WEIDER NUTRITION INTERNATIONAL INC, 424B1, 1997-05-01

WEIDER NUTRITION INTERNATIONAL INC
424B1, 1997-05-01
GROCERIES & RELATED PRODUCTS

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<PAGE> 1

Filed Pursuant to Rule 424(b)(1)
Registration No. 333-12929

5,600,000 Shares
LOGO
WEIDER NUTRITION INTERNATIONAL, INC.

Class A Common Stock
($.01 par value)
------------------

All of the shares of Class A Common Stock, par value $.01 (the "Class A Common
Stock"), of Weider Nutrition International, Inc. (the "Company") offered hereby
are being sold by the Company. Of the 5,600,000 shares of Class A Common Stock
being offered, 4,480,000 shares are initially being offered in the United States
and Canada (the "U.S. Shares") by the U.S. Underwriters (the "U.S. Offering")
and 1,120,000 shares are initially being concurrently offered outside the United
States and Canada (the "International Shares") by the Managers (the
"International Offering" and, together with the U.S. Offering, the "Offerings").
The offering price and underwriting discounts and commissions of the U.S.
Offering and the International Offering are identical.

Prior to the Offerings, there has been no public market for the Class A Common
Stock. The initial public offering price will be $11.00 per share. For
information relating to the factors considered in determining the initial public
offering price of the Class A Common Stock, see "Underwriting."

The Class A Common Stock has been approved for listing on the New York Stock
Exchange under the
symbol "WNI."

FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN
INVESTMENT IN THE CLASS A COMMON STOCK, SEE "RISK FACTORS" ON PAGE 7.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS THE COMPANY(1)
--------------- --------------- ---------------
<S> <C> <C> <C>
Per Share.................................... $11.00 $0.77 $10.23
Total(2)..................................... $61,600,000 $4,312,000 $57,288,000
</TABLE>

(1) Before deducting expenses payable by the Company estimated at $1,500,000.

(2) The Company has granted to the U.S. Underwriters and the Managers options,
each exercisable by Credit Suisse First Boston Corporation for 30 days from
the date of this prospectus, to purchase an aggregate maximum of 840,000
additional shares to cover over-allotments of shares. If the options are
exercised in full, the total Price to Public will be $70,840,000,
Underwriting Discounts and Commissions will be $4,958,800, and Proceeds to
the Company will be $65,881,200.

The U.S. Shares are offered by the several U.S. Underwriters when, as and
if issued by the Company, delivered to and accepted by the U.S. Underwriters and
subject to their right to reject orders in whole or in part. It is expected that
the U.S. Shares will be ready for delivery on or about May 6, 1997, against
payment in immediately available funds.

CREDIT SUISSE FIRST BOSTON
SALOMON BROTHERS INC
ADAMS, HARKNESS & HILL, INC.
HAMBRECHT & QUIST

Prospectus dated April 30, 1997
<PAGE> 2

[ARTWORK]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and consolidated financial
statements, including the notes thereto, appearing elsewhere in this Prospectus.
Information contained in this Prospectus contains "forward-looking statements"
which can be identified by the use of forward-looking terminology such as
"believes," "expects," "may," "will," "should" or "anticipates" or the negative
thereof or other variations thereon or comparable terminology or by discussions
of strategy. No assurance can be given that the future results covered by the
forward-looking statements will be achieved. This Prospectus also contains
important cautionary statements identifying factors with respect to such
forward-looking statements. See "Risk Factors." Unless otherwise indicated, all
information contained herein assumes no exercise by the U.S. Underwriters and
the Managers of their over-allotment options. Unless the context otherwise
requires, all references to the "Company" mean Weider Nutrition International,
Inc. and its subsidiaries and all references to "Weider" or the "Parent" mean
Weider Health and Fitness, the principal stockholder of the Company. All
references to numbers of shares of Common Stock reflect the exchange of all
outstanding common stock of Weider Nutrition Group, Inc. ("Weider Nutrition")
for Common Stock of the Company and a 14,428.9-for-one stock split of the Common
Stock.

THE COMPANY

The Company is a leading manufacturer of branded and private label
nutritional supplements and is a leading marketer of multiple brands of
nutritional supplements through multiple distribution channels. The Company
manufactures a broad range of capsules and tablets, powdered drink mixes,
bottled beverages and nutrition bars and markets branded products in four
principal categories: sports nutrition; vitamins, minerals and herbs; diet; and
healthy snacks. The Company markets its branded products through each key
distribution channel and is one of the leading marketers of nutritional
supplement products to the mass volume retail channel, one of the most
significant and growing distribution channels in the nutritional supplement
industry. Consistent with management's multi-channel strategy, sales of the
Company's products in fiscal 1996 were balanced among mass volume retailers,
health food stores and a combination of other channels, including health clubs
and gyms, international markets and private label manufacturing. According to a
1996 survey conducted by Packaged Facts, an independent consumer market research
firm, the principal domestic markets in which the Company's products compete
totalled approximately $6.5 billion in 1996 and grew at a compound annual growth
rate of approximately 15% from 1992 through 1996. Because of the Company's broad
portfolio of leading brands, multiple distribution channels and state-of-the art
manufacturing capabilities, the Company believes that it is uniquely positioned
to capitalize on the anticipated growth in the nutritional supplement industry.

The Company's products are currently sold in over 38,000 retail outlets in
all 50 states. The Company's customers in the mass volume retail channel
include: mass merchandisers -- Wal-Mart, Target and Kmart; drug
stores -- Walgreens, CVS, American Drug and Thrifty/Payless; warehouse
clubs -- Price Costco and Sam's Club; and supermarkets -- Albertson's, Giant and
Ralphs. The Company services the health food market by distributing its products
to General Nutrition Center ("GNC") and the leading health food distributors
(such as Tree-of-Life, Stow Mills and Nature's Best). The Company also sells
through other distribution channels, including its network of exclusive
distributors to health clubs and gyms (such as Bally's Health and Fitness and
Gold's Gym), international markets, and private label manufacturing for other
nutritional supplement companies. The Company pursues a multi-channel
distribution strategy in order to participate in the growth being experienced in
each of these channels, thereby increasing its overall share of the nutritional
supplement market. The Company also distributes its products to all major
markets worldwide.

As part of its multi-brand, multi-channel strategy, the Company has created
a portfolio of recognized brands designed for specific distribution channels.
The Company manufactures and markets approximately 1,400 products and has
approximately 1,800 SKUs. The positioning of the Company's brand names is
supported by significant advertising and marketing expenditures as well as the
Company's historical association with the Weider name. As a result, the Company
believes that it has many of the leading brands in the nutritional

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<PAGE> 4

supplement industry. The following table identifies the Company's 12 leading
brands and illustrates the Company's multi-brand, multi-channel strategy:

<TABLE>
<CAPTION>
BRAND PRIMARY CHANNEL PRIMARY CATEGORY
--------------------------- --------------------------- ---------------------------
<S> <C> <C>
Great American Mass volume retailers Vitamins and diet
Nutrition(TM)
Joe Weider Signature(TM) Mass volume retailers Sports nutrition and diet
Prime Time(R) Mass volume retailers Vitamins and diet
Tiger's Milk(TM) Mass volume retailers Healthy snacks
Fi-Bar(R) Mass volume retailers Healthy snacks
Schiff(R) Health food stores Vitamins and diet
Metaform(TM) Health food stores Sports nutrition and diet
Victory(TM) Health food stores Sports nutrition
Mega Mass(R) Health food stores Sports nutrition
American Body Building(TM) Health clubs and gyms Sports nutrition and diet
Science Foods(R) Health clubs and gyms Sports nutrition and diet
Steel Bar(R) Health clubs and gyms Sports nutrition
</TABLE>

To support its multi-brand, multi-channel strategy, the Company will
continue to invest in research and development and state-of-the-art
manufacturing and distribution facilities. The Company's research and
development group has successfully developed new brands targeted to specific
consumers, such as Great American Nutrition and Metaform, and new products, such
as Schiff 's Melatonin and Whole Food Phytonutrients. In addition, the Company
manufactures over 80% of its branded products and is building additional
state-of-the-art facilities that it believes will more than double current
capacity. The Company expects its additional facilities to be operational in
mid-1997. The Company believes its research and development commitment and
integrated manufacturing capabilities will continue to provide a significant
advantage in capturing an increasing share of the growing nutritional supplement
market.

The Company intends to broaden its leadership position in the nutritional
supplement industry by combining internal growth with strategic acquisitions.
Specifically, the Company's strategy is to: (i) leverage its portfolio of
established brands to increase its share of the nutritional supplement market;
(ii) develop new brands and product line extensions through its commitment to
research and development; (iii) continue the growth of its balanced distribution
network; (iv) further penetrate international markets; and (v) supplement
internal growth through strategic acquisitions of related businesses and product
lines. The Company believes that its multiple distribution channels, broad
portfolio of leading brands and state-of-the-art manufacturing and distribution
capabilities position it to be the long-term competitive leader in the
nutritional supplement industry.

During the three fiscal years ended May 31, 1996, the Company achieved
compound growth rates in net sales and net income of 43.5% and 61.3%,
respectively. The Company's growth has been a result of increased demand for the
Company's products, the Company's increased penetration of the growing mass
volume retail distribution channel, an aggressive acquisition strategy and new
product introductions. The Company has not experienced revenue and net income
growth during fiscal 1997 at the rates experienced in fiscal 1996 because of
manufacturing and distribution capacity constraints, fewer acquisitions and
decreased sales of melatonin. The nutritional supplement industry is influenced
by products, such as melatonin, that can become popular due to changing consumer
tastes and heightened media attention. In addition, the Company has made
significant investments in manufacturing and distribution infrastructure in
fiscal 1997 to support future growth. These expenditures include higher
depreciation associated with additional capital equipment as well as costs
associated with hiring additional personnel and upgrading information systems.
The Company believes that these investments and the new manufacturing and
distribution capacity expected to be operational in mid-1997 will enable the
Company to meet increased demand in the growing nutritional supplements
industry.

The Company has its principal executive offices at 1960 South 4250 West,
Salt Lake City, Utah 84104-4836, and its telephone number is (801) 975-5000. The
Company was incorporated under the laws of the State of Delaware in 1996.

4
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THE OFFERINGS

<TABLE>
<S> <C>
Class A Common Stock Offered(1):

U.S. Offering......................... 4,480,000 shares

International Offering................ 1,120,000 shares

Total.............................. 5,600,000 shares

Common Stock Outstanding:

Before the Offerings.................. 1,557,604 shares of Class A Common Stock and
15,687,432 shares of Class B Common Stock

After the Offerings(1)(2)............. 8,171,851 shares of Class A Common Stock and
15,687,432 shares of Class B Common Stock

Dividends............................... Upon completion of the Offerings, the Company
intends to commence paying quarterly cash dividends
on its Class A Common Stock and its Class B Common
Stock (together, the "Common Stock") at an initial
annual rate of $0.15 per share. See "Dividend
Policy."

Use of Proceeds......................... The Company intends to apply the net proceeds as
follows: (i) approximately $21.5 million, together
with approximately $42.5 million of borrowings
under the New Credit Agreement (as defined herein),
is expected to be used to repay all outstanding
indebtedness under the Existing Credit Agreement
(as defined herein); (ii) $18.3 million is expected
to be paid at the closing of the Offerings in
connection with a one-time dividend to the holder
of the Class B Common Stock; and (iii)
approximately $15.9 million is expected to be used
to repay intercompany indebtedness owed to Parent,
which indebtedness was incurred primarily in
connection with certain acquisitions and taxes
payable by the Parent on behalf of the Company
pursuant to a tax sharing agreement. Pending such
uses, net proceeds received by the Company will be
invested by the Company in short-term interest
bearing instruments. See "Use of Proceeds."

Voting Rights........................... Except as otherwise required by law, the Class A
Common Stock and Class B Common Stock vote as a
single class on all matters, with each share of
Class A Common Stock entitling its holder to one
vote and each share of Class B Common Stock
entitling its holder to ten votes. All of the
shares of Class B Common Stock are owned by the
Parent. Immediately after consummation of the
Offerings, the Parent will beneficially own shares
of Class B Common Stock representing approximately
95.0% of the combined voting power of the
outstanding shares of Common Stock (approximately
94.6% if the over-allotment options of the U.S.
Underwriters and the Managers are exercised in
full).

New York Stock Exchange Symbol.......... "WNI."
</TABLE>

- ---------------
(1) Does not include up to 840,000 shares of Class A Common Stock subject to the
over-allotment options granted by the Company to the U.S. Underwriters and
the Managers.
(2) Does not include 1,604,000 shares of Class A Common Stock reserved for
issuance under the 1997 Equity Participation Plan of Weider Nutrition
International, Inc. (the "Equity Plan") or 182,717 shares of Class A Common
Stock issuable to certain senior executives of the Company pursuant to the
Management Incentive Agreements (as defined herein) but does include 972,247
shares of Class A Common Stock issuable upon consummation of the Offerings
to certain senior executives of the Company pursuant to the Management
Incentive Agreements and approximately 42,000 shares of Class A Common Stock
to be issued to certain employees of the Company who have a minimum service
period of six months. See "Management -- Equity Plan" and "-- Management
Incentive Agreements."

5
<PAGE> 6

SUMMARY FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
FISCAL YEAR ENDED MAY 31, FEBRUARY 28,
-------------------------------------------------- ---------------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales....................... $58,170 $63,144 $67,870 $90,927 $186,405 $128,448 $151,407
Gross profit.................... 24,343 26,142 28,583 35,516 70,228 48,029 57,399
Impairment of intangible
assets(1).................... -- -- -- -- -- -- 2,095
Operating expenses.............. 18,385 19,036 20,344 24,226 41,068 28,191 36,750
Income from operations.......... 5,958 7,106 8,239 11,290 29,160 19,838 18,554(1)
Net income...................... 2,598 3,563 4,134 6,092 14,964 10,055 8,075(1)
Pro forma net income per common
and common equivalent
share(2)..................... -- -- -- -- $ 0.79 -- $ 0.43
Pro forma common and common
equivalent shares
outstanding(2)............... -- -- -- -- 18,908,672 -- 18,908,672
Supplemental pro forma net
income per common and common
equivalent share(3).......... -- -- -- -- $ 0.69(4) -- $ 0.41(4)
Supplemental pro forma common
and common equivalent shares
outstanding(3)............... -- -- -- -- 23,859,283 -- 23,859,283

OTHER DATA:
EBITDA(5)....................... $ 6,435 $ 7,429 $ 8,629 $13,438 $ 33,908 $ 23,216 $ 24,651
Capital expenditures............ 380 1,469 5,171 1,295 6,084 5,434 6,343
Net sales increase.............. --% 9% 7% 34% 105% --% 18%
Income from operations
increase(6).................. -- 19 16 37 158 -- 4
Net income increase
(decrease)(6)................ -- 37 16 47 146 -- (7)
</TABLE>

<TABLE>
<CAPTION>
FEBRUARY 28, 1997
MAY 31, ---------------------------
-------------------------------- PRO FORMA
1994 1995 1996 ACTUAL AS ADJUSTED(7)
------- ------- -------- -------- --------------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.......... $ 2 $ 2,272 $ 1,592 $ 1,065 $ 1,065
Working capital.................... 14,082 25,044 47,505 61,802 61,802
Total assets....................... 39,548 70,048 133,147 148,685 152,782
Total debt......................... 7,410 28,616 68,054 88,288 52,470
Total stockholders' equity......... 22,946 28,100 39,332 40,303 80,217
</TABLE>

- ---------------

(1) Reflects an impairment of intangible assets recognized as a result of
adopting SFAS No. 121 (as defined herein).

(2) Gives effect to the 14,428.9-for-one stock split and the issuance of
1,666,636 shares of Class A Common Stock as part of the Offerings, the
proceeds from which would be necessary to pay the one-time, $18.3 million
Class B Dividend (as defined herein); otherwise does not give effect to the
Offerings.

(3) Gives effect to (i) the Offerings and the application of the net proceeds
therefrom, including the one-time, $18.3 million Class B Dividend, (ii) the
issuance of 972,247 shares of Class A Common Stock pursuant to the
Management Incentive Agreements, and (iii) the issuance of approximately
42,000 shares of Class A Common Stock to certain employees who have a
minimum service period of six months. Does not give effect to the one-time
compensation expense estimated at approximately $14.5 million ($8.7 million,
net of tax) arising from (a) the conversion of performance units granted to
certain senior executive officers under the Management Incentive Agreements
upon consummation of the Offerings, or (b) certain other stock grants to be
effected upon consummation of the Offerings. See "Management -- Management
Incentive Agreements," "-- Equity Plans" and "Use of Proceeds."

(4) Reflects the retirement of debt with the proceeds of the Offerings as if
such debt was retired at the beginning of the period, which would have the
effect of reducing after-tax interest expense by $1.4 million in fiscal 1996
and $1.6 million in the nine months ended February 28, 1997. The one-time
$14.5 million ($8.7 million, net of taxes) compensation expense described in
note 3 above will take effect upon consummation of the Offerings; this is
expected to impact the Company's net income and stockholders' equity in the
fourth quarter of fiscal 1997. Giving pro forma effect to such compensation
expense would reduce supplemental pro forma net income per common and common
equivalent share by approximately $0.36.

(5) Earnings before interest expense, income taxes, depreciation and
amortization and excluding certain extraordinary or nonrecurring events
("EBITDA") is presented because it is a widely accepted financial indicator
used by certain investors and analysts to analyze and compare companies on
the basis of operating performance. EBITDA is not intended to represent cash
flows for the period, nor has it been presented as an alternative to
operating income as an indicator of operating performance and should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with generally accepted accounting principles.

(6) The nine month period ended February 28, 1997 excludes the impairment of
intangible assets loss of $2.1 million ($1.3 million, net of taxes)
described in note 1 above.

(7) Gives effect to the adjustments described in (i), (ii) and (iii) of note 3
above as well as the one-time compensation expense estimated at
approximately $14.5 million ($8.7 million, net of tax) arising from (a) the
conversion of performance units granted to certain senior executive officers
under the Management Incentive Agreements upon consummation of the
Offerings, and (b) certain other stock grants to be effected upon
consummation of the Offerings.

6
<PAGE> 7

RISK FACTORS

Prospective investors should carefully consider all of the information
contained in this Prospectus before deciding whether to purchase the Class A
Common Stock offered hereby and, in particular, the following factors.
Information contained in this Prospectus contains "forward-looking statements"
which can be identified by the use of forward-looking terminology such as
"believes," "expects," "may," "will," "should" or "anticipates" or the negative
thereof or other variations thereon or comparable terminology or by discussions
of strategy. No assurance can be given that the future results covered by the
forward-looking statements will be achieved. The following matters constitute
cautionary statements identifying important factors with respect to such
forward-looking statements, including certain risks and uncertainties, that
could cause actual results to vary materially from the future results covered in
such forward-looking statements. Other factors could also cause actual results
to vary materially from the future results covered in such forward-looking
statements.

DEPENDENCE ON SIGNIFICANT CUSTOMERS

The Company's largest customers, GNC and Wal-Mart, accounted for
approximately 16% and 10%, respectively, of net sales in fiscal 1996 and 12% and
11%, respectively, of net sales for the nine month period ended February 28,
1997, compared to approximately 26% and 5%, respectively, of net sales in fiscal
1995 and 16% and 9%, respectively, of net sales for the nine month period ended
February 28, 1996. The dollar amount of the Company's sales in fiscal 1996 to
GNC and Wal-Mart grew by 30% and 317%, respectively, over the previous year. The
Company has 26 other major customers, each of which produced sales of between
0.5% and 5% of the Company's net sales in fiscal 1996 and, collectively,
accounted for approximately 32% of net sales in fiscal 1996. The loss of GNC or
Wal-Mart as a customer, the loss of a significant number of other major
customers, or a significant reduction in purchase volume by or financial
difficulty of such customers, for any reason, could have a material adverse
effect on the Company's results of operations or financial condition. There can
be no assurance that GNC and/or Wal-Mart will continue as major customers of the
Company. See "Business -- Sales and Distribution."

PRODUCT LIABILITY

The Company, like any other retailer, distributor and manufacturer of
products that are designed to be ingested, faces an inherent risk of exposure to
product liability claims in the event that the use of its products results in
injury. With respect to product liability claims, the Company has $1.0 million
per occurrence and $1.0 million in aggregate liability insurance subject to a
self-insurance retention of $25,000. In addition, if such claims should exceed
$1.0 million, the Company has excess umbrella liability insurance of up to $25.0
million which will increase to $90.0 million upon consummation of the Offerings.
However, there can be no assurance that such insurance will continue to be
available at a reasonable cost, or, if available, will be adequate to cover
liabilities. The Company generally does not obtain contractual indemnification
from parties supplying raw materials or marketing its products and, in any
event, any such indemnification is limited by its terms and, as a practical
matter, to the creditworthiness of the indemnifying party. In the event that the
Company does not have adequate insurance or contractual indemnification, product
liabilities relating to defective products could have a material adverse effect
on the Company.

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<PAGE> 8

sustained by the plaintiff in the action was a constituent of the raw material
sold by SDA to Schiff Products, or was a factor for which SDA or any of its
affiliates was responsible, except to the extent that action by the Company or
Schiff Products proximately contributed to the injury, and except for certain
claims relating to punitive damages. SDK has posted a revolving irrevocable
letter of credit for the benefit of the indemnified group if SDA is unable or
unwilling to satisfy any claims or judgments. SDK has unconditionally guaranteed
the payment obligations of SDA under the Indemnification Agreement. Although the
Company believes that the prospect of a material adverse effect on the Company's
results of operations or financial condition arising from these lawsuits is
remote and no provision in the Company's financial statements has been made for
any loss that may result from these actions, no assurance can be given that such
lawsuits would not have a material adverse effect on the results of operations
or financial condition of the Company.

The Company is presently engaged in various other legal actions, and,
although ultimate liability for such other actions cannot be determined at the
present time, the Company currently believes that the amount of any such
liability from such other actions and the lawsuits described in the preceding
paragraphs, after taking into consideration the Company's insurance coverage,
will not have a material adverse effect on its results of operations or
financial condition.

GOVERNMENT REGULATION

The manufacturing, packaging, labeling, advertising, distribution and sale
of the Company's products are subject to regulation by one or more governmental
agencies, the most active of which is the Food and Drug Administration (the
"FDA"), which regulates the Company's products under the Federal Food, Drug, and
Cosmetic Act (the "FDCA") and regulations promulgated thereunder. The Company's
products are also subject to regulation by the Federal Trade Commission (the
"FTC"), the Consumer Product Safety Commission (the "CPSC"), the United States
Department of Agriculture (the "USDA") and the Environmental Protection Agency
(the "EPA"). The Company's activities are also regulated by various agencies of
the states, localities and foreign countries to which the Company distributes
its products and in which the Company's products are sold. The FDCA has been
amended several times with respect to dietary supplements, most recently by the
Nutrition Labeling and Education Act of 1990 (the "NLEA") and the Dietary
Supplement Health and Education Act of 1994 (the "DSHEA"). The Company's
products are generally classified and regulated as dietary supplements under the
FDCA, as amended, and are therefore not subject to premarket approval by the
FDA. However, these products are subject to extensive labeling regulation by the
FDA and can be removed from the market if shown to be unsafe. Moreover, if the
FDA determines, on the basis of labeling or advertising claims by the Company,
that the "intended use" of any of the Company's products is for the diagnosis,
cure, mitigation, treatment or prevention of disease, it can regulate those
products as drugs and require premarket clearance for safety and effectiveness.
In addition, if the FDA determines that the requirements of DSHEA for making
claims that a dietary supplement affects the "structure or function" of the body
have not been met, such non-complying claims could result in the regulation of
such products as drugs. See "Business -- Regulation."

The Company's advertising of its dietary supplement products is subject to
regulation by the FTC under the Federal Trade Commission Act, which prohibits
unfair or deceptive trade practices, including false or misleading advertising.
The FTC in recent years has brought a number of actions challenging claims by
companies (other than the Company) for weight loss dietary supplement products
and plans. Most recently, on March 25, 1997, the FTC announced proposed consent
orders in seven cases involving weight loss claims, as well as a general,
coordinated long-term consumer education and law enforcement program titled
"Operation Waistline." On November 7, 1996, the FTC entered into proposed
consent orders (which have since been finally entered) that would prohibit three
companies from claiming that chromium picolinate causes weight loss, increases
muscle mass or regulates blood sugar levels unless the companies had adequate
substantiation for the claims. Although the Company is not a party to the
consent order, chromium picolinate is used in many of the Company's weight loss
and body building products. The Company is a party to a Consent Order (the
"Order") with the FTC, which was signed by the Parent in 1985. Pursuant to the
Order, the Company is prohibited from making certain advertising claims relating
to the muscle building capabilities of Anabolic Mega Paks and Dynamic Life
Essence and other products of substantially similar composition. In connection
with the Company's other food products, the Company is similarly prohibited from
making these claims unless the Company is able to substantiate such

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<PAGE> 9

claims. In 1986, the Parent was required to pay a maximum amount of $400,000
pursuant to the Order as reimbursements to purchasers of Anabolic Mega Paks and
Dynamic Life Essence. To the extent such reimbursements amounted to less than
$400,000, the Parent was required pursuant to the Order to pay the remainder to
a designated research center for the study of the relationship between nutrition
and muscular development. All amounts required to be paid by the Parent pursuant
to the Order have been paid. In September 1991, the FTC informed the Company
that the FTC had reviewed the several compliance reports which had been filed
from March 1986 through and including June 20, 1991 and no action was planned at
such time. Although the Company has received occasional inquiries from the FTC
since September 1991 regarding compliance matters, the FTC has not taken any
formal action regarding the Company's compliance with the Order.

The Company manufactures certain products pursuant to contracts with
customers who distribute the products under their own or other trademarks. Such
private label customers are subject to governmental regulations in connection
with their purchase, marketing, distribution and sale of such products, and the
Company is subject to such regulations in connection with the manufacture of
such products and its delivery of services to such customers. However, the
Company's private label customers are independent companies, and their labeling,
marketing and distribution of such products is beyond the Company's control. The
failure of these customers to comply with applicable laws or regulations could
have a material adverse effect on the Company.

Governmental regulations in foreign countries where the Company plans to
commence or expand sales may prevent or delay entry into the market or prevent
or delay the introduction, or require the reformulation, of certain of the
Company's products. Compliance with such foreign governmental regulations is
generally controlled by the Company's distributors for those countries. These
distributors are independent contractors over whom the Company has limited
control.

The Company may be subject to additional laws or regulations administered
by the FDA or other federal, state or foreign regulatory authorities, the repeal
of laws or regulations which the Company considers favorable, such as the DSHEA,
or more stringent interpretations of current laws or regulations, from time to
time in the future. The Company is unable to predict the nature of such future
laws, regulations, interpretations or applications, nor can it predict what
effect additional governmental regulations or administrative orders, when and if
promulgated, would have on its business in the future. They could, however,
require the reformulation of certain products to meet new standards, the recall
or discontinuance of certain products not able to be reformulated, imposition of
additional recordkeeping requirements, expanded documentation of the properties
of certain products, expanded or different labeling and scientific
substantiation. Any or all of such requirements could have a material adverse
effect on the Company's results of operations and financial condition.

RECENT GOVERNMENT ACTION AND ADVERSE PUBLICITY REGARDING PRODUCTS CONTAINING
EPHEDRINE

Several of the Company's products have included a Chinese herb known as Ma
Huang, a natural source of the stimulant ephedrine. Products containing Ma Huang
accounted for approximately 3.3% of the Company's total net sales in fiscal 1996
and all of such products now come in Ma Huang-free alternatives. In December
1996, the Company decided to discontinue the manufacturing and marketing of
products containing ephedrine in capsule and tablet form due to potential for
misuse but will continue to manufacture and market beverages and powders
containing ephedrine. Ephedrine and Ma Huang have been the subject of recent
adverse publicity in the United States. On April 10, 1996, the FDA issued a
statement warning consumers not to purchase or ingest dietary supplements
containing natural sources of ephedrine that are claimed to produce such effects
as euphoria, heightened awareness, increased sexual sensations or increased
energy, because these products pose significant adverse health risks, including
dizziness, headache, gastrointestinal distress, irregular heartbeat, heart
palpitations, heart attack, strokes, seizures, psychosis and death. On August 27
and 28, 1996, the FDA convened a meeting of its Food Advisory Committee to
discuss adverse reaction reports and other issues concerning dietary supplements
containing ephedrine. Some members of the Advisory Committee concluded that no
safe level of ephedrine in dietary supplements could be identified; others
concluded that such products could be deemed safe if dosage levels of ephedrine
were severely restricted and strict warning labels required. At March 1997, the
FDA had not announced any decision regarding further regulation of products
containing ephedrine. Sales of such products have also been prohibited in
certain localities. In addition, some states have regulated or are considering
regulating ephedrine-containing products as controlled substances or prohibiting
the sale of such products by persons other than licensed pharmacists.
Notwithstanding the Company's decision to discontinue the manufactur-

9
<PAGE> 10

ing and marketing of products containing Ma Huang, there can be no assurance
that the Company will not be subject to product liability actions with respect
to its products that contained Ma Huang. See "Business -- Regulation."

EFFECT OF UNFAVORABLE PUBLICITY

The Company believes the nutritional supplement market is affected by
national media attention regarding the consumption of nutritional supplements.
There can be no assurance that future scientific research or publicity will not
be unfavorable to the nutritional supplement market or any particular product,
or inconsistent with earlier favorable research or publicity. Future reports of
research that are perceived as less favorable or that question such earlier
research could have a material adverse effect on the Company. Because of the
Company's dependence upon consumer perceptions, adverse publicity associated
with illness or other adverse effects
resulting from the consumption of the Company's products or any similar products
distributed by other companies could have a material adverse impact on the
Company. Such adverse publicity could arise even if the adverse effects
associated with such products resulted from consumers' failure to consume such
products as directed. In addition, the Company may not be able to counter the
effects of negative publicity concerning the efficacy of its products.

ABSENCE OF CONCLUSIVE CLINICAL STUDIES

Although many of the ingredients in the Company's products are vitamins,
minerals, herbs and other substances for which there is a long history of human
consumption, some of the Company's products contain innovative ingredients such
as DHEA and melatonin. In addition, although the Company believes all of its
products to be safe when taken as directed by the Company, there is little
long-term experience with human consumption of certain of these innovative
product ingredients in concentrated form. Accordingly, no assurance can be given
that the Company's products, even when used as directed, will have the effects
intended. Although the Company tests the formulation and production of its
products to ensure that they are safe when consumed as directed, they have not
sponsored clinical studies on the long-term effect of human consumption. See
"-- Effect of Unfavorable Publicity," "-- Product Liability" and
"Business -- Product Development."

ACQUISITION RELATED RISKS

Part of the Company's business strategy is to acquire assets that will
complement its existing business. The Company has had preliminary discussions
with, or has evaluated the potential acquisition of, a number of companies,
although no such transaction is considered to be probable at this time. The
Company is unable to predict whether or when any prospective acquisition
candidates will become available or the likelihood of a material transaction
being completed should any negotiations commence. If the Company proceeds with
any such transaction, no assurance can be given that the Company can effectively
integrate the acquired operations with its own. The Company may also seek to
finance any such acquisition through debt financings or issuances of equity and
there can be no assurance that any such financing will be available on
acceptable terms or at all. See "Use of Proceeds," "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources" and "Business -- Strategy."

RISKS ASSOCIATED WITH INTERNATIONAL MARKETS

The Company's continued growth is dependent in significant part upon its
ability to expand its operations into new markets, including international
markets. The Company may experience difficulty entering new international
markets due to greater regulatory barriers, the necessity of adapting to new
regulatory systems and problems related to entering new markets with different
cultural bases and political systems. Approximately 3% of the Company's net
sales for fiscal 1996 were generated outside the United States. Operating in
international markets exposes the Company to certain risks, including, among
other things: (i) changes in or interpretations of foreign regulations that may
limit the Company's ability to sell certain products or repatriate profits to
the United States; (ii) exposure to currency fluctuations; (iii) the potential
imposition of trade or foreign exchange restrictions or increased tariffs; and
(iv) political instability. As the Company continues to expand its international
operations, these and other risks associated with international operations are
likely to increase. See "Business -- Strategy" and "Business -- Regulation."

10
<PAGE> 11

DEPENDENCE ON NEW PRODUCTS

The Company believes its ability to grow in its existing markets is
partially dependent upon its ability to introduce new and innovative products
into such markets. Although the Company seeks to introduce additional products
each year in its existing markets, the success of new products is subject to a
number of conditions, including developing products that will appeal to
customers and obtaining necessary regulatory approvals. There can be no
assurance that the Company's efforts to develop innovative new products will be
successful, that customers will accept new products or that the Company will
obtain required regulatory approvals of such new products. In addition, no
assurance can be given that new products currently experiencing strong
popularity and rapid growth will maintain their sales over time. For example,
Schiff 's Melatonin, introduced in December 1995, had fiscal 1996 net sales of
approximately $18.9 million and accounted for 10% of the Company's net sales.
Sales of melatonin amounted to $6.8 million during the nine months ended
February 28, 1997. See "Business -- Strategy."

DEPENDENCE ON NEW FACILITY

In response to increased sales and the anticipated increase in demand for
nutritional supplements, the Company has leased a 418,000 square-foot
manufacturing, warehouse and office facility located in Salt Lake City, Utah
(the "New Facility"). The New Facility is being built specifically for the
Company and is expected to become operational in mid-1997. Although construction
of the New Facility is on schedule and the Company has implemented certain
operations there in April 1997, there can be no assurance that final
construction will be completed on schedule. If the New Facility is not completed
on schedule, no assurance can be given that the Company could satisfy increasing
demand for its nutritional supplement products. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

NO LONG-TERM CONTRACTS FOR SUPPLY OF RAW MATERIALS

The Company obtains from other sources all of its raw materials for the
manufacture of its products. The Company generally does not have contracts with
any entities or persons committing such suppliers to provide the materials
required for the production of its products. There can be no assurance that
suppliers will provide the raw materials needed by the Company in the quantities
requested or at a price the Company is willing to pay. In the last few years,
natural vitamin E, beta carotene and melatonin have had unusual price
fluctuations as a result of short supply or increases in demand. Because the
Company does not control the actual production of these raw materials, it is
also subject to delays caused by interruption in production of materials based
on conditions not wholly within its control. Such conditions include job actions
or strikes by employees of suppliers, weather, crop conditions, transportation
interruptions and natural disasters or other catastrophic events. The inability
of the Company to obtain adequate supplies of raw materials for its products at
favorable prices, or at all, as a result of any of the foregoing factors or
otherwise could have a material adverse effect on the Company. See "Business --
Manufacturing and Product Quality."

