WEIDER NUTRITION INTERNATIONAL INC, 10-K, 2000-08-29

WEIDER NUTRITION INTERNATIONAL INC
10-K, 2000-08-29
GROCERIES & RELATED PRODUCTS

Previous: OPLINK COMMUNICATIONS INC, S-1/A, EX-27.1, 2000-08-29

Next: WEIDER NUTRITION INTERNATIONAL INC, 10-K, EX-4.5, 2000-08-29

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED MAY 31, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ______ TO _______.

COMMISSION FILE NUMBER:
1-14608

WEIDER NUTRITION INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 87-0563574
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

2002 SOUTH 5070 WEST
SALT LAKE CITY, UTAH 84104-4726
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

Registrant"s telephone number, including area code:
(801) 975-5000

Securities registered pursuant to Section 12(b) of the Act:
Class A Common Stock, par value $.01 per share
(Title of Class)

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

The number of shares outstanding of the Registrant's common stock is
26,226,165 (as of August 3, 2000).

The aggregate market value of the voting stock held by non-affiliates of
the Registrant is approximately $ 30,958,000 (as of August 3, 2000).

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement for its 2000 Annual Meeting
of Shareholders, which will subsequently be filed with the SEC, are incorporated
by reference into Part III.
<PAGE>
PART I
NOTE ON FORWARD LOOKING STATEMENTS

CERTAIN STATEMENTS MADE IN THIS ANNUAL REPORT ON FORM 10-K UNDER THE
CAPTIONS "BUSINESS," "FACTORS AFFECTING FUTURE PERFORMANCE," "LEGAL
PROCEEDINGS," AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS," AND ELSEWHERE HEREIN ARE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF SECURITIES ACT OF 1933, AS
AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
THAT ARE BASED ON MANAGEMENT'S BELIEFS AND ASSUMPTIONS, CURRENT EXPECTATIONS,
ESTIMATES AND PROJECTIONS. STATEMENTS THAT ARE NOT HISTORICAL FACTS, INCLUDING
WITHOUT LIMITATION STATEMENTS WHICH ARE PRECEDED BY, FOLLOWED BY OR INCLUDE THE
WORDS "BELIEVES," "ANTICIPATES," "PLANS," "EXPECTS," "ESTIMATES," "MAY,"
"SHOULD," OR SIMILAR EXPRESSIONS, ARE FORWARD-LOOKING STATEMENTS. THESE
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES, CERTAIN OF WHICH ARE BEYOND
THE COMPANY'S CONTROL, AND THEREFORE ACTUAL RESULTS MAY DIFFER MATERIALLY.

IMPORTANT FACTORS THAT MAY AFFECT FUTURE RESULTS INCLUDE, BUT ARE NOT
LIMITED TO: THE COMPANY'S ABILITY TO IMPLEMENT MORE SOPHISTICATED OPERATING
SYSTEMS AND INVENTORY MANAGEMENT PROGRAMS, THE IMPACT OF COMPETITIVE PRODUCTS
AND PRICING, THE IMPACT OF NEW FDA DIETARY SUPPLEMENT REGULATIONS ON THE
COMPANY'S PRODUCTS AND MARKETING PLANS, INCLUDING, WITHOUT LIMITATION, PRODUCT
LABELING, PRODUCT NAMES AND PRODUCT STRUCTURE/FUNCTION CLAIMS, DEPENDENCE ON
INDIVIDUAL PRODUCTS, DEPENDENCE ON INDIVIDUAL CUSTOMERS, MARKET AND INDUSTRY
CONDITIONS INCLUDING PRICING, DEMAND FOR PRODUCTS, LEVEL OF TRADE INVENTORIES
AND RAW MATERIALS AVAILABILITY AND PRICING, THE SUCCESS OF PRODUCT DEVELOPMENT
AND NEW PRODUCT INTRODUCTIONS INTO THE MARKETPLACE, CHANGES IN LAWS AND
REGULATIONS, THE COMPANY'S ABILITY TO IDENTIFY, RECRUIT AND INTEGRATE KEY
MANAGEMENT PERSONNEL, INCLUDING THE COST AND TIMING THEREOF, LITIGATION AND
GOVERNMENT REGULATORY ACTION, UNCERTAINTY OF MARKET ACCEPTANCE OF NEW PRODUCTS,
RESULTS OF MANAGEMENT'S EVALUATION OF ITS BUSINESS OPERATIONS AND STRATEGIES,
AND OTHER FACTORS DISCUSSED UNDER "FACTORS AFFECTING FUTURE PERFORMANCE" IN ITEM
1 OF THIS ANNUAL REPORT. THE COMPANY DISCLAIMS ANY OBLIGATION TO UPDATE ANY
FORWARD-LOOKING STATEMENTS WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS
OR OTHERWISE.

ITEM 1. BUSINESS

GENERAL

Weider Nutrition International, Inc. (the "Company") develops,
manufactures, markets, distributes and sells branded and private label vitamins,
nutritional supplements and sports nutrition products in the United States and
throughout the world. The Company offers a broad range of capsules and tablets,
powdered drink mixes, bottled beverages and nutrition bars consisting of
approximately 875 stock keeping units ("SKUs") domestically and internationally.
The Company has a portfolio of recognized brands, including Schiff(R),
Weider(TM), American Body Building(TM), Tiger's Milk(R), Multipower(R) And
Multaben that are primarily marketed through mass market, health food store and
health club and gym distribution channels. The Company markets its branded
nutritional supplement products, both domestically and internationally, in four
principal categories: sports nutrition; vitamins, minerals and herbs; weight
management; and nutrition bars. The Company also markets a line of sportswear in
Europe, primarily in Germany, under the Venice Beach brand.

The Company's principal executive offices are located at 2002 South 5070
West, Salt Lake City, Utah 84104 and its telephone number is (801) 975-5000. As
used herein, the "Company" means Weider Nutrition International, Inc. and its
subsidiaries, except where indicated otherwise.

2
<PAGE>
INDUSTRY OVERVIEW

According to NUTRITION BUSINESS JOURNAL, the principal domestic retail
markets in which the Company's products compete totaled approximately $13.9
billion in 1998 and grew at a compound annual growth rate of approximately 12%
from 1995 through 1998. 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 the United States Bureau of the Census, the
35-and-older age group of consumers, which represents a large majority of the
regular users of vitamin and mineral supplements, is projected to grow
significantly faster than the general United States population through 2010.

The Company believes these events and trends together with product
introductions have supplied the growth of the domestic nutritional supplement
market.

The international nutritional supplement market is more fragmented than
the domestic market. As a result, industry data is not readily available.
However, many of the demographic and other trends and events present in the
domestic market, are also present in the international market.

The primary distribution channels in the vitamin and nutritional
supplements industry consist of mass market retailers (including mass
merchandisers, drug stores, supermarkets, discount and convenience stores),
health and natural food stores and direct sales and mail order organizations.
According to PACKAGED FACTS, in 1998 the mass market channel accounted for
approximately 49% of the sales of vitamin, mineral and supplement products,
health and natural food stores accounted for approximately 39% of sales and
direct selling, mail order and the Internet accounted for approximately 12% of
sales.

SALES AND DISTRIBUTION

The Company believes that its continued growth and success in the
nutritional supplements industry, in part, is dependent on the consumers'
recognition of, satisfaction with and allegiance to the Company's branded
products. Accordingly, during fiscal 1999 (and continuing in fiscal 2000), the
Company implemented a more focused marketing initiative that provided
incremental investment in support of its most recognized brands: Schiff(R),
Weider(TM) and American Body Building(TM). The Company believes that this
focused marketing strategy will be beneficial to nutritional supplement
consumers. The incremental investment in these brands enhances the Company's
ability to introduce innovative products that are of premium quality, better
tasting and more consumer application friendly, supported by current science and
technology.

3
<PAGE>
The Company's products are currently sold domestically in over 48,000
retail outlets in all 50 states. The Company's mass market customers include:
mass merchandisers such as Wal-Mart, Target and Kmart; drug stores such as
Walgreens, CVS, Rite Aid and Eckerd; warehouse clubs such as Costco, Sam's Club
and BJ's; and supermarkets such as Albertson's, Giant, Safeway and Fred Meyer.
The Company services the health food market by distributing its products to
General Nutrition Center ("GNC") and leading health food distributors. The
Company also sells through other distribution channels, including its own
network of distributors to health clubs and gyms (such as Bally's Health and
Fitness and Gold's Gym), international markets, and private label manufacturing
for certain retail customers where the Company also distributes its branded
products. The Company pursues a multi-channel distribution strategy in order to
participate in the growth being experienced in each of these channels.

Internationally, the Company sells or distributes its products in
approximately 85 countries around the world, all of which are at different
levels of development and are affected by different factors. In Europe, where
the Company has a substantial majority of its international sales, nutritional
supplement distribution varies by country, but in general, product is primarily
distributed through gyms and fitness studios, health food and specialty stores
and pharmacies. Some product is distributed through the mass market channel, but
this channel is not as developed internationally as it is in the U.S.
Additionally, significant differences exist between the regulatory environment
in the U.S. and the regulatory environment in Europe. As a result, many
nutritional supplements sold in the U.S. are not able to be sold in Europe due
to regulatory restrictions.

BRANDS AND DISTRIBUTION CHANNELS. The Company has created a portfolio of
recognized brands designed for specific distribution channels. The positioning
of the Company's brand names is supported by significant advertising and
marketing expenditures as well as the brand names' long-standing consumer
relationships. 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 leading nutritional
supplement brands and illustrates the Company's multi-brand, multi-channel
strategy:

BRAND PRIMARY CHANNEL
----- ---------------
Schiff(R).......................................... Food, drug, mass
market & health
food stores
Weider(TM)......................................... Food, drug, mass
market
American Body Building(R).......................... Health clubs and gyms
Tiger's Milk(R).................................... Food, drug, mass
market
Multipower(R)...................................... Health clubs and gyms
Multaben........................................... Food, mass market

The Company markets its branded nutritional supplement products both
domestically and internationally in four principal categories: sports nutrition;
vitamins, minerals and herbs; weight management; and nutrition bars. 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. The Company continues to expand its
product innovation and branding opportunities through the pursuit of innovative
ingredients and proprietary formulas from internal research, as well as outside
scientists, experts, formulators and inventors. The Company also markets a line
of sportswear in Europe, primarily in Germany, under the Venice Beach brand.

SPORTS NUTRITION. The Company's sports nutrition category includes a wide
variety of products designed to enhance athletic performance, support the
results derived from exercise programs and replenish the body's vital nutrients
used up during exercise and training. The Company's sports nutrition products
deliver nutritional supplements through a variety of forms, including powdered
drink mixes, tablets, capsules, nutrition bars and beverages. Customer focus
includes athletes, bodybuilders, fitness

4
<PAGE>
enthusiasts, "weekend warriors" and other "on-the-go" consumers. The Company
markets its sports nutrition products domestically under the Weider(TM),
American Body Building(TM), Science Foods(R) and Tiger's Milk(R) brands.

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 American Body Building(TM) and
Science Foods(R) brands are primarily distributed to health clubs and gyms
through the Company's network of independent distributors. American Body
Building(TM) and Science Foods(R) brand products are primarily bottled and
powdered drinks for energy, recovery and weight control, and nutrition bars.

The Weider(TM) and Metaform(R) brands are primarily distributed through
food, drug and mass market retailers and health food stores such as GNC.
Weider(TM) and Metaform(R) brand products are primarily powdered drinks and
supplements to support muscle growth, maintain stamina and control weight.

The Tiger's Milk(R) product line, which has been marketed for over 30
years, includes several nutrition bars that supply significant amounts of
protein, vitamins and other essential nutrients with less fat than a traditional
candy bar.

VITAMINS, MINERALS AND HERBS. The Company markets a complete line of
vitamins, minerals and specialty supplements through the Schiff(R) brand. These
products are offered in various forms, including liquids, tablets, capsules,
softgels and powdered drink mixes. The Schiff(R) brand is distributed primarily
though the mass market as well as health food stores.

According to IRI data, joint health products represent the fastest growing
subcategory within the vitamin, mineral and herb category. The Company markets
certain joint products including Schiff(R) Pain Free(TM)/Move Free(TM) and
certain chondroitin and glucosamine compounds under the Schiff(R) brand.
Schiff's Pain Free(TM)/Move Free(TM) product realized significant growth in
fiscal 2000 and is currently one of the leading joint health products in the
mass market channel. In addition, there are a number of other emerging specialty
supplement categories which are alternatives or complements to over-the-counter
pharmaceutical products for consumers who seek a more natural and preventative
approach to their health care.

Other products sold under the Company's Schiff(R) brand include vitamins,
minerals, herbals and other specialty supplements. The Company's Schiff(R) brand
vitamin products are designed to provide consumers with essential vitamins and
minerals as supplements to their diet. Schiff(R) vitamins and minerals include
multivitamins such as Single Day, individual vitamins and minerals such as
Vitamins C, E and Calcium, specialty formulae for women such as Menopause and
soy, and other specialty formulae including melatonin, DHEA, beta carotene and
B-complex. Schiff(R) vitamins are marketed through health food stores as well as
supermarkets and drug stores within the mass market channel.

WEIGHT MANAGEMENT. The Company manufactures, markets and distributes
natural products that utilize vitamins, herbs and other nutritional supplements
designed to promote weight management. The Company's products are intended to
support consumers' efforts in a number of weight management functions. The
products are specifically formulated, packaged and priced to appeal to a wide
variety of consumers with different demographic characteristics and
physiological needs.

Weight management products under the American Body Building(TM) and
Science Foods(R) 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 independent distributors to health clubs and gyms.
Products under the Weider(TM) brand are intended to aid in weight management,
support muscle mass and to support consumers' efforts to reduce fat. This brand
is primarily distributed through food, drug, mass, club, convenience and health
food retailers.

5
<PAGE>
NUTRITION BARS. The Company's nutrition bars category includes its Tiger's
Milk(R) and Fi-Bar(R) product lines. The Tiger's Milk(R) product line, which has
been marketed for over 30 years, includes several nutrition bars that supply
significant amounts of protein, vitamins and other essential nutrients with less
fat than a traditional candy bar. The Fi-Bar(R) 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 Tiger's Milk(R) and Fi-Bar(R) brands, which are intended to provide
consumers with a healthy alternative to traditional snack foods and candy bars,
are primarily distributed through mass market retailers, convenience and health
food stores. Within sports nutrition categories, the Company also manufactures
international and domestic nutrition bars under the following brands:
Multipower(R), American Body Building(TM), Multaben and Science Foods(R).

INTERNATIONAL MARKETS. The Company believes opportunities exist for
nutritional supplement products in international markets. The Company has
positioned itself to take advantage of such opportunities through new product
launches and strategic alliances.

The July 1998 acquisition of Haleko provided the Company with several of
the premium nutritional supplement brands in Europe as well as significant
nutritional supplement manufacturing capabilities in Germany. Haleko's leading
sports nutrition brand is Multipower(R), which products include a wide variety
of products primarily marketed to health clubs and gyms. Haleko also markets
nutrition products under the Multaben brand primarily to health food stores,
which includes a variety of beverages, soups and other meal replacement products
as well as nutrition bars. Haleko also markets a line of sportswear under the
Venice Beach brand. Sportswear is primarily sold in Germany to health clubs and
gyms as well as to specialty sportswear retail stores. Sales of sportswear
represented approximately 35% and 34% of Haleko's revenues for fiscal 2000 and
1999, respectively.

The Company also markets its brands such as Weider(TM) and Schiff(R) on an
export basis to South America, eastern Europe, the Middle East and the Pacific
Rim through a network of distributors managed from the Company's Salt Lake City
headquarters.

PRIVATE LABEL. Historically, the Company manufactured capsules, tablets,
beverages, nutrition bars and powdered drink mixes for other marketers of
nutritional supplements and certain retail customers. These independent
marketers, or contract manufacturing (private label) customers, market products,
manufactured by the Company, under their own brand name. During fiscal 1999 and
into fiscal 2000, the Company made the decision to limit contract manufacturing
business to select customers that otherwise carry the Company's brands.

