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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

for the Quarterly Period Ended June 30, 20142015

Commission file number 000-23731

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

(435) 655-6106
(Registrant's telephone number, including area code)

        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 Web site, 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 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 Exchange Act). YES o    NO ý

        At July 30, 2014,27, 2015, the registrant had 9,695,0289,532,469 shares of common stock outstanding.

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NUTRACEUTICAL INTERNATIONAL CORPORATION

INDEX

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PART I—FINANCIAL INFORMATION

Item 1.    Financial Statements

NUTRACEUTICAL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(dollars in thousands)

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

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NUTRACEUTICAL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME

(unaudited)

(dollars in thousands, except per share data)

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

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NUTRACEUTICAL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(dollars in thousands)

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

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NUTRACEUTICAL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(dollars in thousands)

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

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NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share data)

1. BASIS OF PRESENTATION

        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 provide 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, includingSolaray®,KAL®,Nature's Life®,LifeTime®,Natural Balance®, bioAllers®,Herbs for Kids®,NaturalCare®,Health from the Sun®,Pioneer®,Nutra BioGenesis™,Life-flo®,Organix South®,PioneerHeritage Store® andMonarch Nutraceuticals™.

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

        In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all necessary adjustments, consisting of normal recurring adjustments, to state fairly the consolidated financial position of the Company as of June 30, 2014,2015, the results of its operations for the three and nine months ended June 30, 20142015 and 20132014 and its cash flows for the nine months ended June 30, 20142015 and 2013,2014, in conformity with accounting principles generally accepted in the United States of America ("US GAAP") for interim financial information applied on a consistent basis. Results for the three and nine months ended June 30, 20142015 are not necessarily indicative of the results to be expected for the full fiscal year.

        Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with US GAAP have been omitted. Accordingly, these financial statements should be read in conjunction with the Company's Form 10-K for the fiscal year ended September 30, 2013,2014, which was filed with the Securities and Exchange Commission on November 26, 2013.20, 2014.

Use of Estimates

        The preparation of these financial statements in conformity with US GAAP 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,slow-moving, obsolete and/or damaged inventory and valuation and recoverability of long-lived assets. Actual results may differ from these estimates.

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NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

1. BASIS OF PRESENTATION (Continued)

New Accounting Standards

        In May 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance, which is included in Accounting Standards Codification ("ASC") 606, "Revenue from Contracts with Customers." This guidance provides a single, comprehensive revenue recognition model for all contracts with customers and requires that a company recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ThisIn July 2015, the FASB delayed the effective date of this guidance by one year. As a result, this guidance is effective for the Company as of October 1, 2017.2018 and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact this standard may have on its consolidated financial statements.

        The Company periodically reviews new accounting standards as theythat are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that the Companyit believes merit further discussion, and the Company expects that none would have a significant impact on the Company'sits consolidated financial statements.

2. ACCOUNTS RECEIVABLE

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

3. INVENTORIES

        Inventories were comprised of the following:

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NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

4. ACQUISITIONS

        During the nine months ended June 30, 2015, the Company made two acquisitions of businesses. On November 18, 2014, the Company acquired certain operating assets of Agape Health Products. On June 4, 2015, the Company acquired certain operating assets of ProClay, LLC. The aggregate purchase price of these acquisitions was $1,266 in cash.

        During the nine months ended June 30, 2014, the Company made six acquisitions of businesses. On October 16, 2013, the Company acquired certain operating assets of TCCD International, Inc. On November 25, 2013, the Company acquired certain operating assets of Green Luxury Brands, Inc. On December 19, 2013, the Company acquired certain operating assets of Twinlab Corporation. On

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NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

4. ACQUISITIONS (Continued)

January 15, 2014, the Company acquired certain operating assets of Peachtree Natural Foods, Inc. On April 11, 2014, the Company acquired certain operating assets of Northwest Health Foods, Inc. On April 17, 2014, the Company acquired certain operating assets of Bio-Genesis Nutraceuticals, Inc. The aggregate purchase price of these acquisitions was $16,211 in cash.

        During the nine months ended June 30, 2013, the Company made two acquisitions of businesses. On April 1, 2013, the Company acquired certain operating assets of Tri Medica International, Inc. On May 17, 2013, the Company acquired certain operating assets of LC Nutrition and Vitamin House. The aggregate purchase price of these acquisitions was $810 in cash.

