NUTRACEUTICAL INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)

1400 Kearns Boulevard, 2nd Floor
Park City, Utah 84060
(Address of principal executive offices including zip code)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý

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 ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein and will not be contained, to the best of the 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. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No ý

The aggregate market value of voting stock held by non-affiliates of the Registrant as of March 31, 2012 at a closing sale price of $14.56 as reported by the NASDAQ Stock Market was approximately $127.3 million. Shares of common stock held by each officer and director and by each person who owns or may be deemed to own 10% or more of the outstanding common stock have been excluded since such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of November 15, 2012, the Registrant had 9,780,128 shares of common stock outstanding.

Portions of the Registrant's Proxy Statement to be used in connection with the solicitation of proxies for the Registrant's 2013 Annual Meeting of Stockholders are incorporated by reference in Part III of this Annual Report on Form 10-K.

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations and business. These forward-looking statements can be identified by the use of terms such as "believe," "expects," "plan," "intend," "may," "will," "should," "can" or "anticipates," or the negative thereof, or variations thereon, or comparable terminology, or by discussions of strategy. Important factors that may cause our results to differ from these forward-looking statements include, but are not limited to:

These statements involve known and unknown risks, uncertainties and other factors that may cause industry trends or our actual results to be materially different from any future results expressed or implied by these statements. For a detailed discussion of these risks and uncertainties, see "Risk Factors" in Item 1A of this Annual Report on Form 10-K. We undertake no obligation to update or revise publicly any forward-looking statements to reflect new information, events or circumstances occurring after the date of this Annual Report on Form 10-K.

Industry data used throughout this report was obtained from industry publications and internal company estimates. While we believe such information to be reliable, its accuracy has not been independently verified and cannot be guaranteed.

NUTRACEUTICAL INTERNATIONAL CORPORATION
ANNUAL REPORT ON FORM 10-K
For The Fiscal Year Ended September 30, 2012

We were incorporated in Delaware in 1993 and maintain our principal executive offices at 1400 Kearns Boulevard, 2^nd Floor, Park City, Utah, 84060. For convenience in this report, the terms "Company," "Nutraceutical," "we" and "us" may be used to refer to Nutraceutical International Corporation and/or its subsidiaries, except where indicated otherwise. Our telephone number is (435) 655-6106.

We are an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores. Internationally, we market and distribute branded nutritional supplements and other natural products to and through health and natural product distributors and retailers. Our core business strategy is to acquire, integrate and operate businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements. We believe that the consolidation and integration of these acquired businesses provides ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships.

We manufacture and sell nutritional supplements and other natural products under numerous brands including Solaray®, KAL®, Nature's Life®, LifeTime®, Natural Balance®, bioAllers®, Herbs for Kids™, NaturalCare®, Health from the Sun®, Life-flo®, Organix South®, Pioneer® and Monarch Nutraceuticals™.

We own neighborhood natural food markets, which operate under the trade names The Real Food Company™, Thom's Natural Foods™ and Cornucopia Community Market™. We also own health food stores, which operate under the trade names Fresh Vitamins™, Granola's™, Nature's Discount™ and Warehouse Vitamins™.

We manufacture and/or distribute one of the broadest branded product lines in the industry with over 7,000 individual stock keeping units ("SKUs"), including approximately 900 SKUs sold internationally. We believe that as a result of our emphasis on innovation, quality, loyalty, education and customer service, our brands are widely recognized in health and natural food stores and among their customers.

We were formed in 1993 to effect a consolidation strategy in the fragmented vitamin, mineral, herbal and other nutritional supplements industry (the "VMS Industry"). Since our formation, we have completed numerous acquisitions of assets or stock. As a result of these acquisitions, internal growth and cost management, we believe that we are well positioned to continue to capitalize on the consolidation that we believe is occurring in the VMS Industry.

We target consumers searching for high quality nutritional and other natural products. We believe many of these consumers shop in sales channels that offer meaningful education, service and support to their customers.

The primary channel that offers this type of support to consumers in the United States has been health and natural food stores (the "Healthy Foods Channel"). Our primary focus has been and remains on this channel. This strategy has enabled us to benefit from the growth of the Healthy Foods Channel. The Healthy Foods Channel consists of approximately 17,000 retailers, including (i) independent health and natural food stores, (ii) health and natural food stores affiliated with local, regional and national health and natural food chains (including health and natural food store chains,

such as Whole Foods Market, and vitamin store chains, such as Vitamin Shoppe and Vitamin World) and (iii) GNC stores. The Healthy Foods Channel principally caters to our primary target consumers: those who desire product education, service and high quality nutritional supplements and other natural products. We believe there are significant differences between mass market retailers (such as supermarkets, drugstores and warehouse clubs) that typically offer a limited selection of discounted natural products and lower-potency nutritional supplements and the Healthy Foods Channel, where natural ingredients, quality, potency, selection and customer support are emphasized. The growth rate of the Healthy Foods Channel is not at (and may not return to) levels achieved in the mid-1990s.

We believe we are among the largest suppliers of nutritional supplements to the Healthy Foods Channel that develop, manufacture, market and directly distribute a majority of their own products. We manufactured approximately 75% of our branded products in fiscal 2012 and believe that the quality of our products is among the highest in the industry. We market our branded products through one of the industry's largest sales forces dedicated to the Healthy Foods Channel. We seek to be a market leader in the development of new and innovative products, introducing over 200 new SKUs in fiscal 2012. We believe that we benefit from greater customer and product diversification than most of our larger competitors.

We believe that consumers seeking high quality products are also purchasing them through other channels, such as products available through health care practitioners and direct to consumer channels and we continue to seek opportunities through acquisitions to explore reaching our target consumers through these and additional channels.

According to Nutrition Business Journal, the total retail natural products market (the "Natural Products Market") is highly fragmented and totaled approximately $126.0 billion in retail sales in calendar 2011. The Natural Products Market is comprised of the following submarkets (with estimated calendar 2011 sales indicated): (i) personal care, $11.8 billion, (ii) natural and organic foods, $43.1 billion, (iii) functional foods, $41.1 billion and (iv) vitamins, minerals and supplements, $30.0 billion. Historically, our primary focus has been on vitamins, minerals and supplements (the "VMS Market"), but recently we have increased our effort in other areas within the Natural Products Market.

The total retail VMS Market is highly fragmented with estimated sales of $30.0 billion in calendar 2011, $28.1 billion in calendar 2010 and $26.9 billion in calendar 2009. We believe that the VMS Market reached its present size due to a number of factors, including (i) interest in healthier lifestyles, living longer and living well, (ii) the publication of research findings supporting the positive health effects of certain nutritional supplements and (iii) the aging of the "Baby Boom" generation combined with the tendency of consumers to purchase more nutritional supplements and natural foods as they age. Over the last few years, some publicly-traded nutritional supplement companies and industry analysts have commented on slowing growth trends and/or ongoing softness in sales of some nutritional supplements. We believe this may be the result of, among other things, the lack of any recent industry-wide "hit" products, negative press releases regarding certain ingredients and companies in the VMS Market and increased market and pricing competition, as well as competition from food and pharmaceutical companies.

We primarily manufacture and market nutritional supplements and also sell certain other natural products. As of September 30, 2012, we sold over 7,000 SKUs, including approximately 900 SKUs sold internationally, under approximately 50 different brands. Our products include: (i) vitamins and minerals, (ii) herbs, (iii) specialty formulas, (iv) personal care products, (v) homeopathics,

(vi) functional foods and (vii) other products. To accommodate consumer preferences, our products come in various formulations and delivery forms, including capsules, tablets, softgels, chewables, liquids, creams, sprays, powders and whole herbs.

We currently market our products through a multiple brand strategy to offer more customer choice and to encourage retailers to allocate additional shelf space to our brands. We have worked to enhance the strength of our brands by instituting business strategies that have included (i) consolidating or expanding our sales force in certain areas, as appropriate, to maximize each brand's geographic coverage, (ii) performance and growth-based incentives for sales representatives, (iii) introducing more sophisticated management information systems and (iv) periodic updating to brand packaging.

We also act as a distributor to the Healthy Foods Channel and to certain international markets for certain third-party brands.

We have a commitment to research and development and to introducing innovative products to correspond with consumer trends and scientific research. We believe that product quality and innovation are fundamental to our long-term growth and success. Through our research and development efforts, we seek to (i) test the safety, purity and potency of products, (ii) develop more effective and efficient means of producing ingredients for use in products, (iii) develop testing methods for ensuring and verifying the consistency of the dosage of ingredients included in our products, (iv) develop new, more effective product delivery forms and (v) develop new products either by combining existing ingredients used in nutritional supplements or identifying new ingredients that can be used in nutritional supplements. Our efforts are designed to lead not only to the development of new and improved products, but also to ensure effective manufacturing quality control measures. For the years ended September 30, 2012, 2011 and 2010, we incurred $3.6 million, $3.9 million and $3.9 million, respectively, in research and development expenditures.

We have entered into a cooperative arrangement with Weber State University in Ogden, Utah through which, among other things, the university provides us with access to certain laboratory space and equipment. We also conduct research and development in our own facilities. We currently employ various professionals in research and development and quality control with degrees in, among other things, chemistry, microbiology and engineering and, in many cases, these professionals have also received training in natural health food products. In addition, we retain the services of outside laboratories from time to time to validate our product standards and manufacturing protocols.

Our quality control program seeks to ensure the superior quality of our products and that they are manufactured in accordance with current Good Manufacturing Practices ("GMPs"). Our processing methods are monitored closely to ensure that only quality ingredients are used and to ensure product purity.

We believe our marketing and sales efforts help to promote demand for our products by educating retailers, who in turn educate their customers, as to the quality and attributes of our natural nutritional supplements and other products. Our branded products are currently sold in the United States primarily in the Healthy Foods Channel. We believe that our products are attractive to retailers in the Healthy Foods Channel due to factors such as the strength of our brand names, the breadth of our product offerings, the quality and potency of our products and the availability of service, sales support and educational materials. We have developed various Internet sites (including http://www.nutraceutical.com) that provide information about our branded lines and the various products within each brand. We have included our Internet site here and elsewhere only as an inactive textual

reference. The information contained on the Internet site is not incorporated by reference into this Annual Report on Form 10-K.

We employ a sales force dedicated to the Healthy Foods Channel. Our sales representatives regularly visit each assigned health and natural food store in their respective areas to assist in the solicitation of orders for products and provide related product sales assistance. We monitor and periodically update our payment structure for our sales force in order to ensure that appropriate incentives are provided for sales growth. We also sell products directly to certain retailers through our telephone customer service organization and certain products to both retailers and distributors and others directly to consumers. We have organized the majority of our marketing and sales efforts under a subsidiary company, NutraBrands, Inc.

Our marketing efforts are focused on product development, in-store marketing support and educating retailers to enhance their knowledge and awareness of our products and to enable them to then educate their customers about our products. Our marketing efforts are designed to foster relationships with our customers in the Healthy Foods Channel and to increase retailer and consumer awareness of our products.

Au Naturel, Inc., a subsidiary of Nutraceutical, was formed in fiscal 1995 for the purpose of marketing and/or selling our branded products internationally. During fiscal 2012, Au Naturel marketed products to distributors and other customers in approximately 55 countries. Au Naturel markets domestic branded products as well as custom-labeled versions of its domestic branded products internationally; however, many of its products must be modified to meet the specific labeling or formulation requirements of the relevant foreign country. In most foreign markets, Au Naturel sells to local distributors. However, in certain foreign markets (including the United Kingdom, the Netherlands, Norway, Sweden and Japan), Au Naturel markets and sells its products directly to retailers.

Monarch Nutraceuticals, Inc., a subsidiary of Nutraceutical, markets branded bulk products and custom blends. Monarch conducts marketing and sales for bulk materials domestically through a separate sales force and internationally directly to manufacturers and through distributors.

Our manufacturing process generally consists of the following operations: (i) sourcing ingredients for products, (ii) warehousing raw ingredients, (iii) measuring ingredients for inclusion in products, (iv) blending, grinding, and chilsonating ingredients into a mixture with a homogeneous consistency and (v) encapsulating, tableting, pouring, pouching, bagging or boxing the blended mixture into the appropriate dosage form using either automatic or semiautomatic equipment. The next step, bottling and packaging, involves placing the product in packaging with appropriate tamper-evident features and sending the packaged product to a distribution point for delivery to retailers. We place special emphasis on quality control, including raw material verification, homogeneity testing, weight deviation measurements and quality sampling. See "Research and Development; Quality Control."

We manufactured approximately 75% of our branded products in fiscal 2012, based on net sales. By manufacturing the majority of our own products, we believe that we maintain better control over product quality and availability while also reducing production costs. Our manufacturing operations are performed primarily in our facilities located in the greater Ogden, Utah area, although we also have a cream manufacturing operation in Phoenix, Arizona, a liquid manufacturing operation in Tulsa, Oklahoma and a personal care manufacturing operation in Bowling Green, Florida. We have a working relationship with numerous outside manufacturers, including softgel manufacturers and packagers and utilize these outside sources from time to time. Manufacturing backlogs, to the extent they may exist from time to time, do not have a material impact on delivery time to the customer. We have organized our manufacturing operations under two subsidiary companies, NutraPure, Inc. and Seychelles Organics, Inc.

We use customized computer software systems, as well as commercially-packaged software, for handling order entry and invoicing, manufacturing, inventory management, shipping, warehouse operations, customer service inquiries, accounting operations and management information. We believe that these systems have improved operating efficiencies and customer service.

We employ a purchasing staff that works with marketing, product development, formulations and quality control personnel to source raw materials for products as well as other items purchased by us. Raw materials are sourced principally from the United States, Europe and China. Raw materials used by us are available from a variety of suppliers and no one supplier accounted for more than 6% of our total raw material purchases in fiscal 2012. We seek to mitigate the risk of a shortage of raw materials through our relationships with our principal suppliers, including identification of alternative suppliers for the same, or similar, raw materials where available. We also manufacture bulk branded products to allow more extensive vertical integration and to improve the quality and consistency of raw materials.

The formulation, manufacturing, packaging, labeling, advertising, distribution and sale (hereafter, "sale" or "sold" may be used to signify all of these activities) of our products are subject to regulation by one or more federal agencies, primarily the Food and Drug Administration ("FDA") and the Federal Trade Commission ("FTC"), and to a lesser extent the Consumer Product Safety Commission ("CPSC"), the United States Department of Agriculture and the Environmental Protection Agency. Our activities are also regulated by various governmental agencies for the states and localities in which our products are sold, as well as by governmental agencies in certain countries outside the United States in which our products are sold. Among other matters, regulation by the FDA and FTC is concerned with product safety and claims made with respect to a product's ability to provide health-related benefits. Specifically, the FDA, under the Federal Food, Drug, and Cosmetic Act ("FDCA"), regulates the formulation, manufacturing, packaging, labeling, distribution and sale of food, including dietary supplements, over-the-counter ("OTC") drugs, and medical devices. The FTC regulates the advertising of these products. The National Advertising Division ("NAD") of the Council of Better Business Bureaus oversees an industry- sponsored, self-regulatory system that permits competitors to resolve disputes over advertising claims. The NAD has no enforcement authority of its own, but may refer matters that appear to violate the FTC Act or the FDCA to the FTC or the FDA for further action, as appropriate.

Federal agencies, primarily the FDA and the FTC, have a variety of procedures and enforcement remedies available to them, including initiating investigations, issuing warning letters and cease-and-desist orders, requiring corrective labeling or advertising, requiring consumer redress (for example, requiring that a company offer to repurchase products previously sold to consumers), seeking injunctive relief or product seizures, imposing civil penalties or commencing criminal prosecution. In addition, certain state agencies have similar authority. These federal and state agencies have in the past used these remedies in regulating participants in the food, dietary supplement and over-the-counter drug industries, including the imposition of civil penalties in the millions of dollars against a few industry participants.