MARKETING

The Company believes its advertising and promotional campaigns, together
with its expanded sales force, have been integral to the Company's growth. 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 $41.2 million in fiscal 2000, $35.9
million in fiscal 1999 and $16.9 million in fiscal 1998.

During fiscal 2000, the Company continued to execute its brand building
support for its core brands, particularly relating to its Schiff(R) Pain
Free(TM) joint health products. National television and radio commercials
featuring Schiff(R) Pain Free(TM) appeared on syndicated radio and television
programs, and national and cable television stations.

The Company promotes its products in various consumer magazines, such as
LADIES HOME JOURNAL, ARTHRITIS TODAY, MAXIM, ESPN MAGAZINE; target publications,
such as FITNESS RUNNER; and trade magazines, such as WHOLE FOODS, VITAMIN
RETAILER and MASS MARKET RETAILER. In addition to these publications, the
Company advertises in several magazines published by Weider

6
<PAGE>
Publications Inc. ("Weider Publications"), an affiliate of the Company,
including MUSCLE AND FITNESS, FLEX, SHAPE, MEN'S FITNESS, NATURAL HEALTH and
JUMP. The Company is also developing internet sites to provide additional
information to consumers, customers and investors.

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
numerous local National Physique Committee bodybuilding competitions. The
Company also promotes its products at numerous trade and consumer shows
representing all current distribution channels.

Market research will continue to play a vital role in securing retail
space for the Company's branded products in the mass market channel and other
relevant distribution channels. The Company is expanding its use of research
data, including Gallup, IRI InfoScan, Spectra Data and other information sources
to identify key consumer demographics, market trends and category potential to
maximize new and existing opportunities with current and potential retail
partners. The Company is also taking a more active role in professional trade
organizations and lobbying groups. The Company is a founding member of the
Corporate Alliance for Integrative Medicine, an industry-based research
organization that works with public and private universities to conduct
scientifically valid studies on natural health products.

COMPANY GROWTH STRATEGY

The Company intends to broaden its leadership position in the nutritional
supplements and sports nutrition categories. Specifically, the Company's
strategy is to: (i) grow core brands through product innovations and consumer
marketing programs; (ii) develop and market innovative new products and product
line extensions through its commitment to reasearch and development; (iii)
enhance customer relationships through the growth of its focused distribution
network; (iv) enhance its execution skills through new operations processes and
decision support systems; (v) achieve cost superiority through formal
productivity benchmarking and continuous improvement programs; (vi) grow
international profitability through integration of European operations and
through expanded export operations outside Europe; and (vii) implement a
comprehensive e-commerce plan. The Company believes that its focused
distribution channels, broad portfolio of leading brands, state-of-the-art
manufacturing and distribution capabilities and strong management team position
it to be a long-term competitive leader in the nutritional supplements industry.

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 safe and efficacious new products and existing product line
extensions. The nutritional supplement industry is influenced by products that
become popular due to changing consumer interests in health, appearance and
longevity along with media attention to these same interests. The Company
believes new product development is important 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.

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: the development of the first domestic source of melatonin with
consistent quality, supply and cost; the introduction of garcinia cambogia, a
popular weight loss ingredient; through acquisition, the producer of the first
high-protein, low carbohydrate beverage; and the retail introduction of the
first carotenoid complex product from natural sources. The Company is in

7
<PAGE>
various stages of development with respect to new product concepts that the
Company anticipates will augment both its existing domestic and international
product lines.

In order to support its commitment to research and development, the
Company hires requisite technical personnel and invests in formulation,
processing and packaging development and the testing of efficacy and shelf life
stability as well as market research with consumers. The Company's product
research and development expenditures were approximately $4.6 million in fiscal
2000, $4.6 million in fiscal 1999 and $4.0 million in fiscal 1998.

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
approximately 90% of its domestic branded products and approximately 45% of its
international branded products. The Company has significant internal
manufacturing competencies in the distinct areas of: sterile liquid beverage
processing, bottling and packaging; powder blending, filling and packaging in
jug, canisters, bottles and pouches; processing, extrusion, coating and
packaging of nutritionally fortified nutrition bars; and capsule and tablet
manufacturing, filling and packaging. The Company has invested in production
line flexibility to accommodate various filling sizes, weights or counts of
product and final shipped unit configurations to fulfill customer and ultimate
consumer needs.

The Company currently manufactures its domestic products in four U.S.
facilities. In June 1997, the Company completed construction of a
state-of-the-art facility that more than tripled the Company's previous capacity
for manufacturing capsules and tablets. The facility, located in Salt Lake City,
Utah, includes the Company's main distribution center and primary administrative
offices. The distribution center features a high-rise racked warehouse and a
fully automated "order-pick" system using optical readers that interpret bar
coded labels on each shipping container.

The Company also currently operates a powders production facility located
in Salt Lake City, Utah and beverage facilities located in Walterboro, South
Carolina and Las Vegas, Nevada. The Company is continuously upgrading its
facilities and enhancing its manufacturing capabilities through new equipment
purchases and technological improvements. In order to improve overall beverage
manufacturing efficiencies the Company will close its Las Vegas, Nevada facility
and transition the operations to the Company's South Carolina facility. The
Company previously closed (during fiscal 1999) its capsule and tablet
manufacturing facility in southern California and transitioned the operations to
its Utah facility.

Internationally, the Company has two primary manufacturing facilities. The
Company has a capsules, tablets and powders facility in Bleckede, Germany that
produces products distributed throughout Europe. This facility has received ISO
9002 certification. The Company also has a facility located in Madrid, Spain
that primarily produces powders for distribution in Spain, France and Italy.
Each of these facilities are continuously upgraded with equipment purchases and
technological improvements.

The Company is committed to providing the highest quality products. The
Company's domestic capsule and tablet facility is designed and operated to meet
USP compliance standards. The Company's quality management systems are detailed
and rigorous, and include a supplier certification selection process and other
analytical processes and procedures. The quality management systems also include
thoroughly equipped and professionally staffed analytical laboratories to assure
raw material acceptance as well as in-process and finished product evaluation
for compliance to specification. 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 the ability to maintain samples from each product batch shipped and,
when appropriate, to analyze such samples to insure product quality. Certified
outside laboratories are used routinely to evaluate the Company's laboratory
performance and to supplement

8
<PAGE>
its internal testing procedures and capabilities.

Sourcing specialists within the Company's purchasing department focus on
maximizing buying power through volume leverage with a smaller select supplier
base. As a result of this effort, material supply savings have been achieved. In
addition, key supply relationships have been established with raw material and
packaging suppliers who bring significant financial, technical, quality and
service resources to the Company.

As part of the Company's strategy of achieving cost superiority through
formal continuous improvement programs and productivity benchmarking, an
integrated supply chain group has been given the accountability to efficiently
plan and execute materials flow. This focus on materials flow is expected to
continue to improve inventory management as well as compliance with customer
requests.

COMPETITION

The market for the sale of nutritional supplements is highly competitive.
Competition is based principally upon price, quality of products, customer
service and marketing support. Numerous companies compete with the Company in
development, manufacture and marketing of nutritional supplements. In addition,
large pharmaceutical companies and packaged food and beverage companies are
increasingly competing with the Company in the nutritional supplement market.
The majority of competitors in the nutritional supplement industry are privately
held and the Company is unable to precisely assess the size of such competitors.

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 of nutritional supplements, such as the Company, that can
respond quickly to new opportunities, support retailers 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, market a broad portfolio of products and offer
superior customer service. The Company believes that it competes favorably with
other nutritional supplement companies and major pharmaceutical companies
because of its competitive pricing, marketing strategies, sales support and the
quality and breadth of its product line.

GOVERNMENT REGULATION

The formulation, manufacturing, packaging, labeling, advertising,
distribution and sale of the Company's products are subject to regulation by one
or more governmental agencies, including the Food and Drug Administration
("FDA"), the Federal Trade Commission (the "FTC"), the Consumer Product Safety
Commission, the United States Department of Agriculture and the Environmental
Protection Agency. The Company's activities are also regulated by various
agencies of the states, localities and foreign countries in which the Company
distributes and sells its products.

The FDA regulates dietary supplements under the Federal Food, Drug and
Cosmetic Act (the "FDCA"), which was amended in October 1994, by the Dietary
Supplement Health and Education Act of 1994 ("DSHEA"). DSHEA establishes a
statutory class of dietary supplements, including vitamins, minerals, herbs,
amino acids and other dietary substances for human use to supplement the diet,
as well as concentrates, metabolites, extracts or combinations of such dietary
ingredients. DSHEA also provides a regulatory framework that ensures consumer
access to safe, quality dietary supplements, recognizes the need for the
dissemination of useful, balanced information regarding dietary supplements,
supports continuing scientific research into the health effects of dietary
supplements and permits the establishment of good manufacturing practices to
improve uniform quality of dietary supplements. Under DSHEA statements of
"nutritional support" may describe how particular dietary ingredients, or the
mechanism of action by which dietary ingredients, affect the structure,

9
<PAGE>
function or general well-being of the body. These statements of nutritional
support are permitted in dietary supplement labeling, provided that, among other
requirements, the company has scientific substantiation that the statements are
truthful and not misleading, discloses that the statements have not been
reviewed by the FDA and notifies the FDA within 30 days that the statements are
being used in dietary supplement labeling. Statements of nutritional support may
not make claims that the dietary supplement is intended to cure, prevent or
mitigate a disease or illness, which claims would cause the FDA to consider the
dietary supplement as an unapproved new drug. The Company labels its products in
a manner that is intended to comply with the provisions of DSHEA; however, no
assurance can be given that the FDA will not take the position that a statement
of nutritional used by the Company is considered by the FDA to be a disease or
illness claim.

In September 1997, the FDA issued regulations further defining labeling
requirements for dietary supplements and conventional foods effective March 23,
1999. In January 2000, the FDA issued additional regulations defining the types
of statements concerning dietary supplements that can be made as
structure/function claims under DSHEA. Although a dietary supplement may not
bear an express or implied claim that it can prevent, treat, cure, mitigate or
diagnose disease (a disease claim) without prior FDA approval as a health claim
or a drug, the final rule expanded the scope of acceptable structure/function
claims for dietary supplements. According to the FDA, the final ruling precludes
express disease claims ("prevents osteoporosis") and implied disease claims
("prevents bone fragility in post-menopausal women") without prior FDA review.
The final rule clarifies, however, that express and implied disease claims can
be made through the name of a product (e.g., "Carpaltum" or "CircuCure");
through a statement about the formulation of a product (contains aspirin), or
through the use of pictures, vignettes, or symbols (electrocardiogram tracings).
The rule permits claims that do not relate to disease. These include health
maintenance claims ("maintains a healthy circulatory system"), other non-disease
claims ("for muscle enhancement" or "helps you relax,") and claims for common,
minor symptoms associated with life stages ("for common symptoms of PMS").

In February 1997, the FDA issued a proposed rule entitled, "CGMP in
Manufacturing, Packing, or Holding Dietary Supplements," which proposes good
manufacturing practices specific to dietary supplements and dietary supplement
ingredients. This proposed rule, if finalized, would require at least some of
the quality control provisions contained in the GMPs for drugs. Such regulations
could, among other things, require the reformulation or discontinuance of
certain products, additional record keeping, warnings, notification procedures
and expanded documentation of the properties and manufacturing processes of
certain products and scientific substantiation regarding ingredients, product
claims, safety or efficacy. Failure to comply with applicable FDA requirements
can result in sanctions being imposed on the Company or the manufacturers of its
products, including warning letters, fines, product recalls and seizures.

Certain of the Company's products are classified as foods, which are
subject to the Nutrition Labeling and Education Act of 1990 (the "NLEA"). The
NLEA prohibits the use of any health claim for foods unless the health claim is
supported by significant scientific agreement and is either pre-approved by the
FDA or the subject of substantial government scientific publications with
notification sent to the FDA. A substantial majority of the Company's products
are classified as dietary supplements under DSHEA.

The FTC exercises jurisdiction over the advertising of nutritional and
dietary supplements under the Federal Trade Commission Act. The role of the FTC,
which enforces laws outlining "unfair or deceptive acts or practices," is to
ensure that consumers get accurate information about dietary supplements so they
can make informed decisions about such products. In November 1998, the FTC
published an advertising guideline for the dietary supplement industry entitled
"Dietary Supplements: An Advertising Guide for Industry." These guidelines
reiterate many of the policies regarding dietary supplements the FTC has
periodically announced over the years, particularly with respect to the
substantiation of claims made in advertising of dietary supplement products.

10
<PAGE>
In the past several years, the FTC has instituted enforcement actions
against several dietary supplement companies alleging false and misleading
advertising of certain products. These enforcement actions have resulted in the
agreement to consent decrees and/or the payment of fines by certain of the
companies involved. The FTC continues to monitor advertising with respect to
dietary supplements and, accordingly, the Company from time to time receives
inquiries from the FTC with respect to the Company's advertising.

In September 1997, the Company received an access letter from the FTC
regarding the Company's advertising with respect to the Company's PhenCal
products. The Company and the FTC are continuing discussions regarding the
resolution of this matter. No assurance can be given that any imposition of
injunctive relief and/or penalties in resolving this matter would not have a
material adverse effect on the Company.

The Company is also a party to a consent order which was signed by Weider
Health and Fitness 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(R) 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.

The Company's international operations are also subject to governmental
regulations in each of the countries in which the Company has operations or
sales or distributes products. These regulations may differ materially from
country to country and from those regulations of the United States, which may
result in additional costs and expenses to the Company due to the reformulation
or repackaging of certain products to meet different standards or regulations,
the imposition of additional record keeping requirements and expanded or
different labeling and scientific substantiation regulations. In addition,
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. The Company's distributors for those countries in which the
Company does not have direct operations generally control compliance with such
foreign governmental regulations. These distributors are independent contractors
over whom the Company has limited control.

As a result of the Company's efforts to comply with applicable statutes
and regulations, the Company has from time to time reformulated, eliminated or
relabeled certain of its products and revised certain aspects of its sales,
marketing and advertising programs. The Company may be subject to additional
laws or regulations administered by the federal, state or foreign regulatory
authorities, the repeal or amendment of laws or regulations which the Company
considers favorable, such as DSHEA, or more stringent interpretations of current
laws or regulations. 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 reformulation of certain products to meet new standards, 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 such requirements could have a material adverse
effect on the Company's results of operations and financial condition.

PRODUCT LIABILITY INSURANCE

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 delivered to consumers, are not within the

11
<PAGE>
control of the Company. See "Manufacturing and Product Quality." Also, sickness
or injury to persons may occur if the Company's products 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 and internationally, the Company has $2.0 million
per occurrence domestically ($1.0 million internationally) and $2.0 million
($1.0 million internationally) in aggregate liability insurance subject to
self-insurance retention of $10,000. In addition, if claims should exceed $2.0
million, the Company has excess umbrella liability insurance of up to $90.0
million. 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; however, any such
indemnification is limited by its terms and, as a practical matter, to the
creditworthiness of the indemnification party. The Company's product liability
insurance does not cover non-safety claims relating to the Company's products,
such as noncompliance with label claims or similar matters.

TRADEMARKS AND PATENTS

The Company owns trademarks registered with the United States Patent and
Trademark Office or similar regulatory agencies in certain other countries for
its Schiff(R), American Body Building(TM), Science Foods(R), Metaform(R) and
Tiger's Milk(R) brands of products. The Company also has obtained trademarks for
certain of its products, processes and slogans and has rights to use other names
material to its business. The Company vigorously protects its trademark and
other intellectual property rights. The Company also pursues patents for its
products or processes when appropriate.

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. The
Company registers certain of its trademarks in certain foreign jurisdictions
where the Company's products are sold or distributed. However, the protection
available in such jurisdictions may not be as extensive as the protection
available to the Company in the United States.

EMPLOYEES

At August 1, 2000, the Company employed approximately 880 persons, of whom
approximately 495 were in management, sales, purchasing, logistics and
administration and approximately 385 were in manufacturing. Additionally, the
Company utilizes temporary employees in some of its manufacturing processes. The
Company is not party to any collective bargaining arrangements and believes that
its relationship with its employees is good.

12
<PAGE>
EXECUTIVE OFFICERS

The following table set forth certain information concerning the executive
officers of the Company.

