indemnitee collects from the Company as an indemnification payment or advancement of Expenses pursuant to this Agreement.

(c)To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies.  If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

(d)In the event of any payment under this Agreement, the Company shall not be subrogated to and hereby waives any rights to be subrogated to any rights of recovery of Indemnitee,

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including rights of indemnification provided to Indemnitee from any other person or entity with whom Indemnitee may be associated (including, without limitation, any Sponsor Entity) as well as any rights to contribution that might otherwise exist; provided, however, that the Company shall be subrogated to the extent of any such payment of all rights of recovery of Indemnitee under insurance policies of the Company or any of its subsidiaries.

(e)The indemnification and contribution provided for in this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of Indemnitee.

Section 13.Duration of Agreement; Not Employment Contract.  This Agreement shall continue until and terminate upon the latest of: (i) ten (10) years after the date that Indemnitee shall have ceased to serve as an officer of the Company or any other Enterprise and (ii) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.  This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators.  This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or the Enterprise) and Indemnitee.  Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board.

Section 14.Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 15.Enforcement.

(a)The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as an officer of the Company.

(b)This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefore, nor to diminish or abrogate any rights of Indemnitee thereunder.

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Section 16.Modification and Waiver.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by all of the parties hereto.  Except as otherwise expressly provided herein, the rights of a party hereunder (including the right to enforce the obligations hereunder of the other parties) may be waived only with the written consent of such party, and no waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

Section 17.Notices.All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

(a)If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

(b)If to the Company to

2100 Smithtown Avenue

Ronkonkoma, NY 11779
Attention:  Irene B. Fisher
Fax Number: 631-218-7341

or to any other address as may have been furnished to Indemnitee by the Company.

Section 18.Contribution.  To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

Section 19.Applicable Law and Consent to Jurisdiction.  This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Chancery Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Chancery Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Delaware Chancery Court, and (iv) waive, and agree not to plead or to make, any claim that any such

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action or proceeding brought in the Delaware Chancery Court has been brought in an improper or inconvenient forum.

Section 20.Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement.  Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

Section 21.Third-Party Beneficiaries.  The Sponsor Entities are intended third-party beneficiaries of this Agreement.

Section 22.Miscellaneous.  Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.  The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

NBTY, INC.	INDEMNITEE
By:
Name:	Name:	Glenn Schneider
Office:	Address:

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EXHIBIT C

Form of Parent Indemnification Agreement

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of [                    ], 2012 by and between Alphabet Holding Company, Inc., a Delaware corporation (the “Company”), and Glenn Schneider (“Indemnitee”).

RECITALS:

WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;

WHEREAS, highly competent persons have become more reluctant to serve as officers or in other capacities unless they are provided with adequate protection through insurance and adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, (i) the Second Amended and Restated Certificate of Incorporation of the Company (as may be amended from time to time, the “Certificate of Incorporation”) and the Amended and Restated Bylaws of the Company (as may be amended from time to time, the “Bylaws”) require indemnification of the officers and directors of the Company, (ii) Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”) and (iii) the Certificate of Incorporation, the Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;

WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation and Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefore, nor to diminish or abrogate any rights of Indemnitee thereunder, and

WHEREAS, (i) Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, (ii) Indemnitee may not be willing to serve or continue to serve as an officer without adequate protection, (iii) the Company desires Indemnitee to serve in such capacity, and (iv) Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified.

AGREEMENT:

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1.Definitions.  (a) As used in this Agreement:

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“Affiliate” of any specified Person shall mean any other Person controlling, controlled by or under common control with such specified Person.

“Corporate Status” describes the Indemnitee’s past, present or future status as a director, officer, fiduciary, trustee, employee or agent of (i) the Company or (ii) any other corporation, limited liability company, partnership or joint venture, trust, employee benefit plan or other enterprise at which such person is or was serving at the request of the Company.

“Enterprise” shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent, fiduciary or trustee.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Expenses” shall mean all reasonable direct and indirect costs, expenses, fees and charges (including without limitation attorneys’ fees, retainers, court costs, transcript costs, fees and costs of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses) of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding.  Expenses also shall include, without limitation, (i) expenses incurred in connection with any appeal resulting from, incurred by Indemnitee in connection with, arising out of respect of or relating to, any Proceeding, including without limitation, the premium, security for, and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent, (ii) for purposes of Section 11(d) only, expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise, (iii) any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, and (iv) any interest, assessments or other charges in respect of the foregoing.

“Indemnity Obligations” shall mean all obligations of the Company to Indemnitee under this Agreement, including the Company’s obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.

“Independent Counsel” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent:  (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder; provided, however, that the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

“Liabilities” means (i) all claims, liabilities, damages, losses, judgments (including pre- and post-judgment interest), orders, fines, penalties and other amounts payable in connection with, arising out of, or in respect of or relating to any Proceeding, including, without limitation, amounts paid in settlement in any Proceeding and all costs and expenses in complying with any judgment, order

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or decree issued or entered in connection with any Proceeding or any settlement agreement, stipulation or consent decree entered into or issued in settlement of any Proceeding.

“Person” shall mean any individual, corporation, partnership, limited partnership, limited liability company, trust, governmental agency or body or any other legal entity.

“Proceeding” shall mean any actual, threatened, pending or completed action, claim, suit, arbitration, alternate dispute resolution mechanism, formal or informal hearing, inquiry or investigation, litigation, inquiry, administrative hearing or any other actual, threatened, pending or completed judicial, administrative or arbitration proceeding (including, without limitation, any such proceeding under the Securities Act of 1933, as amended, or the Exchange Act or any other federal law, state law, statute or regulation), whether brought by or in the name or right of the Company or otherwise, and whether of a civil, criminal, administrative or investigative nature, in each case, in which Indemnitee was, is or will be, or is threatened to be, involved as a party, witness or otherwise by reason of Indemnitee’s Corporate Status or by reason of any actual or alleged action taken by Indemnitee or of any inaction on Indemnitee’s part while acting by reason of Indemnitee’s Corporate Status, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement.

“Sponsor Entities” means (i) Carlyle Partners V, L.P., a Delaware limited partnership, (ii) Carlyle Partners V-A, L.P., a Delaware limited partnership, (iii) CP V Coinvestment A, L.P., a Delaware limited partnership, (iv) CP V Coinvestment B, L.P., a Delaware limited partnership, (v) CEP III Participations, SARL SICAR, a Luxembourg SARL, and (vi) any other investment fund or related management company or general partner that is an Affiliate of the entities described in clauses (i)-(v) hereof, provided, however, that neither the Company nor any of its subsidiaries shall be considered Sponsor Entities hereunder.

(b) For the purpose hereof, references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, fiduciary, trustee, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, fiduciary, trustee, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a Person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner “not opposed to the best interests of the Company” as referred to in this Agreement.  Notwithstanding anything herein to the contrary, in no event shall the Indemnity Obligations arising hereunder, including without limitation, with respect to any Expenses or Liabilities, apply (or be construed so as to apply) to any taxes, fines, interest, penalties or other amounts, in any case, payable by Indemnitee in respect of any compensation or benefits paid or owed to the Indemnitee in respect of Indemnitee’s services (excluding, for the avoidance of doubt, any taxes that may arise in connection with the payment of Indemnity Obligations hereunder, if any).

Section 2.Indemnity in Third-Party Proceedings.  The Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding (other than any Proceeding brought by or in the name or right of the Company to procure a judgment in its favor), or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Company and, in the

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case of a criminal proceeding, had no reasonable cause to believe that Indemnitee’s conduct was unlawful.

Section 3.Indemnity in Proceedings by or in the Right of the Company.  The Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding brought by or in the name or right of the Company to procure a judgment in its favor, or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company.  No indemnification for Liabilities and Expenses shall be made under this Section 3 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

Section 4.Indemnification for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provisions of this Agreement, and without limiting the rights of Indemnitee under any other provision hereof, to the fullest extent permitted by applicable law, to the extent that (i) Indemnitee is a party to (or a participant in) any Proceeding, (ii) the Company is not permitted by applicable law to indemnify Indemnitee with respect to any claim brought in such proceeding if such claim is asserted successfully against Indemnitee and (iii) Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise (including settlement thereof), as to one or more but less than all claims, issues or matters in such Proceeding, then the Company shall indemnify Indemnitee against all Liabilities and Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter.  For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by settlement, entry of a plea of nolo contendere or by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 5.Indemnification For Expenses as a Witness.  Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Liabilities and Expenses suffered or incurred by him or on his behalf in connection therewith.

Section 6.Additional Indemnification.  Notwithstanding any limitation in Sections 2, 3, or 4, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the name or right of the Company to procure a judgment in its favor) against all Liabilities and Expenses suffered or incurred by Indemnitee in connection with such Proceeding:

(a)to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and

(b)to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

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Section 7.Advancement of Expenses.  In accordance with the pre-existing requirement of Article Tenth of the Certificate of Incorporation, and notwithstanding any provision of this Agreement to the contrary, the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made no later than ten (10) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.  Advances shall be unsecured and interest free.  Advances shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement.  Advances shall include any and all Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed.  The Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement, which shall constitute an undertaking providing that the Indemnitee undertakes to repay such advances if and to the extent that it is ultimately determined in a decision by a court of competent jurisdiction from which no appeal can be taken that Indemnitee is not entitled to be indemnified by the Company.

Section 8.Procedure for Notification and Defense of Claim.

(a)Indemnitee shall notify the Company in writing of any Proceeding with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof.  The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding.  To obtain indemnification and/or advancement of Expenses under this Agreement, Indemnitee shall submit to the Company a written request therefor, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such action, suit or proceeding.  Any delay or failure by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay or failure in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement.  The Secretary of the Company shall, promptly upon receipt of such a request for indemnification or advancement of Expenses, advise the Board in writing that Indemnitee has made such a request.

(b)In the event Indemnitee is entitled to indemnification and/or advancement of Expenses with respect to any Proceeding, Indemnitee may, at Indemnitee’s option, (i) retain counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld, conditioned or delayed) to represent Indemnitee with respect to such Proceeding, at the sole expense of the Company, or (ii) have the Company assume the defense of Indemnitee in such Proceeding, in which case the Company shall assume the defense of such Proceeding with counsel selected by the Company and approved by Indemnitee (which approval shall not be unreasonably withheld, conditioned or delayed) within ten (10) days of the Company’s receipt of written notice of Indemnitee’s election to cause the Company to do so.  If the Company is required to assume the defense of any such Proceeding, it shall engage legal counsel for such defense, and the Company shall be solely responsible for all fees and expenses of such legal counsel and otherwise of such defense.  Such legal counsel may represent both Indemnitee and the Company (and/or any other party or parties entitled to be indemnified by the Company with respect to such matter) unless, in the reasonable opinion of legal counsel to Indemnitee, there is an actual or potential conflict of interest between Indemnitee and the Company (or any other such party or parties) or there are legal defenses available to Indemnitee that are not available to the Company (or any such other party or parties).  Notwithstanding either party’s assumption of responsibility for

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defense of a Proceeding, each party shall have the right to engage separate counsel at its own expense.  The party having responsibility for defense of a Proceeding shall provide the other party and its counsel with all copies of pleadings and material correspondence relating to the Proceeding.  Indemnitee and the Company shall reasonably cooperate in the defense of any Proceeding with respect to which indemnification is sought hereunder, regardless of whether the Company or Indemnitee assumes the defense thereof.  Indemnitee may not settle or compromise any Proceeding without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.  The Company may not, without the prior written consent of Indemnitee, which consent shall not be unreasonably withheld, conditioned or delayed, effect any settlement of any Proceeding against Indemnitee or which potentially or actually imposes any cost, liability, exposure or burden on Indemnitee.

Section 9.Procedure Upon Application for Indemnification.

(a)Upon written request by Indemnitee for indemnification pursuant to Section 8(a), the Company shall advance all reasonable fees and expenses necessary to defend against a Claim pursuant to the undertaking set forth in Section 7 hereof.  If any determination by the Company is required by applicable law with respect to Indemnitee’s ultimate entitlement to indemnification, such determination shall be made (i) if Indemnitee shall request such determination be made by Independent Counsel, by Independent Counsel, and (ii) in all other circumstances, in any manner permitted by the DGCL, subject to Section 9(c).  Any decision that a determination is required by law, and any such determination, shall be made within forty-five (45) days after receipt of Indemnitee’s written request for indemnification pursuant to this Agreement.  Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any costs or Expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.  The Company will not deny any written request for indemnification hereunder by Indemnitee unless an adverse determination as to Indemnitee’s entitlement to such indemnification described in this Section 9(a) has been made.  The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.  The Company shall be bound by and shall have no right to challenge a favorable determination of Indemnitee’s entitlements.

(b)In the event any determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 9(a) hereof, (i) the Independent Counsel shall be selected by the Company within ten (10) days of the Submission Date (the cost of each such counsel to be paid by the Company), (ii) the Company shall give written notice to Indemnitee advising it of the identity of the Independent Counsel so selected and (iii) Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company Indemnitee’s written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 1 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  Absent a timely objection, the person so selected shall act as Independent Counsel.  If a written objection is so made by Indemnitee, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court of competent jurisdiction has determined that such

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objection is without merit.  If no Independent Counsel shall have been selected and not objected to before the later of (i) thirty (30) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 9(a) hereof (the “Submission Date”) and (ii) ten (10) days after the final disposition of the Proceeding, each of the Company and Indemnitee shall select a law firm or member of a law firm meeting the qualifications to serve as Independent Counsel, and such law firms or members of law firms shall select the Independent Counsel.  Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 11(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

(c)Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding; provided that, in absence of any such determination with respect to such Proceeding, the Company shall pay Liabilities and advance Expenses with respect to such Proceeding the Company had determined the Indemnitee to be entitled to indemnification and advancement of Expenses with respect to such Proceeding.

Section 10.Presumptions and Effect of Certain Proceedings.

(a)In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 8(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.  Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(b)If the person, persons or entity empowered or selected under Section 9 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefore, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent a prohibition of such indemnification under applicable law; provided, however, that such 30-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if (i) the determination is to be made by Independent Counsel and Indemnitee objects to the Company’s selection of Independent Counsel and (ii) the Independent Counsel ultimately selected requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.

(c)The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any

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criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

(d)Effect of Settlement.  To the greatest extent permitted by law, settlement of any Proceeding without any finding of responsibility, wrongdoing or guilt on the part of the Indemnitee with respect to claims asserted in such Proceeding shall constitute a conclusive determination that Indemnitee is entitled to indemnification hereunder with respect to such Proceeding.

