Condensed Consolidating Financial Statements of Guarantors

9 Months Ended

Jun. 30, 2013

Condensed Consolidating Financial Statements of Guarantors

Condensed Consolidating Financial Statements of Guarantors

14. Condensed Consolidating Financial Statements of Guarantors

        The Notes 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, 2013 and September 30, 2012 and for the three and nine months ended June 30, 2013 and 2012 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, 2013

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	21,230		$	1,631	$	104,523		$	—		$	127,384
Accounts receivable, net		—			144,991		40,715						185,706
Intercompany		896,510			—		272,540			(1,169,050	)		—
Inventories		—			537,557		166,890			—			704,447
Deferred income taxes		—			29,025		596			—			29,621
Other current assets		—			31,252		27,859			—			59,111
Total current assets		917,740			744,456		613,123			(1,169,050	)		1,106,269
Property, plant and equipment, net		106,159			283,838		159,021			—			549,018
Goodwill		—			813,688		426,359			—			1,240,047
Intangible assets, net		—			1,627,612		326,114			—			1,953,726
Other assets		—			73,834		77			—			73,911
Intercompany loan receivable		334,033			40,733		—			(374,766	)		—
Investments in subsidiaries		3,084,357			—		—			(3,084,357	)		—
Total assets	$	4,442,289		$	3,584,161	$	1,524,694		$	(4,628,173	)	$	4,922,971
Liabilities and Stockholder's Equity
Current liabilities:
Current portion of long-term debt	$	—		$	—	$	284		$	—		$	284
Accounts payable		—			183,784		56,466			—			240,250
Intercompany		—			1,169,050		—			(1,169,050	)		—
Accrued expenses and other current liabilities		20,958			141,272		36,250			—			198,480
Total current liabilities		20,958			1,494,106		93,000			(1,169,050	)		439,014
Intercompany loan payable		—			—		374,766			(374,766	)		—
Long-term debt		2,157,500			—		1,157			—			2,158,657
Deferred income taxes		721,559			22,045		7,443			—			751,047
Other liabilities		7,857			8,545		23,436			—			39,838
Total liabilities		2,907,874			1,524,696		499,802			(1,543,816	)		3,388,556
Commitments and contingencies
Stockholder's Equity:
Common stock		—			—		—			—			—
Capital in excess of par		1,556,767			352,019		301,271			(653,290	)		1,556,767
Retained earnings		38,034			1,707,446		759,987			(2,467,433	)		38,034
Accumulated other comprehensive (loss) income		(60,386	)		—		(36,366	)		36,366			(60,386	)
Total stockholder's equity		1,534,415			2,059,465		1,024,892			(3,084,357	)		1,534,415
Total liabilities and stockholder's equity	$	4,442,289		$	3,584,161	$	1,524,694		$	(4,628,173	)	$	4,922,971

Condensed Consolidating Balance Sheet
As of September 30, 2012

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	183,661		$	14,589	$	116,886		$	—		$	315,136
Accounts receivable, net		—			130,281		29,814			—			160,095
Intercompany		1,106,055			—		257,151			(1,363,206	)		—
Inventories		—			546,032		173,564			—			719,596
Deferred income taxes		—			25,609		633			—			26,242
Other current assets		6,000			28,997		29,329			—			64,326
Total current assets		1,295,716			745,508		607,377			(1,363,206	)		1,285,395
Property, plant and equipment, net		61,640			297,009		154,030			—			512,679
Goodwill		—			813,187		407,128			—			1,220,315
Other intangible assets, net		—			1,605,290		346,514			—			1,951,804
Other assets		—			85,860		1,194			—			87,054
Intercompany loan receivable		355,141			40,734		—			(395,875	)		—
Investments in subsidiaries		2,913,403			—		—			(2,913,403	)		—
Total assets	$	4,625,900		$	3,587,588	$	1,516,243		$	(4,672,484	)	$	5,057,247
Liabilities and Stockholder's Equity
Current liabilities:
Accounts payable	$	—		$	154,374	$	58,174		$	—		$	212,548
Intercompany		—			1,363,211		—			(1,363,211	)		—
Accrued expenses and other current liabilities		13,751			111,489		65,112			—			190,352
Total current liabilities		13,751			1,629,074		123,286			(1,363,211	)		402,900
Intercompany loan payable		—			—		395,870			(395,870	)		—
Long-term debt		2,157,500			—		—			—			2,157,500
Deferred income taxes		717,959			—		8,447			—			726,406
Other liabilities		31,458			9,576		24,175			—			65,209
Total liabilities		2,920,668			1,638,650		551,778			(1,759,081	)		3,352,015
Commitments and contingencies
Stockholder's Equity:
Common stock		—			—		—			—			—
Capital in excess of par		1,554,883			352,019		301,271			(653,290	)		1,554,883
Retained earnings		168,943			1,596,919		664,157			(2,261,076	)		168,943
Accumulated other comprehensive (loss) income		(18,594	)		—		(963	)		963			(18,594	)
Total stockholder's equity		1,705,232			1,948,938		964,465			(2,913,403	)		1,705,232
Total liabilities and stockholder's equity	$	4,625,900		$	3,587,588	$	1,516,243		$	(4,672,484	)	$	5,057,247