Some of our products are regulated as conventional foods under the Nutrition Labeling and Education Act of 1990 ("NLEA"). The NLEA amended the FDCA to establish additional requirements for ingredient and nutrition labeling and labeling claims for conventional foods. If the NLEA labeling requirements change at a future time, we may need to revise our product labeling. Most of our products are classified as dietary supplements.

The Dietary Supplement Health and Education Act ("DSHEA") was enacted in 1994, amending the FDCA. We believe DSHEA is generally favorable to consumers and to the dietary supplement industry. DSHEA establishes a statutory class of "dietary supplements," which includes vitamins, minerals, herbs, amino acids and other dietary ingredients for human use to supplement the diet. Dietary ingredients marketed in the United States before October 15, 1994 may be marketed without the submission of a "new dietary ingredient" ("NDI") premarket notification to the FDA. Dietary ingredients not marketed in the United States before October 15, 1994 may require the submission, at least 75 days before marketing, of an NDI notification containing information establishing that the ingredient is reasonably expected to be safe for its intended use. Among other things, DSHEA prevents the FDA from regulating dietary ingredients in dietary supplements as "food additives" and allows the use of statements of nutritional support on product labels and in labeling. The FDA has issued final regulations under DSHEA and has issued draft guidance on NDI notification requirements. Further guidance and regulations are expected. Several bills to amend DSHEA in ways that would make this law less favorable to consumers and industry have been proposed in Congress.

The FDA issued a Final Rule on GMPs for dietary supplements on June 22, 2007. The GMPs cover manufacturers and holders of finished dietary supplement products, including dietary supplement products manufactured outside the United States that are imported for sale into the United States. Among other things, the new GMPs: (a) require identity testing on all incoming dietary ingredients, (b) call for a "scientifically valid system" for ensuring finished products meet all specifications, (c) include requirements related to process controls, including statistical sampling of finished batches for testing and requirements for written procedures and (d) require extensive recordkeeping. We have reviewed the GMPs and have taken steps to ensure compliance. While we believe we are in compliance, there can be no assurance that our operations or those of our suppliers will be in compliance in all respects at all times. Additionally, there is a potential risk of increased audits as the FDA and other regulators seek to ensure compliance with the GMPs.

On December 22, 2006, Congress passed the Dietary Supplement and Nonprescription Drug Consumer Protection Act, which went into effect on December 22, 2007. The law requires, among other things, that companies that manufacture or distribute nonprescription drugs or dietary supplements report serious adverse events allegedly associated with their products to the FDA and institute recordkeeping requirements for all adverse events (serious and non-serious). There is a risk that consumers, the press and government regulators could misinterpret reported serious adverse events as evidence of causation by the ingredient or product complained of, which could lead to additional regulations, banned ingredients or products, increased insurance costs and a potential increase in product liability litigation, among other things.

The Food and Drug Administration Amendments Act of 2007 amended the FDCA to prohibit, with certain exceptions, the marketing of foods to which a drug or biological product has been added. The meaning of this new provision is unclear, and the FDA has requested comments on it. This new provision could have an impact on the marketing of some of our products.

The Consumer Product Safety Improvement Act of 2008 ("CPSIA") primarily addresses children's product safety but also improves the administrative process of the CPSC. Among other things, the CPSIA requires testing and certification of certain products and enhances the CPSC's authority to order recalls.

The FDA Food Safety Modernization Act ("FSMA"), enacted January 4, 2011, amended the FDCA to significantly enhance FDA's authority over various aspects of food regulation. The FSMA granted FDA mandatory recall authority when the FDA determines there is a reasonable probability that a food is adulterated or misbranded and that the use of, or exposure to, the food will cause serious adverse health consequences or death to humans or animals. Other changes include the FDA's expanded access to records; the authority to suspend food facility registrations and require high risk

imported food to be accompanied by a certification; stronger authority to administratively detain food; the authority to refuse admission of an imported food if it is from a foreign establishment to which a U.S. inspector is refused entry for an inspection; and the requirement that importers verify that the foods they import meet domestic standards.

One of the FSMA's more significant changes is the requirement of hazard analysis and risk-based preventive controls ("HARBPC") for all food facilities required to register with the FDA, except dietary supplement facilities in compliance with both GMPs and the serious adverse event reporting requirements. Although dietary supplement facilities are exempt from the HARBPC requirements, dietary ingredient facilities might not qualify for the exemption. The HARBPC requirements, which the FDA has yet to propose, are expected to be onerous because facilities will have to develop and implement preventive controls to assure that identified hazards are significantly minimized or prevented, monitor the effectiveness of the preventive controls and maintain numerous records related to the HARBPC. The HARBPC requirements may increase the costs of dietary ingredients and affect our ability to obtain dietary ingredients.

As required by Section 113(b) of the FSMA, the FDA published in July 2011 a draft guidance document clarifying when the FDA believes a dietary ingredient is an NDI, when a manufacturer or distributor must submit an NDI premarket notification to the FDA, the evidence necessary to document the safety of an NDI and the methods for establishing the identity of an NDI. The draft guidance, if implemented as proposed, could have a material impact on our operations. Although our industry has strongly objected to several aspects of the draft guidance, it is unclear whether and what changes FDA will make to the final guidance. In addition, it is possible that the FDA will begin taking enforcement actions consistent with the interpretations in the draft guidance before issuing a final version.

The new FSMA requirements, as well as the FDA enforcement of the NDI guidance as written, could require us to incur additional expenses, which could be significant, and negatively impact our business in several ways, including, but not limited to, the detention and refusal of admission of imported products, the injunction of manufacturing of any dietary ingredients or dietary supplements until the FDA determines that such ingredients or products are in compliance and the potential imposition of fees for reinspection of noncompliant facilities. Each of these events would increase our liability and could have a material adverse effect on our financial condition, results of operations or cash flows.

The FTC and the FDA have pursued a coordinated effort to challenge what they consider to be unsubstantiated and unsafe weight-loss products, and have also coordinated enforcement against dietary supplement claims in other areas, including children's products. Their efforts to date have focused on manufacturers and marketers as well as media outlets, and have resulted in a significant number of investigations and enforcement actions, some resulting in civil penalties under the FTC Act of several million dollars. We expect that the FTC and the FDA will continue to focus on health-related claims for dietary supplements and foods, and our products could be the subject of an FTC/FDA inquiry.

We market various OTC homeopathic drug products. Homeopathic drugs have a unique status under the FDCA because, unlike other drugs, FDA does not evaluate homeopathic drugs for safety or efficacy prior to marketing. Instead, homeopathic drugs must meet the standards of strength, quality, and purity set forth in the Homeopathic Pharmacopeia of the United States ("HPUS"). FDA has established a policy addressing the lawful sale of homeopathic drugs under the FDC Act. See Compliance Policy Guide ("CPG") 7132.15, "Conditions Under Which Homeopathic Drugs May Be Marketed," CPG Manual § 400.400 (revised March 1995). Under this compliance policy, FDA generally exempts a homeopathic drug from regulation as a new drug if: the active ingredient is subject of a HPUS monograph; the product does not include non-homeopathic active ingredients; the product is homeopathically prepared; the claims (indications) are consistent with homeopathic usage for the active

ingredient(s) in the product, as described in a recognized "material medica" and the OTC homeopathic drug product is intended solely for self-limiting diseases amenable to self-diagnosis and treatment by consumers. CPG 7132.15. In contrast, the FTC treats homeopathic drugs similar to other OTC drugs.

In recent years, state courts have concluded that, because homeopathic drugs are not approved or marketed pursuant to an FDA regulation, claims against a manufacturer of a homeopathic drug are not preempted by the FDCA. Consequently, plaintiff's actions under state consumer protection laws for lack of substantiation have been allowed to proceed. Ignoring the unique character of homeopathic drug products, plaintiff's claims in these actions have been based on the evidence standard applied to conventional drugs. Generally, these actions involve claims for significant monetary damages.

The sale of our products in countries outside the United States is regulated by the governments of those countries. Our plans to commence or expand sales in those countries may be prevented or delayed or even suspended by such regulations or by regulators in those countries. In countries in which we have distributors, compliance with such regulations is generally undertaken by our distributors, but even in these cases we assist with such compliance and in many cases may be liable if a distributor fails to comply. These distributors are independent contractors over whom we have limited control. In certain countries, we distribute our products through our own subsidiary or branch; in these countries we retain responsibility for compliance with all applicable regulations. These countries currently include the United Kingdom, the Netherlands, Norway, Sweden, Japan and certain Caribbean Islands.

In some countries or areas, including those in which we operate or into which we sell, there are new regulations or proposed regulations that may or will prohibit the sale of certain products or certain combination products (such as products containing both vitamins and botanicals) or the use of certain common ingredients, or levels above certain established limits.

As a result of our efforts to comply with applicable statutes and regulations, we have from time to time reformulated, eliminated or relabeled certain of our products and revised certain provisions of our marketing and sales program. We have also suspended or halted sales in certain cases.

The Natural Products Market and the VMS Market are highly competitive. Our principal competitors in the VMS Market that sell to the Healthy Foods Channel include a number of large, nationally-known brands (such as Country Life, Enzymatic Therapy, Garden of Life, Solgar, Natrol, Nature's Plus, Nature's Way, Now Foods, and New Chapter) and many smaller brands, manufacturers and distributors of nutritional supplements. We have recently begun to focus on the broader Natural Products Market within the Healthy Foods Channel and within that market there are a number of large, nationally-known competitors, such as Hain Celestial. Because both the Natural Products Market and the VMS Market generally have low barriers to entry, additional competitors enter the market regularly.

Private label products of our customers also provide competition to our products. Whole Foods Market, Vitamin Shoppe and many health and natural food stores also sell a portion of their offerings under their own private labels. Private label products are often sold at a discount to branded products. We have positioned certain of our brands to meet the needs of our customers in this area of the VMS Market.

We believe that health and natural food stores are increasingly likely to align themselves with those companies that offer a wide variety of high-quality products, have a loyal consumer base, support their brands with strong marketing and education programs and provide consistently high levels of customer service. We believe that we compete favorably with other nutritional supplement companies because of our comprehensive line of products and brands, premium brand names, commitment to quality, ability

to rapidly introduce innovative products, competitive pricing, strong and effective sales force and distribution strategy and sophisticated marketing and promotional support. The wide variety and diversity of the forms, potencies and categories of our products are important points of differentiation between us and many of our competitors.

With regard to the mass market retail channel of distribution, our sales are focused primarily in limited SKUs in the Body Gold®, Sayge® and NaturalCare® lines. All of these lines were focused on the mass market channel when acquired. We do not consider this channel to be an area of primary focus. It is possible that as increasing numbers of companies sell nutritional supplement products and other natural products in the mass market channels (such as Nature Made, Nature's Bounty, Schiff and Hain Celestial), these product offerings may affect sales in the Healthy Foods Channel. We also compete with distributors that sell products to the Healthy Foods Channel as well as the mass market retail channel (such as Nature's Best, Select Nutrition and Tree of Life). In addition, several major pharmaceutical companies continue to offer nutritional supplement lines in the mass market, including Wyeth (Centrum) and Bayer (One-A-Day). Some of these nutritional supplements purport to use proprietary manufacturing techniques or delivery forms. Moreover, pharmaceutical companies offer prescription and over-the-counter products that are or may be competitive with nutritional supplements, particularly with regard to certain categories of products.

We own more than 290 trademarks that have been registered with the United States Patent and Trademark Office and have filed applications to register additional trademarks. In addition, we claim domestic trademark and service mark rights in numerous additional marks that we use. We own a number of trademark registrations in countries outside the United States. Federally registered trademarks in the United States have a perpetual life, as long as they are maintained and renewed on a timely basis and used properly as trademarks, subject to the rights of third parties to seek cancellation of the trademarks if they claim priority or confusion of usage. Most foreign trademark offices use similar trademark renewal processes. We regard our trademarks and other proprietary rights as valuable assets and believe they make a significant positive contribution to the marketing of our products.

We protect our legal rights concerning our trademarks by appropriate legal action. We rely on common law trademark rights to protect our unregistered trademarks. Common law trademark rights do not provide us 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. We have registered and intend to register certain trademarks in certain limited jurisdictions outside the United States where our products are sold, but we may not register all or even some of our trademarks in every country in which we conduct business or intend to conduct business.

We own six U.S. patents and have filed four additional patent applications but generally do not seek patent protection for our products. Our patents expire between July 2017 and December 2025. We sell a number of products that include patented ingredients. We purchase these ingredients from parties that we believe have the right to manufacture and sell those ingredients to us. However, there are a large number of patents that have been granted or applied for in the dietary supplement industry, and there may be an increased possibility that third parties will seek to compel us and our competitors to purchase their patented ingredients or file infringement actions. The cost of these patented ingredients is typically higher than the cost of non-patented ingredients.

We are currently involved in various patent and trademark cases that have arisen in the ordinary course of business. See "Legal Proceedings."

At September 30, 2012, we employed approximately 798 full-time and approximately 64 part-time employees. None of our employees is represented by a collective bargaining unit. We believe that we have a good relationship with our employees.

The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding us. Our Annual Report on Form 10-K filed with the SEC includes all exhibits required to be filed with the SEC. We make available, free of charge, on our website, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such reports are available as soon as is reasonably practicable after we electronically file such materials with the SEC. Additionally, copies of this Annual Report on Form 10-K are available without charge upon request. Please contact us to request copies of this Annual Report on Form 10-K (435-655-6106).

The following table sets forth certain information concerning our executive officers:

Name		Position

Frank W. Gay II	66	Director, Chairman of the Board and Chief Executive Officer
Bruce R. Hough	58	President
Jeffrey A. Hinrichs	55	Director, Executive Vice President, Chief Operating Officer and Secretary
Gary M. Hume	63	Executive Vice President
Stanley E. Soper	49	Vice President, Legal Affairs and Assistant Secretary
Cory J. McQueen	43	Vice President and Chief Financial Officer
Christopher B. Neuberger	45	Vice President, Marketing and Sales
Daren P. Peterson	50	Vice President, Operations
Andrew W. Seelos	45	Assistant Vice President and Controller

Frank W. Gay II has served as the Chairman of our Board of Directors since our inception and as Chief Executive Officer since 1994. Mr. Gay received a master's degree in business administration from Harvard Business School.

Bruce R. Hough was made our President in 1994. Prior to joining Nutraceutical, Mr. Hough acted as a consultant from 1991 to 1993 and as President of Keystone Communications, a telecommunications firm, from 1987 to 1991. Mr. Hough received an associate's degree from Ricks College.

Jeffrey A. Hinrichs has served as our Executive Vice President and Chief Operating Officer since 1994 and as a member of our Board of Directors since 1998. Prior to joining Nutraceutical, Mr. Hinrichs served as President of Solaray from 1993 to 1994 and as Chief Financial Officer, and in other management positions, with Solaray from 1984 to 1993. Mr. Hinrichs received a bachelor of science degree from Weber State University.

Gary M. Hume has served as our Executive Vice President since September 1999. Prior to joining Nutraceutical, Mr. Hume was President and CEO of Murdock Madaus Schwabe (Nature's Way) from 1995 to 1999. Prior to joining Nature's Way, Mr. Hume was President of Tree of Life's Southwest Division for over twenty years. Mr. Hume received a bachelor of arts from Southwestern Union College.