(e)Reliance as Safe Harbor.  For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers, employees, boards (or committees thereof) of the Enterprise in the course of their duties, or on the advice of legal counsel or other advisors (including financial advisors and accountants) for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert or adviser selected with reasonable care by the Enterprise.  The provisions of this Section 10(e) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

(f)Actions of Others.  The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

Section 11.Remedies of Indemnitee.

(a)In the event that (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(a) of this Agreement within forty-five (45) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 4 or 5 or the second to last sentence of Section 9(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefore, (v) payment of indemnification pursuant to Section 2, 3 or 6 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of competent jurisdiction of Indemnitee’s entitlement to such indemnification and/or advancement of Expenses.  Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association.  The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b)In the event that a determination shall have been made pursuant to Section 9(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 11 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.  In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the

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burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

(c)If a determination shall have been made pursuant to Section 9(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a prohibition of such indemnification under applicable law.

(d)The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 11 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.  It is the intent of the Company that the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder.  The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement, any other agreement, the Certificate of Incorporation or Bylaws of the Company as now or hereafter in effect, or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

Section 12.Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(a)The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise.  No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal.  To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Certificate of Incorporation, the Bylaws and/or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b)The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement of Expenses and/or insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity).  The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Liability or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnification Obligations and any

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indemnification afforded to Indemnitee in respect of any Proceeding, Expense, Liability or matter that is the subject of Indemnity Obligations, whether created by law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any other Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) to indemnify Indemnitee and/or advance Expenses to Indemnitee in respect of any proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any other Person with whom or which Indemnitee may be associated (including, any Sponsor Entity) or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases (1) any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) from any claim of contribution, subrogation, reimbursement, exoneration or indemnification, or any other recovery of any kind in respect of amounts paid by the Company hereunder; and (2) any right to participate in any claim or remedy of Indemnitee against any Sponsor Entity (or former Sponsor Entity), whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Sponsor Entity (or former Sponsor Entity), directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right.  In the event any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any insurance policy provided under this Agreement, the payor shall have a right of subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement.  In no event will payment of an Indemnity Obligation of the Company under this Agreement by any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) or their insurers affect the obligations of the Company hereunder or shift primary liability for any Indemnity Obligation to any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity).  Any indemnification and/or insurance or advancement of Expenses provided by any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) with respect to any liability arising as a result of Indemnitee’s Corporate Status or capacity as an officer or director of any Person is specifically in excess over any Indemnity Obligation of the Company or any valid and collectible insurance (including but not limited to any malpractice insurance or professional errors and omissions insurance) provided by the Company under this Agreement, and any obligation to provide indemnification and/or insurance or advance Expenses of any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) shall be reduced by any amount that Indemnitee collects from the Company as an indemnification payment or advancement of Expenses pursuant to this Agreement.

(c)To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies.  If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

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(d)In the event of any payment under this Agreement, the Company shall not be subrogated to and hereby waives any rights to be subrogated to any rights of recovery of Indemnitee, including rights of indemnification provided to Indemnitee from any other person or entity with whom Indemnitee may be associated (including, without limitation, any Sponsor Entity) as well as any rights to contribution that might otherwise exist; provided, however, that the Company shall be subrogated to the extent of any such payment of all rights of recovery of Indemnitee under insurance policies of the Company or any of its subsidiaries.

(e)The indemnification and contribution provided for in this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of Indemnitee.

Section 13.Duration of Agreement; Not Employment Contract.  This Agreement shall continue until and terminate upon the latest of: (i) ten (10) years after the date that Indemnitee shall have ceased to serve as an officer of the Company or any other Enterprise and (ii) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.  This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators.  This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or the Enterprise) and Indemnitee.  Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board.

Section 14.Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 15.Enforcement.

(a)The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as an officer of the Company.

(b)This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and

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applicable law, and shall not be deemed a substitute therefore, nor to diminish or abrogate any rights of Indemnitee thereunder.

Section 16.Modification and Waiver.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by all of the parties hereto.  Except as otherwise expressly provided herein, the rights of a party hereunder (including the right to enforce the obligations hereunder of the other parties) may be waived only with the written consent of such party, and no waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

Section 17.Notices.All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

(a)If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

(b)If to the Company to

2100 Smithtown Avenue

Ronkonkoma, NY 11779
Attention:  Irene B. Fisher
Fax Number: 631-218-7341

or to any other address as may have been furnished to Indemnitee by the Company.

Section 18.Contribution.  To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

Section 19.Applicable Law and Consent to Jurisdiction.  This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Chancery Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware

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Chancery Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Delaware Chancery Court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Chancery Court has been brought in an improper or inconvenient forum.

Section 20.Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement.  Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

Section 21.Third-Party Beneficiaries.  The Sponsor Entities are intended third-party beneficiaries of this Agreement.

Section 22.Miscellaneous.  Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.  The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

ALPHABET HOLDING COMPANY, INC.	INDEMNITEE
By:
Name:	Name: Glenn Schneider
Office:	Address:

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EX-31.1

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Exhibit 31.1

CERTIFICATIONS

I, Jeffrey Nagel, certify that:

1.

I have reviewed this report on Form 10-Q of NBTY, Inc.;

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 the 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(s) 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 report is being prepared;

(b)

Designed such internal control 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(s) 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.

Dated: August 7, 2012

/s/ JEFFREY NAGEL
Jeffrey Nagel
Chief Executive Officer

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Exhibit 31.1

CERTIFICATIONS

EX-31.2

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Exhibit 31.2

CERTIFICATIONS

I, Michael D. Collins, certify that:

1.

I have reviewed this report on Form 10-Q of NBTY, Inc.;

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 the 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(s) 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 report is being prepared;

(b)

Designed such internal control 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(s) 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.

Dated: August 7, 2012

/s/ MICHAEL D. COLLINS
Michael D. Collins
Chief Financial Officer

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Exhibit 31.2

CERTIFICATIONS

EX-32.1

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Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report of NBTY, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jeffrey Nagel, Chief Executive Officer of the Company, 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 and belief:

(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 the Company.

Dated: August 7, 2012

Signature:

/s/ JEFFREY NAGEL
Jeffrey Nagel
Chief Executive Officer

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Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EX-32.2

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Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report of NBTY, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael D. Collins, Chief Financial Officer of the Company, 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 and belief:

(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 the Company.

Dated: August 7, 2012

Signature:

/s/ MICHAEL D. COLLINS
Michael D. Collins
Chief Financial Officer

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Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

XML

Related Party Transactions (Details) (Carlyle, USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Carlyle
Related party transactions
Expected annual consulting fee	$ 3,000
Additional fees associated with other future transactions recorded in selling, general and administrative expenses.	2,250	2,250
One-time transaction fee paid upon effectiveness of the merger		30,000
Portion of transaction fee recorded in merger expenses		14,324
Portion of transaction fee included in deferred financing costs		$ 15,676

XML

Fair Value of Financial Instruments (Details) (Recurring, USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Sep. 30, 2011
Level 2 | Interest rate swaps
Fair value measurements
Derivative liabilities (included in other current liabilities)	$ (8,182)	$ (9,102)
Derivative liabilities (included in other liabilities)	(6,804)	(8,386)
Level 3 | Cross currency swaps
Fair value measurements
Derivative liabilities (included in other current liabilities)	(3,300)	(2,160)
Derivative liabilities (included in other liabilities)	$ (10,550)	$ (8,966)

XML

Condensed Consolidating Financial Statements of Guarantors (Tables)

9 Months Ended

Jun. 30, 2012

Condensed Consolidating Financial Statements of Guarantors

Schedule of condensed consolidating balance sheet

Condensed Consolidating Balance Sheet
As of June 30, 2012

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	75,815		$	1,068	$	182,806		$	—		$	259,689
Accounts receivable, net		—			128,791		27,349			—			156,140
Intercompany		1,251,454			—		132,482			(1,383,936	)		—
Inventories		—			543,582		169,147			—			712,729
Deferred income taxes		—			24,234		615			—			24,849
Other current assets		—			30,353		25,597			—			55,950
Total current assets		1,327,269			728,028		537,996			(1,383,936	)		1,209,357
Property, plant and equipment, net		59,717			282,090		144,774			—			486,581
Goodwill		—			813,188		396,805			—			1,209,993
Intangible assets, net		—			1,615,460		338,106			—			1,953,566
Other assets		—			87,554		84			—			87,638
Intercompany loan receivable		349,809			40,733		—			(390,542	)		—
Investments in subsidiaries		2,819,405			—		—			(2,819,405	)		—
Total assets	$	4,556,200		$	3,567,053	$	1,417,765		$	(4,593,883	)	$	4,947,135
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	—		$	—	$	—		$	—		$	—
Accounts payable		—			162,098		47,908			—			210,006
Intercompany		—			1,383,936		—			(1,383,936	)		—
Accrued expenses and other current liabilities		8,180			112,570		32,033			—			152,783
Total current liabilities		8,180			1,658,604		79,941			(1,383,936	)		362,789
Intercompany loan payable		—			—		390,542			(390,542	)		—
Long-term debt, net of current portion		2,157,500			—		—			—			2,157,500
Deferred income taxes		730,376			—		5,843			—			736,219
Other liabilities		22,448			10,053		20,430			—			52,931
Total liabilities		2,918,504			1,668,657		496,756			(1,774,478	)		3,309,439
Commitments and contingencies
Stockholders' Equity:
Common stock		—			—		—			—			—
Capital in excess of par		1,554,582			352,018		301,271			(653,289	)		1,554,582
Retained earnings		124,987			1,546,378		639,568			(2,185,946	)		124,987
Accumulated other comprehensive income (loss)		(41,873	)		—		(19,830	)		19,830			(41,873	)
Total stockholders' equity		1,637,696			1,898,396		921,009			(2,819,405	)		1,637,696
Total liabilities and stockholders' equity	$	4,556,200		$	3,567,053	$	1,417,765		$	(4,593,883	)	$	4,947,135

Condensed Consolidating Balance Sheet
As of September 30, 2011

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	261,098		$	3,288	$	130,020		$	—		$	394,406
Accounts receivable, net		—			112,841		25,803			—			138,644
Intercompany		1,454,068			—		111,471			(1,565,539	)		—
Inventories		—			517,121		158,248			—			675,369
Deferred income taxes		—			23,706		634			—			24,340
Other current assets		—			31,615		27,877			—			59,492
Total current assets		1,715,166			688,571		454,053			(1,565,539	)		1,292,251
Property, plant and equipment, net		46,507			287,356		145,410			—			479,273
Goodwill		—			813,315		398,884			—			1,212,199
Intangible assets, net		—			1,645,970		359,183			—			2,005,153
Other assets		—			106,622		58			—			106,680
Intercompany loan receivable		325,985			40,734		—			(366,719	)		—
Investments in subsidiaries		2,609,651			—		—			(2,609,651	)		—
Total assets	$	4,697,309		$	3,582,568	$	1,357,588		$	(4,541,909	)	$	5,095,556
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	17,500		$	—	$	—		$	—		$	17,500
Accounts payable		—			131,307		55,204			—			186,511
Intercompany		—			1,565,539		—			(1,565,539	)		—
Accrued expenses and other current liabilities		11,262			123,242		54,038			—			188,542
Total current liabilities		28,762			1,820,088		109,242			(1,565,539	)		392,553
Intercompany loan payable		—			—		366,718			(366,718	)		—
Long-term debt, net of current portion		2,369,375			—		—			—			2,369,375
Deferred income taxes		742,968			—		5,910			—			748,878
Other liabilities		19,309			12,936		15,610			—			47,855
Total liabilities		3,160,414			1,833,024		497,480			(1,932,257	)		3,558,661
Commitments and contingencies
Stockholders' Equity:
Common stock		—			—		—			—			—
Capital in excess of par		1,552,188			352,020		301,271			(653,291	)		1,552,188
Retained earnings		22,472			1,397,524		572,993			(1,970,517	)		22,472
Accumulated other comprehensive income (loss)		(37,765	)		—		(14,156	)		14,156			(37,765	)
Total stockholders' equity		1,536,895			1,749,544		860,108			(2,609,652	)		1,536,895
Total liabilities and stockholders' equity	$	4,697,309		$	3,582,568	$	1,357,588		$	(4,541,909	)	$	5,095,556

Schedule of condensed consolidating statement of income

Condensed Consolidating Statement of Income
Three Months Ended June 30, 2012

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	571,522	$	258,028		$	(30,071	)	$	799,479
Costs and expenses:
Cost of sales		—			334,807		116,761			(30,071	)		421,497
Advertising, promotion and catalog		—			33,068		8,372			—			41,440
Selling, general and administrative		21,316			109,398		91,489			—			222,203
Impairments of Julian Graves		—			—		20,106			—			20,106
Total costs and expenses		21,316			477,273		236,728			(30,071	)		705,246
(Loss) income from operations		(21,316	)		94,249		21,300			—			94,233
Other income (expense):
Equity in income of subsidiaries		74,331			—		—			(74,331	)		—
Intercompany interest		2,933			—		(2,933	)		—			—
Interest		(36,577	)		—		—			—			(36,577	)
Miscellaneous, net		—			145		(347	)		—			(202	)
Total other income (expense)		40,687			145		(3,280	)		(74,331	)		(36,779	)
Income (loss) before income taxes		19,371			94,394		18,020			(74,331	)		57,454
(Benefit) provision for income taxes		(21,869	)		33,037		5,046			—			16,214
Net income (loss)	$	41,240		$	61,357	$	12,974		$	(74,331	)	$	41,240

Condensed Consolidating Statement of Income
Three Months Ended June 30, 2011

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	550,140	$	240,038		$	(26,840	)	$	763,338
Costs and expenses:
Cost of sales		—			322,854		100,859			(26,840	)		396,873
Advertising, promotion and catalog		—			27,974		8,497			—			36,471
Selling, general and administrative		21,418			97,691		92,213			—			211,322
Merger expenses		—			—		614			—			614
Total costs and expenses		21,418			448,519		202,183			(26,840	)		645,280
(Loss) income from operations		(21,418	)		101,621		37,855			—			118,058
Other income (expense):
Equity in income of subsidiaries		91,546			—		—			(91,546	)		—
Intercompany interest		2,765			—		(2,765	)		—			—
Interest		(38,482	)		—		(18	)		—			(38,500	)
Miscellaneous, net		(16	)		1,763		(1,256	)		—			491
Total other income (expense)		55,813			1,763		(4,039	)		(91,546	)		(38,009	)
(Loss) income before income taxes		34,395			103,384		33,816			(91,546	)		80,049
(Benefit) provision for income taxes		(41,233	)		36,185		9,469			—			4,421
Net (loss) income	$	75,628		$	67,199	$	24,347		$	(91,546	)	$	75,628

