Condensed Consolidating Financial Statements of Guarantors

9 Months Ended

Jun. 30, 2011

Condensed Consolidating Financial Statements of Guarantors

Condensed Consolidating Financial Statements of Guarantors

19. Condensed Consolidating Financial Statements of Guarantors

        The 9% senior notes due 2018 were issued by NBTY and are guaranteed by each of its current and future direct and indirect subsidiaries, subject to certain exceptions. These guarantees are full, unconditional and joint and several. The following condensed consolidating financial information presents:

• 1.

  Condensed consolidating financial statements as of June 30, 2011 and September 30, 2010 and for the three and nine months ended June 30, 2011 and 2010 of (a) NBTY, the parent and issuer, (b) the guarantor subsidiaries, (c) the non-guarantor subsidiaries and (d) the Company on a consolidated basis; and
  
  

  2.

  Elimination entries necessary to consolidate NBTY, the parent, with guarantor and non-guarantor subsidiaries.

        The condensed consolidating financial statements are presented using the equity method of accounting for investments in wholly-owned subsidiaries. Under this method, the investments in subsidiaries are recorded at cost and adjusted for our share of the subsidiaries' cumulative results of operations, capital contributions, distributions and other equity changes. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. This financial information should be read in conjunction with the financial statements and other notes related thereto.

Successor
Condensed Consolidating Balance Sheet
As of June 30, 2011

				Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
	Cash and cash equivalents			$	187,221		$	—	$	113,154		—		$	300,375
	Accounts receivable, net				—			111,784		30,695		—			142,479
	Intercompany				1,558,252			—		86,659		(1,644,911	)		—
	Inventories				—			506,854		159,554		—			666,408
	Deferred income taxes				—			26,887		654		—			27,541
	Other current assets				—			25,974		26,746		—			52,720
			Total current assets		1,745,473			671,499		417,462		(1,644,911	)		1,189,523
Property, plant and equipment, net					47,497			292,865		147,006		—			487,368
Goodwill					—			813,109		419,131		—			1,232,240
Intangible assets, net					—			1,654,696		373,510		—			2,028,206
Other assets					—			108,761		61		—			108,822
Intercompany loan receivable					346,131			40,733		—		(386,864	)		—
Investments in subsidiaries					2,578,146			—		—		(2,578,146	)		—
		Total assets		$	4,717,247		$	3,581,663	$	1,357,170	$	(4,609,921	)	$	5,046,159
Liabilities and Stockholders' Equity
Current liabilities:
	Current portion of long-term debt			$	17,500		$	—	$	—		—		$	17,500
	Accounts payable				—			98,467		44,697		—			143,164
	Intercompany				—			1,644,911		—		(1,644,911	)		—
	Accrued expenses and other current liabilities				—			135,548		29,815		—			165,363
			Total current liabilities		17,500			1,878,926		74,512		(1,644,911	)		326,027
Intercompany loan payable					—			—		386,864		(386,864	)		—
Long-term debt, net of current portion					2,373,750			—		—		—			2,373,750
Deferred income taxes					751,179			—		4,486		—			755,665
Other liabilities					37,933			1,416		14,483		—			53,832
			Total liabilities		3,180,362			1,880,342		480,345		(2,031,775	)		3,509,274
Commitments and contingencies
Stockholders' Equity:
	Common stock				—			—		—		—			—
	Capital in excess of par				1,551,198			352,019		301,271		(653,290	)		1,551,198
	Accumulated deficit				(15,417	)		1,349,302		552,432		(1,901,734	)		(15,417	)
	Accumulated other comprehensive loss				1,104			—		23,122		(23,122	)		1,104
			Total stockholders' equity		1,536,885			1,701,321		876,825		(2,578,146	)		1,536,885
			Total liabilities and stockholders' equity	$	4,717,247		$	3,581,663	$	1,357,170	$	(4,609,921	)	$	5,046,159