INTELLECTUAL PROPERTY PROTECTION

At March 18, 1997, the Company had approximately 83 federal trademark
registrations and approximately 95 trademark applications pending with the
United States Patent and Trademark Office. The Company's policy is to pursue
registrations for all of the trademarks associated with its key products. The
Company protects its legal rights concerning its trademarks and is currently
enforcing several trademarks against infringement by litigation, both in the
United States and in foreign countries, including litigation pertaining to its
registered trademark Fat Burners(R). See "Business -- Legal Matters."

11
<PAGE> 12

(provided, however, that an unauthorized third party user has not, prior to the
registration date, perfected its common law rights in the trademark in that
geographic area). The Company intends to register its trademarks in certain
foreign jurisdictions where the Company's products are sold. However, the
protection available in such jurisdictions may not be as extensive as the
protection available to the Company in the United States.

Currently, the Company has three patent applications submitted to the
United States Patent and Trademark Office which are currently under review. To
the extent the Company does not have patents on its products, there can be no
assurance that another company will not replicate one or more of the Company's
products. See "Business -- Trademarks and Patents."

POTENTIAL SALES AND EARNINGS VOLATILITY

The Company's sales and earnings continue to be subject to potential
volatility based upon, among other things: (i) the adverse effect of
distributors' or the Company's failure, and allegations of their failure, to
comply with applicable regulations, which have in the past and could again in
the future result in the removal of certain products from sale in certain
countries, either temporarily or permanently; (ii) the negative impact of
changes in or interpretations of regulations that may limit or restrict the sale
of certain of the Company's products, the expansion of its operations into new
markets and the introduction of its products into each such market; (iii) the
inability of the Company to introduce new products or the introduction of new
products by the Company's competitors; (iv) general conditions in the
nutritional supplement industry; and (v) consumer perceptions of the Company's
products and operations. In particular, because the Company's products are
ingested by consumers, the Company is highly dependent upon consumers'
perception of the safety and quality of its products. As a result, substantial
negative publicity concerning one or more of the Company's products or other
nutritional supplements similar to the Company's products could adversely affect
the Company's results of operations or financial condition. See "-- Effect of
Unfavorable Publicity."

The Company's business is, to some extent, seasonal, with lower sales
typically realized during the first and second fiscal quarters and higher sales
typically realized during the third and fourth fiscal quarters. The Company
believes such fluctuations in sales are the result of greater marketing and
promotional activities toward the end of each fiscal year, customer buying
patterns, and consumer spending patterns related primarily to consumers'
interest in achieving personal health and fitness goals after the beginning of
each new calendar year and before the summer fashion season. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Seasonality."

COMPETITION

The nutritional supplement industry is highly competitive. Numerous
companies compete with the Company in the development, manufacture and marketing
of nutritional supplements. In addition, large pharmaceutical companies and
packaged food and beverage companies compete with the Company on a limited basis
in the nutritional supplement market. Increased competition from such companies
could have a material adverse effect on the Company as they have greater
financial and other resources available to them and possess extensive
manufacturing, distribution and marketing capabilities far greater than those of
the Company. See "Business -- Competition."

DEPENDENCE ON KEY PERSONNEL

The Company believes that its continued success depends to a significant
extent on the management and other skills of Richard B. Bizzaro, the Chief
Executive Officer and President, and Robert K. Reynolds, the Chief Operating
Officer, Executive Vice President and Secretary, as well as its ability to
retain or attract other skilled personnel. The loss or unavailability of the
services of Mr. Bizzaro and Mr. Reynolds could have a material adverse effect on
the Company. See "Management -- Employment Agreements."

NO PRIOR PUBLIC MARKET

Prior to the Offerings, there has been no public market for the Class A
Common Stock. The initial public offering price for the Class A Common Stock has
been determined by negotiations among the Company, the U.S. Underwriters and the
Managers based on factors described in this Prospectus under "Underwriting."

12
<PAGE> 13

CONTROL BY PRINCIPAL STOCKHOLDER

After the Offerings, the Parent will own all of the outstanding shares of
Class B Common Stock representing 95.0% of the aggregate voting power of all
outstanding shares of Common Stock of the Company. In addition, pursuant to
certain shareholders agreements, Hornchurch Investments Limited ("Hornchurch"),
Bayonne Settlement and Mr. Ronald Corey have agreed to vote all of their shares
of Common Stock as directed by the Parent. As a result, the Parent will control
96.0% of the aggregate voting power of all outstanding shares of Common Stock of
the Company and will be in a position to exercise control over the Company and
to determine the outcome of all matters required to be submitted to stockholders
for approval (except as otherwise provided by law or by the Company's amended
and restated certificate of incorporation (the "Certificate of Incorporation")
or amended and restated bylaws (the "Bylaws")) and otherwise to direct and
control the operations of the Company. See "Principal Stockholders" and "Certain
Relationships and Related Party Transactions."

ANTI-TAKEOVER CONSIDERATIONS

After consummation of the Offerings, the Parent will own approximately
65.8% of the shares of the outstanding Common Stock (63.5% if the U.S.
Underwriters' over-allotment option is exercised in full). Accordingly, the
Company will not be able to engage in any strategic transactions without the
approval of the Parent. Even if the Parent's interest in the Company were
reduced below such level, the Company's Certificate of Incorporation and Bylaws
contain certain provisions that could make it more difficult for a third party
to acquire, or discourage a third party from attempting to acquire, control of
the Company. Such provisions could limit the price that certain investors might
be willing to pay in the future for shares of Common Stock. Certain of such
provisions allow the Company to issue preferred stock with rights senior to
those of the Common Stock and impose various procedural and other requirements
which could make it more difficult for stockholders to effect certain corporate
actions. See "Certain Relationships and Related Party Transactions" and
"Description of Capital Stock."

SHARES ELIGIBLE FOR FUTURE SALE

Future sales of substantial amounts of Class A Common Stock in the public
market could adversely affect market prices of the Class A Common Stock. Upon
the closing of the Offerings, there will be 8,171,851 shares of Class A Common
Stock outstanding and 15,687,432 shares of Class B Common Stock outstanding. The
5,600,000 shares of Class A Common Stock sold in the Offerings will be freely
tradeable without restriction or further registration under the Securities Act,
unless held by an "affiliate" of the Company as that term is defined in Rule 144
promulgated under the Securities Act ("Rule 144"), which shares will be subject
to the resale limitations of Rule 144. Of the shares outstanding upon the
closing of the Offerings, 18,259,283 will be deemed "restricted securities"
under Rule 144 and may not be sold unless they are registered under the
Securities Act or unless an exemption from registration, such as the exemption
provided by Rule 144, is available. Upon expiration of the lock-up agreements
described below, 17,245,034 shares of Common Stock will become available for
sale in the public market, subject to volume and manner of sale limitations
pursuant to Rule 144 and 1,465,690 of such shares will be freely tradeable under
Rule 144.

The Company and all of its current stockholders, directors and officers
have agreed that they will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file, or cause to be filed,
with the Securities and Exchange Commission a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), relating to any
additional shares of its Common Stock or securities convertible into or
exchangeable or exercisable for any shares of its Common Stock, or publicly
disclose the intention to make any such offer, sale, pledge, disposal or filing,
without the prior written consent of Credit Suisse First Boston Corporation for
a period of 180 days after the date of this Prospectus, except, in the case of
the Company, for grants of employee stock options or rights pursuant to a plan
in effect on the date of this Prospectus, issuances pursuant to the exercise of
such options or rights and any filing of a registration statement under the
Securities Act with respect to any of the foregoing permitted issuances or
grants.

No prediction can be made as to the effect, if any, that future sales, or
the availability of Class A Common Stock for future sales, will have on the
market price of the Class A Common Stock from time to time. Sales of substantial
amounts of Class A Common Stock by the Company or by stockholders who hold
restricted securities, or the perception that such sales may occur, could
adversely affect market prices for the Class A Common Stock. See "Shares
Eligible for Future Sale."

13
<PAGE> 14

USE OF PROCEEDS

The net proceeds to the Company from the Offerings are estimated to be
approximately $55.8 million (after deducting underwriting discounts and
commissions and estimated offering expenses) (or approximately $64.4 million if
the U.S. Underwriters' and Managers' over-allotment options are exercised in
full). The Company intends to apply the net proceeds of the Offerings as
follows: (i) approximately $21.5 million, together with approximately $42.5
million of borrowings under the New Credit Agreement, is expected to be used to
repay all outstanding indebtedness under the Existing Credit Agreement; (ii)
$18.3 million is expected to be paid in connection with the one-time dividend to
holders of shares of the Class B Common Stock (the "Class B Dividend"); and
(iii) approximately $15.9 million is expected to be used to repay intercompany
indebtedness owed to Parent, which indebtedness was incurred primarily in
connection with certain acquisitions and taxes payable by the Parent on behalf
of the Company pursuant to a tax sharing agreement. Borrowings under the
Existing Credit Agreement bear interest at floating rates (at March 1, 1997,
8.0% for the term note and 7.7% for the revolving line of credit) and maturing
in January 2000. Of the approximately $15.9 million of intercompany indebtedness
owed to Parent, $15.0 million is represented by a note payable (the "Parent
Note"), which bears interest at prime plus 1.00% and matures in January 2000.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources," and "Certain Relationships and
Related Party Transactions -- Interest Paid to Parent." Pending application of
the net proceeds of the Offerings as described above, the Company intends to
invest such proceeds in short-term interest bearing instruments.

DIVIDEND POLICY

The Company intends to commence paying quarterly cash dividends at an
initial annual rate of $0.15 per share. Upon completion of the Offerings, a
quarterly dividend of $0.0375 per share is anticipated to be declared to be
payable on June 15, 1997 to holders of all classes of Common Stock of record at
the close of business on June 1, 1997. The Company's Board of Directors will
determine dividend policy in the future based upon, among other things, the
Company's results of operations, financial condition, contractual restrictions
and other factors deemed relevant at the time. In addition, the Company expects
to enter into a New Credit Agreement which will contain certain customary
financial covenants that may limit the Company's ability to pay dividends on its
Common Stock. Accordingly, there can be no assurance that the Company will be
able to sustain the payment of dividends in the future.

Subject to completion of the Offerings, the Company intends to pay to the
Parent (the sole holder of Class B Common Stock) a one-time dividend in the
amount of $18.3 million at the closing of the Offerings. The Class B Dividend is
not indicative of the Company's future dividend policy. See "Use of Proceeds"
and "Certain Relationships and Related Party Transactions -- Class B Dividend."

In the past, the Company made distributions to the Parent. After the
Offerings, the Company will no longer make distributions to the Parent in excess
of those declared to all stockholders of the Company.

14
<PAGE> 15

DILUTION

At February 28, 1997, the net tangible book value of the Company was $13.6
million, or $0.79 per share, representing the $40.3 million net book value less
trademarks, goodwill, and other acquired intangibles of $26.7 million, divided
by 17,245,036 shares of Common Stock outstanding. After giving effect to the
Offerings, the application of the estimated net proceeds therefrom as described
under "Use of Proceeds," the pro forma net tangible book value of the Company at
February 28, 1997 would have been $53.6 million or $2.24 per share representing
the net tangible book value as adjusted to give effect to the Offerings divided
by 23,859,283 shares of Common Stock outstanding. This represents an immediate
increase in pro forma net tangible book value of $1.45 per share to existing
stockholders and an immediate dilution in pro forma net tangible book value of
$8.76 per share to purchasers of Class A Common Stock in the Offerings, as
illustrated in the following table:

<TABLE>
<CAPTION>
FEBRUARY
28,
1997
-----------
<S> <C> <C>
Assumed initial offering price................................ $ 11.00
Net tangible book value before the Offerings................ $0.79
Increase attributable to new investors...................... 1.45
------

Pro forma net tangible book value after the Offerings......... 2.24
--------
Dilution to new investors..................................... $ 8.76
========
</TABLE>

The following table sets forth at February 28, 1997, the difference between
existing stockholders immediately prior to the Offerings and the purchasers of
shares in the Offerings with respect to the number of shares purchased from the
Company, the total consideration paid, and the average price per share paid. The
calculations in the following table with respect to shares of Class A Common
Stock to be purchased in the Offerings reflect an initial public offering price
of $11.00:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
---------------------- ------------------- PER SHARE
NUMBER PERCENT AMOUNT PERCENT PRICE
---------- ------- ------- ------- ---------
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
Existing stockholders............ 18,259,283 76.5% $20,004 24.5% $ 1.10
New stockholders................. 5,600,000 23.5 61,600 75.5 11.00
---------- ----- ------- -----
Total.......................... 23,859,283 100.0% $81,604 100.0%
========== ===== ======= =====
</TABLE>

The calculations set forth above exclude an aggregate of 1,604,000 shares
of Class A Common Stock reserved for issuance under the Equity Plan and 182,717
shares of Class A Common Stock issuable to certain senior executives of the
Company pursuant to the Management Incentive Agreements but include 972,247
shares of Class A Common Stock issuable upon consummation of the Offerings to
certain senior executives of the Company pursuant to the Management Incentive
Agreements and approximately 42,000 shares of Class A Common Stock to be issued
to certain employees of the Company who have a minimum service period of six
months. See "Management -- Equity Plan" and " -- Management Incentive
Agreements."

15
<PAGE> 16

CAPITALIZATION

The following table sets forth the capitalization of the Company at
February 28, 1997 and as adjusted to give effect to (i) the stock split and the
exchange of the outstanding common stock of Weider Nutrition for Common Stock
and (ii) the Offerings and application of a portion of the proceeds therefrom to
reduce certain indebtedness of the Company and pay the Class B Dividend. See
"Use of Proceeds," "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources" and the
consolidated financial statements and the notes thereto included elsewhere in
this Prospectus.

<TABLE>
<CAPTION>
FEBRUARY 28, 1997
------------------------
ACTUAL AS ADJUSTED
-------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Current portion of long-term debt............................. $ 7,456 $ 3,456
Payable to Parent............................................. 925 --
------- -------
Total short-term obligations............................. 8,381 3,456
------- -------
Long-term debt:
Existing Credit Agreement................................... 60,007 --
New Credit Agreement(1)..................................... -- 44,114
Parent Note................................................. 15,000 --
Notes payable............................................... 1,765 1,765
Mortgage loan............................................... 2,910 2,910
Other....................................................... 225 225
------- -------
Total long-term debt..................................... 79,907 49,014
------- -------
Stockholders' equity(2):
Preferred Stock, par value $.01 per share; shares
authorized -- 10,000,000 actual and as adjusted; shares
outstanding -- 0 actual and 0 as adjusted................ -- --
Class A Common Stock, par value $.01 per share; shares
authorized -- 50,000,000 actual and as adjusted; shares
outstanding -- 1,195.17 actual and 8,171,851 shares as
adjusted(1).............................................. 1 82
Class B Common Stock, par value $.01 per share; shares
authorized -- 25,000,000 shares actual and as adjusted;
shares outstanding -- 0 actual and 15,687,432 as
adjusted................................................. -- 157
Additional paid-in-capital.................................. 4,480 71,187
Foreign currency translation adjustment..................... (131) (131)
Retained earnings (deficit)................................. 35,953 8,922
------- -------
Total stockholders' equity(3)............................ 40,303 80,217
------- -------
Total capitalization................................ $128,591 $ 132,687
======= =======
</TABLE>

- ---------------

(1) Includes approximately $42.5 million borrowed to repay a portion of the
Existing Credit Agreement as well as $1.6 million in net borrowings in
connection with the Management Incentive Agreements.
See"Management -- Management Incentive Agreements."

(2) Total stockholders' equity at February 28, 1997, as adjusted, gives effect
to certain one-time compensation expenses estimated at approximately $14.5
million ($8.7 million, net of tax) associated with conversion of performance
units granted to certain senior executive officers under the Company's
Management Incentive Agreements upon consummation of the Offerings and the
issuance of approximately 42,000 shares of Class A Common Stock to certain
employees who have a minimum service period of six months. See
"Management -- Equity Plan" and "-- Management Incentive Agreements."

(3) Excludes an aggregate of 1,604,000 shares of Class A Common Stock reserved
for issuance under the Equity Plan and 182,717 shares of Class A Common
Stock issuable to certain senior executives of the Company pursuant to the
Management Incentive Agreements but includes 972,247 shares of Class A
Common Stock issuable upon consummation of the Offerings to certain senior
executives of the Company pursuant to the Management Incentive Agreements
and the issuance of approximately 42,000 shares of Class A Common Stock to
certain employees who have a minimum service period of six months. See
"Management -- Equity Plan" and "-- Management Incentive Agreements."

16
<PAGE> 17

THE COMPANY

The Company's business began as the nutritional products division of the
Parent, Weider Health and Fitness, the principal stockholder of the Company. The
predecessor of the Parent was formed by Joe Weider in 1940. The nutritional
products division, along with the Parent's publications and exercise equipment
divisions, established the Weider name as a leading brand in the health and
fitness industry. In particular, the nutritional products division pioneered
under the Weider brand name the manufacturing and marketing of nutritional
supplements intended to enhance athletic performance and support muscle growth.
Such products were initially targeted specifically at weightlifters and
bodybuilders and were sold primarily through health food stores and gyms. In
addition, through its acquisition of Tiger's Milk in 1986, the Company began
marketing one of the most established and widely recognized healthy snack bars.
In order to capitalize on the growing health and fitness industry, the Parent
formed the Company in 1989 in connection with Parent's designation of its three
principal business divisions (Sporting Goods, Nutrition and Publications) as
independent subsidiaries.

As an independent subsidiary, the Company expanded its product line to
target a broader range of consumers and began pursuing a multi-brand,
multi-channel strategy to complement its Weider-brand nutritional supplements.
Accordingly, the Company pursued a strategic program to acquire brands and
related business lines and has acquired and integrated eight businesses since
1989. Following its acquisition of Schiff in 1989, the Company began marketing a
variety of forms of vitamins, minerals and herbs under the Schiff brand name.
The additional acquisitions of certain assets from National Institute of
Nutrition ("Nion"), American Body Building and Natural Nectar (now doing
business as American Nutrition Bars, Inc.) by the Company in 1995 and 1996
position the Company as a fully integrated manufacturer and marketer of powdered
drink mixes, capsules and tablets, beverages and nutrition bars. These three
acquisitions, along with the acquisition of certain assets of Weider Europe B.V.
and Craven Health & Fitness, Ltd., formerly Weider Health & Fitness, Ltd.
("Weider U.K."), contributed $54.6 million in sales and $15.6 million in
incremental EBITDA in fiscal 1996, representing 29% of the Company's net sales
and 46% of the Company's EBITDA, respectively, in fiscal 1996. See "Certain
Relationships and Related Party Transactions." The four acquisitions completed
since January 1, 1995 that have contributed to fiscal 1996 net sales are
described in the following table:

<TABLE>
<CAPTION>
ACQUISITION FISCAL 1996
ACQUISITIONS DATE SALES
---------------------------------------------------------- -------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
American Body Building.................................... January 1995 $ 21,847
Nion...................................................... June 1995 26,399
American Nutrition Bars................................... October 1995 3,839
Weider U.K................................................ January 1996 2,470
</TABLE>

The Company intends to continue its strategy of acquiring branded products
to enhance its established brands and balanced distribution channels. Effective
January 1, 1997, the Company acquired the assets of Science Foods, Inc.
("Science Foods"), previously a competitor of the Company in the sports
nutrition (beverages) market, for cash of $3.9 million and the assumption of
$700,000 in indebtedness. In addition, the Company intends to expand its
multi-brand, multi-channel strategy in international markets. Effective
September 1, 1996, the Company acquired trademarks and nutritional supplement
operations providing distribution capabilities in primarily Spain and Portugal
for a total purchase price of $3.4 million. Such operations and assets are
hereinafter referred to as "Weider Spain." In addition, the Company acquired
certain assets and foreign distribution rights from Weider Sports Equipment Co.,
Ltd., a Canadian company ("Weider Sports Equipment") for $4.0 million in
September 1996 ($3.0 million was paid in cash and $1.0 million was in the form
of an earnout to be paid $40,000 per month for 25 months). Such assets and
distribution rights are hereinafter referred to as "Weider Canada." Through its
nutritional supplements business, Weider Canada currently markets nutritional
supplements to South America, Eastern Europe, Africa and the Pacific Rim. The
Weider Spain and Weider Canada assets generated sales of $3.8 million and $5.6
million, respectively, for fiscal 1996. The Company's acquisitions of certain
assets in Spain and Canada, when combined with the assets acquired from Weider
U.K., provide the Company with the rights to manufacture and market nutritional
supplements worldwide, excluding Australia, New Zealand, Japan, and South
Africa. The rights to manufacture and market nutritional supplements in
Australia, New Zealand, Japan and South Africa are held by third parties
pursuant to certain agreements. See "Certain Relationships and Related Party
Transactions -- Certain International Acquisitions and Royalty Arrangements."

17
<PAGE> 18

SELECTED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The following selected consolidated financial data at May 31, 1995 and 1996
and for the fiscal years ended May 31, 1994, 1995 and 1996 have been derived
from the Company's consolidated financial statements, which have been audited by
Deloitte & Touche LLP, independent auditors, whose report thereon is included
elsewhere in this Prospectus. The following selected consolidated financial data
at May 31, 1992, 1993 and 1994 and for the fiscal years ended May 31, 1992 and
1993 are derived from the audited consolidated financial statements of the
Parent. The selected consolidated financial data at February 28, 1997 and for
the nine months ended February 28, 1996 and 1997 have been derived from
unaudited consolidated financial statements of the Company. In the opinion of
the Company, its unaudited consolidated financial statements have been prepared
on the same basis as the audited consolidated financial statements and include
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the financial position and results of operation for such
periods. Results for the nine months ended February 28, 1997 have not been
audited and are not necessarily indicative of results to be expected for the
full fiscal year. The financial data should be read in conjunction with, and are
qualified in their entirety by, the consolidated financial statements and notes
thereto included elsewhere in this Prospectus. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
NINE MONTHS ENDED
FISCAL YEAR ENDED MAY 31, FEBRUARY 28,
---------------------------------------------------- --------------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales....................................... $58,170 $63,144 $67,870 $90,927 $186,405 $128,448 $151,407
Cost of goods sold.............................. 33,827 37,002 39,287 55,411 116,177 80,419 94,008
------- ------- ------- ------- --------- -------- ---------
Gross profit.................................... 24,343 26,142 28,583 35,516 70,228 48,029 57,399
Impairment of intangible assets(1).............. -- -- -- -- -- -- 2,095
Operating expenses.............................. 18,385 19,036 20,344 24,226 41,068 28,191 36,750
------- ------- ------- ------- --------- -------- ---------
Total operating expenses...................... 18,385 19,036 20,344 24,226 41,068 28,191 38,845
------- ------- ------- ------- --------- -------- ---------
Income from operations.......................... 5,958 7,106 8,239 11,290 29,160 19,838 18,554
Other income (expense):
Interest, net................................. (677) (170) (245) (1,079) (3,736) (2,748) (4,673)
Other......................................... (933) (950) (1,015) 147 (253) (177) (423)
------- ------- ------- ------- --------- -------- ---------
Total..................................... (1,610) (1,120) (1,260) (932) (3,989) (2,925) (5,096)
------- ------- ------- ------- --------- -------- ---------
Income before income taxes...................... 4,348 5,986 6,979 10,358 25,171 16,913 13,458
Provision for income taxes...................... 1,750 2,423 2,845 4,266 10,207 6,858 5,383
------- ------- ------- ------- --------- -------- ---------
Net income...................................... $ 2,598 $ 3,563 $ 4,134 $ 6,092 $ 14,964 $ 10,055 $ 8,075
======= ======= ======= ======= ========= ======== =========
Pro forma net income per common and common
equivalent share(2)........................... -- -- -- -- $ 0.79 -- $ 0.43
Pro forma common and common equivalent shares
outstanding(2)................................ -- -- -- -- 18,908,672 -- 18,908,672
Supplemental pro forma net income per common and
common equivalent share(3).................... -- -- -- -- $ 0.69(4) -- $ 0.41(4)
Supplemental pro forma common and common
equivalent shares outstanding(3).............. -- -- -- -- 23,859,283 -- 23,859,283
OTHER DATA:
EBITDA (5)...................................... $ 6,435 $ 7,429 $ 8,629 $13,438 $ 33,908 $ 23,216 $ 24,651
Capital expenditures............................ 380 1,469 5,171 1,295 6,084 5,434 6,343
Net sales increase.............................. --% 9% 7% 34% 105% --% 18%
Income from operations increase(6).............. -- 19 16 37 158 -- 4
Net income increase (decrease)(6)............... -- 37 16 47 146 -- (7)
</TABLE>

<TABLE>
<CAPTION>
MAY 31, FEBRUARY 28, 1997
---------------------------------- -----------------
1994 1995 1996 ACTUAL
------- ------- -------- -----------------
(UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.......................................... $ 2 $ 2,272 $ 1,592 $ 1,065
Working capital.................................................... 14,082 25,044 47,505 61,802
Total assets....................................................... 39,548 70,048 133,147 148,685
Total debt......................................................... 7,410 28,616 68,054 88,288
Total stockholders' equity......................................... 22,946 28,100 39,332 40,303
</TABLE>

- ---------------

(1) Reflects an impairment of intangible assets recognized as a result of
adopting SFAS No. 121.

(4) Reflects the retirement of debt with the proceeds of the Offerings as if
such debt were retired at the beginning of the period, which would have the
effect of reducing after-tax interest expense by $1.4 million in fiscal 1996
and $1.6 million in the nine months ended February 28, 1997. The one-time
$14.5 million, ($8.7 million, net of taxes) compensation expense described
in note 3 above will take effect upon consummation of the Offerings; this is
expected to impact the Company's net income and stockholders' equity in the
fourth quarter of fiscal 1997. Giving pro forma effect to such compensation
expense would reduce supplemental pro forma net income per common and common
equivalent share by approximately $0.36.

(5) EBITDA is presented because it is a widely accepted financial indicator used
by certain investors and analysts to analyze and compare companies on the
basis of operating performance. EBITDA is not intended to represent cash
flows for the period, nor has it been presented as an alternative to
operating income as an indicator of operating performance and should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with generally accepted accounting principles.

(6) The nine month period ended February 28, 1997 excludes the impairment of
intangible assets loss of $2.1 million ($1.3 million, net of taxes)
described in note 1 above.

18
<PAGE> 19

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with
the consolidated financial statements, including the notes thereto, appearing
elsewhere in this Prospectus.

OVERVIEW

The Company experienced growth in sales over the past two fiscal years. Net
sales were $67.9 million, $90.9 million and $186.4 million for fiscal 1994, 1995
and 1996, respectively. The Company's net sales and net income for the two year
period ended May 31, 1996 increased at compound annual growth rates of 65.7% and
90.3%, respectively. The Company's significant growth has been a result of
increased demand for the Company's products, the Company's increased penetration
of the growing mass volume retail distribution channel, an aggressive
acquisition strategy and new product introductions. The Company acquired a
number of businesses in 1995 and 1996 which contributed to the Company's growth.
For example, acquisitions in 1996 contributed $54.5 million in net sales and
$14.8 million in operating income. Excluding acquisitions, the Company's
internal net sales and net income grew at compound annual growth rates of 39.3%
and 33.2%, respectively, for the two year period ended May 31, 1996.

The Company has not experienced revenue and net income growth during fiscal
1997 at the rates experienced in 1996 because of manufacturing and distribution
capacity constraints, fewer acquisitions and decreased sales of melatonin. The
nutritional supplement industry is influenced by products, such as melatonin,
that can become popular due to changing consumer tastes and heightened media
attention. The Company sold $13.3 million in melatonin during the first nine
months of fiscal 1996 as compared to $6.8 million during the first nine months
of fiscal 1997. In addition, the Company has made significant investments in
manufacturing and distribution infrastructure in fiscal 1997 to support future
growth. These expenditures include higher depreciation associated with
additional capital equipment, as well as costs associated with hiring additional
personnel and upgrading information systems. As a result, operating expenses
have increased in fiscal 1997 as compared to historical levels. The Company is
also building the New Facility that is expected to become operational in mid-
1997 and will more than double current manufacturing and operating capacity
enabling the Company to meet demand associated with the growth of the
nutritional supplements industry.

In the fourth quarter of fiscal 1997, the Company will record a one-time
$14.5 million ($8.7 million, net of taxes) compensation expense primarily
arising from the conversion of performance units granted to certain senior
executive officers upon consummation of the Offerings. See
"Management -- Management Incentive Agreements," "-- Equity Plan" and "Use of
Proceeds."

The foregoing information is "forward-looking" and there can be no
assurance that the future results covered by such forward-looking statements
will be achieved. See "Risk Factors."

The following table shows selected items expressed on an actual basis and
as a percentage of net sales for the periods indicated:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED MAY 31, NINE MONTHS ENDED FEBRUARY 28,
--------------------------------------------------------- --------------------------------------
1994 1995 1996 1996 1997
---------------- ---------------- ----------------- ----------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales................... $67,870 100.0% $90,927 100.0% $186,405 100.0% $128,448 100.0% $151,407 100.0%
Cost of goods sold.......... 39,287 57.9 55,411 60.9 116,177 62.3 80,419 62.6 94,008 62.1
------- ----- ------- ----- -------- ----- -------- ----- -------- -----
Gross profit................ 28,583 42.1 35,516 39.1 70,228 37.7 48,029 37.4 57,399 37.9
Impairment of intangible
assets.................... -- -- -- -- -- -- -- -- 2,095 1.4
Operating expenses.......... 20,344 30.0 24,226 26.6 41,068 22.0 28,191 21.9 36,750 24.2
------- ----- ------- ----- -------- ----- -------- ----- -------- -----
Total operating expenses.... 20,344 30.0 24,226 26.6 41,068 22.0 28,191 21.9 38,845 25.6
------- ----- ------- ----- -------- ----- -------- ----- -------- -----
Income from operations...... 8,239 12.1 11,290 12.4 29,160 15.6 19,838 15.4 18,554 12.3
Other expense............... 1,260 1.9 932 1.0 3,989 2.1 2,925 2.3 5,096 3.4
Provision for income
taxes..................... 2,845 4.2 4,266 4.7 10,207 5.5 6,858 5.3 5,383 3.6
------- ----- ------- ----- -------- ----- -------- ----- -------- -----
Net income.................. $ 4,134 6.1% $ 6,092 6.7% $ 14,964 8.0% $ 10,055 7.8% $ 8,075 5.3%
======= ===== ======= ===== ======== ===== ======== ===== ======== =====
</TABLE>

19
<PAGE> 20

RESULTS OF OPERATIONS

Nine Months Ended February 28, 1997 Compared to the Nine Months Ended February
28, 1996.

Net Sales. Net sales increased 17.9% to $151.4 million in the nine month
period ended February 28, 1997 from $128.4 million in the nine month period
ended February 28, 1996. The increase in net sales resulted primarily from
increased distribution to mass volume retailers, increased volumes with private
label customers and the growth of the Company's international operations.

The Company acquired three manufacturing and distribution operations in the
nine months ended February 28, 1997 and three manufacturing operations in the
nine months ended February 28, 1996. The combined sales for the operations
acquired in the nine months ended February 28, 1997 amounted to approximately
$5.8 million in the nine months ended February 28, 1997 compared to combined
sales for the operations acquired in the nine months ended February 28, 1996 of
approximately $21.1 million in the nine months ended February 28, 1996.

The following table show comparative net sales results categorized by
distribution channel on an actual basis and as a percentage of net sales for the
periods indicated:

<TABLE>
<CAPTION>
NINE MONTHS ENDED FEBRUARY 28,
-----------------------------------------
1996 1997
------------------ ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Mass volume retailers......................... $ 45,497 35.4% $ 54,356 35.9%
Health food................................... 34,722 27.0 31,006 20.5
Private label................................. 27,928 21.8 34,329 22.7
International markets......................... 2,680 2.1 11,704 7.7
Other......................................... 17,621 13.7 20,012 13.2
-------- ----- -------- -----
Total............................... $128,448 100.0% $151,407 100.0%
======== ===== ======== =====
</TABLE>

Sales to mass volume retailers, private label customers, international
markets and other distribution channels increased in the nine month period ended
February 28, 1997 compared to the nine month period ended February 28, 1996.
Sales in the health food channel decreased in the nine month period ended
February 28, 1997 compared to the nine month period ended February 28, 1996
primarily as a result of manufacturing capacity constraints. Sales to mass
volume retailers increased approximately 19.6% to $54.4 million in the nine
month period ended February 28, 1997 from $45.5 million in the nine month period
ended February 28, 1996. The increase in sales to mass volume retailers resulted
primarily from increased penetration of the market and the introduction of new
products. Sales to health food distributors decreased approximately 10.7% to
$31.0 million in the nine month period ended February 28, 1997 from $34.7 in the
nine month period ended February 28, 1996. The decrease in sales to health food
distributors resulted primarily from limitations on the Company's capsule and
tablet manufacturing capacity as evidenced by unfilled orders to health food
store customers. The New Facility is expected to provide the Company substantial
additional capsule and tablet manufacturing capacity. Sales to private label
customers increased 22.9% to $34.3 million in the nine month period ended
February 28, 1997 from $27.9 million in the nine month period ended February 28,
1996. The increase in sales to private label customers resulted from increased
volumes with existing customers.

Sales to international markets increased to $11.7 million in the nine month
period ended February 28, 1997 from $2.7 million in the nine month period ended
February 28, 1996. The increase in sales to international markets resulted
primarily from the Company's entrance into, and growth of, the U.K., Canadian
and Spanish markets as a result of the acquisition of Weider U.K., Weider Canada
and Weider Spain, respectively. The increase in sales to other customers was
primarily a result of additional sports drink sales volume to health clubs and
gyms.