Stanley E. Soper joined Nutraceutical in 1997 as Vice President, Legal Affairs. From September 1999 until March 2001, Mr. Soper founded and was employed at a technology startup. He rejoined Nutraceutical in his previous position in March 2001. Mr. Soper was in private law practice from 1991 to 1997, most recently with Holland & Hart LLP. Mr. Soper received a J.D. from Yale Law School.

Cory J. McQueen joined Nutraceutical in March 1995 as Assistant Controller. Mr. McQueen became Controller in October 1997 and was appointed Vice President in February 2001. In April 2007, Mr. McQueen became Chief Financial Officer. Prior to joining Nutraceutical, he was employed by Price Waterhouse LLP. Mr. McQueen received a master's degree in accounting from the University of Utah and is a Certified Public Accountant.

Christopher B. Neuberger joined Nutraceutical in August 1995 as Director of Marketing for the Premier One brand. Mr. Neuberger left Nutraceutical from March 1997 to December 1997 while he was employed by Weider Nutrition International, Inc. Mr. Neuberger became President of NutraBrands, our marketing and sales subsidiary in March 1999 and was appointed as our Vice President, Marketing and Sales in April 2005. Mr. Neuberger was previously employed by Melaleuca, Inc. Mr. Neuberger received his master's degree in business administration from Thunderbird, The Garvin School of International Management.

Daren P. Peterson joined Nutraceutical in 1994 as Controller. Mr. Peterson served in other management positions prior to his appointment as Vice President, Operations in March 2009. Prior to joining Nutraceutical, Mr. Peterson served in various positions with Solaray from 1985 to 1994. Mr. Peterson received a master's degree in accounting from Weber State University.

Andrew W. Seelos joined Nutraceutical in March 1997 as Assistant Controller. Mr. Seelos was appointed Assistant Vice President and Controller in April 2007. Prior to joining Nutraceutical, he was employed by Price Waterhouse LLP. Mr. Seelos received a master's degree in accounting from Brigham Young University and is a Certified Public Accountant.

Our business routinely encounters and addresses risks, some of which may cause our future results to be different than we currently anticipate. The risk factors described below represent our current view of some of the most important risks facing our businesses and are important to understanding our business. The following information should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and our Consolidated Financial Statements and related notes included in this Annual Report on Form 10-K. This discussion includes a number of forward-looking statements. You should refer to the description of the qualifications and limitations on forward-looking statements under "Special Note Regarding Forward-Looking Statements" above.

Our products are subject to government regulation, both in the United States and abroad, which could increase our costs significantly and limit or prevent the sale of our products. The manufacture, packaging, labeling, advertising, promotion, distribution, and sale of our products are subject to regulation by numerous national and local governmental agencies in the United States and other countries. The primary regulatory bodies in the United States are the FDA and FTC, and we are also subject to the Food Standards Agency and the Department of Health in the United Kingdom and similar regulators in Norway. Failure to comply with these regulatory requirements may result in various types of penalties or fines. These include injunctions, product withdrawals, recalls, product seizures, fines and criminal prosecutions. Individual states also regulate nutritional supplements. A state may interpret claims or products presumptively valid under federal law as illegal under that state's regulations. In markets outside the United States, we are usually required to obtain approvals, licenses, or certifications from a country's ministry of health or comparable agency, as well as labeling and

packaging regulations, all of which vary from country to country. Approvals or licensing may be conditioned on reformulation of products or may be unavailable with respect to certain products or product ingredients. Any of these government agencies, as well as legislative bodies, can change existing regulations, or impose new ones, or could take aggressive measures, causing or contributing to a variety of negative consequences, including:

Any or all of these requirements could have a material adverse effect on us. There can be no assurance that the regulatory environment in which we operate will not change or that such regulatory environment, or any specific action taken against us, will not result in a material adverse effect on us.

If we experience product recalls, we may incur significant and unexpected costs, and our business reputation could be adversely affected. We may be exposed to product recalls and adverse public relations if our products are alleged to cause injury or illness, or if we are alleged to have violated governmental regulations. A product recall could result in substantial and unexpected expenditures, which would reduce operating profit and cash flow. In addition, a product recall may require significant management attention. Product recalls may hurt the value of our brands and lead to decreased demand for our products. Product recalls also may lead to increased scrutiny by federal, state or international regulatory agencies of our operations and increased litigation and could have a material adverse effect on our business, results of operations, financial condition and cash flows.

We may experience product liability claims and litigation to prosecute such claims, and although we maintain product liability insurance, which we believe to be adequate for our needs, there can be no assurance that our insurance coverage will be adequate or that we will be able to maintain adequate insurance coverage. As a manufacturer and a distributor of products for human consumption, we experience product liability claims and litigation to prosecute such claims. Additionally, the manufacture and sale of these products involves the risk of injury to consumers as a result of tampering by unauthorized third parties or product contamination. We carry insurance coverage in the types and amounts that we consider reasonably adequate to cover the risks we face. If insurance coverage is inadequate or unavailable or premium costs continue to rise, we may face additional claims not covered by insurance, and claims that exceed coverage limits or that are not covered could have a material adverse effect on us.

Our success is linked to the size and growth rate of the vitamin, mineral and supplement market and an adverse change in the size or growth rate of that market could have a material adverse effect on us. Some manufacturers in our industry have experienced a slow-down in sales of nutritional supplements. An adverse change in size or growth rate of the vitamin, mineral and supplement market could have a material adverse effect on us. Underlying market conditions are subject to change based on economic conditions, consumer preferences and other factors that are beyond our control, including media attention and scientific research, which may be positive or negative.

Because a substantial majority of our sales are to or through health food stores, we are dependent to a large degree upon the success of this channel as well as the success of specific retailers in the channel. Over 85% of our sales are in the United States. In this market, we sell our products primarily to or through health food stores. Because of this, we are dependent to a large degree upon the success of that channel as well as the success of specific retailers in the channel. There are some large chains of health food stores, such as Whole Foods Market and Vitamin Shoppe, but most health food stores are individual stores or very small chains. We rely on these health food stores to purchase, market, and sell our products. Our success is dependent, to a large degree, on the growth and success of the Healthy Foods Channel, which is outside our control. There can be no assurance that the Healthy Foods Channel will be able to grow or prosper as it faces price and service pressure from other channels, including the mass market. There can be no assurance that retailers in the Healthy Foods Channel, in the aggregate, will respond or continue to respond to our stated loyalty to this channel.

We are highly dependent upon consumers' perception of the safety and quality of our products as well as similar products distributed by other companies in our industry, and adverse publicity and negative public perception regarding particular ingredients or products or our industry in general could limit our ability to increase revenue and grow our business. Decisions about purchasing made by consumers of our products may be affected by adverse publicity or negative public perception regarding particular ingredients or products or our industry in general. This negative public perception may include publicity regarding the legality or quality of particular ingredients or products in general or of other companies or our products or ingredients specifically. Negative public perception may also arise from regulatory investigations, regardless of whether those investigations involve us. We are highly dependent upon consumers' perception of the safety and quality of our products as well as similar products distributed by other companies. Thus, the mere publication of reports asserting that such products may be harmful could have a material adverse effect on us, regardless of whether these reports are scientifically supported. Publicity related to nutritional supplements may also result in increased regulatory scrutiny of our industry and/or the healthy foods channel. Adverse publicity may have a material adverse effect on our business, financial condition, and results of operations. There can be no assurance of future favorable scientific results and media attention or of the absence of unfavorable or inconsistent findings.

We face intense competition from competitors that are larger, more established and that possess greater resources than we do, and if we are unable to compete effectively, we may be unable to maintain sufficient market share to sustain profitability. Numerous manufacturers and retailers compete actively for consumers. There can be no assurance that we will be able to compete in this intensely competitive environment. In addition, nutritional supplements can be purchased in a wide variety of channels of distribution. These channels include mass market retail stores and the Internet. Because these markets generally have low barriers to entry, additional competitors could enter the market at any time. Private label products of our customers also provide competition to our products. Additional national or international companies may seek in the future to enter or to increase their presence in the healthy foods channel or the vitamin, mineral supplement market. Increased competition in either or both could have a material adverse effect on us.

The nutritional supplement industry increasingly relies on intellectual property rights and although we seek to ensure that we do not infringe the intellectual property rights of others, there can be no assurance that third parties will not assert intellectual property infringement claims against us, which claims may result in substantial costs and diversion of management and other resources and could have a material adverse effect on our business, financial condition and operating results. Recently it has become more and more common for suppliers and competitors to apply for patents or develop proprietary technologies and processes. We seek to ensure that we do not infringe the intellectual property rights of others, but there can be no assurance that third parties will not assert intellectual property infringement claims against us. These developments could prevent us from offering or supplying competitive products or

ingredients in the marketplace. They could also result in litigation or threatened litigation against us related to alleged or actual infringement of third-party rights. If an infringement claim is asserted or litigation is pursued, we may be required to obtain a license of rights, pay royalties on a retrospective or prospective basis or terminate our manufacturing and marketing of our products that are alleged to have infringed. Litigation with respect to such matters could result in substantial costs and diversion of management and other resources and could have a material adverse effect on our business, financial condition and operating results.

We may be affected adversely by increased utility and fuel costs. Increasing fuel costs may affect our results of operations adversely in that consumer traffic to health and natural food stores may be reduced and the costs of our sales may increase as we incur fuel costs in connection with our manufacturing operations and the transportation of goods from our warehouse and distribution facilities to health and natural food stores. Also, high oil costs can affect the cost of our raw materials and components and the competitive environment in which we operate may limit our ability to recover higher costs resulting from rising fuel prices.

Adverse economic conditions may harm our business. Inflation or other changes in economic conditions that affect demand for nutritional supplements could adversely affect our revenue. Uncertainty about current global economic conditions poses a risk as consumers and businesses may postpone spending in response to tighter credit markets, negative financial news and/or declines in income or asset values, each of which could have a material negative effect on the demand for our products. Other factors that could influence demand include conditions in the residential real estate and mortgage markets, labor and healthcare costs, access to credit, consumer confidence and other macroeconomic factors affecting consumer spending behavior. These and other economic factors could have a material adverse effect on demand for our products and on our financial condition and operating results.

If we are unable to retain key personnel, our ability to manage our business effectively and continue our growth could be negatively impacted. Key management employees include Frank W. Gay II, Bruce R. Hough, Jeffrey A. Hinrichs, Gary M. Hume, Stanley E. Soper, Cory J. McQueen, Christopher B. Neuberger, Daren P. Peterson, Andrew W. Seelos and certain other employees. These key management employees are primarily responsible for our day-to-day operations, and we believe our success depends in part on our ability to retain them and to continue to attract additional qualified individuals to our management team. We do not have employment agreements with any of our key management employees. The loss or limitation of the services of any of our key management employees or the inability to attract additional qualified management personnel could have a material adverse effect on our business, financial condition and results of operations.

As a part of our business strategy, we have made and expect to continue to make acquisitions that could disrupt our operations and harm our operating results. An element of our strategy includes expanding our product offerings, gaining shelf-space and gaining access to new skills and other resources through strategic acquisitions when attractive opportunities arise. Acquiring additional businesses and the implementation of other elements of our business strategy are subject to various risks and uncertainties. Some of these factors are within our control and some are outside our control. These risks and uncertainties include, but are not limited to, the following:

There can be no assurance that attractive acquisition opportunities will be available to us, that we will be able to obtain financing for or otherwise consummate any acquisitions or that any acquisitions which are consummated will prove to be successful. There can be no assurance that we can successfully execute all aspects of our business strategy.

Because we depend on outside suppliers with whom we do not have long-term agreements for raw materials, we may be unable to obtain adequate supplies of raw materials for our products at favorable prices or at all, which could result in product shortages and back orders for our products, with a resulting loss of net sales and profitability. We acquire all of our raw materials for the manufacture of our products from third-party suppliers. We also rely on third-party co-packers for some of our products. We have few agreements for the continued supply of these materials and products. A number of our products contain one or more ingredients that may only be available from a single source or supplier. Any of our suppliers could discontinue selling to us at any time. Our suppliers or government regulators may interpret new regulations (including GMP regulations) in such a way as to cause a disruption in our supply chain as these parties undertake increased scrutiny of raw materials and components of raw materials and products, causing certain suppliers or us to discontinue, change or suspend the sale of certain ingredients or components. Although we believe that we could establish alternate sources for most of these materials, any delay in locating and establishing relationships with other sources could result in product shortages and back orders for the products, with a resulting loss of net sales and profitability. We are also subject to delays associated with raw materials. These can be caused by conditions not within our control, including:

We acquire many ingredients from suppliers outside of the United States. Purchasing these ingredients is subject to the risks generally associated with importing raw materials from other countries, including, among other factors, delays in shipments, changes in economic and political conditions, quality assurance, tariffs, trade disputes and foreign currency fluctuations. These factors could result in a delay in or disruption of the supply of certain raw materials. Any significant delay in or disruption of the supply of raw materials could have a material adverse effect upon us.

Our success is dependent on the accuracy, reliability, and proper use of sophisticated and dependable information processing systems and management information technology and any interruption in these systems could have a material adverse effect on our business, financial condition and results of operations. Our success is dependent on the accuracy, reliability and proper use of sophisticated and dependable information processing systems and management information technology. Our information technology

systems are designed and selected in order to facilitate order entry and customer billing, maintain customer records, accurately track purchases and incentive payments, manage accounting, finance and manufacturing operations, generate reports, and provide customer service and technical support. Any interruption in these systems could have a material adverse effect on our business, financial condition and results of operations. Like other companies, our information technology systems may be vulnerable to a variety of interruptions due to events beyond our control, including, but not limited to, natural disasters, terrorist attacks, telecommunications failures, computer viruses, hackers, and other security issues. We have technology security initiatives and disaster recovery plans in place or in process to mitigate our risk to these vulnerabilities, but these measures may not be adequate.

Because we manufacture approximately 75% of our products, we are dependent upon the uninterrupted and efficient operation of our manufacturing facilities, which are subject to power failures, the breakdown, failure or substandard performance of equipment, the improper installation or operation of equipment, natural or other disasters and the need to comply with the requirements or directives of government agencies, including the FDA. We are dependent upon the uninterrupted and efficient operation of our manufacturing facilities in Ogden, Utah as well as Phoenix, Arizona, Tulsa, Oklahoma and Bowling Green, Florida. Those operations are subject to power failures, the breakdown, failure or substandard performance of equipment, the improper installation or operation of equipment, natural or other disasters and the need to comply with the requirements or directives of government agencies, including the FDA. There can be no assurance that the occurrence of these or any other operational problems at our facility would not have a material adverse effect on our business, financial condition and results of operations.

We are party to a number of lawsuits that arise in the ordinary course of business and may become party to others in the future. We are party to a number of lawsuits that arise in the ordinary course of business and may become party to others in the future. The possibility of such litigation, and its timing, is in large part outside our control. While none of the current lawsuits in which we are involved are reasonably estimable to be material as of the date of this filing, it is possible that future litigation could arise, or developments could occur in existing litigation, that could have material adverse effects on us.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud, which could harm our business reputation and cause our stock price to decline. Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

If our goodwill or intangible assets become impaired we may be required to record a significant charge to earnings. Under generally accepted accounting principles, we review our amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually. Factors that may indicate that the carrying value of our goodwill or intangible assets may not be recoverable include a decline in stock price and market capitalization, reduced future cash flow estimates and slower growth rates in our industry. Our results of operations may be materially impacted if we are required to record a significant charge due to an impairment of our goodwill or intangible assets.