Predecessor
Condensed Consolidating Balance Sheet
As of September 30, 2010

					Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
	Cash and cash equivalents				$	281,457		$	—	$	65,026		$	—		$	346,483
	Accounts receivable, net					—			107,007		28,370			—			135,377
	Intercompany					—			459,164		777,375			(1,236,539	)		—
	Inventories					—			533,360		135,536			—			668,896
	Deferred income taxes					—			39,488		642			—			40,130
	Other current assets					—			19,162		47,828			—			66,990
				Total current assets		281,457			1,158,181		1,054,777			(1,236,539	)		1,257,876
Property, plant and equipment, net						34,850			231,865		125,184			—			391,899
Goodwill						—			197,701		137,458			—			335,159
Intangible assets, net						—			171,164		23,357						194,521
Other assets						—			20,376		937						21,313
Intercompany loan receivable						336,310			40,733		—			(377,043	)		—
Investments in subsidiaries						2,388,648			—		—			(2,388,648	)		—
		Total assets			$	3,041,265		$	1,820,020	$	1,341,713		$	(4,002,230	)	$	2,200,768
Liabilities and Stockholders' Equity
Current liabilities:
	Current portion of long-term debt				$	62,658		$	—	$	15,500		$	—		$	78,158
	Accounts payable					—			105,073		53,276			—			158,349
	Intercompany					1,236,539			—		—			(1,236,539	)		—
	Accrued expenses and other current liabilities					—			130,965		41,066			—			172,031
				Total current liabilities		1,299,197			236,038		109,842			(1,236,539	)		408,538
Intercompany loan payable						—			—		377,043			(377,043	)		—
Long-term debt, net of current portion						317,252			—		23,876			—			341,128
Deferred income taxes						33,897			—		4,278			—			38,175
Other liabilities						10,966			3,010		18,998			—			32,974
				Total liabilities		1,661,312			239,048		534,037			(1,613,582	)		820,815
Commitments and contingencies
Stockholders' Equity:
	Common stock					508			—		—			—			508
	Capital in excess of par					186,248			352,016		301,271			(653,287	)		186,248
	Retained earnings					1,198,467			1,228,956		513,456			(1,742,412	)		1,198,467
	Accumulated other comprehensive loss					(5,270	)		—		(7,051	)		7,051			(5,270	)
				Total stockholders' equity		1,379,953			1,580,972		807,676			(2,388,648	)		1,379,953
			Total liabilities and stockholders' equity		$	3,041,265		$	1,820,020	$	1,341,713		$	(4,002,230	)	$	2,200,768

Successor
Condensed Consolidating Statement of Income
Three Months Ended June 30, 2011

			Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales				—		$	550,140	$	240,038		$	(26,840	)	$	763,338
Costs and expenses:
	Cost of sales			—			322,854		100,859			(26,840	)		396,873
	Advertising, promotion and catalog			—			27,974		8,497			—			36,471
	Selling, general and administrative			21,418			97,691		92,213			—			211,322
	Merger expenses			—			—		614			—			614
				21,418			448,519		202,183			(26,840	)		645,280
(Loss) income from operations				(21,418	)		101,621		37,855			—			118,058
Other income (expense):
		Equity in income of subsidiaries		91,546			—		—			(91,546	)		—
		Intercompany interest		2,765			—		(2,765	)		—			—
		Interest		(38,482	)		—		(18	)		—			(38,500	)
		Miscellaneous, net		(16	)		1,763		(1,256	)		—			491
				55,813			1,763		(4,039	)		(91,546	)		(38,009	)
Income (Loss) before income taxes				34,395			103,384		33,816			(91,546	)		80,049
(Benefit) provision for income taxes				(41,233	)		36,185		9,469			—			4,421
Net income (loss)			$	75,628		$	67,199	$	24,347		$	(91,546	)	$	75,628

Predecessor
Condensed Consolidating Statement of Income
Three Months Ended June 30, 2010

			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales			$	—		$	518,175		$	194,966		$	(17,285	)	$	695,856
Costs and expenses:
	Cost of sales			—			294,826			85,814			(17,285	)		363,355
	Advertising, promotion and catalog			—			30,195			6,808			—			37,003
	Selling, general and administrative			18,954			90,634			82,530			—			192,118
				18,954			415,655			175,152			(17,285	)		592,476
Income from operations				(18,954	)		102,520			19,814			—			103,380
Other income (expense):
		Equity in income of subsidiaries		78,872			—			—			(78,872	)		—
		Intercompany interest		2,143			—			(2,143	)		—			—
		Interest		(7,096	)		—			(216	)		—			(7,312	)
		Miscellaneous, net		77			(464	)		455			—			68
				73,996			(464	)		(1,904	)		(78,872	)		(7,244	)
Income before provision for income taxes				55,042			102,056			17,910			(78,872	)		96,136
(Benefit)/ provision for income taxes				(11,141	)		35,721			5,373			—			29,953
Net income			$	66,183		$	66,335		$	12,537		$	(78,872	)	$	66,183

