NBTY (NTY) 10-Q 2009 Q3 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 2009
Or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from                             to

Commission File Number: 001-31788

NBTY, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 11-2228617
(I.R.S. Employer
Identification No.)

2100 Smithtown Avenue,
Ronkonkoma, New York 11779
(Address of principal executive offices) (Zip Code)

(631) 567-9500
(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, 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 o    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 definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filerý Accelerated filero Non-accelerated filero
(Do not check if smaller reporting company) Smaller reporting companyo

        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

        The number of shares of Common Stock (par value $.008 per share) outstanding as of August 4, 2009 was 61,873,998.

NBTY, INC.
INDEX

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Stockholders' Equity and Comprehensive Income	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	53
Item 4.	Controls and Procedures	54
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	56
Item 6.	Exhibits	57
Signatures		58
Exhibits

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NBTY, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except per share amounts)

			June 30, 2009		September 30, 2008
Assets
Current assets:
	Cash and cash equivalents		$	69,817	$	90,180
	Accounts receivable, net			131,754		122,878
	Inventories			634,613		585,239
	Deferred income taxes			25,353		25,098
	Other current assets			36,545		75,971
		Total current assets		898,082		899,366
Property, plant and equipment, net				387,858		419,066
Goodwill				337,988		342,379
Intangible assets, net				216,726		230,424
Other assets				35,260		45,123
		Total assets	$	1,875,914	$	1,936,358
Liabilities and Stockholders' Equity
Current liabilities:
	Current portion of long-term debt		$	31,635	$	33,309
	Accounts payable			106,999		120,620
	Accrued expenses and other current liabilities			145,732		172,035
		Total current liabilities		284,366		325,964
Long-term debt, net of current portion				453,454		538,402
Deferred income taxes				38,737		49,139
Other liabilities				32,724		24,657
		Total liabilities		809,281		938,162
Commitments and contingencies
Stockholders' equity:
	Common stock, $.008 par; authorized 175,000 shares; issued and outstanding 61,872 and 61,599 shares at June 30, 2009 and September 30, 2008, respectively			495		493
	Capital in excess of par			144,493		140,990
	Retained earnings			921,530		839,068
	Accumulated other comprehensive income			115		17,645
		Total stockholders' equity		1,066,633		998,196
		Total liabilities and stockholders' equity	$	1,875,914	$	1,936,358

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

3

NBTY, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

(in thousands, except per share amounts)

			Three months ended June 30,						Nine months ended June 30,
			2009			2008			2009			2008
Net sales			$	651,707		$	534,519		$	1,907,813		$	1,577,895
Costs and expenses:
	Cost of sales			359,240			262,455			1,091,386			764,069
	Advertising, promotion and catalog			23,570			35,732			87,889			108,908
	Selling, general and administrative			182,618			166,058			553,177			500,590
	IT project termination costs			10,127			—			18,774			—
				575,555			464,245			1,751,226			1,373,567
Income from operations				76,152			70,274			156,587			204,328
Other income (expense):
	Interest			(8,402	)		(3,721	)		(26,780	)		(11,239	)
	Miscellaneous, net			3,396			2,417			(1,959	)		11,089
				(5,006	)		(1,304	)		(28,739	)		(150	)
Income before provision for income taxes				71,146			68,970			127,848			204,178
Provision for income taxes				25,229			23,444			45,386			68,604
		Net income	$	45,917		$	45,526		$	82,462		$	135,574
Net income per share:
	Basic		$	0.74		$	0.74		$	1.34		$	2.11
	Diluted		$	0.73		$	0.72		$	1.31		$	2.06
Weighted average common shares outstanding:
	Basic			61,796			61,280			61,665			64,105
	Diluted			63,264			62,830			63,124			65,826

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

4

NBTY, Inc.