We are dependent upon our lenders for financing to execute our business strategy and meet our liquidity needs and the lack of adequate financing could negatively impact our business. There is risk that any lenders, even those with strong balance sheets and sound lending practices, could fail or refuse to honor their legal commitments and obligations under existing credit commitments, including but not limited to: extending credit up to the maximum permitted by a credit facility, allowing access to

additional credit features and otherwise accessing capital and/or honoring loan commitments. The lenders on our credit facility are Rabobank International and Wells Fargo. If our lenders failed to honor their legal commitments under our credit facility, it could be difficult in this environment to replace our credit facility on similar terms. Furthermore, we may be unable to renegotiate our existing credit facility or obtain replacement or additional financing.

The market price for our common stock may be particularly volatile, and our stockholders may be unable to resell their shares at a profit. The trading price of our common stock has been subject to wide fluctuations and may continue to fluctuate in the future in response to a variety of factors, including:

In addition, the stock market has historically experienced significant price and volume fluctuations, which have particularly affected the market prices of many nutritional supplement companies and which have, in certain cases, not had a strong correlation to the operating performance of these companies. Stock markets experienced unprecedented volatility in connection with the credit crisis of 2008-2009. General economic conditions, such as recession or interest rate or currency rate fluctuations in the United States or abroad, could negatively affect the market price of our common stock in the future. In addition, our operating results in future quarters may be below the expectations of securities analysts and investors. If that were to occur, the price of our common stock would likely decline, perhaps substantially. In the past, following periods of volatility in the market price of a company's securities, securities class action litigation has often been instituted against that company. Such litigation could result in substantial cost and a diversion of management's attention and resources.

Purpose	Location

Rapid Response Center(1)(2)	Ogden, UT	516,455
Transitional warehouse(3)	Ogden, UT	106,450
Product manufacturing(2)	Tulsa, OK	76,733
Product manufacturing(2)	Ogden, UT	31,230
Corporate Office(2)	Park City, UT	21,065
Product manufacturing	Ogden, UT	17,900
Marketing and sales offices	Park City, UT	15,905
Product manufacturing(2)	Bowling Green, FL	8,210
Product manufacturing	Phoenix, AZ	7,248
Executive offices	Park City, UT	6,103
Product manufacturing	Ogden, UT	5,000
Research, development and quality control	Ogden, UT	1,813

In addition to these principal properties, we own or lease various other properties used in our operations.

As discussed in other filings and elsewhere in this Annual Report on Form 10-K, we are subject to regulation by a number of federal, state and foreign agencies and are involved in various legal matters arising in the ordinary course of business.

We carry insurance coverage in the types and amounts that we consider reasonably adequate to cover the risks we face in the industry in which we compete. See "Business—Risk Factors."

We are involved in various legal matters arising in the normal course of business. In the opinion of management, the losses related to individual regulatory and legal matters in which we are presently involved are not probable and no estimate can be made of the range of potential gains or losses. While incapable of estimation, in the opinion of management, none of the regulatory and legal matters in which we are involved are individually expected to have a material adverse effect on our financial position, results of operations or cash flows. However, our aggregate liability arising from regulatory and legal proceedings related to these matters could have a material effect on our financial position, results of operations or cash flows.

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is traded on the NASDAQ Stock Market under the symbol "NUTR." The common stock commenced trading on the NASDAQ Stock Market on February 20, 1998 upon completion of our initial public offering. The following table sets forth the high and low closing prices per share for the common stock:

	High		Low

2011:
First Quarter	$	16.96	$	14.19
Second Quarter		14.98		13.45
Third Quarter		15.86		14.77
Fourth Quarter		15.31		12.62
2012:
First Quarter		14.20		10.74
Second Quarter		14.63		11.44
Third Quarter		15.65		13.86
Fourth Quarter		16.24		13.05
2013:
First Quarter (through November 15, 2012)		16.19		14.77

As of the close of business on November 15, 2012, there were 175 holders of record of common stock and approximately 1,800 beneficial holders. The closing price of our common stock on November 15, 2012 as reported by the NASDAQ Stock Market was $14.97.

Since our initial public offering, we have neither declared nor paid any cash or other dividends on our common stock and do not expect to pay dividends for the foreseeable future. Instead, we currently intend to retain earnings to support our growth strategy, reduce indebtedness and, depending on market prices, repurchase our common stock. Any future determination by us to pay dividends will be at the discretion of our Board of Directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements and contractual restrictions, including restrictions specified in our amended and restated credit agreement dated December 17, 2010.

Prior to fiscal 2012, our Board of Directors approved a share purchase program authorizing us to buy up to 3,500,000 shares of our common stock. On April 23, 2012, our Board of Directors approved the addition of 1,000,000 shares to our previously approved share purchase program. As of

September 30, 2012, 1,126,885 shares may yet be purchased under this program. Purchases under this program during the fiscal 2012 fourth quarter occurred in July, August and September as follows:

All shares purchased during the fiscal 2012 fourth quarter except for 900 shares were retired prior to September 30, 2012.

Under this approved share purchase program, we may purchase common stock from time to time on the open market and in individually-negotiated transactions. The amount and timing of any purchases will be dependent upon a number of factors, including the price and availability of our shares and general market conditions.

Although options are still outstanding, the previous equity compensation plans were all terminated on September 30, 2005 so no additional options can be granted under those plans.

The selected financial data presented below were derived from our Consolidated Financial Statements. This selected financial data should be read in conjunction with "Management's Discussion

and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the notes thereto.

	Year Ended September 30,

	2012			2011			2010			2009			2008
	(dollars in thousands, except per share data)
Consolidated Statements of Operations Data:
Net sales	$	200,367		$	188,070		$	180,052		$	162,346		$	166,885
Cost of sales		100,413			92,877			86,199			77,137			76,106

Gross profit		99,954			95,193			93,853			85,209			90,779
Operating expenses:
Selling, general and administrative		71,425			68,230			65,666			62,195			66,973
Amortization of intangible assets		2,007			1,654			1,299			697			701
Impairment of goodwill and intangible assets(1)		850			—			—			38,494			2,875

Income (loss) from operations		25,672			25,309			26,888			(16,177	)		20,230
Interest and other expense, net		1,497			1,140			550			1,104			1,270

Income (loss) before provision (benefit) for income taxes		24,175			24,169			26,338			(17,281	)		18,960
Provision (benefit) for income taxes		8,408			8,451			9,955			(2,645	)		7,017

Net income (loss)	$	15,767		$	15,718		$	16,383		$	(14,636	)	$	11,943

Net income (loss) per common share:
Basic	$	1.59		$	1.52		$	1.57		$	(1.35	)	$	1.09
Diluted	$	1.59		$	1.51		$	1.56		$	(1.35	)	$	1.07
Weighted average common shares outstanding:
Basic		9,916,603			10,322,177			10,410,526			10,841,383			10,993,505
Diluted		9,933,997			10,385,583			10,503,933			10,841,383			11,127,634
Other Financial Data:
Adjusted EBITDA(2)	$	35,299		$	33,361		$	34,262		$	28,948		$	28,964
Capital expenditures (excluding acquisitions)		9,953			12,405			11,525			9,176			17,869
Cash flows provided by (used in):
Operating activities		27,162			26,340			17,870			27,781			20,337
Investing activities		(22,201	)		(27,185	)		(26,430	)		(13,800	)		(23,734	)
Financing activities		(2,598	)		(495	)		6,448			(13,257	)		4,075
Balance Sheet Data (at period end):
Cash	$	4,824		$	2,441		$	3,740		$	5,858		$	5,189
Working capital		47,598			42,332			12,621			32,444			36,338
Total assets		185,918			171,665			154,947			132,576			160,879
Total debt		34,000			32,000			28,000			18,500			28,000
Stockholders' equity		131,056			119,675			107,535			94,254			112,675

$975 ($599 after tax, or $0.06 per diluted share) related to certain tradenames. During the year ended September 30, 2008, we recorded a non-cash goodwill impairment charge of $2,875 ($1,811 after tax, or $0.16 per diluted share) related to our domestic health food stores reporting unit.

(2)

"Adjusted EBITDA" (a non-GAAP measure) is defined as earnings before net interest and other expense, taxes, depreciation, amortization and goodwill and intangible asset impairment. Adjusted EBITDA has some inherent limitations in measuring operating performance due to the exclusion of certain financial elements such as depreciation and amortization and is not necessarily comparable to other similarly-titled captions of other companies due to potential inconsistencies in the method of calculation. Furthermore, Adjusted EBITDA is not intended to be a substitute for cash flows from operating activities, as a measure of liquidity or an alternative to net income in determining our operating performance in accordance with United States generally accepted accounting principles. Our use of an EBITDA-based metric should be considered within the following context:

•

We acknowledge that plant and equipment (while less important in our line of business due to outsourcing alternatives) are necessary to earn revenue based on our current business model.

•

Our use of an EBITDA-based measure of operating performance is not based on any belief about the reasonableness of excluding depreciation when measuring financial performance.

•

Our use of an EBITDA-based measure is supported by its importance to the following key stakeholders:

•: Analysts—who estimate our projected Adjusted EBITDA and other EBITDA-based metrics in their independently-developed financial models for investors;
•: Creditors—who evaluate our operating performance based on compliance with certain EBITDA-based debt covenants;
•: Investment Bankers—who use EBITDA-based metrics in their written evaluations and comparisons of companies within our industry; and
•: Board of Directors and Executive Management—who use EBITDA-based metrics for evaluating management performance relative to our operating budget and bank covenant compliance, as well as our ability to service debt and raise capital for growth opportunities, including acquisitions, which are a critical component of our stated strategy. Generally, we have recorded a monthly accrual for incentive compensation as a percentage of Adjusted EBIDTA, which has been paid out to executive management, as well as other employees, upon completion of our annual audit.

The following table sets forth a reconciliation of net income (loss) to Adjusted EBITDA for each period included herein:

	Year Ended September 30,

	2012			2011			2010			2009			2008
	(dollars in thousands)
Net income (loss)	$	15,767		$	15,718		$	16,383		$	(14,636	)	$	11,943
Provision (benefit) for income taxes		8,408			8,451			9,955			(2,645	)		7,017
Interest and other expense, net(1)		1,497			1,140			550			1,104			1,270
Depreciation and amortization		8,777			8,052			7,374			6,631			5,859
Impairment of goodwill and intangible assets(2)		850			—			—			38,494			2,875

Adjusted EBITDA	$	35,299		$	33,361		$	34,262		$	28,948		$	28,964

Percentage of net sales		17.6	%		17.7	%		19.0	%		17.8	%		17.4	%

(1): Includes amortization of deferred financing fees.
(2): During the year ended September 30, 2012, we recorded a non-cash intangible asset impairment charge of $850 ($551 after tax, or $0.06 per diluted share) related to the consolidation of certain brands. During the year ended September 30, 2009, we recorded a non-cash goodwill impairment charge of $37,519 ($27,288 after tax, or $2.52 per diluted share) related to our branded and natural food markets reporting units and we recorded a non-cash intangible asset impairment charge of $975 ($599 after tax, or $0.06 per diluted share) related to certain tradenames. During the year ended September 30, 2008, we recorded a non-cash goodwill impairment charge of $2,875 ($1,811 after tax, or $0.16 per diluted share) related to our domestic health food stores reporting unit.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited Consolidated Financial Statements and accompanying notes thereto included elsewhere in this Annual Report on Form 10-K.

We manufacture and sell nutritional supplements and other natural products under numerous brands including Solaray®, KAL®, Nature's Life®, LifeTime®, Natural Balance®, bioAllers®, Herbs for Kids™, NaturalCare®, Health from the Sun®, Life-flo®, Organix South®, Pioneer® and Monarch Nutraceuticals™.

We own neighborhood natural food markets, which operate under the trade names The Real Food Company™, Thom's Natural Foods™ and Cornucopia Community Market™. We also own health food stores, which operate under the trade names Fresh Vitamins™, Granola's™, Nature's Discount™ and Warehouse Vitamins™.

We manufacture and/or distribute one of the broadest branded product lines in the industry with over 7,000 SKUs, including approximately 900 SKUs sold internationally. We believe that as a result of our emphasis on innovation, quality, loyalty, education and customer service, our brands are widely recognized in health and natural food stores and among their customers.

We were formed in 1993 to effect a consolidation strategy in the fragmented VMS Industry. Since our formation, we have completed numerous acquisitions of assets or stock. We believe that Nutraceutical is well positioned to continue to capitalize on the consolidation we believe is occurring in the VMS Industry.

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America required us to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Significant estimates included values and lives assigned to acquired intangible assets, reserves for customer returns and allowances, uncollectible accounts receivable, valuation adjustments for slow moving, obsolete and/or damaged inventory and valuation and recoverability of long-lived assets. Actual results may differ from these estimates.

Accounts Receivable—Provision is made for estimated bad debts based on a periodic analysis of individual customer balances, including an evaluation of days sales outstanding, payment history, recent payment trends and perceived credit worthiness. If general economic conditions and/or customer financial condition were to change, additional provisions for bad debts may be required, which could have a material impact on the consolidated financial statements.

Inventories—Valuation adjustments are made for slow moving, obsolete and/or damaged inventory based on a periodic analysis of individual inventory items, including an evaluation of historical usage and/or movement, age, expiration date and general condition. If market demand and/or consumer preferences are less favorable than historical trends or future expectations, additional valuation adjustments for slow moving, obsolete and/or damaged inventory may be required, which could have a material impact on the consolidated financial statements.

Property, Plant and Equipment—Depreciation and amortization expense is impacted by our judgments regarding the estimated useful lives of assets placed in service. If the estimated lives of assets are significantly less than expected, depreciation and amortization expense would be accelerated, which could have a material impact on the consolidated financial statements.

We evaluate the recoverability of property, plant and equipment which are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of an asset group may not be recoverable. We measure recoverability of the asset group by comparison of its carrying amount to the future undiscounted cash flows the asset group is expected to generate. If the asset group is considered to be impaired, the difference between the carrying amount and the fair value of the impaired asset group is recorded.

Goodwill and Intangible Assets—Goodwill and intangible assets require estimates and judgments in determining the initial recognition and measurement, including factors and assumptions used in determining fair value and useful lives. Intangible assets with finite useful lives are amortized, while intangible assets with indefinite useful lives are not amortized. Amortizable intangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill and indefinite-lived intangible assets are tested annually for impairment and

are tested for impairment between annual tests if an event occurs that would cause us to believe that value is impaired. The appropriateness of the indefinite-life classification of non-amortizable intangible assets is also reviewed as part of the annual testing or when circumstances warrant a change to a finite life. We perform our annual impairment testing as of September 30 each year, which is the last day of our fiscal year.

A two-step process is used to test for goodwill impairment. The first step is to determine if there is an indication of impairment by comparing the estimated fair value of each reporting unit to its carrying value, including existing goodwill. Reporting unit fair values are estimated using discounted cash flow models as well as considering market and other factors. Goodwill is considered impaired if the carrying value of a reporting unit exceeds the estimated fair value. Upon an indication of impairment, a second step is performed to measure the amount of the impairment by comparing the implied fair value of the reporting unit's goodwill with its carrying value.

Intangible assets with indefinite useful lives are tested for impairment at the individual tradename level by comparing the fair value of the indefinite-lived intangible asset to its carrying amount. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment charge is recognized. Fair values of indefinite-lived intangible assets are determined based on discounted cash flows.

Amortizable intangible assets are reviewed for recoverability by comparing an asset group's carrying amount to the future undiscounted cash flows the asset group is expected to generate. If the asset group is considered to be impaired, the difference between the carrying amount and the fair value of the impaired asset group is recorded.

For fiscal 2012, we recorded a non-cash intangible asset impairment charge of $0.9 million ($0.6 million after tax, or $0.06 per diluted share) related to the consolidation of certain brands. The fiscal 2012 non-cash intangible asset impairment charge had no impact on our compliance with debt covenants, cash flows or available liquidity.