Condensed Consolidating Statement of Income
Nine Months Ended June 30, 2012

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	1,637,221	$	765,563		$	(94,237	)	$	2,308,547
Costs and expenses:
Cost of sales		—			982,346		344,601			(94,237	)		1,232,710
Advertising, promotion and catalog		—			107,068		23,214			—			130,282
Selling, general and administrative		58,849			320,848		274,510			—			654,207
Impairments of Julian Graves		—			—		20,106			—			20,106
Total costs and expenses		58,849			1,410,262		662,431			(94,237	)		2,037,305
(Loss) income from operations		(58,849	)		226,959		103,132			—			271,242
Other income (expense):
Equity in income of subsidiaries		215,429			—		—			(215,429	)		—
Intercompany interest		8,538			—		(8,538	)		—			—
Interest		(122,473	)		—		—			—			(122,473	)
Miscellaneous, net		222			2,047		(2,128	)		—			141
Total other income (expense)		101,716			2,047		(10,666	)		(215,429	)		(122,332	)
Income (loss) before income taxes		42,867			229,006		92,466			(215,429	)		148,910
(Benefit) provision for income taxes		(59,648	)		80,152		25,891			—			46,395
Net income (loss)	$	102,515		$	148,854	$	66,575		$	(215,429	)	$	102,515

Condensed Consolidating Statement of Income
Nine Months Ended June 30, 2011

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	1,599,156	$	696,431		$	(83,544	)	$	2,212,043
Costs and expenses:
Cost of sales		—			1,029,956		338,518			(83,544	)		1,284,930
Advertising, promotion and catalog		—			93,186		23,337			—			116,523
Selling, general and administrative		56,941			296,212		269,232			—			622,385
Merger expenses		43,857			—		622			—			44,479
Total costs and expenses		100,798			1,419,354		631,709			(83,544	)		2,068,317
(Loss) income from operations		(100,798	)		179,802		64,722			—			143,726
Other income (expense):
Equity in income of subsidiaries		159,322			—		—			(159,322	)		—
Intercompany interest		7,908			—		(7,908	)		—			—
Interest		(155,255	)		—		(33	)		—			(155,288	)
Miscellaneous, net		49			5,348		(2,648	)		—			2,749
Total other income (expense)		12,024			5,348		(10,589	)		(159,322	)		(152,539	)
(Loss) income before income taxes		(88,774	)		185,150		54,133			(159,322	)		(8,813	)
(Benefit) provision for income taxes		(80,804	)		64,804		15,157			—			(843	)
Net (loss) income	$	(7,970	)	$	120,346	$	38,976		$	(159,322	)	$	(7,970	)

Schedule of consolidating statement of cash flows

Condensed Consolidating Statement of Cash Flows
Nine Months Ended June 30, 2012

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash (used in) provided by operating activities	$	60,979		$	7,886		$	68,992		$	—	$	137,857
Cash flows from investing activities:
Purchase of property, plant and equipment		(16,902	)		(10,106	)		(14,567	)		—		(41,575	)
Net cash used in investing activities		(16,902	)		(10,106	)		(14,567	)		—		(41,575	)
Cash flows from financing activities:
Principal payments under long-term debt agreements		(229,375	)										(229,375	)
Proceeds from stock options exercised		15											15
Net cash used in financing activities		(229,360	)		—			—			—		(229,360	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(1,639	)		—		(1,639	)
Net decrease in cash and cash equivalents		(185,283	)		(2,220	)		52,786			—		(134,717	)
Cash and cash equivalents at beginning of period		261,098			3,288			130,020			—		394,406
Cash and cash equivalents at end of period	$	75,815		$	1,068		$	182,806		$	—	$	259,689

Condensed Consolidating Statement of Cash Flows
Nine Months Ended June 30, 2011

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash provided by operating activities	$	86,239		$	20,992		$	63,010		$	—	$	170,241
Cash flows from investing activities:
Purchase of property, plant and equipment		(1,467	)		(17,701	)		(16,313	)		—		(35,481	)
Cash paid for acquisitions, net of cash acquired		(3,982,431	)		(3,197	)		(446	)				(3,986,074	)
Net cash used in investing activities		(3,983,898	)		(20,898	)		(16,759	)		—		(4,021,555	)
Cash flows from financing activities:
Principal payments under long-term debt agreements		(8,750	)		(429	)		(390	)		—		(9,569	)
Payments for financing fees		(138,227	)		—			—			—		(138,227	)
Proceeds from borrowings		2,400,000			—			—			—		2,400,000
Capital contribution		1,550,400			—			—			—		1,550,400
Net cash provided by (used in) financing activities		3,803,423			(429	)		(390	)		—		3,802,604
Effect of exchange rate changes on cash and cash equivalents		—			335			2,267			—		2,602
Net (decrease) increase in cash and cash equivalents		(94,236	)		—			48,128			—		(46,108	)
Cash and cash equivalents at beginning of period		281,457			—			65,026			—		346,483
Cash and cash equivalents at end of period	$	187,221		$	—		$	113,154		$	—	$	300,375

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Condensed Consolidating Financial Statements of Guarantors (Details) (Senior notes due 2018)	Jun. 30, 2012
Senior notes due 2018
Long-Term Debt
Interest rate on debt instrument (as a percent)	9.00%

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Fair Value of Financial Instruments (Details 5) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
Fair value measurements
Julian Graves Tradename and certain fixed assets re-measured at fair value, impairment charge	$ 20,106	$ 20,106
Level 2
Fair value measurements
Fair value of Notes	717	717
Level 3 | Non-recurring
Fair value measurements
Julian Graves Tradename and certain fixed assets re-measured at fair value, impairment charge		$ 20,106

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Litigation Summary

9 Months Ended

Jun. 30, 2012

Litigation Summary

Litigation Summary

4. Litigation Summary

Stock Purchases

        On May 11, 2010, a putative class-action, captioned John F. Hutchins v. NBTY, Inc., et al, was filed in the United States District Court, Eastern District of New York, against NBTY and certain current and former officers, claiming that the defendants made false material statements, or concealed adverse material facts, for the purpose of causing members of the class to purchase NBTY stock at allegedly artificially inflated prices. An amended complaint, seeking unspecified compensatory damages, attorneys' fees and costs, was served on February 1, 2011. The Company moved to dismiss the amended complaint on March 18, 2011 and that motion was denied on March 6, 2012. Discovery is ongoing. We believe the claims are without merit and we intend to vigorously defend this action. At this time, however, no determination can be made as to the ultimate outcome of the litigation or the amount of liability, if any, on the part of any of the defendants.

Employment Class Actions

        On or about July 7, 2010, a putative class action captioned Hamilton and Taylor v. Vitamin World, Inc. was filed against one of our subsidiaries in the Alameda Superior Court, California. Plaintiffs seek to represent a class of employees in connection with several causes of action alleging, among other things, wage and hour violations. Plaintiffs describe the class as all non-exempt current and former employees of Vitamin World Stores in California. The complaint seeks compensatory damages, statutory penalties, restitution, disgorgement of profits, and attorneys' fees and costs in unidentified amounts. Vitamin World, Inc. has agreed upon a proposed settlement with the plaintiffs, and the parties have submitted settlement documentation to the court for approval, which would provide for payments to the class. Until such settlement is approved and entered by the court, however, no determination can be made as to the ultimate outcome of the litigation or the amount of liability, if any, on the part of the defendant. This proposed settlement is not material.

        On or about April 8, 2010, a putative class action captioned Dirickson v. NBTY Acquisition, LLC, NBTY Manufacturing, LLC, NBTY, Inc., and Volt Management Corporation ("Volt") was filed against the Company and certain subsidiaries in the Superior Court of California, County of Los Angeles. Volt is not related to the Company. Plaintiff seeks to represent a class of employees in connection with several causes of action alleging, among other things, wage and hour violations. The complaint seeks damages on behalf of all non-exempt employees within the State of California who worked for Volt or any of the NBTY entities between April 8, 2006 and April 8, 2010, including compensatory damages, unpaid wages, statutory penalties, restitution, unspecified injunctive relief, unjust enrichment and attorneys' fees and costs in unidentified amounts. The parties submitted to the court a settlement agreement providing for potential payments to the class and the court preliminarily approved the settlement agreement on or about May 9, 2012. No determination can be made as to the ultimate outcome of the litigation or the amount of liability, if any, until such settlement is approved and entered by the court. The estimated settlement value is not material.

Glucosamine-Based Dietary Supplements

        Beginning in June 2011, certain putative class actions have been filed in various jurisdictions against the Company, its subsidiary Rexall Sundown, Inc. ("Rexall"), and/or other companies as to which there may be a duty to defend and indemnify, challenging the marketing of glucosamine-based dietary supplements, under various states' consumer protection statutes. The lawsuits against the Company and its subsidiaries are: Cardenas v. NBTY, Inc. and Rexall Sundown, Inc. (filed June 14, 2011 in the United States District Court for the Eastern District of California, on behalf of a putative class of California consumers seeking unspecified compensatory damages based on theories of restitution and disgorgement, plus punitive damages and injunctive relief); and Jennings v. Rexall Sundown, Inc. (filed August 22, 2011 in the United States District Court for the District of Massachusetts, on behalf of a putative class of Massachusetts consumers seeking unspecified trebled compensatory damages), as well as other cases in California and Illinois against certain wholesale customers as to which the Company may have certain indemnification obligations. Motions to dismiss have been filed in all of these cases. On April 10, 2012, the motion to dismiss was granted in part and denied in part in the Jennings case and discovery has commenced; all other cases currently remain at the pleading stage. The Company disputes the allegations and intends to vigorously defend these actions. At this time, however, no determination can be made as to the ultimate outcome of the litigation or the amount of liability, if any, on the part of any of the defendants.

Claims in the Ordinary Course

        In addition to the foregoing, other regulatory inquiries, claims, suits and complaints (including product liability, false advertising, intellectual property and Proposition 65 claims) arise from time to time in the ordinary course of our business. We believe that such other inquiries, claims, suits and complaints would not have a material adverse effect on our consolidated financial condition, results of operations or cash flows, if adversely determined against us.

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Condensed Consolidating Financial Statements of Guarantors (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Sep. 30, 2011	Jun. 30, 2011	Sep. 30, 2010
Current assets:
Cash and cash equivalents	$ 259,689	$ 394,406	$ 300,375	$ 346,483
Accounts receivable, net	156,140	138,644
Inventories	712,729	675,369
Deferred income taxes	24,849	24,340
Other current assets	55,950	59,492
Total current assets	1,209,357	1,292,251
Property, plant and equipment, net	486,581	479,273
Goodwill	1,209,993	1,212,199
Intangible assets, net	1,953,566	2,005,153
Other assets	87,638	106,680
Total assets	4,947,135	5,095,556
Current liabilities:
Current portion of long-term debt		17,500
Accounts payable	210,006	186,511
Accrued expenses and other current liabilities	152,783	188,542
Total current liabilities	362,789	392,553
Long-term debt, net of current portion	2,157,500	2,369,375
Deferred income taxes	736,219	748,878
Other liabilities	52,931	47,855
Total liabilities	3,309,439	3,558,661
Commitments and contingencies
Stockholders' equity:
Common stock
Capital in excess of par	1,554,582	1,552,188
Retained earnings	124,987	22,472
Accumulated other comprehensive loss	(41,873)	(37,765)
Total stockholders' equity	1,637,696	1,536,895
Total liabilities and stockholders' equity	4,947,135	5,095,556
Parent Company
Current assets:
Cash and cash equivalents	75,815	261,098	187,221	281,457
Intercompany	1,251,454	1,454,068
Total current assets	1,327,269	1,715,166
Property, plant and equipment, net	59,717	46,507
Intercompany loan receivable	349,809	325,985
Investment in subsidiaries	2,819,405	2,609,651
Total assets	4,556,200	4,697,309
Current liabilities:
Current portion of long-term debt		17,500
Accrued expenses and other current liabilities	8,180	11,262
Total current liabilities	8,180	28,762
Long-term debt, net of current portion	2,157,500	2,369,375
Deferred income taxes	730,376	742,968
Other liabilities	22,448	19,309
Total liabilities	2,918,504	3,160,414
Stockholders' equity:
Common stock
Capital in excess of par	1,554,582	1,552,188
Retained earnings	124,987	22,472
Accumulated other comprehensive loss	(41,873)	(37,765)
Total stockholders' equity	1,637,696	1,536,895
Total liabilities and stockholders' equity	4,556,200	4,697,309
Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	1,068	3,288
Accounts receivable, net	128,791	112,841
Inventories	543,582	517,121
Deferred income taxes	24,234	23,706
Other current assets	30,353	31,615
Total current assets	728,028	688,571
Property, plant and equipment, net	282,090	287,356
Goodwill	813,188	813,315
Intangible assets, net	1,615,460	1,645,970
Other assets	87,554	106,622
Intercompany loan receivable	40,733	40,734
Total assets	3,567,053	3,582,568
Current liabilities:
Accounts payable	162,098	131,307
Intercompany	1,383,936	1,565,539
Accrued expenses and other current liabilities	112,570	123,242
Total current liabilities	1,658,604	1,820,088
Other liabilities	10,053	12,936
Total liabilities	1,668,657	1,833,024
Stockholders' equity:
Common stock
Capital in excess of par	352,018	352,020
Retained earnings	1,546,378	1,397,524
Total stockholders' equity	1,898,396	1,749,544
Total liabilities and stockholders' equity	3,567,053	3,582,568
Non-Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	182,806	130,020	113,154	65,026
Accounts receivable, net	27,349	25,803
Intercompany	132,482	111,471
Inventories	169,147	158,248
Deferred income taxes	615	634
Other current assets	25,597	27,877
Total current assets	537,996	454,053
Property, plant and equipment, net	144,774	145,410
Goodwill	396,805	398,884
Intangible assets, net	338,106	359,183
Other assets	84	58
Total assets	1,417,765	1,357,588
Current liabilities:
Accounts payable	47,908	55,204
Accrued expenses and other current liabilities	32,033	54,038
Total current liabilities	79,941	109,242
Intercompany loan payable	390,542	366,718
Deferred income taxes	5,843	5,910
Other liabilities	20,430	15,610
Total liabilities	496,756	497,480
Stockholders' equity:
Capital in excess of par	301,271	301,271
Retained earnings	639,568	572,993
Accumulated other comprehensive loss	(19,830)	(14,156)
Total stockholders' equity	921,009	860,108
Total liabilities and stockholders' equity	1,417,765	1,357,588
Eliminations
Current assets:
Intercompany	(1,383,936)	(1,565,539)
Total current assets	(1,383,936)	(1,565,539)
Intercompany loan receivable	(390,542)	(366,719)
Investment in subsidiaries	(2,819,405)	(2,609,651)
Total assets	(4,593,883)	(4,541,909)
Current liabilities:
Intercompany	(1,383,936)	(1,565,539)
Total current liabilities	(1,383,936)	(1,565,539)
Intercompany loan payable	(390,542)	(366,718)
Total liabilities	(1,774,478)	(1,932,257)
Stockholders' equity:
Capital in excess of par	(653,289)	(653,291)
Retained earnings	(2,185,946)	(1,970,517)
Accumulated other comprehensive loss	19,830	14,156
Total stockholders' equity	(2,819,405)	(2,609,652)
Total liabilities and stockholders' equity	$ (4,593,883)	$ (4,541,909)