Condensed Consolidated Statements of Stockholders' Equity and Comprehensive Income

Nine Months Ended June 30, 2009 and 2008

(Unaudited)

(in thousands)

		Common Stock
														Accumulated Other Comprehensive Income
		Number of Shares			Amount			Capital in Excess of Par			Retained Earnings						Total Stockholders' Equity
Balance, September 30, 2008			61,599		$	493		$	140,990		$	839,068		$	17,645		$	998,196
Components of comprehensive income:
	Net income											82,462						82,462
	Foreign currency translation adjustment, net of taxes														(12,733	)		(12,733	)
	Change in fair value of interest rate swaps, net of taxes														(4,797	)		(4,797	)
Comprehensive income:																	$	64,932
Exercise of stock options			273			2			1,435									1,437
Excess tax benefit from exercise of stock options									55									55
Stock-based compensation									2,013									2,013
Balance, June 30, 2009			61,872		$	495		$	144,493		$	921,530		$	115		$	1,066,633
Balance, September 30, 2007			67,118		$	537		$	143,244		$	864,852		$	47,337		$	1,055,970
Components of comprehensive income:
	Net income											135,574						135,574
	Foreign currency translation adjustment, net of taxes														(3,781	)		(3,781	)
Comprehensive income:																	$	131,793
Adoption of FIN 48												(3,025	)					(3,025	)
Purchase and retirement of treasury shares			(6,716	)		(54	)		(12,468	)		(175,910	)					(188,432	)
Exercise of stock options			632			5			3,847									3,852
Excess tax benefit from exercise of stock options									4,984									4,984
Stock-based compensation									1,176									1,176
Balance, June 30, 2008			61,034		$	488		$	140,783		$	821,491		$	43,556		$	1,006,318

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

5

NBTY, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

					Nine months ended June 30,
					2009			2008
Cash flows from operating activities:
	Net income				$	82,462		$	135,574
	Adjustments to reconcile net income to cash provided by operating activities:
		Impairments and disposals of assets				4,520			441
		Depreciation and amortization				51,604			41,038
		IT project termination costs				16,521			—
		Foreign currency transaction loss (gain)				5,113			(1,594	)
		Stock-based compensation				2,013			1,176
		Amortization of deferred charges				951			562
		Allowance for doubtful accounts				(366	)		(543	)
		Inventory reserves				5,666			5,676
		Deferred income taxes				888			1,372
		Excess income tax benefit from exercise of stock options				(55	)		(4,984	)
		Changes in operating assets and liabilities, net of acquisitions:
			Accounts receivable			(11,129	)		(3,376	)
			Inventories			(63,228	)		(26,438	)
			Other assets			9,162			11,744
			Accounts payable			(7,061	)		675
			Accrued expenses and other liabilities			(8,915	)		472
				Net cash provided by operating activities		88,146			161,795
Cash flows from investing activities:
	Purchase of property, plant and equipment					(38,584	)		(32,031	)
	Purchase of available-for-sale investments					—			(364,917	)
	Proceeds from sale of available-for-sale investments					—			463,087
	Cash paid for acquisitions, net of cash acquired					(264	)		(5,072	)
	Acquisition deposit					—			(11,500	)
	Escrow refund, net of purchase price adjustments					14,460			—
				Net cash (used in) provided by investing activities		(24,388	)		49,567
Cash flows from financing activities:
	Principal payments under long-term debt agreements and capital leases					(25,176	)		(720	)
	Proceeds from borrowings under the Revolving Credit Facility					95,000			—
	Principal payments under the Revolving Credit Facility					(155,000	)		—
	Excess income tax benefit from exercise of stock options					55			4,984
	Proceeds from stock options exercised					1,437			3,852
	Purchase of treasury stock (subsequently retired)					—			(188,432	)
				Net cash used in financing activities		(83,684	)		(180,316	)
Effect of exchange rate changes on cash and cash equivalents						(437	)		(1,972	)
Net (decrease) increase in cash and cash equivalents						(20,363	)		29,074
Cash and cash equivalents at beginning of period						90,180			92,902
Cash and cash equivalents at end of period					$	69,817		$	121,976

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

6

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(in thousands, except per share amounts)

1. Basis of Presentation

        NBTY, Inc. (together with its subsidiaries, "we," "our," "us," "NBTY," or the "Company") is a leading global vertically integrated manufacturer, marketer, distributor and retailer of a broad line of high-quality, value-priced nutritional supplements in the United States and throughout the world. We market over 25,000 products under numerous owned and private-label brands, including Nature's Bounty®, Vitamin World®, Pure Protein®, Body Fortress®, Puritan's Pride®, Holland & Barrett®, Rexall®, Osteo-Bi-Flex®, Flex-A-Min®, Knox®, Sundown®, MET-Rx®, WORLDWIDE Sport Nutrition®, American Health®, DeTuinen®, Le Naturiste™, SISU®, Solgar®, Physiologics® and Ester-C®.