The ongoing uncertainty in general and economic conditions may continue to impact retail and consumer demand, as well as the market price of our common stock, and could negatively impact our future operating performance, cash flow and/or stock price and could result in additional goodwill and/or intangible asset impairment charges being recorded in future periods. Also, we periodically review our brands to achieve marketing, sales and operational synergies. These reviews could result in additional brands being consolidated or discontinued and could result in additional intangible asset impairment charges being recorded in future periods. Additional goodwill and/or intangible asset impairment charges could materially impact our consolidated financial statements. There were no at-risk reporting units at September 30, 2012. The valuation of goodwill and intangible assets is subject to a high degree of judgment, uncertainty and complexity.

Revenue Recognition—Revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the product has been shipped and the customer takes ownership and assumes the risk of loss; (3) the selling price is fixed or determinable; and (4) collection of the resulting receivable is reasonably assured. We believe that these criteria are satisfied upon shipment from our facilities or, in the case of our neighborhood natural food markets and health food stores, at the point of sale within these stores. Revenue is reduced by provisions for estimated returns and allowances, which are based on historical averages that have not varied significantly for the periods presented, as well as specific known claims, if any. No other significant deductions from revenue must be estimated at the point in time that revenue is recognized.

Other than our previous discussion of goodwill and intangible asset impairment, our estimates and judgments related to our critical accounting policies, including factors and assumptions considered in making these estimates and judgments, did not vary significantly for the periods presented and had no material impact on the consolidated financial statements as reported.

For additional information on our accounting policies, see Note 2 of the accompanying Consolidated Financial Statements.

The following table sets forth certain Consolidated Statements of Operations data as a percentage of net sales for the periods indicated:

	Year Ended September 30,

	2012			2011			2010
Net sales		100.0	%		100.0	%		100.0	%
Cost of sales		50.1			49.4			47.9

Gross profit		49.9			50.6			52.1
Selling, general and administrative		35.6			36.3			36.5
Amortization of intangible assets		1.0			0.8			0.7
Impairment of intangible asset		0.5			—			—

Income from operations		12.8			13.5			14.9
Interest and other expense, net		0.7			0.6			0.3

Income before provision for income taxes		12.1			12.9			14.6
Provision for income taxes		4.2			4.5			5.5

Net income		7.9	%		8.4	%		9.1	%

Net Sales. Net sales increased by $12.3 million, or 6.5%, to $200.4 million for fiscal 2012 from $188.1 million for fiscal 2011. Net sales of branded nutritional supplements and other natural products increased by $9.6 million, or 5.5%, to $183.4 million for fiscal 2012 compared to $173.8 million for fiscal 2011. The increase in net sales of branded nutritional supplements and other natural products was primarily related to the net sales contributions of the fiscal 2011 and fiscal 2012 acquisitions and, to a lesser extent, an increase in sales volume of branded products to certain customers. The impact on net sales of branded products attributable to price changes was not material. Other net sales increased by $2.7 million, or 19.4%, to $17.0 million for fiscal 2012 compared to $14.3 million for fiscal 2011. The increase in other net sales was primarily related to the net sales contributions of the fiscal 2012 acquisitions, partially offset by the closure of three health food stores and one natural food market during fiscal 2011 and fiscal 2012.

Gross Profit. Gross profit increased by $4.8 million, or 5.0%, to $100.0 million for fiscal 2012 from $95.2 million for fiscal 2011. This increase in gross profit was primarily attributable to the increase in net sales. As a percentage of net sales, gross profit decreased to 49.9% for fiscal 2012 from 50.6% for fiscal 2011. This decrease in gross profit percentage was primarily attributable to increased material costs due to vendor price increases and, to a lesser extent, changes in sales mix and increased manufacturing overhead costs related to the expansion of our liquid manufacturing operations.

Selling, General and Administrative. Selling, general and administrative expenses increased by $3.2 million, or 4.7%, to $71.4 million for fiscal 2012 from $68.2 million for fiscal 2011. This increase in selling, general and administrative expenses was primarily attributable to operational and transition costs related to the fiscal 2011 and fiscal 2012 acquisitions. As a percentage of net sales, selling, general and administrative expenses decreased to 35.6% for fiscal 2012 compared to 36.3% for fiscal 2011. This decrease in selling, general and administrative expenses as a percentage of net sales was primarily attributable to the increase in net sales, which allowed us to better leverage our cost structure.

Amortization of Intangible Assets. Amortization of intangible assets was $2.0 million for fiscal 2012 and $1.7 million for fiscal 2011. For each period, amortization expense was primarily related to intangible assets recorded in connection with acquisitions.

Impairment of Intangible Asset. During fiscal 2012, we recorded a non-cash intangible asset impairment charge of $0.9 million ($0.6 million after tax, or $0.06 per diluted share) related to the consolidation of our food, drug and mass ("FDM") brands. The charge represented the entire carrying amount of the Alan James Group™ ("AJG") brand. Existing products under the AJG brand were combined under our primary FDM Body Gold® brand. We believe this brand consolidation provides increased efficiencies and synergies for our FDM products and customers.

Interest and Other Expense, Net. Net interest and other expense was $1.5 million for fiscal 2012 and $1.1 million for fiscal 2011 and primarily consisted of interest expense on indebtedness under our revolving credit facility.

Provision for Income Taxes. Our effective tax rate was 34.8% for fiscal 2012 and 35.0% for fiscal 2011.

Net Sales. Net sales increased by $8.0 million, or 4.5%, to $188.1 million for fiscal 2011 from $180.1 million for fiscal 2010. Net sales of branded nutritional supplements and other natural products increased by $9.2 million, or 5.6%, to $173.8 million for fiscal 2011 compared to $164.6 million for fiscal 2010. The increase in net sales of branded nutritional supplements and other natural products was primarily related to the net sales contributions of the fiscal 2011 and fiscal 2010 acquisitions. The impact on net sales of branded products attributable to price changes was not material. Other net sales decreased by $1.2 million, or 7.7%, to $14.3 million for fiscal 2011 compared to $15.5 million for fiscal 2010. The decrease in other net sales was primarily related to the closure of two health food stores and one natural food market during fiscal 2011.

Gross Profit. Gross profit increased by $1.3 million, or 1.4%, to $95.2 million for fiscal 2011 from $93.9 million for fiscal 2010. This increase in gross profit was primarily attributable to the increase in net sales. As a percentage of net sales, gross profit decreased to 50.6% for fiscal 2011 from 52.1% for fiscal 2010. This decrease in gross profit percentage was primarily attributable to increased manufacturing overhead costs related to the expansion of our liquid manufacturing operations.

Selling, General and Administrative. Selling, general and administrative expenses increased by $2.5 million, or 3.9%, to $68.2 million for fiscal 2011 from $65.7 million for fiscal 2010. This increase in selling, general and administrative expenses was primarily attributable to operational and transition costs related to the fiscal 2011 acquisitions. As a percentage of net sales, selling, general and administrative expenses were 36.3% for fiscal 2011 compared to 36.5% for fiscal 2010.

Amortization of Intangible Assets. Amortization of intangible assets was $1.7 million for fiscal 2011 and $1.3 million for fiscal 2010. For each period, amortization expense was primarily related to intangible assets recorded in connection with acquisitions.

Interest and Other Expense, Net. Net interest and other expense was $1.1 million for fiscal 2011 and $0.6 million for fiscal 2010 and primarily consisted of interest expense on indebtedness under our revolving credit facility with the increase being primarily related to an increase in interest rates.

Provision for Income Taxes. Our effective tax rate was 35.0% for fiscal 2011 and 37.8% for fiscal 2010. The decrease in the effective tax rate was primarily due to an increase in the domestic production deduction rate. In each period, our effective tax rate was higher than the federal statutory rate primarily due to state taxes.

The following table sets forth certain quarterly financial data for fiscal 2012 and fiscal 2011. This quarterly information is unaudited, has been prepared on the same basis as the annual financial statements and, in our opinion, reflects all normally recurring adjustments necessary for fair presentation of the information for the periods presented. Operating results for any quarter are not necessarily indicative of results for any future period.

	Fiscal 2012								Fiscal 2011

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(dollars in thousands, except per share data: unaudited)
Net sales	$	46,628	$	53,871	$	49,607	$	50,261	$	45,243	$	49,549	$	47,453	$	45,825
Gross profit		23,258		26,988		24,729		24,979		23,462		25,414		23,907		22,410
Net income		3,411		4,830		3,352		4,174		3,947		4,552		3,945		3,274
Net income per common share:
Basic	$	0.34	$	0.49	$	0.34	$	0.42	$	0.38	$	0.44	$	0.38	$	0.32
Diluted	$	0.34	$	0.49	$	0.34	$	0.42	$	0.38	$	0.44	$	0.38	$	0.32

We believe that our business is characterized by minor seasonality. However, sales to any particular customer can vary substantially from one quarter to the next based on such factors as industry trends, timing of promotional discounts, international economic conditions and acquisition-related activities. Excluding the effect of acquisitions, we have historically recorded higher branded products sales volume during the second fiscal quarter due to increased interest in health-related products among consumers following the holiday season. The fiscal 2012 acquisitions were completed during the first, second and third quarters and the fiscal 2011 acquisitions were completed during the first, second, third and fourth quarters.

As of September 30, 2012, we had cash of $4.8 million. Net cash provided by operating activities was $27.2 million, $26.3 million and $17.9 million for the years ended September 30, 2012, 2011 and 2010, respectively. The increase in net cash provided by operating activities in fiscal 2012 was primarily attributable to an increase in cash provided by changes in assets and liabilities, net of effects of acquisitions.

Net cash used in investing activities was $22.2 million, $27.2 million and $26.4 million for the years ended September 30, 2012, 2011 and 2010, respectively. Our investing activities during these periods consisted of acquisitions of businesses and capital expenditures.

During the year ended September 30, 2012, we made six acquisitions of businesses. On October 27, 2011, we acquired certain operating assets of Mia Rose Products, Inc. On November 22, 2011, we acquired certain operating assets of Collective Wellbeing, LLC. On January 16, 2012, we acquired certain operating assets of Nature's Discount, Inc. and Top Health. On January 27, 2012, we acquired certain operating assets of Your Crown and Glory, LLC. On March 2, 2012, we acquired certain operating assets of Treehouse Vitamins, LLC. On June 7, 2012, we acquired certain operating assets of Direct Access Network, Inc. The aggregate purchase price of these acquisitions was $12.2 million in cash.

During the year ended September 30, 2011, we made five acquisitions of businesses. On October 7, 2010, we acquired certain operating assets of TRC Nutritional Labs, Inc. On October 14, 2010, we acquired certain operating assets of The Heritage Store, Inc. On February 24, 2011, we acquired certain operating assets of SunFeather Natural Soap Company, Inc. On May 26, 2011, we acquired certain operating assets of Skin by Ann Webb, LLC. On September 15, 2011, we acquired certain operating

assets of Transitions for Health, Inc., dba Emerita. The aggregate purchase price of these acquisitions was $14.8 million in cash.

The fiscal 2012 and fiscal 2011 acquisitions were financed primarily using borrowings under our revolving credit facility, as well as cash provided by operating activities. These acquisitions are in keeping with our business strategy of consolidating the fragmented industry where we compete and acquiring nutritional brands with products we currently do not sell. The expected long-term sales and expense synergies of acquired businesses are generally not realized immediately following acquisition as certain transition and integration matters must be completed.

Capital expenditures during the years ended September 30, 2012, 2011 and 2010 related primarily to buildings, building improvements related to facility consolidation efforts, distribution and manufacturing equipment and information systems.

Net cash provided by (used in) financing activities was $(2.6) million, $(0.5) million and $6.4 million for the years ended September 30, 2012, 2011 and 2010, respectively. Our financing activities during these periods consisted primarily of borrowings and repayments under our revolving credit facility related to operating needs, payments of deferred financing fees, purchases of common stock for treasury and proceeds from the issuance of common stock.

In October 2007, we registered a direct stock purchase plan with the Securities and Exchange Commission. The purpose of this direct stock purchase plan is to provide a convenient way for existing stockholders, as well as new investors, to purchase shares of our common stock. A total of 1,500,000 shares of our common stock were registered under the plan with 15,142 and 19,577 shares purchased during the years ended September 30, 2012 and 2011, respectively.

On December 17, 2010, we amended and restated our revolving credit facility (the "Restated Credit Agreement"). The Restated Credit Agreement extends the term of the credit facility to December 2015, resets the available credit borrowings to $90 million with no automatic reductions and provides an accordion feature which can increase the available credit borrowings to $120 million subject to approval by the lenders and compliance with certain covenants and conditions. The lenders under the Restated Credit Agreement are Rabobank International and Wells Fargo. To date, we have not experienced any difficulties in accessing the available funds under the Restated Credit Agreement. Deferred financing fees of $0.9 million related to the Restated Credit Agreement are being amortized over the term of the Restated Credit Agreement.

At September 30, 2012, we had outstanding revolving credit borrowings of $34.0 million under the Restated Credit Agreement. Borrowings under the Restated Credit Agreement are collateralized by substantially all of our assets. At our election, borrowings bear interest at the applicable Eurodollar Rate plus a variable margin or at a base rate, which is the higher of the Federal Funds Rate plus 0.5% or the Prime Lending Rate, plus a variable margin. At September 30, 2012, the applicable weighted-average interest rate for outstanding borrowings was 2.65%. We are also required to pay a quarterly fee of 0.50% on the unused balance under the Restated Credit Agreement. Accrued interest on Eurodollar Rate borrowings is payable based on elected intervals of one, two or three months. Accrued interest on base rate borrowings is payable quarterly. The Restated Credit Agreement matures on December 15, 2015, and we are required to repay all principal and interest outstanding under the Restated Credit Agreement on such date.

The Restated Credit Agreement contains restrictive covenants, including restrictions on incurring other indebtedness and requirements that we maintain certain financial ratios. As of September 30, 2012, we were in compliance with these restrictive covenants. Upon the occurrence of a default or an event of default, the lender has various remedies or rights, which may include proceeding against the collateral or requiring us to repay all amounts outstanding under the Restated Credit Agreement.

A key component of our business strategy is to seek to make additional acquisitions, which may require that we obtain additional financing, which could include the incurrence of substantial additional indebtedness. We believe that borrowings under the Restated Credit Agreement or a replacement credit facility, together with cash flows from operations, will be sufficient to make required payments under the Restated Credit Agreement or any such replacement facility, and to make anticipated capital expenditures and fund working capital needs for fiscal 2013.

Our significant non-cancelable contractual obligations and other commitments as of September 30, 2012 were as follows:

In June 2011, the Financial Accounting Standards Board ("FASB") issued authoritative guidance which is included in Accounting Standards Codification ("ASC") 220, "Comprehensive Income." This guidance no longer allows comprehensive income to be presented as a component of the statement of stockholders' equity but instead requires comprehensive income to be presented either in a continuous statement of comprehensive income or in two separate but consecutive statements. This guidance is effective for us as of October 1, 2012 and will not have an impact on our results of operations.

In September 2011, the FASB issued authoritative guidance which is included in ASC 350, "Intangibles—Goodwill and Other". This guidance simplifies how goodwill is tested for impairment by first allowing an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. This guidance is effective for us as of October 1, 2012 and is not expected to have a material impact on our Consolidated Financial Statements.

In July 2012, the FASB issued further authoritative guidance which is also included in ASC 350. This guidance allows a Company to first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset, other than goodwill, is impaired. This guidance is effective for us as of October 1, 2012 and is not expected to have a material impact on our Consolidated Financial Statements.

We periodically review new accounting standards that are issued. Although some of these accounting standards may be applicable to us, we have not identified any other new standards that we believe merit further discussion, and we expect that none would have a significant impact on our Consolidated Financial Statements.

