<PAGE>
FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[x] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the fiscal year ended September 30, 1997.
OR
[ ] 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 0-10666
NBTY, INC.
(Exact name of registrant as specified in charter)
DELAWARE 11-2228617
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
90 Orville Drive 11716
- ---------------- -----
Bohemia, New York (Zip Code)
- -----------------
(Address of principal executive office)
(516) 567-9500
- --------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.008 per share
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 for
this Form 10-K [X].
The aggregate market value of the voting stock held by nonaffiliates of the
registrant, based upon the closing price of shares of Common Stock on the
National Association of Securities Dealers Automated Quotation ("NASDAQ")
National Market System at April 30, 1998 was approximately $950,000,000.
The number of shares of Common Stock of the registrant outstanding at April 30,
1998 was approximately 69,136,221.
Documents Incorporated by Reference: None
1
<PAGE>
PART I
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
This Form 10-K/A contains the restatement of the Consolidated Financial
Statements of NBTY, Inc. as of September 30, 1997 and 1996 and for each of the
three years in the period ended September 30, 1997, to reflect the adoption of
Statement of Financial Accounting Standards ("SFAS") No. 128 "Earnings per
Share" for each of the years presented. Such restatement is being made in order
to comply with Item II(b) of Form S-3 which is to be filed subsequently. Such
Form S-3 will also reflect the adoption of SFAS No. 128.
PART IV
ITEM 14 - FINANCIAL STATEMENTS AND EXHIBITS.
Restatement of Consolidated Financial Statements of NBTY, Inc. as of September
30, 1997 and 1996 and for each of the three years ended September 30, 1997.
<PAGE>
HISTORICAL
NBTY, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Stockholders of NBTY, Inc.:
We have audited the accompanying consolidated balance sheets of NBTY, Inc. and
Subsidiaries as of September 30, 1996 and 1997 and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended September 30, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of NBTY,
Inc. and Subsidiaries as of September 30, 1996 and 1997, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended September 30, 1997, in conformity with generally accepted
accounting principles.
Coopers & Lybrand L.L.P.
Melville, New York
November 6, 1997,
except as to Note 1
the date of which is
April 3, 1998
2
<PAGE>
NBTY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND 1997
(DOLLARS AND SHARES IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1997
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................................... $ 9,292 $ 18,419
Short-term investments.................................................................. 11,024 8,362
Accounts receivable, less allowance for doubtful accounts of $794 in 1996 and $991 in
1997................................................................................. 11,625 15,701
Inventories............................................................................. 38,070 75,936
Deferred income taxes................................................................... 3,155 6,032
Prepaid catalog costs and other current assets.......................................... 5,683 18,885
-------- --------
Total current assets............................................................... 78,849 143,335
Cash held in escrow....................................................................... 144,262
Property, plant and equipment, net........................................................ 61,732 108,173
Intangible assets, net.................................................................... 3,975 140,447
Other assets.............................................................................. 994 6,521
-------- --------
Total assets....................................................................... $145,550 $542,738
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations......................... $ 935 $ 1,016
Accounts payable........................................................................ 10,943 44,514
Accrued expenses........................................................................ 14,705 34,325
-------- --------
Total current liabilities.......................................................... 26,583 79,855
Long-term debt............................................................................ 15,178 163,447
Obligations under capital leases.......................................................... 3,219 2,700
Promissory note payable................................................................... 169,909
Deferred income taxes..................................................................... 2,827 7,474
Other liabilities......................................................................... 793 2,293
-------- --------
Total liabilities.................................................................. 48,600 425,678
-------- --------
Commitments and contingencies
Stockholders' equity:
Common stock, $.008 par; authorized 25,000 shares in 1996 and 75,000 in 1997; issued
20,080 shares in 1996 and 60,351 shares in 1997 and outstanding 18,593 shares in 1996
and 55,842 shares in 1997............................................................ 160 483
Capital in excess of par................................................................ 56,014 55,982
Retained earnings....................................................................... 44,008 61,238
-------- --------
100,182 117,703
Less 1,487 and 4,509 treasury shares at cost, in 1996 and 1997, respectively............ (2,648) (3,206)
Stock subscriptions receivable.......................................................... (584)
Cumulative translation adjustment....................................................... 2,563
-------- --------
Total stockholders' equity......................................................... 96,950 117,060
-------- --------
Total liabilities and stockholders' equity......................................... $145,550 $542,738
-------- --------
-------- --------
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
NBTY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1995 1996 1997
-------- -------- --------
<S> <C> <C> <C>
Net sales.................................................................... $178,760 $194,403 $281,407
-------- -------- --------
Costs and expenses:
Cost of sales.............................................................. 93,875 95,638 135,886
Catalog printing, postage and promotion.................................... 19,262 17,635 19,227
Selling, general and administrative........................................ 56,728 58,515 86,588
Litigation settlement costs................................................ 6,368
-------- -------- --------
169,865 171,788 248,069
-------- -------- --------
Income from operations....................................................... 8,895 22,615 33,338
-------- -------- --------
Other income (expense):
Interest, net.............................................................. (1,084) (1,445) (6,655)
Miscellaneous, net......................................................... 571 1,203 2,033
-------- -------- --------
(513) (242) (4,622)
-------- -------- --------
Income before income taxes................................................... 8,382 22,373 28,716
Income taxes................................................................. 3,246 9,021 11,486
-------- -------- --------
Net income.............................................................. $ 5,136 $ 13,352 $ 17,230
-------- -------- --------
-------- -------- --------
Net income per share:
Basic...................................................................... $ 0.10 $ 0.24 $ 0.31
Diluted.................................................................... 0.09 0.22 0.29
Weighted average common shares outstanding:
Basic...................................................................... 53,387 55,425 55,839
Diluted.................................................................... 59,923 59,927 60,163
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
NBTY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(DOLLARS AND SHARES IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCK TREASURY STOCK
------------------ -------------------
NUMBER OF CAPITAL IN RETAINED NUMBER OF
SHARES AMOUNT EXCESS OF PAR EARNINGS SHARES AMOUNT
--------- ------ ------------- -------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Balance, September 30, 1994.............................. 18,778 $150 $53,209 $ 25,520 1,213 $ (863)
Net income for year ended September 30, 1995........... 5,136
Exercise of stock options.............................. 430 3 212
Tax benefit from exercise of stock options............. 731
Purchase of treasury stock, at cost.................... 228 (1,483)
--------- ------ ------------- -------- --------- -------
Balance, September 30, 1995.............................. 19,208 153 54,152 30,656 1,441 (2,346)
Net income for year ended September 30, 1996........... 13,352
Exercise of stock options.............................. 872 7 588
Tax benefit from exercise of stock options............. 1,274
Purchase of treasury stock, at cost.................... 46 (302)
--------- ------ ------------- -------- --------- -------
Balance, September 30, 1996.............................. 20,080 160 56,014 44,008 1,487 (2,648)
Net income for year ended September 30, 1997........... 17,230
Gain on foreign currency translation...................
