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