Inflation affects the cost of raw materials, goods and services we use. In recent years, inflation has been modest. The competitive environment somewhat limits our ability to recover higher costs resulting from inflation by raising prices. We seek to mitigate the adverse effects of inflation primarily through improved productivity and cost containment programs. We do not believe that inflation has had a material impact on our results of operations for the periods presented, except with respect to increased costs in manufacturing, packaging and distribution resulting from increased fuel and other petrochemical costs, as well as payroll-related costs, insurance premiums, and other costs arising from or related to government-imposed regulations.

At our election, borrowings under the Restated Credit Agreement bear interest at the applicable Eurodollar Rate plus a variable margin or at a base rate, which is the higher of the Federal Funds Rate plus 0.5% or the Prime Lending Rate, plus a variable margin. At September 30, 2012, the applicable weighted-average interest rate for borrowings was 2.65% and we had total borrowings outstanding of $34.0 million. A hypothetical 100 basis point change in interest rates would not have had a material impact on our reported net income or cash flows in fiscal 2012, 2011 or 2010.

With respect to our international operations, we are subject to currency fluctuations; however, we do not believe that these fluctuations would have a material adverse impact on our financial position or results of operations because the majority of our net sales to foreign countries are transacted in U.S. dollars. Net sales to foreign countries not transacted in U.S. dollars included sales to customers in Norway, Sweden, the United Kingdom, the Netherlands, Japan, Barbados and St. Lucia. To date, we have not hedged any of our potential foreign currency exposures.

The information required by Item 8 is set forth on pages F-1 through F-22 of this Annual Report on Form 10-K. The supplemental financial information required by Item 302 of Regulation S-K is set forth in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Selected Quarterly Financial Data; Seasonality."

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There have been no changes in our independent registered public accounting firm, PricewaterhouseCoopers LLP, or disagreements with our accountants on matters of accounting and financial disclosure.

Evaluation of Disclosure Controls and Procedures. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate, to allow for timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and we are required to apply our judgment in evaluating the cost-benefit relationship with respect to possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation under the supervision and with the participation of our management, including our principal executive and principal financial officers, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2012. Based on this evaluation, our principal executive and financial officers have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2012.

Management's Report on Internal Control over Financial Reporting. We are responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). In order to evaluate the effectiveness of internal control over financial reporting, we conducted an assessment as of September 30, 2012, based on the criteria in Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Our internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, and effected by our board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Based on our assessment, we have concluded that, as of September 30, 2012, we did maintain effective internal controls over financial reporting based on the criteria in Internal Control—Integrated Framework issued by the COSO. The effectiveness of our internal control over financial reporting as of September 30, 2012 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Remediation of Material Weakness. As of September 30, 2011, we did not maintain effective internal controls over impairment testing for certain indefinite-lived intangible assets. Specifically, we did not have adequate controls over the periodic evaluation for impairment of certain indefinite-lived tradenames in accordance with generally accepted accounting principles because the evaluation was performed on an aggregate basis rather than on an individual tradename level. This control deficiency constituted a material weakness as of September 30, 2011. Upon making the determination that our indefinite-lived tradenames should be tested for impairment on an individual level, we implemented processes and controls during fiscal 2012 to remediate the material weakness and enhance our internal control over financial reporting, including the following:

We determined as of September 30, 2012 that the controls discussed above were effectively designed and demonstrated effective operation which enabled us to conclude that the material weakness has been remediated.

Changes in Internal Control over Financial Reporting. Except for the remediation of the material weakness discussed above, there were no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Information required by this item with respect to our directors, our audit committee, our audit committee financial expert and procedures by which stockholders may recommend nominees to the board of directors is set forth under the heading "The Board of Directors" in our definitive Proxy Statement for the 2013 Annual Meeting of Stockholders (the "Proxy Statement"), to be filed with the SEC within 120 days of the end of our fiscal year, which information is incorporated herein by reference. Information required by this item regarding our executive officers is included in Part I of this Annual Report on Form 10-K under the heading "Business—Executive Officers." Information required by this item with respect to Section 16(a) beneficial ownership reporting compliance is set forth in the Proxy Statement under the heading "Section 16(a) Beneficial Ownership Reporting Compliance," which information is incorporated herein by reference.

We have adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-K under the Exchange Act. This Code of Ethics applies to all our directors, officers and employees. The Code of Ethics is available on our website: www.nutraceutical.com. Additionally, we will provide to any person, without charge, upon request, a copy of the Code of Ethics. A person may request a copy by writing to Nutraceutical International Corporation, Attn.: Investor Relations, 1500 Kearns Boulevard, Suite B-200, Park City, Utah 84060 or by telephoning us at (435) 655-6106.

Information required by this item is set forth in the Proxy Statement under the heading "Executive Compensation," which information is incorporated herein by reference (except for the Compensation Committee Report).

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information required by this item is set forth in the Proxy Statement under the heading "Principal Stockholders," which information is incorporated herein by reference.

Item 13. Certain Relationships, Related Transactions and Director Independence

Information required by this item is set forth in the Proxy Statement under the headings "The Board of Directors—Compensation Committee Interlocks and Insider Participation" and "The Board of Directors—Certain Relationships, Related Transactions and Director Independence," which information is incorporated herein by reference.

Information required by this item appears in the Proxy Statement under the heading "Fees Paid to PricewaterhouseCoopers LLP" and is incorporated herein by reference.

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 21^st day of November 2012.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities indicated on this 21^st day of November 2012.


Signature		Capacity

/s/ FRANK W. GAY II Frank W. Gay II		Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer)
/s/ JEFFREY A. HINRICHS Jeffrey A. Hinrichs		Director, Executive Vice President, Chief Operating Officer and Secretary
/s/ CORY J. MCQUEEN Cory J. McQueen		Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
/s/ GREGORY M. BENSON Gregory M. Benson		Director
/s/ MICHAEL D. BURKE Michael D. Burke		Director
/s/ J. KIMO ESPLIN J. Kimo Esplin		Director
/s/ JAMES D. STICE James D. Stice		Director

Nutraceutical International Corporation

Index to Consolidated Financial Statements

To the Board of Directors and Stockholders
of Nutraceutical International Corporation:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, stockholders' equity and comprehensive income and cash flows present fairly, in all material respects, the financial position of Nutraceutical International Corporation and its subsidiaries at September 30, 2012 and 2011, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 2012 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2012, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in management's report referred to above. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

NUTRACEUTICAL INTERNATIONAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

	September 30,

	2012			2011
Assets
Current assets:
Cash	$	4,824		$	2,441
Accounts receivable, net		13,590			13,671
Inventories		46,073			39,853
Prepaid expenses and other current assets		2,295			4,617
Deferred income taxes		1,486			1,487

Total current assets		68,268			62,069
Property, plant and equipment, net		75,454			72,094
Goodwill		14,752			8,853
Intangible assets, net		19,874			19,693
Deferred income taxes, net		5,953			7,175
Other non-current assets		1,617			1,781

Total assets	$	185,918		$	171,665

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	12,838		$	11,892
Accrued expenses		7,832			7,845

Total current liabilities		20,670			19,737
Long-term debt		34,000			32,000
Other non-current liabilities		192			253

Total liabilities		54,862			51,990

Commitments and contingencies (Notes 10, 14 and 16)
Stockholders' equity:
Preferred stock, $0.01 par value, 5,000,000 shares authorized; issued and outstanding—none		—			—
Common stock, $0.01 par value, 50,000,000 shares authorized; 9,840,045 shares issued and 9,839,145 shares outstanding at September 30, 2012; 10,124,934 shares issued and outstanding at September 30, 2011		98			101
Additional paid-in capital		15,400			19,794
Retained earnings		115,235			99,468
Accumulated other comprehensive income		338			312
Treasury stock		(15	)		—

Total stockholders' equity		131,056			119,675

Total liabilities and stockholders' equity	$	185,918		$	171,665

The accompanying notes are an integral part of these consolidated financial statements.

NUTRACEUTICAL INTERNATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per share data)

	Years ended September 30,

	2012		2011		2010
Net sales	$	200,367	$	188,070	$	180,052
Cost of sales		100,413		92,877		86,199

Gross profit		99,954		95,193		93,853

Operating expenses:
Selling, general and administrative		71,425		68,230		65,666
Amortization of intangible assets		2,007		1,654		1,299
Impairment of intangible asset		850		—		—

		74,282		69,884		66,965

Income from operations		25,672		25,309		26,888
Interest and other expense, net		1,497		1,140		550

Income before provision for income taxes		24,175		24,169		26,338
Provision for income taxes		8,408		8,451		9,955

Net income	$	15,767	$	15,718	$	16,383

Net income per common share:
Basic	$	1.59	$	1.52	$	1.57
Diluted		1.59		1.51		1.56
Weighted average common shares outstanding:
Basic		9,916,603		10,322,177		10,410,526
Dilutive effect of stock options		17,394		63,406		93,407

Diluted		9,933,997		10,385,583		10,503,933

The accompanying notes are an integral part of these consolidated financial statements.

NUTRACEUTICAL INTERNATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

	Years ended September 30,

	2012			2011			2010
Cash flows from operating activities:
Net income	$	15,767		$	15,718		$	16,383
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		8,777			8,052			7,374
Amortization of deferred financing fees		184			157			56
Impairment of intangible asset		850			—			—
Losses on disposals of property, plant and equipment		1			15			—
Deferred income taxes, net		1,223			2,893			1,988
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net		328			(2,159	)		2,535
Inventories		(3,396	)		2,477			(9,273	)
Prepaid expenses and other current assets		2,464			(1,713	)		354
Other non-current assets		(100	)		324			(1,025	)
Accounts payable		946			1,271			(627	)
Accrued expenses		(7	)		(327	)		50
Other non-current liabilities		125			(368	)		55

Net cash provided by operating activities		27,162			26,340			17,870

Cash flows from investing activities:
Purchases of property, plant and equipment		(9,953	)		(12,405	)		(11,525	)
Acquisitions of businesses		(12,248	)		(14,780	)		(14,905	)

Net cash used in investing activities		(22,201	)		(27,185	)		(26,430	)

Cash flows from financing activities:
Proceeds from debt		10,000			20,500			19,500
Payments on debt		(8,000	)		(16,500	)		(10,000	)
Payments of deferred financing fees		—			(878	)		—
Proceeds from issuances of common stock		721			775			679
Purchases of common stock for treasury		(5,563	)		(4,721	)		(3,995	)
Tax benefit from stock option exercises		244			329			264

Net cash provided by (used in) financing activities		(2,598	)		(495	)		6,448

Effect of exchange rate changes on cash		20			41			(6	)

Net increase (decrease) in cash		2,383			(1,299	)		(2,118	)
Cash at beginning of year		2,441			3,740			5,858

Cash at end of year	$	4,824		$	2,441		$	3,740

The accompanying notes are an integral part of these consolidated financial statements.

NUTRACEUTICAL INTERNATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND
COMPREHENSIVE INCOME

(dollars in thousands)

	Common Stock											Accumulated Other Comprehensive Income (Loss)

	Common Stock						Additional Paid-In Capital			Retained Earnings					Treasury Stock			Total Stockholders' Equity
	Shares			Amount			Additional Paid-In Capital			Retained Earnings					Treasury Stock			Total Stockholders' Equity
Balance at October 1, 2009		10,580,782		$	106		$	26,458		$	67,367	$	323		$	—		$	94,254
Net income		—			—			—			16,383		—			—			16,383
Other comprehensive loss:
Foreign currency translation adjustment, net of tax		—			—			—			—		(50	)		—			(50	)

Total comprehensive income																			16,333
Issuances of common stock		98,306			1			678			—		—			—			679
Tax benefit from stock option exercises		—			—			264			—		—			—			264
Purchases of common stock for treasury		—			—			—			—		—			(3,995	)		(3,995	)
Retirement of common stock in treasury		(327,348	)		(3	)		(3,992	)		—		—			3,995			—

Balance at September 30, 2010		10,351,740			104			23,408			83,750		273			—			107,535
Net income		—			—			—			15,718		—			—			15,718
Other comprehensive income:
Foreign currency translation adjustment, net of tax		—			—			—			—		39			—			39

Total comprehensive income																			15,757
Issuances of common stock		108,965			1			774			—		—			—			775
Tax benefit from stock option exercises		—			—			329			—		—			—			329
Purchases of common stock for treasury		—			—			—			—		—			(4,721	)		(4,721	)
Retirement of common stock in treasury		(335,771	)		(4	)		(4,717	)		—		—			4,721			—

Balance at September 30, 2011		10,124,934			101			19,794			99,468		312			—			119,675
Net income		—			—			—			15,767		—			—			15,767
Other comprehensive income:
Foreign currency translation adjustment, net of tax		—			—			—			—		26			—			26

Total comprehensive income																			15,793
Issuances of common stock		131,347			1			906			—		—			—			907
Tax benefit from stock option exercises		—			—			244			—		—			—			244
Purchases of common stock for treasury		—			—			—			—		—			(5,563	)		(5,563	)
Retirement of common stock in treasury		(416,236	)		(4	)		(5,544	)		—		—			5,548			—

Balance at September 30, 2012		9,840,045		$	98		$	15,400		$	115,235	$	338		$	(15	)	$	131,056

The accompanying notes are an integral part of these consolidated financial statements.

NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

Nutraceutical International Corporation and its subsidiaries (the "Company") is an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores. Internationally, the Company markets and distributes branded nutritional supplements and other natural products to and through health and natural product distributors and retailers. The Company's core business strategy is to acquire, integrate and operate businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements. The Company believes that the consolidation and integration of these acquired businesses provides ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships.

The Company manufactures and sells nutritional supplements and other natural products under numerous brands including Solaray®, KAL®, Nature's Life®, LifeTime®, Natural Balance®, bioAllers®, Herbs for Kids™, NaturalCare®, Health from the Sun®, Life-flo®, Organix South®, Pioneer® and Monarch Nutraceuticals™.

The Company owns neighborhood natural food markets, which operate under the trade names The Real Food Company™, Thom's Natural Foods™ and Cornucopia Community Market™. The Company also owns health food stores, which operate under the trade names Fresh Vitamins™, Granola's™, Nature's Discount™ and Warehouse Vitamins™.

Principles of Consolidation—The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances were eliminated.

Use of Estimates—The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America required management to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Significant estimates included values and lives assigned to acquired intangible assets, reserves for customer returns and allowances, uncollectible accounts receivable, valuation adjustments for slow moving, obsolete and/or damaged inventory and valuation and recoverability of long-lived assets. Actual results may differ from these estimates.

Fair Value of Financial Instruments—The Company believes that the fair values of financial instruments, including cash, accounts receivable, accounts payable and debt, approximated their respective book values at September 30, 2012 and 2011. The book values of cash, accounts receivable and accounts payable approximated their fair values based on their short-term nature. Estimated fair values for debt have been determined based on borrowing rates currently available to the Company for bank loans with similar terms and maturities and are classified as Level 2 (significant observable inputs other than quoted prices) in the Financial Accounting Standards Board's ("FASB") fair value hierarchy.

Cash—The majority of the Company's cash was held by one bank at September 30, 2012. As a result of this concentration, the Company's cash balances frequently exceed federally insured limits. The Company does not believe it is subject to any other unusual risks as a result of this concentration other than those normally associated with commercial banking relationships.

Inventories—Branded inventories included freight-in, materials, labor and overhead costs and were stated at the lower of cost or market, cost being determined by a moving weighted average. Retail inventories were accounted for using the retail method. Valuation adjustments are made for slow moving, obsolete and/or damaged inventory based on a periodic analysis of individual inventory items, including an evaluation of historical usage and/or movement, age, expiration date and general condition.