Gross Profit. Gross profit increased approximately 19.6% to $57.4 million
in the nine month period ended February 28, 1997 from $48.0 million in the nine
month period ended February 28, 1996. Gross profit as a percentage of net sales
was 37.9% for the nine month period ended February 28, 1997 compared to 37.4%
for the nine month period ended February 28, 1996. The increase in gross profit
resulted primarily from a shift in the mix in product sales towards higher
margin capsules and tablets and increased sales in higher margin distribution

20
<PAGE> 21

channels. Gross profit from sales price increases during the nine month period
ended February 28, 1997 were offset by increases in certain raw material and
other production costs.

Operating Expenses. Operating expenses increased approximately 37.8% to
$38.8 million in the nine month period ended February 28, 1997 from $28.2
million in the nine month period ended February 28, 1996. The Company adopted
SFAS No. 121 effective June 1, 1996 and, primarily as a result of the Company's
decision to discontinue manufacturing and marketing products containing
ephedrine in capsule and tablet form, the Company recognized an impairment of
intangible assets loss of approximately $2.1 million ($1.3 million, net of tax).
The impaired assets primarily consist of intangible costs associated with the
acquisitions of the Excel and Exceed brands. Operating expenses (excluding the
intangible assets impairment loss) increased approximately 30.4% to $36.8
million in the nine month period ended February 28, 1997 from $28.2 million in
the nine month period ended February 28, 1996. Operating expenses (excluding the
intangible assets impairment loss) as a percentage of net sales were 24.2% for
the nine month period ended February 28, 1997 compared to 21.9% for the nine
month period ended February 28, 1996, primarily as a result of additional
personnel, new information systems and depreciation of additional capital
equipment to accommodate future growth. The Company determined the amount of the
intangible assets impairment loss for Excel based on the anticipated decline in
revenues that will result from the discontinuance of products containing
ephedrine. The Company anticipates minimal future revenues for Exceed brand
products. Accordingly, the Company recognized an impairment loss for the related
intangible assets with questionable recoverability. During the nine month period
ended February 28, 1997, sales of Excel brand products were approximately $1.0
million and sales of Exceed brand products were approximately $100,000. The
Company believes that the impairment of these brands and the related decline in
revenues will not have a material adverse effect on the Company's results of
operations.

Selling and marketing expenses as a percentage of net sales were 15.5% for
the nine month period ended February 28, 1997 compared to 14.2% for the nine
month period ended February 28, 1996. The increase in selling and marketing
expenses resulted primarily from increased investment in additional sales
personnel and certain royalty costs.

General and administrative expenses as a percentage of net sales were 6.8%
in the nine month period ended February 28, 1997 compared to 5.7% in the nine
month period ended February 28, 1996 primarily as a result of costs associated
with additional personnel.

Amortization of intangible assets expense remained relatively constant
during the nine month period ended February 28, 1997, as compared to the nine
month period ended February 28, 1996. The Company currently amortizes goodwill
over periods of 15 to 35 years. Research and development costs as a percentage
of net sales remained relatively constant for the nine month period ended
February 28, 1997 compared to the nine month period ended February 28, 1996.

Other Income (Expense). Other income (expense) increased approximately
74.2% to ($5.1) million for the nine month period ended February 28, 1997 from
($2.9) million for the nine month period ended February 28, 1996. The increase
in other income (expense) consisted primarily of increased interest costs
associated with additional indebtedness incurred in connection with the Weider
U.K., Weider Canada and Science Foods acquisitions, increased working capital
requirements and additions to property and equipment.

Provision for Income Taxes. Provisions for income taxes decreased 21.5% to
$5.4 million for the nine month period ended February 28, 1997 from $6.9 million
for the nine month period ended February 28, 1996. Income taxes as a percentage
of pre-tax income amounted to approximately 40.0% for the nine month period
ended February 28, 1997 compared to 40.5% for the nine month period ended
February 28, 1996.

Acquisitions. The Company's operating results for the nine month period
ended February 28, 1997 include the effects of certain acquisitions that
occurred immediately prior or subsequent to February 28, 1996. These
acquisitions consisted of Weider U.K., Weider Canada, Weider Spain, and Science
Foods, a producer and distributor of nutritional drinks. The acquisitions of
Weider U.K. and Weider Canada represent related party transactions. See "Certain
Relationships and Related Party Transactions -- Certain Acquisitions."

21
<PAGE> 22

The following table shows certain operating results for each of these
acquisitions that are included in the Company's overall operating results for
the nine month period ended February 28, 1997.

<TABLE>
<CAPTION>
WEIDER WEIDER WEIDER SCIENCE
U.K. SPAIN(1) CANADA(1) FOODS(2)
------ -------- --------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales.................................. $4,921 $1,991 $ 2,718 $1,066
Gross profit............................... 1,720 1,049 902 325
Operating income........................... 456 358 236 106
</TABLE>

- ---------------

(1) Reflects only six months of operations.
(2) Reflects only two months of operations.

Accounting Policies. Effective June 1, 1996, the Company adopted SFAS No.
121, "Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed Of." The Company recognized an impairment loss of $2.1 million ($1.3
million, net of tax) during the nine month period ending February 28, 1997.

The Company evaluates the economic factors for determining requisite
recovery periods for certain intangible assets on a case by case basis. The
Company recognizes amortization of goodwill over periods of 15 to 35 years.
Management determined that a 35 year life was appropriate for the goodwill of
$2.8 million associated with the Science Foods acquisition. Management
anticipates a similar life will be appropriate for goodwill associated with
future acquisitions.

Fiscal Year Ended May 31, 1996 Compared to Fiscal Year Ended May 31, 1995

Net Sales. Net sales increased approximately 105.1% to $186.4 million in
fiscal 1996 from $90.9 million in fiscal 1995. The increase in net sales in
fiscal 1996 resulted primarily from increased distribution to mass volume
retailers and greater contributions from the Company's acquisitions during
fiscal 1996 than fiscal 1995.

The Company acquired one manufacturing operation in fiscal 1995 and two
manufacturing operations and certain international rights to use the Weider name
in fiscal 1996. The combined sales for the operations acquired in fiscal 1996
amounted to $32.7 million in fiscal 1996 compared to combined sales for the
operations acquired in fiscal 1995 of $7.8 million in fiscal 1995.

The following table shows comparative net sales results categorized by
distribution channel on an actual basis and as a percentage of net sales for the
fiscal years indicated:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MAY 31,
----------------------------------------
<S> <C> <C> <C> <C>
1995 1996
----------------- ------------------

<CAPTION>
(DOLLARS IN
THOUSANDS)
<S> <C> <C> <C> <C>
Mass volume retailers.......................... $24,267 26.7% $ 63,705 34.2%
Health food.................................... 40,074 44.1 49,295 26.4
Private label.................................. 11,502 12.6 43,773 23.5
International markets.......................... 4,335 4.8 5,445 2.9
Other.......................................... 10,749 11.8 24,187 13.0
------- ----- -------- -----
Total................................ $90,927 100.0% $186,405 100.0%
======= ===== ======== =====
</TABLE>

Sales to mass volume retailers increased approximately 162.1% to $63.7
million in fiscal 1996 from $24.3 million in fiscal 1995. The increase in sales
to mass volume retailers in fiscal 1996 resulted primarily from the Company
obtaining new accounts, expanding distribution to existing accounts and
introducing new branded products, including a line of melatonin products under
the Schiff brand. Products introduced in the last fiscal year accounted for
$38.8 million of the Company's fiscal 1996 net sales of which Schiff 's
Melatonin contributed $18.9 million. Sales to health food stores increased
approximately 22.9% to $49.3 million in fiscal 1996 from $40.1 million in fiscal
1995. The increase in sales to health food stores was primarily the result of
the introduction of new branded products. Sales to private label customers
increased approximately 280.9% to $43.8 million in fiscal 1996 from $11.5
million in fiscal 1995. The increase in sales to private label customers was
primarily due to the acquisition of Nion. Sales to international markets
increased approximately 25.6% to

22
<PAGE> 23

$5.4 million in fiscal 1996 from $4.3 million in fiscal 1995. The increase in
sales to international markets resulted primarily from the acquisition of Weider
U.K. Sales to other customers increased approximately 126.2% to $24.2 million in
fiscal 1996 from $10.7 million in fiscal 1995. The increase in sales to other
customers, including health clubs and gyms, was primarily attributable to the
American Body Building acquisition in fiscal 1995.

Gross Profit. Gross profit increased approximately 97.8% to $70.2 million
in fiscal 1996 from $35.5 million in fiscal 1995. The increase in gross profit
in fiscal 1996 resulted primarily from the approximately 105.0% increase in
sales in fiscal 1996 from fiscal 1995. Gross margin decreased to 37.7% for
fiscal 1996 from 39.1% for fiscal 1995, primarily as a result of shifts in
product mix to lower margin beverages, nutrition bars and private label capsules
and tablets manufacturing, which was partially mitigated by increased
manufacturing efficiencies, higher sales prices and increased concentration on
branded capsules and tablets.

Operating Expenses. Selling and marketing expenses, including sales,
marketing, advertising and freight costs, increased approximately 71.6% to $26.6
million in fiscal 1996 from $15.5 million in fiscal 1995. The increase in
selling and marketing expenses in fiscal 1996 resulted primarily from increased
advertising and personnel required to handle higher volumes of products
associated with increased sales and acquisitions in fiscal 1996. Selling and
marketing expenses as a percentage of net sales were 14.3% in fiscal 1996
compared to 17.0% in fiscal 1995. Advertising expenses increased 95.4% to $8.4
million in fiscal 1996 from $4.3 million in fiscal 1995. The increase in
advertising expenses resulted primarily from increased television, magazine and
co-op advertising. Advertising expense as a percentage of net sales was 4.5% in
fiscal 1996 compared to 4.7% in fiscal 1995.

General and administrative expenses increased approximately 75.8% to $10.9
million in fiscal 1996 from $6.2 million in fiscal 1995. The dollar increase in
general and administrative expenses in fiscal 1996 resulted primarily from
incremental expenses added by the acquisition of Nion and American Nutrition
Bars. General and administrative expenses as a percentage of net sales were 5.9%
in fiscal 1996 compared to 6.8% in fiscal 1995. The decrease in general and
administrative expenses as a percentage of net sales was primarily a result of
increased sales volumes.

The expense for amortization of intangible assets increased approximately
90.9% to $2.1 million for fiscal 1996 from $1.1 million for fiscal 1995. The
increase in amortization of intangible assets resulted primarily from the Weider
U.K., Nion and American Nutrition Bars acquisitions in fiscal 1996 and the
American Body Building acquisition in fiscal 1995. Amortization of intangible
assets expense as a percentage of net sales was 1.1% in fiscal 1996 compared to
1.2% in fiscal 1995.

Other Income (Expense). Other income (expense) increased approximately
329.2% to ($4.0) million in fiscal 1996 from ($932,000) in fiscal 1995. The
increase in other income (expense) resulted primarily from an increase in
interest expense of 236.4% to $3.7 million in fiscal 1996 from $1.1 million in
fiscal 1995. Interest expense increased in fiscal 1996 as a result of the
Company's incurrence of additional indebtedness in connection with the Weider
U.K., Nion and American Nutrition Bars acquisitions and increased investment in
inventory and fixed assets. The Company's total indebtedness, including the
amounts payable to the Parent, increased approximately 138.1% to $68.1 million
at May 31, 1996 from $28.6 million at May 31, 1995. This increase in total
indebtedness resulted primarily from increased borrowing for acquisitions of
$16.1 million and the Company's added investment in inventory and accounts
receivable of $26.6 million due to overall growth in operations.

Provision for Income Taxes. Provision for income taxes increased
approximately 137.2% to $10.2 million in fiscal 1996 from $4.3 million in fiscal
1995. The dollar increase in provision for income taxes resulted primarily from
increased net sales in fiscal 1996 compared to fiscal 1995. Provision for income
taxes as a percentage of net sales was 5.5% in fiscal 1996 compared to 4.7% in
fiscal 1995.

Acquisitions. Effective January 1, 1995, the Company acquired certain
assets of the nutritional drink business formerly owned by American Body
Building. The Company's operating results for fiscal 1996 include the American
Body Building acquisition for the entire fiscal year compared to the five months
of operations that were recorded in fiscal 1995. Results of operations for
American Body Building recorded by the Company in fiscal 1996 were net sales of
$21.8 million, gross profit of $4.1 million and incremental operating income of
$3.1

23
<PAGE> 24

million, compared to net sales of $7.8 million, gross profit of $1.9 million and
incremental operating income of $1.3 million in fiscal 1995.

Effective June 1, 1995, the Company acquired a capsule and tablet
manufacturing operation formerly owned by Nion. Results of operations for Nion
in fiscal 1996 were net sales of $26.4 million, gross profit of $13.3 million
and incremental operating income of $11.5 million.

Effective October 16, 1995, the Company acquired the American Nutrition
Bars' manufacturing facility. Results of operations for American Nutrition Bars
in fiscal 1996 were net sales of $3.8 million, gross profit of $1.0 million and
operating loss of $234,000.

Effective January 1, 1996, the Company acquired certain net assets and
customers in Europe from Weider U.K., a related party, for $1.5 million. See
"Certain Relationships and Related Party Transactions -- Certain International
Acquisitions and Royalty Arrangements." Net assets acquired amounted to $48,942
and were recorded at their historical cost. The remaining excess purchase price
of approximately $1.4 million plus other acquisition costs amounting to $250,000
were charged to retained earnings as a distribution of capital to the Parent.
Results of operations in fiscal 1996 for this acquisition were sales of $2.5
million, gross profit of $900,000 and incremental operating income of $400,000.

In connection with the acquisition of Weider U.K., the Company entered into
an agency agreement with a primary supplier of powdered drink mixes for European
operations. The agreement requires the supplier to provide working capital
funds, to maintain ownership of all inventories and to provide all logistics and
administrative support. In return, the supplier is paid a declining percentage
of profits. See "Business -- Strategy -- Penetration of International Markets."

Fiscal Year Ended May 31, 1995 Compared to Fiscal Year Ended May 31, 1994

Net Sales. Net sales increased approximately 33.9% to $90.9 million in
fiscal 1995 from $67.9 million in fiscal 1994. The increase in net sales
resulted primarily from increased penetration of the mass volume retail
distribution channel, which added $8.2 million to fiscal 1995 net sales, and
increased private label powdered drink mix manufacturing, which added $3.6
million to fiscal 1995 net sales. In addition, the midyear acquisition of
American Body Building added $7.8 million to fiscal 1995 net sales.

The Company acquired one manufacturing operation in fiscal 1995 and the
rights to two brand names in fiscal 1994. The combined sales from the acquired
manufacturing operation amounted to $7.8 million in fiscal 1995 compared to
combined sales from the acquired brand names of $2.3 million in fiscal 1994.

The following table shows comparative net sales results categorized by
distribution channel for the fiscal years indicated:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED MAY 31,
---------------------------------------
1994 1995
----------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Mass volume retailers........................... $16,011 23.6% $24,267 26.7%
Health food..................................... 37,241 54.9 40,074 44.1
Private label................................... 7,915 11.7 11,502 12.6
International markets........................... 2,539 3.7 4,335 4.8
Other........................................... 4,164 6.1 10,749 11.8
------- ----- ------- -----
Total................................. $67,870 100.0% $90,927 100.0%
======= ===== ======= =====
</TABLE>

Sales to mass volume retailers increased approximately 51.9% to $24.3
million in fiscal 1995 from $16.0 million in fiscal 1994, due primarily to the
introduction of new branded products. The increase in sales to other customers,
including health clubs and gyms, was due primarily to the acquisition of
American Body Building.

Gross Profit. Gross profit increased approximately 24.1% to $35.5 million
in fiscal 1995 from $28.6 million in fiscal 1994. The increase in gross profit
in fiscal 1995 resulted primarily from the acquisition of American Body Building
in fiscal 1995 and was offset in part by smaller gross margins associated with
American

24
<PAGE> 25

Body Building's product lines. Gross margin decreased slightly to 39.1% in
fiscal 1995 from 42.1% in fiscal 1994 primarily as a result of certain increases
in raw material prices and product mix costs as well as smaller gross margins
associated with American Body Building's product lines.

Operating Expenses. Selling and marketing expenses, including sales,
marketing, advertising and freight costs, increased approximately 24.0% to $15.5
million in fiscal 1995 from $12.5 million in fiscal 1994. The increase in
selling and marketing expenses in fiscal 1995 resulted primarily from increased
advertising and personnel required to handle higher volumes of products
associated with increased sales and the fiscal 1995 acquisition of American Body
Building. Selling and marketing expenses as a percentage of net sales were 17.0%
in fiscal 1995 compared to 18.5% in fiscal 1994. Advertising expenses increased
approximately 38.7% to $4.3 million in fiscal 1995 from $3.1 million in fiscal
1994. The increase in advertising expenses resulted primarily from increased
television, magazine and co-op advertising. Advertising expense as a percentage
of net sales was 4.7% in fiscal 1995 compared to 4.6% in fiscal 1994.

General and administrative expenses increased approximately 5.1% to $6.2
million in fiscal 1995 from $5.9 million in fiscal 1994. The dollar increase in
general and administrative expense in fiscal 1995 resulted primarily from
incremental expenses added by the acquisition of American Body Building. General
and administrative expenses as a percentage of net sales were 6.8% in fiscal
1995 compared to 8.7% in fiscal 1994.

The expense for amortization of intangible assets increased approximately
35.3% to $1.1 million for fiscal 1995 from $813,000 for fiscal 1994. Capitalized
intangible assets increased approximately $9.8 million in fiscal 1995 and $3.4
million in fiscal 1994. The increase in capitalized intangible assets resulted
from the American Body Building acquisition in fiscal 1995 and the Excel and
Exceed acquisitions in fiscal 1994. Amortization of intangible assets expense as
a percentage of net sales was 1.2% in both fiscal 1995 and fiscal 1994.

Other Income (Expense). Other income (expense) decreased approximately
28.3% to ($932,000) in fiscal 1995 from ($1.3) million in fiscal 1994. Other
income (expense) as a percentage of net sales was 1.0% in fiscal 1995 compared
to 1.9% in fiscal 1994.

Provision for Income Taxes. Provision for income taxes increased
approximately 53.6% to $4.3 million in fiscal 1995 from $2.8 million in fiscal
1994. The increase in provision for income taxes resulted primarily from
increased net sales in fiscal 1995 compared to fiscal 1994. Provision for income
taxes as a percentage of net sales was 4.7% in 1995 compared to 4.2% in 1994.

Acquisitions. Effective December 1, 1993, the Company acquired the Excel
brand name from Key Products, Inc. Effective December 14, 1993, the Company
acquired the Exceed brand name from Abbott Laboratories. Results of operations
reported for these acquisitions in fiscal 1995 were net sales of $4.6 million,
gross profit of $2.6 million and operating income of $1.4 million compared to
net sales of $2.3 million, gross profit of $1.4 million and operating income of
$800,000 reported from the date of the acquisitions through May 31, 1994.

Effective January 1, 1995, the Company acquired certain assets of the
nutritional beverage business formerly known as American Body Building. Results
of operations for American Body Building in fiscal 1995 were net sales of $7.8
million, gross profit of $1.9 million and incremental operating income of $1.3
million.

25
<PAGE> 26

LIQUIDITY AND CAPITAL RESOURCES

Prior to the Offerings, the Company's operations and capital requirements
were financed through internally generated funds, borrowings under the Existing
Credit Agreement and loans from the Parent. For fiscal years ended May 31, 1995
and 1996 and the nine months ended February 28, 1997, the Company's primary
capital requirements were as follows:

<TABLE>
<CAPTION>
YEAR ENDED MAY 31, NINE MONTHS ENDED
------------------- FEBRUARY 28,
1995 1996 1997
------- ------- ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Working capital increase excluding term debt... $ 8,366 $ 9,274 $ 3,571
Capital expenditures and trademark purchases... 1,295 6,219 8,105
Total consideration for acquisitions........... 15,038 29,772 7,951
Distributions to the Parent, net............... 938 3,731 6,973
Other debt repayments.......................... 2,766 3,449 10,981
------- ------- --------
Total capital requirements........... $28,403 $52,445 $ 37,581
======= ======= ========
</TABLE>

These capital requirements, which primarily reflect the growth of the
Company, were satisfied as follows:

<TABLE>
<CAPTION>
YEAR ENDED MAY 31, NINE MONTHS ENDED
------------------- FEBRUARY 28,
1995 1996 1997
------- ------- ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Working capital provided by operations......... $ 7,289 $18,513 $ 14,347
Net increases in Existing Credit Agreement..... 19,200 18,750 26,057
Net loans from (payments to) the Parent........ 1,914 15,182 (2,823)
------- ------- --------
$28,403 $52,445 $ 37,581
======= ======= ========
</TABLE>

In March 1997, the Company received a commitment from General Electric
Capital Corporation ("GECC") for a $130.0 million senior secured, long-term
credit facility (the "New Credit Agreement"). The Company expects that the New
Credit Agreement will contain standard terms and conditions, including, subject
to permitted amounts, a limitation on the ability of the Company to pay
dividends on the Common Stock. The commitment is subject to several significant
conditions precedent. The obligations of the Company under the New Credit
Agreement will be secured by a first priority lien on all owned or acquired
tangible and intangible assets of the Company and a pledge to GECC of the
capital stock of the U.S. subsidiaries of the Company (including the subsidiary
that owns the Company's foreign subsidiaries). The Company will also pledge to
GECC at least 65% of the capital stock of each foreign subsidiary of the
Company. The Company intends to use approximately $21.5 million of the net
proceeds of the Offerings, together with approximately $42.5 million of
borrowings under the New Credit Agreement, to terminate its obligations under
the Existing Credit Agreement and will rely on the New Credit Agreement to meet
its short-term cash requirements. See "Use of Proceeds." Specifically,
borrowings available under the New Credit Agreement will be used for general
working capital needs and to support capital expenditures and, if necessary, to
effect acquisitions and to accelerate growth. As a result, upon the consummation
of the Offerings, the Company expects to have approximately $85.9 million of
available credit under the New Credit Agreement.

The Company's cash requirements through the remainder of fiscal 1997 are
expected to include expenditures in connection with: (i) investing in research
and development, including hiring additional technical personnel, acquiring new
product lines for nutrition bars, beverages, tablets and capsules, and
purchasing additional research and development equipment, including data and
formulation software; (ii) hiring additional personnel, if and as necessary, to
support the Company's distribution facilities as sales of the Company's
nutritional supplements increase; and (iii) continuing advertising and
promotional investments to educate consumers about the Company's products.
Capital expenditures in fiscal 1997 are expected to aggregate approximately
$18.5 million, excluding acquisitions. The Company expects that cash flows from
operations and borrowings under the New Credit Agreement will be sufficient for
the above purposes.

The Company's long-term capital requirements are expected to include
capital expenditures to support continued growth of nutritional supplements
sales. The Company may also enter into strategic acquisitions as the

26
<PAGE> 27

nutritional supplements industry continues to consolidate. The Company expects
to fund its long-term capital requirements including construction of capital
projects such as a new manufacturing and distribution facility for the next
twelve months and in the foreseeable future, through the use of operating cash
flow supplemented as necessary by borrowings under the New Credit Agreement and,
if necessary, through debt financings or the issuance of additional equity.

The Company, the Parent and certain subsidiaries of the Parent (each a
"Borrower" and together the "Borrowers"), entered into an Amended and Restated
Credit Agreement, dated January 4, 1995, as amended from time to time (the
"Existing Credit Agreement"), with GECC. A total of $64.0 million in borrowings
was outstanding under the Existing Credit Agreement at February 28, 1997
consisting of approximately $16.0 million of indebtedness evidenced by a term
note payable to GECC and approximately $48.0 million under a revolving line of
credit. Borrowings under the Existing Credit Agreement bear interest at floating
rates (at March 1, 1997, 8.0% for the term note and 7.7% for the revolving line
of credit) and mature in January 2000. Each of the Borrowers has jointly and
severally guaranteed the obligations of the other Borrowers under the Existing
Credit Agreement. Simultaneously with the closing of the Offerings, the Company
intends to repay all of its outstanding obligations under the Existing Credit
Agreement and terminate all liabilities and obligations with respect to its
guarantee of the other Borrowers' obligations thereunder. Until March 1, 1997,
with respect to its allocated portion of the indebtedness under the Existing
Credit Agreement, the Company paid interest to the Parent at a rate of interest
higher than that paid to GECC with respect to such indebtedness. From and after
March 1, 1997, the Company has paid interest on such indebtedness at a rate
equal to the interest paid to GECC by the Parent with respect to such
indebtedness. See "Certain Relationships and Related Party
Transactions -- Interest Paid to Parent."

IMPACT OF INFLATION

The Company has historically been able to pass inflationary increases for
raw materials and other costs onto its customers through price increases and
anticipates that it will be able to continue to do so in the future.

SEASONALITY

The Company's business is seasonal, with lower sales typically realized
during the first and second fiscal quarters and higher sales typically realized
during the third and fourth fiscal quarters. The Company believes such
fluctuations in sales are the result of greater marketing and promotional
activities toward the end of each fiscal year, customer buying patterns, and
consumer spending patterns related primarily to the consumers' interest in
achieving personal health and fitness goals after the beginning of each new
calendar year and before the summer fashion season. See "Risk
Factors -- Potential Sales and Earnings Volatility"

IMPACT OF RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS

In 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121 ("SFAS No. 121"), "Accounting for the
Impairment of Long-lived Assets and for Long-Lived Assets to be Disposed Of,"
which provides guidance on how to measure impairment of long-lived assets,
certain intangibles and goodwill related to those assets to be held and used,
and for long-lived assets and certain identifiable intangibles to be disposed
of. The Company adopted this statement effective June 1, 1996 and recognized an
impairment loss of approximately $2.1 million ($1.3 million, net of tax). The
impaired assets primarily consist of intangible costs associated with certain
acquisitions.

In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-Based Compensation" which defines a fair value based
method of accounting for stock based employee compensation plans. Under SFAS No.
123, companies are encouraged, but are not required, to adopt the fair value
method for fiscal years beginning after December 15, 1995 for all employee
awards granted after the beginning of such year. Companies are permitted to
continue to account for such transactions under Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" (APB No. 25), but
must, in future years, disclose in a note to the financial statements pro forma
net income and earnings per share as if SFAS No. 123 had been applied. The
Company has determined that it will not adopt the fair value method but will

27
<PAGE> 28

continue to account for stock-based compensation under APB No. 25 and will
provide the requisite disclosure under SFAS No. 123.

In February 1997, the Financial Accounting Standards Board issued SFAS No.
128 (SFAS No. 128), "Earnings per Share" which supersedes Accounting Principles
Board Opinion No. 15 "Earnings per Share" and replaces the presentation of
primary EPS with a presentation of basic EPS. It also requires dual presentation
of basic and diluted EPS on the face of the income statement for all entities
with complex capital structures and provides guidance on other computational
changes. SFAS No. 128 is effective for financial statements for both interim and
annual periods ending after December 15, 1997. Earlier application is not
permitted. The Company does not expect the adoption of SFAS No. 128 to have a
material impact on the financial position and results of operations of the
Company.

28
<PAGE> 29

BUSINESS
GENERAL

The Company is a leading manufacturer of branded and private label
nutritional supplements and is a leading marketer of multiple brands of
nutritional supplements through multiple distribution channels. The Company
manufactures a broad range of capsules and tablets, powdered drink mixes,
bottled beverages and nutrition bars and markets branded products in four
principal categories: sports nutrition; vitamins, minerals and herbs; diet; and
healthy snacks. The Company markets its branded products through each key
distribution channel and is one of the leading marketers of nutritional
supplement products to the mass volume retail channel, one of the most
significant and growing distribution channels in the nutritional supplement
industry. Consistent with management's multi-channel strategy, sales of the
Company's products in fiscal 1996 were balanced among mass volume retailers,
health food stores and a combination of other channels, including health clubs
and gyms, international markets and private label manufacturing. According to
Packaged Facts, an independent consumer market research firm, the principal
domestic markets in which the Company's products compete totalled approximately
$6.5 billion in 1996 and grew at a compound annual growth rate of approximately
15% from 1992 through 1996. Because of the Company's broad portfolio of leading
brands, multiple distribution channels and state-of-the-art manufacturing
capabilities, the Company believes that it is uniquely positioned to capitalize
on the anticipated growth in the nutritional supplement industry.

29
<PAGE> 30

As a result, the Company believes that it has many of the leading brands in
the nutritional supplement industry. The following table identifies the
Company's 12 leading brands and illustrates the Company's multi-brand,
multi-channel strategy:

<TABLE>
<CAPTION>
BRAND PRIMARY CHANNEL PRIMARY CATEGORY PRODUCT FORMS
- ------------------------- ---------------------- -------------------------- --------------------------
<S> <C> <C> <C>
Great American Mass volume retailers Vitamins and diet Beverages, nutrition bars,
Nutrition(TM) powdered drink mixes and
capsules and tablets
Joe Weider Signature(TM) Mass volume retailers Sports nutrition and diet Powdered drink mixes and
capsules and tablets
Prime Time(R) Mass volume retailers Vitamins and diet Capsules and tablets
Tiger's Milk(TM) Mass volume retailers Healthy snacks Nutrition bars
Fi-Bar(R) Mass volume retailers Healthy snacks Nutrition bars
Schiff(R) Health food stores Vitamins and diet Capsules and tablets
Metaform(TM) Health food stores Sports nutrition and diet Powdered drink mixes and
nutrition bars
Victory(TM) Health food stores Sports nutrition Powdered drink mixes and
capsules and tablets
Mega Mass(R) Health food stores Sports nutrition Powdered drink mixes
American Body Health clubs and gyms Sports nutrition and diet Beverages, nutrition bars,
Building(TM) powdered drink mixes and
capsules and tablets
Science Foods(R) Health clubs and gyms Sports nutrition and diet Beverages, nutrition bars
and powdered drink mixes
Steel Bar(R) Health clubs and gyms Sports nutrition Nutrition bars
</TABLE>

To support its multi-brand, multi-channel strategy, the Company will
continue to invest in research and development and state-of-the-art
manufacturing and distribution facilities. The Company's research and
development group has successfully developed new brands targeted to specific
consumers, such as Great American Nutrition and Metaform, and new products, such
as Schiff's Melatonin and Whole Food Phytonutrients. In addition, the Company
manufactures over 80% of its branded products and is building additional
state-of-the-art facilities that it believes will more than double current
capacity. The Company expects its additional facilities to be operational in
mid-1997. The Company believes its research and development commitment and
integrated manufacturing capabilities will continue to provide a significant
advantage in capturing an increasing share of the growing nutritional supplement
market.

STRATEGY

The Company has demonstrated the ability to grow its business profitably by
introducing new brands and products, expanding distribution capability and
acquiring related businesses. In fiscal 1996, the Company's net sales increased
105.1% to $186.4 million from net sales of $90.9 million in fiscal 1995 and net
income increased 145.9% to $15.0 million in fiscal 1996 from net income of $6.1
million in fiscal 1995. During the three fiscal years ended May 31, 1996, the
Company achieved compound growth rates in net sales and net income of 43.5% and
61.3%, respectively. The Company believes that its broad distribution channels,
portfolio of leading brands and state-of-the-art manufacturing and distribution
capabilities position it as the long-term competitive leader in the nutritional
supplement industry. The Company's strategy is to:

Leverage Its Portfolio of Established Brands. The Company believes that
its portfolio of established brands will enable the Company to continue
increasing its share of the nutritional supplement market. The Company's brands
are positioned as leaders in specific product categories and distribution
channels. Schiff and Great American Nutrition are leading vitamin brands in
health food stores and in mass volume retailers, respectively, American Body
Building is a leading sports nutrition brand in gyms and health clubs, Victory
and Metaform are leading sports nutrition brands in health food stores and Joe
Weider Signature is among the leading sports

30
<PAGE> 31

nutrition brand in the mass volume retail market. Tiger's Milk and Fi-Bar are
among the leading nutritional bar brands in supermarkets, health food stores and
convenience stores. Each of these brands has name recognition and consumer
loyalty within its target market. The Company plans to continue promoting its
brands through focused marketing efforts; in fiscal 1996, to publicize its
brands, the Company spent $16.5 million in selling, marketing and advertising
compared to $9.9 million in fiscal 1995.

Develop New Brands and Product Line Extensions. The Company strives to be
on the leading edge of the industry in terms of product development and intends
to continue its commitment to research and development to create new brands and
product line extensions. The nutritional supplement industry is influenced by
products that become popular due to changing consumer tastes and heightened
media attention. The Company believes it is important to continually develop new
products in order to capitalize on such new market opportunities, strengthen
relationships with customers by meeting demand, increase market share and
preserve gross margins. The Company's focus on research and development enables
it to readily formulate and manufacture innovative products and quickly
capitalize on industry trends. For example, this strong commitment to research
and product development enabled the Company to capitalize on the sudden
popularity of melatonin, by quickly formulating and marketing Schiff's
Melatonin.

Continue Growing Its Balanced Distribution Network. The Company has
demonstrated the ability to enter new channels of distribution while preserving
growth in existing distribution channels. Unlike many of its competitors, the
Company has effectively marketed some of its products in the mass volume retail
market while preserving loyalty from its health food store customers. The
Company has achieved this balance by designating brands such as Schiff, Victory
and Metaform as health food brands with limited distribution in the mass volume
retail market. The Company's fiscal 1996 net sales were approximately 34% to
mass volume retailers, 26% to health food stores and 40% to others, including
health clubs and gyms, international markets and private label manufacturing. As
consumer awareness and acceptance of nutritional supplements grow, the Company
expects growth in each distribution channel, with concentration in mass volume
retailers, including drug stores and supermarkets. The Company is uniquely
positioned to capitalize on the growth in each distribution channel through
existing customer relationships and a strong performance history in these
channels.

Acquire Strategically Related Businesses and Product Lines. The
nutritional supplement industry is fragmented and includes a number of small
manufacturers and distributors, many of which are being acquired by larger
companies. The Company believes that growth in the nutritional supplement
industry will generate further consolidation and create continuing opportunities
for the Company to acquire additional nutritional supplement manufacturing and
marketing companies over the next decade. The Company's financial resources and
operating capabilities, along with management's demonstrated ability to make and
integrate acquisitions, uniquely position the Company to be a leader in the
industry's consolidation. The Company has successfully acquired four businesses
in the last two years and has increased the operating performance of each
acquired company. For example, with respect to acquisitions the Company has
included in its results of operations for at least one full fiscal year, sales
for the 12-month period prior to such acquisitions were $14.2 million and
approximately $11.4 million, for American Body Building and Nion, respectively,
compared to sales for fiscal 1996 of $21.8 million and $26.4 million,
respectively.