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Long-Term Debt (Details) (USD $)	1 Months Ended	9 Months Ended			1 Months Ended	9 Months Ended			9 Months Ended				9 Months Ended		1 Months Ended			9 Months Ended					1 Months Ended
	Mar. 31, 2011	Jun. 30, 2012	Jun. 30, 2011	Sep. 30, 2011	Dec. 31, 2011 Term loan B-1	Jun. 30, 2012 Term loan B-1	Sep. 30, 2011 Term loan B-1	Mar. 02, 2011 Term loan B-1	Jun. 30, 2012 Term loan B-1 Eurodollar (LIBOR)	Jun. 30, 2012 Term loan B-1 Base rate	Jun. 30, 2012 Revolving credit facility	Oct. 02, 2010 Revolving credit facility	Jun. 30, 2012 Revolving credit facility Eurodollar (LIBOR)	Jun. 30, 2012 Revolving credit facility Base rate	Oct. 31, 2010 Notes	Jun. 30, 2012 Notes	Sep. 30, 2011 Notes	Jun. 30, 2012 Notes On or after October 1, 2014	Jun. 30, 2012 Notes On or after October 1, 2015	Jun. 30, 2012 Notes On or after October 1, 2016 and thereafter	Jun. 30, 2012 Notes Prior to October 1, 2014	Oct. 02, 2010 Term loan A	Mar. 31, 2011 Term loan B	Oct. 02, 2010 Term loan B
Long-Term Debt
Long-term debt, gross		$ 2,157,500,000		$ 2,386,875,000		$ 1,507,500,000	$ 1,736,875,000									$ 650,000,000	$ 650,000,000
Less: current portion				17,500,000
Total long-term debt		2,157,500,000		2,369,375,000
Borrowing capacity											200,000,000	250,000,000
Face amount of debt								1,750,000,000														250,000,000		1,500,000,000
Reference rate for variable interest rate									Eurodollar (LIBOR)	Base rate			Eurodollar (LIBOR)	Base rate
Floor for reference rate (as a percent)									1.00%	2.00%
Margin rate over reference rate (as a percent)									3.25%	2.25%			3.25%	2.25%
Write off deferred financing cost	20,824,000	9,289,000	20,824,000		9,289,000
Write off premium																							2,394,000
Termination costs on interest rate swap contracts	1,525,000
Early principal payments					225,000,000
Unused line fee percentage											0.50%
Fronting fee Percentage											0.25%
Additional prepayment as a percentage of excess cash flows						50.00%
Debt issued															$ 650,000,000
Interest rate on debt instrument (as a percent)																9.00%
Redemption price as a percentage of principal amount																		104.50%	102.25%	100.00%	100.00%

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Sep. 30, 2011
Inventories
Raw materials	$ 166,298	$ 148,206
Work-in-process	20,572	15,521
Finished goods	525,859	511,642
Total inventories	$ 712,729	$ 675,369

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Condensed Consolidating Financial Statements of Guarantors (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Condensed Consolidating Statement of Income
Net sales	$ 799,479	$ 763,338	$ 2,308,547	$ 2,212,043
Costs and expenses:
Cost of sales	421,497	396,873	1,232,710	1,284,930
Advertising, promotion and catalog	41,440	36,471	130,282	116,523
Selling, general and administrative	222,203	211,322	654,207	622,385
Impairments of Julian Graves assets	20,106		20,106
Merger expenses		614		44,479
Total costs and expenses	705,246	645,280	2,037,305	2,068,317
Income from operations	94,233	118,058	271,242	143,726
Other income (expense):
Interest	(36,577)	(38,500)	(122,473)	(155,288)
Miscellaneous, net	(202)	491	141	2,749
Total other expense	(36,779)	(38,009)	(122,332)	(152,539)
Income (loss) before income taxes	57,454	80,049	148,910	(8,813)
Provision (benefit) for income taxes	16,214	4,421	46,395	(843)
Net income (loss)	41,240	75,628	102,515	(7,970)
Parent Company
Costs and expenses:
Selling, general and administrative	21,316	21,418	58,849	56,941
Merger expenses				43,857
Total costs and expenses	21,316	21,418	58,849	100,798
Income from operations	(21,316)	(21,418)	(58,849)	(100,798)
Other income (expense):
Equity in income of subsidiaries	74,331	91,546	215,429	159,322
Intercompany interest	2,933	2,765	8,538	7,908
Interest	(36,577)	(38,482)	(122,473)	(155,255)
Miscellaneous, net		(16)	222	49
Total other expense	40,687	55,813	101,716	12,024
Income (loss) before income taxes	19,371	34,395	42,867	(88,774)
Provision (benefit) for income taxes	(21,869)	(41,233)	(59,648)	(80,804)
Net income (loss)	41,240	75,628	102,515	(7,970)
Guarantor Subsidiaries
Condensed Consolidating Statement of Income
Net sales	571,522	550,140	1,637,221	1,599,156
Costs and expenses:
Cost of sales	334,807	322,854	982,346	1,029,956
Advertising, promotion and catalog	33,068	27,974	107,068	93,186
Selling, general and administrative	109,398	97,691	320,848	296,212
Total costs and expenses	477,273	448,519	1,410,262	1,419,354
Income from operations	94,249	101,621	226,959	179,802
Other income (expense):
Miscellaneous, net	145	1,763	2,047	5,348
Total other expense	145	1,763	2,047	5,348
Income (loss) before income taxes	94,394	103,384	229,006	185,150
Provision (benefit) for income taxes	33,037	36,185	80,152	64,804
Net income (loss)	61,357	67,199	148,854	120,346
Non-Guarantor Subsidiaries
Condensed Consolidating Statement of Income
Net sales	258,028	240,038	765,563	696,431
Costs and expenses:
Cost of sales	116,761	100,859	344,601	338,518
Advertising, promotion and catalog	8,372	8,497	23,214	23,337
Selling, general and administrative	91,489	92,213	274,510	269,232
Impairments of Julian Graves assets	20,106		20,106
Merger expenses		614		622
Total costs and expenses	236,728	202,183	662,431	631,709
Income from operations	21,300	37,855	103,132	64,722
Other income (expense):
Intercompany interest	(2,933)	(2,765)	(8,538)	(7,908)
Interest		(18)		(33)
Miscellaneous, net	(347)	(1,256)	(2,128)	(2,648)
Total other expense	(3,280)	(4,039)	(10,666)	(10,589)
Income (loss) before income taxes	18,020	33,816	92,466	54,133
Provision (benefit) for income taxes	5,046	9,469	25,891	15,157
Net income (loss)	12,974	24,347	66,575	38,976
Eliminations
Condensed Consolidating Statement of Income
Net sales	(30,071)	(26,840)	(94,237)	(83,544)
Costs and expenses:
Cost of sales	(30,071)	(26,840)	(94,237)	(83,544)
Total costs and expenses	(30,071)	(26,840)	(94,237)	(83,544)
Other income (expense):
Equity in income of subsidiaries	(74,331)	(91,546)	(215,429)	(159,322)
Total other expense	(74,331)	(91,546)	(215,429)	(159,322)
Income (loss) before income taxes	(74,331)	(91,546)	(215,429)	(159,322)
Net income (loss)	$ (74,331)	$ (91,546)	$ (215,429)	$ (159,322)

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Litigation Summary (Details) (Hamilton and Taylor v. Vitamin World, Inc)	1 Months Ended
	Jul. 31, 2010 lawsuit
Hamilton and Taylor v. Vitamin World, Inc
Employment Class Actions
Number of lawsuits filed against subsidiary	1

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
Income Taxes
Effective income tax rate (as a percent)	28.20%	31.20%
Accrued interest	$ 1,550	$ 1,550
Accrued penalties	635	635
Liability of unrecognized tax benefits	11,112	11,112
Unrecognized tax benefits, recognition of which would have an effect on income tax expense and effective income tax rate	$ 8,620	$ 8,620

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Long-Term Debt

9 Months Ended

Jun. 30, 2012

Long-Term Debt.

Long-Term Debt

3. Long-Term Debt

        The components of long-term debt are as follows:

	June 30, 2012		September 30, 2011
Senior Credit Facilities:
Term loan B-1	$	1,507,500	$	1,736,875
Revolving credit facility		—		—
Notes		650,000		650,000
		2,157,500		2,386,875
Less: current portion		—		17,500
Total	$	2,157,500	$	2,369,375

Senior credit facilities

        On October 1, 2010 (the "Closing Date"), we entered into our senior credit facilities (the "Credit Agreement") consisting of a $250,000 revolving credit facility, a $250,000 term loan A and a $1,500,000 term loan B. The term loan facilities were used to fund, in part, the Acquisition.

        On March 1, 2011 (the "Refinancing Date"), NBTY, Holdings, Barclays Bank PLC, as administrative agent, and several other lenders entered into the First Amendment and Refinancing Agreement to the Credit Agreement (the "Refinancing") pursuant to which we repriced our loans and amended certain other terms under our then existing credit agreement. Under the terms of the Refinancing, the original $250,000 term loan A and $1,500,000 term loan B were replaced with a new $1,750,000 term loan B-1 and the $250,000 revolving credit facility was modified to $200,000. Borrowings under term loan B-1 bear interest at a floating rate which can be, at our option, either (i) Eurodollar (LIBOR) rate plus an applicable margin, or (ii) base rate plus an applicable margin, in each case, subject to a Eurodollar (LIBOR) rate floor of 1.00% or a base rate floor of 2.00%, as applicable. The applicable margin for term loan B-1 and the revolving credit facility is 3.25% per annum for Eurodollar (LIBOR) loans and 2.25% per annum for base rate loans, with a step-down in rate for the revolving credit facility upon the achievement of a certain total senior secured leverage ratio. Substantially all other terms are consistent with the original term loan B, including the amortization schedule of term loan B-1 and maturity dates. As a result of the Refinancing, $20,824 of previously capitalized deferred financing costs were expensed. In addition, $2,394 of the call premium on term loan B and termination costs on interest rate swap contracts of $1,525 were expensed.

        On December 30, 2011, we prepaid $225,000 of our future principal payments on our term loan B-1. As a result of this prepayment, $9,289 of deferred financing costs were charged to interest expense. In accordance with the prepayment provisions of the Refinancing, future scheduled payments of principal will not be required until the final balloon payment is due in October 2017.

        The following fees are applicable under the revolving credit facility: (i) an unused line fee of 0.50% per annum, based on the unused portion of the revolving credit facility; (ii) a letter of credit participation fee on the aggregate stated amount of each letter of credit available to be drawn equal to the applicable margin for Eurodollar rate loans; (iii) a letter of credit fronting fee equal to 0.25% per annum on the daily amount of each letter of credit available to be drawn; and (iv) certain other customary fees and expenses of our letter of credit issuers.

        The revolving credit facility matures in October 2015 and term loan B-1 matures in October 2017.

        We may voluntarily prepay loans or reduce commitments under our Credit Agreement, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty.

        We must make additional prepayments on term loan B-1 with the net cash proceeds of asset sales, casualty and condemnation events, the incurrence or issuance of indebtedness (other than indebtedness permitted to be incurred under our Credit Agreement unless specifically incurred to refinance a portion of our Credit Agreement) and 50% of excess cash flow (such percentage subject to reduction based on achievement of a certain total senior secured leverage ratio), in each case, subject to certain reinvestment rights and other exceptions. We are also required to make prepayments under our revolving credit facility at any time when, and to the extent that, the aggregate amount of the outstanding loans and letters of credit under the revolving credit facility exceeds the aggregate amount of commitments in respect of the revolving credit facility.

        Our obligations under our Credit Agreement are guaranteed by Holdings and each of our current and future direct and indirect subsidiaries other than (i) foreign subsidiaries, (ii) unrestricted subsidiaries, (iii) non-wholly owned subsidiaries, (iv) certain receivables financing subsidiaries, (v) certain immaterial subsidiaries and (vi) certain holding companies of foreign subsidiaries, and are secured by a first lien on substantially all of their assets, including capital stock of subsidiaries (subject to certain exceptions).

        Our Credit Agreement contains customary negative covenants, including, but not limited to, restrictions on our and our restricted subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, prepay or modify terms of certain junior indebtedness, enter into transactions with affiliates, amend organizational documents, or change our line of business or fiscal year. We were in compliance with all covenants under the Credit Agreement at June 30, 2012. In addition, our Credit Agreement requires the maintenance of a maximum total senior secured leverage ratio on a quarterly basis, calculated with respect to Consolidated EBITDA, as defined therein, if at any time amounts are outstanding under the revolving credit facility, including swingline loans and letters of credit. Since the inception of this revolving credit facility, we have not drawn any funds down on this facility. All other financial covenants in the original senior credit facility were removed as part of the Refinancing.

        Our Credit Agreement provides that, upon the occurrence of certain events of default, our obligations thereunder may be accelerated and the lending commitments terminated. Such events of default include payment defaults to the lenders, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy proceedings, material money judgments, material ERISA/pension plan events, certain change of control events and other customary events of default.

Notes

        On October 1, 2010, NBTY issued $650,000 outstanding notes bearing interest at 9% in a private placement. On August 2, 2011, these privately placed notes were exchanged for substantially identical notes that were registered under the Securities Act of 1933, as amended (the privately placed notes and such registered notes exchanged therefore, the "Notes"). The Notes are senior unsecured obligations and mature on October 1, 2018. Interest on the Notes is paid on April 1 and October 1 of each year, and commenced on April 1, 2011.

        On and after October 1, 2014, we may redeem the Notes, at our option, in whole at any time or in part from time to time, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and additional interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on October 1 of the years set forth below:

Period	Redemption Price
2014		104.50	%
2015		102.25	%
2016 and thereafter		100.00	%

        In addition, at any time prior to October 1, 2014, we may redeem the Notes at our option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium (as defined in the indenture governing the Notes) as of, and accrued and unpaid interest and additional interest, if any, to the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

        The Notes are jointly and severally irrevocably and unconditionally guaranteed by each of our subsidiaries that is a guarantor under the Credit Agreement. The Notes are uncollateralized and rank senior in right of payment to existing and future indebtedness that is expressly subordinated to the Notes, rank equally in right of payment to our and our subsidiary guarantors' senior unsecured debt, and are effectively junior to any of our or our subsidiary guarantors' secured debt, to the extent of the value of the collateral securing such debt. The Notes contain certain customary covenants including, but not limited to, restrictions on our and our restricted subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, or pay dividends. We were in compliance with all covenants under the Notes at June 30, 2012.