Successor
Condensed Consolidating Statement of Income
Nine months Ended June 30, 2011

			Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales				—		$	1,599,156	$	696,431		$	(83,544	)	$	2,212,043
Costs and expenses:
	Cost of sales			—			1,029,956		338,518			(83,544	)		1,284,930
	Advertising, promotion and catalog			—			93,186		23,337			—			116,523
	Selling, general and administrative			56,941			296,212		269,232			—			622,385
	Merger expenses			43,857			—		622			—			44,479
				100,798			1,419,354		631,709			(83,544	)		2,068,317
(Loss) income from operations				(100,798	)		179,802		64,722			—			143,726
Other income (expense):
		Equity in income of subsidiaries		159,322			—		—			(159,322	)		—
		Intercompany interest		7,908			—		(7,908	)		—			—
		Interest		(155,255	)		—		(33	)		—			(155,288	)
		Miscellaneous, net		49			5,348		(2,648	)		—			2,749
				12,024			5,348		(10,589	)		(159,322	)		(152,539	)
(Loss) income before income taxes				(88,774	)		185,150		54,133			(159,322	)		(8,813	)
(Benefit) provision for income taxes				(80,804	)		64,804		15,157			—			(843	)
Net (loss) income			$	(7,970	)	$	120,346	$	38,976		$	(159,322	)	$	(7,970	)

Predecessor
Condensed Consolidating Statement of Income
Nine months Ended June 30, 2010

			Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales			$	—		$	1,577,866	$	625,939		$	(51,638	)	$	2,152,167
Costs and expenses:
	Cost of sales			—			931,575		275,533			(51,638	)		1,155,470
	Advertising, promotion and catalog			—			97,784		18,898			—			116,682
	Selling, general and administrative			56,904			267,389		251,150			—			575,443
				56,904			1,296,748		545,581			(51,638	)		1,847,595
Income from operations				(56,904	)		281,118		80,358			—			304,572
Other income (expense):
		Equity in income of subsidiaries		235,585			—		—			(235,585	)		—
		Intercompany interest		6,502			—		(6,502	)		—			—
		Interest		(22,411	)		—		(573	)		—			(22,984	)
		Miscellaneous, net		254			1,816		543			—			2,613
				219,930			1,816		(6,532	)		(235,585	)		(20,371	)
Income before provision for income taxes				163,026			282,934		73,826			(235,585	)		284,201
(Benefit)/ provision for income taxes				(25,399	)		99,027		22,148			—			95,776
Net income			$	188,425		$	183,907	$	51,678		$	(235,585	)	$	188,425

Successor
Condensed Consolidating Statement of Cash Flows
Nine months Ended June 30, 2011

					Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
	Net income				$	(7,970	)	$	120,346		$	38,976		$	(159,322	)	$	(7,970	)
	Adjustments to reconcile net (loss) income to net cash & cash equivalents provided by operating activities:
		Equity in earnings of subsidiaries				(159,322	)		—			—			159,322			—
		Impairments and disposals of assets							1,493			546			—			2,039
		Depreciation and amortization				3,620			57,155			15,797			—			76,572
		Foreign currency transaction (gain) loss				(2,369	)		—			850			—			(1,519	)
		Amortization of deferred charges				11,247			—			—			—			11,247
		Write off of financing fees				20,824			—			—			—			20,824
		Stock-based compensation				798			—			—			—			798
		Allowance for doubtful accounts				—			5,458			—			—			5,458
		Amortization of incremental inventory fair value				—			83,952			38,152			—			122,104
		Inventory reserves				—			23,086			—			—			23,086
		Deferred income taxes				—			(42,059	)		—			—			(42,059	)
		Changes in operating assets and liabilities:
			Accounts receivable			—			(8,326	)		(2,146	)		—			(10,472	)
			Inventories			—			(1,323	)		(22,137	)		—			(23,460	)
			Other assets			—			9,814			7,195			—			17,009
			Accounts payable			—			(5,492	)		(10,452	)		—			(15,944	)
			Accrued expenses and other liabilities			—			1,191			(8,663	)		—			(7,472	)
			Intercompany accounts			219,411			(224,303	)		4,892			—			—
				Net cash provided by operating activities		86,239			20,992			63,010			—			170,241
Cash flows from investing activities:
	Purchase of property, plant and equipment					(1,467	)		(17,701	)		(16,313	)		—			(35,481	)
	Cash paid for acquisitions, net of cash acquired					(3,982,431	)		(3,197	)		(446	)		—			(3,986,074	)
				Net cash used in investing activities		(3,983,898	)		(20,898	)		(16,759	)		—			(4,021,555	)
Cash flows from financing activities:
	Principal payments under long-term debt agreements and capital leases					(8,750	)		(429	)		(390	)		—			(9,569	)
	Payments for financing fees					(138,227	)		—			—			—			(138,227	)
	Proceeds from borrowings					2,400,000			—			—			—			2,400,000
	Capital contribution					1,550,400			—			—			—			1,550,400
				Net cash provided by (used in) financing activities		3,803,423			(429	)		(390	)		—			3,802,604
Effect of exchange rate changes on cash and cash equivalents						—			335			2,267			—			2,602
Net (decrease) increase in cash and cash equivalents						(94,236	)		—			48,128			—			(46,108	)
Cash and cash equivalents at beginning of period						281,457			—			65,026			—			346,483
Cash and cash equivalents at end of period					$	187,221		$	—		$	113,154		$	—		$	300,375

Condensed Consolidating Statement of Cash Flows
Nine Months Ended June 30, 2010

					Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
	Net income				$	188,425		$	183,907		$	51,678		$	(235,585	)	$	188,425
	Adjustments to reconcile net income to net cash & cash equivalents provided by operating activities:
		Equity in earnings of subsidiaries				(235,585	)		—			—			235,585			—
		Impairments and disposals of assets				—			9,418			615			—			10,033
		Depreciation and amortization				3,692			33,575			12,804			—			50,071
		Foreign currency transaction loss				2,158			—			(846	)		—			1,312
		Stock-based compensation				4,365			469			474			—			5,308
		Amortization of deferred charges				1,093			—			—			—			1,093
		Allowance for doubtful accounts				—			1,977			—			—			1,977
		Inventory reserves				—			3,317			—			—			3,317
		Deferred income taxes				—			2,082			(34	)		—			2,048
		Excess income tax benefit from exercise of stock options				(6,097	)		—			—			—			(6,097	)
		Changes in operating assets and liabilities, net of acquisitions:
			Accounts receivable			—			769			8,001			—			8,770
			Inventories			—			5,005			1,440			—			6,445
			Other assets			—			13,212			(1,176	)		—			12,036
			Accounts payable			—			(26,928	)		5,570			—			(21,358	)
			Accrued expenses and other liabilities			—			5,458			1,877			—			7,335
			Intercompany accounts			222,903			(219,102	)		(3,801	)		—			—
				Net cash (used in) provided by operating activities		180,954			13,159			76,602			—			270,715
Cash flows from investing activities:
	Purchase of property, plant and equipment					(819	)		(13,013	)		(26,526	)		—			(40,358	)
	Proceeds from sale of available-for-sale investments					2,000			—			—			—			2,000
	Cash paid for acquisitions, net of cash acquired					—			—			(11,875	)		—			(11,875	)
				Net cash provided by (used in) investing activities		1,181			(13,013	)		(38,401	)		—			(50,233	)
Cash flows from financing activities:
	Principal payments under long-term debt agreements and capital leases					(42,279	)		(146	)		(567	)		—			(42,992	)
	Excess income tax benefit from exercise of stock options					6,097			—			—			—			6,097
	Proceeds from stock options exercised					10,324			—			—			—			10,324
															—
				Net cash used in financing activities		(25,858	)		(146	)		(567	)		—			(26,571	)
Effect of exchange rate changes on cash and cash equivalents						—			—			(6,280	)		—			(6,280	)
Net increase in cash and cash equivalents						156,277			—			31,354			—			187,631
Cash and cash equivalents at beginning of period						46,169			—			59,832			—			106,001
Cash and cash equivalents at end of period					$	202,446		$	—		$	91,186		$	—		$	293,632