Segment Information

6 Months Ended

Mar. 31, 2014

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.

        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 743 Holland & Barrett stores (including franchised stores in the following countries: 27 in China, 27 in Singapore, eight in each of United Arab Emirates and Cyprus, four in Malta and one in each of Gibraltar and Iceland), 131 De Tuinen stores (including seven franchised locations) in the Netherlands, 57 GNC (UK) stores in the U.K., 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 417 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:

	Total Reportable Business Segments
	Wholesale		European Retail		Direct Response/E- Commerce		North American Retail		Total		Corporate/ Manufacturing			Consolidated
Three Months Ended March 31, 2014:
Net sales	$	443,449	$	215,317	$	63,601	$	56,659	$	779,026	$	—		$	779,026
Income (loss) from operations		19,004		49,915		7,388		1,702		78,009		(27,741	)		50,268
Depreciation and amortization		9,081		4,133		2,833		767		16,814		9,020			25,834
Capital expenditures		172		9,547		113		3,957		13,789		12,208			25,997
Three Months Ended March 31, 2013:
Net sales	$	445,672	$	187,103	$	63,898	$	61,201		757,874		—			757,874
Income (loss) from operations		26,964		42,517		11,075		6,866		87,422		(63,932	)		23,490
Depreciation and amortization		10,068		3,766		2,505		613		16,952		12,327			29,279
Capital expenditures		55		5,810		656		668		7,189		22,985			30,174
Six Months Ended March 31, 2014:
Net sales	$	948,723	$	420,229	$	123,963	$	113,216	$	1,606,131	$	—		$	1,606,131
Income (loss) from operations		101,732		93,875		14,363		4,494		214,464		(50,014	)		164,450
Depreciation and amortization		18,167		8,177		5,645		1,473		33,462		17,937			51,399
Capital expenditures		203		14,868		682		7,590		23,343		23,901			47,244
Six Months Ended March 31, 2013:
Net sales	$	939,876	$	366,087	$	122,582	$	118,556		1,547,101		—			1,547,101
Income (loss) from operations		96,891		82,501		23,324		12,748		215,464		(86,849	)		128,615
Depreciation and amortization		19,697		7,509		5,009		1,243		33,458		19,212			52,670
Capital expenditures		230		13,918		768		1,425		16,341		47,351			63,692

        Total assets by segment are as follows:

	March 31, 2014		September 30, 2013
Reportable Business Segments:
Wholesale	$	2,615,071	$	2,553,857
European Retail		963,349		924,979
Direct Response / E-Commerce		688,244		692,685
North American Retail		123,768		119,395
Total Reportable Business Segments:		4,390,432		4,290,916
Corporate / Manufacturing		728,951		782,400
Consolidated assets	$	5,119,383	$	5,073,316