The Condensed Consolidated Statements of Operations and Comprehensive Income and the Condensed Consolidated Statements of Cash Flows presented herein include the activities of these acquired businesses from their respective dates of acquisition. The expected long-term sales and expense synergies of acquired businesses generally are not realized immediately following acquisition, as certain transition and integration matters must be completed.

        These acquisitions are in keeping with the Company's business strategy of consolidating the fragmented industry in which it competes andcompetes. 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 their respective dates of acquisition. The excess of aggregate purchase price over the fair values of the assets acquired was classified as goodwill. The goodwill relates to expected synergies from these acquisitions. The following reflects the final allocation of the aggregate purchase price for these acquisitions to the aggregate assets acquired:

        The fiscal 20142015 and fiscal 20132014 acquired intangible assets totaling $5,803$393 and $270,$5,803, respectively, related to trademarks, tradenames and customer relationships, and are being amortized over periods of two to twelve years for financial statement purposes. The fiscal 20142015 and fiscal 20132014 acquired intangible assets are expected to be deductible for tax purposes over fifteen years. Goodwill, which is not subject to amortization for financial statement purposes, of $762 for fiscal 2015 and $7,675 for fiscal 2014, and $294 for fiscal 2013, is expected to be deductible for tax purposes over fifteen years.

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NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

5. GOODWILL AND INTANGIBLE ASSETS

        The change in the carrying amount of goodwill from September 30, 20132014 to June 30, 20142015 was as follows:

        The carrying amounts of intangible assets at June 30, 20142015 and September 30, 20132014 were as follows:

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NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

5. GOODWILL AND INTANGIBLE ASSETS (Continued)

        Estimated future amortization expense related to the June 30, 20142015 net carrying amount of $12,953$11,308 for intangible assets subject to amortization is as follows:

        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 brands being consolidated or discontinued and could result in intangible asset impairment charges being recorded in future periods. AdditionalSuch 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.

6. DEBT

        Debt was comprised of the following:

        The carrying value of the Company's debt is stated at book value which approximated itsapproximates fair value at June 30, 20142015 and September 30, 2013.2014. 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 FASB's fair value hierarchy.

        On December 17, 2010,November 4, 2014, the Company amended and restated its revolving credit facility (the "Restated Credit"Credit Agreement"). The Restated Credit Agreement extends the term of the credit facility to December 2015, resetsNovember 2019, increases the available credit borrowings to $90,000$100,000 with no automatic reductions and provides an accordion feature that can increase the available credit borrowings to $120,000$130,000, subject to approval by

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NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

6. DEBT (Continued)

approval by the lenders and compliance with certain covenants and conditions. The lenders under the Restated Credit Agreement arecontinue to be 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$420 related to the Restated Credit Agreement are being amortized over the term of the Restated Credit Agreement on a straight-line basis, which is not materially different from the effective interest method.Agreement.

        At June 30, 2014,2015, the Company had outstanding revolving credit borrowings of $41,500$32,000 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, whichBase Rate plus a variable margin. Base Rate is the higher ofof: (i) the Prime Lending Rate, (ii) the Federal Funds Rate plus 0.5% or (iii) the Prime Lendingone-month Eurodollar Rate multiplied by the Statutory Reserve Rate plus 1.0% (capitalized terms are defined in the Credit Agreement, a variable margin.copy of which was filed with the Securities and Exchange Commission on November 5, 2014). At June 30, 2014,2015, the applicable weighted-average interest rate for outstanding borrowings was 2.23%1.78%. The Company is also required to pay a variable quarterly fee of 0.50% on the unused balance under the Restated Credit Agreement. At June 30, 2015, the applicable rate was 0.25%. Accrued interest on Eurodollar Rate borrowings is payable based on elected intervals of one, two or three months. Accrued interest on base rateBase Rate borrowings is payable quarterly. The Restated Credit Agreement matures on December 15, 2015,November 4, 2019, 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 limitations on incurring other indebtedness and requirements that the Company maintain certain financial ratios. As of June 30, 2014,2015, the Company was in compliance with the restrictive covenants. Upon the occurrence of a 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.