NAME AGE POSITION
---- --- --------
Bruce J. Wood 50 Chief Executive Officer,
President and Director
Jerome J. Bock 60 Executive Vice President -
Operations
Stephen D. Young 46 Executive Vice President -
International
Joseph W. Baty 43 Executive Vice President and -
Chief Financial Officer
James P. Lacey 40 Executive Vice President -
Sales and Marketing
Daniel A. Thomson 35 Senior Vice President - Legal
Affairs, General Counsel and
Secretary

Mr. Wood has served as Chief Executive Officer, President and a Director
of the Company since June 1999. From January 1998 to December 1998, Mr. Wood
was the President and a founder of All Stick Label LLC. From 1973 to December
1997, Mr. Wood held various management positions with divisions of Nabisco,
Inc., including President and Chief Executive Officer of Nabisco, Ltd.,
President of Planters Lifesavers Company, and Senior Vice President, Marketing
of Nabisco Biscuit Company and Del Monte USA.

Mr. Bock has served as Executive Vice President - Operations of the
Company since July 1999. Prior to joining the Company, Mr. Bock served as Vice
President of Operations for the Hunt-Wesson Division of ConAgra, Inc. from 1993
to February 1999. From 1990 to 1993, Mr. Bock was the President of the Rolling
Pin Business Unit of Shato Holdings, Inc. Prior to joining Shato Holdings, Mr.
Bock held various operations and management positions with The Pillsbury Company
from 1962 to 1989.

Mr. Young has served as an Executive Vice President of the Company since
January 1997. From January 1994 to July 1999, Mr. Young served as the Chief
Financial Officer of the Company. Prior to joining the Company in 1993, Mr.
Young served as Vice President Finance at First Health Strategies, which he
joined in 1983. Mr. Young is a certified public accountant.

Mr. Baty has served as Executive Vice President and Chief Financial
Officer of the Company since November 1999. From January 1997 to October 1999,
Mr. Baty served as Senior Vice President - Finance of the Company. Prior to
joining the Company, Mr. Baty was a partner at KPMG LLP, which he joined in
1984. Mr. Baty is a certified public accountant.

Mr. Lacey has served as Executive Vice President - Sales and Marketing of
the Company since March 2000. From July 1999 to February 2000 Mr. Lacey served
as Senior Vice President - Sales of the Company. From January 1998 to July
1999, Mr. Lacey served as Chief Operating Officer of Everlast Nutritional
Products. From July 1996 to December 1997, Mr. Lacey was Vice President of
Sales at Powerbar, Inc. Prior to joining Powerbar, Mr. Lacey held various
sales, marketing and management positions from 1982 to 1996 with Gillette-Oral-
B Laboratories, Nestle Food Corporation, and Smith Kline-Beecham.

Mr. Thomson has served as Senior Vice President - Legal Affairs and
General Counsel of the Company since July 1998 and Secretary since July 1999.
Prior to joining the Company, Mr. Thomson was in private law practice in the
corporate and securities departments of Latham & Watkins and LeBoeuf, Lamb,
Greene & MacRae. Mr. Thomson, a certified public accountant, was an accountant
and consultant with the firm of Price Waterhouse prior to practicing law.

13
<PAGE>
FACTORS AFFECTING FUTURE PERFORMANCE

DEPENDENCE ON SIGNIFICANT CUSTOMERS. The Company's largest customers are
Costco, Wal-Mart and GNC. These three customers accounted for approximately 44%
and 43% respectively, of the Company's net sales for the fiscal years ended May
31, 2000 and 1999. The loss of either Costco, Wal-Mart or GNC as a customer, or
a significant reduction in purchase volume by Costco, Wal-Mart or GNC, could
have a material adverse effect on the Company's results of operations or
financial condition. The Company cannot assure you that Costco, Wal-Mart and/or
GNC will continue as major customers of the Company.

DEPENDENCE ON NEW AND INDIVIDUAL PRODUCTS. The Company believes its
ability to grow in its existing market is partially dependent upon its ability
to introduce new and innovative products into these 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 variables,
including developing products that will appeal to customers and obtaining
necessary regulatory approvals. The Company cannot assure you that its efforts
to develop and introduce 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, the Company cannot assure you that individual or groups of
similar products currently experiencing strong popularity and rapid growth will
maintain sales levels over time. During fiscal year 2000, net sales for the
Company's Schiff(R) Pain Free(TM) product were approximately 29% of the
Company's total net sales. The Company is currently transitioning the name of
its Schiff(R) Pain Free(TM) product to Schiff(R) Move Free(TM) to comply with
new regulations published by the FDA in January 2000. See "Impact of Government
Regulation on the Company's Operations."

IMPACT OF GOVERNMENT REGULATION ON THE COMPANY'S OPERATIONS. The Company's
operations, properties and products are subject to regulation by various
foreign, federal, state and local government entities and agencies, particularly
the FDA and FTC. See "Government Regulation." Among other matters, such
regulation is concerned with statements and claims made in connection with the
packaging, labeling, marketing and advertising of the Company's products. The
governmental agencies have a variety of processes and remedies available to
them, including initiating investigations, issuing warning letters and cease and
desist orders, requiring corrective labeling or advertising, requiring consumer
redress, seeking injunctive relief or product seizure, imposing civil penalties
and commencing criminal prosecution.

The Company may be subject in the future to additional laws or regulations
administered by federal, state or foreign regulatory authorities, the repeal or
amendment of laws or regulations which the Company considers favorable, such as
DSHEA, or more stringent interpretations of current laws or regulations. The
Company is unable to predict the nature of such future laws, regulations,
interpretations or applications, nor can the Company predict what effect
additional governmental regulations or administrative orders, when and if
promulgated, would have on the Company's business in the future. Such future
laws and regulations could, however, require the reformulation of certain
products to meet new standards, the recall or discontinuance of certain products
that cannot be reformulated, the imposition of additional recordkeeping
requirements, expanded documentation of product efficacy, and expanded or
modified 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 "Government Regulation."

14
<PAGE>
ABILITY TO IMPLEMENT BUSINESS STRATEGY. The Company's business and
operations have experienced significant growth and increased complexity in
recent years. The Company has recently refined its growth and business
strategies, designed to focus on and support the Company's core brands, products
and customers. The Company's future success depends upon its ability to
successfully implement these growth and business strategies. The Company cannot
assure you that it will be able to successfully implement these strategies or,
if implemented, that the strategies will achieve the anticipated results. The
failure to successfully implement these strategies could have a material adverse
effect on the Company's results of operations and financial condition.

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 in
the nutritional supplement market. These companies have greater financial and
other resources available to them and possess extensive manufacturing,
distribution and marketing capabilities far greater than those the Company has
available or possess. Increased competition from such companies could have a
material adverse effect on the Company's financial results and business.

RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S INDEBTEDNESS. The Company's
borrowing arrangements impose upon the Company certain financial and operating
covenants, including, among others, requirements that the Company maintain
certain financial ratios and satisfy certain financial tests, limitations on
capital expenditures and restrictions or limitations on the Company's ability to
incur debt, pay dividends or take certain other corporate actions, all of which
may restrict the Company's ability to expand or to pursue its business
strategies. Changes in economic or business conditions, results of operations or
other factors could in the future cause a violation of one or more covenants in
the Company's debt instruments.

ABILITY TO ATTRACT AND RETAIN KEY MANAGEMENT PERSONNEL. The Company's
operations have experienced significant growth in recent years. The Company's
ability to manage that growth and added business complexity and to implement its
business strategies is largely dependent upon the efforts, performance,
abilities and continued service of the Company's management personnel. The
competition for such personnel is intense, and the Company cannot assure you it
will be able to retain key management personnel or attract and retain additional
experienced management personnel. The Company's failure to attract and retain
such personnel could have a material adverse effect on the Company's results of
operations and financial condition.

EFFECT OF UNFAVORABLE PUBLICITY. The Company believes that the nutritional
supplement market is affected by national media attention regarding the
consumption of nutritional supplements. The Company cannot assure you that
future scientific research or publicity will not be unfavorable to the
nutritional supplement market or any particular product, or inconsistent with
previous 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's business or financial results. The
Company also depends upon consumer perceptions of the safety, quality and
efficacy of its products as well as similar products sold or distributed by
other companies (which may not adhere to the same quality standards as the
Company). Accordingly, negative 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's business or financial results. Such adverse publicity
could arise even if the adverse effects associated with such products resulted
from consumers' failure to consume such products as directed.

15
<PAGE>
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.

As a result of the Company's acquisition of Haleko in July 1998, the
Company's international sales have increased substantially over historical
levels. Approximately 34% of the Company's net sales for fiscal 2000 were
generated outside the United States. Operating in international markets exposes
the Company to certain risks, including, among other things, changes in or
interpretations of foreign regulations that may limit the Company's ability to
sell certain products or repatriate products to the United States, foreign
currency fluctuations, the potential imposition of trade or foreign exchange
restrictions or increased tariffs and political instability. As the Company
continues to expand its international operations, these and other risks
associated with international operations are likely to increase.

AVAILABILITY OF RAW MATERIALS. The Company obtains all of its raw
materials for the manufacture of its products from third parties. The Company
cannot assure you that suppliers will provide the raw materials the Company
needs in the quantities requested, at a price the Company is willing to pay; or
that meet the Company's quality standards. Any significant delay in or
disruption of the supply of raw materials could, among other things,
substantially increase the cost of such materials, require reformulation or
repackaging of products, require the qualification of new suppliers; or result
in the Company's inability to meet customer demands for certain products. The
occurrence of any of the foregoing could have a material adverse effect on the
Company's results of operations or financial condition.

INTELLECTUAL PROPERTY PROTECTION. The Company believes that trademarks and
other proprietary rights are important to its success and its competitive
position. 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 the Company is currently enforcing various
trademarks against infringement, both in the United States and in foreign
countries. 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.

POTENTIAL SALES AND EARNINGS VOLATILITY. The Company's sales and earnings
continue to be subject to potential volatility based upon, among other things,
the Company's inability to implement its business strategies; changes in
regulations that may limit or restrict the sale of certain of the Company's
products, the expansion of the Company's operations into new markets, or the
introduction of the Company's products into new markets; the Company's failure,
or its distributors' failure (and allegations of the Company's or their
failure), to comply with applicable regulations; the Company's inability to
introduce new products; lack of market acceptance of the Company's new products;
the introduction of new products by the Company's competitors; consumer
perceptions of the Company's products and operations; and general conditions in
the nutritional supplement industry.

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.

16
<PAGE>
CONTROL BY PRINCIPAL STOCKHOLDER. Weider Health and Fitness owns all of
the outstanding shares of Class B Common Stock of the Company representing
approximately 94% of the aggregate voting power of all outstanding shares of the
Company's common stock. Weider Health and Fitness is 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 or amended
and restated bylaws) and otherwise to direct and control the operations of the
Company. Accordingly, the Company cannot engage in any strategic transactions
without the approval of Weider Health and Fitness.

ITEM 2. PROPERTIES

At May 31, 2000, the Company owned or leased the following facilities:

<TABLE>
<CAPTION>
APPROXIMATE EXPIRATION
LOCATION FUNCTION SQUARE FEET LEASE/OWN DATE OF LEASE
-------- -------- ----------- --------- --------------
<S> <C> <C> <C> <C>
Salt Lake City, UT Company Headquarters, 418,000 Lease March 2013
Manufacturing & Pro-
duction, Warehouse &
Distribution
Salt Lake City, UT Manufacturing & Pro- 144,000 Own N/A
duction, Warehouse
Walterboro, S.C. Manufacturing & Pro- 55,000 Own N/A
duction
Las Vegas, NV Manufacturing & Pro- 27,500 Lease November 2000
duction
Montreal, Quebec Administrative Offices 24,600 Lease Month to month
& Warehouse
Madrid, Spain Administrative Offices, 20,000 Lease September 2006
Manufacturing & Pro-
Duction
Neumarkt, Italy Administrative Offices
& Warehouse 23,200 Own N/A
Hamburg, Germany Administrative Offices 25,400 Lease September 2003
Bleckede, Germany Manufacturing & Produc- 100,000 Own N/A
tion, Warehouse
Various, Germany(1) Sales & Administrative Various Leases Various
Offices
</TABLE>

(1) The Company has several small sales and administrative offices primarily
located in Germany.

ITEM 3. LEGAL PROCEEDINGS

THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934. THESE STATEMENTS RELATE TO THE COMPANY'S LEGAL
PROCEEDINGS DESCRIBED BELOW. THE COMPANY IS INVOLVED IN VARIOUS LEGAL
PROCEEDINGS WHICH ARISE IN THE ORDINARY COURSE OF ITS BUSINESS. LITIGATION IS
INHERENTLY UNCERTAIN AND MAY RESULT IN ADVERSE RULINGS OR DECISIONS AND THE
COMPANY IS UNABLE TO PREDICT THE OUTCOME OF THESE PROCEEDINGS. ADDITIONALLY, THE
COMPANY MAY ENTER INTO SETTLEMENTS OR BE SUBJECT TO JUDGMENTS WHICH MAY,
INDIVIDUALLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT ON THE
COMPANY'S RESULTS OF OPERATIONS. ACCORDINGLY, ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS.

17
<PAGE>
In March 1999, the plaintiff's attorney involved in a previously settled
California matter regarding certain of the Company's bar products filed a
lawsuit on behalf of Michael Morelli and an alleged class in the Supreme Court
of the State of New York (New York County) alleging similar unfair competition
and false advertising claims under New York law. In May 1999, the plaintiff's
attorney also filed a lawsuit on behalf of Lisa Fasig and an alleged class in
the Circuit Court of Lee County, Florida alleging similar claims under Florida
law. The Company disputes the allegations and is vigorously opposing the
lawsuits.

The Company has been named as a defendant in two lawsuits alleging that
consumption of certain of its products containing ephedrine caused injuries and
damages to two individuals. The Company disputes the allegations and is opposing
the lawsuits. The Company believes that, after taking into consideration the
Company's insurance coverage, such lawsuits, if successful, would not have a
material adverse effect on the Company's financial condition. The Company cannot
assure you that it will not be subject to further private civil actions with
respect to its ephedrine products or that product liability insurance will
continue to be available. See "Product Liability Insurance" under Item 1.

The Company has been in discussions with the FTC regarding advertising
with respect to the Company's PhenCal products. See "Government Regulation"
under Item 1. above for further information.

The Company is involved in other claims, legal actions and governmental
proceedings that arise from the Company business operations. Although ultimate
liability cannot be determined at the present time, the Company believes that
any liability resulting from these matters, if any, after taking into
consideration the Company's insurance coverage, will not have a material adverse
effect on the Company's financial position or cash flows.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to the vote of security holders during the fourth
quarter of fiscal 2000.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

In May 1997, the Company completed its initial public equity offering of
6,440,000 shares (includes over-allotment of 840,000 shares) of Class A common
stock, $.01 par value per share, which were issued at $11.00 per share (the
"IPO"). The Company's Class A common stock is traded on the New York Stock
Exchange under the symbol "WNI."

The high and low closing prices of the Company's Class A common stock for
each quarter of fiscal 2000, 1999 and 1998, respectively, are set forth below:

FISCAL YEAR ENDED MAY 31, 2000: HIGH LOW
---- ---
First Quarter............................ $ 5.31 $ 3.56
Second Quarter........................... 4.19 3.06
Third Quarter............................ 4.88 3.19
Fourth Quarter........................... 4.06 3.25

FISCAL YEAR ENDED MAY 31, 1999:
First Quarter............................ $17.38 $ 8.81
Second Quarter........................... 10.75 4.25
Third Quarter............................ 7.50 5.25
Fourth Quarter........................... 6.50 4.50

18
<PAGE>
HIGH LOW
---- ---
FISCAL YEAR ENDED MAY 31, 1998:
First Quarter............................ $19.75 $12.25
Second Quarter........................... 15.25 10.38
Third Quarter............................ 15.13 10.75
Fourth Quarter........................... 16.13 11.00

The Company paid an annual dividend of $0.15 per share (quarterly dividend
of $0.0375 per share) for fiscal 2000, 1999 and 1998. In addition, the Company
paid a quarterly dividend of $0.0375 per share subsequent to year end. The
dividend was declared to be payable on June 20, 2000 to holders of all classes
of common stock of record at the close of business on June 12, 2000. 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's credit agreement entered into with Bankers
Trust Company, effective June 30, 2000, contains certain customary financial
covenants that may limit the Company's ability to pay dividends on its common
stock (See Note 7 to the Consolidated Financial Statements). Accordingly, there
can be no assurance that the Company will be able to sustain the payment of
dividends in the future.