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Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Comprehensive Income (Loss)
Net income (loss), as reported	$ 41,240	$ 75,628	$ 102,515	$ (7,970)
Foreign currency translation adjustments, net of taxes	(26,733)	(164)	(5,517)	15,836
Change in fair value of swaps, net of taxes	4,351	(4,736)	1,409	(14,732)
Total comprehensive income (loss)	$ 18,858	$ 70,728	$ 98,407	$ (6,866)

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012 segment	Jun. 30, 2011
Segment Information
Number of business segments			4
Segment Information
Net sales	$ 799,479	$ 763,338	$ 2,308,547	$ 2,212,043
Income (loss) from operations	94,233	118,058	271,242	143,726
Depreciation of property, plant and equipment	26,163	25,759	78,482	76,572
Capital expenditures	19,900	6,718	41,575	35,481
Fair value adjustment to inventory				122,104
Merger expenses related to Acquisition		614		44,479
Impairments of Julian Graves assets	20,106		20,106
Julian Graves
Segment Information
Impairments of Julian Graves assets			20,106
Wholesale [Member]
Segment Information
Net sales	480,137	458,460	1,373,560	1,319,527
Income (loss) from operations	74,043	86,589	180,355	223,213
Depreciation of property, plant and equipment	9,911	10,251	29,726	28,888
Capital expenditures	131	81	632	422
European Retail
Segment Information
Net sales	182,876	179,970	548,870	530,526
Income (loss) from operations	19,297	31,185	92,269	88,797
Depreciation of property, plant and equipment	4,051	4,039	12,027	11,906
Capital expenditures	6,955	3,058	16,228	15,044
Impairments of Julian Graves assets	20,106		20,106
European Retail | Ireland
Segment Information
Number of stores	42		42
European Retail | Holland & Barrett
Segment Information
Number of stores	676		676
European Retail | Holland & Barrett | Singapore
Segment Information
Number of franchised stores	10		10
European Retail | Holland & Barrett | Cyprus
Segment Information
Number of franchised stores	6		6
European Retail | Holland & Barrett | Malta
Segment Information
Number of franchised stores	3		3
European Retail | Holland & Barrett | Hungary
Segment Information
Number of franchised stores	1		1
European Retail | Holland & Barrett | United Arab Emirates
Segment Information
Number of franchised stores	3		3
European Retail | Julian Graves | U.K.
Segment Information
Number of stores	189		189
European Retail | GNC (UK) stores | U.K.
Segment Information
Number of stores	51		51
European Retail | De Tuinen | Netherlands
Segment Information
Number of stores	106		106
Number of franchised stores	10		10
Direct Response/E-Commerce
Segment Information
Net sales	76,198	67,853	207,976	193,576
Income (loss) from operations	16,339	16,880	43,291	45,936
Depreciation of property, plant and equipment	2,674	2,661	8,024	7,987
Capital expenditures	81		81	27
North American Retail
Segment Information
Net sales	60,268	57,055	178,141	168,414
Income (loss) from operations	6,092	4,910	14,576	8,823
Depreciation of property, plant and equipment	816	823	2,745	2,481
Capital expenditures	215	114	503	895
North American Retail | Canadian
Segment Information
Number of stores	80		80
North American Retail | Vitamin World
Segment Information
Number of stores	430		430
Corporate/Manufacturing
Segment Information
Income (loss) from operations	(21,538)	(21,506)	(59,249)	(223,043)
Depreciation of property, plant and equipment	8,711	7,985	25,960	25,310
Capital expenditures	12,518	3,465	24,131	19,093
Fair value adjustment to inventory				122,104
Merger expenses related to Acquisition		$ 614		$ 44,479

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Sep. 30, 2011	Jun. 30, 2011	Sep. 30, 2010
Current assets:
Cash and cash equivalents	$ 259,689	$ 394,406	$ 300,375	$ 346,483
Accounts receivable, net	156,140	138,644
Inventories	712,729	675,369
Deferred income taxes	24,849	24,340
Other current assets	55,950	59,492
Total current assets	1,209,357	1,292,251
Property, plant and equipment, net	486,581	479,273
Goodwill	1,209,993	1,212,199
Intangible assets, net	1,953,566	2,005,153
Other assets	87,638	106,680
Total assets	4,947,135	5,095,556
Current liabilities:
Current portion of long-term debt		17,500
Accounts payable	210,006	186,511
Accrued expenses and other current liabilities	152,783	188,542
Total current liabilities	362,789	392,553
Long-term debt, net of current portion	2,157,500	2,369,375
Deferred income taxes	736,219	748,878
Other liabilities	52,931	47,855
Total liabilities	3,309,439	3,558,661
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par; one thousand shares authorized, issued and outstanding
Capital in excess of par	1,554,582	1,552,188
Retained earnings	124,987	22,472
Accumulated other comprehensive loss	(41,873)	(37,765)
Total stockholders' equity	1,637,696	1,536,895
Total liabilities and stockholders' equity	$ 4,947,135	$ 5,095,556

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Condensed Consolidating Financial Statements of Guarantors (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Condensed Consolidating Statement of Cash Flows
Net cash provided by operating activities			$ 137,857	$ 170,241
Cash flows from investing activities:
Purchase of property, plant and equipment	(19,900)	(6,718)	(41,575)	(35,481)
Cash paid for acquisitions				(3,986,074)
Net cash used in investing activities			(41,575)	(4,021,555)
Cash flows from financing activities:
Principal payments under long-term debt agreements			(229,375)	(9,569)
Proceeds from stock options exercised			15
Payments for financing fees				(138,227)
Proceeds from borrowings				2,400,000
Capital contribution				1,550,400
Net cash (used in) provided by financing activities			(229,360)	3,802,604
Effect of exchange rate changes on cash and cash equivalents			(1,639)	2,602
Net decrease in cash and cash equivalents			(134,717)	(46,108)
Cash and cash equivalents at beginning of period			394,406	346,483
Cash and cash equivalents at end of period	259,689	300,375	259,689	300,375
Parent Company
Condensed Consolidating Statement of Cash Flows
Net cash provided by operating activities			60,979	86,239
Cash flows from investing activities:
Purchase of property, plant and equipment			(16,902)	(1,467)
Cash paid for acquisitions				(3,982,431)
Net cash used in investing activities			(16,902)	(3,983,898)
Cash flows from financing activities:
Principal payments under long-term debt agreements			(229,375)	(8,750)
Proceeds from stock options exercised			15
Payments for financing fees				(138,227)
Proceeds from borrowings				2,400,000
Capital contribution				1,550,400
Net cash (used in) provided by financing activities			(229,360)	3,803,423
Net decrease in cash and cash equivalents			(185,283)	(94,236)
Cash and cash equivalents at beginning of period			261,098	281,457
Cash and cash equivalents at end of period	75,815	187,221	75,815	187,221
Guarantor Subsidiaries
Condensed Consolidating Statement of Cash Flows
Net cash provided by operating activities			7,886	20,992
Cash flows from investing activities:
Purchase of property, plant and equipment			(10,106)	(17,701)
Cash paid for acquisitions				(3,197)
Net cash used in investing activities			(10,106)	(20,898)
Cash flows from financing activities:
Principal payments under long-term debt agreements				(429)
Net cash (used in) provided by financing activities				(429)
Effect of exchange rate changes on cash and cash equivalents				335
Net decrease in cash and cash equivalents			(2,220)
Cash and cash equivalents at beginning of period			3,288
Cash and cash equivalents at end of period	1,068		1,068
Non-Guarantor Subsidiaries
Condensed Consolidating Statement of Cash Flows
Net cash provided by operating activities			68,992	63,010
Cash flows from investing activities:
Purchase of property, plant and equipment			(14,567)	(16,313)
Cash paid for acquisitions				(446)
Net cash used in investing activities			(14,567)	(16,759)
Cash flows from financing activities:
Principal payments under long-term debt agreements				(390)
Net cash (used in) provided by financing activities				(390)
Effect of exchange rate changes on cash and cash equivalents			(1,639)	2,267
Net decrease in cash and cash equivalents			52,786	48,128
Cash and cash equivalents at beginning of period			130,020	65,026
Cash and cash equivalents at end of period	$ 182,806	$ 113,154	$ 182,806	$ 113,154

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Basis of Presentation

9 Months Ended

Jun. 30, 2012

Basis of Presentation

Basis of Presentation

1. Basis of Presentation

        NBTY, Inc. ("NBTY", and together with its subsidiaries, the "Company," "we," or "us") has prepared these financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") applicable to interim financial information and on a basis that is consistent with the accounting principles applied in our audited financial statements for the fiscal year ended September 30, 2011, including the notes thereto (our "2011 Financial Statements") included in our Annual Report on Form 10-K ("2011 Annual Report"). In our opinion, these financial statements reflect all adjustments (including normal recurring items) necessary for a fair presentation of our results for the interim periods presented. These financial statements do not include all information or notes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with GAAP. Accordingly, these financial statements should be read in conjunction with the 2011 Financial Statements. Results for interim periods are not necessarily indicative of results which may be achieved for a full year.

        On October 1, 2010, pursuant to an Agreement and Plan of Merger dated as of July 15, 2010, among NBTY, Alphabet Holding Company, Inc., a Delaware corporation ("Holdings") formed by an affiliate of TC Group, L.L.C. (d/b/a The Carlyle Group ("Carlyle")), and Alphabet Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Holdings ("Merger Sub"), formed solely for the purpose of entering into the Merger, Merger Sub merged with and into NBTY with NBTY as the surviving corporation (also referred to herein as the "Merger" or the "Acquisition"). As a result of the Merger, NBTY became a wholly owned subsidiary of Holdings.

        Merger Sub was deemed to be the acquirer for accounting purposes and therefore, the Acquisition was accounted for using the acquisition method of accounting in accordance with the accounting guidance for business combinations and non-controlling interests. Accordingly, the purchase price of the Acquisition has been allocated to the Company's assets and liabilities based upon their estimated fair values at the acquisition date. For accounting purposes, the purchase price allocation was applied on October 1, 2010.

        For the nine months ended June 30, 2011, Merger expenses consisted of $15,660 in costs associated with an unused bridge loan, $14,324 for a portion of the transaction fee paid to Carlyle, $6,929 for an employment agreement termination payment to a former executive officer and $7,566 of other merger related costs. There were no Merger expenses for the nine months ended June 30, 2012.

Julian Graves Limited Administration

        On July 2, 2012, in accordance with the provisions of the United Kingdom Insolvency Act of 1986 and pursuant to a resolution of the board of directors of Julian Graves Limited, a company organized under the laws of the United Kingdom and Wales (the "UK Debtor") and an indirect, wholly-owned subsidiary of the Company, representatives from Deloitte LLP (the "Administrators") were appointed as administrators in respect of the UK Debtor (the "UK Administration"). The UK Administration, which was limited to the UK Debtor, was initiated in response to continuing operating losses of the UK Debtor and their related impact on the Company's cash flows. In connection with the UK Administration, the UK Debtor, which has retail stores in various locations in the United Kingdom, is expected to be marketed for sale or wound down. The effect of the UK Debtor's entry into administration was to place the management, affairs, business and property of the UK Debtor under the direct control of the Administrators.

        As of June 30, 2012, the carrying value of all assets relating to the UK Debtor were evaluated and an impairment of $20,106, primarily relating to the Julian Graves Tradename, was recorded. As of July 2, 2012, concurrent with the transfer of control of the UK debtor to the Administrator, a deconsolidation loss of approximately $4,000 was recorded.

        Contingent liabilities for potential claims under the UK Administration, which may result from (i) negotiations; (ii) actions of the Administrators; (iii) resolution of contractual arrangements, including unexpired leases; and (iv) material adverse developments or other events, may be recorded in future periods. No assurance can be provided that we will not be subject to future litigation and/or liabilities related to the UK Administration. Additional liabilities, if any, will be recorded when they become probable and estimable and could materially affect our future results of operations, financial condition and cash flows.

Estimates

        The preparation of financial statements in conformity with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and reported amounts of revenues and expenses during the reporting periods. These judgments can be subjective and complex, and consequently actual results could differ materially from those estimates and assumptions. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our most significant estimates include: sales returns, promotions and other allowances; inventory valuation and obsolescence; valuation and recoverability of long-lived assets; stock-based compensation; income taxes; and accruals for the outcome of current litigation.

Accounts Receivable Reserves

        Accounts receivable are presented net of the following reserves:

	June 30, 2012		September 30, 2011
Allowance for sales returns	$	10,464	$	10,793
Promotional programs incentive allowance		80,872		74,593
Allowance for doubtful accounts		5,219		5,468
	$	96,555	$	90,854

Recent Accounting Developments

        In June 2011, the Financial Accounting Standards Board ("FASB") amended its guidance on the presentation of comprehensive income in financial statements to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items that are recorded in other comprehensive income. The new accounting guidance requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The provisions of this new guidance are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. However, the requirement to present items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income has been temporarily delayed by the FASB until further evaluation can be done on the impact of its implementation. We are currently evaluating the impact of adopting this guidance on our financial statements.

        In September 2011, the FASB issued guidance to allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If after assessing the totality of events or circumstances, an entity determines it is not likely that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is not required. This new guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of the guidance is not expected to have a material impact on our financial position, results of operations or cash flows.

        In July 2012, the FASB issued guidance to allow an entity to make a qualitative assessment of whether it is more likely than not that an indefinite-lived intangible asset's fair value is less than its carrying value before applying the two-step quantitative impairment test. If it is determined through the qualitative assessment that an indefinite-lived intangible asset's fair value is more likely than not greater than its carrying value, the remaining impairment steps would be unnecessary. The qualitative assessment is optional, allowing entities to directly apply the quantitative assessment. This new guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of the guidance is not expected to have a material impact on our financial position, results of operations or cash flows.