Condensed Consolidating Statement of Income
Three Months Ended June 30, 2013

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	560,753	$	268,735		$	(26,659	)	$	802,829
Costs and expenses:
Cost of sales		—			333,113		118,416			(26,659	)		424,870
Advertising, promotion and catalog		—			38,315		9,835			—			48,150
Selling, general and administrative		22,320			114,205		87,897			—			224,422
Facility restructuring charge		—			4,944		—			—			4,944
Total costs and expenses		22,320			490,577		216,148			(26,659	)		702,386
(Loss) income from operations		(22,320	)		70,176		52,587			—			100,443
Other income (expense):
Intercompany interest		4,683			—		(4,683	)		—			—
Interest		(34,142	)		—		78			—			(34,064	)
Miscellaneous, net		—			5,094		(1,270	)		—			3,824
Total other expense		(29,459	)		5,094		(5,875	)		—			(30,240	)
(Loss) income before income taxes		(51,779	)		75,270		46,712			—			70,203
(Benefit) provision for income taxes		(20,463	)		26,337		13,079			—			18,953
Equity in income of subsidiaries		82,566			—		—			(82,566	)		—
Net (loss) income		51,250			48,933		33,633			(82,566	)		51,250
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustment, net of income taxes		(3,733	)		—		(2,938	)		2,938			(3,733	)
Change in fair value of interest rate and cross currency swaps, net of income taxes		2,037			—		—			—			2,037
Comprehensive income (loss)	$	49,554		$	48,933	$	30,695		$	(79,628	)	$	49,554

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

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	571,522	$	240,865		$	(30,071	)	$	782,316
Costs and expenses:
Cost of sales		—			334,807		109,150			(30,071	)		413,886
Advertising, promotion and catalog		—			33,068		8,244			—			41,312
Selling, general and administrative		21,316			109,398		81,065			—			211,779
Total costs and expenses		21,316			477,273		198,459			(30,071	)		666,977
(Loss) income from operations		(21,316	)		94,249		42,406			—			115,339
Other income (expense):
Intercompany interest		2,933			—		(2,933	)		—			—
Interest		(36,579	)		—		—			—			(36,579	)
Miscellaneous, net		—			145		(246	)		—			(101	)
Total other expense		(33,646	)		145		(3,179	)		—			(36,680	)
(Loss) income from continuing operations before income taxes		(54,962	)		94,394		39,227			—			78,659
(Benefit) provision for income taxes on continuing operations		(14,589	)		33,037		5,046			—			23,494
(Loss) income from contining operations		(40,373	)		61,357		34,181			—			55,165
Equity in income of subsidiaries		81,613			—		—			(81,613	)		—
Loss from discontinued operations, net of income taxes		—			—		(13,925	)		—			(13,925	)
Net income		41,240			61,357		20,256			(81,613	)		41,240
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustment, net of income taxes		(26,733	)		—		(22,462	)		22,462			(26,733	)
Change in fair value of interest rate and cross currency swaps, net of income taxes		4,351			—		—			—			4,351
Comprehensive income (loss)	$	18,858		$	61,357	$	(2,206	)	$	(59,151	)	$	18,858

Condensed Consolidating Statement of Income
Nine Months Ended June 30, 2013

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	1,652,669	$	773,718		$	(76,457	)	$	2,349,930
Costs and expenses:
Cost of sales		—			1,000,986		343,106			(76,457	)		1,267,635
Advertising, promotion and catalog		—			116,449		26,257			—			142,706
Selling, general and administrative		78,844			338,099		258,445			—			675,388
Facility restructuring charge		—			35,144		—			—			35,144
Total costs and expenses		78,844			1,490,678		627,808			(76,457	)		2,120,873
(Loss) income from operations		(78,844	)		161,991		145,910			—			229,057
Other income (expense):
Intercompany interest		9,595			—		(9,595	)		—			—
Interest		(113,070	)		—		321			—			(112,749	)
Miscellaneous, net		(164	)		7,986		(3,538	)		—			4,284
Total other expense		(103,639	)		7,986		(12,812	)		—			(108,465	)
(Loss) income before income taxes		(182,483	)		169,977		133,098			—			120,592
(Benefit) provision for income taxes		(62,143	)		59,450		37,268			—			34,575
Equity in income of subsidiaries		206,357			—		—			(206,357	)		—
Net income		86,017			110,527		95,830			(206,357	)		86,017
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustment, net of income taxes		(58,042	)		—		(35,403	)		35,403			(58,042	)
Change in fair value of interest rate and cross currency swaps, net of income taxes		16,243			—		—			—			16,243
Comprehensive income (loss)	$	44,218		$	110,527	$	60,427		$	(170,954	)	$	44,218