The closing price of the Company's Class A common stock on August 3, 2000
was $2.94. The approximate number of stockholders of record on August 3, 2000
was 340.

19
<PAGE>
ITEM 6. SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

The following selected consolidated financial data as of, and for the
fiscal years ended May 31, 1996 through May 31, 2000 have been derived from the
Company's consolidated financial statements, which have been audited by Deloitte
& Touche LLP, independent auditors. The financial data should be read in
conjunction with the consolidated financial statements and notes thereto,
included elsewhere in this Annual Report on Form 10-K. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS) FISCAL YEAR ENDED MAY 31,
-----------------------------------------------------------------------------
1996 1997 1998 1999 2000
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales .................................... $ 186,405 $ 218,566 $ 250,542 $ 335,488 $ 364,668
Cost of goods sold ........................... 116,177 136,875 161,334 221,062 228,573
--------- --------- --------- --------- ---------
Gross profit ................................. 70,228 81,691 89,208 114,426 136,095
--------- --------- --------- --------- ---------
Operating expenses ........................... 41,068 51,745 60,903 104,834 118,197
Severance, recruiting and
reorganization costs ....................... -- -- -- 3,062 4,116
Management and employee compensation charges . -- 14,495 401 804 301
Plant consolidation and transition ........... -- -- -- 5,113 --
Other inventory related charges .............. -- -- -- 4,115 --
Asset impairment costs ....................... -- 2,095 -- 535 --
--------- --------- --------- --------- ---------
Total operating expenses .................. 41,068 68,335 61,304 118,463 122,614
--------- --------- --------- --------- ---------
Income (loss) from operations ................ 29,160 13,356 27,904 (4,037) 13,481
Other income (expense):
Interest, net .............................. (3,736) (5,791) (4,219) (9,550) (11,086)
Other ...................................... (253) (557) (671) (430) (177)
--------- --------- --------- --------- ---------
Total other expense, net ................. (3,989) (6,348) (4,890) (9,980) (11,263)
--------- --------- --------- --------- ---------
Income (loss) before income taxes ............ 25,171 7,008 23,014 (14,017) 2,218
Income tax expense (benefit) ................. 10,207 2,708 9,010 (5,239) 1,145
--------- --------- --------- --------- ---------
Net income (loss) ............................ $ 14,964 $ 4,300 $ 14,004 $ (8,778) $ 1,073
========= ========= ========= ========= =========
Weighted average shares
outstanding, in thousands (1):
Basic ........................................ 17,245 17,866 24,702 24,930 25,042
========= ========= ========= ========= =========
Diluted ...................................... 17,245 17,866 25,001 24,930 25,048
========= ========= ========= ========= =========

Net income (loss) per share (1):
Basic ........................................ $ 0.87 $ 0.24 $ 0.57 $ (0.35) $ 0.04
========= ========= ========= ========= =========
Diluted ...................................... $ 0.87 $ 0.24 $ 0.56 $ (0.35) $ 0.04
========= ========= ========= ========= =========

<CAPTION>
(DOLLARS IN THOUSANDS) AT MAY 31,
-----------------------------------------------------------------------------
1996 1997 1998 1999 2000
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents .................... $ 1,592 $ 1,259 $ 684 $ 1,926 $ 3,011
Working capital (2) .......................... 42,605 62,015 85,688 79,001 42,327
Total assets ................................. 133,147 168,756 209,740 256,029 227,268
Total debt ................................... 68,054 45,094 70,346 115,439 82,880
Total stockholders' equity ................... 39,332 92,424 103,136 91,780 86,658
</TABLE>

(1) During fiscal 1998, the Company adopted SFAS No. 128, "Earnings Per Share."
Earnings per share amounts for fiscal 1996 and 1997 have been restated to
conform to the requirements of SFAS No. 128.

(2) Working capital at May 31, 1999 excludes $98,654 due in June 2000 under the
Company's credit facility (See Note 7 to the Consolidated Financial Statements).
Including such amount, working capital (deficit) amounts to $(19,653) at May 31,
1999.

20
<PAGE>
ITEM 7. 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 ANNUAL REPORT ON FORM 10-K. EXCEPT FOR THE HISTORICAL
INFORMATION CONTAINED HEREIN, THE MATTERS DISCUSSED IN THIS ANNUAL REPORT
CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED, THAT ARE BASED ON MANAGEMENT'S BELIEFS AND ASSUMPTIONS,
CURRENT EXPECTATIONS, ESTIMATES, AND PROJECTIONS. STATEMENTS THAT ARE NOT
HISTORICAL FACTS, INCLUDING WITHOUT LIMITATION STATEMENTS WHICH ARE PRECEDED BY,
FOLLOWED BY OR INCLUDE THE WORDS "BELIEVES," "ANTICIPATES," "PLANS," "EXPECTS,"
"MAY," "SHOULD" OR SIMILAR EXPRESSIONS ARE FORWARD-LOOKING STATEMENTS. THESE
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES, CERTAIN OF WHICH ARE BEYOND
THE COMPANY'S CONTROL, AND, THEREFORE, ACTUAL RESULTS MAY DIFFER MATERIALLY

OVERVIEW

The Company develops, manufactures, markets, distributes and sells branded
and private label vitamins, nutritional supplements and sports nutrition
products in the United States and throughout the world. Net income (loss) for
the fiscal years ended May 31, 2000, 1999 and 1998 amounted to $1.1 million,
$(8.8) million and $14.0 million, respectively. The Company's operating results
for fiscal 2000 and 1999 were affected by several strategic initiatives that
were initially and/or primarily implemented during this two-year period. These
initiatives included, among others, organizational changes and upgrading
management systems (including senior management changes), the decision to reduce
domestic SKUs by over two-thirds, the refinement of the Company's growth and
business strategies designed to focus on its primary brands and customers,
including the introduction of an enhanced marketing plan resulting in
significantly increased selling and marketing costs, the expansion of the
Company's international operations primarily from the acquisition of Haleko, the
closing of the Company's capsule and tablet manufacturing facility in
California, the limitation of contract manufacturing (private label) business to
select customers that otherwise carry the Company's brands and certain other
initiatives.

The implementation of these initiatives and the refinement of the
Company's growth and business strategies is an ongoing process. While the focus
of this process is to improve future profitability, no assurance can be given
that decisions made by the Company relating to these initiatives will not
adversely effect the Company's financial condition and results of operations.

21
<PAGE>
The Company experienced growth in sales over the past three fiscal years.
Net sales were $364.7 million, $335.5 million and $250.5 million for fiscal
years 2000, 1999 and 1998, respectively. The Company's growth has been a result
of the Company's acquisition strategy, increased demand for the Company's
products, including the growth in Schiff(R) Pain Free(TM)/Move Free(TM) sales
and the Company's increased penetration of the mass market distribution channel.
In July 1998, the Company acquired 100% of the outstanding shares of Haleko
Hanseatisches Lebensmittle Kontor GmbH, ("Haleko"), which is the largest sports
nutrition company in Europe and is headquartered in Germany. The Company's
acquisition of Haleko resulted in incremental net sales of approximately $105.1
million and $73.4 million (ten months) in fiscal 2000 and 1999, respectively.
Haleko had sales of approximately $69.0 million for the twelve months ending May
31, 1998.

The following table shows selected items as reported and as a percentage
of net sales for the years indicated:

<TABLE>
<CAPTION>
2000 1999 1998
---------------------------- ----------------------------- ----------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net sales .................... $ 364,668 100.0% $ 335,488 100.0% $ 250,542 100.0%
Cost of goods
sold ....................... 228,573 62.7 221,062 65.9 161,334 64.4
------------ ------------ ------------ ------------ ------------ ------------
Gross profit ................. 136,095 37.3 114,426 34.1 89,208 35.6
------------ ------------ ------------ ------------ ------------ ------------
Operating
expenses ................... 118,197 32.4 104,834 31.3 60,903 24.3
Severance, recruiting and
reorganizational costs ..... 4,116 1.1 3,062 .9 -- --
Management and employee
compensation
charges .................... 301 .1 804 .2 401 .2
Plant consolidation and
transition ................. -- -- 5,113 1.5 -- --
Other inventory related
charges .................... -- -- 4,115 1.2 -- --
Asset impairment costs ....... -- -- 535 .2 -- --
------------ ------------ ------------ ------------ ------------ ------------
Total operating
expenses ................... 122,614 33.6 118,463 35.3 61,304 24.5
------------ ------------ ------------ ------------ ------------ ------------
Income (loss)from
operations ................. 13,481 3.7 (4,037) (1.2) 27,904 11.1
Other expense, net ........... 11,263 3.1 9,980 3.0 4,890 2.0
Income tax expense
(benefit) ................. 1,145 .3 (5,239) (1.6) 9,010 3.5
------------ ------------ ------------ ------------ ------------ ------------
Net income (loss) ............ $ 1,073 .3% $ (8,778) (2.6)% $ 14,004 5.6%
============ ============ ============ ============ ============ ============
</TABLE>

RESULTS OF OPERATIONS
(FISCAL 2000 COMPARED TO FISCAL 1999)

NET SALES. Net sales for the fiscal year ended May 31, 2000 increased
$29.2 million, or 8.7%, to $364.7 million from $335.5 million for the fiscal
year ended May 31, 1999. The following table shows comparative net sales results
categorized by distribution channel as reported and as a percentage of net sales
for the fiscal years indicated (dollars in thousands):

2000 1999
-------------------- --------------------
Mass market .................. $180,927 49.7% $152,046 45.4%
Health food stores ........... 34,642 9.5 56,178 16.7
Health clubs and gyms ........ 22,326 6.1 24,960 7.4
International markets ........ 122,605 33.6 89,189 26.6
Contract manufacturing ....... 378 .1 8,474 2.5
Other ........................ 3,790 1.0 4,641 1.4
-------- -------- -------- --------
Total .................. $364,668 100.0% $335,488 100.0%
======== ======== ======== ========

22
<PAGE>
Sales to mass market customers (including food, drug, mass, club and
convenience stores) increased approximately 19.0% to $180.9 million in fiscal
2000 from $152.0 million in fiscal 1999. The increase in sales to mass market
customers was primarily the result of increased sales to existing accounts of
certain leading branded products, including Schiff(R) Pain Free(TM)/Move
Free(TM), offset by reduced volumes of certain other branded products primarily
due to the Company's SKU reduction program and a temporary delay in the
introduction of new products (primarily during the first nine months of fiscal
2000). Gross sales of the Company's Schiff(R) Pain Free(TM)/Move Free(TM)
products amounted to $111.3 million for fiscal 2000 compared to $71.1 million
for fiscal 1999.

Sales to health food stores decreased approximately 38.3% to $34.6 million
for fiscal 2000 from $56.2 million for fiscal 1999. Sales to health clubs and
gyms decreased approximately 10.6% to $22.3 million for fiscal 2000 from $25.0
million for fiscal 1999. The decrease in sales resulted primarily from the
Company's increased focus on the mass market distribution channel as well as a
temporary delay in the introduction of new products into the health food, and
health club and gym distribution channels. Gross sales of new products,
including line extensions, amounted to approximately $10.4 million for fiscal
2000 compared to approximately $29.8 million for fiscal 1999.

Sales to international markets increased 37.5% to $122.6 million for the
year ended May 31, 2000 from $89.2 million for the year ended May 31, 1999. The
increase in sales to international markets resulted primarily from the Company's
acquisition of Haleko in July 1998 and the growth in Haleko's sportswear
business. Haleko's net sales amounted to $105.1 million and $73.4 million,
respectively, for the years ended May 31, 2000 and May 31, 1999. The Company's
financial results for fiscal 2000 included Haleko's operating results for an
entire year (compared to ten months included in fiscal 1999).

Contract manufacturing (private label) sales volume decreased
approximately 95.5% to $0.4 million for fiscal 2000 from $8.5 million for fiscal
1999. The decrease in contract manufacturing sales is consistent with the
Company's decision to limit contract manufacturing business to select customers
that otherwise carry the Company's brands. Private label business for customers
that otherwise carry the Company's brands are included in the net sales amounts
for the distribution channel applicable to such customer.

The Company's three largest customers accounted for approximately 44% of
the Company's aggregate net sales for the year ended May 31, 2000 and 43% for
the year ended May 31, 1999.

GROSS PROFIT. Gross profit increased approximately 18.9% to $136.1 million
for the year ended May 31, 2000 from $114.4 million for the year ended May 31,
1999. Gross profit, as a percentage of net sales, was 37.3% for the year ended
May 31, 2000 compared to 34.1% for the year ended May 31, 1999.

The increase in the gross profit percentage resulted primarily from a
change in domestic sales mix, efficiencies from consolidation of the Company's
capsule and tablet manufacturing facilities, increased higher margin
international sales, and reduced credits for returned products and decreased
inventory related costs.

OPERATING EXPENSES. Operating expenses, including certain severance,
recruiting and reorganization costs, increased approximately 3.5% to $122.6
million for fiscal 2000 from $118.5 million for fiscal 1999. During fiscal 2000
the Company continued its initiative for organizational changes and upgrading of
management systems (including senior management changes) that resulted in
approximately $4.3 million of costs incurred during the year. During fiscal 1999
the Company recognized, in aggregate, approximately $12.8 million in charges
relating to the consolidation of capsule and tablet manufacturing to its Utah
facility, severance costs related to the departure of a former CEO and the
termination of approximately twenty employees and other inventory charges
resulting from charitable contributions and excess labels, packaging and
discontinuation of certain SKUs to comply with DSHEA product labeling
requirements effective March 1999. Excluding these charges for the respective
periods, operating expenses increased $12.7 million, or 12.0% during fiscal 2000
in comparison to fiscal 1999 primarily due to increased selling and marketing
expenses.

23
<PAGE>
Selling and marketing expenses, including sales, marketing, advertising,
freight and other costs, increased approximately 16.8% to $81.8 million for
fiscal 2000 from $70.1 million for fiscal 1999. The increase in selling and
marketing expenses resulted primarily from the acquisition of Haleko, increased
advertising and promotion costs associated with the Company's brand building
initiatives and personnel costs required to handle higher sales volumes. The
Company expects its selling and marketing expenses, as a percentage of sales, to
increase in future years.

General and administrative expenses increased approximately 5.7% to $28.4
million for the year ended May 31, 2000 compared to $26.9 million for the year
ended May 31, 1999. The increase in general and administrative expenses for
fiscal 2000 resulted primarily from the acquisition of Haleko and increased
employee compensation and other personnel costs, partially offset by a reduction
in legal costs.

OTHER EXPENSE. Other expense, net, amounted to $11.3 million for the year
ended May 31, 2000 compared to $10.0 million for the year ended May 31, 1999.
The net increase of approximately $1.3 million resulted primarily from increased
fees and interest costs associated with extending the maturity date of the
previous credit facility, together with an overall higher effective borrowing
rate.

INCOME TAXES. Provision for income taxes amounted to $1.1 million for the
year ended May 31, 2000 compared to a tax benefit of $5.2 million for the year
ended May 31, 1999. The income tax expense resulted primarily from realization
of pre-tax earnings for fiscal 2000 in comparison to a pre-tax loss for fiscal
1999. Effective tax rate changes result primarily from tax rate differences for
the Company's domestic and international operations.

RESULTS OF OPERATIONS
(FISCAL 1999 COMPARED TO FISCAL 1998)

NET SALES. Net sales for the year ended May 31, 1999 increased $85.0
million, or 33.9%, to $335.5 million from $250.5 million for the year ended May
31, 1998.