Further Penetrate International Markets. The Company believes that
significant growth opportunities exist in international markets. The Company
intends to increase its penetration of international markets through strategic
acquisitions and by introducing new products and brands into countries where the
Company already operates. The Company has manufacturing capabilities in the U.K.
as a result of an agreement with an indirect subsidiary of Archer Daniels
Midland, in Spain as a result of the purchase of Weider Spain and in Montreal as
a result of the acquisition of Weider Canada. In connection with the acquisition
of Weider Sports Equipment, with the exception of Australia, New Zealand, Japan
and South Africa, the Company will have distribution rights for nutritional
supplement products in every major market in the world. Weider U.K., which was
acquired on January 1, 1996, accounted for sales of $2.5 million and net income
of $220,000 in fiscal 1996.

31
<PAGE> 32

INDUSTRY

The Company believes it is well positioned to capitalize on the growth of
the nutritional supplements market. According to Packaged Facts, the principal
markets in which the Company's products compete totalled approximately $6.5
billion in 1996 and grew at a compound annual growth rate of approximately 15%
from 1992 through 1996. The Company believes several factors account for the
steady growth of the nutritional supplement market, including increased public
awareness of the health benefits of nutritional supplements and favorable
demographic trends toward older Americans who are more likely to consume
nutritional supplements.

Over the past several years, public awareness of the positive effects of
nutritional supplements on health has been heightened by widely publicized
reports and medical research findings indicating a correlation between the
consumption of nutrients and the reduced incidence of certain diseases. Reports
have indicated that the United States government and universities generally have
increased sponsorship of research relating to nutritional supplements. In
addition, Congress has established the Office of Alternative Medicine within the
National Institutes of Health to foster research into alternative medical
treatment modalities, which may include natural remedies. Congress has also
recently established the Office of Dietary Supplements in the National
Institutes of Health to conduct and coordinate research into the role of dietary
supplements in maintaining health and preventing disease.

The Company believes that the aging of the United States population,
together with a corresponding increased focus on preventative health care
measures, will continue to result in increased demand for certain nutritional
supplement products. According to Congressional findings that accompanied the
DSHEA, national surveys reveal that almost 43% of Americans regularly consume
vitamins, minerals and herbal supplements and 80% consume these products at some
time during their lives. The 35-and-older age group of consumers, which is
expected to continue to grow over the next two decades, represents 78% of the
regular users of vitamin and mineral supplements. Based on data provided by the
United States Bureau of the Census, from 1990 to 2010, the 35-and-older age
group of the United States population is projected to increase by 32%, a
significantly greater increase than the 20% projected increase for the United
States population in general.

The Company believes these and other trends have helped fuel the growth of
the nutritional supplement market. To meet the increased demand for nutritional
supplements, a number of successful nutritional supplement products have been
introduced over the past several years, including function specific products for
weight loss, sports nutrition, menopause, energy and mental alertness. In
addition, the use of a number of innovative ingredients, such as CitriMax(R),
DHEA, chromium picolinate and melatonin, have created opportunities to offer new
products.

BRANDS AND PRODUCTS

As part of its multi-brand, multi-channel strategy, the Company has
developed a portfolio of brands and diverse products designed for specific
distribution channels to meet the demands of a wide variety of consumers. The
Company believes that offering multiple brands is important to its success in
selling through many separate distribution channels, because selling the same
nutritional supplement brand across multiple distribution channels can weaken a
brand's value to brand-conscious consumers and retailers. Accordingly, the
Company designs its branded products for specific distribution channels. For
example, the Schiff brand primarily targets shoppers in health food stores,
while the Great American Nutrition brand is designed to reach primarily mass
volume retail shoppers. The Company believes having distinct brands positioned
in each distribution channel is one of its strongest competitive advantages,
enabling the Company to participate in the growth currently being experienced in
each of these channels.

The Company markets its branded products in four principal categories of
nutritional supplements: sports nutrition; vitamins, minerals and herbs; diet;
and healthy snacks. The Company also manufactures private label products for
other nutritional supplement marketers. The Company manufactures and markets
approximately 1,400 products and has approximately 1,800 SKUs. The Company
believes that offering its customers a wide variety of products also provides
the Company a competitive advantage in capturing an increasing share of the
growing nutritional supplement market.

32
<PAGE> 33

The following table outlines the approximate number of products of each of
the Company's product categories and its private label business at February 28,
1997:

<TABLE>
<CAPTION>
APPROXIMATE
NUMBER OF
PRODUCTS
-----------
<S> <C>
Branded products:
Sports nutrition............................................... 317
Vitamins, minerals and herbs................................... 363
Diet........................................................... 44
Healthy snacks................................................. 89
-----
Subtotal.................................................... 813
Private label.................................................... 587
-----
Total....................................................... 1,400
=====
</TABLE>

Sports Nutrition. The Company's sports nutrition category includes a wide
variety of products designed to enhance athletic performance and support the
results derived from exercise programs. The Company's sports nutrition products
deliver nutritional supplements through a variety of forms, including powdered
drink mixes, tablets, capsules, nutrition bars and beverages. The target
consumers for the Company's sports nutrition products are athletes, bodybuilders
and fitness enthusiasts. While each of the Company's products offers distinct
benefits to the consumer, the Company's sports nutrition products are intended
to generally enhance the consumer's ability to control weight, support muscle
growth, lose fat and increase energy levels and stamina. The following table
summarizes the major brands and representative products of the Company's sports
nutrition category:

<TABLE>
<CAPTION>
MAJOR BRANDS REPRESENTATIVE PRODUCTS
- ---------------------------------------- -----------------------------------
<S> <C>
American Body Building.................. Blue Thunder protein beverages and
Ripped Force energy beverages and
powdered drink mixes
Science Foods........................... White Lightning protein beverages
and Turbo-Tea energizing beverages
Victory................................. Mass 1000 and Professional powdered
drink mixes
Mega Mass............................... Giant Mega Mass and Super Mega Mass
powdered drink mixes
Metaform................................ Metaform and Metaform Heat powdered
drink mixes and nutrition bars
Joe Weider Signature.................... Dynamic Weight Gain and Dynamic
Muscle Builder powdered drink
mixes
Tiger's Milk............................ Tiger Sport nutrition bars
Steel Bar............................... Steel Bar nutrition bars
</TABLE>

The American Body Building brands, which are intended to help the consumer
increase energy levels and stamina, control weight and lose fat, are primarily
distributed to health clubs and gyms through the Company's exclusive
distributors. Science Foods products are distributed through health clubs and
gyms through direct, non-exclusive distributors. The Victory, Mega Mass,
Metaform and Joe Weider Signature brands, which are intended to support
consumers' efforts to control weight, support muscle growth and lose fat, are
primarily distributed through mass volume retailers and health food stores such
as GNC. The Tiger's Milk product line, which has been marketed for over 30
years, includes seven nutrition bars that supply significant amounts of protein,
vitamins and other essential nutrients with less fat than a traditional candy
bar. Both Tiger Sport and Steel Bar are nationally distributed through
supermarkets, convenience stores, warehouse clubs and health food stores.

Vitamins, Mineral and Herbs. The Company markets a complete line of
vitamins and minerals, including multivitamins, multiminerals, antioxidants and
digestive enzymes. These products are offered in various forms (including
liquids, tablets, capsules, softgels and powdered drink mixes). In addition,
herbs and phytonutrients constitute a small but growing percentage of the net
sales of the Company. Herbs and phytonutrients, which are a

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growing category in the nutritional supplement industry, are alternatives or
complements to over-the-counter pharmaceutical products for consumers who seek a
more natural and preventative approach to their health care.

<TABLE>
<CAPTION>
MAJOR BRANDS REPRESENTATIVE PRODUCTS
- ---------------------------------------- -----------------------------------
<S> <C>
Schiff vitamins......................... Multivitamins, multiminerals,
antioxidants and digestive enzymes
Schiff herbs............................ Ginseng, garlic, ginkgo biloba and
echinacea
Excel................................... Ultra High Performance and High
Performance capsules
Prime Time.............................. Prime Time capsules and tablets
Great American Nutrition................ Cold-Free zinc lozenges
</TABLE>

The Company's Schiff brand vitamin products are designed to provide
consumers with essential vitamins and minerals as supplements to their diet.
Schiff vitamins and minerals include multivitamins such as Single Day(TM),
multiminerals such as Guided(TM) Multiminerals Complex, individual vitamins and
minerals such as Vitamins C, E, and Calcium, specialty formulae such as PMS,
Menopause and DHEA, beta carotene and other antioxidants and B-complex. In
addition, the Company introduced Schiff's Melatonin in December 1995, which is a
natural hormone reported in the popular media to combat insomnia and jet lag.
Schiff vitamins are marketed primarily through health food stores but are also
sold through supermarkets and drug stores within the mass volume retail channel.

The Company markets various herbs (including ginseng, garlic, ginkgo biloba
and echinacea) under the Schiff brand primarily in health food stores. Through
its phytocharged supplement line distributed primarily through health food
stores, Schiff is a leader in the development and introduction of
phytonutrients, which are naturally-occurring compounds in plants that are
believed to promote health and prevent disease. These phytonutrients include
lycopene (the beta carotene relative that has been recently linked in the
popular media to lowering prostate cancer risk) and beta glucan (an extract from
oats that is the soluble fiber believed to be responsible for lowering blood
cholesterol levels).

The Company markets certain of its vitamins, minerals and herbal
supplements as energy enhancers under the Excel brand. Excel is the premier
herbal energy supplement line in GNC and health food stores nationwide. The
Company acquired the Excel brand in December 1993 to participate in the growing
market for energy enhancers. Excel's energy products include Ultra High
Performance and High Performance with Ginseng. All Excel products were
originally formulated with Ma Huang, an herb that naturally contains the
stimulant ephedrine; however, in December 1996, the Company decided to
discontinue the manufacturing and marketing of products containing ephedrine in
capsule and tablet form due to potential for misuse but will continue to
manufacture and market beverages and powders containing ephedrine. The Company
now offers Ma Huang-free alternatives (consisting of a unique proprietary blend
of herbs) to all of its Excel products. See "Recent Government Action and
Adverse Publicity Regarding Products Containing Ephedrine." While Excel targets
health food stores for herbal energy products, Great American Nutrition
distributes such products through mass volume retailers.

The Company's vitamins, minerals and herbs category consists of several
products targeting consumers in discrete groups. For example, Great American
Nutrition's Cold-Free(TM) zinc lozenges appeal to common cold sufferers.
Cold-Free(TM) is being distributed through mass volume retailers and health food
stores.

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<PAGE> 35

Diet. The Company is one of the leading suppliers to mass volume retailers
of natural products that utilize vitamins, herbs and other nutritional
supplements designed to promote weight control. The Company's diet products are
intended to support consumers' efforts in a number of weight control functions,
including metabolizing fat, suppressing the appetite, replacing meals and
providing low calorie, low fat snacks. The products are specifically formulated,
packaged and priced to appeal to a wide variety of consumers with different
demographic characteristics and physiological needs:

<TABLE>
<CAPTION>
MAJOR BRANDS REPRESENTATIVE PRODUCTS
- ---------------------------------------- -----------------------------------
<S> <C>
Great American Nutrition................ Fat Burner drinks and supplements
Schiff.................................. Ultra Lean capsules and tablets
American Body Building.................. Ripped Force and Cutting Force
energy beverages
Science Foods........................... Razor Ripped and Cut-Up energy
beverages
Joe Weider Signature.................... Fat Burner supplements
Metaform................................ Metaform Heat powdered drink mixes
Excel................................... Super Diet and Fat Burner capsules
and tablets
Prime Time.............................. Prime Time capsules and tablets
</TABLE>

The Great American Nutrition brands, which are intended to support
consumers' efforts to reduce fat, are primarily distributed through mass volume
retailers. The Schiff brands, which are intended to aid in suppressing the
appetite, are primarily distributed through health food stores. The American
Body Building brands, which are intended to support consumers' efforts to reduce
fat and provide a low calorie source of energy, are primarily distributed
through the Company's exclusive distributors to health clubs and gyms. The Joe
Weider Signature and Metaform brands, which are intended to enhance the
consumers' efforts to control weight, support muscle growth and lose fat, are
primarily distributed through mass volume retailers and health food stores, such
as GNC. The Excel line, which is intended to aid in suppressing the appetite and
support consumers efforts to reduce fat, is distributed primarily through health
food stores. Prime Time, a comprehensive health program designed specifically
for men over age 40, is distributed primarily through mass volume retailers.

Healthy Snacks. The Company's healthy snacks category includes its Fi-Bar
and Tiger's Milk product lines. The Fi-Bar product line is comprised of Fat Free
Granola bars and fruit and nut bars coated with yogurt, chocolate or carob made
without hydrogenated fats. The October 1995 acquisition of the American
Nutrition Bars' manufacturing facility and Fi-Bar brand positions the Company to
be a major private label bar manufacturer and adds another well-known healthy
snack bar line to its Tiger's Milk brand. The Tiger's Milk product line, which
as been marketed for over 30 years, includes seven nutrition bars that supply
significant amounts of protein, vitamins and other essential nutrients with less
fat than a traditional candy bar.

<TABLE>
<CAPTION>
MAJOR BRANDS REPRESENTATIVE PRODUCTS
- ---------------------------------------- -----------------------------------
<S> <C>
Tiger's Milk............................ Tiger's Milk nutrition bars
Fi-Bar.................................. Fat Free Fi-Bar nutrition bars
</TABLE>

The Tiger's Milk and Fi-Bar brands, which are intended to provide consumers
with a healthy alternative to traditional snack foods and candy bars, are
primarily distributed through mass volume retailers.

Private Label. The Company manufactures capsules, tablets, beverages,
nutrition bars and powdered drink mixes for more than 30 other marketers of
nutritional supplements. These independent marketers, or private label
customers, market the Company's products under their own brand name. The Company
believes private label manufacturing provides opportunities to enhance
profitable growth through increased efficiencies from greater use of operating
capacities. In addition, the Company believes private label manufacturing allows
it to hone its ability to innovate new products.

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<PAGE> 36

PRODUCT RESEARCH AND DEVELOPMENT

The Company strives to be a leader in nutritional supplement product
development and intends to continue its commitment to research and development
to create new brands and product line extensions. The nutritional supplement
industry is influenced by products that become popular due to changing consumer
tastes and media attention. The Company believes it is important to develop new
products in the nutritional supplement industry in order to capitalize on new
market opportunities, to strengthen relationships with customers by meeting
demand and to increase market share. In addition, the Company believes that
continually introducing new products is important to preserving and enhancing
gross margins due to the relatively short life cycle of some products. Recently
developed products are an important component to the Company's total product
mix. For example, products introduced in the last fiscal year accounted for 21%
of the Company's fiscal 1996 sales.

As a result of the Company's product development history, the Company
believes that it has built a reputation in the nutritional supplement industry
for innovation in both branded and private label products. The Company has
pioneered a number of innovations in the nutritional supplement industry,
including: (i) the development of the first domestic source of melatonin with
consistent quality, supply and cost; (ii) the introduction of garcinia cambogia,
a popular weight loss ingredient; (iii) the production of the first
high-protein, low carbohydrate beverage; and (iv) the retail introduction of the
first carotenoid complex product. The Company is in various stages of
development with respect to new product concepts that will augment its existing
product lines.

Due to the importance of new product introductions in the nutritional
supplement industry, the Company continues to make product development a
priority. The Company averaged $1.5 million in annual expenditures for research
and development for the last two fiscal years and has budgeted $2.7 million for
research and development in fiscal 1997. The Company is increasing its
commitment to research and development by hiring additional technical personnel,
purchasing additional research and development equipment, including data and
formulation software, and acquiring pilot lines for nutrition bars, beverages,
tablets and capsules. In addition, the Company has begun sponsoring research and
clinical trials at universities and medical centers.

SALES AND DISTRIBUTION

As part of its multi-brand, multi-channel strategy, the Company markets its
branded nutritional products through each key distribution channel. The
Company's major distribution channels are mass volume retailers, health food
stores and other channels, including its network of exclusive distributors to
health clubs and gyms, international markets and private label manufacturing.
The Company is pursuing a multi-channel distribution strategy to increase sales
and market share, reduce its dependence on any one distribution channel and
target specific markets for its nutritional supplement products. The products
consist of 12 brands and are available in over 38,000 retail outlets in all 50
states. In addition to servicing a number of domestic retail outlets directly,
the Company also sells its products through a network of distributors in the
United States and abroad.

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<PAGE> 37

The Company is one of the leading suppliers of branded nutritional
supplements to mass volume retailers and sells its nutritional supplements to
every major nutritional supplement distributor servicing health and nutritional
stores. The following table shows some of the Company's principal customers in
each distribution channel:

<TABLE>
<CAPTION>
MASS VOLUME RETAILERS HEALTH FOOD STORES OTHER
------------------------- ----------------------- --------------------------------
<S> <C> <C>
Wal-Mart GNC Private label customers
Walgreens Tree-of-Life American Bodybuilding Beverages
Sam's Club Stow Mills Military commissaries
Price Costco Nature's Best Bally's Health and Fitness Clubs
American Drug Super Nutrition Gold's Gym
Kmart Nutra Source Boots (U.K.)
Fred Meyer North Farm Coop Holland & Barrett (U.K.)
Thrifty/Payless L&H Vitamins Corte Ingles (Spain)
Albertson's Threshold Enterprises Decathalon (France)
Target
</TABLE>

The Company's largest customers, GNC and Wal-Mart, accounted for
approximately 16% and 10%, respectively, of net sales in fiscal 1996 and 12% and
11%, respectively, of net sales for the nine month period ended February 28,
1997, compared to approximately 26% and 5%, respectively, of net sales in fiscal
1995 and 16% and 9%, respectively, of net sales for the nine month period ended
February 28, 1996. The dollar amount of the Company's sales in fiscal 1996 to
GNC and Wal-Mart grew by 30% and 317%, respectively, over the previous year. The
Company has 26 other major customers each of which produced sales of between
0.5% and 5% of the Company's net sales in fiscal 1996 and, collectively,
accounted for 32% of net sales in fiscal 1996. The loss of GNC or Wal-Mart as a
customer, the loss of a significant number of other major customers, or a
significant reduction in purchase volume by or financial difficulty of such
customers, for any reason, could have a material adverse effect on the Company's
results of operations or financial condition. See "Risk Factors -- Dependence on
Significant Customers."

International Markets. The Company believes significant opportunities
exist for nutritional supplement products in international markets. The Company
has positioned itself to take advantage of such opportunities through its
acquisition of Weider U.K., Weider Spain and Weider Canada. After the
acquisition of Weider Spain, the Company has the capability to manufacture
nutritional supplements in Spain and market nutritional supplements throughout
continental Europe, including Italy, Germany, France, Belgium, the Netherlands,
Luxembourg, Portugal and Spain. Through Weider Canada, the Company markets
nutritional supplements to South America, Russia and the Pacific Rim. These
acquisitions provide the Company with the rights to manufacture and market
nutritional supplements worldwide, excluding Australia, New Zealand, Japan and
South Africa. In addition, the Company has manufacturing capabilities in the
United Kingdom as a result of an agreement with an indirect subsidiary of Archer
Daniels Midland. Approximately, 1.3%, or $2.5 million, of the Company's fiscal
1996 sales were derived from the United Kingdom. See "Certain Relationships and
Related Party Transactions -- Certain International Acquisitions and Royalty
Arrangements."

MARKETING AND CUSTOMER SALES SUPPORT

A comprehensive promotional program and extensive advertising, in
combination with a large, well-trained sales force and superior customer service
standards, have been integral to the Company's growth. These factors have
enhanced brand name recognition of the Company's products and positioned it as a
leader in the nutritional supplement industry. A key part of the Company's
strategy is to help educate consumers about innovative, safe and beneficial
nutritional supplement products. The Company's marketing and advertising
expenditures were approximately $11.3 million in fiscal 1996, $6.7 million in
fiscal 1995, and $4.9 million in fiscal 1994.

The Company promotes its products in more than 37 consumer magazines, such
as Newsweek, People, Cosmopolitan, Self, Parade, Martha Stewart Living, Woman's
Day, Family Circle and Mademoiselle and trade magazines, such as Whole Foods,
Vitamin Retailer, Mass Market Retailer and Chain Drug Review. In addition to

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<PAGE> 38

these publications, the Company advertises in several magazines published by
Weider Publications Inc. ("Weider Publications"), an affiliate of the Company,
including: Muscle and Fitness, Flex, Shape, Men's Fitness, and Senior Golfer.
Weider Publications also features editorials on nutritional products, providing
nutritional supplement consumers with further research and information. See
"Certain Relationships and Related Party Transactions." The Company also
maintains several Internet sites.

The Company participates in consumer education by sponsoring and attending
various sporting events, including leading professional body building
competitions such as The Mr. Olympia, The Arnold Schwarzenegger Classic and 45
local National Physique Committee bodybuilding competitions. In addition, the
Company plays an active role in supporting industry and consumer advocate
organizations for nutritional products. The Company also promotes its products
at numerous trade and consumer shows representing all current distribution
channels. In addition, the Company expects to pay endorsements to professional
and amateur athletes in order to promote a positive image for the Company's
nutritional products.

The Company is committed to providing superior service both to retailers
and consumers. The Company's sales and marketing team consists of approximately
120 professionals organized by distribution channel, brand and product type.
This enables the Company to quickly service the needs of both retailers and
consumers. The Company believes that up-to-date reporting and hands-on
management allow its sales team to be responsive to consumer needs for new
products, creating promotions and producing extensive marketing support
materials.

International Markets. Through the acquisition of Weider U.K., Weider
Spain and Weider Canada, the Company has increased its presence in the major
international markets for nutritional supplements. Sales offices and staff in
London, Madrid and Montreal and distributors in every major international market
other than Australia, New Zealand, Japan and South Africa, will be headed by a
vice president of sales and marketing based in Utah and will form the foundation
for the Company's future growth and expansion in international markets.

MANUFACTURING AND PRODUCT QUALITY

The Company has invested in manufacturing to meet the growing demand for
nutritional supplement products, to ensure continued operating efficiencies and
to maintain high product quality standards. The Company manufactures over 80% of
its branded products. The Company's products are currently manufactured in five
separate facilities in Salt Lake City, Utah; Irwindale, California; Walterboro,
South Carolina; City of Industry, California; and Las Vegas, Nevada. However,
the Company has consolidated many of its operations in its main distribution
center and headquarters in Salt Lake City, Utah. Consistent with its commitment
to capturing an increasing share of the growing nutritional supplement market,
the Company is building the New Facility in Salt Lake City, Utah.

Existing Salt Lake City Facility. In addition to being the Company's main
distribution center and corporate headquarters, the 152,000 square-foot existing
Salt Lake City facility also contains the dry powder manufacturing operation for
the Company, which includes blending, bottling and packaging of powdered drink
mixes. The facility can produce over 400,000 pounds of powdered drink mixes
daily and prepare for shipment 65,200 packages of various sizes per day. The dry
powder manufacturing operation can simultaneously run seven packaging lines
giving the Company the flexibility to produce powdered drink mixes in a variety
of packages, including cans, jugs, bags, boxes, buckets and packets. The Company
plans to maintain all domestic powdered drink mix manufacturing in the existing
facility after completion of the New Facility in mid-1997. In addition,
information systems will be expanded in fiscal 1997; the Company's existing
AS400 hardware will be upgraded to double existing capacity and the Company's JD
Edwards software will be upgraded to increase all distribution, manufacturing
and multilingual/multicurrency capacities. The Company can operate the facility
with three manufacturing shifts, but typically dedicates two shifts to
manufacturing and the third to sanitation, maintenance and change-over. The
facility also produces powdered drink mixes for private label companies and
international customers. In addition to its manufacturing capabilities, the
facility contains quality control and research and development labs.

Future Salt Lake City Facility. In response to increased sales and the
anticipated increase in demand for nutritional supplements, the Company has
leased a 418,000 square-foot manufacturing, warehouse and office facility
located in Salt Lake City, Utah. This facility is being built specifically for
the Company and is expected to

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<PAGE> 39

become operational in mid-1997. The New Facility will more than double current
distribution capacity. A significant portion of office, distribution and bar
manufacturing operations will be consolidated in the New Facility. In addition,
the New Facility will have 85,000 square-feet of capacity for manufacturing
capsules and tablets to supplement Nion's manufacturing facility. Raw materials
and finished products will be stored within the New Facility, utilizing
Automated Guided Vehicles, narrow aisles and radio frequency technology. The New
Facility will also contain an order picking module called the "pick tunnel," a
560-foot-long racking unit that holds 1,012 SKUs in a four-level structure. The
system is designed to provide high-speed distribution and has the software
capabilities to run up to 13 customer orders simultaneously. The Company expects
the new system will improve the current rate at which the Company selects and
sorts orders at its distribution facility. With this new system, the Company
expects to be able to ship directly to customers and fulfill orders with greater
accuracy. In addition to the 24 acres on which the New Facility is being built,
the Company purchased an additional 10 contiguous acres for future expansion.
See "Business -- Properties."

Nion Facility. The Nion capsule and tablet manufacturing facility is
located in Irwindale, California. The 95,000 square-foot facility operates under
pharmaceutical Good Manufacturing Practices ("GMP") and holds an
over-the-counter drug license. A number of the Company's products, including
those of Great American Nutrition and Schiff, as well as private label products,
are produced in this state-of-the-art facility, which can produce over 18
million capsules and tablets per day and operates 24 hours per day, six days per
week. The facility can also fill 85,000 bottles per day on six high-speed
packaging lines. In addition to its manufacturing capabilities, the facility
contains product quality and research and development labs. In order to meet
growing demand, Nion expanded in Southern California by 34,000 square-feet in
June 1996 to 129,000 square-feet, and will further expand with another 85,000
square-feet in the New Facility. The Company expects the expansion will allow
Nion to produce the Company's products along with its additional private label
business for the foreseeable future.

American Bottling and Beverage Facility. The American Bottling and
Beverage facility, which manufactures American Body Building beverages, is
located in Walterboro, South Carolina and supplies beverages across North
America and Europe. This plant began producing beverages under the American Body
Building label in December 1995 and currently has the capacity to bottle 480,000
bottles per day. The 55,000 square-foot facility is on a ten-acre site with
access to the port of Charleston. The site allows for expansion up to another
50,000 square-feet, allowing for increases in both manufacturing and warehousing
capacity. With the current production lines, the Company believes the capacity
exists to meet projected volumes for the next three years. The Company can
operate the facility on three manufacturing shifts, but typically dedicates two
shifts to manufacturing and the third to sanitation, maintenance and
change-over. The Company has entered into an arrangement with a bottle supplier
whose plant will be constructed adjacent to the American Bottling and Beverage
facility. The new bottling plant, which opened in October of 1996, has reduced
the Company's freight costs, increased supply and reduced on-hand bottle
inventory.

American Nutrition Bars Facility. The American Nutrition Bars facility in
City of Industry, California produces nutrition bars. The plant produces Tiger's
Milk and Fi-Bar products as well as private label nutrition bars. The Company
plans to close the City of Industry facility (one of two facility leases has
been terminated by the Company) and relocate the American Nutrition Bars
operations to the New Facility in mid-1997. The bar manufacturing capacity at
the New Facility is expected to exceed the capacity of the City of Industry
facility. The original facility could blend approximately 128,000 pounds of
ingredients and could extrude approximately 880,000 bars per day. The Company
could operate the facility on three manufacturing shifts, but typically
dedicated two shifts to manufacturing and the third to sanitation, maintenance
and change-over. The state-of-the-art extrusion equipment gives American
Nutrition Bars the flexibility to produce a wide array of bars in many forms and
shapes.

Science Foods Facility. Effective January 1, 1997, the Company acquired
the assets of Science Foods. The Science Foods facility, located in Las Vegas,
Nevada, manufactures the Science Foods brand beverages and supplies these drinks
to approximately 2,000 health and fitness clubs located primarily in the western
United States. The 27,500 square-foot facility has the capacity to bottle 64,000
bottles per day. The Company believes that a bottling plant located in the
western United States will complement the Company's South Carolina facility.
Significant freight cost savings are expected as the Company will have the
capability of delivering its American Body Building beverages to the western
United States more economically.

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<PAGE> 40

Quality Standards. The Company is committed to meeting the highest quality
standards in the industry. The Company's manufacturing facilities are in the
initial evaluation and implementation phases of ISO 9000 certification. As part
of this process, all testing and inspection procedures performed by more than 35
quality control professionals are standardized and periodically evaluated for
compliance. Each of the Company's manufacturing sites is equipped with
microbiology and quality control laboratories. Samples are evaluated using
visual and flavor profiles as well as analytical testing using high pressure
liquid chromatography, atomic absorption, a UV fluorometer, thin layer
chromatography and infrared spectrophotometric equipment. The Company's products
are also subject to extensive shelf life stability testing through which the
Company determines the effects of aging on its products. The Company's product
retention program allows the Company to maintain samples from each product batch
shipped and to analyze such samples to ensure product quality. Certified outside
laboratories are used routinely to evaluate the Company's laboratory performance
and to supplement its testing capabilities.

Purchasing. The Company focuses on purchasing raw materials from the
highest quality-cost effective vendors and sources its raw materials and
purchased goods from over 275 different qualified vendors. The Company orders
and purchases a majority of its raw materials from its Salt Lake City
headquarters, allowing the Company to benefit from volume purchasing discounts.

Distribution. The Company's main distribution center is currently located
within the 152,000 square-foot Salt Lake City facility, however, each satellite
facility has the capability to ship directly to customers. In addition to its
domestic distribution facilities, the Company has distribution capabilities in
the United Kingdom, Spain and Canada. The recent acquisition of Weider Spain
enables the Company to manufacture nutritional supplements in Spain and market
nutritional supplements throughout continental Europe, including Italy, Germany,
France, Belgium, the Netherlands, Luxembourg, Portugal and Spain. Through Weider
Canada, the Company markets nutritional supplements to South America, Eastern
Europe and the Pacific Rim. These acquisitions provide the Company with the
rights to manufacture and market nutritional supplements worldwide, excluding
Australia, New Zealand, Japan and South Africa. The Company expects that its
distribution capacity will be more than doubled as a result of the construction
of the New Facility. The majority of the distribution capacity currently located
in the Salt Lake City facility will be moved to the New Facility and each
satellite facility in California and South Carolina will maintain the capability
to ship directly to customers.

COMPETITION

The nutritional supplement industry consists of six principal types of
suppliers: independent health food suppliers, who focus primarily on vitamins
and nutritional supplements; mass volume retail suppliers, who sell nutritional
products that have mass appeal; gym and health club product companies; direct
sale and mail order marketers; private label manufacturers; and major
pharmaceutical companies. The majority of competitors in the nutritional
supplement industry are small marketing operations focused on one or two of
these distribution channels.

The Company does not compete with any one competitor in all of its
distribution channels. The Company's primary competitors in the independent and
natural health food market include Nature's Way, Nutraceuticals, Solgar,
Twinlab, Rexall Sundown and EAS. In the mass volume retail market, competitors
include Amerifit, Richardson Labs, Slim-Fast, Thompson Medical and Cybergenics.
Gyms and health club suppliers include Costello's and Nature's Best. In the
direct sale and mail order markets, competitors include Amrion, Amway, Nu-Skin,
Usana and in the private label manufacturing market, competitors include GNP,
Pharmavite, Leiner, Tishcon and Northridge Labs. In addition, large
pharmaceutical companies and packaged food and beverage companies compete with
the Company on a limited basis in the nutritional supplement market. Increased
competition from such companies could have a material adverse effect on the
Company as they have greater financial and other resources available to them and
possess extensive manufacturing, distribution and marketing capabilities far
greater than those of the Company.

The Company believes that by reacting quickly to market changes, scientific
discoveries and competitive challenges, the Company will continue to compete
effectively in the nutritional supplement industry. As the nutritional
supplement industry grows and evolves, the Company believes retailers will rely
heavily on suppliers,

40
<PAGE> 41

such as the Company, that can respond quickly to new opportunities, support them
with production capacity and flexibility, and provide innovative and high margin
products. In addition, retailers have begun to align themselves with suppliers,
such as the Company, who are financially stable, aggressively market a broad
portfolio of products and offer superior customer service. The Company believes
it has a distinct competitive advantage over other nutritional supplement
companies because of its portfolio of recognized brands, multiple distribution
channels and state-of-the-art manufacturing capabilities. The Company's
financial, marketing and manufacturing resources allow it to support advertising
and marketing brand campaigns and quickly develop, manufacture and innovate new
product concepts in response to industry trends.

REGULATION

The manufacturing, packaging, labeling, advertising, distribution and sale
of the Company's products are subject to regulation by one or more governmental
agencies, the most active of which is the FDA, which regulates the Company's
products under the FDCA and regulations promulgated thereunder. The Company's
products are also subject to regulation by the FTC, the CPSC, the USDA and the
EPA. The Company's activities are also regulated by various agencies of the
states, localities and foreign countries to which the Company distributes its
products and in which the Company's products are sold. The FDCA has been amended
several times with respect to dietary supplements, most recently by the NLEA and
the DSHEA.

The Company is a party to the Order with the FTC, which was signed by the
Parent in 1985. Pursuant to the Order, the Company is prohibited from making
certain advertising claims relating to the muscle building capabilities of
Anabolic Mega Paks and Dynamic Life Essence and any other product of
substantially similar composition. In connection with the Company's other food
products, the Company is similarly prohibited from making these claims unless
the Company is able to substantiate such claims. In 1986, the Parent was
required to pay a maximum amount of $400,000 pursuant to the Order as
reimbursements to purchasers of Anabolic Mega Paks and Dynamic Life Essence. To
the extent such reimbursements amounted to less than $400,000, the Parent was
required pursuant to the Order to pay the remainder to a designated research
center for the study of the relationship between nutrition and muscular
development. The Parent has paid all amounts required to be paid under the
Order. In September 1991, the FTC informed the Company that the FTC had reviewed
the several compliance reports which had been filed from March 1986 through and
including June 20, 1991 and no action was planned at such time. Although the
Company has received occasional inquiries from the FTC regarding compliance
matters since September 1991, the FTC has not taken any formal action regarding
the Company's compliance with the Order.