Exercise of stock options.............................. 37 1 33
Tax benefit from exercise of stock options............. 257
Repayment of stock subscriptions receivable for options
exercised...........................................
Stock tendered as payment for options exercised........ 16 (558)
April 3, 1998 three-for-one stock split effected in the
form of a 200% stock dividend....................... 40,234 322 (322) 3,006
--------- ------ ------------- -------- --------- -------
Balance, September 30, 1997.............................. 60,351 $483 $55,982 $ 61,238 4,509 $(3,206)
--------- ------ ------------- -------- --------- -------
--------- ------ ------------- -------- --------- -------
<CAPTION>
STOCK CUMULATIVE
SUBSCRIPTIONS TRANSLATION
RECEIVABLE ADJUSTMENT TOTAL
------------- ---------- --------
<S> <C> <C> <C>
Balance, September 30, 1994.............................. $78,016 $ 78,016
Net income for year ended September 30, 1995........... 5,136
Exercise of stock options.............................. 215
Tax benefit from exercise of stock options............. 731
Purchase of treasury stock, at cost.................... (1,483)
------------- ---------- --------
Balance, September 30, 1995.............................. 82,615
Net income for year ended September 30, 1996........... 13,352
Exercise of stock options.............................. $ (584) 11
Tax benefit from exercise of stock options............. 1,274
Purchase of treasury stock, at cost.................... (302)
------------- ---------- --------
Balance, September 30, 1996.............................. (584) 96,950
Net income for year ended September 30, 1997........... 17,230
Gain on foreign currency translation................... $2,563 2,563
Exercise of stock options.............................. 34
Tax benefit from exercise of stock options............. 257
Repayment of stock subscriptions receivable for options
exercised........................................... 96 96
Stock tendered as payment for options exercised........ 488 (70)
April 3, 1998 three-for-one stock split effected in the
form of a 200% stock dividend.......................
------------- ---------- --------
Balance, September 30, 1997.............................. $ -- $2,563 $117,060
------------- ---------- --------
------------- ---------- --------
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
NBTY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1995 1996 1997
------- ------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income................................................................... $ 5,136 $13,352 $ 17,230
Adjustments to reconcile net income to cash provided by operating activities:
Loss on disposal/sale of property, plant and equipment.................... 374 31
Depreciation and amortization............................................. 4,840 5,623 8,167
Provision (recovery) for allowance for doubtful accounts.................. (18) 216 197
Deferred income taxes..................................................... 685 (642) (2,750)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable..................................................... (2,120) 1,616 (4,048)
Inventories............................................................. 4,454 (2,036) (19,545)
Prepaid catalog costs and other current assets.......................... (264) 487 (4,499)
Other assets............................................................ 1,124 675 47
Accounts payable........................................................ 3,160 (5,468) 13,694
Accrued expenses........................................................ 2,810 5,690 14,590
Other liabilities....................................................... 275 24 1,500
Income tax receivable................................................... 1,300
------- ------- ---------
Net cash provided by operating activities............................ 21,756 19,537 24,614
------- ------- ---------
Cash flows from investment activities:
Increase in intangible assets................................................ (1,064) (67) (1,843)
Purchase of property, plant and equipment.................................... (11,548) (15,750) (21,092)
Proceeds from sale of property, plant and equipment.......................... 4 20
Proceeds from sale of short-term investments................................. 2,662
Purchase of short-term investments........................................... (11,024)
Receipt of payments on notes from sale of direct mail cosmetics business..... 741 1,047
Proceeds from sale of direct mail cosmetics business......................... 350
Cash from acquisition........................................................ 5,580
------- ------- ---------
Net cash used in investing activities................................ (12,612) (25,746) (13,626)
------- ------- ---------
Cash flows from financing activities:
Net payments under line of credit agreement.................................. (5,000)
Proceeds from bond offering, net of discount................................. 148,763
Cash held in escrow.......................................................... (144,262)
Bond issue costs............................................................. (5,575)
Borrowings under long-term debt agreements................................... 2,400 6,000
Principal payments under long-term debt agreements and capital leases........ (798) (586) (932)
Purchase of treasury stock................................................... (1,292) (302) (70)
Proceeds from stock options exercised........................................ 24 11 34
Repayment of stock subscription receivable................................... 96
------- ------- ---------
Net cash (used in) provided by financing activities.................. (4,666) 5,123 (1,946)
------- ------- ---------
Effect of exchange rate changes on cash and cash equivalents................... 85
------- ------- ---------
Net increase (decrease) in cash and cash equivalents........................... 4,478 (1,086) 9,127
Cash and cash equivalents at beginning of year................................. 5,900 10,378 9,292
------- ------- ---------
Cash and cash equivalents at end of year....................................... $10,378 $ 9,292 $ 18,419
------- ------- ---------
------- ------- ---------
Supplemental disclosure of cash flow information:
Cash paid during the period for interest..................................... $ 1,086 $ 1,454 $ 2,717
Cash paid during the period for income taxes................................. $ 1,649 $ 5,387 $ 14,008
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
NBTY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS--(CONTINUED)
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(DOLLARS IN THOUSANDS)
Non-cash investing and financing information
On October 9, 1995, the Company sold certain assets of its direct-mail
cosmetics business for $2,495. The Company received $350 in cash and
non-interest bearing notes aggregating $2,145 for inventory, a customer list and
other intangible assets. The inventory note was repaid in full in October 1996.
