Segment Information

3 Months Ended

Dec. 31, 2015

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:

•           Consumer Products Group—This segment sells products worldwide under various brand names and third-party private labels. Our products are sold to the major mass merchandisers, club stores, drug store chains and supermarkets, as well as to online retailers, independent pharmacies, health food stores, the military and other retailers.

•           Holland & Barrett International—This segment operates 1,088 stores including 857 Holland & Barrett stores (including 701 company-owned stores in the UK, 50 in Ireland and one in Sweden; and franchised stores in the following countries: 35 in China, 27 in Singapore, 19 in United Arab Emirates, 11 in Cyprus, five in Malta, four in Kuwait, three in Spain and one in Gibraltar). Holland & Barrett International also operated 167 De Tuinen stores (including cobranded stores) in the Netherlands (of which five were franchises), 18 Essenza stores in Belgium, and 46 GNC/MET-Rx stores in the UK. Holland & Barrett International operates Holland & Barrett retail websites in the UK, Ireland, the Netherlands and Belgium, as well as retail websites for De Tuinen in the Netherlands and the GNC/MET-Rx brands in the UK. The revenue generated by this segment consists of sales of its branded products and third-party products as well as franchise fees. We are in the process of rebranding or cobranding our De Tuinen and Essenza stores to leverage consumer awareness of our Holland & Barrett brand. We are also in the process of rebranding our GNC brand stores to MET-Rx.

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

•           Vitamin World—This segment generates revenue through its 378 owned and operated U.S. Vitamin World stores selling proprietary brand and third-party products, as well as internet-based sales fromwww.vitaminworld.com. In February 2016, the company entered into an agreement to divest this segment. This transaction is expected to close during the second fiscal quarter of fiscal 2016. (See Note 14)

        In the first quarter of our fiscal year ending September 30, 2016, we changed our internal reporting by (i) presenting certain executive compensation within the segment that is managed by such executive rather than within Corporate/Manufacturing and (ii) transferring certain immaterial customers to the Puritan's Pride segment from the Consumer Products Group segment, as that is how this business is now managed. Accordingly, for the three months ended December 31, 2014, we made certain reclassifications to our segment presentation to conform to current period presentation for these above changes.

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

	Total Reportable Business Segments
	Consumer Products Group		Holland & Barrett International		Puritan's Pride		Vitamin World(1)			Total		Corporate/ Manufacturing			Consolidated
Three Months Ended December 31, 2015:
Net sales	$	472,430	$	218,461	$	61,552	$	49,547		$	801,990	$	—		$	801,990
Income (loss) from operations		46,338		38,839		5,089		(13,137	)		77,129		(35,088	)		42,041
Depreciation and amortization		9,359		6,472		2,914		872			19,617		12,235			31,852
Capital expenditures		7,861		21,228		20		628			29,737		10,301			40,038
Three Months Ended December 31, 2014:
Net sales	$	494,705	$	213,597	$	63,564	$	53,905		$	825,771	$	—		$	825,771
Income (loss) from operations		61,148		46,315		5,677		1,200			114,340		(22,522	)		91,818
Depreciation and amortization		9,002		5,049		2,830		895			17,776		10,289			28,065
Capital expenditures		73		10,703		13		1,023			11,812		7,278			19,090

(1)           Includes an impairment of $11,656 for the three months ended December 31, 2015. (See Note 7 and 14)

        Total assets by segment are as follows:

	December 31, 2015		September 30, 2015
Reportable Business Segments:
Consumer Products Group	$	2,650,476	$	2,542,942
Holland & Barrett International		948,965		944,825
Puritan's Pride		506,351		514,795
Vitamin World		41,941		51,881
Total Reportable Business Segments:		4,147,733		4,054,443
Corporate / Manufacturing		753,594		813,966
Consolidated assets	$	4,901,327	$	4,868,409