Segment Information

9 Months Ended

Jun. 30, 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/Manufacturing.

        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 730 Holland & Barrett stores (including franchised stores in the following countries: 23 in each of Singapore and China, seven in each of United Arab Emirates and Cyprus, four in Malta and one in each of Gibraltar and Iceland), 57 GNC (UK) stores in the U.K., 122 De Tuinen stores (including seven franchised locations) in the Netherlands, 47 Nature's Way stores in Ireland and 13 Essenza stores in Belgium which were acquired in June of 2013, as well as internet-based sales from www.hollandandbarret.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 423 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 June 30, 2013:
Net sales	$	489,227	$	191,692	$	63,670	$	58,240	$	—		$	802,829
Income (loss) from operations		65,995		45,478		9,001		7,247		(27,278	)		100,443
Depreciation and amortization		9,171		3,544		2,506		609		15,444			31,274
Capital expenditures		177		7,494		2,280		1,475		21,736			33,162
Three Months Ended June 30, 2012:
Net sales	$	480,138	$	176,460	$	66,369	$	59,349	$	—		$	782,316
Income (loss) from operations		74,043		41,748		13,749		7,336		(21,537	)		115,339
Depreciation and amortization		8,930		3,209		2,662		716		10,014			25,531
Capital expenditures		131		6,946		81		215		12,518			19,891
Nine Months Ended June 30, 2013:
Net sales	$	1,429,103	$	557,779	$	186,252	$	176,796	$	—		$	2,349,930
Income (loss) from operations		162,886		127,979		32,325		19,995		(114,128	)		229,057
Depreciation and amortization		27,319		10,405		7,515		1,851		36,854			83,944
Capital expenditures		407		21,412		3,048		2,900		69,087			96,854
Nine Months Ended June 30, 2012:
Net sales	$	1,373,560	$	522,590	$	179,912	$	174,448	$	—		$	2,250,510
Income (loss) from operations		180,355		116,759		35,807		18,356		(59,248	)		292,029
Depreciation and amortization		26,808		9,490		7,980		2,319		29,851			76,448
Capital expenditures		632		16,210		81		503		24,131			41,557

(1)

Includes restructuring charges of $4,944 and $35,144 for the three and nine months ended June 30, 2013, respectively.

• Total assets by segment:

	June 30, 2013		September 30, 2012
Wholesale	$	2,558,411	$	2,531,145
European Retail		876,523		864,231
Direct Response / E-Commerce		713,526		772,240
North American Retail		109,554		91,510
Corporate / Manufacturing		664,957		798,121
Consolidated assets	$	4,922,971	$	5,057,247