In April 1997, the Company received the final payment of the customer list note.
(See Note 3)
During fiscal 1996, the Company entered into capital leases for machinery
and equipment aggregating $2,635.
During fiscal 1995, 1996 and 1997, options were exercised with shares of
common stock issued to certain officers and directors. Accordingly, the tax
benefit of approximately $731, $1,274 and $257 for the years ended September 30,
1995, 1996 and 1997, respectively, was recorded as an increase in capital in
excess of par and a reduction in taxes currently payable. In addition, during
fiscal 1997, common stock was surrendered to the Company in satisfaction of $488
of the stock subscription outstanding at September 30, 1996. (See Note 12)
In connection with the acquisition of Holland & Barrett Holdings Ltd. on
August 7, 1997, the Company issued two promissory notes aggregating $170,000 as
consideration for the purchase of capital stock. Such notes were paid in October
1997 from the cash held in escrow at September 30, 1997. (See Note 2)
See notes to consolidated financial statements.
7
<PAGE>
NBTY, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business operations
NBTY, Inc., formerly Nature's Bounty, Inc. (the 'Company'), manufactures
and distributes vitamins, food supplements and health and beauty aids primarily
in the United States and the United Kingdom. The processing, formulation,
packaging, labeling and advertising of the Company's products are subject to
regulation by one or more federal agencies, including the Food and Drug
Administration, the Federal Trade Commission, the Consumer Product Safety
Commission, the United States Department of Agriculture, the United States
Environmental Protection Agency and the United States Postal Service.
Within the United Kingdom ('U.K.'), the manufacturing, advertising, sales
and marketing of food products is regulated by a number of governmental agencies
including the Ministry of Agriculture, Fisheries and Food, the Department of
Health, the Food Advisory Committee and the Committee on Toxicity, among others.
Principles of consolidation and basis of presentation
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All intercompany accounts and transactions
have been eliminated.
Revenue recognition
The Company recognizes revenue upon shipment or, with respect to its own
retail store operations, upon the sale of products. The Company has no single
customer that represents more than 10% of annual net sales or accounts
receivable as of and for the years ended September 30, 1995, 1996 and 1997.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Inventories
Inventories are stated at the lower of cost or market. Cost is determined
on the weighted average method which approximates first-in, first-out basis. The
cost elements of inventory include materials, labor and overhead. In fiscal
1995, no one supplier provided more than 10% of purchases. One supplier provided
approximately 12% of the Company's purchases in 1996 and 1997.
Prepaid catalog costs
Mail order production and mailing costs are capitalized as prepaid catalog
costs and charged to expense over the catalog period, which typically
approximates three months.
Advertising expense
All media (television, radio, magazine) and cooperative advertising costs
are generally expensed as incurred. Total expenses relating to advertising and
promotion for fiscal 1995, 1996 and 1997 were $8,823, $9,098 and $11,338,
respectively.
8
<PAGE>
NBTY, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES--(CONTINUED)
Property, plant and equipment
Property, plant and equipment are carried at cost. Depreciation is provided
on a straight-line basis over the estimated useful lives of the related assets.
Expenditures which significantly improve or extend the life of an asset are
capitalized.
Maintenance and repairs are charged to expense in the year incurred. Cost
and related accumulated depreciation for property, plant and equipment are
removed from the accounts upon sale or disposition and the resulting gain or
loss is reflected in earnings.
Intangible assets
Goodwill represents the excess of purchase price over the fair value of
identifiable net assets of companies acquired. Goodwill and other intangibles
are amortized on a straight-line basis over appropriate periods not exceeding 40
years.
Foreign currency translation
The financial statements of international subsidiaries are translated into
U.S. dollars using the exchange rate at each balance sheet date for assets and
liabilities and an average exchange rate for each period for revenues, expenses,
and gains and losses. Where the local currency is the functional currency,
translation adjustments are recorded as a separate component of stockholder's
equity.
Income taxes
The Company recognizes deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Deferred tax liabilities and assets are determined
based on the difference between the financial statement and tax bases of assets
and liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.
Cash and cash equivalents
The Company considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents.
Short-term investments
Short-term interest bearing investments are those with maturities of less
than one year but greater than three months when purchased. These investments
are readily convertible to cash and are stated at market value, which
approximates cost. Realized gains and losses are included in other income on a
specific identification basis in the period they are realized.