7. SHARE PURCHASES

        During the three and nine months ended June 30, 2015, the Company purchased 63,276 and 180,301 shares of common stock for an aggregate price of $1,266 and $3,618, respectively. During the three and nine months ended June 30, 2014, the Company purchased 99,541 and 156,661 shares of common stock for an aggregate price of $2,368 and $3,798, respectively. During the three and nine months ended June 30, 2013, the Company purchased 39,917 and 171,920 sharesAll of common stock for an aggregate price of $710 and $2,865, respectively. Allthese shares of common stock held in treasury were retired prior to June 30 in the respective fiscal yearquarter of purchase, except that as ofat June 30, 20142015 and 2013,2014, the Company held 9,6731,000 and 2,5009,673 shares of common stock in treasury, respectively. As of June 30, 2014,2015, the Company was permitted to purchase up to 786,204551,723 additional shares under its approved purchase plan.plan, with no expiration date or restrictions. The Company accounts for treasury shares using the cost method.

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NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

8. STOCK OPTIONS AND OTHER EQUITY AWARDS

        The following table summarizes stock option activity during the nine months ended June 30, 2014:2015:

        All stock options outstanding at June 30, 2015 expire on September 30, 2015.

        No options to purchase shares of common stock for the three and nine months ended June 30, 20142015 and 20132014 were excluded from the computation of diluted earnings per share because the exercise pricesnone of allthe stock options were less thananti-dilutive.

        During the average share pricenine months ended June 30, 2015, the Company received proceeds of $356 related to the Company's common stock.

exercise of stock options. During this same period, the Company recorded a tax benefit of $55 and optionees realized an aggregate pre-tax gain of $141 from these stock option exercises. During the nine months ended June 30, 2014, the Company received proceeds of $115 related to the exercise of stock options. During this same period, the Company recorded a tax benefit of $51 and optionees realized an aggregate pre-tax gain of $133 from these stock option exercises. During the nine months ended June 30, 2013, the Company received proceeds of $2,060 related to the exercise of stock options. During this same period, the Company recorded a tax benefit of $411 and optionees realized an aggregate pre-tax gain of $1,064 from these stock option exercises.

        On January 28, 2013, stockholders approved the Nutraceutical International Corporation 2013 Long-Term Equity Incentive Plan (the "2013 Plan") and the reservation of 800,000 shares of the Company's common stock for issuance under the 2013 Plan. Equity awards available under the 2013 Plan include stock options, stock appreciation rights and stock awards. In conjunction with the Company's fiscal 2014 and fiscal 2013 incentive compensation (bonus) payments, 24,827 and 31,788 shares of the Company's common stock were issued.issued, respectively. These non-cash stock awards were granted on December 11, 2014 and December 11, 2013 at aan aggregate fair value of $504 and $775, respectively, with fair value being determined by the closing price of the Company's common stock on the grant date. These stock awards were registered, unrestricted and fully vested on the grant date. As of June 30, 2014, 768,2122015, 743,385 shares of the Company's common stock arewere available for issuance under the 2013 Plan.

9. DIVIDENDS

        In December 2012, the Company's board of directors declared a special cash dividend of $1.00 per share for all shares of common stock. This special cash dividend totaled $9,785 and was paid on December 28, 2012 to stockholders of record on December 21, 2012.

10. SEGMENTS

        Segment identification and selection is consistent with the management structure used by the CompanyCompany'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 CompanyCompany's chief operating decision maker does not review operating results on a disaggregated basis; rather, the chief operating decision maker reviews operating results on an aggregate basis.

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NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

10.9. SEGMENTS (Continued)

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 three and nine months ended June 30, 20142015 and 20132014 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 three and nine months ended June 30, 20142015 and 20132014 were as follows:

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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

General

        The following discussion and analysis should be read in conjunction with the other sections of this report on Form 10-Q, including Part I, Item 1.

        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 provide 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, includingSolaray®,KAL®,Nature's Life®,LifeTime®,Natural Balance®, bioAllers®,Herbs for Kids®,NaturalCare®,Health from the Sun®,Pioneer®,Nutra BioGenesis™,Life-flo®,Organix South®,PioneerHeritage Store® andMonarch Nutraceuticals™.