The Company manufactures certain products pursuant to contracts with
customers who distribute the products under their own or other trademarks. Such
customers are subject to governmental regulations in connection with their
purchase, marketing, distribution and sale of such products, and the Company is
subject to such regulations in connection with the manufacture of such products
and its delivery of services to such customers. However, the Company's contract
manufacturing customers are independent companies, and their labeling, marketing
and distribution of such products is beyond the Company's control. The failure
of these customers to comply with applicable laws or regulations could have a
material adverse effect on the Company.

The Company has a number of individuals dedicated to regulatory compliance,
including a Vice President of Quality Control, a Director of Regulatory Affairs
and a Vice President of Research, in addition to a number of outside legal
consultants. The Vice President of Quality Control is responsible for conforming
each of the Company's manufacturing facilities to applicable GMPs and federal
and state regulations. The Director of Regulatory Affairs' responsibilities
include ensuring that all product packaging and advertising comply with FDA and
FTC requirements and serving as the primary liaison between the Company and the
Company's outside

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<PAGE> 42

patent consultants. The Vice President of Research is responsible for submitting
structure/function claims to the FDA and validating any technical claims made in
any of the Company's advertising or packaging.

The Company may be subject to additional laws or regulations administered
by the FDA or other federal, state or foreign regulatory authorities, the repeal
or amendment of laws or regulations which the Company considers favorable, such
as the DSHEA, or more stringent interpretations of current laws or regulations,
from time to time in the future. The Company is unable to predict the nature of
such future laws, regulations, interpretations or applications, nor can it
predict what effect additional governmental regulations or administrative
orders, when and if promulgated, would have on its business in the future. They
could, however, require the reformulation of certain products to meet new
standards, the recall or discontinuance of certain products not able to be
reformulated, imposition of additional recordkeeping requirements, expanded
documentation of the properties of certain products, expanded or different
labeling and scientific substantiation. Any or all of such requirements could
have a material adverse effect on the Company's results of operations and
financial condition. See "Risk Factors -- Government Regulation."

EMPLOYEES

At February 28, 1997, the Company employed approximately 520 persons, of
whom approximately 290 were in management, sales, purchasing, logistics and
administration and approximately 230 were in manufacturing. Additionally, the
Company utilizes temporary employees in some of its manufacturing processes. For
fiscal 1996, the Company's temporary employment expense was approximately $3.8
million. The Company is not party to, and does not expect to be a party to, any
collective bargaining arrangements.

PROPERTIES

The Company operates the following facilities:

<TABLE>
<CAPTION>
LOCATION FUNCTION AGGREGATE SPACE LEASE/OWN
- --------------------- --------------------------------- -------------------- ---------
<S> <C> <C> <C>
Salt Lake City, UT Company headquarters; 152,000 square feet Own
manufacturing and distribution
center for capsules and
tablets, powdered drink mixes
and nutrition bars
Irwindale, CA Capsule and tablet manufacturing 129,000 square feet Lease
City of Industry, CA Nutritional bar manufacturing 35,000 square feet Lease
Walterboro, SC Liquids manufacturing 55,000 square feet Own
Las Vegas, NV Liquids manufacturing 27,500 square feet Lease
Montreal, Quebec Office and warehouse space 24,600 square feet Lease
Madrid, Spain Office and manufacturing 20,000 square feet Lease
</TABLE>

The Company owns a 152,000 square foot, state-of-the-art distribution,
manufacturing and office facility in Salt Lake City, Utah, which it has occupied
since December 1993. This facility has served as the Company's international
executive offices for management, sales and administration. In addition, this
facility is the distribution center for capsules and tablets, powdered drink
mixes and nutrition bars and provides 47,000 square feet for powdered drink mix
manufacturing operations. The Company also leases 67,000 square feet of
warehouse space in Salt Lake City.

The Company leases three separate facilities in Irwindale, California,
aggregating approximately 129,000 square feet for capsule and tablet
manufacturing operations. Capsules and tablets, sold by the Company under the
brand names Schiff, Excel, and Great American Nutrition, are produced in these
facilities, along with capsules and tablets for private label customers.

The Company currently leases a building in City of Industry, California,
that it is approximately 35,000 square feet for nutritional bar manufacturing
operations. Nutrition bars sold under the brand names Fi-Bar and Tiger's Milk
are produced at this facility, along with nutrition bars for private label
customers. The nutrition bar manufacturing operations will be moved to the New
Facility in 1997 and the City of Industry operations will be

42
<PAGE> 43

closed and the lease will be terminated. The lease for an additional 25,000
square foot facility has been terminated already.

The Company owns a 55,000 square foot liquids manufacturing facility in
Walterboro, South Carolina. This state-of-the-art facility produces drinks such
as American Body Building beverages sold through independent distributors and
produces other beverages sold under the Great American Nutrition label to mass
volume retail distributors. The liquids manufacturing operation formerly located
on Long Island, New York, was acquired on January 1, 1995, and subsequently
moved to Walterboro, South Carolina.

The Company has entered a lease for the 418,000 square foot New Facility,
which is expected to be operational by mid-1997. The lease agreement governing
the New Facility is for an initial term of 16 years with two 5-year renewal
options.

In connection with the acquisition of the assets of Science Foods,
effective January 1, 1997, the Company assumed a lease for a 27,500 square foot
manufacturing facility in Las Vegas, Nevada. This facility currently produces
Science Foods branded beverages that are sold through distributors to
approximately 2,000 health and fitness clubs. The lease for this facility
expires in November 1999.

In connection with the purchase of Weider Canada, on September 1, 1996, the
Company and Ben Weider entered into a two-year lease pursuant to which the
Company agreed to lease an approximately 24,600 square foot office and warehouse
facility in Montreal from Ben Weider.

In connection with the purchase of Weider Spain, on September 1, 1996, the
Company entered into an agreement to lease a 20,000 square foot office and
manufacturing facility in Madrid, Spain. The lease has a 10 year term.

TRADEMARKS AND PATENTS

At March 18, 1997 the Company had approximately 83 federal trademark
registrations and approximately 95 trademark applications pending with the
United States Patent and Trademark Office. The Company's policy is to pursue
registrations for all of the trademarks associated with its key products. The
Company protects its legal rights concerning its trademarks and is currently
enforcing several trademarks against infringement by litigation, both in the
United States and in foreign countries, including litigation pertaining to its
registered trademark Fat Burners(R). See "Business -- Legal Matters."

The Company relies on common law trademark rights to protect its
unregistered trademarks. Common law trademark rights do not provide the Company
with the same level of protection as afforded by a United States federal
registration of a trademark. In addition, common law trademark rights are
limited to the geographic area in which the trademark is actually used, while a
United States federal registration of a trademark enables the registrant to stop
the unauthorized use of the trademark by any third party anywhere in the United
States even if the registrant has never used the trademark in the geographic
area wherein the unauthorized use is being made (provided, however, that an
unauthorized third party user has not, prior to the registration date, perfected
its common law rights in the trademark in that geographical area). The Company
intends to register its trademarks in certain foreign jurisdictions where the
Company's products are sold. However, the protection available in such
jurisdictions may not be as extensive as the protection available to the Company
in the United States. See "Risk Factors -- Intellectual Property Protection."

Currently, the Company has three patent applications submitted to the
United States Patent and Trademark Office which are currently under review. The
Company expects definitive action from the United States Patent and Trademark
Office sometime in late 1997.

LEGAL MATTERS

Because the Company manufactures products designed to be ingested, it faces
the risk that materials used for the final products may be contaminated with
substances that may cause sickness or other injury to persons who have used the
products. Although the Company maintains production and operating standards
designed to prevent such events, certain portions of the process of product
development, including the production, harvesting, storage and transportation of
raw materials, along with the handling, transportation and storage of finished
products

43
<PAGE> 44

delivered to consumers, are not within the control of the Company. Furthermore,
sickness or injury to persons may occur if products manufactured by the Company
are ingested in dosages which exceed the dosage recommended on the product
label. The Company cannot control misuse of its products by consumers or the
marketing, distribution and resale of its products by its customers. With
respect to product liability claims in the United States, the Company has $1.0
million per occurrence and $1.0 million in aggregate liability insurance subject
to self-insurance retention of $25,000. In addition, if claims should exceed
$1.0 million, the Company has excess umbrella liability insurance of up to $25.0
million which it expects to increase to $90.0 million prior to the Offerings.
However, there can be no assurance that such insurance will continue to be
available, or if available, will be adequate to cover potential liabilities. The
Company generally does not obtain contractual indemnification from parties
supplying raw materials or marketing its products and, in any event, any such
indemnification is limited by its terms and, as a practical matter, to the
creditworthiness of the indemnification party. In the event that the Company
does not have adequate insurance or contractual indemnification, product
liabilities relating to defective products could have a material adverse effect
on the Company.

The Company and its subsidiary, Schiff Products, Inc. ("Schiff Products"),
together with other distributors, manufacturers and retailers of L-Tryptophan,
are defendants in actions in federal and state courts seeking compensatory and,
in some cases, punitive damages for alleged personal injuries resulting from the
ingestion of products containing allegedly contaminated L-Tryptophan. The
Company acquired Schiff Products pursuant to an asset acquisition transaction in
1989. Schiff Products was a distributor of L-Tryptophan, but neither the Company
nor Schiff Products ever distributed products that are the subject of the
lawsuits. In each lawsuit, the L-Tryptophan products were shipped by the entity
from whom the Company purchased the trademark Schiff and other assets in 1989.
The Company and Schiff Products have entered into an indemnification agreement
(the "Indemnification Agreement") with Showa Denko America ("SDA"), a U.S.
subsidiary of a Japanese corporation, Showa Denko, K.K. ("SDK"). Under the
Indemnification Agreement, SDA agreed to assume the defense of all claims
arising out of the ingestion of L-Tryptophan products, pay all legal fees and
indemnify the Company and its affiliates against liability in any action if it
is determined that a proximate cause of the injury sustained by the plaintiff in
the action was a constituent of the raw material sold by SDA to Schiff Products,
or was a factor for which SDA or any of its affiliates was responsible, except
to the extent that action by the Company or Schiff Products proximately
contributed to the injury, and except for certain claims relating to punitive
damages. SDK has posted a revolving irrevocable letter of credit for the benefit
of the indemnified group if SDA is unable or unwilling to satisfy any claims or
judgments. SDK has unconditionally guaranteed the payment obligations of SDA
under the Indemnification Agreement. Although the Company believes that the
prospect of a material adverse effect on the Company's results of operations or
financial condition arising from these lawsuits is remote and no provision in
the Company's financial statements has been made for any loss that may result
from these actions, no assurance can be given that such lawsuits would not have
a material adverse effect on the results of operations or financial condition of
the Company. See "Risk Factors -- Products Liability."

The Company has filed suit in the United States District Court for the
District of Utah on March 20, 1995 against one of its competitors for
infringement of the Company's federally registered trademark Fat Burners(R). The
defendant has petitioned the United States Patent and Trademark office to cancel
the registration of the Fat Burners(R) trademark. The cancellation proceeding
has been suspended by the U.S. Trademark Office, pending the outcome of the
above-noted litigation. The defendant had filed a motion for summary judgment,
which was denied and the case is still in the discovery stage.

The Company was named as one of several defendants in a suit filed by John
Psathas in California Superior Court, Contra Costa County in December 1996
alleging unfair competition and false advertising under California law. Mr.
Psathas alleges that the defendants, including the Company, promoted and sold a
product known as Steel Bars, the labels and advertising materials for which
contained incorrect information concerning the product's nutritional content.
Mr. Psathas seeks, among other things, injunctive relief prohibiting the alleged
conduct and compelling restitution of monies obtained from the sale of Steel
Bars and attorneys' fees. The Company answered the complaint on February 27,
1997 and denied all material allegations. If the Company cannot reach an
agreeable settlement with Mr. Psathas, the Company intends to defend the
complaint vigorously.

The Natural Resources Defense Council (the "NRDC") filed a suit in the San
Francisco Superior Court on February 3, 1997, naming Schiff Products, Inc., as a
defendant. The complaint in that action contends that

44
<PAGE> 45

calcium supplements sold by the Company and many other nutritional supplement
companies in California do not comply with Proposition 65. Proposition 65
prohibits businesses from exposing any person to a substance known to the State
of California to cause cancer or reproductive harm without warning that person
prior to the exposure. Warnings are not required if the exposure would not pose
a significant risk. Also, the laws implementing Proposition 65 provide that no
warning is required for exposures to substances that occur naturally in food.
Proposition 65 provides for penalties of $2,500 for each time a person is
exposed to a product that violates the requirements of Proposition 65. In its
suit the NRDC questions whether the presence of lead in calcium supplements is
at a sufficiently high level to require a warning. The Company's position is
that lead in calcium supplements is at a very low level and that, moreover,
calcium supplements are food, and any lead present is naturally occurring. The
Company owns Schiff Products and will be defending the NRDC action against
Schiff. Since the lawsuit was recently filed and served, it is too early to
determine the probable outcome or cost of defending the action. The Attorney
General of the State of California has also filed suit against several
manufacturers for marketing calcium supplements that exceed lead content under
Proposition 65. Although the Company has not been named in this suit, there can
be no assurance that the Company will not ultimately be named.

The Company is presently engaged in various other legal actions, and,
although ultimate liability cannot be determined at the present time, the
Company currently believes that the amount of any such liability from these
other actions and the lawsuits described in the preceding paragraphs, after
taking into consideration the Company's insurance coverage, will not have a
material adverse effect on its results of operations and financial condition.

45
<PAGE> 46

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The table below sets forth the names and ages at February 28, 1997 of the
directors and executive officers of the Company.

<TABLE>
<CAPTION>
DIRECTORS AND EXECUTIVE
OFFICERS AGE POSITION
- ------------------------- --- -----------------------------------------------------
<S> <C> <C>
Eric Weider.............. 33 Director and Chairman of the Board
Richard B. Bizzaro....... 54 Chief Executive Officer, President and Director
Robert K. Reynolds....... 40 Chief Operating Officer, Executive Vice President,
Secretary and Director
Richard A. Blair......... 37 Executive Vice President -- Sales and Marketing
Stephen D. Young......... 43 Executive Vice President -- Operations and Chief
Financial Officer
Ronald L. Corey.......... 58 Director
Roger H. Kimmel.......... 50 Director
George F. Lengvari....... 54 Director
</TABLE>

Eric Weider has been a director of the Company since June 1989, Chairman of
the Board since August 1996 and is currently President and Chief Executive
Officer of the Parent. Mr. Weider also serves as a member of the board of
directors of a number of public and private companies in the United States and
Canada, including the Parent and Mpact Immedia Corporation. Mr. Weider is also
the President of the Joe Weider Foundation.

Richard B. Bizzaro has been Chief Executive Officer, President and a
director of the Company since June 1990. Prior to his appointment as Chief
Executive Officer and President of the Company, he was Vice President of Sales
for the Parent, responsible for sales at Weider Nutrition and Weider Exercise
Equipment. Mr. Bizzaro has worked for the Company, the Parent or one of the
Parent's affiliates since 1983.

Robert K. Reynolds has been Executive Vice President, Chief Operating
Officer and Secretary of the Company since July 1992 and a director of the
Company since January 1994. Mr. Reynolds joined the Company in September 1990 as
Chief Financial Officer. Mr. Reynolds, a certified public accountant, is
primarily responsible for all domestic and international operations.

Richard A. Blair has been Executive Vice President -- Sales and Marketing
of the Company since January 1997. From January 1994 to January 1997, Mr. Blair
was Senior Vice President -- Sales of the Company. Mr. Blair is primarily
responsible for overseeing the national sales force and distribution channels
and for directing marketing, creative and advertising strategies. Mr. Blair
joined the Company in June 1991 and prior thereto was Director of Sales and
Marketing at Tunturi Sports Equipment Company, which he joined in 1984.

Stephen D. Young has been Executive Vice President -- Operations and Chief
Financial Officer of the Company since January 1997. From January 1994 to
January 1997, Mr. Young was Senior Vice President -- Finance and Chief Financial
Officer of the Company. Mr. Young joined the Company in September 1993. He is
responsible for all finance, accounting, information systems, human resources,
administration, due diligence on acquisitions, operations and product
development. Mr. Young is a certified public accountant and, prior to September
1993, was Vice President Finance at First Health Strategies, which he joined in
1983.

Ronald L. Corey has been a director of the Company since August 1996. Mr.
Corey has been President of the Club de Hockey Canadien Inc. (the Montreal
Canadiens) and the Molson Center Inc. since 1982. In addition, between 1985 and
1989, Mr. Corey held the position of Chairman of the Board and director of the
Montreal Port Corporation. Mr. Corey has served as a director of numerous
companies, including Banque Laurentienne, Reno-Depot Inc. and Transamerica Life
Companies.

Roger H. Kimmel has been a director of the Company since August 1996. Mr.
Kimmel has been a partner at the law firm of Latham & Watkins for more than five
years. Mr. Kimmel is a director of Algos Pharmaceutical Corporation and TSR
Paging Inc.

46
<PAGE> 47

George F. Lengvari has been a director of the Company since August 1996.
Mr. Lengvari has been Vice Chairman of the Parent since June 1995 and Chairman
of Weider Publications U.K. since September 1994. Prior to joining the Parent,
Mr. Lengvari was a partner for 22 years in the law firm Lengvari Braman and is
currently of counsel to the law firm LaPointe Rosenstein. Mr. Lengvari currently
serves as a member of the board of directors of the Parent.

The Bylaws of the Company provide for a Board of Directors of at least
three but not more than 15 directors. In accordance with the Bylaws, the Board
of Directors has fixed the number of directors at nine, leaving three vacancies
which the Parent expects to fill with at least two independent directors
promptly after the Offerings, with the first of such independent directors being
selected within three months after the Offerings and the second being selected
within six months after the Offerings. The Certificate of Incorporation provides
that holders of Class B Common Stock have the right to 10 votes on all matters
presented to stockholders of the Company for vote, including the election of
directors. As a result, the Parent, as the holder of all of the outstanding
shares of Class B Common Stock, will have the right to elect all of the
directors of the Company. Directors will be elected at the annual meeting of
stockholders, except for vacancies filled by the Board of Directors, and each
director will hold office until his successor is elected and qualified;
provided, however, unless otherwise restricted by the Company's Certificate of
Incorporation or law, any director or the entire Board of Directors may be
removed, either with or without cause, from the Board of Directors at any
meeting of stockholders by a majority of the votes cast and entitled to be voted
at that meeting. Officers serve at the discretion of the Board of Directors. See
"Description of Capital Stock -- Common Stock."

The Board of Directors created an Audit Committee which is responsible for
reviewing the results and scope of the audit and other services provided by the
Company's independent auditors. The Board of Directors also created a
Compensation Committee which is responsible for determining executive
compensation and administering the Stock Option Plan. The Board of Directors
intends to designate a committee consisting of independent directors to review
all material related party transactions. Messrs. Weider, Lengvari and Kimmel
serve on both the Audit and the Compensation Committees.

DIRECTOR COMPENSATION

Members of the Board of Directors who are not (i) employees of the Company
or (ii) employees or directors of the Parent (together, the "Independent
Directors") will receive an annual fee of approximately $12,000, options to
purchase 20,000 shares of Class A Common Stock upon agreeing to serve as a
director of the Company (or upon consummation of the Offerings if later) and
options to purchase 7,000 shares of Class A Common Stock upon completion of each
successive year of service as a director. Options granted to Independent
Directors will become exercisable in equal annual installments on each of the
first five anniversaries of the date of the grant so long as the Independent
Director continues to serve as a director of the Company. The Company will also
reimburse all directors for their expenses incurred in connection with their
activities as directors of the Company. Directors who are not Independent
Directors receive no compensation for serving on the Board of Directors.

COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company did not have a Compensation Committee during fiscal 1996.
Officers' compensation during fiscal 1996 to officers other than Messrs. Bizzaro
and Reynolds was determined by the Chief Executive Officer and Chief Operating
Officer and approved by the Compensation Committee of the Parent. Officers'
compensation during fiscal 1996 to Messrs. Bizzaro and Reynolds was determined
by the Compensation Committee of the Parent. The Parent's Compensation Committee
consisted of Messrs. Eric Weider, Ben Weider, and George F. Lengvari.

47
<PAGE> 48

EXECUTIVE COMPENSATION

The following table sets forth certain information with respect to the
compensation paid by the Company for services rendered to the Company in all
capacities for the fiscal year ended May 31, 1996 to its Chief Executive Officer
and to its four most highly paid executive officers other than the Chief
Executive Officer (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------- --------------- OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS/SARS(1) COMPENSATION(2)
- --------------------------------------- ---- -------- -------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Richard B. Bizzaro..................... 1996 $270,000 $425,476 15,169 $15,900
Chief Executive Officer and
President
Robert K. Reynolds..................... 1996 200,000 283,651 10,113 15,900
Chief Operating Officer, Executive
Vice President and Secretary
Richard A. Blair....................... 1996 145,000 141,826 4,035 15,900
Executive Vice President -- Sales and
Marketing
Richard S. Kashenberg(3)............... 1996 175,000 141,826 4,035 7,312
Senior Vice President; Chief
Executive Officer and President
of Nion
Stephen D. Young(4).................... 1996 110,000 93,605 4,035 8,100
Executive Vice President -- Operations
and Chief Financial Officer
</TABLE>

- ---------------
(1) The Company entered into Management Incentive Agreements pursuant to which
certain employees of the Company were granted performance units as incentive
compensation. See "-- Management Incentive Agreements."

(2) Other compensation for Messrs. Bizzaro, Reynolds and Blair in 1996 includes
matching contributions to the Company's 401(k) plans, health insurance
premium payments by the Company, long-term disability premium payments by
the Company, automobile allowances provided by the Company, and life
insurance premium payments by the Company.

(3) The Company began compensating Mr. Kashenberg on September 1, 1995. Mr.
Kashenberg's employment with the Company ended effective December 31, 1996.
Other compensation for Mr. Kashenberg in 1996 includes club membership dues
paid by the Company, automobile allowances paid by the Company, life
insurance premium payments by the Company, matching contributions to the
Company's 401(k) plan, health insurance premium payments by the Company in
1996 and long-term disability premium payments by the Company.

(4) Other compensation for Mr. Young in 1996 includes matching contributions to
the Company's 401(k) plan, health insurance premium payments by the Company,
long-term disability premium payments by the Company, and life insurance
premium payments by the Company.

MANAGEMENT INCENTIVE AGREEMENTS

The Company has management incentive agreements (the "Management Incentive
Agreements") pursuant to which certain employees of the Company (the
"Recipients") have been granted performance units ("Performance Units") as
incentive compensation. The Performance Units entitle the Recipients to a cash
payment or, at the option of the Company, shares of Class A Common Stock upon
the conversion of the Performance Unit. In accordance with the terms of the
Management Incentive Agreements, the Performance Units may be converted by the
Recipients upon the occurrence of any of the following events (each a
"Conversion Event"): the merger, consolidation or sale of all or substantially
all of the assets of the Company; the acquisition of 50% or more of the fair
market value of the outstanding capital stock of the Company by persons who were
not direct or indirect stockholders of the Company as of the grant date; the
initial public offering by the Company of its Common Stock; or the termination
of the employee's employment with the Company for any reason, including death or
disability.

48
<PAGE> 49

SUMMARY OF PERFORMANCE UNIT HOLDINGS AND PAYMENTS

The following table sets forth certain information relating to the
Performance Units held by each Recipient, after giving effect to the Offerings:

<TABLE>
<CAPTION>
PAYMENTS TO RECIPIENTS AFTER
OFFERINGS
------------------------------------
CLASS A COMMON STOCK
VALUE OF VALUE OF -----------------------
VESTED PERFORMANCE UNVESTED PERFORMANCE NUMBER OF
RECIPIENT UNITS UNITS CASH VALUE SHARES
- -------------------------- ------------------ ---------------------- ---------- ----------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Richard B. Bizzaro........ $ 6,815 $ -- $ 1,363 $ 5,452 495,645
Robert K. Reynolds........ 4,543 -- 909 3,635 330,430
Richard A. Blair.......... 574 502 172 402 36,543
Stephen D. Young.......... 574 502 172 402 36,543
David P. Mastroiani....... 574 502 172 402 36,543
Stephen J. Krzeski........ 574 502 172 402 36,543
----------- ---------- ---------- ----------- -------
Total........... $ 13,654 $ 2,008 $ 2,960 $ 10,695 972,247
=========== ========== ========== =========== =======
</TABLE>

A portion of the Performance Units granted to Recipients other than Messrs.
Bizzaro and Reynolds will be accelerated in connection with the Offerings and
the remainder of each such Recipient's unvested Performance Units will be
cancelled. As consideration for the unvested Performance Units to be cancelled
in connection with the Offerings Recipients other than Messrs. Bizzaro and
Reynolds will receive a grant of restricted Class A Common Stock for that number
of shares equal to (i) the excess of the current value of the cancelled
Performance Units over the base value of such Performance Units divided by (ii)
the initial public offering price of the Class A Common Stock. Such shares of
restricted Class A Common Stock will not be transferable prior to the expiration
of the transfer restriction, which will lapse as such shares vest. The vesting
schedule for the restricted shares shall be as follows: 20% of such shares vest
on the first anniversary of grant, with 20% vesting on each subsequent
anniversary until all such restricted shares have vested. If any Recipient of
restricted shares terminates his employment with the Company, the Company will
have the option to repurchase such Recipient's unvested restricted shares at the
base value of such shares.

Simultaneously with the Offerings, which constitute a Conversion Event, and
as reflected in the table above, the Company intends to pay amounts owed to
Messrs. Bizzaro and Reynolds under the Management Incentive Agreements in cash
and Class A Common Stock, with the number of shares of such Class A Common Stock
to be equal to 80% of the conversion value of the vested Performance Units held
by each of Messrs. Bizzaro and Reynolds divided by the initial public offering
price and the amount of cash to equal 20% of the conversion value of such vested
Performance Units. In addition, the Company intends to pay in full the amounts
owed to Recipients other than Messrs. Bizzaro and Reynolds under the Management
Incentive Agreement in cash and Class A Common Stock, with the number of shares
of such Class A Common Stock to be equal to 70% of the conversion value of the
vested Performance Units held by each of the Recipients other than Messrs.
Bizzaro and Reynolds divided by the initial public offering price and the amount
of cash equal to 30% of the conversion value of the vested Performance Units
held by each of the Recipients other than Messrs. Bizzaro and Reynolds. The
primary reason for the cash payments is to assist the Recipients with payment of
their personal income tax liabilities resulting from conversion of their
Performance Units. Upon conversion of a Performance Unit, Messrs. Bizzaro and
Reynolds will receive approximately 14,061 shares of Class A Common Stock and
Recipients other than Messrs. Bizzaro and Reynolds will receive approximately
5,270 shares of Class A Common Stock.

In order to further facilitate the payment of individual income taxes, the
Company will make available to each Recipient a loan in principal amount up to
30% of the conversion value of the vested Performance Units held by each
Recipient. Such loans to the Recipients will bear interest at 8.0% per annum and
will have terms of 5 years from the borrowing date and shall be secured by the
Recipients. Shares of Class A Common Stock received by a Recipient will not have
been registered pursuant to the Securities Act and may be resold by the
Recipient only pursuant to an effective registration statement, pursuant to Rule
144 or pursuant to another exemption under the Securities Act.

49
<PAGE> 50

In connection with a payment to the Recipients upon consummation of the
Offerings, the Company expects to issue not more than 972,247 shares of Class A
Common Stock to Recipients under the Management Incentive Agreements. The
estimated pro forma impact on the financial statements of the Company of
payments under the Management Incentive Agreements, as well as the issuance of
approximately 42,000 shares pursuant to the Equity Plan (see "-- Equity Plan"),
is summarized as follows.

<TABLE>
<CAPTION>
ESTIMATED IMPACT
----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
Performance Unit Conversion:
Class A Common Stock to be issued to Recipients................... $ 11,157
Cash paid to Recipients........................................... 3,339
-------
Total Performance Unit conversion.............................. $ 14,496
=======
Pro Forma Income Statement Impact:
Compensation expense recognized by Company........................ $ 14,496
Corporate income tax benefit...................................... (5,798)
-------
One-time charge to net income.................................. $ 8,698
=======
Pro Forma Balance Sheet Impact:
Cash paid to Recipients........................................... $ (3,339)
Loans to Recipients for personal income taxes..................... (4,097)
Cash income tax benefit........................................... 5,798
-------
Net reduction in cash.......................................... (1,638)
Loans to Recipients for personal income taxes..................... 4,097
-------
Net increase in assets......................................... $ 2,459
=======
Decrease to retained earnings..................................... $ (8,690)
Increase in paid-in capital for stock conversion.................. 11,157
-------
Net increase in stockholders' equity........................... $ 2,459
=======
</TABLE>

As a result of the conversion of $14.5 million in Performance Units upon
consummation of the Offerings, the Company will record a one-time after-tax
compensation expense of $8.7 million during the fourth quarter of fiscal 1997.
In addition, the Company will have a net cash outflow during the fourth quarter
of $1.6 million due to the partial payment of amounts owed to Recipients in cash
and loans made to Recipients for personal income taxes payable by such
Recipients in connection with the conversion of their Performance Units, which
would be offset by the cash income tax benefit associated with the non-cash
compensation expense as a result of the conversion. With respect to pro forma
balance sheet impacts, the Company expects an increase to stockholders' equity
during the fourth quarter of $2.5 million reflecting the conversion of
Recipients' Performance Units into Class A Common Stock and the reduction in
retained earnings due to the associated compensation charge net of tax.

In connection with the vesting of restricted shares granted to Recipients
(other than Messrs. Bizzaro and Reynolds) for unvested Performance Units
cancelled in connection with the Offerings, the Company expects an annual,
non-cash, pre-tax compensation expense of $400,000 per year for the next five
years.

All Recipients are subject to the short-swing profits rules under Section
16(b) of the Exchange Act. Pursuant thereto and to Section 83(b) of the Code,
each Recipient may elect, upon the issuance to him of such Class A Common Stock,
to be taxable thereon as of the date of issuance on the basis of the fair market
value of such restricted Class A Common Stock as of such date. By agreement with
each Recipient, the Company shall withhold such cash to make payment on behalf
of each Recipient to the applicable taxing authority.

EQUITY PLAN

On February 28, 1997, the Company adopted and the stockholders of the
Company approved the 1997 Equity Participation Plan of Weider Nutrition
International, Inc. (the "Equity Plan"). The principal purposes of

50
<PAGE> 51

the Equity Plan are to provide incentives for officers, employees and
consultants of the Company through granting of options, restricted stock and
other awards ("Awards"), thereby stimulating their personal and active interest
in the Company's development and financial success, and inducing them to remain
in the Company's employ. The Equity Plan is also intended to assist the Company
in attracting and retaining qualified non-employee directors by providing for
the automatic grant of non-qualified stock options to Independent Directors.

Upon consummation of the Offerings, the Company intends to grant to certain
executive officers and other employees non-qualified stock options to purchase
an aggregate of approximately 1,048,000 shares of Class A Common Stock, and to
each of the Independent Directors, non-qualified stock options to purchase
20,000 shares of Class A Common Stock each, all at an exercise price equal to
the public offering price. The other terms of such options, including
exercisability and vesting, will be determined by the Board of Directors or the
Committee (as defined herein) in its discretion, and may vary among such
options. In addition, upon consummation of the Offerings, the Company intends to
make stock payments of approximately 42,000 shares in the aggregate of Class A
Common Stock to certain employees of the Company based upon seniority as
determined by the Committee (as defined herein).

Under the Equity Plan, not more than 1,646,000 shares of Class A Common
Stock (or the equivalent in other equity securities) are authorized for issuance
upon exercise of options, stock appreciation rights ("SARs"), and other Awards,
or upon vesting of restricted or deferred stock awards. Furthermore, the maximum
number of shares which may be subject to Awards granted under the Equity Plan to
any individual in any fiscal year of the Company cannot exceed 300,000.

The principal features of the Equity Plan are summarized below, but the
summary is qualified in its entirety by reference to the Equity Plan, which is
filed as an exhibit to the registration statement of which this Prospectus is a
part.

Administration

Prior to the closing of the Offerings, the Board of Directors will
administer the Equity Plan. As soon as practical after the closing of the
Offerings, the Compensation Committee of the Board of Directors or another
committee thereof (the "Committee") will administer the Equity Plan with respect
to grants to employees or consultants of the Company and the full Board will
administer the Equity Plan with respect to options granted to Independent
Directors. The Committee will consist of at least two members of the Board of
Directors, each of whom is both a "non-employee director" for purposes of Rule
16b-3 under the Exchange Act ("Rule 16b-3") and an "outside director" for the
purposes of Section 162(m) of the Code.

Subject to the terms and conditions of the Equity Plan, the Committee has
the authority to select the employees and consultants to whom Awards are to be
made, to determine the number of shares to be subject thereto and the terms and
conditions thereof (including exercisability and vesting), and to make all other
determinations and to take all other actions necessary or advisable for the
administration of the Equity Plan with respect to grants or awards made to
employees or consultants. The Committee (and the Board of Directors) is also
authorized to adopt, amend and rescind rules relating to the administration of
the Equity Plan. Notwithstanding the foregoing, the Board of Directors shall
conduct the general administration of the Equity Plan with respect to Options
granted to Independent Directors.

Eligibility

Options, SARs, restricted stock and other Awards under the Equity Plan may
be granted to individuals who are employees or consultants of the Company (or
any future subsidiaries) selected by the Committee for participation in the
Equity Plan. In addition, the Equity Plan provides for automatic grants of
non-qualified stock options to Independent Directors.

Independent Directors

The Equity Plan provides for (i) automatic grants of non-qualified stock
options to purchase 20,000 shares of Class A Common Stock to each Independent
Director at the time of appointment or election to the Board of

51
<PAGE> 52

Directors (or upon the consummation of the Offerings in the case of Independent
Directors elected or appointed to the Board of Directors prior to the
consummation of the Offerings), and (ii) automatic grants of non-qualified stock
options to purchase 7,000 shares of Class A Common Stock to each Independent
Director upon each successive anniversary of the initial grant. The exercise
price of such options shall be the fair market value of a share of Class A
Common Stock on the date of grant. Each such option shall become exercisable in
equal annual installments on each of the first five anniversaries of the date of
the grant so long as the Independent Director continues to serve as a director
of the Company; provided, however, to the extent permitted by Rule 16b-3, the
Board of Directors may accelerate the exercisability of options upon the
occurrence of certain specified extraordinary corporate transactions or events.
See "-- Equity Plan -- Merger, Consolidation and Other Events." No portion of an
option granted to any Independent Director shall be exercisable after the eighth
anniversary of the date of grant or after the termination of the Independent
Director's services as director of the Company.