Common shares and earnings per share
In February 1997, the Financial Accounting Standards Board ('FASB')
issued Statement of Financial Accounting Standards ("SFAS") No. 128, 'Earnings
Per Share.' The statement requires the presentation of both 'basic' and
'diluted' earnings per share ('EPS') on the face of the income statement. Basic
EPS is based on the weighted average number of shares of common stock
outstanding during each period while diluted EPS is based on the weighted
average number of shares of common stock and common stock equivalents
outstanding during each period. Common stock equivalents included in diluted
EPS, which consisted of common shares issuable upon the exercise of outstanding
stock
9
<PAGE>
NBTY, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES--(CONTINUED)
options, were 6,536, 4,502 and 4,324 for the years ended September 30, 1995,
1996 and 1997, respectively. The financial statements and related footnotes have
been restated to reflect the adoption of SFAS No. 128.
In March 1998, the Company's board of directors declared a three-for-one
stock split payable in the form of a 200% stock dividend. This distribution has
been reflected in the fiscal 1997 consolidated financial statements and all per
common share amounts have been retroactively restated to account for the stock
split. In addition, stock options and the related exercise prices have been
amended to reflect this transaction. Also, in March 1998, the Company's
certificate of incorporation was amended to authorize the issuance of up to
75,000 shares of common stock, par value $.008 per share.
Reclassifications
Certain reclassifications have been made to conform prior year amounts to
the current year presentation.
Accounting changes
Effective October 1, 1996, the Company adopted the disclosure-only
provisions of SFAS No. 123, 'Accounting for Stock-Based Compensation'. As
permitted by SFAS No. 123, the Company continues to measure compensation cost
in accordance with Accounting Principles Board Opinion No. 25, 'Accounting for
Stock Issued to Employees.' As the Company has not granted any options during
fiscal 1996 or 1997, there would not have been any impact on the Company's
financial position or results of operations on a pro forma basis.
Effective October 1, 1996, the Company adopted SFAS No. 121, 'Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of.' This statement requires that certain assets be reviewed for impairment and,
if impaired, be measured at fair value, whenever events or changes in
circumstances indicate that the carrying amount of the asset may not be
recoverable. The adoption of SFAS No. 121 at October 1, 1996 and its application
during fiscal 1997 had no material impact on the Company's financial position or
results of operations.
New accounting standards
In June 1997, the FASB issued SFAS No. 130, 'Reporting Comprehensive
Income,' which establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income is defined
to include all changes in equity except those resulting from investments by
owners and distribution to owners. Among other disclosures, SFAS No. 130
requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements.
In addition, in June 1997, the FASB issued SFAS No. 131, 'Disclosures About
Segments of an Enterprise and Related Information,' which establishes standards
for reporting information about operating segments. It also establishes
standards for disclosures regarding products and services, geographic areas and
major customers.
Both of these new standards are effective for periods beginning after
December 15, 1997 and require comparative information for earlier years to be
restated. The implementation of these new standards will not affect the
Company's results of operations and financial position, but may have an impact
on future financial statement disclosures.
10
<PAGE>
NBTY, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
2. ACQUISITION OF HOLLAND & BARRETT HOLDINGS LTD.
On August 7, 1997, the Company acquired all of the issued and outstanding
capital stock of Holland & Barrett Holdings Ltd. ('H&B') from Lloyds Chemist's
plc ('Lloyds') for an aggregate purchase price of approximately $169,000 plus
acquisition costs of approximately $811. The acquisition has been accounted for
under the purchase method and, accordingly, the results of operations are
included in the financial statements from the date of acquisition. H&B markets a
broad line of nutritional supplement products, including vitamins, minerals and
other nutritional supplements and food product. At the date of acquisition, H&B
operated approximately 410 retail stores in the United Kingdom.
The Company issued to Lloyds two promissory notes (the 'Promissory Notes')
totaling approximately $170,000 as consideration for the purchase of capital
stock of H&B. The Promissory Notes, which are collateralized by two letters of
credit issued by a lending institution, were paid in full in October 1997.
In connection with the Acquisition, the Company (i) entered into a $50,000
revolving credit facility (the 'Revolving Credit Facility'), which provides
borrowings for working capital and general corporate purposes, and (ii) issued
$150,000 in Senior Subordinated Notes due 2007.
Assets acquired and liabilities assumed include cash ($5,580), inventory
($18,045), other current assets ($11,078), property, plant and equipment
($31,554), and current and long-term liabilities ($27,154 and $4,058,
respectively). The excess cost of investment over the net book value of H&B at
the date of acquisition resulted in an increase in goodwill of $133,725 which
will be amortized over 25 years. Additionally, finance related costs of
approximately $5,600 will be amortized over 10 years.
The following unaudited condensed pro forma information presents a summary
of consolidated results of operations of the Company and H&B as if the
acquisition had occurred at the beginning of fiscal 1996, with pro forma
adjustments to give effect to the amortization of goodwill, interest expense on
acquisition debt and certain other adjustments, together with related income tax
effects.
The pro forma information, which does not give effect to anticipated
intercompany product sales, is not necessarily indicative of the results of
operations had H&B been acquired as of the earliest period presented below.
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30,
1996 1997
------------- -------------
<S> <C> <C>
Net sales....................................................... $ 345,305 $ 428,953
Net income...................................................... $ 6,110 $ 12,458
Net income per diluted share.................................... $ 0.10 $ 0.21
</TABLE>
3. SALE OF DIRECT-MAIL COSMETICS BUSINESS
On October 9, 1995, the Company sold certain assets of its direct-mail
cosmetics business for $2,495. The Company received $350 in cash and non
interest bearing notes aggregating $2,145 for inventory, a customer list and
other intangible assets. Revenues applicable to this marginally unprofitable
business were $8,284 and $137 for fiscal 1995 and 1996, respectively. The
inventory note was repaid in full in October 1996 and, in April 1997, the
Company received the final payment of the customer list note.