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	$	707,526		$	(94,237	)	$	2,250,510
Costs and expenses:
Cost of sales		—			982,346		319,657			(94,237	)		1,207,766
Advertising, promotion and catalog		—			107,068		22,730			—			129,798
Selling, general and administrative		58,849			320,848		241,220			—			620,917
Total costs and expenses		58,849			1,410,262		583,607			(94,237	)		1,958,481
(Loss) income from operations		(58,849	)		226,959		123,919			—			292,029
Other income (expense):
Intercompany interest		8,538			—		(8,538	)		—			—
Interest		(122,479	)		—		—			—			(122,479	)
Miscellaneous, net		222			2,047		(1,822	)		—			447
Total other expense		(113,719	)		2,047		(10,360	)		—			(122,032	)
(Loss) income from continuing operations before income taxes		(172,568	)		229,006		113,559			—			169,997
(Benefit) provision for income taxes on continuing operations		(52,580	)		80,152		25,891			—			53,463
(Loss) income from contining operations		(119,988	)		148,854		87,668			—			116,534
Equity in income of subsidiaries		222,503			—		—			(222,503	)		—
Loss from discontinued operations, net of income taxes		—			—		(14,019	)		—			(14,019	)
Net income		102,515			148,854		73,649			(222,503	)		102,515
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustment, net of income taxes		(5,517	)		—		(5,674	)		5,674			(5,517	)
Change in fair value of interest rate and cross currency swaps, net of income taxes		1,409			—		—			—			1,409
Comprehensive income (loss)	$	98,407		$	148,854	$	67,975		$	(216,829	)	$	98,407

Condensed Consolidating Statement of Cash Flows
Nine Months Ended June 30, 2013

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash provided by operating activities	$	168,442		$	29,082		$	15,511		$	—	$	213,035
Cash flows from investing activities:
Purchase of property, plant and equipment		(36,172	)		(37,062	)		(23,620	)		—		(96,854	)
Proceeds from sale of building		7,548			—			—			—		7,548
Cash paid for acquisitions, net of cash acquired		(77,936	)		(4,536	)		—			—		(82,472	)
Cash used in investing activities		(106,560	)		(41,598	)		(23,620	)		—		(171,778	)
Cash flows from financing activities:
Principal payments under long-term debt agreements		—			(442	)		—			—		(442	)
Proceeds from borrowings under the revolver		80,000			—			—			—		80,000
Paydowns of debt under the revolver		(80,000	)		—			—			—		(80,000	)
Payments for financing fees		(7,387	)		—			—			—		(7,387	)
Dividends paid		(216,926	)		—			—			—		(216,926	)
Cash used in financing activities		(224,313	)		(442	)		—			—		(224,755	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(4,254	)		—		(4,254	)
Net decrease in cash and cash equivalents		(162,431	)		(12,958	)		(12,363	)		—		(187,752	)
Cash and cash equivalents at beginning of period		183,661			14,589			116,886			—		315,136
Cash and cash equivalents at end of period	$	21,230		$	1,631		$	104,523		$	—	$	127,384

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

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash provided by operating activities of continuing operations	$	60,979		$	7,886		$	67,195		$	—	$	136,060
Cash provided by operating activities of discontinued operations		—			—			1,797			—		1,797
Net cash 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	)		(14,549	)		—		(41,557	)
Cash used in investing activities of continuing operations		(16,902	)		(10,106	)		(14,549	)		—		(41,557	)
Cash used in investing activities of discontinued operations		—			—			(18	)		—		(18	)
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
Cash used in financing activities of continuing operations		(229,360	)		—			—			—		(229,360	)
Cash used in financing activities of discontinued operations		—			—			—			—		—
Net cash used in financing activities		(229,360	)		—			—			—		(229,360	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(1,653	)		—		(1,653	)
Net (decrease) increase in cash and cash equivalents		(185,283	)		(2,220	)		52,772			—		(134,731	)
Change in cash for discontinued operations		—			—			465			—		465
Cash and cash equivalents at beginning of period		261,098			3,288			128,949			—		393,335
Cash and cash equivalents at end of period	$	75,815		$	1,068		$	182,186		$	—	$	259,069