Awards under the Equity Plan

Each Award will be set forth in a separate agreement with the person
receiving the Award and will indicate the type, terms and conditions of the
Award.

Nonqualified Stock Options ("NQSOs"). NQSOs will provide for the right to
purchase Common Stock at a specified price which, except with respect to NQSOs
intended to qualify as performance-based compensation under Section 162(m) of
the Code, may be less than fair market value on the date of grant (but not less
than par value), and usually will become exercisable (in the discretion of the
Committee) in one or more installments after the grant date, subject to the
participant's continued employment with the Company and/or subject to the
satisfaction of individual or Company performance targets established by the
Committee. NQSOs may be granted for any term (not exceeding eight years)
specified by the Committee.

Incentive Stock Options ("ISOs"). ISOs will be designed to comply with
certain restrictions contained in the Code. Among such restrictions, ISOs must
have an exercise price not less than the fair market value of a share of Class A
Common Stock on the date of grant, may only be granted to employees, must expire
within a specified period of time following the Optionee's termination of
employment, and must be exercised within ten years after the date of grant; but
may be subsequently modified to disqualify them from treatment as ISOs. In the
case of an ISO granted to an individual who owns (or is deemed to own) at least
10% of the total combined voting power of all classes of stock of the Company,
the Equity Plan provides that the exercise price must be at least 110% of the
fair market value of a share of Common Stock on the date of grant and the ISO
must expire upon the fifth anniversary of the date of its grant.

Restricted Stock. Restricted Stock may be sold to participants at various
prices (but not below par value) and made subject to such restrictions as may be
determined by the Committee. Restricted stock, typically, may be repurchased by
the Company at the original purchase price if the conditions or restrictions are
not met. In general, restricted stock may not be sold, or otherwise transferred
or hypothecated, until restrictions are removed or expire. Purchasers of
restricted stock, unlike recipients of options, will have voting rights and will
receive dividends prior to the time when the restrictions lapse.

Deferred Stock. Deferred Stock may be awarded to participants, typically
without payment of consideration, but subject to vesting conditions based on
continued employment or on performance criteria established by the Committee.
Like restricted stock, deferred stock may not be sold, or otherwise transferred
or hypothecated, until vesting conditions are removed or expire. Unlike
restricted stock, deferred stock will not be issued until the deferred stock
award has vested, and recipients of deferred stock generally will have no voting
or dividend rights prior to the time when vesting conditions are satisfied.

Stock Appreciation Rights. SARs may be granted in connection with stock
options or other Awards, or separately. SARs granted by the Committee in
connection with stock options or other awards typically will provide for
payments to the holder based upon increases in the price of the Company's Common
Stock over the exercise price of the related option or other Awards, but
alternatively may be based upon criteria such as book value. Except as required
by Section 162(m) of the Code with respect to an SAR intended to qualify as
performance-based compensation as described in Section 162(m) of the Code, there
are no restrictions specified in the Equity Plan on the amount of gain
realizable from the exercise of SARs, although restrictions may be

52
<PAGE> 53

imposed by the Committee in the SAR agreements. The Committee may elect to pay
SARs in cash or in Common Stock or in a combination of both.

Dividend Equivalents. Dividend equivalents represent the value of the
dividends per share paid by the Company, calculated with reference to the number
of shares covered by the stock options, SARs or other Awards held by the
participant.

Performance Awards. Performance Awards may be granted by the Committee on
an individual or group basis. Generally, these Awards will be based upon
specific performance targets and may be paid in cash or in Class A Common Stock
or in a combination of both. Performance Awards may include "phantom" stock
Awards that provide for payments based upon increases in the price of the
Company's Class A Common Stock over a predetermined period. Performance Awards
may also include bonuses which may be granted by the Committee on an individual
or group basis and which may be payable in cash or in Class A Common Stock or in
a combination of both.

Stock Payments. Stock payments may be authorized by the Committee in the
form of shares of Class A Common Stock or an option or other right to purchase
Class A Common Stock as part of a deferred compensation arrangement or otherwise
in lieu of or in addition to all or any part of compensation, including bonuses,
that would otherwise be payable in cash to the employee or consultant.

The Committee may designate as "Section 162(m) Participants" certain
employees whose compensation for a given fiscal year may be subject to the limit
on deductible compensation imposed by Section 162(m) of the Code. The Committee
may grant Awards to Section 162(m) Participants that vest or become exercisable
upon the attainment of performance targets which are related to one or more of
the following performance goals: (i) pre-tax income; (ii) operating income;
(iii) cash flow; (iv) earnings per share; (v) return on equity; (vi) return on
invested capital or assets; (vii) earnings before interest, taxes, depreciation
and amortization ("EBITDA"); (viii) market value of Common Stock; and (ix) cost
reduction or savings.

Merger, Consolidation and Other Events

The Equity Plan provides the Committee (the Board with respect to options
granted to Independent Directors) discretion to amend the terms (such as
exercise price, number shares and vesting) of outstanding Awards and future
grants that may be made under the Equity Plan upon the occurrence of a
recapitalization, stock split, reorganization, merger, consolidation,
liquidation, dissolution, or sale, transfer, exchange or other disposition of
all or substantially all of the assets of the Company or other similar corporate
event and provides further, that in any event, upon the occurrence of a
"Corporate Transaction" or a "Change in Control" (each as defined in the Equity
Plan) all outstanding Awards shall become immediately exercisable, vested or
payable, as applicable, unless such Award is otherwise assumed by a successor or
replaced by a similar right with respect to securities of the successor entity
or subject to other limitation imposed at the time of grant.

Securities Laws and Federal Income Taxes

Securities Laws. The Equity Plan is intended to conform to the extent
necessary with all provisions of the Securities Act and the Exchange Act and any
and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including without limitation Rule 16b-3. The Equity Plan
will be administered, and options will be granted and may be exercised, only in
such a manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Equity Plan and options granted thereunder
shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.

General Federal Tax Consequences. Under current federal laws, in general,
recipients of awards and grants of nonqualified stock options, stock
appreciation rights, restricted stock, deferred stock, dividend equivalents,
performance awards, and stock payments under the Equity Plan are taxable under
Section 83 of the Code upon their receipt of Class A Common Stock or cash with
respect to such awards or grants and, subject to Section 162(m) of the Code, the
Company will be entitled to an income tax deduction with respect to the amounts
taxable to such recipients. Under Sections 421 and 422 of the Code, recipients
of ISOs are generally not taxable on their receipt of Class A Common Stock upon
their exercises of ISOs if the ISOs and option stock are held for

53
<PAGE> 54

certain minimum holding periods and, in such event, the Company is not entitled
to income tax deductions with respect to such exercises. Participants in the
Equity Plan will be provided with detailed information regarding the tax
consequences relating to the various types of awards and grants under the plan.

Section 162(m) Limitation. In general, under Section 162(m) of the Code
("Section 162(m)"), income tax deductions of publicly-held corporations may be
limited to the extent total compensation (including base salary, annual bonus,
stock option exercises and non-qualified benefits paid) for certain executive
officers exceeds $1.0 million (less the amount of any "excess parachute
payments" as defined in Section 280G of the Code) in any one year. Under a
Section 162(m) transition rule for compensation plans of corporations which are
privately held and which become publicly held in an initial public offering, the
Equity Plan will not be subject to Section 162(m) until the "Transition Date"
which is defined as the earliest of (i) the material modification of the Equity
Plan; (ii) the issuance of all Class A Common Stock and other compensation that
has been allocated under the Equity Plan; or (iii) the first meeting of
stockholders at which directors are to be elected that occurs after December 31,
2000. However, under Section 162(m), the deduction limit does not apply to
certain "performance-based compensation" established by an independent
compensation committee which is adequately disclosed to, and approved by,
stockholders. In particular, stock options and SARs will satisfy the
"performance-based compensation" exception if the awards are made by a
qualifying compensation committee, the plan sets the maximum number of shares
that can be granted to any person within a specified period and the compensation
is based solely on an increase in the stock price after the grant date (i.e. the
option exercise price is equal to or greater than the fair market value of the
stock subject to the award on the grant date). Thus, Awards other than options
and SARs, will qualify as "performance-based compensation" for purposes of
Section 162(m) if granted or subject to vesting based upon preestablished
objective performance goals, the material terms of which are disclosed to and
approved by the stockholders of the Company.

The Company has attempted to structure the Equity Plan in such a manner
that, after the Transition Date, subject to obtaining shareholder approval for
the Equity Plan, the remuneration attributable to Awards which meet the other
requirements of Section 162(m) will not be subject to the $1.0 million
limitation. The Company has not, however, requested a ruling from the IRS or an
opinion of counsel regarding this issue.

EMPLOYEE PROFIT SHARING BONUS PLAN

The Company in the past has granted, and expects to continue to grant,
bonuses to employees under a nonqualified profit sharing program. Under this
program, the Board of Directors or a committee appointed thereby, at its
discretion, may grant bonuses following the end of a fiscal year in an aggregate
amount of up to 9% of the Company's income before income taxes and bonuses for
such fiscal year. For the fiscal year ended May 31, 1996, the Company incurred
bonus expenses of $2.4 million, representing 8.5% of income before bonuses of
$28.1 million. Of the $2.4 million, $1.3 million was paid to the senior
executives, who earn a fixed percentage of income before bonus upon achievement
of over 85% of budget. These fixed percentages for the seven senior executives
in fiscal 1996 were as follows:

<TABLE>
<CAPTION>
PERCENT OF INCOME
BEFORE BONUS
-----------------
<S> <C>
Richard B. Bizzaro........................................... 1.50%
Robert K. Reynolds........................................... 1.00
Richard A. Blair............................................. 0.50
Richard S. Kashenberg........................................ 0.50
Stephen D. Young............................................. 0.33
Other senior executive officers.............................. 0.66
-----
4.49%
=====
</TABLE>

In addition to the senior executives, the identity of bonus recipients and
the amount of any bonus will be determined by the Compensation Committee of the
Board of Directors in consultation with the Chief Executive Officer and the
Chief Operating Officer. The Company intends to adopt a bonus plan in 1998 tied
to return on capital.

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<PAGE> 55

EMPLOYEE BENEFIT PLANS

The Company has adopted a 401(k) profit sharing plan. The plan is available
to all United States employees with at least six consecutive months of service
who have attained the age of 18. Participants may defer up to 15% of their
pre-tax earnings, subject to certain limitations arising under federal income
tax laws. The Company matches up to 50% of each employee's contributions, up to
5% of such employee's pre-tax earnings and $4,000 per year. Company
contributions vest 20% per year of service beginning with the third year of
service.

The Company also maintains for all of its full-time employees health and
major medical insurance, dental insurance, long-term disability and accidental
death and dismemberment insurance. Term life insurance is provided to each full
time employee in an amount equal to such employee's annual base salary up to a
maximum coverage of $50,000.

EMPLOYMENT AGREEMENTS

Upon consummation of the Offerings, the Company expects to enter into
employment agreements with Messrs. Bizzaro and Reynolds that will extend through
May 31, 2002 and May 31, 2000, respectively. The annual base salary for Messrs.
Bizzaro and Reynolds will be $325,000 and $250,000, respectively, and will
increase $25,000 and $20,000, respectively, in each successive year. In
addition, Messrs. Bizzaro and Reynolds will be eligible for bonuses up to a
maximum of 150% of their annual base salaries and will receive options to
purchase 220,000 shares and 120,000 shares, respectively, of Class A Common
Stock. The agreements will contain customary confidentiality and non-competition
provisions.

The Company and Messrs. Blair, Krzeski, Mastroianni and Young (the
"Executives") entered into employment agreements (the "Employment Agreements")
effective June 1, 1994, which, as of May 31, 1995, continue on a month-to-month
basis until otherwise renewed or terminated. Pursuant to the terms of the
Employment Agreements, the base salary per year for Messrs. Blair, Krzeski,
Mastroianni and Young is $145,000, $85,000, $85,000, and $110,000, respectively.
Each Employment Agreement provides that the Company can increase or decrease the
Executive's base salary, consistent with general salary increases or decreases,
as the case may be, or as appropriate in light of the performance of the Company
and the Executive. In addition to the base salary that each Executive receives
pursuant to the Employment Agreements, each Executive is entitled to an annul
bonus in an amount equal to a percentage of the Executive's base salary
(prorated for a partial year) corresponding to a percentage of the annual
performance and profitability goal of the Company (as set forth therein).

Effective January 1, 1997, Mr. Kashenberg and the Company entered into a
Severance Agreement and General Release of All Claims which provides that the
employment relationship between the Company and Mr. Kashenberg terminated as of
December 31, 1996. As consideration for his resignation from the Company and the
discharge of all the Company's obligations to Mr. Kashenberg under his
employment agreement and the Management Incentive Agreements, the Company paid
Mr. Kashenberg $180,000. In addition, the Company and Mr. Kashenberg entered
into a Consulting and Noncompetition Agreement pursuant to which the Company
engaged Mr. Kashenberg as an independent contractor for a term beginning on
January 1, 1997 and continuing until October 31, 1997. As consideration for
services rendered by Mr. Kashenberg under the Consulting and Noncompetition
Agreement the Company agreed to pay Mr. Kashenberg approximately $10,400 per
month for the term of the agreement. Furthermore, the agreements with Mr.
Kashenberg preserve the customary noncompetition provision in Mr. Kashenberg's
employment contract beyond the termination of his employment agreement.

RETIREMENT BENEFITS

Messrs. Bizzaro and Reynolds are parties to separate Retirement Program
Benefits Agreements with the Parent pursuant to which each individual, on
retirement, will receive, on an annual basis for 20 years, a percentage of his
immediately preceding three years average base compensation, (excluding bonus),
less certain deductions for the present value of his future social security
benefits. The percentage of three years average base compensation actually paid
depends upon the individual's age on retirement and years of service with the
Company. The benefits are paid in monthly, quarterly or annual payments at the
discretion of the Parent. The

55
<PAGE> 56

Parent owns whole life insurance policies on the lives of Messrs. Bizzaro and
Reynolds, together with policies on the lives of other executives who are
participants in this program (none of whom are employees of the Company). The
policies have been contributed to a RABBI Trust of which Sanwa Bank California
is the trustee. Collectively, these policies fund the retirement benefits due
all participants. The Parent pays the annual premiums on all policies and
charges the Company for its portion of the premiums ($250,000 in fiscal 1996),
which is part of the corporate allocation between the Parent and the Company.
The Parent has accrued retirement benefit obligations to Mr. Bizzaro of $542,000
and to Mr. Reynolds of $94,000 as of May 31, 1996.

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<PAGE> 57

PRINCIPAL STOCKHOLDERS

The following table sets forth information with respect to the beneficial
ownership of the Common Stock as of the date hereof, after giving effect to the
stock split and the exchange of all of the outstanding shares of common stock of
Weider Nutrition for Common Stock. The table indicates beneficial ownership for
(i) each person who is known by the Company to beneficially own more than 5% of
any class of the Common Stock, (ii) each of the Company's directors, (iii) each
Named Executive Officer and (iv) all directors and executive officers as a
group.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
PRIOR TO THE OFFERINGS(1) AFTER THE OFFERINGS
------------------------------------------ ------------------------------------------
PERCENT OF
NUMBER PERCENT NUMBER PERCENT TOTAL VOTING
---------------------- ----------------- ---------------------- ----------------- POWER AFTER
NAME CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B THE OFFERINGS
- ------------------------ --------- ---------- ------- ------- --------- ---------- ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Weider Health and
Fitness(2)............. -- 15,687,432 --% 100.0% -- 15,687,432 --% 100.0% 95.1%
21100 Erwin Street
Woodland Hills, CA
91367
Hornchurch Investments
Ltd.(3)............... 1,293,266 -- 83.0 -- 1,293,266 -- 15.8 -- *
Atlantic House
4-8 Circular Road
Douglas, Isle of Man
Bayonne Settlement(4)... 172,426 -- 11.1 -- 172,426 -- 2.1 -- *
24 Union Street
St. Helier, Jersey
(U.K.)
Habib Settlement........ 34,485 -- 2.2 -- 34,485 -- * -- *
15 Avenue DuFour
Geneva, Switzerland
Eric Weider............. -- -- -- -- -- -- -- -- --
Richard B. Bizzaro...... -- -- -- -- 495,645 -- 6.1 -- *
Robert K. Reynolds...... -- -- -- -- 330,430 -- 4.0 -- *
Ronald L. Corey......... 57,427 -- 3.7 -- 57,427 -- * -- *
Roger H. Kimmel......... -- -- -- -- -- -- -- -- --
George F. Lengvari...... -- -- -- -- -- -- -- -- --
Richard A. Blair........ -- -- -- -- 36,543 -- * -- *
Stephen D. Young........ -- -- -- -- 36,543 -- * -- *
All executive officers
and directors as a
group (8 persons)..... 57,427 -- 3.7 -- 956,588 -- 11.7 -- *
</TABLE>

- ---------------
* Less than one percent.

(1) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares at a given date which such person has
the right to acquire within 60 days after such date. For purposes of
computing the percentage of outstanding shares held by each person or group
of persons named above on a given date, any security which such person or
persons has the right to acquire within 60 days after such date is deemed to
be outstanding but is not deemed to be outstanding for the purpose of
computing the percentage of ownership of any other person.

(2) Messrs. Weider and Lengvari, as executive officers and directors of the
Parent, may be deemed to share beneficial ownership of the shares shown as
beneficially owned by the Parent. Such persons disclaim beneficial ownership
of such shares. In addition, shares beneficially owned by the Parent exclude
shares held by Hornchurch, Bayonne and Mr. Corey, which such parties have
agreed to vote as directed by the Parent.

(3) Hornchurch is a corporation organized under the laws of the Isle of Man and
is controlled by a trust, the beneficiaries of which are the non-Canadian
resident children of Richard J. Renaud, formerly a director of the Company.
The trust that controls Hornchurch is administered by an independent
trustee. Mr. Renaud disclaims beneficial ownership of such shares.

(4) Bayonne Settlement is a trust organized under the laws of Jersey (U.K.), of
which family members of George F. Lengvari are included among the
beneficiaries. Bayonne Settlement is administered by an independent trustee.
Mr. Lengvari disclaims beneficial ownership of such shares.

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<PAGE> 58

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

CLASS B DIVIDEND

In connection with the Offerings, the Company intends to pay to the Parent
(the sole holder of Class B Common Stock) a one-time dividend in the amount of
$18.3 million at the closing of the Offerings. The Class B Dividend is
conditioned upon the closing of the Offerings. See "Use of Proceeds" and
"Description of Capital Stock -- Common Stock." In the past, the Company made
distributions to the Parent. After the Offerings, the Company will no longer
make distributions to the Parent in excess of those declared to all stockholders
of the Company. See Note 9 to the Company's consolidated financial statements.

PARENT NOTE

Under the terms of the Parent Note, the Company is obligated to pay to the
Parent the principal amount of $15.0 million on substantially the same terms as
those applicable to the revolving line of credit under the Existing Credit
Agreement.

ADVERTISING AGREEMENT

The Company and Weider Publications are parties to an Advertising Agreement
(the "Advertising Agreement") under which the Company is obligated (pursuant to
an annually updated notification in connection with the Company's budget) to
purchase a minimum number of advertising pages in each of the publications of
Weider Publications each month at a price below that charged to unaffiliated
third party advertisers. The advertising the Company purchases under the
Advertising Agreement will be priced at the direct production cost per page (the
"Ad Page Rate") for each publication for the first five years and at premiums to
the Ad Page Rate in subsequent years. The Ad Page Rate for each publication will
be determined on an annual basis in accordance with the terms of the Advertising
Agreement. The Ad Page Rate shall not apply to any company or business acquired
by the Company after December 31, 1996. Should Weider Publications develop or
acquire new publications during the term of the Advertising Agreement, the
Company will have the right, but not the obligation, to purchase advertising in
such publications on terms similar to those covering Weider Publications'
existing publications. The Advertising Agreement has a ten-year term and is
subject to termination by either party if certain specified events occur,
including a change of control of the Parent or an initial public offering of
Weider Publications. Although management believes that upon termination of the
Advertising Agreement the Company will be able to secure advertising at similar
rates, there can be no assurance that advertising at such rates will be
available.

CERTAIN INTERNATIONAL ACQUISITIONS AND ROYALTY ARRANGEMENTS

In connection with its strategy to expand its nutritional supplements
business in international markets, the Company has acquired or licensed from
related parties certain assets and distribution rights. The Company recently
acquired manufacturing capabilities in the United Kingdom, Spain and Canada and
recently licensed international rights to use the Weider name and trademarks.
The Company now controls distribution rights for the Weider name and trademarks
worldwide, except for Australia, New Zealand, Japan and South Africa. Sales
under these license arrangements are subject to certain royalty arrangements;
however, the Company is not required to pay any royalties with respect to sales
of its products in the United States, Canada, Mexico, Spain or Portugal (the
"Royalty-Free Territories").

Effective January 1, 1996, the Company acquired certain net assets in
Europe of Weider U.K. and affiliated entities, all related parties, for $1.5
million. Net assets acquired amounted to $48,942 and were recorded at their
historical cost. The remaining excess purchase price of approximately $1.4
million plus other acquisition costs amounting to $250,000 were charged to
retained earnings as a distribution to the Parent. The Company acquired assets
of Weider Canada for $4.0 million in September 1996 ($3.0 million was paid in
cash and $1.0 million was in the form of an earnout to be paid $40,000 per month
for 25 months). In connection with the purchase of Weider Canada, on September
1, 1996, the Company agreed to lease a 24,623 square foot office and warehouse

58
<PAGE> 59

facility in Montreal from Ben Weider (the "Weider Canada Lease"). The Weider
Canada Lease has a two-year term and an annual base rent of $98,492.

The Company obtained the exclusive right to use the Weider name and
trademarks outside of the Royalty-Free Territories throughout the world, with
the exceptions of Australia, New Zealand, Japan and South Africa, pursuant to a
sublicense agreement dated December 1, 1996 with Mariz Gestao E Investimentos
Limitada ("Mariz"). Mariz is a company incorporated under the laws of Portugal
and owned by a trust of which the family members of George F. Lengvari, a
director of the Company, are included among the beneficiaries. Mariz obtained
its exclusive international rights to use the Weider name and trademarks
pursuant to a license agreement, effective June 1, 1994, between Mariz and Joe
Weider, Ben Weider, Weider Sports Equipment and the Parent (the "Licensors").
Pursuant to the license agreement with Mariz, the Company is required to make
annual royalty payments to Mariz commencing on December 1, 1998 on sales of the
Company's brands in existence on December 1, 1996 in countries covered by the
agreement. The royalty payments are to be equal to (i) 4% of sales up to $33.0
million; (ii) 3.5% of sales greater than $33.0 million and less than $66.0
million; (iii) 3.0% of sales from $66.0 million to $100.0 million; and (iv) 2.5%
of sales over $100.0 million. In addition, the sublicense agreement with Mariz
includes an irrevocable buy-out option exercisable by the Company after May 31,
2002 for a purchase price equal to the greater of $7.0 million or 6.5 times the
aggregate royalties paid by the Company in the fiscal year immediately preceding
the date of the exercise of the option.

TRANSFER OF INTELLECTUAL PROPERTY

In July 1985, the Parent and Joe Weider entered into an agreement pursuant
to which the Parent was granted all rights, title and interest in and to a
system of weight training known as "The Weider System" and the exclusive right
to use of the name "Joe Weider" within the continental United States. As
consideration for such grants, the Parent agreed to pay Joe Weider approximately
$620,000 over seven years through May 31, 1992 and $450,000 for each year
thereafter for the rest of his lifetime (of which $250,000 is paid by the
Company). The Parent's right to use the "The Weider System" and "Joe Weider"
survives the death of Joe Weider. Since the transfer by Joe Weider of such
intellectual property to the Parent in 1985, the Parent has developed
approximately 80 related federal trademark registrations and approximately 108
related trademark applications that are used in the nutritional supplements
business.

Effective September 1, 1996, the Parent assigned to the Company
substantially all such intellectual property. The Parent retained three
trademarks used in both the Company's nutritional supplements business and the
Parent's body building and exercise equipment divisions; however, the Parent
entered into a Trademark and License Agreement granting to the Company a
perpetual, royalty-free, fully paid license to use such trademarks for its
nutritional supplements business. In addition, each of Weider Nutrition, Schiff
Products and American Nutrition Bars assigned to the Company all trademarks it
owned and either registered in the United States or filed applications for
registration in the United States for the nutritional supplements business.

HORNCHURCH INVESTMENTS LIMITED

Effective June 1, 1994, the Company sold Common Stock representing a 15%
ownership interest to Hornchurch, a related party. As consideration for such
Common Stock, the Company received from Hornchurch certain equity and debt
instruments of Hornchurch. Concurrent with the sale of such Common Stock to
Hornchurch, the Company declared and paid a dividend of that consideration to
Parent. The sale was recorded at the net book value of the Common Stock issued
($4,114,338) and no gain or loss was recognized. Subsequently thereto, Parent
acquired a portion of the shares of Class A Common Stock held by Hornchurch in a
series of transactions, thereby reducing Hornchurch's ownership interest in the
Company to 7.5% of the outstanding Common Stock of the Company prior to giving
effect to the Offerings. After giving effect to the Offerings, Hornchurch will
own 1,293,266 shares of Class A Common Stock, representing 15.8% of the
outstanding Class A Common Stock and 5.4% of the outstanding Common Stock.

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TAX SHARING AND INDEMNIFICATION AGREEMENT

Prior to the consummation of the Offerings, the Company, on behalf of
itself and its subsidiaries, and the Parent, on behalf of itself and its
subsidiaries, will enter into a Tax Sharing and Indemnification Agreement (the
"Tax Agreement"). The Tax Agreement generally provides that the Parent is
responsible for all taxes due with respect to taxable periods ending on or prior
to the closing of the Offerings (other than taxes for such periods relating to
the Company and its subsidiaries, for which the Company is responsible) and that
the Company is responsible for taxes of the Company and its subsidiaries due
with respect to all subsequent taxable periods. Subject to certain limitations,
the Company (and its subsidiaries) will be indemnified by the Parent, and the
Parent (and its subsidiaries) will be indemnified by the Company, against
payment of a tax liability properly allocable to the other under the agreement.
In addition, the Tax Agreement generally supersedes a tax sharing agreement
between Weider Nutrition, on behalf of itself and its subsidiaries, and the
Parent (the "Prior Tax Sharing Agreement"). With certain exceptions, the Prior
Tax Sharing Agreement will be terminated as of the closing of the Offerings. The
Prior Tax Sharing Agreement generally allocated to Weider Nutrition liability
for taxes of Weider Nutrition and its subsidiaries, calculated as if Weider
Nutrition and its subsidiaries filed tax returns separately from the Parent.

CERTAIN RELATIONSHIPS OF DIRECTORS

Eric Weider, Chairman of the Board of Directors of the Company, is
currently President, Chief Executive Officer and a director of the Parent. Mr.
Lengvari, a director of the Company, is currently Vice Chairman and a director
of the Parent. Messrs. Weider and Lengvari will continue to serve as directors
of the Parent after the Offerings. In addition, Mr. Lengvari's family members
are included among the beneficiaries under the Bayonne Settlement, a trust that
owns 11.1% of the Class A Common Stock outstanding prior to the Offerings. In
addition, Mariz, a company owned by a trust of which family members of George F.
Lengvari, a director of the Company, are included among the beneficiaries, was
granted the exclusive right to use the Weider name and trademarks outside of the
United States, Canada and Mexico. The Company has sublicensed such rights from
Mariz. See "Certain Relationships and Related Party Transactions -- Transfer of
Intellectual Property."

Ronald L. Corey received fees from the Parent in connection with consulting
services rendered to the Parent in fiscal 1996. Latham & Watkins, of which Roger
H. Kimmel, a director of the Company, is a partner, performed legal services for
the Parent during the Parent's fiscal year ended May 31, 1996.

MANAGEMENT INCENTIVE AGREEMENTS

The Company entered into Management Incentive Agreements pursuant to which
certain employees of the Company were granted Performance Units as incentive
compensation. The Performance Units entitle the Recipients to a cash payment or,
at the option of the Company, shares of Class A Common Stock upon the conversion
of the Performance Units. In accordance with the terms of the Management
Incentive Agreements, the Performance Units may be converted by the Recipients
upon the occurrence of certain events, including the Offerings. Simultaneously
with the Offerings, the Company intends to pay in full the amounts owed to
Recipients under the Management Incentive Agreements in Class A Common Stock or,
at the election of the Recipient, in cash and Class A Common Stock, with the
number of shares of such Class A Common Stock to be determined using the initial
public offering price in the Offerings and with the amount of cash to be paid
not to exceed 45% of the value of such Recipient's Performance Units. In
connection with such payment, the Company expects to issue no more than 972,247
shares of Class A Common Stock to Recipients under the Management Incentive
Agreements. See "Management -- Management Incentive Agreements." In connection
with the sale of a sister subsidiary by the Parent in 1994, Messrs. Bizzaro and
Reynolds converted a portion of their Performance Units for which Mr. Bizzaro
received $531,777 and Mr. Reynolds received $354,517.

LOAN TO MR. BIZZARO

The Company loaned Mr. Bizzaro, President and Chief Executive Officer of
the Company, $200,000 pursuant to a promissory note dated August 15, 1994.
Borrowings under the promissory note bear interest at the

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rate of 7% per annum and mature on August 15, 2000. Borrowing under the note
outstanding at the closing of the Offerings will be offset by amounts payable to
Mr. Bizzaro under his Management Incentive Agreement. The note is secured by a
deed of trust to property owned by Mr. Bizzaro. At February 28, 1997,
approximately $235,000 in principal and interest was outstanding under the
promissory note.

SURF CITY SQUEEZE

Surf City Squeeze, Inc., an Arizona corporation ("Surf City Squeeze"), is a
customer of the Company that operates retail sales outlets for beverages that
contain certain of the Company's products. The Parent is the controlling member
in Surf Ventures L.L.C., the principal member of Surf City Squeeze. Messrs.
Bizzaro, Reynolds and Kimmel and Mr. Richard J. Renaud, individually, and trusts
of which (i) the family of Mr. George F. Lengvari are included as beneficiaries
and (ii) the non-Canadian resident children of Mr. Richard J. Renaud are
included as beneficiaries, are also members of Surf Ventures, L.L.C. The Company
had $754,000 in sales to Surf City Squeeze in fiscal 1996. The Company's
products sold to Surf City Squeeze are competitively priced. The Company is not
the exclusive supplier of nutritional supplement products to Surf City Squeeze.
On January 13, 1997, Surf City Squeeze filed a petition for bankruptcy
protection pursuant to Chapter 11 of the Bankruptcy Act. The Company's operating
results were not, and are not expected to be, materially impacted by Surf City
Squeeze's bankruptcy filing.

KASHENBERG SEVERANCE AGREEMENT

Effective January 1, 1997, Mr. Kashenberg and the Company entered into a
Severance Agreement and General Release of All Claims which provided that the
employment relationship between the Company and Mr. Kashenberg terminated as of
December 31, 1996. As consideration for his resignation from the Company and the
discharge of all the Company's obligations to Mr. Kashenberg under his
employment agreement and the Management Incentive Agreements, the Company paid
Mr. Kashenberg $180,000. In addition, the Company and Mr. Kashenberg entered
into a Consulting and Noncompetition Agreement pursuant to which the Company
engaged Mr. Kashenberg as an independent contractor for a term beginning on
January 1, 1997 and continuing until October 31, 1997. As consideration for
services rendered by Mr. Kashenberg under the Consulting and Noncompetition
Agreement the Company agreed to pay Mr. Kashenberg approximately $10,400 per
month for the term of the agreement. Furthermore, the Consulting and
Noncompetition Agreement provides that the customary noncompetition provision in
Mr. Kashenberg's employment contract survives the termination of his employment.

INTEREST PAID TO PARENT

While the Parent and its subsidiaries, including the Company, are parties
to the Existing Credit Agreement, the Parent administers the Existing Credit
Agreement on behalf of all of its subsidiaries, including the Company, arranging
borrowings and servicing the debt for its subsidiaries. The Parent is the
principal guarantor, and the Company is the principal borrower, under the
Existing Credit Agreement. The Parent charges its subsidiaries, including the
Company, interest on borrowings under the Existing Credit Agreement, with the
Company's portion of such charges (the "Service Charge") bearing interest at
prime rate plus 1% (revolving line of credit) and prime rate plus 1 1/4% (term
note). The Service Charge exceeds the interest paid to GECC by the Parent on
such borrowings due primarily to lower contracted rates offered under the
Existing Credit Agreement of LIBOR plus 2 1/4% on revolver loans and LIBOR plus
2 1/2% on term loans. The Service Charge amounted to approximately $113,000,
$378,000 and $485,000 in fiscal 1995 and 1996 and for the nine month period
ended February 28, 1997, respectively. The Company did not borrow under any
prior credit agreements. The Service Charge was discontinued by the Parent as of
March 1, 1997. See Notes 5 and 9 to the Company's consolidated financial
statements.

In addition, the Company has intercompany indebtedness owed to Parent which
was incurred primarily in connection with certain acquisitions and taxes payable
by the Parent on behalf of the Company pursuant to a tax sharing agreement. The
intercompany indebtedness to Parent is adjusted daily for changes in the
Company's cash "sweep" position in the consolidated cash management system. The
Parent charges the Company interest on the intercompany indebtedness at prime
rate plus an interest rate spread as set forth in the credit agreement in effect
(1 1/4% as of February 28, 1997). Effective June 1, 1996, $15.0 million of the
intercompany indebtedness owed to

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Parent was in the form of the Parent Note, which bears interest at the prime
rate plus 1% and matures in January 2000. Interest paid to the Parent amounted
to approximately $218,000, $103,000, $453,000 and $1,125,000 in fiscal 1994,
1995 and 1996 and the nine months ended February 28, 1997, respectively. See
Notes 5 and 9 to the Company's consolidated financial statements.

The Company intends to repay all borrowings under the Existing Credit
Agreement and all intercompany indebtedness owed to Parent with the net proceeds
from the Offerings plus borrowings under the New Credit Agreement. See "Use of
Proceeds."