11
<PAGE>
NBTY, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
4. INVENTORIES
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------
1996 1997
------- -------
<S> <C> <C>
Raw materials........................................................... $17,132 $29,892
Work-in-process......................................................... 1,523 3,516
Finished goods.......................................................... 19,415 42,528
------- -------
$38,070 $75,936
------- -------
------- -------
</TABLE>
5. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------
1996 1997
------- --------
<S> <C> <C>
Land................................................................... $ 4,765 $ 5,050
Buildings and leasehold improvements................................... 38,088 47,819
Machinery and equipment................................................ 28,560 33,540
Furniture and fixtures................................................. 8,484 53,552
Transportation equipment............................................... 641 1,015
Computer equipment..................................................... 8,545 14,635
------- --------
89,083 155,611
Less accumulated depreciation and amortization....................... 27,351 47,438
------- --------
$61,732 $108,173
------- --------
------- --------
</TABLE>
Depreciation and amortization of property, plant and equipment for the
years ended September 30, 1995, 1996 and 1997 was approximately $3,190, $4,974
and $7,104, respectively.
Property, plant and equipment includes approximately $4,051 for assets
recorded under capital leases for fiscal 1996 and 1997.
6. INTANGIBLE ASSETS
Intangible assets, at cost, acquired at various dates are as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------- AMORTIZATION
1996 1997 PERIOD
------- -------- ------------
<S> <C> <C> <C>
Goodwill........................................................... $ 469 $136,972 20-40
Customer lists..................................................... 8,784 9,816 6-15
Trademark and licenses............................................. 1,201 1,201 2-3
Covenants not to compete........................................... 1,305 1,305 5-7
------- --------
11,759 149,294
Less accumulated amortization.................................... 7,784 8,847
------- --------
$ 3,975 $140,447
------- --------
------- --------
</TABLE>
Amortization included in the consolidated statements of income under the
caption 'selling, general and administrative expenses' in 1995, 1996 and 1997
was approximately $776, $649 and $1,063, respectively.
12
<PAGE>
NBTY, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
7. ACCRUED EXPENSES
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------
1996 1997
------- -------
<S> <C> <C>
Litigation settlement costs............................................. $ 5,600
Payroll and related payroll taxes....................................... $ 2,731 4,185
Customer deposits....................................................... 1,863 2,363
Accrued purchases and interest.......................................... 2,800
Income taxes payable.................................................... 2,670 7,456
Other................................................................... 7,441 11,921
------- -------
$14,705 $34,325
------- -------
------- -------
</TABLE>
8. LONG-TERM DEBT
<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------
1996 1997
------- --------
<S> <C> <C>
Senior debt:
8 5/8% Senior subordinated notes due 2007, net of unamortized
discount of $1,237 (a)............................................ $148,763
Mortgages:
First mortgage, payable in monthly principal and interest (10.375%)
installments (b).................................................. $ 7,447 7,317
First mortgage payable in monthly principal and interest (9.73%)
installments of $25 (c)........................................... 2,258 2,169
First mortgage, payable in monthly principal and interest (7.375%)
installments of $55 (d)........................................... 5,926 5,693
Revolving credit agreement (e)
------- --------
15,631 163,942
Less current portion................................................. 453 495
------- --------
$15,178 $163,447
------- --------
------- --------
</TABLE>
- ------------------
(a) In September 1997, the Company issued 10-year Senior Subordinated Notes due
2007. The Notes are unsecured and subordinated in right of payment for all
existing and future indebtedness of the Company. The Company is in the
process of registering these Notes under the Securities Act of 1933 through
an exchange offer. Such Exchange Notes, once issued, will have terms
substantially identical to the original Notes.
(b) In September 1990, the Company obtained an $8,000 first mortgage,
collateralized by the underlying building, issued through the Town of Islip,
New York Industrial Development Agency. The taxable bond, held by an
insurance company, has monthly principal and interest payments of $75 for
ten years through 2000, with a final payment of $6,891 in September 2000.
(c) In November 1994, the Company purchased a building which it previously
occupied under a long-term lease. The purchase price of approximately $3,090
was funded with $690 in cash and the balance through a 15-year mortgage note
payable. This agreement contains various restrictive covenants which require
the maintenance of certain financial ratios and limits capital expenditures.
13
<PAGE>
NBTY, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
8. LONG-TERM DEBT--(CONTINUED)
(d) In April 1996, the Company obtained a $6,000 first mortgage with a fixed
interest rate of 7.375%, collateralized by the underlying real estate. The
mortgage has monthly principal and interest payments of $55 for fifteen
years through 2011.
(e) In September 1997, the Company entered into a Revolving Credit Agreement
(the 'Agreement') with five banks that provides for borrowings up to
$50,000, which expires September 23, 2003. Virtually all of the Company's
assets serve as collateral under the Agreement, which is subject to normal
banking terms and conditions. The Agreement provides that loans may be made
under a selection of rate formulas including Prime or Euro currency rates.
The Agreement provides for the maintenance of various financial ratios and
covenants. As of September 30, 1997, there were no outstanding borrowings
under the Agreement.