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

        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 of companies withinbusinesses in the VMS Industry. As a result of acquisitions, internal growth and cost management, we believe that we are well positioned to continue to capitalize on acquisition opportunities that arise in the VMS Industry.

Critical Accounting Policies

        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,slow-moving, obsolete and/or damaged inventory and valuation and recoverability of long-lived assets. Actual results may differ from these estimates. Our critical accounting policies include the following:

        Accounts Receivable—Provision is made for estimated bad debts based on periodic analysis of individual customer balances, including an evaluation of days sales outstanding, payment history, recent payment trends and perceived credit worthiness.creditworthiness. If general economic conditions and/or customer financial conditionconditions 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,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

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adjustments for slow moving,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 actualestimated 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.

        Property,We evaluate the recoverability of property, plant and equipment 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 thean asset group by comparison of its carrying amount to the future undiscounted cash flows we expect the asset group is expected to generate. If we consider thean asset group is considered to be impaired, we measure the amount of any impairment as the difference between the carrying amount and the fair value of the impaired asset group.group is recognized as an impairment charge.

        Goodwill and Intangible Assets—Goodwill and intangible assets require estimates and a high degree of judgmentjudgments in determining the initial recognition and measurement, of goodwill and intangible assets, including factors and assumptions used in determining fair values and useful lives. 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 on an annual basisand when events or between annual tests if an event occurs that would cause us to believe thatchanges in circumstances indicate the carrying value is impaired.may not be recoverable. 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 modelsmarket data 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 onestimated using discounted cash flows.flow models.

        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 thean asset group is considered to be impaired, the difference between the carrying amount and the fair value of the impaired asset group is recorded.

        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. AdditionalSuch goodwill and/or intangible asset impairment charges could materially impact our consolidated financial statements. The valuation of goodwill and intangible assets is subject to a high degree of judgment, uncertainty and complexity.

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        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 customer 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.

        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.

New Accounting Standards

        See Note 1 to the Condensed Consolidated Financial Statements for information regarding new accounting standards.

Results of Operations

        The following table sets forth certain consolidated statementsConsolidated Statements of operationsComprehensive Income data as a percentage of net sales for the periods indicated:

Comparison of the Three Months Ended June 30, 20142015 to the Three Months Ended June 30, 2013
2014

        Net Sales.    Net sales increaseddecreased by $4.8$1.2 million, or 9.5%2.2%, to $54.4 million for the three months ended June 30, 2015 (the "third quarter of fiscal 2015") from $55.6 million for the three months ended June 30, 2014 ("third(the "third quarter of fiscal 2014") from $50.8 million for the three months ended June 30, 2013 ("third quarter of fiscal 2013"). Net sales of branded nutritional supplements and other natural products increaseddecreased by $4.3$0.8 million, or 9.5%1.8%, to $49.3 million for the third quarter of fiscal 2015, compared to $50.1 million for the third quarter of fiscal 2014 compared to $45.8 million for the third quarter of fiscal 2013.2014. The increasedecrease in net sales of branded nutritional supplements and other natural products was primarily related to the net sales contributions of the fiscal 2013 and fiscal 2014 acquisitions and, to a lesser extent, an increasedecrease in sales volume of branded products to certain customers. The impact oncustomers, partially offset by price increases of $1.9 million and, to a lesser extent, the net sales contributions of branded products attributable tothe fiscal 2014 and fiscal 2015 acquisitions. Other net

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price changes was not material. Other net sales increased by $0.5were $5.1 million or 9.5%, tofor the third quarter of fiscal 2015 and $5.5 million for the third quarter of fiscal 2014 compared to $5.0 million for the third quarter of fiscal 2013. The increase in other net sales was primarily related to the net sales contributions of the fiscal 2013 and fiscal 2014 acquisitions.2014.

        Gross Profit.    Gross profit increaseddecreased by $2.3$0.8 million, or 9.1%2.7%, to $26.4 million for the third quarter of fiscal 2015 from $27.2 million for the third quarter of fiscal 2014 from $24.9 million for the third quarter of fiscal 2013.2014. This increasedecrease in gross profit was primarily attributablerelated to the increasedecrease in net sales. As a percentage of net sales, gross profit was 48.6% for the third quarter of fiscal 2015 and 48.8% for the third quarter of fiscal 2014 and 49.0% for the third quarter of fiscal 2013.2014.