Property, Plant and Equipment—Property, plant and equipment were stated at cost, less accumulated depreciation and amortization. Depreciation and amortization were provided using the straight-line method over the estimated useful lives of the respective assets. Expenditures for renewals and betterments were capitalized, while maintenance and repairs were charged to operations in the periods incurred. Upon sale or disposal of an asset, the historical cost and related accumulated depreciation or amortization of such asset were removed from their respective accounts and any gain or loss was recorded in the Consolidated Statements of Operations.

The Company evaluates the recoverability of property, plant and equipment which are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of an asset group may not be recoverable. The Company measures recoverability of the asset group by comparison of its carrying amount to the future undiscounted cash flows the asset group is expected to generate. If the asset group is considered to be impaired, the difference between the carrying amount and the fair value of the impaired asset group is recorded.

Goodwill and Intangible Assets—The excess of purchase price over fair value of assets acquired in purchase transactions was classified as goodwill. Intangible assets with finite useful lives are amortized while intangible assets with indefinite useful lives are not amortized. Amortizable intangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill and indefinite-lived intangible assets are tested annually for impairment and are tested for impairment between annual tests if an event occurs that would cause the Company to believe that value is impaired. The appropriateness of the indefinite-life classification of non-amortizable intangible assets is also reviewed as part of the annual testing or when circumstances warrant a change to a finite life. The Company performs its annual impairment testing as of September 30 each year, which is the last day of the Company's fiscal year.

Deferred Financing Fees—The Company deferred certain debt issuance costs, including bank, legal, accounting and other fees, related to the establishment and subsequent amendment and restatement of a credit agreement (Note 9). These costs are being amortized using the straight-line method, which approximates the effective interest rate method, based on the terms of the credit agreement.

Foreign Currency Translation—The functional currency of each of the Company's foreign subsidiaries and branches is the local currency. All assets and liabilities of foreign subsidiaries and branches were translated into U.S. Dollars at fiscal year-end exchange rates. Income and expense items were translated at exchange rates prevailing during the year. The resulting translation adjustments, net of income taxes, were recorded in accumulated other comprehensive income, which is a component of stockholders' equity.

Revenue Recognition—Revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the product has been shipped and the customer takes ownership and assumes the risk of loss; (3) the selling price is fixed or determinable; and (4) collection of the resulting receivable is reasonably assured. The Company believes that these criteria are satisfied upon shipment from its facilities or, in the case of the Company's neighborhood natural food markets and health food stores, at the point of sale within these stores. Revenue is reduced by provisions for estimated returns and allowances, which are based on historical averages that have not varied significantly for the periods presented, as well as specific known claims, if any.

Shipping and Handling Costs—The Company incurred shipping and handling costs related to third party freight charges, as well as internal warehousing and order fulfillment costs. These costs were classified as selling, general and administrative expenses and totaled $13,658, $11,563, and $10,502 for the years ended September 30, 2012, 2011 and 2010, respectively.

Research and Development—The Company expensed research and development costs as incurred. For the years ended September 30, 2012, 2011 and 2010, the Company incurred $3,625, $3,935 and $3,938, respectively, in research and development expenditures.

Advertising—The Company expensed advertising costs the first time the respective advertising took place. These costs were included in selling, general and administrative expenses.

Income Taxes—The Company accounted for income taxes using the asset and liability method which required the Company to record deferred tax assets and liabilities for the differences between

the financial statement and tax bases of assets and liabilities using the expected applicable future tax rates.

The Company accounted for uncertain tax positions taken or expected to be taken in a tax return including the related financial statement recognition, measurement, reporting and disclosure (Note 11).

Concentrations of Credit Risk—In the normal course of business, the Company provided credit terms to its customers; however, collateral was not required. Accordingly, the Company performed credit evaluations of its customers and maintained allowances for possible losses which, when realized, were within the range of management's expectations. From time to time, a higher concentration of credit risk existed on outstanding accounts receivable for a select number of customers due to individual buying patterns.

New Accounting Standards—In June 2011, the FASB issued authoritative guidance which is included in Accounting Standards Codification ("ASC") 220, "Comprehensive Income." This guidance no longer allows comprehensive income to be presented as a component of the statement of stockholders' equity but instead requires comprehensive income to be presented either in a continuous statement of comprehensive income or in two separate but consecutive statements. This guidance is effective for the Company as of October 1, 2012 and will not have an impact on the Company's results of operations.

In September 2011, the FASB issued authoritative guidance which is included in ASC 350, "Intangibles—Goodwill and Other". This guidance simplifies how goodwill is tested for impairment by first allowing an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. This guidance is effective for the Company as of October 1, 2012 and is not expected to have a material impact on the Company's Consolidated Financial Statements.

In July 2012, the FASB issued further authoritative guidance which is also included in ASC 350. This guidance allows a Company to first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset, other than goodwill, is impaired. This guidance is effective for the Company as of October 1, 2012 and is not expected to have a material impact on the Company's Consolidated Financial Statements.

The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that it believes merit further discussion, and the Company expects that none would have a significant impact on its Consolidated Financial Statements.

During the year ended September 30, 2012, the Company made six acquisitions of businesses. On October 27, 2011, the Company acquired certain operating assets of Mia Rose Products, Inc. On November 22, 2011, the Company acquired certain operating assets of Collective Wellbeing, LLC. On January 16, 2012, the Company acquired certain operating assets of Nature's Discount, Inc. and Top Health. On January 27, 2012, the Company acquired certain operating assets of Your Crown and

Glory, LLC. On March 2, 2012, the Company acquired certain operating assets of Treehouse Vitamins, LLC. On June 7, 2012, the Company acquired certain operating assets of Direct Access Network, Inc. The aggregate purchase price of these acquisitions was $12,248 in cash.

During the year ended September 30, 2011, the Company made five acquisitions of businesses. On October 7, 2010, the Company acquired certain operating assets of TRC Nutritional Labs, Inc. On October 14, 2010, the Company acquired certain operating assets of The Heritage Store, Inc. On February 24, 2011, the Company acquired certain operating assets of SunFeather Natural Soap Company, Inc. On May 26, 2011, the Company acquired certain operating assets of Skin by Ann Webb, LLC. On September 15, 2011, the Company acquired certain operating assets of Transitions for Health, Inc., dba Emerita. The aggregate purchase price of these acquisitions was $14,780 in cash.

These acquisitions are in keeping with the Company's business strategy of consolidating the fragmented industry where it competes. These acquisitions were accounted for using the acquisition method of accounting. Accordingly, the aggregate purchase price was assigned to the assets acquired based on their fair values at the respective dates of acquisition. The excess of aggregate purchase price over the fair values of the assets acquired was classified as goodwill (Note 7). The goodwill relates to expected synergies from these acquisitions. The Consolidated Statements of Operations and Consolidated Statements of Cash Flows presented herein include the activities of these acquired businesses from their respective dates of acquisition. The following reflects the final allocation of the aggregate purchase prices for the fiscal 2012 and fiscal 2011 acquisitions to the aggregate assets acquired:

The fiscal 2012 and fiscal 2011 acquired intangible assets included trademarks and tradenames totaling $0 and $449, respectively, which have indefinite lives and are not subject to amortization for financial statement purposes, as well as intangible assets totaling $2,958 and $3,367, respectively, related to trademarks, tradenames, customer relationships and non-compete agreements, which are being amortized over a period of two to fifteen years for financial statement purposes. Acquired intangible assets of $2,958 related to the fiscal 2012 acquisitions and $3,816 related to the fiscal 2011 acquisitions are expected to be deductible for tax purposes over fifteen years. Goodwill, which is not subject to amortization for financial statement purposes, of $5,899 related to the fiscal 2012 acquisitions and $3,515 related to the fiscal 2011 acquisitions is expected to be deductible for tax purposes over fifteen years.

Accounts receivable, net of allowances for sales returns and doubtful accounts, consisted of the following:

Property, plant and equipment, net of accumulated depreciation and amortization, were comprised of the following:

			September 30,

	Estimated Useful Life in Years		September 30,
	Estimated Useful Life in Years		2012			2011
Land		—	$	8,354		$	7,854
Buildings		30		66,329			63,484
Leasehold improvements		1 - 7		2,739			2,512
Furniture, fixtures and equipment		3 - 10		53,868			47,943

				131,290			121,793
Less accumulated depreciation and amortization				(55,836	)		(49,699	)

			$	75,454		$	72,094

At September 30, 2012 and 2011, the Company had no equipment under capital leases. Substantially all property, plant and equipment of the Company collateralized its debt obligations (Note 9).

Depreciation and amortization of property, plant and equipment totaled $6,770, $6,398 and $6,075 for the years ended September 30, 2012, 2011 and 2010, respectively.

Goodwill and indefinite-lived intangible assets are tested annually for impairment and are tested for impairment between annual tests if an event occurs that would cause the Company to believe that value is impaired. The Company performs its annual impairment testing as of September 30 each year, which is the last day of the Company's fiscal year. Amortizable intangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. There were no at-risk reporting units at September 30, 2012.

The changes in the carrying amount of goodwill for the years ended September 30, 2011 and 2012 were as follows:

	Goodwill

Balance as of October 1, 2010
Goodwill	$	45,732
Accumulated impairment losses		(40,394	)

		5,338
Goodwill attributable to fiscal 2011 acquisitions		3,515

Balance as of September 30, 2011
Goodwill		49,247
Accumulated impairment losses		(40,394	)

		8,853
Goodwill attributable to fiscal 2012 acquisitions		5,899

Balance as of September 30, 2012
Goodwill		55,146
Accumulated impairment losses		(40,394	)

	$	14,752

The carrying amounts of intangible assets at September 30, 2012 and 2011 were as follows:

	September 30, 2012							September 30, 2011

	September 30, 2012							September 30, 2011							Weighted- Average Amortization Period (Years)
	Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount		Gross Carrying Amount(1)		Accumulated Amortization(1)			Net Carrying Amount		Weighted- Average Amortization Period (Years)
Intangible assets subject to amortization:
Trademarks/trade names/patents	$	2,674	$	(778	)	$	1,896	$	1,812	$	(550	)	$	1,262		12
Customer relationships/distribution rights/non-compete agreements		12,239		(5,519	)		6,720		10,037		(3,716	)		6,321		6
Developed software and technology		772		(772	)		—		772		(759	)		13		5

		15,685		(7,069	)		8,616		12,621		(5,025	)		7,596
Intangible assets not subject to amortization:
Trademarks/trade names/licenses		11,258		—			11,258		12,097		—			12,097

	$	26,943	$	(7,069	)	$	19,874	$	24,718	$	(5,025	)	$	19,693

Aggregate amortization expense related to intangible assets subject to amortization totaled $2,007, $1,654 and $1,299 for the years ended September 30, 2012, 2011 and 2010, respectively.

Estimated amortization expense related to intangible assets subject to amortization is as follows:

During the year ended September 30, 2012, the Company recorded a non-cash intangible asset impairment charge of $850 ($551 after tax, or $0.06 per diluted share) related to the consolidation of its food, drug and mass market ("FDM") brands. The charge represented the entire carrying amount of the Alan James Group™ ("AJG") brand. Existing products under the AJG brand were combined under the Company's primary FDM Body Gold® brand. The Company believes this brand consolidation provides increased efficiencies and synergies for its FDM products and customers.

The ongoing uncertainty in general and economic conditions may continue to impact retail and consumer demand, as well as the market price of the Company's common stock, and could negatively impact the Company's future operating performance, cash flow and/or stock price and could result in additional goodwill and/or intangible asset impairment charges being recorded in future periods. Also, the Company periodically reviews its brands to achieve marketing, sales and operational synergies. These reviews could result in additional brands being consolidated or discontinued and could result in additional intangible asset impairment charges being recorded in future periods. Additional goodwill and/or intangible asset impairment charges could materially impact the Company's consolidated financial statements. The valuation of goodwill and intangible assets is subject to a high degree of judgment, uncertainty and complexity.

On December 17, 2010, the Company amended and restated its revolving credit facility (the "Restated Credit Agreement"). The Restated Credit Agreement extends the term of the credit facility to December 2015, resets the available credit borrowings to $90,000 with no automatic reductions and provides an accordion feature which can increase the available credit borrowings to $120,000 subject to approval by the lenders and compliance with certain covenants and conditions. The lenders under the Restated Credit Agreement are Rabobank International and Wells Fargo. To date, the Company has not experienced any difficulties in accessing the available funds under the Restated Credit Agreement. Deferred financing fees of $878 related to the Restated Credit Agreement are being amortized over the term of the Restated Credit Agreement.

At September 30, 2012, the Company had outstanding revolving credit borrowings of $34,000 under the Restated Credit Agreement. Borrowings under the Restated Credit Agreement are collateralized by substantially all assets of the Company. At the Company's election, borrowings bear interest at the applicable Eurodollar Rate plus a variable margin or at a base rate, which is the higher of the Federal Funds Rate plus 0.5% or the Prime Lending Rate, plus a variable margin. At

September 30, 2012, the applicable weighted-average interest rate for outstanding borrowings was 2.65%. The Company is also required to pay a quarterly fee of 0.50% on the unused balance under the Restated Credit Agreement. Accrued interest on Eurodollar Rate borrowings is payable based on elected intervals of one, two or three months. Accrued interest on base rate borrowings is payable quarterly. The Restated Credit Agreement matures on December 15, 2015, and the Company is required to repay all principal and interest outstanding under the Restated Credit Agreement on such date.

The Restated Credit Agreement contains restrictive covenants, including restrictions on incurring other indebtedness and requirements that the Company maintain certain financial ratios. As of September 30, 2012, the Company was in compliance with the restrictive covenants. Upon the occurrence of a default or an event of default, the lender has various remedies or rights, which may include proceeding against the collateral or requiring the Company to repay all amounts outstanding under the Restated Credit Agreement.

The Company leases retail, office, storage and warehouse space under non-cancelable operating leases, the last of which expires during fiscal 2018; however, the Company has negotiated extension options in many cases. These operating leases require the Company to pay all taxes, insurance and maintenance.

The following summarizes future minimum lease payments required under the Company's significant non-cancelable operating leases:

Total rent expense incurred by the Company under significant non-cancelable operating leases was $2,219, $2,796 and $3,337 for the years ended September 30, 2012, 2011 and 2010, respectively.

A summary of the composition of net deferred income tax assets and liabilities was as follows:

	September 30,

	2012			2011
Current Deferred Income Tax Assets
Accounts receivable reserves	$	541		$	616
Inventory reserves		477			493
Accrued liabilities		468			378

	$	1,486		$	1,487

Non-Current Deferred Income Tax Assets and Liabilities, net
Goodwill and other intangible assets	$	5,803		$	6,775
Property, plant and equipment		(39	)		210
Other non-current liabilities		189			190

	$	5,953		$	7,175

The differences between income taxes at the statutory federal income tax rate and income taxes reported in the Consolidated Statements of Operations were as follows:

As of September 30, 2012, the Company's liability related to unrecognized tax benefits was $57 of which $51 would impact the Company's effective tax rate if recognized. The liability related to unrecognized tax benefits was recorded as a component of other non-current liabilities in the

Company's Consolidated Balance Sheets. Interest related to unrecognized tax benefits is recorded as a component of interest and other expense in the Company's Consolidated Statements of Operations. For the years ended September 30, 2012 and 2011, the Company recorded a net benefit of $0 and $3, respectively, for interest related to unrecognized tax benefits. At September 30, 2012, the Company had $5 in accrued interest related to unrecognized tax benefits. As of September 30, 2011, the Company's liability related to unrecognized tax benefits was $107. The Company does not anticipate any significant changes in unrecognized tax benefits during the next twelve months.