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Fair Value of Financial Instruments (Details 3) In Thousands, unless otherwise specified	1 Months Ended	3 Months Ended	9 Months Ended				3 Months Ended	9 Months Ended
	Dec. 31, 2010 Interest rate swaps USD ($) contract	Jun. 30, 2011 Interest rate swaps USD ($)	Jun. 30, 2012 Interest rate swaps USD ($)	Mar. 31, 2011 Interest rate swaps contract	Jun. 30, 2012 Interest rate swaps December 2012 USD ($)	Jun. 30, 2012 Interest rate swaps December 2013 USD ($)	Jun. 30, 2012 Cross currency swaps USD ($)	Jun. 30, 2012 Cross currency swaps USD ($)	Jun. 30, 2012 Cross currency swaps GBP (£)	Dec. 31, 2010 Cross currency swaps contract
Derivative information
Number of derivative contracts entered into by the entity	3			3						3
Payment on termination of derivative contract	$ 1,525
Notional amount of each derivative contract		333,333						305,000	194,200
Notional amount of derivative contracts			1,000,000		266,666	166,666
Fixed interest rate (as a percent)			1.92%
Derivative term			4 years
Forward rate							1.565	1.565	1.565
Hedge ineffectiveness resulted in an expense							$ 1,524	$ 2,516

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Jun. 30, 2012

Fair Value of Financial Instruments

Summarizes liabilities measured at fair value on a recurring basis

   The following table summarizes liabilities measured at fair value on a recurring basis at June 30, 2012:

	Level 1		Level 2			Level 3
Liabilities:
Current:
Interest rate swaps (included in other current liabilities)	$	—	$	(8,182	)	$	—
Cross currency swaps (included in other current liabilities)	$	—	$	—		$	(3,300	)
Non-current:
Interest rate swaps (included in other liabilities)	$	—	$	(6,804	)	$	—
Cross currency swaps (included in other liabilities)	$	—	$	—		$	(10,550	)

        The following table summarizes liabilities measured at fair value on a recurring basis at September 30, 2011:

	Level 1		Level 2			Level 3
Liabilities:
Current:
Interest rate swaps (included in other current liabilities)	$	—	$	(9,102	)	$	—
Cross currency swaps (included in other current liabilities)	$	—	$	—		$	(2,160	)
Non-current:
Interest rate swaps (included in other liabilities)	$	—	$	(8,386	)	$	—
Cross currency swaps (included in other liabilities)	$	—	$	—		$	(8,966	)

Schedule of level 3 activity related to cross currency swaps

	Three months ended June 30, 2012			Three months ended June 30, 2011			Nine months ended June 30, 2012			Nine months ended June 30, 2011
Beginning balance:	$	(18,859	)	$	(16,337	)	$	(11,126	)	$	—
Realized / unrealized gain (loss) on cross currency swaps		5,009			1,948			(2,724	)		(14,389	)
Ending balance:	$	(13,850	)	$	(14,389	)	$	(13,850	)	$	(14,389	)

Schedule of effect of derivative instruments designated as cash flow and net investment hedging instruments

	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income
	Three months ended June 30, 2012			Three months ended June 30, 2012			Nine months ended June 30, 2012			Nine months ended June 30, 2012
Cash Flow Hedges:
Interest rate swaps	$	(1,814	)	$	(2,319	)	$	(5,445	)	$	(6,982	)
Net Investment Hedges:
Cross currency swaps	$	3,845		$	—		$	(128	)	$	—
Total	$	2,031		$	(2,319	)	$	(5,573	)	$	(6,982	)

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Fair Value of Financial Instruments (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
Impact on income statement of derivative instruments designated as cash flow and net investment hedging instruments
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)	$ 2,031	$ (5,573)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income	(2,319)	(6,982)
Interest rate swaps | Cash Flow Hedges:
Impact on income statement of derivative instruments designated as cash flow and net investment hedging instruments
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)	(1,814)	(5,445)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income	(2,319)	(6,982)
Cross currency swaps | Net Investment Hedges:
Impact on income statement of derivative instruments designated as cash flow and net investment hedging instruments
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)	$ 3,845	$ (128)

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Segment Information (Tables)

9 Months Ended

Jun. 30, 2012

Segment Information

Schedule of financial information of business segments

	Wholesale		European Retail(2)		Direct Response/ E-Commerce		North American Retail		Corporate/ Manufacturing(1)			Consolidated
Three months ended June 30, 2012:
Net sales	$	480,137	$	182,876	$	76,198	$	60,268	$	—		$	799,479
Income (loss) from operations		74,043		19,297		16,339		6,092		(21,538	)		94,233
Depreciation and amortization		9,911		4,051		2,674		816		8,711			26,163
Capital expenditures		131		6,955		81		215		12,518			19,900
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, 2012:
Net sales	$	1,373,560	$	548,870	$	207,976	$	178,141	$	—		$	2,308,547
Income (loss) from operations		180,355		92,269		43,291		14,576		(59,249	)		271,242
Depreciation and amortization		29,726		12,027		8,024		2,745		25,960			78,482
Capital expenditures		632		16,228		81		503		24,131			41,575
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

(1)

Income from operations for the nine months ended June 30, 2011 included a fair value adjustment to our inventory of $122,104, as well as Merger expenses relating to the Acquisition of $614 and $44,479 for the three and nine months ended June 30, 2011, respectively. There were no Merger expenses recorded following our fiscal year end September 30, 2011.

(2)

Income from operations for the three and nine months ended June 30, 2012 included an impairment charge of $20,106 relating to Julian Graves Limited (See note 1).

Schedule of total assets by segment

• 	June 30, 2012		September 30, 2011
  Wholesale	$	2,519,623	$	2,527,402
  European Retail		904,660		883,892
  Direct Response / E-Commerce		773,700		781,464
  North American Retail		96,866		99,466
  Corporate / Manufacturing(1)		652,286		803,332
  Consolidated assets	$	4,947,135	$	5,095,556

(1)

Total assets decreased for the Corporate / Manufacturing segment as a result of the $225,000 prepayment of the term loan B-1.

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Inventories

9 Months Ended

Jun. 30, 2012

Inventories

Inventories

2. Inventories

        The components of inventories are as follows:

	June 30, 2012		September 30, 2011
Raw materials	$	166,298	$	148,206
Work-in-process		20,572		15,521
Finished goods		525,859		511,642
Total	$	712,729	$	675,369

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Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2012	Sep. 30, 2011
Consolidated Balance Sheets
Common stock, par (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	1,000	1,000
Common stock, shares issued	1,000	1,000
Common stock, shares outstanding	1,000	1,000

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Basis of Presentation (Policies)

9 Months Ended

Jun. 30, 2012

Basis of Presentation

Estimates

Estimates

        The preparation of financial statements in conformity with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and reported amounts of revenues and expenses during the reporting periods. These judgments can be subjective and complex, and consequently actual results could differ materially from those estimates and assumptions. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our most significant estimates include: sales returns, promotions and other allowances; inventory valuation and obsolescence; valuation and recoverability of long-lived assets; stock-based compensation; income taxes; and accruals for the outcome of current litigation.

Accounts Receivable Reserves

Accounts Receivable Reserves

        Accounts receivable are presented net of the following reserves:

	June 30, 2012		September 30, 2011
Allowance for sales returns	$	10,464	$	10,793
Promotional programs incentive allowance		80,872		74,593
Allowance for doubtful accounts		5,219		5,468
	$	96,555	$	90,854

Recent Accounting Developments

Recent Accounting Developments

        In June 2011, the Financial Accounting Standards Board ("FASB") amended its guidance on the presentation of comprehensive income in financial statements to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items that are recorded in other comprehensive income. The new accounting guidance requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The provisions of this new guidance are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. However, the requirement to present items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income has been temporarily delayed by the FASB until further evaluation can be done on the impact of its implementation. We are currently evaluating the impact of adopting this guidance on our financial statements.

        In September 2011, the FASB issued guidance to allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If after assessing the totality of events or circumstances, an entity determines it is not likely that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is not required. This new guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of the guidance is not expected to have a material impact on our financial position, results of operations or cash flows.

        In July 2012, the FASB issued guidance to allow an entity to make a qualitative assessment of whether it is more likely than not that an indefinite-lived intangible asset's fair value is less than its carrying value before applying the two-step quantitative impairment test. If it is determined through the qualitative assessment that an indefinite-lived intangible asset's fair value is more likely than not greater than its carrying value, the remaining impairment steps would be unnecessary. The qualitative assessment is optional, allowing entities to directly apply the quantitative assessment. This new guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of the guidance is not expected to have a material impact on our financial position, results of operations or cash flows.

XML

Document and Entity Information	9 Months Ended
	Jun. 30, 2012	Jul. 30, 2012
Document and Entity Information
Entity Registrant Name	NBTY INC
Entity Central Index Key	0000070793
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		1,000
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

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Basis of Presentation (Tables)

9 Months Ended

Jun. 30, 2012

Basis of Presentation

Schedule of accounts receivable reserves

	June 30, 2012		September 30, 2011
Allowance for sales returns	$	10,464	$	10,793
Promotional programs incentive allowance		80,872		74,593
Allowance for doubtful accounts		5,219		5,468
	$	96,555	$	90,854

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Consolidated Statements of Operations (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net sales	$ 799,479	$ 763,338	$ 2,308,547	$ 2,212,043
Costs and expenses:
Cost of sales	421,497	396,873	1,232,710	1,284,930
Advertising, promotion and catalog	41,440	36,471	130,282	116,523
Selling, general and administrative	222,203	211,322	654,207	622,385
Impairments of Julian Graves assets	20,106		20,106
Merger expenses		614		44,479
Total costs and expenses	705,246	645,280	2,037,305	2,068,317
Income from operations	94,233	118,058	271,242	143,726
Other income (expense):
Interest	(36,577)	(38,500)	(122,473)	(155,288)
Miscellaneous, net	(202)	491	141	2,749
Total other expense	(36,779)	(38,009)	(122,332)	(152,539)
Income (loss) before income taxes	57,454	80,049	148,910	(8,813)
Provision (benefit) for income taxes	16,214	4,421	46,395	(843)
Net income (loss)	$ 41,240	$ 75,628	$ 102,515	$ (7,970)

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Fair Value of Financial Instruments

9 Months Ended

Jun. 30, 2012

Fair Value of Financial Instruments

Fair Value of Financial Instruments

7. Fair Value of Financial Instruments

        GAAP establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. GAAP also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

• •

  Level 1—Quoted prices in active markets for identical assets or liabilities.

  •

  Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

  •

  Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

        The following table summarizes liabilities measured at fair value on a recurring basis at June 30, 2012:

	Level 1		Level 2			Level 3
Liabilities:
Current:
Interest rate swaps (included in other current liabilities)	$	—	$	(8,182	)	$	—
Cross currency swaps (included in other current liabilities)	$	—	$	—		$	(3,300	)
Non-current:
Interest rate swaps (included in other liabilities)	$	—	$	(6,804	)	$	—
Cross currency swaps (included in other liabilities)	$	—	$	—		$	(10,550	)

        The following table summarizes liabilities measured at fair value on a recurring basis at September 30, 2011:

	Level 1		Level 2			Level 3
Liabilities:
Current:
Interest rate swaps (included in other current liabilities)	$	—	$	(9,102	)	$	—
Cross currency swaps (included in other current liabilities)	$	—	$	—		$	(2,160	)
Non-current:
Interest rate swaps (included in other liabilities)	$	—	$	(8,386	)	$	—
Cross currency swaps (included in other liabilities)	$	—	$	—		$	(8,966	)

        Our swap contracts are measured at fair value based on a market approach valuation technique. With the market approach, fair value is derived using prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Although non-performance risk of the Company and the counterparty is present in all swap contracts and is a component of the estimated fair values, we do not view non-performance risk to be a significant input to the fair value for the interest rate swap contracts. However, with respect to our cross currency swap contracts, we believe that non-performance risk is higher; therefore we classify these swap contracts as "Level 3" in the fair value hierarchy and, accordingly, records estimated fair value adjustments based on internal projections and views of those contracts. The performance risk for the cross currency swap contracts as a percentage of the unadjusted liabilities ranged from 16.5% to 24.4% (18.7% weighted average).

        The following table shows the Level 3 activity related to cross currency swaps for the three and nine months ended June 30, 2012 and 2011:

	Three months ended June 30, 2012			Three months ended June 30, 2011			Nine months ended June 30, 2012			Nine months ended June 30, 2011
Beginning balance:	$	(18,859	)	$	(16,337	)	$	(11,126	)	$	—
Realized / unrealized gain (loss) on cross currency swaps		5,009			1,948			(2,724	)		(14,389	)
Ending balance:	$	(13,850	)	$	(14,389	)	$	(13,850	)	$	(14,389	)

Interest Rate Swaps

        To manage the potential risk arising from changing interest rates and their impact on long-term debt, our policy is to maintain a combination of available fixed and variable rate financial instruments. During December 2010, we entered into three interest rate swap contracts that were subsequently terminated in connection with the Refinancing, resulting in a termination payment of $1,525. During March 2011, we entered into three interest rate swap contracts to fix the LIBOR indexed interest rates on a portion of our senior credit facilities until the indicated expiration dates of these swap contracts. Each swap contract has an initial notional amount of $333,333 (for a total of one billion dollars), with a fixed interest rate of 1.92% for a four-year term. The notional amount of each swap decreases to $266,666 in December 2012, decreases to $166,666 in December 2013 and has a maturity date of December 2014. Under the terms of the swap contracts, variable interest payments for a portion of our senior credit facilities are swapped for fixed interest payments. These interest rate swap contracts were designated as a cash flow hedge of the variable interest payments on a portion of our term loan debt. We assess hedge effectiveness based on the overall changes in the fair value of the interest rate swap contracts. We measure any potential ineffectiveness using the hypothetical derivative method, and any ineffectiveness will be recognized in current earnings. Hedge ineffectiveness from inception to June 30, 2012 was insignificant.

Cross Currency Swaps

        To manage the potential exposure from adverse changes in currency exchange rates, specifically the British pound, arising from our net investment in British pound denominated operations, we entered into three cross currency swap contracts in December 2010. The aggregate notional amount of the swap contracts is £194,200 (approximately $305,000), with a forward rate of 1.565, and a termination date of September 30, 2017.

        These cross currency contracts were designated as a net investment hedge to the net investment in our British pound denominated operations. We assess hedge effectiveness based on the overall changes in the fair value of the cross currency swap contracts. We measure potential hedge ineffectiveness using the hypothetical derivative method and is recognized in miscellaneous, net in the accompanying statements of operations. Hedge ineffectiveness for the three and nine months ended June 30, 2012 resulted in an expense of $1,524 and $2,516, respectively, and for the three and nine months ended June 30, 2011, hedge ineffectiveness was insignificant.

        The following table shows the effect of our derivative instruments designated as cash flow and net investment hedging instruments for the three and nine months ended June 30, 2012:

	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income
	Three months ended June 30, 2012			Three months ended June 30, 2012			Nine months ended June 30, 2012			Nine months ended June 30, 2012
Cash Flow Hedges:
Interest rate swaps	$	(1,814	)	$	(2,319	)	$	(5,445	)	$	(6,982	)
Net Investment Hedges:
Cross currency swaps	$	3,845		$	—		$	(128	)	$	—
Total	$	2,031		$	(2,319	)	$	(5,573	)	$	(6,982	)

Notes

        The fair value of the Notes, based on then quoted market prices, was approximately $717,000 on June 30, 2012, which is considered to be a Level 2 fair value.