        We have prepared these financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") applicable to interim financial information and on a basis that is consistent with the accounting principles applied in our Annual Report on Form 10-K for the fiscal year ended September 30, 2008 ("2008 Form 10-K"). In our opinion, these financial statements reflect all adjustments (including normal recurring items) necessary for a fair presentation of our results for the interim periods presented. These financial statements do not include all information or notes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with GAAP. Accordingly, these financial statements should be read in conjunction with the financial statements and notes thereto contained in our 2008 Form 10-K. Results for interim periods are not necessarily indicative of results which may be achieved for a full year.

        We have evaluated subsequent events through August 7, 2009, the date of issuance of these financial statements.

Estimates

        The preparation of financial statements in conformity with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. These judgments can be subjective and complex, and consequently actual results could differ materially from those estimates and assumptions. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our most significant estimates include: sales returns and other allowances; inventory valuation and obsolescence; valuation and recoverability of long-lived assets, including goodwill; income taxes; and accruals for the outcome of current litigation.

7

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

1. Basis of Presentation (Continued)

Accounts Receivable Reserves

        Accounts receivable were net of the following reserves:

	June 30, 2009		September 30, 2008
Allowance for sales returns	$	12,761	$	8,904
Promotional program incentive allowance		42,233		43,902
Allowance for doubtful accounts		6,495		9,768
	$	61,489	$	62,574

Recent Accounting Developments

        In June 2009, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 168, "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162", ("SFAS 168"), which is effective for us on July 1, 2009. SFAS 168 does not alter current GAAP, but rather integrates existing accounting standards with other authoritative guidance. Under SFAS 168 there will be a single source of authoritative GAAP for nongovernmental entities and will supersede all other previously issued non-SEC accounting and reporting guidance. The adoption of SFAS 168 will not have any impact on our financial position or results of operations.

        In June 2009, FASB issued SFAS No. 167, "Amendments to FASB Interpretation No. 46(R)" ("SFAS 167"). SFAS 167 amends FIN 46(R), "Consolidation of Variable Interest Entities (revised December 2003)—an interpretation of ARB No. 51" to require an enterprise to perform an analysis to determine whether the enterprise's variable interest or interests give it a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as one with the power to direct the activities of a variable interest entity that most significantly impacts the entity's economic performance and the obligation to absorb losses of the entity that could potentially be significant to the variable interest. SFAS 167 will become effective for us October 1, 2010. We anticipate that the adoption of SFAS 167 will not have a significant impact on our consolidated financial position or results of operations since we currently do not have any variable interest entities.

        In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" ("SFAS 165"). SFAS 165 establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. We adopted SFAS 165 on June 30, 2009. The adoption of SFAS 165 had no impact on our financial position or results of operations.

        In April 2009, the FASB issued FSP No. 141R-1 "Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies" ("FSP 141R-1"). FSP 141R-1 amends the provisions in SFAS 141(R) for the initial recognition and measurement, subsequent measurement and accounting, and disclosures for assets and liabilities arising from contingencies in

8

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

1. Basis of Presentation (Continued)

business combinations. FSP 141R-1 eliminates the distinction between contractual and non-contractual contingencies, including the initial recognition and measurement criteria in SFAS 141(R) and instead carries forward most of the provisions in SFAS 141 for acquired contingencies. FSP 141R-1 is effective for all business acquisitions occurring on or after October 1, 2009. The impact of the adoptions will be dependent upon the extent and nature of any future acquisitions.

        In April 2009, the FASB issued FASB Staff Position SFAS No. 107-1 and APB No. 28-1, "Interim Disclosures about Fair Value of Financial Instruments" ("FSP 107-1 and APB 28-1"). This FSP amends SFAS No. 107, "Disclosures about Fair Value of Financial Instruments" and APB Opinion No. 28, "Interim Financial Reporting", to require disclosures about fair value of financial instruments not measured on the balance sheet at fair value in interim financial statements as well as in annual financial statements. FSP 107-1 and APB 28-1 applies to all financial instruments within the scope of SFAS 107 and requires all entities to disclose the methods and significant assumptions used to estimate the fair value of financial instruments. FSP 107-1 and APB 28-1 became effective for us on June 30, 2009. The adoption of this FSP did not have a significant impact on our consolidated financial statements.

        In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" ("SFAS 162"). This statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States (the GAAP hierarchy). This Statement was effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles." The adoption of this statement did not have a material effect on our consolidated financial statements.