During fiscal 2011 and fiscal 2012, the aggregate changes in the balance of unrecognized tax benefits were as follows:

The Company files income tax returns in the United States federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. The Company is no longer subject to U.S. federal tax examinations for fiscal years before 2009. The Company is no longer subject to examination in any U.S. state jurisdiction or foreign jurisdiction for fiscal years prior to 2007.

Description of Capital Stock—At September 30, 2012 and 2011, the Company had two authorized classes of stock: Common Stock and Preferred Stock, each with a par value of $0.01 per share. At September 30, 2012 and 2011, 5,000,000 shares of Preferred Stock were authorized with no shares issued or outstanding.

Stock Option Plans—During the year ended September 30, 1998, the Company's Board of Directors adopted the 1998 Stock Incentive Plan. This plan provided for granting options to purchase Common Stock to executives, employees and consultants of the Company and its subsidiaries. Grants under this plan vested over a period of two to four years and expire no later than the tenth anniversary of the date of grant. In aggregate, 1,050,000 shares of Common Stock were reserved for issuance under this plan. As of September 30, 2012, options to purchase 198,000 shares of Common Stock were issued, outstanding and exercisable under this plan.

During the year ended September 30, 1998, the Company's Board of Directors adopted the 1998 Non-Employee Director Stock Option Plan. This plan provided for granting options to purchase Common Stock to non-employee directors of the Company. Grants under this plan vested over a period of three years and expire no later than the tenth anniversary of the date of grant. In aggregate, 150,000 shares of Common Stock were reserved for issuance under this plan. As of September 30, 2012,

options to purchase 20,000 shares of Common Stock were issued, outstanding and exercisable under this plan.

On September 30, 2005, the Company terminated the 1998 Stock Incentive Plan and the 1998 Non-Employee Director Stock Option Plan. After September 30, 2005, no new awards of any kind will be granted under any of these plans. However, the termination of these plans did not have any effect on outstanding options. Outstanding, vested options may be exercised any time prior to the expiration date of such award to the same extent such award would have been exercisable had the plans not been terminated.

As of September 30, 2012, options to purchase an aggregate 218,000 shares of Common Stock were issued, outstanding and exercisable. The following table sets forth option activity under the 1998 Stock Incentive Plan and the 1998 Non-Employee Director Stock Option Plan for the years ended September 30, 2010, 2011 and 2012:

			Average Price Per Share		Aggregate Option Price

Outstanding at October 1, 2009	457,917		$	8.85	$	4,054
Exercised	(66,229	)		4.20		(278	)

Outstanding at September 30, 2010	391,688			9.64		3,776
Exercised	(89,388	)		5.59		(500	)

Outstanding at September 30, 2011	302,300			10.84		3,276
Exercised	(84,300	)		6.12		(516	)

Outstanding at September 30, 2012	218,000			12.66	$	2,760

Options granted were issued at exercise prices that represented the quoted market price of Common Stock at the respective grant dates. For the years ended September 30, 2012, 2011 and 2010, options to purchase 26,250, 13,125 and 71,325 shares of common stock, respectively, were excluded from the computation of diluted earnings per share because the exercise prices of these stock options were greater than the average share price of the Company's common stock and, therefore, the effect would have been antidilutive.

The following table sets forth data related to exercise prices and lives for all issued, outstanding and exercisable options as of September 30, 2012, which include grants made under the 1998 Stock Incentive Plan and the 1998 Non-Employee Director Stock Option Plan:

At September 30, 2012, the aggregate intrinsic value of stock options outstanding and exercisable was $675. The intrinsic value is the amount by which the market value of the underlying common stock exceeds the exercise price of the respective stock option.

During the years ended September 30, 2012, 2011 and 2010, the Company received proceeds of $516, $500 and $278, respectively, related to the exercise of stock options and optionees realized aggregate pre-tax gains of $590, $854 and $683, respectively, from these stock option exercises.

Share Purchase Program—Prior to fiscal 2012, the Company's Board of Directors approved a share purchase program authorizing the Company to buy up to 3,500,000 shares of Common Stock of the Company. On April 23, 2012, the Company's Board of Directors approved the addition of 1,000,000 shares to the Company's previously approved share purchase program. During fiscal 2012, the Company purchased 417,136 shares at an aggregate price of $5,563. During fiscal 2011, the Company purchased 335,771 shares at an aggregate price of $4,721. During fiscal 2010, the Company purchased 327,348 shares at an aggregate price of $3,995. All shares of Common Stock held in treasury were retired prior to September 30 in the respective fiscal year of purchase except at September 30, 2012 the Company held 900 shares of Common Stock in treasury. As of September 30, 2012, the Company was permitted to purchase up to 1,126,885 additional shares under its approved share purchase program. The shares available for repurchase at September 30, 2012 have no expiration date. The Company accounts for treasury shares using the cost method.

Direct Stock Purchase Plan—In October 2007, the Company registered a direct stock purchase plan with the Securities and Exchange Commission. The purpose of this direct stock purchase plan is to provide a convenient way for existing stockholders, as well as new investors, to purchase shares of the Company's Common Stock. A total of 1,500,000 shares of the Company's Common Stock were registered under the plan with 15,142 and 19,577 shares purchased for the years ended September 30, 2012 and 2011, respectively.

Segment identification and selection is consistent with the management structure used by the Company's chief operating decision maker to evaluate performance and make decisions regarding resource allocation, as well as the materiality of financial results consistent with that structure. Based on the Company's management structure and method of internal reporting, the Company has one operating segment. The Company does not review operating results on a disaggregated basis; rather, management reviews operating results on an aggregate basis.

Net sales attributed to customers in the United States and foreign countries for the years ended September 30, 2012, 2011 and 2010 were as follows:

Certain net sales attributed to customers in the United States are sold to customers who in turn may sell such products to customers in foreign countries while certain net sales attributed to customers in foreign countries are sold to customers who in turn may sell such products to customers in the United States.

The Company's net sales by product group for the years ended September 30, 2012, 2011 and 2010 were as follows:

401(k) Plan—The Company has a 401(k) defined contribution profit sharing plan that covers substantially all employees. Under the plan, employees may contribute up to 75% of their compensation subject to certain exceptions and limitations. In addition, employees who meet certain age requirements may contribute additional amounts permitted by law under the plan. The Company makes matching contributions to the plan up to the first 4% of employee contributions and is permitted to make discretionary contributions under the plan. The amounts contributed to the plan by the Company were $867, $842 and $800 for the years ended September 30, 2012, 2011 and 2010, respectively.

Cash paid by the Company for interest was $1,182, $816 and $430 for the years ended September 30, 2012, 2011 and 2010, respectively. Cash paid by the Company for taxes was $4,928, $7,041 and $7,575 for the years ended September 30, 2012, 2011 and 2010, respectively.

The formulation, manufacturing, processing, packaging, labeling, advertising, distribution and sale of nutritional supplements (including vitamins, amino acids, minerals, herbs, other botanicals and other dietary ingredients), such as those sold by the Company, are subject to regulation by one or more federal agencies, principally the Food and Drug Administration (the "FDA") and the Federal Trade Commission and, to a lesser extent, the Consumer Product Safety Commission and the United States Department of Agriculture. These activities are also regulated by various governmental agencies for the states and localities in which the Company's products are sold, as well as by governmental agencies in certain countries in which the Company's products are sold outside the United States.

Although management believes that the Company is in material compliance with the statutes, laws, rules and regulations of every jurisdiction in which it operates, from time to time one or more government agencies have asserted or may assert that some particular aspect or facility is not in compliance with a specific provision or law. No assurance can be given that the Company's compliance with applicable statutes, laws, rules and regulations will not be challenged by governing authorities or private parties or that the Company's response to any such challenge will be successful or that such challenges will not have a material adverse effect on the Company's financial position, results of operations or cash flows.

The Company, like any other retailer, distributor or manufacturer of products that are designed to be ingested, also faces inherent risk of exposure to product liability claims in the event that the use of its products results in injury. With respect to product liability claims, the Company has liability insurance; however, liability policies contain deductibles and exclusions (such as those related to specific ingredients or types of claims) and there can be no assurance that such insurance will be adequate to cover all potential liabilities. In the event that the Company does not have adequate insurance (or any insurance) or contractual indemnification from parties supplying raw materials or marketing its products, product liability related to defective products could have a material adverse effect on the Company.

The Company is involved in various legal matters arising in the normal course of business. In the opinion of management, the losses related to individual regulatory and legal matters in which the Company is presently involved are not probable and no estimate can be made of the range of potential gains or losses. While incapable of estimation, in the opinion of management, the individual regulatory and legal matters in which it is involved are not expected to have a material adverse effect on the Company's financial position, results of operations or cash flows. However, the aggregate liability of the Company arising from regulatory and legal proceedings related to these matters could have a material effect on the Company's financial position, results of operations or cash flows.

NUTRACEUTICAL INTERNATIONAL CORPORATION

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Description	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to Other Accounts		Deductions		Balance at End of Period

	(dollars in thousands)
September 30, 2012
Deducted from related asset account:
Allowance for sales returns	$	894	$	4,467	$	—	$	4,490	$	871
Allowance for doubtful accounts		1,171		—		—		154		1,017
September 30, 2011
Deducted from related asset account:
Allowance for sales returns		966		4,286		—		4,358		894
Allowance for doubtful accounts		1,135		45		—		9		1,171
September 30, 2010
Deducted from related asset account:
Allowance for sales returns		817		4,144		—		3,995		966
Allowance for doubtful accounts		1,362		85		—		312		1,135

Number			Description

	3.1		Form of Amended and Restated Certificate of Incorporation of Nutraceutical(1)
	3.2		Form of By-laws of Nutraceutical(1)
	4.1		Form of certificate representing Common Stock(1)
	4.2		Amended and Restated Registration Agreement dated as of January 31, 1995 among Nutraceutical and certain of its stockholders(1)
	10.1		Form of Indemnification Agreement(1)
	10.2		1998 Stock Incentive Plan(1)
	10.3		1998 Non-Employee Director Stock Option Plan(1)
	10.4		Form of Agreement for Stock Options granted under the 1998 Stock Incentive Plan and 1998 Non-Employee Director Stock Option Plan(2)
	10.5		First Amendment to Credit Agreement dated as of September 7, 2006 among Nutraceutical and its lenders(3)
	10.6		Amended and Restated Credit Agreement dated as of December 17, 2010 among Nutraceutical and its lenders(4)
	11.1		Computation of earnings per share
			The information required by Exhibit 11.1 is set forth on page F-4 of this Form 10-K.
	21.1		Subsidiaries of Nutraceutical(5)
	23.1		Consent of PricewaterhouseCoopers LLP(5)
	31.1		Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(5)
	32.1		Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(5)
	101.INS		XBRL Instance Document(6)
	101.SCH		XBRL Taxonomy Extension Schema Document(6)
	101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document(6)
	101.DEF		XBRL Taxonomy Extension Definition Linkbase Document(6)
	101.LAB		XBRL Taxonomy Extension Labels Linkbase Document(6)
	101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document(6)


(Mark One)
ý		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
for the Fiscal Year Ended September 30, 2012
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from to


Common Stock, par value $.01 per share		The NASDAQ Stock Market LLC
(Title of class)		(Name of exchange on which registered)


Large Accelerated Filer o		Accelerated Filer ý		Non-accelerated Filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Period		Average Price Paid Per Share

July 1 - 31, 2012	4,800	$	14.98	4,800
August 1 - 31, 2012	5,800		13.38	5,800
September 1 - 30, 2012	900		16.20	900

	11,500		14.27	11,500	1,126,885

	Payments Due By Period

Contractual Obligations and Other Commitments	Total		Less Than 1 Year		1 - 3 Years		4 - 5 Years		After 5 Years
	(dollars in thousands)
Debt	$	34,000	$	—	$	—	$	34,000	$	—
Interest on debt(a)		3,882		1,210		2,420		252		—
Operating leases		4,920		2,910		1,705		282		23

Total	$	42,802	$	4,120	$	4,125	$	34,534	$	23


Delaware (State or other jurisdiction of incorporation)		87-0515089 (I.R.S. Employer Identification Number)


PART I
Item 1	Business	1
Item 1A	Risk Factors	11
Item 1B	Unresolved Staff Comments	17
Item 2	Properties	18
Item 3	Legal Proceedings	18
Item 4	Mine Safety Disclosures	18
PART II
Item 5	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	19
Item 6	Selected Financial Data	20
Item 7	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	31
Item 8	Financial Statements and Supplementary Data	31
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	31
Item 9A	Controls and Procedures	31
Item 9B	Other Information	33
PART III
Item 10	Directors, Executive Officers and Corporate Governance	33
Item 11	Executive Compensation	33
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	33
Item 13	Certain Relationships, Related Transactions and Director Independence	33
Item 14	Principal Accounting Fees and Services	33
PART IV
Item 15	Exhibits and Financial Statement Schedules	34

Plan Category		Weighted-average exercise price of outstanding options, warrants and rights (b)

Equity compensation plans approved by security holders	218,000	$	12.66	—
Equity compensation plans not approved by security holders	—		—	—

Total:	218,000		12.66	—


		NUTRACEUTICAL INTERNATIONAL CORPORATION
		By:		/s/ FRANK W. GAY II Frank W. Gay II Chairman of the Board and Chief Executive Officer

		Page

Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firm			F-2
Consolidated Balance Sheets at September 30, 2012 and 2011			F-3
Consolidated Statements of Operations for the years ended September 30, 2012, 2011 and 2010			F-4
Consolidated Statements of Cash Flows for the years ended September 30, 2012, 2011 and 2010			F-5
Consolidated Statements of Stockholders' Equity and Comprehensive Income for the years ended September 30, 2012, 2011 and 2010			F-6
Notes to Consolidated Financial Statements			F-7
Schedule to Consolidated Financial Statements:
For the years ended September 30, 2012, 2011 and 2010
Schedule II—Valuation and Qualifying Accounts

	Fiscal 2012 Acquisitions		Fiscal 2011 Acquisitions

Aggregate assets acquired:
Current assets	$	3,213	$	3,080
Property, plant and equipment		178		4,369
Goodwill		5,899		3,515
Intangible assets		2,958		3,816

	$	12,248	$	14,780

	September 30,

	2012			2011
Accounts receivable	$	15,478		$	15,736
Less allowances		(1,888	)		(2,065	)

	$	13,590		$	13,671

	September 30,

	2012		2011
Raw materials	$	16,394	$	16,001
Work-in-process		5,152		5,626
Finished goods		24,527		18,226

	$	46,073	$	39,853

Year Ending September 30,	Estimated Amortization Expense

2013	$	2,122
2014		1,832
2015		1,650
2016		1,026
2017		681
Thereafter		1,305

	$	8,616

	September 30,

	2012		2011
Employee payroll, taxes, benefits and performance incentives	$	5,180	$	5,045
Other accrued expenses		2,652		2,800

	$	7,832	$	7,845

	Years Ended September 30,

	2012		2011		2010
Current:
Federal	$	6,296	$	4,911	$	7,008
State		893		747		1,078
Deferred:
Federal		1,034		2,395		1,603
State		185		398		266

	$	8,408	$	8,451	$	9,955

	September 30, 2012

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Shares		Weighted-Average Exercise Price		Shares		Weighted-Average Exercise Price
$11.53 - $14.22
(Avg. life: 1.6 years)		218,000	$	12.66		218,000	$	12.66

	September 30,

	2012		2011
Long-term debt—revolving credit facility	$	34,000	$	32,000

	Unrecognized Tax Benefits

Balance as of October 1, 2010	$	128
Reductions due to lapsed statute of limitations		(21	)

Balance as of September 30, 2011		107
Reductions due to lapsed statute of limitations		(50	)

Balance as of September 30, 2012	$	57