Assets Re-measured at Fair Value on a Non-recurring Basis

        In connection with the UK Administration (See note 1), we re-measured the Julian Graves Tradename and certain fixed assets using Level 3 inputs, which resulted in an impairment of $20,106.

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Comprehensive Income (Loss)

9 Months Ended

Jun. 30, 2012

Comprehensive Income (Loss)

Comprehensive Income (Loss)

6. Comprehensive Income (Loss)

	Three months ended June 30, 2012			Three months ended June 30, 2011			Nine months ended June 30, 2012			Nine months ended June 30, 2011
Net income (loss), as reported	$	41,240		$	75,628		$	102,515		$	(7,970	)
Foreign currency translation adjustments, net of taxes		(26,733	)		(164	)		(5,517	)		15,836
Change in fair value of swaps, net of taxes		4,351			(4,736	)		1,409			(14,732	)
Total comprehensive income (loss)	$	18,858		$	70,728		$	98,407		$	(6,866	)

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Business and Credit Concentration (Tables)

9 Months Ended

Jun. 30, 2012

Business and Credit Concentration

Schedule of customers accounted for the specified percentages of gross accounts receivable

	June 30, 2012			September 30, 2011
Customer A		16	%		18	%
Customer B		10	%		11	%
Customer C		12	%		10	%

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Inventories (Tables)

9 Months Ended

Jun. 30, 2012

Inventories

Schedule of components of inventories

	June 30, 2012		September 30, 2011
Raw materials	$	166,298	$	148,206
Work-in-process		20,572		15,521
Finished goods		525,859		511,642
Total	$	712,729	$	675,369

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Segment Information

9 Months Ended

Jun. 30, 2012

Segment Information

Segment Information

10. 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—This segment sells products worldwide 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 676 Holland & Barrett stores (including 10 franchised stores in Singapore, six franchised stores in Cyprus, three franchised stores in both Malta and United Arab Emirates and one franchised store in Hungary), 189 Julian Graves stores, which have subsequently been placed into UK Administration (See Note 1), and 51 GNC (UK) stores in the U.K., 106 De Tuinen stores (including 10 franchised locations) in the Netherlands and 42 Nature's Way stores in Ireland. Our revenue generated from this segment 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 430 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		European Retail(2)		Direct Response/ E-Commerce		North American Retail		Corporate/ Manufacturing(1)			Consolidated
Three months ended June 30, 2012:
Net sales	$	480,137	$	182,876	$	76,198	$	60,268	$	—		$	799,479
Income (loss) from operations		74,043		19,297		16,339		6,092		(21,538	)		94,233
Depreciation and amortization		9,911		4,051		2,674		816		8,711			26,163
Capital expenditures		131		6,955		81		215		12,518			19,900
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, 2012:
Net sales	$	1,373,560	$	548,870	$	207,976	$	178,141	$	—		$	2,308,547
Income (loss) from operations		180,355		92,269		43,291		14,576		(59,249	)		271,242
Depreciation and amortization		29,726		12,027		8,024		2,745		25,960			78,482
Capital expenditures		632		16,228		81		503		24,131			41,575
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

(1)

Income from operations for the nine months ended June 30, 2011 included a fair value adjustment to our inventory of $122,104, as well as Merger expenses relating to the Acquisition of $614 and $44,479 for the three and nine months ended June 30, 2011, respectively. There were no Merger expenses recorded following our fiscal year end September 30, 2011.

(2)

Income from operations for the three and nine months ended June 30, 2012 included an impairment charge of $20,106 relating to Julian Graves Limited (See note 1).

• Total assets by segment:

	June 30, 2012		September 30, 2011
Wholesale	$	2,519,623	$	2,527,402
European Retail		904,660		883,892
Direct Response / E-Commerce		773,700		781,464
North American Retail		96,866		99,466
Corporate / Manufacturing(1)		652,286		803,332
Consolidated assets	$	4,947,135	$	5,095,556

(1)

Total assets decreased for the Corporate / Manufacturing segment as a result of the $225,000 prepayment of the term loan B-1.

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Business and Credit Concentration

9 Months Ended

Jun. 30, 2012

Business and Credit Concentration

Business and Credit Concentration

8. Business and Credit Concentration

Financial Instruments

        Financial instruments that potentially subject us to credit risk consist primarily of cash and cash equivalents (the amounts of which may, at times, exceed Federal Deposit Insurance Corporation limits on insurable amounts), investments and trade accounts receivable. We mitigate our risk by investing in or through major financial institutions.

Customers

        We perform on-going credit evaluations of our customers and adjust credit limits based upon payment history and the customers' current creditworthiness, as determined by review of their current credit information. Customers' account activity is continuously monitored. As a result of this review process, we record bad debt expense, which is based upon historical experience as well as specific customer collection issues that have been identified, in order to adjust the carrying amount of the related receivable to its estimated realizable value. While such bad debt expenses historically have been within expectations and the allowances established, if the financial condition of one or more of our customers were to deteriorate, additional bad debt provisions may be required.

        One customer represented 21% and 25% of the Wholesale segment's net sales for the three months ended June 30, 2012 and 2011, respectively. It also represented 13% and 15% of our consolidated net sales for the three months ended June 30, 2012 and 2011, respectively. This customer also represented 23% and 25% of the Wholesale segment's net sales for the nine months ended June 30, 2012 and 2011, respectively. It also represented 14% and 15% of our consolidated net sales for the three months ended June 30, 2012 and 2011, respectively. The loss of this customer, or any one of our other major customers, would have a material adverse effect on our results of operations if we were unable to replace that customer.

        The following customers accounted for the following percentages of the Wholesale segment's gross accounts receivable as of June 30, 2012 and September 30, 2011, respectively:

	June 30, 2012			September 30, 2011
Customer A		16	%		18	%
Customer B		10	%		11	%
Customer C		12	%		10	%

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Related Party Transactions

9 Months Ended

Jun. 30, 2012

Related Party Transactions

Related Party Transactions

9. Related Party Transactions

Consulting Agreement—Carlyle

        In connection with the Acquisition, we entered into a consulting agreement with Carlyle under which we pay Carlyle a fee for consulting services Carlyle provides to us and our subsidiaries. Under this agreement, subject to certain conditions, we expect to pay an annual consulting fee to Carlyle of $3,000; we reimburse them for their out-of-pocket expenses, and we pay them additional fees associated with other future transactions. For the nine months ended June 30, 2012 and 2011, these fees totaled $2,250 and are recorded in selling, general and administrative expenses. Carlyle also received a one-time transaction fee of $30,000 upon effectiveness of the Merger. Of this amount, $14,324 was recorded in Merger expenses and $15,676 was included with deferred financing costs.

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Condensed Consolidating Financial Statements of Guarantors

9 Months Ended

Jun. 30, 2012

Condensed Consolidating Financial Statements of Guarantors

Condensed Consolidating Financial Statements of Guarantors

11. Condensed Consolidating Financial Statements of Guarantors

        The 9% senior notes due 2018 were issued by NBTY and are guaranteed by each of its current and future direct and indirect subsidiaries, subject to certain exceptions. These guarantees are full, unconditional and joint and several. The following condensed consolidating financial information presents:

• 1.

  Condensed consolidating financial statements as of June 30, 2012 and September 30, 2011 and for the three and nine months ended June 30, 2012 and 2011 of (a) NBTY, the parent and issuer, (b) the guarantor subsidiaries, (c) the non-guarantor subsidiaries and (d) the Company on a consolidated basis; and
  
  

  2.

  Elimination entries necessary to consolidate NBTY, the parent, with guarantor and non-guarantor subsidiaries.

        The condensed consolidating financial statements are presented using the equity method of accounting for investments in wholly owned subsidiaries. Under this method, the investments in subsidiaries are recorded at cost and adjusted for our share of the subsidiaries' cumulative results of operations, capital contributions, distributions and other equity changes. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. This financial information should be read in conjunction with the financial statements and other notes related thereto.

Condensed Consolidating Balance Sheet
As of June 30, 2012

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	75,815		$	1,068	$	182,806		$	—		$	259,689
Accounts receivable, net		—			128,791		27,349			—			156,140
Intercompany		1,251,454			—		132,482			(1,383,936	)		—
Inventories		—			543,582		169,147			—			712,729
Deferred income taxes		—			24,234		615			—			24,849
Other current assets		—			30,353		25,597			—			55,950
Total current assets		1,327,269			728,028		537,996			(1,383,936	)		1,209,357
Property, plant and equipment, net		59,717			282,090		144,774			—			486,581
Goodwill		—			813,188		396,805			—			1,209,993
Intangible assets, net		—			1,615,460		338,106			—			1,953,566
Other assets		—			87,554		84			—			87,638
Intercompany loan receivable		349,809			40,733		—			(390,542	)		—
Investments in subsidiaries		2,819,405			—		—			(2,819,405	)		—
Total assets	$	4,556,200		$	3,567,053	$	1,417,765		$	(4,593,883	)	$	4,947,135
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	—		$	—	$	—		$	—		$	—
Accounts payable		—			162,098		47,908			—			210,006
Intercompany		—			1,383,936		—			(1,383,936	)		—
Accrued expenses and other current liabilities		8,180			112,570		32,033			—			152,783
Total current liabilities		8,180			1,658,604		79,941			(1,383,936	)		362,789
Intercompany loan payable		—			—		390,542			(390,542	)		—
Long-term debt, net of current portion		2,157,500			—		—			—			2,157,500
Deferred income taxes		730,376			—		5,843			—			736,219
Other liabilities		22,448			10,053		20,430			—			52,931
Total liabilities		2,918,504			1,668,657		496,756			(1,774,478	)		3,309,439
Commitments and contingencies
Stockholders' Equity:
Common stock		—			—		—			—			—
Capital in excess of par		1,554,582			352,018		301,271			(653,289	)		1,554,582
Retained earnings		124,987			1,546,378		639,568			(2,185,946	)		124,987
Accumulated other comprehensive income (loss)		(41,873	)		—		(19,830	)		19,830			(41,873	)
Total stockholders' equity		1,637,696			1,898,396		921,009			(2,819,405	)		1,637,696
Total liabilities and stockholders' equity	$	4,556,200		$	3,567,053	$	1,417,765		$	(4,593,883	)	$	4,947,135

Condensed Consolidating Balance Sheet
As of September 30, 2011

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	261,098		$	3,288	$	130,020		$	—		$	394,406
Accounts receivable, net		—			112,841		25,803			—			138,644
Intercompany		1,454,068			—		111,471			(1,565,539	)		—
Inventories		—			517,121		158,248			—			675,369
Deferred income taxes		—			23,706		634			—			24,340
Other current assets		—			31,615		27,877			—			59,492
Total current assets		1,715,166			688,571		454,053			(1,565,539	)		1,292,251
Property, plant and equipment, net		46,507			287,356		145,410			—			479,273
Goodwill		—			813,315		398,884			—			1,212,199
Intangible assets, net		—			1,645,970		359,183			—			2,005,153
Other assets		—			106,622		58			—			106,680
Intercompany loan receivable		325,985			40,734		—			(366,719	)		—
Investments in subsidiaries		2,609,651			—		—			(2,609,651	)		—
Total assets	$	4,697,309		$	3,582,568	$	1,357,588		$	(4,541,909	)	$	5,095,556
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	17,500		$	—	$	—		$	—		$	17,500
Accounts payable		—			131,307		55,204			—			186,511
Intercompany		—			1,565,539		—			(1,565,539	)		—
Accrued expenses and other current liabilities		11,262			123,242		54,038			—			188,542
Total current liabilities		28,762			1,820,088		109,242			(1,565,539	)		392,553
Intercompany loan payable		—			—		366,718			(366,718	)		—
Long-term debt, net of current portion		2,369,375			—		—			—			2,369,375
Deferred income taxes		742,968			—		5,910			—			748,878
Other liabilities		19,309			12,936		15,610			—			47,855
Total liabilities		3,160,414			1,833,024		497,480			(1,932,257	)		3,558,661
Commitments and contingencies
Stockholders' Equity:
Common stock		—			—		—			—			—
Capital in excess of par		1,552,188			352,020		301,271			(653,291	)		1,552,188
Retained earnings		22,472			1,397,524		572,993			(1,970,517	)		22,472
Accumulated other comprehensive income (loss)		(37,765	)		—		(14,156	)		14,156			(37,765	)
Total stockholders' equity		1,536,895			1,749,544		860,108			(2,609,652	)		1,536,895
Total liabilities and stockholders' equity	$	4,697,309		$	3,582,568	$	1,357,588		$	(4,541,909	)	$	5,095,556

Condensed Consolidating Statement of Income
Three Months Ended June 30, 2012

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	571,522	$	258,028		$	(30,071	)	$	799,479
Costs and expenses:
Cost of sales		—			334,807		116,761			(30,071	)		421,497
Advertising, promotion and catalog		—			33,068		8,372			—			41,440
Selling, general and administrative		21,316			109,398		91,489			—			222,203
Impairments of Julian Graves		—			—		20,106			—			20,106
Total costs and expenses		21,316			477,273		236,728			(30,071	)		705,246
(Loss) income from operations		(21,316	)		94,249		21,300			—			94,233
Other income (expense):
Equity in income of subsidiaries		74,331			—		—			(74,331	)		—
Intercompany interest		2,933			—		(2,933	)		—			—
Interest		(36,577	)		—		—			—			(36,577	)
Miscellaneous, net		—			145		(347	)		—			(202	)
Total other income (expense)		40,687			145		(3,280	)		(74,331	)		(36,779	)
Income (loss) before income taxes		19,371			94,394		18,020			(74,331	)		57,454
(Benefit) provision for income taxes		(21,869	)		33,037		5,046			—			16,214
Net income (loss)	$	41,240		$	61,357	$	12,974		$	(74,331	)	$	41,240