        Selling, General and Administrative.    Selling, general and administrative expenses increaseddecreased by $1.9$0.7 million, or 10.4%3.5%, to $19.1 million for the third quarter of fiscal 2015 from $19.8 million for the third quarter of fiscal 2014 from $17.9 million for the third quarter of fiscal 2013. This increase in selling, general and administrative expenses was primarily attributable to operational and transition costs related to the fiscal 2013 and fiscal 2014 acquisitions.2014. As a percentage of net sales, selling, general and administrative expenses weredecreased to 35.1% for the third quarter of fiscal 2015 from 35.5% for the third quarter of fiscal 20142014. This decrease in selling, general and 35.2% for the third quarter of fiscal 2013.administrative expenses was primarily attributable to year-over-year cost improvements in many selling, general and administrative expense areas.

        Amortization of Intangible Assets.    Amortization of intangible assets was $0.7 million for both the third quarter of fiscal 20142015 and $0.6 million for the third quarter of fiscal 2013.2014. 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 $0.3 million for the third quarter of fiscal 2015 and $0.4 million for the third quarter of fiscal 2014 and $0.3 million for the third quarter of fiscal 2013 and primarily consisted of interest expense on indebtedness under our revolving credit facility.

        Provision for Income Taxes.    Our effective tax rate was 36.9%30.3% for both the third quarter of fiscal 20142015 and 36.9% for the third quarter of fiscal 2013. In each period, our2014. The decrease in the effective tax rate was higher thanprimarily related to a decrease in the federal statutory rate primarily due to state taxes.valuation allowance for foreign tax credits of $0.3 million.

Comparison of the Nine Months Ended June 30, 20142015 to the Nine Months Ended June 30, 2013
2014

        Net Sales.    Net sales increased by $4.9$0.8 million, or 3.1%0.5%, to $162.8 million for the nine months ended June 30, 2015 from $162.0 million for the nine months ended June 30, 2014 from $157.1 million for the nine months ended June 30, 2013.2014. Net sales of branded nutritional supplements and other natural products increased by $4.3$0.4 million, or 3.0%0.3%, to $147.0 million for the nine months ended June 30, 2015 from $146.6 million for the nine months ended June 30, 2014 from $142.3 million for the nine months ended June 30, 2013.2014. The increase in net sales of branded nutritional supplements and other natural products was primarily related to the net sales contributions of the fiscal 20132014 and fiscal 20142015 acquisitions and $1.5 million in price increases of $2.7 million, partially offset by a decrease in sales volume of branded products to certain customers. Other net sales increased by $0.6were $15.8 million or 4.1%, tofor the nine months ended June 30, 2015 and $15.4 million for the nine months ended June 30, 2014 from $14.82014.

        Gross Profit.    Gross profit decreased by $0.9 million, or 1.0%, to $79.5 million for the nine months ended June 30, 2013. The increase in other net sales was primarily related to the net sales contributions of the fiscal 2013 and fiscal 2014 acquisitions.

        Gross Profit.    Gross profit increased by $3.2 million, or 4.2%, to2015 from $80.4 million for the nine months ended June 30, 2014 from $77.2 million for the nine months ended June 30, 2013. The increase in gross profit was primarily attributable to the increase in net sales.2014. As a percentage of net sales, gross profit increaseddecreased to 48.8% for the nine months ended June 30, 2015 from 49.6% for the nine months ended June 30, 2014 from 49.1% for the nine months ended June 30, 2013.2014. This increasedecrease in gross profit percentage was primarily attributablerelated to decreasedan increase in manufacturing labor and overhead costs, partially offset by the increase in certain manufacturing processes.net sales.

        Selling, General and Administrative.    Selling, general and administrative expenses increased by $3.3$0.8 million, or 6.1%1.4%, to $58.4 million for the nine months ended June 30, 2015 from $57.6 million for the nine months ended June 30, 2014 from $54.3 million for the nine months ended June 30, 2013.2014. As a percentage of net sales, selling, general and administrative expenses increased to 35.9% for the nine months ended June 30, 2015, compared to 35.6% for the nine months ended June 30, 2014 compared to 34.6% for the nine

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months ended June 30, 2013.2014. This increase in selling, general and administrative expenses was primarily attributable to operational and transition costs related to the fiscal 20132014 acquisitions, partially offset by year-over-year cost improvements in many selling, general and fiscal 2014 acquisitions.administrative expense areas.

