Segment Information

9 Months Ended

Jun. 30, 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 746 Holland & Barrett stores (including franchised stores in the following countries: 28 in China, 27 in Singapore, nine in each of United Arab Emirates and Cyprus, four in Malta and one in each of Gibraltar and Iceland), 138 De Tuinen stores (including seven franchised locations) in the Netherlands, 54 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 419 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 June 30, 2014:
Net sales	$	471,344	$	215,328	$	63,940	$	56,349	$	806,961	$	—		$	806,961
Income (loss) from operations		41,355		48,386		9,009		3,073		101,823		(22,535	)		79,288
Depreciation and amortization		9,032		4,807		2,830		892		17,561		9,748			27,309
Capital expenditures		41		12,380		402		4,388		17,211		7,981			25,192
Three Months Ended June 30, 2013:
Net sales	$	489,228	$	191,692	$	63,670	$	58,239	$	802,829	$	—		$	802,829
Income (loss) from operations		65,995		45,478		9,001		7,247		127,721		(27,278	)		100,443
Depreciation and amortization		9,171		3,544		2,506		609		15,830		15,444			31,274
Capital expenditures		177		7,494		2,280		1,475		11,426		19,736			31,162
Nine Months Ended June 30, 2014:
Net sales	$	1,420,067	$	635,556	$	187,904	$	169,565	$	2,413,092	$	—		$	2,413,092
Income (loss) from operations		143,087		142,260		23,372		7,568		316,287		(72,549	)		243,738
Depreciation and amortization		27,199		12,984		8,475		2,365		51,023		27,686			78,709
Capital expenditures		244		27,248		1,084		11,977		40,553		31,883			72,436
Nine Months Ended June 30, 2013:
Net sales	$	1,429,103	$	557,779	$	186,252	$	176,796	$	2,349,930	$	—		$	2,349,930
Income (loss) from operations		162,886		127,979		32,325		19,995		343,185		(114,128	)		229,057
Depreciation and amortization		27,319		10,405		7,515		1,851		47,090		36,854			83,944
Capital expenditures		407		21,412		3,048		2,900		27,767		69,087			96,854

        Total assets by segment are as follows:

	June 30, 2014		September 30, 2013
Reportable Business Segments:
Wholesale	$	2,647,424	$	2,553,857
European Retail		992,482		924,979
Direct Response / E-Commerce		690,254		692,685
North American Retail		128,983		119,395
Total Reportable Business Segments:		4,459,143		4,290,916
Corporate / Manufacturing		666,636		782,400
Consolidated assets	$	5,125,779	$	5,073,316