The following table shows comparative net sales results categorized by
distribution channel as reported and as a percentage of net sales for the fiscal
years indicated (dollars in thousands):

1999 1998
-------------------- --------------------
Mass market ................. $152,046 45.4% $110,388 44.4%
Health food stores .......... 56,178 16.7 61,742 24.6
Health clubs and gyms ....... 24,960 7.4 25,853 10.3
International markets ....... 89,189 26.6 17,295 6.6
Contract manufacturing ...... 8,474 2.5 30,341 12.1
Other ....................... 4,641 1.4 4,923 2.0
-------- -------- -------- --------
Total ................. $335,488 100.0% $250,542 100.0%
======== ======== ======== ========

Sales to mass market customers and international markets increased during
1999 compared to 1998. Sales to mass market customers increased approximately
37.7% to $152.0 million in 1999 from $110.4 million in 1998. The increase in
sales to mass market customers resulted primarily from increased penetration of
the market and the sale of new products offset by the effects of the Company's
fiscal 1999 strategic initiatives. Gross sales of Schiff(R) Pain Free(TM)/Move
Free(TM) amounted to approximately $71.1 million for the year ended May 31, 1999
compared to $17.9 million for the year ended May 31, 1998.

Sales to international markets increased $71.9 million to $89.2 million
for the year ended May 31, 1999 from $17.3 million for the year ended May 31,
1998. The increase in sales to international markets resulted primarily from the
Company's acquisition of Haleko offset by a relatively small decrease in other
international sales volume (resulting primarily from a change in year end for
international operations). Haleko's sales for fiscal 1999 (ten months) amounted
to approximately $73.4 million.

24
<PAGE>
Overall sales to health food stores decreased approximately 9.0% to $56.2
million for fiscal 1999 compared to $61.7 million for fiscal 1998. The decrease
in sales resulted primarily from the Company's increased focus on the mass
market distribution channel together with certain individual retailers in the
health food distribution channel. Sales to GNC, the Company's most significant
health food retailer, remained relatively constant in fiscal 1999 compared to
fiscal 1998, whereas sales to other health food stores decreased in fiscal 1999
compared to fiscal 1998.

Sales to health clubs and gyms decreased approximately 3.5% to $25.0
million for fiscal 1999 from $25.9 million for fiscal 1998. The decrease
resulted primarily from reduced volumes with certain distributors.

Contract manufacturing (private label) sales volume decreased
approximately 72.1% to $8.5 million for the year ended May 31, 1999 from $30.3
million for the year ended May 31, 1998. The decrease in contract manufacturing
sales is consistent with the Company's decision to limit contract manufacturing
business to select customers that otherwise carry the Company's brands.

The Company's three largest customers accounted for approximately 43% of
net sales for the year ended May 31, 1999 and 41% for the year ended May 31,
1998.

GROSS PROFIT. Gross profit increased approximately 28.3% to $114.4 million
for the year May 31, 1999 from $89.2 million for the year ended May 31, 1998.
Gross profit, as a percentage of net sales, was 34.1% for the year ended May 31,
1999 compared to 35.6% for the year ended May 31, 1998. The decrease in the
gross profit percentage resulted primarily from inventory charges recognized due
to the Company's domestic SKU reduction program together with associated credits
for returned goods.

OPERATING EXPENSES. Operating expenses increased approximately 93.2% to
$118.5 million for the year ended May 31, 1999 from $61.3 million for the year
ended May 31, 1998. As discussed previously, the Company initiated several
strategic decisions during fiscal 1999, including, among others, the closing of
its California-based capsule and tablet manufacturing facility, the
implementation of a domestic SKU reduction program, organizational changes and
upgrading management systems, and the expansion of the Company's international
operations. These initiatives, together with the acquisition of Haleko, general
sales growth and increased legal costs, resulted in a significant increase in
total operating expenses.

Selling and marketing expenses increased approximately 78.6% to $70.1
million for the year ended May 31, 1999 from $39.2 million for the year ended
May 31, 1998. Selling and marketing expenses as a percentage of net sales were
20.9% for the year ended May 31, 1999 compared to 15.7% for the year ended May
31, 1998. The increase in selling and marketing expense resulted primarily from
the Company's acquisition of Haleko and incremental advertising and promotional
costs in support of the Company's brand building strategies. Total selling,
marketing and advertising costs amounted to $49.8 million in fiscal 1999
compared to $24.2 million in fiscal 1998. Incremental selling and marketing
costs resulting from the Haleko acquisition amounted to $18.1 million in fiscal
1999.

General and administrative expenses, as a percentage of net sales, were
8.0% for the year ended May 31, 1999 compared to 6.2% for the year ended May 31,
1998. The increase resulted primarily from increased legal costs, "Year 2000"
implementation and compliance costs, as well as other costs associated with
information system capabilities and the incremental costs associated with the
acquisition of Haleko.

OTHER EXPENSE. Other expense, net, amounted to $10.0 million for the year
ended May 31, 1999 compared to $4.9 million for the year ended May 31, 1998. The
net increase of approximately $5.1 million consists primarily of increased
interest costs associated with additional indebtedness incurred in connection
with the acquisition of Haleko as well as a higher overall effective borrowing
rate for fiscal 1999 in comparison to fiscal 1998.

25
<PAGE>
INCOME TAXES. The Company recognized an income tax benefit for the fiscal
year ended May 31, 1999 as a result of its pretax loss. The Company's overall
effective tax rate is higher in fiscal 1999, in comparison to 1998, primarily as
a result of a higher effective tax rate associated with Haleko's operating
results. Income taxes (benefit), as a percentage of pre-tax income, amounted to
approximately 37.4% for the year ended May 31, 1999 compared to 39.2% for the
year ended May 31, 1998.

LIQUIDITY AND CAPITAL RESOURCES

Effective June 30, 2000, the Company and its domestic subsidiaries entered
into a new $90.0 million senior credit facility (the "New Credit Facility") with
Bankers Trust Company. The New Credit Facility replaced the Company's previous
credit facility, which consisted of a revolving line of credit that expired on
June 30, 2000.

The New Credit Facility is comprised of a $30.0 million term loan and a
$60.0 million revolving loan. Under the revolving loan, the Company may borrow
up to the lesser of $60.0 million or the sum of (i) 85% of eligible accounts
receivable and (ii) the lesser of $30.0 million or 65% of the eligible
inventory. The New Credit Facility contains customary terms and conditions,
including, among others, financial covenants regarding minimum cash flows and
limitations on indebtedness and the Company's ability to pay dividends under
certain circumstances. The obligations of the Company under the New Credit
Facility are secured by a first priority lien on all owned or acquired tangible
and intangible assets of the Company and its domestic subsidiaries. The New
Credit Facility is being used to fund the normal working capital and capital
expenditure requirements of the Company. At the inception of the New Credit
Facility, the Company borrowed approximately $64.8 million (together with the
proceeds from the subordinated loan discussed below) to repay in full its
outstanding obligation under the previous credit facility and related financing
costs of the New Credit Facility.

Concurrently with the New Credit Facility, on June 30, 2000 the Company
entered into a $10.0 million senior subordinated loan agreement (the
"Subordinated Loan"). The proceeds from the Subordinated Loan were used to repay
outstanding obligations under the Company's previous credit facility. The
Subordinated Loan contains customary terms and conditions, including, among
others, financial covenants regarding minimum cash flows and limitations on
indebtedness and the Company's ability to pay dividends under certain
circumstances.

The Company had working capital of approximately $42.3 million at May 31,
2000 compared to $79.0 million at May 31, 1999 (excluding $98.7 million
outstanding at May 31, 1999 under the previous credit agreement; See Note 7 to
the Consolidated Financial Statements). The decrease in working capital resulted
primarily from reduced receivables and inventories. Current receivables and
inventories decreased $7.0 million and $16.5 million, respectively, during the
year ended May 31, 2000. The decrease in receivables was primarily attributable
to a change in customer sales mix. The decrease in inventories was primarily
attributable to improved inventory management, including the Company's SKU
reduction program.

During fiscal 2000, the Company's aggregate current and long-term debt
decreased approximately $32.6 million to $82.9 million at May 31, 2000,
primarily as a result of the decrease in receivables and inventories.

The Company expects to fund its long-term capital requirements for the
next twelve months through the use of operating cash flow supplemented as
necessary by borrowings under both the New Credit Agreement and Haleko's
approximate $18.6 million secured credit facility (see Note 7 to the
Consolidated Financial Statements). The Company also from time to time may
evaluate strategic acquisitions as the nutritional supplements industry
continues to consolidate. The funding of future acquisitions, if any, may
require other debt financing or the issuance of additional equity.

26
<PAGE>
The Company paid an annual dividend of $0.15 per share (quarterly dividend
of $0.0375 per share) for fiscal 2000. In addition, the Company paid a quarterly
dividend of $0.0375 per share subsequent to year end. The dividend was declared
to be payable on June 20, 2000 to holders of all classes of common stock of
record at the close of business on June 12, 2000. 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 New
Credit Agreement contains 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.

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.

Furthermore, as a result of changes in product sales mix and other
factors, as discussed above, the Company experiences fluctuations in gross
profit and operating margins on a quarter-to-quarter basis.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which supersedes SFAS No. 80, "Accounting
for Futures Contracts," SFAS No. 105, "Disclosure of Information About Financial
Instruments with Off-Balance-Sheet Risk and Financial Instruments with
Concentration of Credit Risk," and SFAS No. 119, "Disclosures about Derivative
Financial Instruments and Fair Value of Financial Instruments," and also amends
certain aspects of other SFAS's previously issued. SFAS No. 133 establishes
accounting and reporting standards for derivative instruments and hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the balance sheet and measure those instruments at fair
value. SFAS No. 133, as amended by SFAS No. 137, is effective for the Company's
financial statements for the year ending May 31, 2001. The Company does not
expect the impact of adopting SFAS No. 133 to be material in relation to its
financial statements.

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") 101, "Revenue Recognition in Financial Statements."
SAB 101 establishes accounting and reporting standards for the recognition of
revenue. It states that revenue generally is realized or realizable and earned
when all of the following criteria are met: (1) persuasive evidence of an
arrangement exists; (2) delivery has occurred or services have been rendered;
(3) the seller's price to the buyer is fixed or determinable; and (4)
collectibility is reasonably assured. SAB 101 is effective for the Company's
financial statements in the fiscal quarter beginning March 1, 2001. The Company
has not determined the impact of adopting SAB 101 to the Company's financial
statements.

27
<PAGE>
YEAR 2000

As of August 29, 2000, the Company is not aware of any material year
2000 problems in any of its critical systems and services. In addition, the
Company has not received any notification from any supplier of critical systems
or services of any material year 2000 related problems in their businesses. In
the event that any year 2000 related problems arise in the future, the Company
formulated a year 2000 plan to address such issues. However, although the
Company has a year 2000 plan, no assurance can be given that such plan will be
able to solve all year 2000 issues that might still arise or that the failure to
solve any such year 2000 issue will not have a material adverse effect on the
Company.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following discussion involves forward-looking statements of market
risk which assume for analytical purposes that certain adverse market conditions
may occur. Actual future market conditions may differ materially from such
assumptions. Accordingly, the forward-looking statements should not be
considered projections by the Company of future events or losses.

The Company's cash flows and net earnings are subject to fluctuations
resulting from changes in interest rates and foreign exchange rates. The Company
currently is not party to any significant derivative instruments and its current
policy does not allow speculation in derivative instruments for profit or
execution of derivative instrument contracts for which there are no underlying
exposure. The Company does not use financial instruments for trading purposes.

The Company measures its market risk, related to its holdings of financial
instruments, based on changes in interest rates utilizing a sensitivity
analysis. The Company does not believe that a hypothetical 10% change in
interest rates would nave a material effect on the Company's pretax earnings or
cash flows.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial statements and supplementary data for the Company are on the
following pages F-1 through F-25.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

None

28
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Independent Auditors' Report................................................F-2

Consolidated Balance Sheets at May 31, 2000 and 1999........................F-3

Consolidated Statements of Operations, Years Ended
May 31, 2000, 1999 and 1998.................................................F-4

Consolidated Statements of Stockholders' Equity,
Years Ended May 31, 2000, 1999 and 1998.....................................F-5

Consolidated Statements of Cash Flows, Years
Ended May 31, 2000, 1999 and 1998...........................................F-6

Notes to Consolidated Financial Statements..................................F-8

F-1
<PAGE>
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,
2000 and 1999, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the three years in the period
ended May 31, 2000. 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 auditing standards generally accepted
in the United States of America. 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 our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Weider Nutrition International,
Inc. and subsidiaries at May 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
May 31, 2000 in conformity with accounting principles generally accepted in the
United States of America.

DELOITTE & TOUCHE LLP

Salt Lake City, Utah
August 18, 2000

F-2
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MAY 31, 2000 AND 1999
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
ASSETS
2000 1999
--------------- ---------------
<S> <C> <C>
Current assets:
Cash and cash equivalents ................................................................ $ 3,011 $ 1,926
Receivables, net (Note 3) ................................................................ 53,522 60,524
Inventories (Note 4) ..................................................................... 47,113 63,658
Prepaid expenses and other ............................................................... 4,982 4,712
Deferred taxes (Note 8) .................................................................. 6,560 7,387
--------------- ---------------

Total current assets ............................................................ 115,188 138,207
--------------- ---------------

Property and equipment, net (Note 5) ....................................................... 47,198 48,872
--------------- ---------------

Other assets:
Intangible assets, net (Note 6) .......................................................... 49,412 51,980
Deposits and other assets ................................................................ 6,745 12,806
Notes receivable related to
stock performance units (Note 9) ....................................................... 4,188 4,164
Deferred taxes (Note 8) .................................................................. 4,537 --
--------------- ---------------

Total other assets .............................................................. 64,882 68,950
--------------- ---------------

Total assets .......................................................... $ 227,268 $ 256,029
=============== ===============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable ......................................................................... $ 32,650 $ 25,492
Accrued expenses ......................................................................... 21,735 18,406
Earnout amounts payable (Note 2) ......................................................... 2,796 3,246
Current portion of long-term debt (Note 7) ............................................... 15,131 110,716
Income taxes payable ..................................................................... 549 --
--------------- ---------------

Total current liabilities ....................................................... 72,861 157,860
--------------- ---------------

Long-term debt (Note 7) .................................................................... 67,749 4,723
--------------- ---------------

Deferred taxes (Note 8) .................................................................... -- 1,666
--------------- ---------------

Commitments and contingencies (Notes 2, 7, 9, 10 and 11)

Stockholders' equity:
Preferred stock, par value $.01 per share; shares
authorized-10,000,000; no shares issued and outstanding ................................ -- --
Class A common stock, par value $.01 per share; shares
authorized-50,000,000; shares issued and
outstanding-9,363,778 (2000) and 9,334,036 (1999) ...................................... 94 93
Class B common stock, par value $.01 per share; shares
authorized-25,000,000; shares issued and
outstanding-15,687,432 (2000 and 1999) ................................................. 157 157
Additional paid-in capital ............................................................... 83,225 82,985
Other accumulated comprehensive loss ..................................................... (5,003) (2,331)
Retained earnings ........................................................................ 8,185 10,876
--------------- ---------------

Total stockholders' equity ...................................................... 86,658 91,780
--------------- ---------------

Total liabilities and stockholders' equity ............................ $ 227,268 $ 256,029
=============== ===============
</TABLE>
See notes to consolidated financial statements.
F-3
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED MAY 31, 2000, 1999 AND 1998
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
2000 1999 1998
--------------- --------------- ---------------
<S> <C> <C> <C>
Net sales ........................................................ $ 364,668 $ 335,488 $ 250,542

Cost of goods sold ............................................... 228,573 221,062 161,334
--------------- --------------- ---------------

Gross profit ..................................................... 136,095 114,426 89,208
--------------- --------------- ---------------

Operating expenses:
Selling and marketing .......................................... 81,843 70,072 39,230
General and administrative ..................................... 28,429 26,895 15,515
Research and development ....................................... 4,599 4,629 3,983
Amortization of intangible assets .............................. 3,326 3,238 2,175
Severance, recruiting and
reorganization costs ......................................... 4,116 3,062 --
Management and employee
compensation charges ......................................... 301 804 401
Plant consolidation and transition ............................. -- 5,113 --
Other inventory related charges ................................ -- 4,115 --
Asset impairment costs ......................................... -- 535 --
--------------- --------------- ---------------

Total operating expenses .............................. 122,614 118,463 61,304
--------------- --------------- ---------------

Income (loss) from operations .................................... 13,481 (4,037) 27,904
--------------- --------------- ---------------

Other income (expense):
Interest income ................................................ 697 629 599
Interest expense ............................................... (11,783) (10,179) (4,818)
Other .......................................................... (177) (430) (671)
--------------- --------------- ---------------

Total other expense, net .............................. (11,263) (9,980) (4,890)
--------------- --------------- ---------------

Income (loss) before income taxes ................................ 2,218 (14,017) 23,014

Income tax expense (benefit) ..................................... 1,145 (5,239) 9,010
--------------- --------------- ---------------

Net income (loss) ................................................ $ 1,073 $ (8,778) $ 14,004
=============== =============== ===============

Weighted average shares outstanding:
Basic .......................................................... 25,042,073 24,930,272 24,702,283
=============== =============== ===============
Diluted ........................................................ 25,048,106 24,930,272 25,000,616
=============== =============== ===============

Net income (loss) per share:
Basic .......................................................... $ 0.04 $ (0.35) $ 0.57
=============== =============== ===============
Diluted ........................................................ $ 0.04 $ (0.35) $ 0.56
=============== =============== ===============
</TABLE>
See notes to consolidated financial statements.

F-4
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED MAY 31, 2000, 1999 AND 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
OTHER
CLASS A CLASS B ADDITIONAL ACCUMULATED
COMMON COMMON PAID-IN COMPREHENSIVE RETAINED
STOCK STOCK CAPITAL LOSS EARNINGS TOTAL
-------------- --------------- --------------- --------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at June 1, 1997 ............... $ 90 $ 157 $ 79,271 $ (177) $ 13,083 $ 92,424

Comprehensive income:
Net income .......................... -- -- -- -- 14,004 14,004
Foreign currency translation
adjustments ....................... -- -- -- 12 -- 12
-----------
Total comprehensive
Income ....................... 14,016
Issuance of stock in
connection with
performance units
(Note 9) .......................... 1 -- 400 -- -- 401
Dividends paid on common
Stock ............................. -- -- -- -- (3,705) (3,705)
-------------- --------------- --------------- --------------- ---------- -----------

Balance at May 31, 1998 ............... 91 157 79,671 (165) 23,382 103,136

Comprehensive loss:
Net loss ............................ -- -- -- -- (8,778) (8,778)
Available-for-sale securities
valuation adjustment .............. -- -- -- (1,691) -- (1,691)
Foreign currency translation
adjustments ....................... -- -- -- (475) -- (475)
-----------
Total comprehensive
loss ...................... (10,944)
Issuance of stock in
connection with
acquisition (Note 2) .............. 1 -- 2,599 -- -- 2,600
Issuance of stock in
connection with
performance units (Note 9) ........ 1 -- 803 -- -- 804
Tax loss from performance
units ............................. -- -- (226) -- -- (226)
Stock options exercised ............. -- -- 138 -- -- 138
Dividends paid on common
stock ............................. -- -- -- -- (3,728) (3,728)
-------------- --------------- --------------- --------------- ---------- -----------

Balance at May 31, 1999 ............... 93 157 82,985 (2,331) 10,876 91,780

Comprehensive loss:
Net income .......................... -- -- -- -- 1,073 1,073
Available-for-sale securities
valuation adjustment .............. -- -- -- (200) -- (200)
Foreign currency translation
adjustments ....................... -- -- -- (2,472) -- (2,472)
-----------
Total comprehensive loss ... (1,599)
Issuance of stock in
connection with
performance units (Note 9) ........ 1 -- 300 -- -- 301
Tax loss from performance
units ............................. -- -- (72) -- -- (72)
Stock options exercised ............. -- -- 12 -- -- 12
Dividends paid on common
stock ............................. -- -- -- -- (3,764) (3,764)
-------------- -------------- --------------- --------------- ---------- -----------

Balance at May 31, 2000 ............... $ 94 $ 157 $ 83,225 $ (5,003) $ 8,185 $ 86,658
============== =============== =============== =============== ========== ===========
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MAY 31, 2000, 1999 AND 1998
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
2000 1999 1998
--------------- --------------- ---------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) .................................................. $ 1,073 $ (8,778) $ 14,004

Adjustments to reconcile net income (loss) to net
cash provided by (used in)
operating activities:
Provision for bad debts ........................................ 2,074 1,094 273
Deferred taxes ................................................. (1,289) (211) 860
Depreciation, amortization and
asset impairment ............................................. 10,959 14,135 7,996
Management and employee stock
compensation charges ......................................... 301 804 401
Tax loss from performance units ................................ (72) (226) --
Changes in operating assets and liabilities-net of
assets acquired:
Receivables ............................................... 6,512 5,362 (8,805)
Inventories ............................................... 17,683 6,531 (19,741)
Prepaid expenses and other ................................ (254) (694) (564)
Deposits and other assets ................................. 5,354 6,878 (4,804)
Accounts payable .......................................... 3,325 (3,971) 3,632
Other current liabilities ................................. 3,200 (3,386) 1,388
--------------- --------------- ---------------

Net cash provided by (used in)
operating activities ......................................... 48,866 17,538 (5,360)
--------------- --------------- ---------------

Cash flows from investing activities:
Purchase of property and equipment ................................. (5,877) (11,409) (11,870)
Proceeds from disposition of property
and equipment .................................................... 148 1,040 --
Increase in notes receivable ....................................... (24) (177) (3,987)
Purchase of intangible assets ...................................... (267) (1,050) --
Purchase of companies, net of cash acquired ........................ (1,164) (24,326) --
Purchase of available-for-sale securities .......................... -- (4,998) --
--------------- --------------- ---------------

Net cash used in investing activities .......................... (7,184) (40,920) (15,857)
--------------- --------------- ---------------

Cash flows from financing activities:
Issuance of common stock ........................................... 12 138 --
Dividends paid ..................................................... (3,764) (3,728) (3,705)
Proceeds from long-term debt ....................................... 4,143 33,757 27,438
Payments on long-term debt ......................................... (34,628) (3,174) (2,186)
--------------- --------------- ---------------

Net cash provided by (used in)
financing activities .......................................... (34,237) 26,993 21,547
--------------- --------------- ---------------

Effect of exchange rate changes on cash .............................. (6,360) (2,369) (905)
--------------- --------------- ---------------

Increase (decrease) in cash and cash
equivalents ........................................................ 1,085 1,242 (575)

Cash and cash equivalents, beginning of year ......................... 1,926 684 1,259
--------------- --------------- ---------------

Cash and cash equivalents, end of year ............................... $ 3,011 $ 1,926 $ 684
=============== =============== ===============
</TABLE>

F-6
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MAY 31, 2000, 1999 AND 1998
(DOLLARS IN THOUSANDS)

SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:

2000 1999 1998
-------- -------- --------
Cash paid during the year for:
Interest .......................... $ 12,741 $ 8,238 $ 4,930
Income taxes (net of refunds) ..... (597) 276 4,792

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

In connection with the acquisitions of net assets from other companies (see
Note 2), the Company assumed liabilities as follows for the years ended May 31:

2000 1999
-------- --------

Fair value of assets acquired .......... $ 4,573 $ 39,393
Cost in excess of fair value of
net assets acquired .................. 1,113 20,440
Cash paid, net of cash acquired ........ (1,164) (24,326)
Stock issued ........................... -- (2,600)
Debt and liabilities issued ............ (54) (4,900)
-------- --------

Liabilities assumed .................... $ 4,468 $ 28,007
======== ========

Note: There were no acquisitions consummated during fiscal 1998.

(Concluded)

See notes to consolidated financial statements.

F-7
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MAY 31, 2000, 1999 AND 1998
(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"). The Company is a majority-owned
subsidiary of Weider Health and Fitness ("WHF"). All significant intercompany
accounts and transactions have been eliminated.

INITIAL PUBLIC OFFERING--Effective May 1, 1997, the Company consummated an
initial public offering of its Class A common stock (the "IPO"). A total of
6,440,000 shares were sold to the public at $11 per share. The net proceeds to
the Company from the IPO amounted to approximately $63.9 million (after
underwriters' discounts of $5.0 million and offering costs of $2.0 million).

Prior to the IPO, the Board of Directors (the "Board") authorized the
Company to issue shares of Class B common stock to WHF in exchange for its Class
A holdings. A total of 15,687,432 shares of Class B common stock were issued to
WHF. Each holder of Class B common stock is entitled to ten votes per share on
all matters presented to a vote of stockholders, including the election of
directors.

DESCRIPTION OF BUSINESS--The Company develops, manufactures, markets,
distributes and sells branded and private label vitamins, nutritional
supplements and sports nutrition products in the United States and throughout
the world. The Company offers a broad range of capsules and tablets, powdered
drink mixes, bottled beverages and nutrition bars. The Company markets its
branded nutritional supplement products, both domestically and internationally,
through mass market, health foods store and health club and gym distribution
channels. The Company also markets a line of sportswear in Europe, primarily in
Germany.

USE OF ESTIMATES AND ASSUMPTIONS IN PREPARING FINANCIAL STATEMENTS--The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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. Such estimates include, among others, the allowance for
doubtful accounts, the allowance for sales returns and the accrual for pending
litigation costs. Actual results could differ from the 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.

F-8
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

BARTER TRANSACTIONS- During fiscal 1998, the Company entered into a barter
transaction whereby inventories in the amount of $4.5 million, at cost, were
exchanged for cash of $0.4 million and advertising credits of $4.1 million. The
Company expenses the capitalized barter credits over a three-year period.
Capitalized barter credits amounted to approximately $1.3 million at May 31,
2000. The advertising credits do not have an expiration date. The Company
accounts for such transactions at the lower of the net realizable value of the
inventory or the barter credits.

INVESTMENT IN AVAILABLE-FOR-SALE SECURITIES--During fiscal 1999, the
Company invested in certain "available-for-sale" equity securities with an
original cost of $4,998. In accordance with Statement of Financial Accounting
Standards ("SFAS") No. 115, these securities are recorded at fair value with the
accompanying unrealized holding gains (losses), net of income tax effects,
included as a separate component of stockholders' equity. At May 31, 2000,
unrealized losses of $3,152, net of income tax benefits of $1,261, were included
in other accumulated comprehensive loss in the accompanying financial
statements.

PROPERTY AND EQUIPMENT--Property and equipment are stated at cost less
accumulated depreciation. Depreciation and amortization expense was $7,633
(2000), $7,708 (1999) and $5,667 (1998), computed primarily using the
straight-line method over the estimated useful lives of 31 to 50 years for
buildings, 2 to 10 years for furniture and equipment and 3 to 16 years for
leasehold improvements.

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:

Cost in excess of fair value of net assets acquired 10-35 years
Patents and trademarks 10-20 years
Noncompete agreements 5 years

The Company evaluates the economic factors for determining requisite
recovery periods for certain intangible assets on a case-by-case basis.

LONG-LIVED ASSETS--Impairment of long-lived assets is determined in
accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and of Long-Lived Assets to be Disposed Of." The Company evaluates the
carrying value of long-term assets based upon current and anticipated
undiscounted cash flows, and recognizes an impairment when such estimated cash
flows will be less than the carrying value of the asset. Measurement of the
amount of impairment, if any, is based upon the difference between carrying
value and fair value. The Company recognized an asset impairment in the amount
of $535 in fiscal 1999.

INCOME TAXES--The Company records in its balance sheet deferred income tax
liabilities and assets for temporary differences in the basis of assets and
liabilities as reported for financial statement purposes and income tax
purposes.

F-9
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

NET SALES--The Company recognizes sales upon shipment of a product to a
customer. Allowances are made for uncollectible accounts and future sales
returns. The Company's three largest customers accounted for approximately 44%,
43% and 41%, respectively, of net sales in fiscal 2000, 1999 and 1998. At May
31, 2000 and 1999, amounts due from these customers represented approximately
43% and 41%, respectively, of total trade accounts receivable. The Company's
Schiff(R) Pain Free(TM)/Move Free(TM) product accounted for 29%, 20% and 8% of
net sales for fiscal 2000, 1999 and 1998, respectively.

STOCK-BASED COMPENSATION--In October 1995, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 123, "Accounting for Stock-Based
Compensation", which became effective for the Company beginning June 1,
1997. SFAS No. 123 requires expanded disclosures of stock-based compensation
arrangements with employees. The Company decided to disclose the effect of
SFAS No. 123 on a proforma basis and to continue to follow Accounting
Principles Board ("APB") Opinion No. 25 (as permitted by SFAS No. 123) as it
relates to stock based compensation. Accordingly, the appropriate required
disclosure of the effects of SFAS No. 123 are included in Note 9.

OTHER ACCUMULATED COMPREHENSIVE INCOME (LOSS)--During fiscal 1999, the
Company adopted SFAS No. 130, "Reporting Comprehensive Income." SFAS No. 130
establishes standards for reporting and display of other accumulated
comprehensive income (loss) and its components (revenues, expenses, gains, and
losses) in a full set of general purpose financial statements. SFAS No. 130
requires that an enterprise (a) classify items of other accumulated
comprehensive income (loss) by their nature in a financial statement and (b)
display the balance of other accumulated comprehensive income (loss) separately
from retained earnings and additional paid-in-capital in the equity section of
the balance sheet.

NET INCOME (LOSS) PER SHARE--During fiscal 1998, the Company adopted SFAS
No. 128, "Earnings Per Share." SFAS No. 128 establishes new standards for
computing and presenting net income (loss) per share. Net income (loss) per
share is computed by both the basic and diluted methods. Basic net income (loss)
per share is computed using the weighted average number of common shares
outstanding. Diluted net income (loss) per share is computed using the weighted
average number of common shares and potentially diluted common shares
outstanding during the period. Potentially dilutive common shares consist of
common stock options and performance units (Note 9) as well as warrants (Note
7). Common stock options and performance units were antidilutive during fiscal
1999 and, accordingly, were not included in the computation of diluted net loss
per share.

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.

FOREIGN CURRENCY TRANSLATION-The Company considers local currency as the
functional currency for its foreign operations. All assets and liabilities are
translated at period-end exchange rates and all income statement amounts are
translated at an average of month-end rates. At May 31, 2000, unrealized foreign
currency translation losses of $7,363, net of income tax benefits of $4,251,
were included in other accumulated comprehensive loss in the accompanying
financial statements.

F-10
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

RECENTLY ISSUED ACCOUNTING STANDARDS--In June 1998, the FASB issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities," which
supersedes SFAS No. 80, "Accounting for Futures Contracts," SFAS No. 105,
"Disclosure of Information About Financial Instruments with Off-Balance-Sheet
Risk and Financial Instruments with Concentration of Credit Risk," and SFAS No.
119, "Disclosures about Derivative Financial Instruments and Fair Value of
Financial Instruments," and also amends certain aspects of other SFAS's
previously issued. SFAS No. 133 establishes accounting and reporting standards
for derivative instruments and hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value. SFAS No. 133, as amended by SFAS
No. 137, is effective for the Company's financial statements for the year ending
May 31, 2001. The Company does not expect the impact of adopting SFAS No. 133 to
be material in relation to its financial statements.

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") 101, "Revenue Recognition in Financial Statements."
SAB 101 establishes accounting and reporting standards for the recognition of
revenue. It states that revenue generally is realized or realizable and earned
when all of the following criteria are met: (1) persuasive evidence of an
arrangement exists; (2) delivery has occurred or services have been rendered;
(3) the seller's price to the buyer is fixed or determinable; and, (4)
collectibility is reasonably assured. SAB 101 is effective for the Company's
financial statements in the fiscal quarter beginning March 1, 2001. The Company
has not determined the impact of adopting SAB 101 to the Company's financial
statements.

RECLASSIFICATIONS--Certain amounts in prior year financial statements have
been reclassified to conform with the current year presentation.

2. ACQUISITIONS

In August 1999, the Company acquired the remaining 50% of the outstanding
shares of Sy-Fra Sportalimenti di Frank Sambo & Company SrL and Haleko Italia
SrL, previously 50% owned corporations, organized under the laws of Italy. The
Company accounted for this acquisition as a purchase. The purchase price, net of
cash acquired, consisted of $1.2 million in cash and the recognition of $1.1
million in goodwill, subject to final allocation of the purchase price. The
goodwill is being amortized over 35 years. Proforma information is not provided
as the effects are not material.