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        Amortization of Intangible Assets.    Amortization of intangible assets was $2.2 million for the nine months ended June 30, 2015 and $1.9 million for the nine months ended June 30, 2014 and $1.7 million for the nine months ended June 30, 2013.2014. 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 $1.0$0.8 million for both the nine months ended June 30, 20142015 and 2013$1.0 million for the nine months ended June 30, 2014 and primarily consisted of interest expense on indebtedness under our revolving credit facility.

        Provision for Income Taxes.    Our effective tax rate was 34.3% for the nine months ended June 30, 2015 and 37.0% for the nine months ended June 30, 2014 and 36.0% for2014. The decrease in the nine months ended June 30, 2013. In each period, our effective tax rate was higher thanprimarily related to a decrease in the federal statutory rate primarily due to state taxes.valuation allowance for foreign tax credits of $0.3 million.

Adjusted EBITDA

        Adjusted EBITDA (a non-GAAP measure) is defined in our performance measures as earnings before net interest and other expense, taxes, depreciation, amortization and amortization.goodwill and intangible asset impairments. 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 generally accepted accounting principles. Our use of an EBITDA-based metric should be considered within the following context:

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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.



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



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



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Analysts—who estimate our projected Adjusted EBITDA and other EBITDA-based metrics in their independently-developed financial models for investors;



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Creditors—who evaluate our operating performance based on compliance with certain EBITDA-based debt covenants;



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Investment Bankers—who use EBITDA-based metrics in their written evaluations and comparisons of companies within our industry; and



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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. Historically,Generally, we have recorded a monthly accrual for incentive compensation as a percentage of Adjusted EBITDA, which has been paid out to executive management, as well as other employees, upon completion of our annual audit.

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

        Our Adjusted EBITDA increased to $9.8 million for the third quarter of fiscal 2015 from $9.6 million for the third quarter of fiscal 2014 from $8.9 million for the third quarter of fiscal 2013.2014. Adjusted EBITDA as a percentage of net sales wasincreased to 18.1% for the third quarter of fiscal 2015 from 17.3% for the third quarter of fiscal 2014 and 17.5% for the third quarter of fiscal 2013.2014.

        Our Adjusted EBITDA increaseddecreased to $28.6 million for the nine months ended June 30, 2015 from $29.2 million for the nine months ended June 30, 2014 from $28.5 million for the nine months ended June 30, 2013.2014. Adjusted EBITDA as a percentage of net sales wasdecreased to 17.6% for the nine months ended June 30, 2015 from 18.0% for the nine months ended June 30, 2014 and 18.1% for the nine months ended June 30, 2013.2014.

Seasonality

        We believe that our business is characterized by minor seasonality. However, sales to any particular customer or of any particular product can vary substantially from one quarter to the next based on such factors as industry trends, timing of promotional discounts, domestic and 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 (January through March) due to increased interest in health-related products among consumers following the holiday season.

Liquidity and Capital Resources

        We had working capital of $57.6$62.4 million as of June 30, 20142015, compared to $53.3$62.1 million as of September 30, 2013.2014. The increase in working capital was primarily the result of increasesan increase in accounts receivableinventories and inventories,a decrease in accrued expenses, partially offset by a decrease in cash.

        Net cash provided by operating activities for the nine months ended June 30, 20142015 was $16.1$21.2 million, compared to $19.2$16.1 million for the comparable period in fiscal 2013.2014. This decreaseincrease in net cash provided by operating activities for the nine months ended June 30, 20142015 was primarily attributable to changes in operating assets and liabilities.

        Net cash used in investing activities was $24.8$7.8 million for the nine months ended June 30, 20142015, compared to $7.0$24.8 million for the comparable period in fiscal 2013.2014. Our investing activities consisted of acquisitions of businesses and capital expenditures. The capital expenditures primarily related to buildings, building improvements, distribution and manufacturing equipment and information systems.