Condensed Consolidating Statement of Income
Three Months Ended June 30, 2011

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	550,140	$	240,038		$	(26,840	)	$	763,338
Costs and expenses:
Cost of sales		—			322,854		100,859			(26,840	)		396,873
Advertising, promotion and catalog		—			27,974		8,497			—			36,471
Selling, general and administrative		21,418			97,691		92,213			—			211,322
Merger expenses		—			—		614			—			614
Total costs and expenses		21,418			448,519		202,183			(26,840	)		645,280
(Loss) income from operations		(21,418	)		101,621		37,855			—			118,058
Other income (expense):
Equity in income of subsidiaries		91,546			—		—			(91,546	)		—
Intercompany interest		2,765			—		(2,765	)		—			—
Interest		(38,482	)		—		(18	)		—			(38,500	)
Miscellaneous, net		(16	)		1,763		(1,256	)		—			491
Total other income (expense)		55,813			1,763		(4,039	)		(91,546	)		(38,009	)
(Loss) income before income taxes		34,395			103,384		33,816			(91,546	)		80,049
(Benefit) provision for income taxes		(41,233	)		36,185		9,469			—			4,421
Net (loss) income	$	75,628		$	67,199	$	24,347		$	(91,546	)	$	75,628

Condensed Consolidating Statement of Income
Nine Months Ended June 30, 2012

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	1,637,221	$	765,563		$	(94,237	)	$	2,308,547
Costs and expenses:
Cost of sales		—			982,346		344,601			(94,237	)		1,232,710
Advertising, promotion and catalog		—			107,068		23,214			—			130,282
Selling, general and administrative		58,849			320,848		274,510			—			654,207
Impairments of Julian Graves		—			—		20,106			—			20,106
Total costs and expenses		58,849			1,410,262		662,431			(94,237	)		2,037,305
(Loss) income from operations		(58,849	)		226,959		103,132			—			271,242
Other income (expense):
Equity in income of subsidiaries		215,429			—		—			(215,429	)		—
Intercompany interest		8,538			—		(8,538	)		—			—
Interest		(122,473	)		—		—			—			(122,473	)
Miscellaneous, net		222			2,047		(2,128	)		—			141
Total other income (expense)		101,716			2,047		(10,666	)		(215,429	)		(122,332	)
Income (loss) before income taxes		42,867			229,006		92,466			(215,429	)		148,910
(Benefit) provision for income taxes		(59,648	)		80,152		25,891			—			46,395
Net income (loss)	$	102,515		$	148,854	$	66,575		$	(215,429	)	$	102,515

Condensed Consolidating Statement of Income
Nine Months Ended June 30, 2011

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	1,599,156	$	696,431		$	(83,544	)	$	2,212,043
Costs and expenses:
Cost of sales		—			1,029,956		338,518			(83,544	)		1,284,930
Advertising, promotion and catalog		—			93,186		23,337			—			116,523
Selling, general and administrative		56,941			296,212		269,232			—			622,385
Merger expenses		43,857			—		622			—			44,479
Total costs and expenses		100,798			1,419,354		631,709			(83,544	)		2,068,317
(Loss) income from operations		(100,798	)		179,802		64,722			—			143,726
Other income (expense):
Equity in income of subsidiaries		159,322			—		—			(159,322	)		—
Intercompany interest		7,908			—		(7,908	)		—			—
Interest		(155,255	)		—		(33	)		—			(155,288	)
Miscellaneous, net		49			5,348		(2,648	)		—			2,749
Total other income (expense)		12,024			5,348		(10,589	)		(159,322	)		(152,539	)
(Loss) income before income taxes		(88,774	)		185,150		54,133			(159,322	)		(8,813	)
(Benefit) provision for income taxes		(80,804	)		64,804		15,157			—			(843	)
Net (loss) income	$	(7,970	)	$	120,346	$	38,976		$	(159,322	)	$	(7,970	)

Condensed Consolidating Statement of Cash Flows
Nine Months Ended June 30, 2012

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash (used in) provided by operating activities	$	60,979		$	7,886		$	68,992		$	—	$	137,857
Cash flows from investing activities:
Purchase of property, plant and equipment		(16,902	)		(10,106	)		(14,567	)		—		(41,575	)
Net cash used in investing activities		(16,902	)		(10,106	)		(14,567	)		—		(41,575	)
Cash flows from financing activities:
Principal payments under long-term debt agreements		(229,375	)										(229,375	)
Proceeds from stock options exercised		15											15
Net cash used in financing activities		(229,360	)		—			—			—		(229,360	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(1,639	)		—		(1,639	)
Net decrease in cash and cash equivalents		(185,283	)		(2,220	)		52,786			—		(134,717	)
Cash and cash equivalents at beginning of period		261,098			3,288			130,020			—		394,406
Cash and cash equivalents at end of period	$	75,815		$	1,068		$	182,806		$	—	$	259,689

Condensed Consolidating Statement of Cash Flows
Nine Months Ended June 30, 2011

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash provided by operating activities	$	86,239		$	20,992		$	63,010		$	—	$	170,241
Cash flows from investing activities:
Purchase of property, plant and equipment		(1,467	)		(17,701	)		(16,313	)		—		(35,481	)
Cash paid for acquisitions, net of cash acquired		(3,982,431	)		(3,197	)		(446	)				(3,986,074	)
Net cash used in investing activities		(3,983,898	)		(20,898	)		(16,759	)		—		(4,021,555	)
Cash flows from financing activities:
Principal payments under long-term debt agreements		(8,750	)		(429	)		(390	)		—		(9,569	)
Payments for financing fees		(138,227	)		—			—			—		(138,227	)
Proceeds from borrowings		2,400,000			—			—			—		2,400,000
Capital contribution		1,550,400			—			—			—		1,550,400
Net cash provided by (used in) financing activities		3,803,423			(429	)		(390	)		—		3,802,604
Effect of exchange rate changes on cash and cash equivalents		—			335			2,267			—		2,602
Net (decrease) increase in cash and cash equivalents		(94,236	)		—			48,128			—		(46,108	)
Cash and cash equivalents at beginning of period		281,457			—			65,026			—		346,483
Cash and cash equivalents at end of period	$	187,221		$	—		$	113,154		$	—	$	300,375

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Fair Value of Financial Instruments (Details 2) (Cross currency swaps, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Level 3 activity
Beginning balance:	$ (18,859)	$ (16,337)	$ (11,126)
Realized/unrealized gain (loss) on cross currency swaps	5,009	1,948	(2,724)	(14,389)
Ending balance:	$ (13,850)	$ (14,389)	$ (13,850)	$ (14,389)
Weighted average performance risk for derivative contracts as a percentage of unadjusted liabilities			18.70%
Minimum
Level 3 activity
Performance risk for derivative contracts as a percentage of unadjusted liabilities			16.50%
Maximum
Level 3 activity
Performance risk for derivative contracts as a percentage of unadjusted liabilities			24.40%

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Comprehensive Income (Loss) (Tables)

9 Months Ended

Jun. 30, 2012

Comprehensive Income (Loss)

Schedule of comprehensive income (loss)

	Three months ended June 30, 2012			Three months ended June 30, 2011			Nine months ended June 30, 2012			Nine months ended June 30, 2011
Net income (loss), as reported	$	41,240		$	75,628		$	102,515		$	(7,970	)
Foreign currency translation adjustments, net of taxes		(26,733	)		(164	)		(5,517	)		15,836
Change in fair value of swaps, net of taxes		4,351			(4,736	)		1,409			(14,732	)
Total comprehensive income (loss)	$	18,858		$	70,728		$	98,407		$	(6,866	)

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Basis of Presentation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended		1 Months Ended	9 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Jun. 30, 2011 Carlyle	Jul. 31, 2012 UK Debtor	Jun. 30, 2012 UK Debtor
Basis of Presentation
Costs associated with an unused bridge loan			$ 15,660
Portion of transaction fee recorded in merger expenses			14,324
Employment agreement termination payment due to a former executive officer			6,929
Other merger related cost			7,566
Impairments of Julian Graves assets	20,106	20,106			20,106
Deconsolidation loss				$ 4,000

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Segment Information (Details 2) (USD $)			1 Months Ended											9 Months Ended
	Jun. 30, 2012	Sep. 30, 2011	Dec. 31, 2011 Term loan B-1	Jun. 30, 2012 Wholesale [Member]	Sep. 30, 2011 Wholesale [Member]	Jun. 30, 2012 European Retail	Sep. 30, 2011 European Retail	Jun. 30, 2012 Direct Response/E-Commerce	Sep. 30, 2011 Direct Response/E-Commerce	Jun. 30, 2012 North American Retail	Sep. 30, 2011 North American Retail	Jun. 30, 2012 Corporate/Manufacturing	Sep. 30, 2011 Corporate/Manufacturing	Jun. 30, 2012 Corporate/Manufacturing Term loan B-1
Total assets by segment:
Consolidated assets	$ 4,947,135,000	$ 5,095,556,000		$ 2,519,623,000	$ 2,527,402,000	$ 904,660,000	$ 883,892,000	$ 773,700,000	$ 781,464,000	$ 96,866,000	$ 99,466,000	$ 652,286,000	$ 803,332,000
Prepayment of debt			$ 225,000,000											$ 225,000,000

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities:
Net income (loss)	$ 102,515	$ (7,970)
Adjustments to reconcile net income (loss) to net cash and cash equivalents provided by (used in) operating activities:
Impairments and disposals of assets	629	2,039
Impairments on Julian Graves assets	20,106
Depreciation of property, plant and equipment	44,748	42,917
Amortization of intangible assets	33,734	33,655
Foreign currency transaction gain	(1,440)	(1,519)
Amortization of deferred financing fees	10,865	11,247
Write-off of deferred financing fees	9,289	20,824
Stock-based compensation	2,379	798
Allowance for doubtful accounts	331	5,458
Amortization of incremental inventory fair value		122,104
Inventory reserves	(1,183)	23,086
Deferred income taxes	(12,518)	(42,059)
Changes in operating assets and liabilities:
Accounts receivable	(17,264)	(10,472)
Inventories	(35,642)	(23,460)
Other assets	8,454	17,009
Accounts payable	4,265	(15,944)
Accrued expenses and other liabilities	(31,411)	(7,472)
Net cash provided by operating activities	137,857	170,241
Cash flows from investing activities:
Purchase of property, plant and equipment	(41,575)	(35,481)
Cash paid for acquisitions		(3,986,074)
Net cash used in investing activities	(41,575)	(4,021,555)
Cash flows from financing activities:
Principal payments under long-term debt agreements	(229,375)	(9,569)
Proceeds from stock options exercised	15
Payments for financing fees		(138,227)
Proceeds from borrowings		2,400,000
Capital contribution		1,550,400
Net cash (used in) provided by financing activities	(229,360)	3,802,604
Effect of exchange rate changes on cash and cash equivalents	(1,639)	2,602
Net decrease in cash and cash equivalents	(134,717)	(46,108)
Cash and cash equivalents at beginning of period	394,406	346,483
Cash and cash equivalents at end of period	259,689	300,375
Non-cash investing information:
Property, plant and equipment additions included in accounts payable	$ 18,608	$ 1,302

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Income Taxes

9 Months Ended

Jun. 30, 2012

Income Taxes

Income Taxes

5. Income Taxes

        Our provision for income taxes is impacted by a number of factors, including federal taxes, our international tax structure, state tax rates in the jurisdictions where we conduct business, and our ability to utilize state tax credits that expire between 2013 and 2016. Therefore, our overall effective income tax rate could vary as a result of these factors.

        The effective income tax rate for the three months ended June 30, 2012 was 28.2%. The effective income tax rate for the nine months ended June 30, 2012 was 31.2%. Our effective income tax rates for the three and nine months ended June 30, 2012 were higher than the prior comparable periods primarily due to certain foreign benefits and other deductions that were higher in proportion to the net tax expense and thus decreased the effective tax rate for the three and nine months ended June 30, 2011.

        We accrue interest and penalties related to unrecognized tax benefits in income tax expense. This methodology is consistent with previous periods. At June 30, 2012, we had $1,550 and $635 accrued for the potential payment of interest and penalties, respectively. As of June 30, 2012, we were subject to U.S. federal income tax examinations for the tax years 2007-2011, and to foreign examinations for the tax years of 2005-2011. In addition, we are generally subject to state and local examinations for fiscal years 2007-2011.

        We are under an Internal Revenue Service ("IRS") examination for the tax years 2007-2009. Among other issues, the IRS has questioned the values used by the Company to transfer product and provide services to an international subsidiary. We believe we have appropriately valued such product transfers and services and intend to continue to support this position.

        At June 30, 2012, we had a liability of $11,112 for unrecognized tax benefits, the recognition of which would have an effect of $8,620 on income tax expense and the effective income tax rate. We do not believe that the amount will change significantly in the next 12 months. At this time, we are unable to make a reasonably reliable estimate of the timing of payments in years beyond 12 months due to uncertainties in the timing of various tax audit outcomes.

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Basis of Presentation (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Sep. 30, 2011
Accounts receivable reserves
Total accounts receivable reserves	$ 96,555	$ 90,854
Allowance for sales returns
Accounts receivable reserves
Total accounts receivable reserves	10,464	10,793
Promotional programs incentive allowance
Accounts receivable reserves
Total accounts receivable reserves	80,872	74,593
Allowance for doubtful accounts
Accounts receivable reserves
Total accounts receivable reserves	$ 5,219	$ 5,468

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Business and Credit Concentration (Details) (Customer concentration risk)	9 Months Ended	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended			12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2012 Net sales Wholesale customer	Jun. 30, 2012 Net sales One customer	Jun. 30, 2011 Net sales One customer	Jun. 30, 2012 Net sales One customer	Jun. 30, 2011 Net sales One customer	Jun. 30, 2012 Net sales One customer Wholesale	Jun. 30, 2011 Net sales One customer Wholesale	Jun. 30, 2012 Net sales One customer Wholesale	Jun. 30, 2011 Net sales One customer Wholesale	Jun. 30, 2012 Gross accounts receivable Customer A Wholesale	Sep. 30, 2011 Gross accounts receivable Customer A Wholesale	Jun. 30, 2012 Gross accounts receivable Customer B Wholesale	Sep. 30, 2011 Gross accounts receivable Customer B Wholesale	Jun. 30, 2012 Gross accounts receivable Customer C Wholesale	Sep. 30, 2011 Gross accounts receivable Customer C Wholesale
Business and Credit Concentration
Number of customers	1
Percentage of concentration risk		13.00%	15.00%	14.00%	15.00%	21.00%	25.00%	23.00%	25.00%	16.00%	18.00%	10.00%	11.00%	12.00%	10.00%

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Long-Term Debt (Tables)

9 Months Ended

Jun. 30, 2012

Long-Term Debt.

Schedule of components of long-term debt

	June 30, 2012		September 30, 2011
Senior Credit Facilities:
Term loan B-1	$	1,507,500	$	1,736,875
Revolving credit facility		—		—
Notes		650,000		650,000
		2,157,500		2,386,875
Less: current portion		—		17,500
Total	$	2,157,500	$	2,369,375

Schedule of redemption prices of Notes

Period	Redemption Price
2014		104.50	%
2015		102.25	%
2016 and thereafter		100.00	%