In July 1998, the Company acquired 100% of the outstanding shares of
Haleko Hanseatisches Lebensmittel Kontor GmbH, a corporation organized under the
laws of Germany ("Haleko"). The initial purchase price was comprised of $25.6
million in cash, 200,000 shares of Class A common stock, and up to an $8.4
million contingent earnout agreement tied to future financial performance for
the subsequent three-year period. In addition, $14.8 million in debt was assumed
and $4.9 million in acquisition-related capital costs were recognized.

F-11
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

The acquisition was accounted for as a purchase transaction. The initial
excess of the purchase price over the estimated fair value of the acquired net
assets (approximately $20.4 million) was recorded as goodwill which is being
amortized over 35 years. The Company has recognized approximately $2.8 million
and $3.2 million, respectively, of the earnout agreement based on Haleko's
financial performance for fiscal 2000 and 1999. These amounts were recorded as
additional goodwill and are being amortized over approximately 33 to 34 years.
The earnout payments for fiscal 2000 and 1999 are included as current
liabilities in the accompanying balance sheets at May 31, 2000 and 1999.

The following unaudited proforma results of operations of the Company give
the approximate effect to the acquisition of Haleko as though the transaction
occurred on June 1, 1997.

YEAR ENDED MAY 31,
--------------------------
1999 1998
--------- ---------

Net sales ............................ $ 347,529 $ 319,683
Income (loss) from operations ........ (3,464) 31,264
Net income (loss) .................... (8,704) 14,329
Diluted income (loss) per share ...... (0.35) 0.57

3. RECEIVABLES, NET

Receivables, net, consist of the following at May 31:

2000 1999
--------- ---------

Trade accounts ....................... $ 61,184 $ 63,215
Income taxes ......................... -- 2,195
Other ................................ 929 1,168
--------- ---------
62,113 66,578
Less allowance for doubtful accounts
and sales returns ................... (8,591) (6,054)
--------- ---------

Total ......................... $ 53,522 $ 60,524
========= =========

4. INVENTORIES

Inventories consist of the following at May 31:

2000 1999
--------- ---------

Raw materials ........................ $ 12,493 $ 24,364
Work in process ...................... 2,210 3,364
Finished goods ....................... 32,410 35,930
--------- ---------

Total ........................ $ 47,113 $ 63,658
========= =========

Inventory totaling $1,800 ($4,000 in 1999), primarily consisting of two
raw materials, is included as a long-term asset in deposits and other assets in
the accompanying balance sheets. The Company expects to consume these raw
materials subsequent to fiscal 2001.

F-12
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

5. PROPERTY AND EQUIPMENT

Property and equipment consists of the following at May 31:

2000 1999
------- -------

Land $ 2,020 $ 1,679
Buildings 12,990 12,343
Furniture and equipment 43,837 40,528
Leasehold improvements 11,306 11,005
Construction in progress 596 1,087
------- -------
70,749 66,642
Less accumulated depreciation
and amortization (23,551) (17,770)
------- -------

Total $47,198 $48,872
======= =======

6. INTANGIBLE ASSETS

Intangible assets consist of the following at May 31:

2000 1999
------- -------

Cost in excess of fair value
of net assets acquired $54,134 $53,706
Patents and trademarks 10,601 10,452
Noncompete agreements 187 209
------- -------
64,922 64,367

Less accumulated amortization (15,510) (12,387)
------- -------

Total $49,412 $51,980
======= =======

F-13
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

7. LONG-TERM DEBT

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

2000 1999
------- -------

Advances under a $90,000 secured
revolving line of credit bearing interest
at floating rates (11.78% to 13.50% at
May 31, 2000) (see below for discussion
of debt refinancing) $65,006 $98,654

Advances under a $14,000 secured revolving
line of credit bearing interest at various
rates ranging from 4.00% to 7.25% (see
below for discussion of debt refinancing) 13,044 7,604

Mortgage loan, due in monthly installments,
bearing interest at 7.63%, due
February 2009 2,631 2,755

Notes payable arising from the acquisition
of Haleko bearing interest at various
rates ranging from 5.50% to 7.00%,
due 2001 and 2002 1,247 2,556

Short term notes payable to original Haleko
stockholders bearing interest at 6.75% -- 2,705

Notes payable arising from other previous
acquisitions 539 707

Other 413 458
------- -------

Total 82,880 115,439
Less current portion (15,131) (110,716)
------- -------

Long-term portion $67,749 $ 4,723
======= =======

F-14
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

The New Credit Facility is comprised of a $30.0 million term loan and a
$60.0 million revolving loan. Under the revolving loan, the Company may borrow
up to the lesser of $60.0 million or the sum of (i) 85% of eligible accounts
receivable and (ii) the lesser of $30.0 million or 65% of the eligible
inventory. The New Credit Facility contains customary terms and conditions,
including, among others, financial covenants regarding minimum cash flows and
limitations on indebtedness and the Company's ability to pay dividends under
certain circumstances. The obligations of the Company under the New Credit
Facility are secured by a first priority lien on all owned or acquired tangible
and intangible assets of the Company and its domestic subsidiaries. Borrowings
under the New Credit Facility bear interest at floating rates (10.00% and 11.00%
at June 30, 2000) and the New Credit Facility matures on March 31, 2005.

The New Credit Facility is being used to fund the normal working capital
and capital expenditure requirements of the Company. At the inception of the New
Credit Facility, the Company borrowed approximately $64.8 million (together with
the proceeds from the subordinated loan discussed below) to repay in full its
outstanding obligation under the previous credit facility and related financing
costs of the New Credit Facility.

Concurrently with the New Credit Facility, on June 30, 2000, the Company
entered into a $10.0 million senior subordinated loan agreement (the
"Subordinated Loan"). The proceeds from the Subordinated Loan were used to repay
outstanding obligations under the Company's previous credit facility. The
Subordinated Loan contains customary terms and conditions, including, among
others, financial covenants regarding minimum cash flows and limitations on
indebtedness and the Company's ability to pay dividends under certain
circumstances. The Subordinated Loan bears interest at 13% per annum and matures
on June 30, 2006. As part of the Subordinated Loan transaction, the Company
issued warrants to purchase up to 1,174,955 shares of the Company's Class A
common stock at an exercise price of $0.01 per share, subject to certain
customary antidilution provisions. The issuance of the warrants, exercised
effective August 3, 2000, resulted in the recognition of approximately $3.5
million in "original issue discount" costs that will be recognized as an
adjustment to the effective interest rate over the life of the Subordinated
Loan. The Company also granted certain registration rights with respect to the
common stock issuable under the warrants pursuant to a Registration Rights
Agreement dated as of June 30, 2000.

Amounts outstanding under the previous credit facility have been
reclassified as a long-term obligation at May 31, 2000.

Subsequent to May 31, 2000, Haleko entered into a new, approximate $18.6
million secured revolving line of credit (bearing interest at rates from 5.60%
to 8.00%) that matures in June 2001.

As of May 31, 2000, future payments of long-term debt are presently due as
follows: $15,131 (2001), $3,301 (2002), $5,489 (2003), $6,241 (2004), $12,217
(2005), and $40,501 thereafter.

F-15
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

8. INCOME TAXES

The components of income tax expense (benefit) consist of the following
for the years ended May 31:

2000 1999 1998
------- ------- -------

Federal:
Current ............................ $ 227 $(3,400) $ 7,238
Deferred ........................... 241 (1,220) 248

Foreign:
Current ............................ 2,235 (1,037) 38
Deferred ........................... (1,652) 1,422 --

State and local:
Current ............................ (28) (591) 874
Deferred ........................... 122 (413) 612
------- ------- -------

Total .................... $ 1,145 $(5,239) $ 9,010
======= ======= =======

Income tax expense (benefit) differs from a calculated income tax at the
Federal statutory rate as follows:

2000 1999 1998
------- ------- -------

Computed Federal income tax expense
(benefit) at the statutory
rate of 34% for fiscal 2000 and
35% for fiscal 1999 and 1998 ....... $ 754 $(4,906) $ 8,055
Amortization of cost in excess of
fair value of net assets acquired .. 178 151 153
Meals and entertainment .............. 79 39 34
Foreign Service Corporation benefit .. (279) (98) (220)
Charitable contributions ............. (287) (499) (10)
Foreign income taxes, other .......... 646 370 4
State income tax expense (benefit) ... 97 (653) 966
Other ................................ (43) 357 28
------- ------- -------

Total .................... $ 1,145 $(5,239) $ 9,010
======= ======= =======

F-16
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

Net deferred income tax assets consist of the following at May 31:

2000 1999
-------------------- --------------------
LONG- LONG-
CURRENT TERM CURRENT TERM
-------- -------- -------- --------
Assets:
Accounts receivable allowances . $ 2,507 $ -- $ 2,021 $ --
Inventories adjustment ......... 1,136 -- 2,528 --
Deferred compensation .......... -- 1,242 -- 1,362
Accrued vacation and bonuses ... 345 -- 327 --
Accrued other .................. 635 256 508 421
Amortization of intangibles .... -- 482 -- 592
Capitalized inventory costs .... 530 -- 1,195 --
State and other taxes .......... -- 126 -- 1,158
Basis difference in acquired
companies .................... -- 844 -- 95
Charitable and net operating
loss carryovers .............. -- 2,798 -- 1,782
Basis difference in securities . 1,279 -- 1,127 --
Foreign currency adjustment .... -- 4,096 -- 821
Research and development, and
other credits ................ 487 -- -- --
-------- -------- -------- --------

Total ................ 6,919 9,844 7,706 6,231
-------- -------- -------- --------

Liabilities:
Basis differences in
fixed assets ................. -- 3,853 -- 2,853
Basis differences in
acquired companies ........... -- -- -- 1,615
Inventories adjustment ......... -- 247 -- 1,306
Amortization of intangibles .... -- 107 -- 110
State taxes .................... 359 -- 319 --
Other .......................... -- 1,100 -- 2,013
-------- -------- -------- --------

Total ................ 359 5,307 319 7,897
-------- -------- -------- --------

Deferred income taxes, net ....... $ 6,560 $ 4,537 $ 7,387 $ (1,666)
======== ======== ======== ========

9. MANAGEMENT INCENTIVE AND STOCK PLANS

MANAGEMENT INCENTIVE PLAN--Prior to the Company's IPO, certain employees
(the "Recipients") had management incentive agreements (the "Agreements")
pursuant to which the employees were granted performance units ("Performance
Units") as incentive compensation.

Simultaneously with the IPO, which triggered a conversion under the
Agreements, the Company paid in cash and shares of Class A Common stock the
vested portion of the Performance Units. The unvested portion of the performance
units (represented by 182,716 restricted shares of Class A common stock as of
the IPO date) generally vest (contingent upon continued employment and/or other
factors) over a five-year period at 20% per year through May 2002.

F-17
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

During fiscal 2000, 1999 and 1998, 27,409 shares, 73,087 shares and 36,543
shares, respectively, of Class A common stock vested and became issued and
outstanding. The Company recognized compensation charges of $301, $804 and $401
in fiscal 2000, 1999 and 1998, respectively, in connection with the additional
vested Class A common shares.

In order to facilitate the payment of individual income taxes, the Company
makes 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 bear interest at 8.0% per annum, are repayable five
years from the borrowing date and are secured by the Recipients' stock. At May
31, 2000 and 1999, aggregate loans outstanding amounted to $4,188 and $4,164,
respectively (see Note 11).

EQUITY PLAN--The 1997 Equity Participation Plan (the "Equity Plan")
provides for the granting of stock options, stock appreciation rights,
restricted or deferred stock and other awards ("Awards") to officers, directors,
and key employees responsible for the direction and management of the Company
and to nonemployee consultants. Under the Equity Plan, a total of 3,500,000
shares of Class A common stock (or the equivalent in other equity securities)
are reserved for issuance.

Stock options granted per the Equity Plan primarily become exercisable
after three to five years from the date of grant in equal, ratable amounts per
each successive anniversary date. Stock options expire no later than eight years
after the date of grant.

Information relating to stock options issued per the Equity Plan is as
follows:
WEIGHTED
NUMBER AVERAGE PER
OF SHARE OPTION TOTAL
SHARES PRICE PRICE
---------- ---------- ----------
Options outstanding, June 1, 1997 . 1,208,000 $ 11.00 $ 13,288
Granted ........................ 167,000 12.46 2,082
Exercised ...................... -- -- --
Cancelled ...................... (92,000) (11.00) (1,012)
---------- ---------- ----------

Options outstanding, May 31, 1998 . 1,283,000 11.19 14,358
Granted ........................ 1,366,500 6.19 8,464
Exercised ...................... (12,600) (11.00) (138)
Cancelled ...................... (518,067) (10.78) (5,584)
---------- ---------- ----------

Options outstanding, May 31, 1999 . 2,118,833 8.07 17,100
Granted ........................ 1,038,000 4.52 4,692
Exercised ...................... (2,333) (5.06) (12)
Cancelled ...................... (1,176,200) (7.64) (8,986)
---------- ---------- ----------

Options outstanding, May 31, 2000 . 1,978,300 $ 6.47 $ 12,794
========== ========== ==========

Exercisable options, May 31, 2000 . 377,433 $ 8.41 $ 3,174
========== ========== ==========

F-18
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

The weighted average fair market value of options granted during fiscal
2000, 1999 and 1998 amounted to $1.64, $2.57, and $4.92, respectively.

The Company applied APB Opinion No. 25 in accounting for its stock options
and, accordingly, no compensation expense has been recognized for stock options
in the accompanying financial statements.

Proforma information regarding net income (loss) and net income (loss) per
share is required by SFAS No. 123, and has been determined as if the Company had
accounted for its employee stock options including the unvested performance
units under the fair value method of SFAS No. 123. The fair value for these
options was estimated at the date of grant using a Binomial Option pricing model
with the following weighted average assumptions for 2000, 1999 and 1998,
respectively.
2000 1999 1998
------- ------- -------
Risk-free interest rate 6.18% 4.64% 5.20%
Dividend yield 3.32% 2.48% 1.19%
Volatility factor 60.95% 69.21% 50.43%
Weighted average expected life 2.58 years 2.68 years 3.5 years

For the purposes of proforma disclosure, the estimated fair value of the
stock options is amortized to expense over the options vesting period. The
Company's proforma net income (loss) and net income (loss) per share were as
follows:

2000 1999 1998
------- ------- -------

Net income (loss), as reported $ 1,073 $(8,778) $14,004
Net income (loss), proforma 857 (9,194) 13,513
Basic net income (loss) per
share, as reported .04 (.35) .57
Diluted net income (loss) per
share, as reported .04 (.35) .56
Basic net income (loss) per share,
proforma .03 (.37) .55
Diluted net income (loss) per
share, proforma .03 (.37) .54

The following table summarizes information about stock options outstanding
at May 31, 2000:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
--------------------------------------------------------------------------- ----------------------------------
WEIGHTED
AVERAGE
REMAINING WEIGHTED WEIGHTED
RANGE OF CONTRACTUAL AVERAGE AVERAGE
EXERCISE NUMBER LIFE EXERCISE NUMBER EXERCISE
PRICES OUTSTANDING (IN YEARS) PRICE EXERCISABLE PRICE
---------------- ----------- ------------ -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$3.19 to $4.44 418,000 7.3 $ 4.01 -- $ --
$4.50 to $5.75 1,038,000 6.8 5.11 177,133 5.32
$11.00 to $13.00 522,300 5.0 11.13 200,300 11.14
</TABLE>

F-19
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

10. COMMITMENTS AND CONTINGENCIES

LEASES--The Company leases warehouse and office facilities, manufacturing
and production facilities, transportation equipment and other equipment under
several operating lease agreements expiring through 2013. As of May 31, 2000,
future minimum payments of $36,422 under the noncancelable operating leases are
due as follows: $3,955 (2001), $3,666 (2002), $3,588 (2003), $2,915 (2004),
$2,865 (2005) and $19,433 thereafter. Rental expense amounted to $4,499 (2000),
$4,762 (1999) and $4,064 (1998).