        During the nine months ended June 30, 2015, we made two acquisitions of businesses. On November 18, 2014, we acquired certain operating assets of Agape Health Products. On June 4, 2015, we acquired certain operating assets of ProClay, LLC. The aggregate purchase price of these acquisitions was $1.3 million in cash.

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        During the nine months ended June 30, 2014, we made six acquisitions of businesses. On October 16, 2013, we acquired certain operating assets of TCCD International, Inc. On November 25, 2013, we acquired certain operating assets of Green Luxury Brands, Inc. On December 19, 2013, we acquired certain operating assets of Twinlab Corporation. On January 15, 2014, we acquired certain

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operating assets of Peachtree Natural Foods, Inc. On April 11, 2014, we acquired certain operating assets of Northwest Health Foods, Inc. On April 17, 2014, we acquired certain operating assets of Bio-Genesis Nutraceuticals, Inc. The aggregate purchase price of these acquisitions was $16.2 million in cash.

        DuringNet cash used in financing activities was $14.6 million for the nine months ended June 30, 2013, we made two acquisitions of businesses. On April 1, 2013, we acquired certain operating assets of Tri Medica International, Inc. On May 17, 2013, we acquired certain operating assets of LC Nutrition2015 and Vitamin House. The aggregate purchase price of these acquisitions was $0.8 million.

        Netnet cash provided by financing activities was $5.4 million for the nine months ended June 30, 2014 and net cash used in financing activities was $11.5 million for the comparable period in fiscal 2013.2014. During these periods, financing activities primarily related to borrowings and repayments under our revolving credit facility, payments of deferred financing fees, purchases of common stock for treasury and proceeds from the issuance of common stock related to stock option exercises and the direct stock purchase plan. Also, in December 2012, our board of directors declared a special cash dividend of $1.00 per share for all shares of common stock. This special cash dividend totaled $9.8 million and was paid on December 28, 2012.

        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 3,0613,745 shares purchased during the nine months ended June 30, 2014.2015. As of June 30, 2014,2015, there were 1,382,4441,377,990 shares of common stock available for purchase.

        On December 17, 2010,November 4, 2014, we amended and restated our revolving credit facility (the "Restated Credit"Credit Agreement"). The Restated Credit Agreement extends the term of the credit facility to December 2015,November 2019, resets the available credit borrowings to $90$100.0 million with no automatic reductions and provides an accordion feature whichthat can increase the available credit borrowings to $120$130.0 million, subject to approval by the lenders and compliance with certain covenants and conditions. The lenders under the Restated Credit Agreement arecontinue to be 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$0.4 million related to the Restated Credit Agreement are being amortized over the term of the Restated Credit Agreement on a straight-line basis, which is not materially different from the effective interest method.Agreement.

        At June 30, 2014,2015, we had outstanding revolving credit borrowings of $41.5$32.0 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, whichBase Rate plus a variable margin. Base Rate is the higher ofof: (i) the Prime Lending Rate, (ii) the Federal Funds Rate plus 0.5% or (iii) the Prime Lendingone-month Eurodollar Rate multiplied by the Statutory Reserve Rate plus 1.0% (capitalized terms are defined in the Credit Agreement, a variable margin.copy of which was filed with the Securities and Exchange Commission on November 5, 2014). At June 30, 2014,2015, the applicable weighted-average interest rate for outstanding borrowings was 2.23%1.78%. We are also required to pay a quarterly fee of 0.50% on the unused balance under the Restated Credit Agreement. At June 30, 2015, the applicable rate was 0.25%. 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,November 4, 2019, 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 limitations on incurring certain other indebtedness and requirements that we maintain certain financial ratios. As of June 30, 2014,2015, we were in compliance with the restrictive covenants. Upon the occurrence of a 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.

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        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

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indebtedness or the issuance of additional stock. We believe that borrowings under our current revolving credit facility or a replacement credit facility, together with cash flows from operations, will be sufficient to make required payments under the current credit facility or any such replacement facility, and to make anticipated capital expenditures and fund working capital needs for the next twelve months.

Contractual Obligations and Other Commitments

        Our significant non-cancelable contractual obligations and other commitments as of June 30, 20142015 were as follows: