Segment Information

6 Months Ended

Mar. 31, 2013

Segment Information

Segment Information

13. Segment Information

        We are organized by 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.

        Effective October 1, 2012, we reorganized our segments to better align them with how we currently review operating results for the purposes of allocating resources and managing performance. After this reorganization, we continue to have four reportable segments as follows: 1) Wholesale, 2) European Retail, 3) Direct Response/E-Commerce and 4) North American Retail. In accordance with ASC 280, Segment Reporting, we have reclassified all prior period amounts to conform to our new reportable segment presentation. The reclassification of prior period amounts did not have a material impact on the Company's financial statements, and were as follows:

• •

  The European Retail Segment now includes the results of the European direct response/e-commerce business, which was previously reported in the Direct Response/E-Commerce segment.

  •

  The North American Retail segment now includes the results of Vitamin World's e-commerce business, which was previously reported in the Direct Response/E-Commerce segment.

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

• •

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

  •

  European Retail—This segment generates revenue through its 711 Holland & Barrett stores (including franchised stores in the following countries: eighteen in Singapore, fifteen in China, seven in United Arab Emirates, six in Cyprus, four in Malta and one in each of Gibraltar and Iceland), 57 GNC (UK) stores in the U.K., 118 De Tuinen stores (including seven franchised locations) in the Netherlands and 44 Nature's Way stores in Ireland, as well as internet based sales from www.hollandandbarrett.com, www.detuinen.nl and www.gnc.co.uk. Such revenue consists of sales of proprietary brand and third-party products as well as franchise fees.

  •

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

  •

  North American Retail—This segment generates revenue through its 425 owned and operated Vitamin World stores selling proprietary brand and third- party products, as well as internet based sales fromwww.vitaminworld.com.
  
  
  

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

	Wholesale		European Retail		Direct Response/ E-Commerce		North American Retail		Corporate/ Manufacturing(1)			Consolidated
Three Months Ended March 31, 2013:
Net sales	$	445,672	$	187,103	$	63,898	$	61,201	$	—		$	757,874
Income (loss) from continuing operations		26,964		42,517		11,075		6,866		(63,932	)		23,490
Depreciation and amortization		10,068		3,766		2,505		613		12,327			29,279
Capital expenditures		55		5,810		656		668		22,985			30,174
Three Months Ended March 31, 2012:
Net sales	$	449,051	$	181,006	$	61,790	$	61,139	$	—		$	752,986
Income (loss) from continuing operations		45,357		44,030		12,367		6,083		(17,820	)		90,017
Depreciation and amortization		9,907		3,470		2,659		870		8,646			25,552
Capital expenditures		140		3,393		—		71		5,995			9,599
Six Months Ended March 31, 2013:
Net sales	$	939,876	$	366,087	$	122,582	$	118,556	$	—		$	1,547,101
Income (loss) from continuing operations		96,891		82,501		23,324		12,748		(86,849	)		128,615
Depreciation and amortization		19,697		7,509		5,009		1,243		19,212			52,670
Capital expenditures		230		13,918		768		1,425		47,351			63,692
Six Months Ended March 31, 2012:
Net sales	$	893,422	$	346,131	$	113,543	$	115,099	$	—		$	1,468,195
Income (loss) from continuing operations		106,312		75,011		22,058		11,020		(37,712	)		176,689
Depreciation and amortization		19,815		6,933		5,318		1,602		17,249			50,917
Capital expenditures		501		9,264		—		288		11,613			21,666

(1)

Includes restructuring charges of $30,200 for the three and six months ended March 31, 2013.

• Total assets by segment:

	March 31, 2013		September 30, 2012
Wholesale	$	2,558,725	$	2,531,145
European Retail		857,071		864,231
Direct Response / E-Commerce		715,441		772,240
North American Retail		112,366		91,510
Corporate / Manufacturing		677,420		798,121
Consolidated assets	$	4,921,023	$	5,057,247