Required principal payments of long-term debt are as follows:
<TABLE>
<CAPTION>
YEARS ENDED
SEPTEMBER 30,
- --------------------------------------------------------------
<S> <C>
1998........................................................ $ 495
1999........................................................ 539
2000........................................................ 7,420
2001........................................................ 444
2002........................................................ 481
Thereafter.................................................. 154,563
--------
$163,942
--------
--------
</TABLE>
In August 1997, in connection with the promissory notes issued as
consideration for the purchase of H&B, the Company was issued two standby
letters of credit aggregating $170,000. At September 30, 1997, there were no
borrowings outstanding under the letters of credit. As of October 17, 1997, upon
payment of the promissory notes, the letters of credit were cancelled.
In 1997, the Company recorded a loss of $2,265 in connection with an
interest rate lock which was settled on October 28, 1997.
9. CAPITAL LEASE OBLIGATIONS
The Company enters into various capital leases for machinery and equipment
which provide the Company with bargain purchase options at the end of such lease
terms. Future minimum payments under capital lease obligations as of September
30, 1997 are as follows:
<TABLE>
<S> <C>
1998........................................................... $ 759
1999........................................................... 759
2000........................................................... 759
2001........................................................... 759
2002........................................................... 692
Thereafter..................................................... 172
------
3,900
Less, amount representing interest............................. 679
------
Present value of minimum lease payments (including $521 due
within one year)............................................ $3,221
------
------
</TABLE>
14
<PAGE>
NBTY, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
10. INCOME TAXES
Provision (benefit) for income taxes consists of the following:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
---------------------------
1995 1996 1997
------ ------ -------
<S> <C> <C> <C>
Federal
Current................................................................. $2,225 $7,551 $14,207
Deferred................................................................ 637 (501) (2,530)
State
Current................................................................. 336 2,112 1,218
Deferred................................................................ 48 (141) (220)
Foreign benefit........................................................... (1,189)
------ ------ -------
Total provision........................................................... $3,246 $9,021 $11,486
------ ------ -------
------ ------ -------
</TABLE>
The following is a reconciliation of the income tax expense computed using
the statutory federal income tax rate to the actual income tax expense and its
effective income tax rate.
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------------------------
1995 1996 1997
-------------------- -------------------- ---------------------
PERCENT OF PERCENT OF PERCENT OF
PRETAX PRETAX PRETAX
AMOUNT INCOME AMOUNT INCOME AMOUNT INCOME
------ ---------- ------ ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Income tax expense at statutory
rate................................ $2,850 34.0% $7,831 35.0% $10,051 35.0%
State income taxes, net of federal
income tax benefit.................. 254 3.0% 1,281 5.7% 649 2.3%
Other, individually less than 5%...... 142 1.7% (91) (0.4%) 786 2.7%
------ ---------- ------ ---------- ------- ----------
Actual income tax provision........... $3,246 38.7% $9,021 40.3% $11,486 40.0%
------ ---------- ------ ---------- ------- ----------
------ ---------- ------ ---------- ------- ----------
</TABLE>
The components of deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
1996 1997
------- -------
<S> <C> <C>
Deferred tax assets:
Current:
Inventory capitalization............................................ $ 243 $ 351
Accrued expenses and reserves not currently deductible.............. 2,591 5,350
Tax credits......................................................... 321 331
------- -------
Current deferred tax assets....................................... 3,155 6,032
------- -------
Noncurrent:
Intangibles......................................................... 335 333
Reserves not currently deductible................................... 200 188
------- -------
Total noncurrent.................................................. 535 521
------- -------
Deferred tax liabilities:
Property, plant and equipment.......................................... (3,362) (7,995)
------- -------
Net deferred tax (liability) asset................................ $ 328 $(1,442)
------- -------
------- -------
</TABLE>
Available state tax credits of $321 and $331 in 1996 and 1997,
respectively, are scheduled to expire through fiscal 2002.
15
<PAGE>
NBTY, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
11. COMMITMENTS
Leases
The Company conducts retail operations under operating leases which expire
at various dates through 2020. Some of the leases contain renewal options and
provide for additional rentals based upon sales plus certain tax and maintenance
costs.
Future minimal rental payments under the retail location and other leases
that have initial or noncancelable lease terms in excess of one year at
September 30, 1997 are as follows:
<TABLE>
<CAPTION>
YEAR ENDING
SEPTEMBER 30,
- --------------------------------------------------------------
<S> <C>
1998........................................................ $ 25,322
1999........................................................ 24,501
2000........................................................ 23,522
2001........................................................ 22,176
2002........................................................ 20,804
Thereafter.................................................. 161,623
--------
$277,948
--------
--------
</TABLE>
Operating lease rental expense, including real estate tax and maintenance
costs, and leases on a month to month basis were approximately $1,248, $1,979
and $7,750 for the years ended September 30, 1995, 1996 and 1997, respectively.
Purchase commitments
The Company was committed to make future purchases under various purchase
order arrangements with fixed price provisions aggregating approximately $12,923
and $26,102 at September 30, 1996 and 1997, respectively.
Capital commitments
The Company had approximately $15,800 in open capital commitments related
to a manufacturing facility and computer hardware and software at September 30,
1997.
Employment and consulting agreements
The Company has employment agreements with two of its officers. The
agreements, which expire in January 2004, provide for minimum salary levels,
including cost of living adjustments, and also contain provisions regarding
severance and changes in control of the Company. The commitment for salaries as
of September 30, 1997 was approximately $749 per year.
The Company also has a two-year consulting agreement with its former
chairman and current director which expires on December 31, 1997. Such agreement
requires annual payments of approximately $350. The parties are presently
negotiating a renewal of the agreement under substantially comparable terms. In
addition, an entity owned by a relative of an officer received sales commissions
of $510, $417 and $541 in 1995, 1996 and 1997, respectively.