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DESCRIPTION OF CAPITAL STOCK

Pursuant to the Company's Certificate of Incorporation, as in effect on the
date hereof, the Company's authorized capital stock consists of (i) 50 million
shares of Class A Common Stock, $.01 par value, (ii) 25 million shares of Class
B Common Stock, $.01 par value and (iii) 10 million shares of preferred stock,
$.01 par value (the "Preferred Stock"). The following summaries of certain
provisions of the Common Stock and Preferred Stock do not purport to be complete
and are subject to, and qualified in their entirety by, the provisions of the
Company's Certificate of Incorporation, which is included as an exhibit to the
Registration Statement of which this Prospectus forms a part, and by applicable
law.

COMMON STOCK

At February 28, 1997, there were 1,557,604 shares of Class A Common Stock
outstanding that were held by four stockholders of record and 15,687,432 shares
of Class B Common Stock outstanding held by the Parent. Each holder of Class A
Common Stock is entitled to one vote for each share held of record on the
applicable record date on all matters presented to a vote of stockholders,
including the election of directors. Each holder of Class B Common Stock is
entitled to ten votes per share on the applicable record date and is entitled to
vote, together with the holders of the Class A Common Stock, on all matters
which are subject to shareholder approval. The holders of shares of the Class A
Common Stock shall not have the right to convert their shares of Class A Common
Stock into any other securities of the Company. The holders of shares of the
Class B Common Stock at their election shall have the right, at any time or from
time to time, to convert any or all of their shares of Class B Common Stock into
shares of Class A Common Stock, on a one to one basis, by delivery to the
Company of the certificates representing such shares of Class B Common Stock
duly endorsed for such conversion.

Any shares of the Class B Common Stock that are transferred will
automatically convert into shares of the Class A Common Stock, on a one to one
basis effective as of the date on which certificates representing such shares
are presented for transfer on the books of the Company, unless transferred to a
Permitted Transferee. A Permitted Transferee generally means an affiliate of
the Parent. In certain circumstances set forth in the Certificate of
Incorporation, the change in ownership or control of a record or beneficial
holder of Class B Common Stock will also result in the conversion of such
holder's Class B Common Stock into Class A Common Stock. The Certificate of
Incorporation also provides that the Company will not register the transfer of
any shares of Class B Common Stock unless the transferee and the transferor of
such Class B Common Stock have furnished such affidavits and other proof as the
Company may reasonably request to establish that such proposed transferee is a
Permitted Transferee.

Subject to the rights of the holders of any outstanding Preferred Stock and
except for the Class B Dividend, each holder of Common Stock on the applicable
record date is entitled to receive ratably such dividends, if any, as may be
declared from time to time by the Board of Directors out of funds legally
available for that purpose. See "Dividend Policy." In the event of a
liquidation, dissolution or winding up of the Company, each holder of Common
Stock is entitled to share ratably in all assets remaining after payment of
liabilities, subject to prior distribution rights of Preferred Stock, if any,
then outstanding. In addition, the Certificate of Incorporation provides that in
the case of certain business combinations, all holders of the Common Stock shall
share ratably and equally in all consideration paid to stockholders of the
Company in connection with such business combination. Holders of Common Stock
have no cumulative voting rights or preemptive rights to purchase or subscribe
for any stock or other securities and there are no conversion rights or
redemption or sinking fund provisions with respect to such stock. All
outstanding shares of Common Stock are validly issued, fully paid and
non-assessable, and the shares of Class A Common Stock to be issued upon the
closing of the Offerings, when issued and sold as contemplated by this
Prospectus, will be validly issued, fully paid and nonassessable.

PREFERRED STOCK

The Company's Certificate of Incorporation authorizes 10 million shares of
Preferred Stock. The Board of Directors is authorized to divide the Preferred
Stock into one or more series and, with respect to each series, to determine the
preferences and rights and the qualifications, limitations, or restrictions
thereof, including the dividend rights, conversion rights, voting rights,
redemption rights and terms, liquidation preferences, sinking

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fund provisions, the number of shares constituting the series and the
designation of such series. The Board of Directors may, without stockholder
approval, issue Preferred Stock with voting and other rights that could
adversely affect the voting power of the holders of Common Stock and could have
certain anti-takeover effects. There are currently no shares of Preferred Stock
outstanding and the Company has no current intention to issue any shares of
Preferred Stock.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

The Certificate of Incorporation provides that a director of the Company
will not be personally liable to the Company or its stockholders for monetary
damages for any breach of fiduciary duty as a director, except in certain cases
where liability is mandated by the Delaware General Corporation Law (the
"DGCL"). The provision has no effect on any non-monetary remedies that may be
available to the Company or its stockholders, nor does it relieve the Company or
its directors from compliance with federal or state securities laws. The
Certificate of Incorporation and the Bylaws of the Company allow for
indemnification, to the fullest extent permitted by the DGCL, of any person who
is or was involved in any manner in any investigation, claim or other proceeding
by reason of the fact that such person is or was a director or officer of the
Company or is or was serving at the request of the Company as a director or
officer of another corporation, against all expenses and liabilities actually
and reasonably incurred by such person in connection with the investigation,
claim or other proceeding. Prior to the Offerings, the Company also plans to
obtain officer and director liability insurance with respect to certain matters,
including matters arising under the Securities Act.

SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW

Following the consummation of the Offerings, the Company will be subject to
the "business combination" statute of the DGCL. In general, such statute
prohibits a publicly held Delaware corporation from engaging in various
"business combination" transactions with any "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an "interested stockholder," unless (i) the transaction is approved by
the board of directors of the corporation prior to the date the interested
stockholder obtained such status, (ii) upon consummation of the transaction
which resulted in the stockholder becoming an interested stockholder, the
interested stockholder owns at least 85% of the outstanding voting stock of the
corporation outstanding at the time the transaction commenced, excluding for
purposes of determining the number of shares outstanding, those shares owned, by
(a) persons who are directors and also officers and (b) employee stock plans in
which employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange
offer, or (iii) on or subsequent to such date, the business combination is
approved by the board of directors and authorized at an annual or special
meeting of stockholders, and not by written consent, by the affirmative vote of
at least 66 2/3 of the outstanding voting stock which is not owned by the
interested stockholder. A "business combination" includes mergers, asset sales
and other transactions resulting in a financial benefit to a stockholder. An
"interested stockholder" is a person who, together with affiliates and
associates, owns (or, within three years, did own) 15% or more of the
corporation's voting stock. The statute could prohibit or delay the
accomplishment of mergers or other takeover or change in control attempts with
respect to the Company and, accordingly, may discourage attempts to acquire the
Company.

SECTION 228 OF THE DELAWARE GENERAL CORPORATION LAW

Section 228 of the DGCL allows any action which is required to be or may be
taken at a special or annual meeting of the stockholders of a corporation to be
taken without a meeting with the written consent of holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted, provided that the certificate of incorporation
of such corporation does not contain a provision to the contrary. The
Certificate of Incorporation contains no such provision, and, therefore,
pursuant to Section 228 and the Bylaws, stockholders holding a majority of the
voting power of the Common Stock will be able to effect most corporate matters
requiring stockholder approval by written consent, without the need for a
duly-noticed and duly-held meeting of stockholders. Following the consummation
of the Offerings, the Parent holdings of Class B Common Stock will

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represent approximately 95.0% of the voting power of the Common Stock. See "Risk
Factors -- Control by Principal Stockholder."

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is The Bank of New
York. Its telephone number is (212) 815-2728.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offerings, there has been no market for the Common Stock of
the Company. Future sales of substantial amounts of Common Stock in the public
market following the Offerings, or the perception that such sales could occur,
could adversely affect the market price of the Common Stock.

Upon the completion of the Offerings, the Company will have 8,171,851
shares of Class A Common Stock outstanding and 15,687,432 shares of Class B
Common Stock outstanding. Of these shares, the 5,600,000 shares of Class A
Common Stock sold in the Offerings will be freely tradable without restriction
under the Securities Act, unless held by "affiliates" of the Company, as that
term is defined in Rule 144 under the Securities Act. The remaining 2,571,851
shares of Class A Common Stock and 15,687,432 shares of Class B Common Stock
held by existing stockholders were issued and sold by the Company in reliance on
exemptions from the registration requirements under the Securities Act. These
shares may be sold in the public market only if registered, or pursuant to an
exemption from registration, such as the exemption provided by Rule 144 under
the Securities Act. The existing stockholders of the Company prior to the
completion of the Offerings, who hold 17,245,034 shares of Common Stock, have
entered into lock-up agreements under which such stockholders have agreed not to
offer, sell or otherwise dispose of any shares or securities exchangeable for or
convertible into shares of Common Stock owned by them for a period of 180 days
after the date of this Prospectus, without the prior written consent of Credit
Suisse First Boston Corporation. Upon expiration of the lock-up agreements,
17,245,034 shares of Common Stock will become available for sale in the public
market, subject to volume and manner of sale limitations pursuant to Rule 144
and 1,465,690 of such shares will be freely tradeable under Rule 144.

In general, under Rule 144 as in effect after April 29, 1997, commencing 90
days after the date of this Prospectus, a person who has beneficially owned
shares for at least one year is eligible to sell in "broker's transactions" or
to market makers, within any three-month period, a number of shares that does
not exceed the greater of (i) one percent of the number of shares then
outstanding or (ii) the average weekly trading volume of the Common Stock during
the four calendar weeks preceding such sale. Sales under Rule 144 are also
generally subject to certain notice requirements and to the availability of
specified current public information about the Company. Under Rule 144(k), a
person who is not deemed to have been an affiliate of the Company at any time
during the 90 days preceding a proposed sale, and who has beneficially owned the
shares proposed to be sold for at least two years, is entitled to sell such
shares without having to comply with the manner of sale, volume limitation,
notice or public information provisions of Rule 144.

Approximately 90 days after the date of this Prospectus, the Company
intends to file a Registration Statement on Form S-8 covering shares issuable
under the Stock Option Plan, thus permitting the resale of such shares in the
public market without restriction under the Securities Act, subject to
restrictions on resale contained in the Stock Option Plan.

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CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS

The following is a general discussion of certain United States Federal tax
consequences of the acquisition, ownership and disposition of Class A Common
Stock by a holder that is an individual, corporation, estate or trust and, for
United States Federal income tax purposes, is not a "United States person" (a
"Non-United States Holder"). This discussion is based upon the United States
Federal tax law now in effect, which is subject to change, possibly
retroactively. For purposes of this discussion, a "United States person" means a
citizen or resident of the United States; a corporation, a partnership or other
entity created or organized in the United States or under the laws of the United
States or of any political subdivision thereof; or an estate or trust whose
income is includible in gross income for United States Federal income tax
purposes regardless of its source. This discussion does not consider any
specific facts or circumstances that may apply to a particular Non-United States
Holder. Prospective investors are urged to consult their tax advisors regarding
the United States Federal tax consequences of acquiring, holding and disposing
of Class A Common Stock, as well as any tax consequences that may arise under
the laws of any foreign, state, local or other taxing jurisdiction.

DIVIDENDS

Dividends paid to a Non-United States Holder will generally be subject to
withholding of United States Federal income tax at the rate of 30% (or at a
reduced tax treaty rate), unless the dividend is effectively connected with the
conduct of a trade or business within the United States by the Non-United States
Holder, in which case the dividend will be subject to the United States Federal
income tax on net income on the same basis that applies to United States persons
generally. In the case of a Non-United States Holder which is a corporation,
such effectively connected income also may be subject to the branch profits tax.
Non-United States Holders should consult their tax advisors concerning any
applicable income tax treaties that may provide for a lower rate of withholding
or other rules different from those described above.

GAIN ON DISPOSITION

A Non-United States Holder will generally not be subject to United States
Federal income tax on gain recognized on a sale or other disposition of Class A
Common Stock unless (i) the gain is effectively connected with the conduct of a
trade or business within the United States by the Non-United States Holder, (ii)
in the case of a Non-United States Holder who is a nonresident alien individual
and holds the Class A Common Stock as a capital asset, such holder is present in
the United States for 183 or more days in the taxable year of disposition and
either such individual has a "tax home" in the United States or the gain is
attributable to an office or other fixed place of business maintained by such
individual in the United States or (iii) the Company is or has been a "U.S. real
property holding corporation" for United States Federal income tax purposes
(which the Company does not believe that it is or is likely to become). Gain
that is effectively connected with the conduct of a trade or business within the
United States by the Non-United States Holder will be subject to the United
States Federal income tax on net income on the same basis that applies to United
States persons generally (and, with respect to corporate holders, under certain
circumstances, the branch profits tax) but will not be subject to withholding.
Non-United States Holders should consult their own tax advisors concerning any
applicable treaties that may provide for different rules.

FEDERAL ESTATE TAXES

Class A Common Stock owned or treated as owned by an individual who is not
a citizen or resident (for United States estate tax purposes) of the United
States at the date of death will be included in such individual's estate for
United States Federal estate tax purposes, unless an applicable estate tax
treaty provides otherwise.

INFORMATION REPORTING AND BACKUP WITHHOLDING

The Company generally must report annually to the Internal Revenue Service
and to each Non-United States Holder the amount of dividends paid to, and the
tax withheld with respect to, such holder, regardless of whether

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any tax was actually withheld. This information may also be made available to
the tax authorities of a country in which the Non-United States Holder resides.

Under temporary United States Treasury regulations, United States
information reporting requirements and backup withholding tax will generally not
apply to dividends paid on the Class A Common Stock to a Non-United States
Holder at an address outside the United States. Payments by a United States
office of a broker of the proceeds of a sale of the Class A Common Stock is
subject to both backup withholding at a rate of 31% and information reporting
unless the holder certifies its Non-United States Holder status under penalties
of perjury or otherwise establishes an exemption. Information reporting
requirements (but not backup withholding) will also apply to payments of the
proceeds of sales of the Class A Common Stock by foreign offices of United
States brokers, or foreign brokers with certain types of relationships to the
United States, unless the broker has documentary evidence in its records that
the holder is a Non-United States Holder and certain other conditions are met,
or the holder otherwise establishes an exemption.

Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules will, in certain circumstances, be refunded or credited
against the Non-United States Holder's United States Federal income tax
liability, provided that the required information is furnished to the Internal
Revenue Service.

PROPOSED REGULATIONS

Under current United States Treasury regulations, dividends paid to an
address in a foreign country are presumed to be paid to a resident of that
country (unless the payor has knowledge to the contrary) for purposes of the
withholding discussed above and, under the current interpretation of United
States Treasury regulations, for purposes of determining the applicability of a
tax treaty rate. Under recently proposed United States Treasury regulations that
are proposed to be effective for payments made after December 31, 1997 (the
"Proposed Regulations"), however, a Non-United States Holder of Class A Common
Stock who wishes to claim the benefit of an applicable treaty rate would be
required to satisfy applicable certification requirements. Under the Proposed
Regulations, dividend payments would also be made subject to information
reporting and backup withholding unless these applicable certification
requirements are satisfied. In addition, under the Proposed Regulations, in the
case of Class A Common Stock held by a foreign partnership, (x) the
certification requirement would generally be applied to the partners of the
partnership and (y) the partnership would be required to provide certain
information, including a United States taxpayer identification number. The
Proposed Regulations also provide look-through rules for tiered partnerships.
There can be no assurance that the Proposed Regulations will be adopted or as to
the provisions that they will include if and when adopted in temporary or final
form.

UNITED STATES FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT

Under the Foreign Investment in Real Property Tax Act ("FIRPTA"), any
person who acquires a "United States real property interest" (as described
below) from a foreign person must deduct and withhold a tax equal to 10% of the
amount realized by the foreign transferor. In addition, a foreign person who
disposes of a United States real property interest generally is required to
recognize gain or loss that is subject to United States federal income tax. A
"United States real property interest" generally includes any interest (other
than an interest solely as a creditor) in a United States corporation unless it
is established under specific procedures that the corporation is not (and was
not for the prior five-year period) a "United States real property holding
corporation." The Company does not believe that it is a United States real
property holding corporation as of the date hereof, although it has not
conducted or obtained an appraisal of its assets to determine whether it is now
or will be a United States real property holding corporation. If it is not
established that the Company is not a United States real property holding
corporation, then, unless an exemption applies, shares of the Class A Common
Stock would be treated as United States real property interests. As discussed
below, however, an exemption should apply to the Class A Common Stock except
with respect to a Non-United States Holder whose beneficial ownership of Class A
Common Stock exceeds 5% of the total fair market value of the Class A Common
Stock.

An interest in a United States corporation generally will not be treated as
a United States real property interest if, at any time during the calendar year,
any class of stock of the corporation is "regularly traded" on an established
securities market (the "regularly-traded exemption"). The Company believes that,
following the

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consummation of the Offerings, the Company's Class A Common Stock will be
regularly traded on an established securities market within the meaning of the
applicable regulations, although there can be no assurance that the Class A
Common Stock, if so traded, will remain regularly traded. The remainder of this
discussion assumes that the Class A Common Stock is and will remain regularly
traded on an established securities market.

The regularly-traded exemption is not available to a regularly traded
interest (such as the Class A Common Stock) if such interest is owned by a
person who beneficially owns (actually or constructively) more than 5% of the
total fair market value of that class of interests at any time during the
five-year period ending on the date of disposition of such interest or other
applicable determination date. Accordingly, except with respect to a sale or
other disposition of Class A Common Stock by a Non-United States Holder whose
aggregate beneficial ownership has exceeded that 5% threshold, no withholding or
income taxation under the FIRPTA rules should be required with respect to the
sale, exchange or other disposition of Class A Common Stock by a Non-United
States Holder.

Any investor that may approach or exceed 5% ownership, either alone or in
conjunction with related persons, should consult its own tax advisor concerning
the United States tax consequences that may result.

68
<PAGE> 69

UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement, dated April 30, 1997 (the "U.S. Underwriting Agreement"), the
underwriters named below (the "U.S. Underwriters"), for whom Credit Suisse First
Boston Corporation, Salomon Brothers Inc, Adams, Harkness & Hill, Inc. and
Hambrecht & Quist LLC are acting as representatives (the "Representatives"),
have severally but not jointly agreed to purchase from the Company the following
respective numbers of U.S. Shares:

<TABLE>
<CAPTION>
NUMBER OF
U.S.
U.S. UNDERWRITERS SHARES
-------------------------------------------------------------------------- ---------
<S> <C>
Credit Suisse First Boston Corporation.................................... 912,000
Salomon Brothers Inc...................................................... 912,000
Adams, Harkness & Hill, Inc. ............................................. 608,000
Hambrecht & Quist LLC..................................................... 608,000
Bear, Stearns & Co. Inc. ................................................. 120,000
D.A. Davidson & Co. ...................................................... 60,000
Donaldson, Lufkin & Jenrette Securities Corporation....................... 120,000
Everen Securities, Inc. .................................................. 60,000
Fahnestock & Co. Inc. .................................................... 60,000
Invemed Associates, Inc. ................................................. 120,000
Jefferies & Company, Inc. ................................................ 120,000
Ladenburg, Thalmann & Co. Inc. ........................................... 60,000
Laidlaw Equities, Inc. ................................................... 60,000
Lehman Brothers Inc. ..................................................... 120,000
Lintz Glover White & Co., Inc. ........................................... 60,000
Montgomery Securities..................................................... 120,000
Morgan Stanley & Co. Incorporated......................................... 120,000
Piper Jaffray Inc. ....................................................... 60,000
Rodman & Renshaw, Inc. ................................................... 60,000
Sanders Morris Mundy...................................................... 60,000
Stifel, Nicolaus & Company, Incorporated.................................. 60,000
-----------
Total........................................................... 4,480,000
===========
</TABLE>

The U.S. Underwriting Agreement provides that the obligations of the U.S.
Underwriters are subject to certain conditions precedent and that the U.S.
Underwriters will be obligated to purchase all of the U.S. Shares offered hereby
(other than those shares covered by the over-allotment option described below)
if any are purchased. The U.S. Underwriting Agreement provides that, in the
event of a default by a U.S. Underwriter, in certain circumstances the purchase
commitments of non-defaulting U.S. Underwriters may be increased or the U.S.
Underwriting Agreement may be terminated.

The Company has entered into a Subscription Agreement, dated April 30, 1997
(the "Subscription Agreement"), with the Managers of the International Offering
(the "Managers") providing for the concurrent offer and sale of the
International Shares outside the United States and Canada. The closing of the
U.S. Offering is a condition to the closing of the International Offering and
vice versa.

The Company has granted to the U.S. Underwriters and the Managers options,
each exercisable by Credit Suisse First Boston Corporation ("CSFBC"), and
expiring at the close of business on the thirtieth (30th) day after the date of
this Prospectus, to purchase an aggregate of up to 840,000 additional shares at
the initial public offering price, less the underwriting discounts or
commissions, all as set forth on the cover page of this Prospectus. Such options
may be exercised only to cover over-allotments in the sale of the shares of
Class A Common Stock offered hereby. To the extent that these options to
purchase are exercised, each U.S. Underwriter and each Manager will become
obligated, subject to certain conditions, to purchase approximately the same
percentage of additional shares being sold to the U.S. Underwriters and the
Managers as the number of U.S. Shares set forth next to such U.S. Underwriter's
name in the preceding table and as the number set forth next to

69
<PAGE> 70

such Manager's name in the corresponding table in the prospectus relating to the
International Offering bears to the sum of the total number of shares of Class A
Common Stock in such tables.

The Company has been advised by the Representatives that the U.S.
Underwriters propose to offer the U.S. Shares in the United States and Canada to
the public initially at the public offering price set forth on the cover page of
this Prospectus and, through the Representatives, to certain dealers at such
price less a concession of $0.47 per share, and the U.S. Underwriters and such
dealers may allow a discount of $0.10 per share on sales to certain other
dealers. After the initial public offering, the public offering price and
concession and discount to dealers may be changed by the Representatives.

The public offering price, the aggregate underwriting discounts and
commissions per share and per share concession and discount to dealers for the
U.S. Offering and the concurrent International Offering will be identical.
Pursuant to an agreement between the U.S. Underwriters and Managers (the
"Intersyndicate Agreement") relating to the Offerings, changes in the public
offering price, concession and discount to dealers will be made only upon mutual
agreement of CSFBC, as representative of the U.S. Underwriters, and Credit
Suisse First Boston (Europe) Limited ("CSFBL") on behalf of the Managers.

Pursuant to the Intersyndicate Agreement, each of the U.S. Underwriters has
agreed that, as part of the distribution of the U.S. Shares and subject to
certain exceptions, it has not offered or sold, and will not offer or sell,
directly or indirectly, any shares of Class A Common Stock or distribute any
prospectus relating to the Class A Common Stock to any person outside the United
States or Canada or to any other dealer who does not so agree. Each of the
Managers has agreed or will agree that, as part of the distribution of the
International Shares and subject to certain exceptions, it has not offered or
sold, and will not offer or sell, directly or indirectly, any shares of Class A
Common Stock or distribute any prospectus relating to the Class A Common Stock
in the United States or Canada or to any dealer who does not so agree. The
foregoing limitations do not apply to stabilization transactions or to
transactions between the U.S. Underwriters and the Managers pursuant to the
Intersyndicate Agreement. As used herein, "United States" means the United
States of America (including the States and the District of Columbia), its
territories, possessions and other areas subject to its jurisdiction, "Canada"
means Canada, its provinces, territories, possessions and other areas subject to
its jurisdiction, and an offer or sale shall be in the United States or Canada
if it is made to (i) any individual resident of the United States or Canada or
(ii) any corporation, partnership, pension, profit-sharing or other trust or
other entity (including any such entity acting as an investment advisor with
discretionary authority) whose office most directly involved with the purchase
is located in the United States or Canada.

Pursuant to the Intersyndicate Agreement, sales may be made between the
U.S. Underwriters and the Managers of such number of shares of Common Stock as
may be mutually agreed upon. The price of any shares so sold will be the public
offering price, less such amount as may be mutually agreed upon by CSFBC, as
representative of the U.S. Underwriters, and CSFBL, on behalf of the Managers,
but not exceeding the selling concession applicable to such shares. To the
extent there are sales between the U.S. Underwriters and the Managers pursuant
to the Intersyndicate Agreement, the number of shares of Class A Common Stock
initially available for sale by the U.S. Underwriters or by the Managers may be
more or less than the amount appearing on the cover page of this Prospectus.
Neither the U.S. Underwriters nor the Managers are obligated to purchase from
the other any unsold shares of Class A Common Stock.

The Company and all of its current stockholders, directors and officers
have agreed that they will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file, or cause to be filed,
with the Securities and Exchange Commission a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), relating to any
additional shares of its Common Stock or securities convertible into or
exchangeable or exercisable for any shares of its Common Stock, or publicly
disclose the intention to make any such offer, sale, pledge, disposal or filing,
without the prior written consent of CSFBC for a period of 180 days after the
date of this Prospectus, excepting, in the case of the Company, grants of
employee stock options or rights pursuant to a plan in effect on the date of
this Prospectus, issuances pursuant to the exercise of such options or rights
and any filing of a registration statement under the Securities Act with respect
to any of the foregoing permitted issuances or grants.

The Representatives, on behalf of the U.S. Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the

70
<PAGE> 71

Securities Act of 1934 (the "Exchange Act"). Over-allotment involves syndicate
sales in excess of the offering size, which creates a syndicate short position.
Stabilizing transactions permit bids to purchase the underlying security so long
as the stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of Class A Common Stock in the open market after
the distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the Representatives to reclaim a selling concession from a
syndicate member when Class A Common Stock originally sold by such syndicate
member is purchased in a syndicate covering transaction to cover syndicate short
positions. Such stabilizing transactions, syndicate covering transactions and
penalty bids may cause the price of Class A Common Stock to be higher than it
would otherwise be in the absence of such transactions. These transactions may
be effected on The New York Stock Exchange or otherwise and, if commenced, may
be discontinued at any time.

The U.S. Underwriters have reserved up to 280,000 shares of Class A Common
Stock offered hereby for sale to certain directors, officers and employees of
the Company and its affiliates, business affiliates and related persons who have
expressed an interest in purchasing such reserved shares at the initial public
offering price. The number of shares available to the general public will be
reduced to the extent such employees purchase reserved shares. Any reserved
shares that are not so purchased by such persons will be offered by the U.S.
Underwriters to the general public on the same terms as the other shares offered
hereby.

The Company has agreed to indemnify the U.S. Underwriters and the Managers
against certain liabilities, including civil liabilities under the Securities
Act, or to contribute to payments that the U.S. Underwriters and the Managers
may be required to make in respect thereof.

Application has been made to list the Class A Common Stock on the New York
Stock Exchange under the symbol "WNI." In compliance with New York Stock
Exchange listing requirements, the Underwriters will sell round lots of 100 or
more shares of Class A Common Stock to a minimum of 2,000 beneficial owners.

The Underwriters have advised the Company that discretionary sales will not
exceed 5% of the shares of Class A Common Stock offered hereby.

71
<PAGE> 72

NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of the shares of Class A Common Stock in Canada is being
made only on a private placement basis exempt from the requirement that the
Company prepare and file a prospectus with the securities regulatory authorities
in each province where trades of the Class A Common Stock are effected.
Accordingly, any resale of the Class A Common Stock in Canada must be made in
accordance with applicable securities laws which will vary depending on the
relevant jurisdiction, and which may require resales to be made in accordance
with available statutory exemptions or pursuant to a discretionary exemption
granted by the applicable Canadian securities regulatory authority. Purchasers
are advised to seek legal advice prior to any resale of the Class A Common
Stock.

REPRESENTATIONS OF PURCHASERS

Each purchaser of the Class A Common Stock in Canada who receives a
purchase confirmation will be deemed to represent to the Company and the dealer
from whom such purchase confirmation is received that (i) such purchaser is
entitled under applicable provincial securities laws to purchase such Class A
Common Stock without the benefit of a prospectus qualified under such securities
laws, (ii) where required by law, that such purchaser is purchasing as principal
and not as agent and (iii) such purchaser has reviewed the text above under
"Resale Restrictions."

RIGHTS OF ACTION (ONTARIO PURCHASERS)

The shares of Class A Common Stock being offered are those of a foreign
issuer and Ontario purchasers will not receive the contractual right of action
prescribed by section 32 of the Regulation under the Securities Act (Ontario).
As a result, Ontario purchasers must rely on other remedies that may be
available, including common law rights of action for damages or rescission or
rights of action under the civil liability provisions of the U.S. federal
securities laws.

ENFORCEMENT OF LEGAL RIGHTS

All of the Company's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
Company or such persons. All or a substantial portion of the assets of the
Company and such persons may be located outside of Canada and, as a result, it
may not be possible to satisfy a judgment against the Company or such persons in
Canada or to enforce a judgment obtained in Canadian courts against such Company
or persons outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of a share of Class A Common Stock to whom the Securities Act
(British Columbia) applies is advised that such purchaser is required to file
with the British Columbia Securities Commission a report within ten days of the
sale of any Class A Common Stock acquired by such purchaser pursuant to the
Offerings. Such report must be in the form attached to British Columbia
Securities Commission Blanket Order BOR #95/17, a copy of which may be obtained
from the Company. Only one such report must be filed in respect of Class A
Common Stock acquired on the same date and under the same prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

Canadian purchasers of Class A Common Stock should consult their own legal
and tax advisers with respect to the tax consequences of an investment in Class
A Common Stock in their particular circumstances and with respect to the
eligibility of Class A Common Stock for investment by the purchaser under
relevant Canadian legislation.

72
<PAGE> 73

LEGAL MATTERS

The validity of the Class A Common Stock offered in the Offerings will be
passed upon for the Company by Latham & Watkins, New York, New York. Roger H.
Kimmel, a director of the Company, is a partner of Latham & Watkins. Certain
legal matters in connection with the Offerings will be passed upon for the U.S.
Underwriters and Managers by Irell & Manella LLP, Los Angeles, California.

EXPERTS

The consolidated financial statements of Weider Nutrition International,
Inc. at May 31, 1995 and 1996 and for the years ended May 31, 1994, 1995 and
1996 appearing in this Prospectus and the Registration Statement of which this
Prospectus is a part have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports appearing herein and elsewhere in the
Registration Statement and are included in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.

AVAILABLE INFORMATION

A Registration Statement on Form S-1 (together with all amendments,
exhibits and schedules thereto, the "Registration Statement") relating to the
Class A Common Stock offered by the Company has been filed with the Securities
and Exchange Commission (the "Commission"), Washington, D.C. 20549. This
Prospectus, which constitutes part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement.
Statements contained in this Prospectus as to the content of any contract or any
other document referred to herein are not necessarily complete and in each
instance reference is made to the copy of such contract or document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference. The Registration Statement and the exhibits and
schedules thereto may be inspected at the public reference room maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should also be available for inspection and copying at is regional offices
located at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and 7 World Trade Center, 13th Floor, New York, New York
10048. In addition, certain information on file with the Commission can be
accessed via the Commission's Internet home page at http://www.sec.gov/. Copies
of such material can be obtained from the public reference section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates.

73
<PAGE> 74

WEIDER NUTRITION INTERNATIONAL, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Independent Auditors' Report.......................................................... F-2

Consolidated Balance Sheets at May 31, 1995 and 1996 and unaudited at February 28,
1997................................................................................ F-3

Consolidated Statements of Income for the Years Ended May 31, 1994, 1995 and 1996
and unaudited for the Nine Months Ended February 28, 1996 and 1997.................. F-4

Consolidated Statements of Stockholders' Equity for the Years Ended May 31, 1994,
1995 and 1996 and unaudited for the Nine Months Ended February 28, 1997............. F-5

Consolidated Statements of Cash Flows for the Years Ended May 31, 1994, 1995 and 1996
and unaudited for the Nine Months Ended February 28, 1996 and 1997.................. F-6

Notes to Consolidated Financial Statements............................................ F-8
</TABLE>

F-1
<PAGE> 75

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Weider Nutrition International, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Weider Nutrition
International, Inc. and subsidiaries (collectively, the "Company") as of May 31,
1995 and 1996, and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the three years in the period ended May 31,
1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that out audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the consolidated financial position of Weider Nutrition
International, Inc. and subsidiaries at May 31, 1995 and 1996, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended May 31, 1996 in conformity with generally
accepted accounting principles.