LITIGATION--The Company was named as a defendant in a lawsuit filed in
December 1996 alleging unfair competition and false advertising under California
law. A settlement agreement with regard to the matter was agreed to in July
1998. In March 1999, the plaintiff's attorney in the California matter filed a
lawsuit on behalf of Michael Morelli and an alleged class in the Supreme Court
of the State of New York (New York County) alleging similar claims under New
York law. In May 1999, the plaintiffs' attorney also filed a lawsuit on behalf
of Lisa Fasig and an alleged class in the Circuit Court of Lee County, Florida
alleging similar claims under Florida law. The Company disputes the allegations
and will vigorously oppose the lawsuits.

ROYALTIES--The Company obtained the exclusive right to use the Weider name
and trademarks outside of specified royalty-free territories (most notably North
America) 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 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 certain affiliates, including WHF (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. The Company incurred royalty expense of $390 and
$203 for fiscal 2000 and 1999, respectively, relating to the Mariz licensing
agreement.

F-20
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

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 $381, $334 and $271 for fiscal
2000, 1999 and 1998, respectively.

11. RELATED PARTY TRANSACTIONS

Significant related party transactions, not otherwise disclosed, are
summarized below.

Payments to reimburse WHF for Company expenses (including primarily
advertising, insurance, endorsements, retirement benefits and royalties) consist
of the following for the years ended May 31:

2000 1999 1998
-------- -------- --------
Operating expenses $ 2,230 $ 3,053 $ 2,193
Other 250 400 498
-------- -------- --------

Total $ 2,480 $ 3,453 $ 2,682
======== ======== ========

In connection with the terms of a previous employee's severance agreement,
and at such person's option, the Company may be required to repurchase
approximately 330,400 shares of common stock at market value. The Company also
agreed to adjust such person's obligations to the Company (relating to
Performance Units; see Note 9) in the event that the Company's common stock does
not achieve a minimum per share price level. In the event that the Company's
common stock does not achieve such level by fiscal 2002, amounts due the Company
($1,665 at May 31, 2000) will be reduced by 50%.

F-21
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

12. OPERATING SEGMENTS

During fiscal 1999, the Company adopted SFAS No. 131, "Disclosures About
Segments of an Enterprise and Related Information", which changes the way the
Company reports information about its operating segments.

The Company has two primary reportable segments. These segments include
the Company's U.S. based or domestic operations, and the Company's international
operations. The Company has three primary divisions within its domestic
operations: Mass Market Division; Health Food Store Division; and the Health
Club and Gym Division. The Company manufactures and markets nutritional
products, including a full line of vitamins, joint-related and other
nutraceuticals, and sports nutrition supplements through its Mass Market
Division; a full line of vitamins, nutraceuticals and sports nutrition products
primarily through independent distributors and a significant retailer in its
Health Food Store Division; and a full line of sports nutrition products in its
Health Club and Gym Division. The Company also manufactures and markets
nutritional and other products, including a full line of sports nutrition
supplements and sportswear, together with certain other nutraceuticals within
its international operations.

The accounting policies of these segments are the same as those described
in Note 1 to the consolidated financial statements. The Company evaluates the
performance of its operating segments based on actual and expected operating
results of the respective segments and/or divisions. Certain noncash and other
expenses, and domestic assets, are not allocated to the divisions within the
domestic operating segment.

Segment information for fiscal 2000, 1999 and 1998, respectively, are
summarized as follows:
INCOME
(LOSS)
NET FROM INTEREST
2000: SALES OPERATIONS EXPENSE
------------ ------------ ------------
Domestic Operations:
Mass market ................. $ 180,927 $ 20,327 $ 3,616
Health food stores .......... 34,642 (6,446) 2,025
Health clubs and gyms ....... 22,326 (662) 1,302
Other ....................... 4,168 (1,546) 288
Unallocated ................. -- (4,300) --
------------ ------------ ------------

242,063 7,373 7,231

International Operations ...... 122,605 6,108 4,552
------------ ------------ ------------

$ 364,668 $ 13,481 $ 11,783
============ ============ ============

F-22
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

INCOME
(LOSS)
NET FROM INTEREST
1999: SALES OPERATIONS EXPENSE
------------ ------------ ------------
Domestic Operations:
Mass market ........... $ 152,046 $ 12,074 $ 3,512
Health food stores .... 56,178 (3,490) 1,691
Health clubs and gyms . 24,960 711 862
Other ................. 13,115 (4,333) 331
Unallocated ........... -- (12,825) --
------------ ------------ ------------

246,299 (7,863) 6,396

International Operations: 89,189 3,826 3,783
------------ ------------ ------------

$ 335,488 $ (4,037) $ 10,179
============ ============ ============

INCOME
NET FROM INTEREST
1998: SALES OPERATIONS EXPENSE
------------ ------------ ------------
Domestic Operations:
Mass market ........... $ 110,388 $ 16,995 $ 1,839
Health food stores .... 61,742 6,077 1,400
Health clubs and gyms . 25,853 1,242 600
Other ................. 35,264 2,973 330
------------ ------------ ------------

233,247 27,287 4,169

International Operations: 17,295 617 649
------------ ------------ ------------

$ 250,542 $ 27,904 $ 4,818
============ ============ ============

Reconciliation of assets for the reportable segments is as follows at May
31, 2000:

Total domestic assets $ 199,829
Total international assets 79,003
Eliminations (51,564)
---------

Total $ 227,268
=========

Capital expenditures for domestic and international operations amounted to
$4.1 million and $1.8 million, respectively, for fiscal 2000, $10.1 million and
$1.3 million, respectively, for fiscal 1999, and $11.8 million and $.1 million,
respectively, for fiscal 1998.

F-23
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

13. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Quarterly data (unaudited) for the years ended May 31, 2000, 1999 and 1998
is as follows:

QUARTER ENDED
----------------------------------
AUG. 31 NOV. 30 FEB. 29 MAY 31
------- ------- ------- -------
2000:
Net sales $89,967 $87,376 $90,449 $96,876
Gross profit 33,535 32,861 33,799 35,900
Income from operations 2,959 4,395 4,138 1,989
Income tax expense (benefit) (19) 662 733 (231)
Net income (loss) 246 1,043 854 (1,070)

Basic and diluted net income
(loss) per share .01 .04 .03 (.04)

QUARTER ENDED
----------------------------------
AUG. 31 NOV. 30 FEB. 28 MAY 31
------- ------- ------- -------
1999:
Net sales $67,946 $83,274 $89,030 $95,238
Gross profit 23,528 28,503 33,350 29,045
Income (loss) from operations 4,538 (6,496) 3,506 (5,585)
Income tax expense (benefit) 1,115 (3,740) 307 (2,921)
Net income (loss) 1,707 (5,440) 407 (5,452)

Basic and diluted net income
(loss) per share .07 (.22) .02 (.22)

QUARTER ENDED
----------------------------------
AUG. 31 NOV. 30 FEB. 28 MAY 31
------- ------- ------- -------
1998:
Net sales $53,515 $60,811 $62,368 $73,848
Gross profit 17,873 20,629 23,003 27,703
Income from operations 3,996 5,406 7,752 10,750
Income tax expense 1,127 1,574 2,538 3,771
Net income 1,692 2,532 3,971 5,809

Basic net income per share .07 .10 .16 .24
Diluted net income per share .07 .10 .16 .23

The Company's operating results for fiscal 2000 and 1999 were affected by
several strategic initiatives that were initially and/or primarily implemented
during this two-year period. These initiatives included, among others,
organizational changes and upgrading management systems (including senior
management changes), the decision to reduce SKUs by over two-thirds, the
refinement of the Company's growth and business strategies designed to focus on
its primary brands and customers, including the introduction of an enhanced
marketing plan resulting in significantly increased selling and marketing costs,
the expansion of the Company's international operations primarily from the
acquisition of Haleko, the closing of the Company's capsule and tablet
manufacturing facility in California, the limitation of contract manufacturing
business to select customers that otherwise carry the Company's brands and
certain other initiatives.

F-24
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

Costs associated with these various initiatives were recorded in the
period that they were incurred. Implementation of certain initiatives including,
among others, organizational changes and upgrading management systems, the
decision to reduce domestic SKUs by over two-thirds (resulting in realization of
excess returns and credits and inventory related charges) and the refinement of
the Company's growth and business strategies as well as settlement of certain
litigation matters resulted in significant costs being incurred during the
fourth quarters of fiscal 2000 and/or 1999.

During the fourth quarters of fiscal 2000 and 1999, the Company recognized
approximately $2.3 million and $11.0 million, respectively, of aggregate pre-tax
charges primarily associated with decisions made by management during these
respective periods to implement, continue and/or substantially finalize certain
of the strategic initiatives described above.

F-25
<PAGE>
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

See "Item 1" - Executive Officers' for certain information relating to the
Company's executive officers. See also the Company's Proxy Statement,
incorporated by reference in Part III of this Form 10-K, under the heading
"Directors and Executive Officers of the Registrant."

ITEM 11. EXECUTIVE COMPENSATION

See the Company's Proxy Statement, incorporated by references in Part III
of this Form 10-K, under the headings "Executive Compensation" and "Certain
Relationships and Related Party Transactions."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

See the Company's Proxy Statement, incorporated by reference in Part III
of this Form 10-K, under the heading "Security Ownership of Certain Beneficial
Owners and Management."

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

See the Company's Proxy Statement, incorporated by reference in Part III
of this Form 10-K, under the heading "Certain Relationships and Related Party
Transactions."

29
<PAGE>
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Documents filed as part of this report

(1) Financial Statements

See "Item 8. Financial Statements and Supplementary Data" for
Financial Statements included with this Annual Report on Form 10-K.

(2) Financial Statement Schedules

Schedule II - Valuation and Qualifying Accounts

All other schedules have been omitted because they are not required, not
applicable, or the information is otherwise set forth in the financial
statements or notes thereto.

(3) Exhibits

2.1 Stock Purchase Agreement, dated July 9, 1998, by and among Weider
Nutrition Group, Inc. and Wolfgang Brandt and Eberhardt Schluter. (2)
2.2 Amendment Deed to Stock Purchase Agreement, dated July 24, 1998. (2)
2.3 Share Transfer Deed, dated July 24, 1998 1998. (2)
3.1 Amended and Restated Certificate of Incorporation of Weider Nutrition
International, Inc. (1)
3.2 Amended and Restated Bylaws of Weider Nutrition International, Inc. (1)
4.1 Credit Agreement dated as of June 30, 2000 among Weider Nutrition
International, Inc. and Bankers Trust Company. (4)
4.2 Senior Subordinated Loan Agreement dated as of June 30, 2000 among Weider
Nutrition International, Inc., Wynnchurch Capital Partners, L.P., and
Wynnchurch Capital Partners Canada, L.P. (4)
4.3 Warrants to Purchase Shares of Class A Common Stock of Weider Nutrition
International, Inc.(4)
4.4 Registration Rights Agreement dated as of June 30, 2000 among Weider
Nutrition International, Inc., Wynnchurch Capital Partners, L.P. and
Wynnchurch Capital Partners Canada, L.P. (4)
4.5 First Amendment to Credit Agreement dated as of June 30, 2000 among Weider
Nutrition International, Inc. and Bankers Trust Company. (5)
10.1 Build-To-Suit Lease Agreement, dated March 20, 1996, between SCI
Development Services Incorporated and Weider Nutrition Group, Inc. (1)
10.2 Agreement by and between Joseph Weider and Weider Health and Fitness (1)
10.3 1997 Equity Participation Plan of Weider Nutrition International, Inc. (1)
10.4 Form of Tax Sharing Agreement by and among Weider Nutrition International,
Inc. and its subsidiaries and Weider Health and Fitness and its
subsidiaries (1)
10.5 Form of Employment Agreement between Weider Nutrition International, Inc.
and Richard B. Bizzaro (1)
10.6 Form of Employment Agreement between Weider Nutrition International, Inc.
and Robert K. Reynolds (1)
10.7 Form of Senior Executive Employment Agreement between Weider Nutrition
International, Inc. and certain senior executives of the Company (1)
10.8 Advertising Agreement between Weider Nutrition International, Inc. and
Weider Publications, Inc.(1)
10.9 Amended and Restated Shareholders Agreement between Weider Health and
Fitness and Hornchurch Investments Limited (1)
10.10 Amended and Restated Shareholders Agreement between Weider Health and
Fitness, Bayonne Settlement and Ronald Corey(1)
10.12 License Agreement between Mariz Gestao E Investmentos Limitada and Weider
Nutrition Group Limited (1)
10.13 Form of Employment Agreement between Weider Nutrition International, Inc.
and Bruce J. Wood. (3)
21 Subsidiaries of Weider Nutrition International, Inc.(5)
23.1 Independent Auditors' Consent (5)
27.1 FINANCIAL DATA SCHEDULE SUMMARY (5)
-------------------------------
(1) Filed as an Exhibit to the Company's Registration Statement on Form S-1
(File No.333-12929)and incorporated herein by reference.
(2) Previously filed in the Company's Current Report on Form 8-K dated as of
July 24, 1998 and incorporated herein by reference.
(3) Previously filed in the Company's Current Report on Form 10-K dated as of
August 30, 1999 and incorporated herein by reference.
(4) Previously filed in the Company's Current Report on Form 8-K dated as of
June 30, 2000 and incorporated herein by reference.
(5) FILED HEREWITH.
-------------------------------

30
<PAGE>
(b) Reports on Form 8-K
No report on Form 8-K was filed during the fourth quarter of fiscal
2000. A Report on Form 8-K was filed subsequent to fiscal year 2000
dated as of June 30, 2000.

(d) Financial Statement Schedules
The financial statement schedules required by Regulation S-K are set
forth in (a) (2) above.

31
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Weider Nutrition International, Inc.

Dated: August 29, 2000 By: /S/ BRUCE J. WOOD
-----------------
Bruce J. Wood
Chief Executive Officer
and President

Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.

NAME TITLE DATE
---- ----- ----

/s/ ERIC WEIDER Chairman of the Board August 29, 2000
---------------------------- and Director

/s/ BRUCE J. WOOD Chief Executive Officer, August 29, 2000
---------------------------- President and Director
(Principal Executive Officer)

/s/ JOSEPH W. BATY Executive Vice President, August 29, 2000
---------------------------- Chief Financial Officer

/s/ RONALD L. COREY Director August 29, 2000
----------------------------

/s/ DONALD G. DRAPKIN Director August 29, 2000
----------------------------

/s/ DAVID J. GUSTIN Director August 29, 2000
----------------------------

/s/ ROGER H. KIMMEL Director August 29, 2000
----------------------------

/s/ GEORGE F. LENGVARI Vice Chairman of the Board August 29, 2000
---------------------------- and Director

/s/ H. F. POWELL Director August 29, 2000
----------------------------

32
<PAGE>
WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED MAY 31, 2000, 1999 AND 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
ADDITIONS
BALANCE AT CHARGED TO ADDITIONS
BEGINNING COSTS/ VIA BALANCE AT
DESCRIPTION OF YEAR EXPENSES ACQUISITION DEDUCTIONS END OF YEAR
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
ALLOWANCE FOR DOUBTFUL
ACCOUNTS:

1998 ........................... $ 212 $ 273 $ -- $ (194) $ 291
--------------- --------------- --------------- --------------- ---------------
1999 ........................... $ 291 $ 1,094 $ 977 $ (134) $ 2,228
--------------- --------------- --------------- --------------- ---------------
2000 ........................... $ 2,228 $ 2,074 $ 32 $ (1,412) $ 2,922
--------------- --------------- --------------- --------------- ---------------

ALLOWANCE FOR SALES RETURNS:

1998 ........................... $ 988 $ 15,396 $ -- $ (14,734) $ 1,650
--------------- --------------- --------------- --------------- ---------------
1999 ........................... $ 1,650 $ 23,048 $ 196 $ (21,068) $ 3,826
--------------- --------------- --------------- --------------- ---------------
2000 ........................... $ 3,826 $ 19,310 $ -- $ (17,467) $ 5,669
--------------- --------------- --------------- --------------- ---------------
</TABLE>

--------