12. STOCK OPTION PLANS
The Board of Directors approved the issuance of 6,660 non-qualified options
on September 23, 1990, exercisable at $0.21 per share, which options terminate
on September 23, 2000. In addition, on March 11, 1992,
16
<PAGE>
NBTY, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
12. STOCK OPTION PLANS--(CONTINUED)
the Board approved the issuance of an aggregate of 5,400 non-qualified stock
options to directors and officers, exercisable at $0.31 per share, and expiring
on March 10, 2002. The exercise price of each of the aforementioned issuances
was in excess of the market price at the date such options were granted.
During fiscal 1997, options were exercised with 37 shares of common stock
issued (prior to the aforementioned stock split) to certain officers and a
director for $23. As a result of the exercise of those options, the Company
received a compensation deduction for tax purposes of approximately $643 and a
tax benefit of approximately $257 which was credited to capital in excess of
par.
During fiscal 1996, options were exercised with 872 shares of common stock
issued (prior to the aforementioned stock split) to certain officers and
directors for $11 and interest bearing notes in the amount of $584. As a result
of the exercise of these options, the Company was entitled to a compensation
deduction for tax purposes of approximately $3,145 and a tax benefit of
approximately $1,274 which was credited to capital in excess of par.
During fiscal 1995, options were exercised with 430 shares of common stock
issued (prior to the aforementioned stock split) to certain officers and
directors for $24 and an interest bearing note in the amount of $191. The
promissory note, including interest, was paid by the surrender of 23 NBTY common
shares to the Company at the prevailing market price. As a result of the
exercise of these options, the Company was entitled to a compensation deduction
of approximately $1,828 which resulted in a tax benefit of approximately $731
which was credited to capital in excess of par.
A summary of stock option activity is as follows:
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
NUMBER OF EXERCISE NUMBER OF EXERCISE NUMBER OF EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
--------- -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year...... 8,475 $ .24 7,185 $ .25 4,569 $ .25
Exercised............................. 1,290 .17 2,616 .23 111 .31
--------- -------- --------- -------- --------- --------
Outstanding at end of year............ 7,185 $ .25 4,569 $ .25 4,458 $ .25
--------- -------- --------- -------- --------- --------
--------- -------- --------- -------- --------- --------
Exercisable at end of year............ 7,185 $ .25 4,569 $ .25 4,458 $ .25
--------- -------- --------- -------- --------- --------
--------- -------- --------- -------- --------- --------
</TABLE>
As of September 30, 1997, the weighted average remaining contractual life
of outstanding options was 4 years. In addition, there were no options available
for grant at September 30, 1995, 1996 or 1997.
13. EMPLOYEE BENEFIT PLANS
The Company maintains defined contribution savings plans and an employee
stock ownership plan. The accompanying financial statements reflect
contributions to these plans in the approximate amount of $498, $489 and $1,209
for the years ended September 30, 1995, 1996 and 1997, respectively.
14. LITIGATION
L-tryptophan
The Company and certain other companies in the industry have been named as
defendants in cases arising out of the ingestion of products containing
L-tryptophan. The Company had been named in more than 265 lawsuits, of which
four are still pending against the Company. The other 261 lawsuits have been
settled at no cost to the Company. The Company's supplier of L-tryptophan agreed
to indemnify the Company and the other companies named in the lawsuits through
the final resolution of all cases involving L-tryptophan. In addition, the
17
<PAGE>
NBTY, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
14. LITIGATION--(CONTINUED)
supplier has posted, for the benefit of the Company and the other companies
named in the lawsuits, a revolving, irrevocable letter of credit of $20,000 to
be used in the event that the supplier is unable or unwilling to satisfy any
claims or judgments. While not all of these suits quantify the amount demanded,
the Company believes that the amount required to either settle these cases or to
pay judgments rendered therein will be paid by the supplier or by the Company's
product liability insurance carrier.
While the outcome of any litigation is uncertain, it is the opinion of
management and legal counsel of the Company that it is remote that the Company
will incur a material loss as a result of the L-tryptophan litigation and
claims. Accordingly, no provision for liability, if any, that may result
therefrom has been made in the Company's financial statements.
Shareholder litigation
In October 1994, two lawsuits were commenced in the U.S. District Court,
Eastern District of New York, against the Company and two of its officers. On
October 17, 1997, a Memorandum of Understanding was entered into between the
Company and the attorneys representing the Plaintiff class agreeing to an $8,000
($4,400 cash, $3,600 stock) settlement of the lawsuit. Subsequently, the Company
entered into a Capital Stipulation of Settlement calling for, among other
things, a total cash payment of $8,000. The Company has been notified by its
insurance carrier that it is willing to reimburse the Company to the extent of
$2,400. Accordingly, as of September 30, 1997, the Company recorded a $5,600
provision for its portion of the settlement which, along with related legal fees
of approximately $768, has been reflected separately in the statement of income.
Other litigation
The Company is also involved in miscellaneous claims and litigation which
management believes, taken individually or in the aggregate, would not have a
material adverse effect on the Company's financial position or its business.
15. FOREIGN OPERATIONS
In connection with the Company's recent acquisition of H&B which operates
primarily in the United Kingdom, the Company has significantly expanded its
operations outside of the United States. The following information has been
summarized by geographic area as of September 30, 1997 and for the year then
ended.