DELOITTE & TOUCHE LLP

Salt Lake City, Utah
July 10, 1996
(September 26, 1996 as to last
paragraph in Note 5 and the "Litigation"
paragraph of Note 7)

F-2
<PAGE> 76

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
MAY 31, 1995 AND 1996 AND UNAUDITED FEBRUARY 28, 1997
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
FEBRUARY 28, 1997
-------------------------
PRO FORMA
1995 1996 UNAUDITED UNAUDITED
------- -------- ---------- ----------
<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents..................... $ 2,272 $ 1,592 $ 1,065
Accounts receivable, net of allowance for
doubtful accounts of $150 (1995) and $137
(1996)..................................... 21,497 33,526 34,739
Other receivables............................. 475 1,035 1,968
Inventories................................... 18,204 42,382 46,677
Prepaid expenses and other.................... 732 4,806 2,775
Deferred taxes................................ 1,433 2,704 3,053
------- -------- --------
Total current assets....................... 44,613 86,045 90,277
------- -------- --------
Property and equipment, net..................... 9,954 21,411 26,298
------- -------- --------
Other assets:
Intangible assets, net........................ 14,452 23,783 26,658
Deposits and other assets..................... 804 1,404 4,918
Deferred taxes................................ 225 504 534
------- -------- --------
Total other assets......................... 15,481 25,691 32,110
------- -------- --------
Total assets.......................... $70,048 $133,147 $148,685
======= ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable.............................. $11,451 $ 19,093 $ 13,135
Accrued expenses.............................. 1,881 6,668 6,959
Current portion of long-term debt............. 2,709 9,032 7,456
Payable to Weider............................. 3,528 3,747 925
------- -------- --------
Total current liabilities.................. 19,569 38,540 28,475
------- -------- --------
Long-term debt.................................. 22,379 55,275 79,907
------- -------- --------
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $.01 per share;
10,000,000 shares authorized, no shares
issued and outstanding.....................
Class A and Class B Common Stock, par value
$1.00 per share; 100,000 shares authorized,
1,195.17 issued and outstanding............ 1 1 1 $ 1
Additional paid-in-capital.................... 4,480 4,480 4,480 4,480
Foreign currency translation.................. -- -- (131) (131)
Retained earnings............................. 23,619 34,851 35,953 17,620
------- -------- -------- --------
Total stockholders' equity................. 28,100 39,332 40,303 $ 21,970
------- -------- -------- ========
Total liabilities and stockholders'
equity.............................. $70,048 $133,147 $148,685
======= ======== ========
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE> 77

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED MAY 31, 1994, 1995 AND 1996
AND UNAUDITED FOR THE NINE MONTHS ENDED FEBRUARY 28, 1996 AND 1997
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
FEBRUARY 28,
-----------------------
1994 1995 1996 1996 1997
------- ------- ----------- -------- -----------
UNAUDITED
<S> <C> <C> <C> <C> <C>
Net sales............................ $67,870 $90,927 $ 186,405 $128,448 $ 151,407
Cost of goods sold................... 39,287 55,411 116,177 80,419 94,008
------- ------- -------- ------- -------
Gross profit......................... 28,583 35,516 70,228 48,029 57,399
------- ------- -------- ------- -------
Operating expenses:
Selling and marketing.............. 12,548 15,472 26,596 18,175 23,415
General and administrative......... 5,868 6,198 10,924 7,290 10,296
Amortization of intangible
assets.......................... 813 1,107 2,079 1,570 1,500
Impairment of intangible assets.... -- -- -- -- 2,095
Research and development........... 1,115 1,449 1,469 1,156 1,539
------- ------- -------- ------- -------
Total operating expenses........ 20,344 24,226 41,068 28,191 38,845
------- ------- -------- ------- -------
Income from operations............... 8,239 11,290 29,160 19,838 18,554
------- ------- -------- ------- -------
Other income (expense):
Interest, net...................... (245) (1,079) (3,736) (2,748) (4,673)
Other.............................. (1,015) 147 (253) (177) (423)
------- ------- -------- ------- -------
Total........................... (1,260) (932) (3,989) (2,925) (5,096)
------- ------- -------- ------- -------
Income before income taxes........... 6,979 10,358 25,171 16,913 13,458
Provision for income taxes........... 2,845 4,266 10,207 6,858 5,383
------- ------- -------- ------- -------
Net income........................... $ 4,134 $ 6,092 $ 14,964 $ 10,055 $ 8,075
======= ======= ======== ======= =======
Pro forma net income per common and
common equivalent share
(unaudited)........................ -- -- $ 0.79 -- $ 0.43
======== =======
Pro forma common and common
equivalent shares outstanding
(unaudited)........................ -- -- 18,908,672 -- 18,908,672
======== =======
Supplemental pro forma net income per
common and common equivalent share
(unaudited)........................ -- -- $ 0.69 -- $ 0.41
======== =======
Supplemental pro forma common and
common equivalent shares
outstanding (unaudited)............ -- -- 23,859,283 -- 23,859,283
======== =======
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE> 78

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED MAY 31, 1994, 1995 AND 1996
AND UNAUDITED FOR THE NINE MONTHS ENDED FEBRUARY 28, 1997
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
CLASS
A FOREIGN
AND B ADDITIONAL CURRENCY
COMMON PAID-IN TRANSLATION RETAINED
STOCK CAPITAL ADJUSTMENTS EARNINGS TOTAL
------ ---------- ----------- -------- -------
<S> <C> <C> <C> <C> <C>
Balance at June 1, 1993............... $ 1 $ -- $ -- $ 19,485 $19,486
Net income.......................... -- -- -- 4,134 4,134
Distributions to Weider............. -- -- -- (674) (674)
---- ------ ----- ------- -------
Balance at May 31, 1994............... 1 -- -- 22,945 22,946
Net income.......................... -- -- -- 6,092 6,092
Issuance of common stock............ -- 4,480 -- -- 4,480
Distributions to Weider............. -- -- -- (5,418) (5,418)
---- ------ ----- ------- -------
Balance at May 31, 1995............... 1 4,480 -- 23,619 28,100
Net income.......................... -- -- -- 14,964 14,964
Distributions to Weider............. -- -- -- (3,732) (3,732)
---- ------ ----- ------- -------
Balance at May 31, 1996............... 1 4,480 -- 34,851 39,332
Net income (unaudited).............. -- -- -- 8,075 8,075
Distributions to Weider
(unaudited)...................... -- -- -- (6,973) (6,973)
Foreign currency translation
adjustments (unaudited).......... -- -- (131) -- (131)
---- ------ ----- ------- -------
Balance at February 28, 1997
(unaudited)......................... $ 1 $4,480 $(131) $ 35,953 $40,303
==== ====== ===== ======= =======
</TABLE>

F-5
<PAGE> 79

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MAY 31, 1994, 1995 AND 1996
AND UNAUDITED FOR THE NINE MONTHS ENDED FEBRUARY 28, 1996 AND 1997
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
FEBRUARY 28,
--------------------
1994 1995 1996 1996 1997
------- ------- -------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income............................. $ 4,134 $ 6,092 $ 14,964 $ 10,055 $ 8,075
Adjustments to reconcile net income to
cash provided by (used in) operating
activities:
Provisions for bad debts............ 101 108 98 156 131
Deferred tax provision.............. (129) (911) (1,550) (1,901) (378)
Depreciation and amortization....... 1,405 2,000 5,001 3,555 4,424
Impairment loss..................... -- -- -- -- 2,095
Changes in operating assets and
liabilities-net of assets acquired:
Accounts receivable................. 908 (4,240) (8,219) (6,866) (623)
Other receivables................... 763 (519) (496) (3,442) (732)
Inventories......................... (2,086) (8,928) (18,452) (10,779) (3,504)
Prepaid expenses and other.......... 388 (83) (3,742) (3,504) 2,035
Deposits and other assets........... (122) 75 (428) 351 (3,457)
Accounts payable.................... 3,156 1,031 881 (2,658) (6,780)
Accrued expenses.................... (107) 25 (259) (260) (1,248)
------- ------- -------- -------- --------
Net cash provided by (used in)
operating activities........... 8,411 (5,350) (12,202) (15,293) 38
------- ------- -------- -------- --------
Cash flows from financing activities:
Issuance of common stock............... -- 4,480 -- -- --
Distributions to Weider................ (673) (5,418) (3,731) (1,555) (6,973)
Net increase (decrease) in payable to
Weider.............................. (463) 1,914 182 23,925 (2,823)
Proceeds from long-term debt........... 3,445 17,953 35,250 9,500 36,030
Payments on long-term debt............. (3,672) (1,519) (4,949) (2,506) (13,481)
------- ------- -------- -------- --------
Net cash provided by (used in)
financing activities........... (1,363) 17,410 26,752 29,364 12,753
------- ------- -------- -------- --------
Cash flows from investing activities:
Purchase of companies, net of cash
acquired............................ (1,875) (8,495) (9,011) (9,011) (5,083)
Purchase of trademarks................. -- -- (135) (1,441) (1,761)
Purchase of property and equipment..... (5,171) (1,295) (6,084) (5,434) (6,343)
------- ------- -------- -------- --------
Net cash used in investing
activities................... (7,046) (9,790) (15,230) (15,886) (13,187)
------- ------- -------- -------- --------
Effect of exchange rate changes on
cash................................... -- -- -- -- (131)
------- ------- -------- -------- --------
Increase (decrease) in cash and cash
equivalents............................ 2 2,270 (680) (1,815) (527)
Cash and cash equivalents, beginning of
period................................. -- 2 2,272 2,272 1,592
------- ------- -------- -------- --------
Cash and cash equivalents, end of
period................................. $ 2 $ 2,272 $ 1,592 $ 457 $ 1,065
======= ======= ======== ======== ========
</TABLE>

(continued)

F-6
<PAGE> 80

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MAY 31, 1994, 1995 AND 1996
AND UNAUDITED FOR THE NINE MONTHS ENDED FEBRUARY 28, 1996 AND 1997
(DOLLARS IN THOUSANDS)

SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
FEBRUARY 28,
-------------------
1994 1995 1996 1996 1997
------ ------ ------- ------ ------
UNAUDITED
<S> <C> <C> <C> <C> <C>
Cash paid during the year for:
Interest......................... $ 297 $1,163 $ 3,816 $2,824 $4,684
Income taxes..................... 3,208 2,279 11,920 7,013 3,400
</TABLE>

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:

In connection with the acquisitions of net assets from other companies, the
Company assumed liabilities as follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
FEBRUARY 28,
-------------------
1994 1995 1996 1996 1997
------- ------- ------- ------- -------
UNAUDITED
<S> <C> <C> <C> <C> <C>
Fair value of assets acquired..... $ 1,004 $ 6,250 $18,497 $18,497 $ 4,472
Cost in excess of fair value of
net assets acquired............. 2,508 8,788 11,275 11,275 3,479
Cash paid, net of cash acquired... (1,875) (8,495) (9,011) (9,011) (5,083)
Debt and liabilities issued....... (1,226) (2,000) (7,063) (7,063) (1,300)
------- ------- ------- -------- -------
Liabilities assumed............... $ 411 $ 4,543 $13,698 $13,698 $ 1,568
======= ======= ======= ======== =======
</TABLE>

See notes to consolidated financial statements.

F-7
<PAGE> 81

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 1994, 1995 AND 1996
AND UNAUDITED FOR THE NINE MONTHS ENDED
FEBRUARY 28, 1997
(DOLLARS IN THOUSANDS EXCEPT SHARE DATA)

1. SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements
include the accounts of Weider Nutrition International, Inc. and its
wholly-owned subsidiaries (collectively, the "Company") which is a
majority-owned subsidiary of Weider Health and Fitness ("Weider" or the
"Parent"). All significant intercompany accounts and transactions have been
eliminated.

DESCRIPTION OF BUSINESS -- The Company is principally involved in the
development, manufacturing and marketing of nutritional supplement products.

USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS -- The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
sales and expenses during the reporting period. Actual results could differ from
those estimates.

CASH EQUIVALENTS -- Cash equivalents include highly liquid investments with
an original maturity of three months or less.

INVENTORIES -- Inventories are stated at the lower of cost (on a first-in,
first-out basis) or market.

PROPERTY AND EQUIPMENT -- Property and equipment are stated at cost less
accumulated depreciation. Depreciation and amortization expense was $592 (1994),
$894 (1995) and $2,922 (1996), computed primarily using the straight-line method
over the estimated useful lives of 31 years for buildings and 2 to 7 years for
other property and equipment.

INCOME TAXES -- The Company files consolidated returns with Weider for
Federal and state income tax purposes. For financial statement purposes, the
Company has provided for income taxes as if it were filing separately. The
Company records in its balance sheet deferred income tax liabilities and assets
for the expected future tax consequences of events that have been recognized in
different periods for financial statements versus tax returns. Current income
taxes payable are included in payable to Weider on the balance sheet.

NET SALES -- The Company recognizes sales upon shipment of a product to a
customer. Allowances are made for uncollectible accounts and future credits. Net
sales and receivables included a customer concentration as follows:

<TABLE>
<CAPTION>
1994 1995 1996
------- ------- --------
<S> <C> <C> <C>
Total net sales...................................... $67,870 $90,927 $186,405
General Nutrition Center ("GNC") net sales........... 18,043 23,600 30,579
GNC percent of net sales............................. 27% 26% 16%
GNC percent of receivables........................... 36 28 16
</TABLE>

FINANCIAL INSTRUMENTS -- The Company's financial instruments, when valued
using market interest rates, would not be materially different from the amounts
presented in the consolidated financial statements.

INTANGIBLE ASSETS -- Intangible assets are stated at cost and amortized
using the straight-line method over the estimated useful lives of the assets as
follows:

<TABLE>
<S> <C>
Cost in excess of fair value of net assets acquired.................... 10 - 15 years
Patents and trademarks................................................. 10 - 20 years
Non-compete agreement.................................................. 5 years
</TABLE>

F-8
<PAGE> 82

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

UNAUDITED PRO FORMA NET INCOME PER SHARE -- For purposes of computing the
pro-forma net income per share, all references to shares of Common Stock reflect
a 14,428.9-for-one stock split ("stock split") which will occur in conjunction
with the public offering. The calculation of pro forma net income per common and
common equivalent share was determined by dividing pro forma net income by the
pro forma common and common equivalent shares outstanding after giving
retroactive effect to the stock split and the issuance of 1,666,636 shares of
Class A Common Stock the proceeds from which would be necessary to pay the
one-time, $18.3 million Class B Dividend and otherwise does not give effect to
the offerings of approximately 5,600,000 shares of Class A Common Stock upon
effectiveness of the Registration Statement (the "Offerings"). The calculation
of supplemental pro forma net income per common and common equivalent share was
determined by dividing pro forma net income by the pro forma common and common
equivalent shares outstanding after giving retroactive effect to the stock
split, the Offerings and the issuance of an aggregate of 1,014,247 shares of
Class A Common Stock to senior executives and certain other qualifying
employees. The calculation reflects the retirement of debt with the proceeds of
the Offerings as if such debt was retired at the beginning of the period (which
would have the effect of reducing after-tax interest expense by $1.4 million in
fiscal 1996 and $1.6 million in the nine months ended February 28, 1997) but
does not give effect to the one-time compensation expense estimated at
approximately $14.5 million ($8.7 million, net of tax) arising from the issuance
of an aggregate of 1,014,247 shares of Class A Common Stock described above.
After giving pro forma effect to such compensation expense, supplemental pro
forma net income per common and common equivalent share would be reduced by
approximately $0.36 per share. In addition, in accordance with Securities and
Exchange Commission Staff Accounting Bulletin ("SAB") No. 83, shares issued and
share options or warrants granted within one year of or in contemplation of the
anticipated initial public offering of Class A Common Stock have been included
in the calculation of common share equivalents, using the treasury stock method
to determine the dilutive effect of the issuances, as if they were outstanding
for all periods presented. There are no dilutive common equivalent shares other
than those considered outstanding for all periods presented in accordance with
SAB No. 83.

UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS -- The consolidated
financial statements at February 28, 1997 and for the nine months ended February
28, 1996 and 1997 have been derived from unaudited consolidated financial
statements of the Company. Management believes the Company's unaudited
consolidated financial statements have been prepared on the same basis as the
audited financial statements and include all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of the financial
position and results of operations for such periods. Results for the nine months
ended February 28, 1997 have not been audited and are not necessarily indicative
of results to be expected for the full fiscal year.

UNAUDITED PRO FORMA STOCKHOLDERS' EQUITY -- The unaudited pro forma
stockholders' equity balance at February 28, 1997 gives effect to the $18.3
million distribution to Weider to be paid after the closing of the Company's
anticipated initial public offering but does not give effect to such initial
public offering and the use of proceeds therefrom.

ACCOUNTING STANDARDS -- In March 1995, the Financial Accounting Standards
Board issued SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of." This statement addresses the
accounting for the impairment of long-lived assets, such as property and
equipment, certain identifiable intangibles and goodwill related to those
assets. Long-lived assets and certain identifiable intangibles are to be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. An impairment loss
is recognized when the sum of the future cash flows is less than the carrying
amount of the asset. The statement also requires that long-lived assets and

F-9
<PAGE> 83

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

identifiable intangibles be accounted for at the lower of cost or fair value
less cost to sell. The Company adopted SFAS No. 121 effective June 1, 1996.
Subsequent to May 31, 1996, primarily as a result of the Company's decision to
discontinue manufacturing and marketing products containing ephedrine in capsule
and tablet form, the Company recognized an impairment of intangible assets
relating to the acquisitions of the Excel and Exceed brands of approximately
$2.1 million ($1.3 million, net of tax).

In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings per Share" which supersedes Accounting Principles Board Opinion
No. 15 "Earnings per Share" and replaces the presentation of primary earnings
per share with a presentation of basic earnings per share. It also requires dual
presentation of basic and diluted earnings per share on the face of the income
statement for all entities with complex capital structures and provides guidance
on other computational changes. SFAS No. 128 is effective for financial
statements for both interim and annual periods ending after December 15, 1997.
Earlier application is not permitted. The Company does not expect the adoption
of SFAS No. 128 to have a material impact on the financial position or results
of operations of the Company.

2. INVENTORIES

Inventories consisted of the following at May 31:

<TABLE>
<CAPTION>
1995 1996
------- -------
<S> <C> <C>
Raw materials.................................................... $ 6,628 $16,840
Work in process.................................................. 237 3,165
Finished goods................................................... 11,339 22,378
------- -------
Total.................................................. $18,204 $42,383
======= =======
</TABLE>

3. PROPERTY AND EQUIPMENT

Property and equipment is stated at cost and consists of the following at
May 31:

<TABLE>
<CAPTION>
1995 1996
------- -------
<S> <C> <C>
Land............................................................. $ 832 $ 1,679
Buildings........................................................ 6,770 6,970
Furniture and equipment.......................................... 5,055 15,772
Leasehold improvements........................................... -- 2,616
------- -------
Sub-total...................................................... 12,657 27,037
Less accumulated depreciation and amortization................... (2,703) (5,626)
------- -------
Total.................................................. $ 9,954 $21,411
======= =======
</TABLE>

In March 1996, the Company purchased a 24-acre parcel of land located in
Salt Lake City, Utah for cash of $2,091. The land was subsequently sold to a
leasing company for cost and the Company entered into a build-to-suit lease
agreement to construct its headquarters and manufacturing facility on the land.
The leasing company

F-10
<PAGE> 84

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

will spend approximately $16,900 to complete the project. The lease agreement
requires the Company to fund any leasehold improvements necessary in excess of
$5,852. The lease term will be for 16 years and, lease commitments total
approximately $1,855 per year for the first five years and approximately $24,216
in total obligations thereafter. Construction of this facility has commenced and
is expected to be completed by mid-1997. Included in prepaid expenses and other
is a deposit in escrow of $2,485 related to the sale of the land by the Company
and a cash advance to the leasing company which was refunded to the Company in
June 1996.

4. INTANGIBLE ASSETS

Intangible assets consist of the following at May 31:

<TABLE>
<CAPTION>
1995 1996
------- -------
<S> <C> <C>
Cost in excess of fair value of net assets acquired.............. $15,085 $26,360
Patents and trademarks........................................... 2,237 2,371
Non-compete agreement............................................ 500 500
------- -------
17,822 29,231
Less accumulated amortization.................................... (3,370) (5,448)
------- -------
Total.................................................. $14,452 $23,783
======= =======
</TABLE>

The intangible assets result from business combinations accounted for as
purchases and are stated at cost. Amortization expense was $813 (1994), $1,107
(1995) and $2,079 (1996).

5. LONG-TERM DEBT

Long-term debt consists of the following at May 31:

<TABLE>
<CAPTION>
1995 1996
-------- --------
<S> <C> <C>
Term note payable to General Electric Credit Corporation ("GECC")
bearing interest at prime plus 1.25%, quarterly principal
payments due through February 1997 of $750, through February
1998 of $1,000, through February 1999 of $1,250 and through
February 2000 of $1,750 (see Note 9)........................... $ 10,200 $ 18,250
$40,000 revolving line of credit to GECC bearing interest at
prime plus 1%, through January 2000 (see Note 9)............... 9,000 19,700
Note payable to Weider, unsecured, bearing interest at prime plus
1.00%, through January 2000.................................... -- 15,000
Note payable to the previous owner of American Body Building in
connection with an earnout agreement, due January 1997, subject
to achieving minimum sales levels (see Note 8)................. 2,000 1,000
Mortgage loan, due in monthly installments of $30 including
interest at 7.625% due February 2009........................... 3,164 3,078
Note payable in connection with an earnout agreement from the
acquisition of Nion, payable annually, based upon operating
income as defined (see Note 8)................................. -- 5,250
Note payable to the previous owner of Nion, quarterly
installments of $151 plus interest at 8% through September 1998
(see Note 8)................................................... -- 1,209
Other............................................................ 724 820
-------- --------
Total....................................................... 25,088 64,307
Less current portion............................................. 2,709 9,032
-------- --------
Long-term portion........................................... $ 22,379 $ 55,275
======= =======
</TABLE>

F-11
<PAGE> 85

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

As of May 31, 1996, future payments of long-term debt are due as follows:
$9,031 (1997), $6,343 (1998), $5,607 (1999), $5,359 (2000), $34,810 (2001) and
$3,157 thereafter.

The notes payable to GECC are secured by all of the real and personal
property of Weider and the common stock of the Company. In addition, the notes
contain certain covenants, which, among other things, require Weider (i) to
maintain specified financial ratios and levels, as defined, and (ii) to restrict
additional indebtedness, liens, investments and guarantees; limit payments for
dividends, stock repurchases and distributions; limit capital expenditures; and
restrict transactions with affiliates. At May 31, 1996, Weider was in compliance
with these covenants.

On September 26, 1996, the Company converted $15,000 of the $18,747 Due to
Weider balance to a note payable. Since the Company intended to refinance a
portion of the Due to Weider balance as of May 31, 1996 with long-term debt and
since this note has been executed, $15,000 of the balance has been classified as
long-term debt.

6. INCOME TAXES

The components of income tax expense were as follows for the years ended
May 31:

<TABLE>
<CAPTION>
1994 1995 1996
------ ------ -------
<S> <C> <C> <C>
Current................................................. $2,974 $5,177 $11,757
Deferred................................................ (129) (911) (1,550)
------ ------ -------
Total......................................... $2,845 $4,266 $10,207
====== ====== =======
</TABLE>

The provision for income taxes differs from a calculated income tax at
federal statutory rates as follows:

<TABLE>
<CAPTION>
1994 1995 1996
------- ------- --------
<S> <C> <C> <C>
Computed federal income tax expense at the statutory
rate of 35%........................................... $ 2,442 $ 3,625 $ 8,810
Amortization of costs in excess of fair value of net
assets acquired....................................... 133 133 133
Meals and entertainment................................. 8 25 31
State income taxes...................................... 228 463 1,221
Other................................................... 34 20 12
------ ------ -------
Total......................................... $ 2,845 $ 4,266 $ 10,207
====== ====== =======
</TABLE>

F-12
<PAGE> 86

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Deferred income tax assets are included in the balance sheets, as follows:

<TABLE>
<CAPTION>
1995 1996
--------------------- ---------------------
CURRENT LONG-TERM CURRENT LONG-TERM
------- --------- ------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Accounts receivable allowances............ $ 351 $ -- $ 539 $ --
Deferred compensation..................... -- 284 -- 369
Accrued vacation and bonuses.............. 71 -- 112 --
Capitalization of inventory costs......... 364 -- 845 --
Options and units......................... -- 71 -- 272
State taxes............................... 239 -- 727 --
Non-compete agreement..................... -- 39 -- 66
Basis difference in acquired companies.... -- 123 -- 118
Inventory allowance....................... 408 -- 481 --
------ ---- ------ ----
Total.................................. 1,433 517 2,704 825
------ ---- ------ ----
LIABILITIES:
Amortization of intangibles............... -- 103 -- 105
Loss on sale of fixed assets.............. -- 143 -- 147
Depreciation.............................. -- 46 -- 69
------ ---- ------ ----
Total.................................. -- 292 -- 321
------ ---- ------ ----
Deferred income taxes, net................ $1,433 $ 225 $2,704 $ 504
====== ==== ====== ====
</TABLE>

7. COMMITMENTS AND CONTINGENCIES

LEASES -- The Company leases warehouse and office facilities,
transportation equipment and other equipment under several operating lease
agreements expiring through 2000. As of May 31, 1996, future minimum payments of
$3,254 under the noncancelable operating leases are due as follows: $1,403
(1997), $1,095 (1998), $609 (1999), and $147 (2000). Rental expense charged to
operations amounted to $612 (1994), $629 (1995), and $1,610 (1996).

OPTIONS AND UNITS -- The Company has awarded performance units to certain
key employees at base values (exercise prices) per unit equal to the book value
per share of the Company at the specified award date. The units vest ratably
over a ten-year period from the award date except that vesting may be
accelerated for certain defined events. The Company shall convert the units to
cash or stock at the option of the holder at fair market value less base value
in the case of certain defined events, including a merger, sale of stock, sale
of all assets or public offering, or equal to book value less base value, on the
date of a voluntary termination. The following table sets forth performance
units awarded as of May 31, 1995 and 1996:

<TABLE>
<CAPTION>
NUMBER OF UNITS PRICE PER UNIT
------------------- --------------------
AWARDED VESTED BASE BOOK
------- ------ -------- --------
<S> <C> <C> <C> <C>
MAY 31, 1995:
Year of grant:
1991.................................... 37.60 17.60 $ 13,406 $ 23,268
1994.................................... 24.00 2.40 19,200 23,268
MAY 31, 1996:
Year of grant:
1991.................................... 37.60 20.93 13,406 39,331
1994.................................... 24.00 4.80 19,200 32,909
1996.................................... 6.00 .60 23,663 32,909
</TABLE>

F-13
<PAGE> 87

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company recorded compensation expense of $183 (1995) and $500 (1996) in
connection with these units.

LITIGATION -- The Company was involved as a defendant in a lawsuit which
alleged unfair competition, false advertising and trademark infringement in
connection with the marketing and distribution by the Company of the product
METAFORM. In September 1996, this lawsuit was settled with no expense to the
Company.

OTHER LITIGATION -- The Company is involved in various other claims,
potential unasserted claims and legal actions arising in the ordinary course of
business. In the opinion of management, based in part on discussions with legal
counsel, the ultimate outcome of these matters will not have a material adverse
effect on the Company's financial position or results of operations.

ROYALTIES -- In conjunction with certain acquisitions, the Company has
entered into agreements which require royalty payments on the sales of specific
products as follows:

<TABLE>
<CAPTION>
ROYALTY PRODUCT/BRAND EXPIRATION
- ------------------------------- ------------------------------ --------------
<S> <C> <C>
2% net sales Certain Exceed brand products December 1998
5% net sales Specific Schiff brand products July 1997
4% net sales Specific Weider products June 2000
2% net sales on first All bar products October 2005
$20,000 3% net sales thereafter
</TABLE>

Royalties paid were approximately $96 (1994), $97 (1995) and $504 (1996).

Additionally, the Company entered into a sublicense agreement dated
December 1, 1996 whereby the Company obtained the exclusive right to use the
Weider name and trademarks in certain countries throughout the world. Under the
agreement the Company is required to make annual royalty payments to a company
owned by a trust of which the family members of a director of the Company are
included among the beneficiaries. The royalty payments are to commence on
December 1, 1998 on sales of the Company's brands in existence on December 1,
1996 in countries covered by the agreement. The royalty payments are to be equal
to 4% of sales to $33.0 million, 3.5% of sales from $33.0 million to $66.0
million, 3.0% of sales from $66.0 million to $100.0 million and 2.5% of sales
over $100.0 million. The royalty payments include a buyout option with a
purchase price equal to the greater of $7.0 million or 6.5 times the aggregate
royalties paid by the Company in the fiscal year immediately preceding the date
of the exercise of the option.

ADVERTISING AGREEMENTS -- The Company and Weider Publications, Inc., a
subsidiary of Weider, are parties to an advertising agreement whereby the
Company is obligated to purchase a minimum number of advertising pages, as
determined monthly, in each of the publications of the subsidiary of Weider at a
price determined annually which is below that charged to unaffiliated third
party advertisers. This agreement has a ten year term and is subject to
termination by either party if certain specified events occur, including a
change of control of Weider or an initial public offering of the subsidiary of
Weider. Total amounts paid to the subsidiary of Weider in the past for
advertising were $699,000, $807,000 and $1,202,000 for each of the years in the
three-year period ended May 31, 1996, respectively, and $1,229,000 for the nine
months ended February 28, 1997.

RETIREMENT PLAN -- The Company sponsors a contributory 401(k) savings plan
covering all employees who have met minimum age and service requirements.
Contributions to this plan were approximately $68, $90 and $112 for the years
ended May 31, 1994, 1995 and 1996, respectively, and were included in general
and administrative expenses.

8. ACQUISITIONS

In December 1993, the Company acquired the Excel brand name with certain
associated assets for cash of $1,175 and notes of $3,400 (consisting of
potential earnout payments of which $1,226 has been paid and the

F-14
<PAGE> 88

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

remaining potential payments of $2,174 are not recorded in the Company's
liabilities because the payment of such obligations is uncertain; if such
additional earnout payments become required, a corresponding increase in
goodwill will be recorded). The Company accounted for this acquisition as a
purchase and recognized intangible assets of $2,564 amortized primarily over 15
years.

Also in December 1993, the Company acquired the Exceed brand name and
associated inventory for cash of $700 and assumed certain liabilities of $203.
The Company accounted for the acquisition as a purchase and recognized
intangible assets of $853 amortized primarily over 15 years.

In January 1995, the Company acquired certain assets of American Body
Building Products, Inc. and two other related companies for cash of $8,620, a
note of $2,000 which is related to potential earn out payments (see Note 5) and
the assumption of certain liabilities. The Company accounted for this
acquisition as a purchase and recognized goodwill of $8,788, which is being
amortized over 15 years. American Body Building Products, Inc. manufactures and
distributes energy drinks and nutrition bars.

In June 1995, the Company acquired the assets of National Institute of
Nutrition, Inc. (dba Nion Laboratories) ("Nion") for cash of $8,190, notes of
$7,063 (including $5,250 relating to potential earnout payments) (see Note 5)
and the assumption of certain liabilities. The Company accounted for this
acquisition as a purchase and recognized goodwill of $8,149, which is being
amortized over 15 years. Nion manufactures and distributes nutritional
supplements in capsule and tablet form.

In October 1995, the Company acquired certain assets of a company ("ANB")
for the forgiveness of a note receivable of $850 and the assumption of certain
liabilities. The Company accounted for this acquisition as a purchase and
recognized goodwill of $3,126, which is being amortized over 15 years. The
acquired facility manufactures and distributes nutritional bars.

In January 1996, the Company purchased net assets with a recorded value of
$49 and rights to use the Weider name in England, Ireland and with certain
customer accounts in Austria, France and Switzerland for $557 from a commonly
controlled entity. The Company incurred liabilities of $250 to the benefit of
the commonly controlled entity. As a result, $758 is included in distribution to
Weider for the purchase of such assets. The purchase of these assets was
accounted for at the historical cost of $49 in the records of the Company and
the results of operations have been included since January 1, 1996. Included in
distributions to Weider is an additional $900 paid for the rights to use the
Weider name in the European countries not included above.

Effective September 1996, the Company acquired certain assets and
international distribution rights from a related party in Canada for $4,000. Of
the $4,000 purchase price, $3,000 was paid in cash and $1,000 was in the form of
an earnout to be paid $40 per month for 25 months.

Effective September 1, 1996, the Company acquired trademarks and
nutritional supplement operations providing distribution capabilities in
primarily Spain and Portugal for a total purchase price of $3,350. Of the
$3,350, $500 was paid for certain assets in Spain, $200 was paid as
consideration for a covenant not to compete from the seller, $300 was paid as a
condition to closing, $500 is to be paid on each of the first and second
anniversaries of the closing and $1,350 was paid for certain trademarks.

Effective January 1, 1997, the Company acquired the net assets of Science
Foods, Inc., a competing sports nutrition beverage manufacturer, for $3,900 in
cash plus the assumption of $700 in debt.

The pro forma results of operations of the Company for the years ended May
31, 1995 and 1996 (assuming the Nion and ANB acquisitions had occurred on June
1, 1994) are as follows:

<TABLE>
<CAPTION>
1995 1996
------- -------
<S> <C> <C>
Revenues................................................................. 119,339 189,518
Net income............................................................... 1,783 14,108
</TABLE>

F-15
<PAGE> 89

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. RELATED PARTY TRANSACTIONS

Effective June 1, 1994, the Company sold common stock representing 16 1/3%
ownership interest primarily to related parties. As consideration for the common
stock, the Company received from these parties certain equity and debt
instruments. Concurrent with the sale, the Company declared and paid a dividend
of that consideration to Weider. The Company recorded these transactions at the
net book value of the common shares exchanged ($4,480) and recognized no gain.

Payments to reimburse Weider for Company expenses (including primarily
insurance, endorsements, retirement benefits, interest and royalties) are
summarized as follows for the years ended May 31:

<TABLE>
<CAPTION>
1994 1995 1996
------ ------ ------
<S> <C> <C> <C>
Operating expense................................ $1,896 $1,483 $2,044
Interest, net.................................... 218 897 3,327
Other............................................ 250 250 250
------ ------ ------
$2,364 $2,630 $5,621
====== ====== ======
</TABLE>

The payable to Weider is due on demand and bears interest at the same rate
as the revolving loans payable to GECC (see Note 5). Interest is payable
monthly. Included in net interest above is interest paid to Weider for both the
payable to Weider and to reimburse Weider for interest paid to GECC on behalf of
the Company. Additionally, included in long-term debt is a note payable to
Weider of $15,000 at May 31, 1996 (see Note 5).

The notes payable to GECC are administered by Weider. Weider is the
principal guarantor and the Company is the principal borrower. Weider charges
the Company interest on the notes payable to GECC at prime plus 1% (revolving
line of credit) and prime plus 1.25% (term note), which includes a service
charge for arranging the borrowing and servicing the debt due primarily to lower
contracted rates on the notes payable to GECC of LIBOR plus 2.25% and LIBOR plus
2.50%. The service charge amounted to $113,000 and $378,000 for the years ended
May 31, 1995 and 1996. The service charge was discontinued by Weider as of March
1, 1997.

Included in deposits and other assets are loans to officers in principal
amount of $200 at May 31, 1995 and 1996.

F-16
<PAGE> 90

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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER OR MANAGER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 7
Use of Proceeds....................... 14
Dividend Policy....................... 14
Dilution.............................. 15
Capitalization........................ 16
The Company........................... 17
Selected Financial Data............... 18
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 19
Business.............................. 29
Management............................ 46
Principal Stockholders................ 57
Certain Relationships and Related
Party Transactions.................. 58
Description of Capital Stock.......... 63
Shares Eligible for Future Sale....... 65
Certain United States Federal Tax
Consequences to Non-United States
Holders............................. 66
Underwriting.......................... 69
Notice to Canadian Residents.......... 72
Legal Matters......................... 73
Experts............................... 73
Available Information................. 73
Index to Consolidated Financial
Statements.......................... F-1
</TABLE>

------------------

UNTIL MAY 25, 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE CLASS A COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

===============================================================================

[WEIDER LOGO]

5,600,000 Shares

Class A Common Stock
PROSPECTUS
CREDIT SUISSE FIRST BOSTON

SALOMON BROTHERS INC

ADAMS, HARKNESS & HILL, INC.

HAMBRECHT & QUIST
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