<TABLE>
<CAPTION>
IDENTIFIABLE OPERATING
ASSETS SALES INCOME
------------ -------- ---------
<S> <C> <C> <C>
United States...................................................... $328,548 $254,910 $ 36,619
United Kingdom..................................................... 214,190 26,497 (3,281)
------------ -------- ---------
$542,738 $281,407 $ 33,338
------------ -------- ---------
------------ -------- ---------
</TABLE>
18
<PAGE>
NBTY, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
16. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of the unaudited quarterly results of operations
for fiscal 1996 and 1997:
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30,
------------ --------- -------- -------------
<S> <C> <C> <C> <C>
1996:
Net sales........................................ $ 38,589 $55,605 $ 47,900 $52,309
Gross profit..................................... 17,779 27,760 24,453 28,773
Income before income taxes....................... (412) 7,502 6,503 8,780(a)
Net income....................................... (251) 4,576 3,763 5,264
Net income per diluted share..................... $ -- $ 0.07 $ 0.06 $ 0.09
1997:
Net sales........................................ $ 47,327 $75,019 $ 61,761 $97,300
Gross profit..................................... 24,757 39,342 31,803 49,619
Income before income taxes....................... 5,484 12,723 8,548 1,961(a)
Net income....................................... 3,290 7,634 5,129 1,177
Net income per diluted share..................... $ 0.06 $ 0.13 $ 0.08 $ 0.02
</TABLE>
- ------------------
(a) Year-end adjustments resulting in an increase to pre-tax income of
approximately $2 million and $2.1 million primarily related to adjustments
of inventory amounts in 1996 and 1997, respectively.
19
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: May 5, 1998 By: /s/ Scott Rudolph
----------------------------------
Scott Rudolph
President, Chief Executive Officer
Dated: May 5, 1998 By: /s/ Harvey Kamil
----------------------------------
Harvey Kamil
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
Dated: May 5, 1998 By: /s/ Scott Rudolph
----------------------------------
Scott Rudolph
Chairman, President and
Chief Executive Officer
Dated: May 5, 1998 By: /s/ Arthur Rudolph
----------------------------------
Arthur Rudolph, Director
Dated: May 5, 1998 By: /s/ Aram Garabedian
----------------------------------
Aram Garabedian, Director
Dated: May 5, 1998 By: /s/ Bernard G. Owen
----------------------------------
Bernard G. Owen, Director
Dated: May 5, 1998 By: /s/ Alfred Sacks
----------------------------------
Alfred Sacks, Director
Dated: May 5, 1998 By: /s/ Murray Daly
----------------------------------
Murray Daly, Director
Dated: May 5, 1998 By: /s/ Glenn Cohen
----------------------------------
Glenn Cohen, Director
Dated: May 5, 1998 By: /s/ Bud Solk
----------------------------------
Bud Solk, Director
Dated: May 5, 1998 By: /s/ Nathan Rosenblatt
----------------------------------
Nathan Rosenblatt, Director
----------------------------------
Michael L. Ashner, Director
20
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
NBTY, INC. (FORMERLY NATURE'S BOUNTY, INC.)
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-1-1994
<PERIOD-END> SEP-30-1995
<CASH> 10,378,476
<SECURITIES> 0
<RECEIVABLES> 12,931,124
<ALLOWANCES> 576,579
<INVENTORY> 36,972,592
<CURRENT-ASSETS> 67,722,731
<PP&E> 70,737,588
<DEPRECIATION> 22,413,012
<TOTAL-ASSETS> 124,103,258
<CURRENT-LIABILITIES> 27,058,226
<BONDS> 11,283,129
0
0
<COMMON> 153,662
<OTHER-SE> 82,461,783
<TOTAL-LIABILITY-AND-EQUITY> 124,103,258
<SALES> 178,759,871
<TOTAL-REVENUES> 178,759,871
<CGS> 93,875,162
<TOTAL-COSTS> 93,875,162
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,084,331
<INCOME-PRETAX> 8,381,375
<INCOME-TAX> 3,245,517
<INCOME-CONTINUING> 5,135,858
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,135,858
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.09
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<CASH> 20,316,998
<SECURITIES> 0
<RECEIVABLES> 12,418,781
<ALLOWANCES> 793,669
<INVENTORY> 38,070,071
<CURRENT-ASSETS> 78,850,218
<PP&E> 89,082,883
<DEPRECIATION> 27,351,258
<TOTAL-ASSETS> 145,550,201
<CURRENT-LIABILITIES> 26,582,622
<BONDS> 16,113,299
0
0
<COMMON> 160,638
<OTHER-SE> 96,789,219
<TOTAL-LIABILITY-AND-EQUITY> 145,550,201
<SALES> 194,403,040
<TOTAL-REVENUES> 194,403,040
<CGS> 95,638,272
<TOTAL-COSTS> 95,638,272
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,445,036
<INCOME-PRETAX> 22,372,933
<INCOME-TAX> 9,021,054
<INCOME-CONTINUING> 13,351,879
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,351,879
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0.22
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<CASH> 171,043
<SECURITIES> 0
<RECEIVABLES> 16,692
<ALLOWANCES> 991
<INVENTORY> 75,936
<CURRENT-ASSETS> 143,335
<PP&E> 155,611
<DEPRECIATION> 47,439
<TOTAL-ASSETS> 542,738
<CURRENT-LIABILITIES> 80,855
<BONDS> 335,933
0
0
<COMMON> 161
<OTHER-SE> 116,899
<TOTAL-LIABILITY-AND-EQUITY> 542,738
<SALES> 281,407
<TOTAL-REVENUES> 281,407
<CGS> 135,886
<TOTAL-COSTS> 135,886
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,655
<INCOME-PRETAX> 28,716
<INCOME-TAX> 11,486
<INCOME-CONTINUING> 17,230
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,230
<EPS-PRIMARY> 0.31
<EPS-DILUTED> 0.29
</TABLE>