        In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133" ("SFAS 161"). SFAS 161 requires enhanced disclosures regarding an entity's derivative and hedging activities. These enhanced disclosures include information regarding how and why an entity uses derivative instruments; how derivative instruments and related hedge items are accounted for under SFAS 133, "Accounting for Derivative Instruments and Hedging Activities", and its related interpretations; and how derivative instruments and related hedge items affect an entity's financial position, financial performance and cash flows. We adopted SFAS 161 as of January 1, 2009. The adoption of SFAS 161 had no impact on our financial position or results of operations. The additional disclosures required by SFAS 161 are included in Note 11.

        In December 2007, the FASB issued SFAS No. 141 (revised 2007), ("SFAS 141R"), "Business Combinations", which replaces SFAS No. 141. The statement retains the purchase method of accounting for acquisitions, however, it includes changes in the way assets and liabilities are recognized in purchase accounting. It also changes the recognition of assets acquired and liabilities assumed arising from contingencies, requires the capitalization of in-process research and development at fair value, and requires the expensing of acquisition-related costs as incurred. SFAS 141R will become effective for us beginning October 1, 2009 and will apply prospectively to business combinations completed on or

9

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

1. Basis of Presentation (Continued)

after that date. The impact of the adoption of SFAS 141R will be dependent on the extent and nature of any future acquisitions.

        In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159 permits companies to choose to measure certain financial instruments and other eligible items at fair value when the items are not otherwise currently required to be measured at fair value. Under SFAS 159, the decision to measure items at fair value is made at specified election dates on an irrevocable instrument-by-instrument basis. Companies electing the fair value option would be required to recognize changes in fair value in earnings and to expense upfront cost and fees associated with the item for which the fair value option is elected. Companies electing the fair value option are required to distinguish, on the face of the statement of financial position, the fair value of assets and liabilities for which the fair value option has been elected and similar assets and liabilities measured using another measurement attribute. SFAS 159 became effective for us on October 1, 2008. The adoption of SFAS 159 did not have any impact on our consolidated financial position or results of operations as we did not elect the fair value option.

        In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157"). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and enhances disclosures about fair value measurements. SFAS 157 applies when other accounting pronouncements require fair value measurements; it does not require new fair value measurements. We adopted SFAS 157 on October 1, 2008 for financial assets and liabilities carried at fair value and non financial assets and liabilities that are recognized or disclosed on a recurring basis. The adoption did not have a material effect on our consolidated financial statements. In February 2008, the FASB issued FASB Staff Position 157-2, which provides for a one-year deferral of the provisions of SFAS 157 for non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a non-recurring basis. FASB Staff Position 157-2 will become effective for us beginning October 1, 2009. We anticipate that the adoption of FASB Staff Position SFAS 157-2 will not have a significant impact on our consolidated financial position or results of operations.

2. Acquisitions

Leiner

        On July 14, 2008, we acquired substantially all the nutritional supplement assets of Leiner Health Products Inc. ("Leiner") plus the assumption of certain liabilities for $370,600 (subject to adjustment based upon finalization of working capital balances acquired at the date of closing). During December 2008, the working capital balances were finalized resulting in an additional payment by us of $2,366 which increased goodwill. The working capital payment was made from the $15,000 held in escrow and the remainder of the escrow was returned to NBTY. The purchase price was funded primarily by the use of our existing $325,000 revolving credit facility and cash on hand. The Company also incurred $3,470 of direct transaction costs for a total purchase price of $376,436. Substantially all the goodwill associated with this acquisition is deductible for tax purposes.

10

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

2. Acquisitions (Continued)

        At the closing of the Leiner acquisition, we anticipated workforce reductions and, as such, included an estimated accrual for such reductions comprised of severance and employee benefits, in the purchase price allocation. The rollforward of the workforce reduction accrual was as follows:

Accrual at September 30, 2008	$	5,849
Additional accruals		2,204
Payments		(4,560	)
Accrual at June 30, 2009	$	3,493

        During the nine months ended June 30, 2009, we incurred $2,204 of severance costs, in the form of stay-bonuses for services incurred in the period. These costs are recorded over the service period and are paid to the Leiner transitional associates upon their termination. This amount was included in selling, general and administrative expense in the consolidated statement of income for the nine months ended June 30, 2009.

        The following unaudited pro forma financial information presents a summary of our consolidated net sales and net income for the three and nine months ended June 30, 2008, assuming that the acquisition of Leiner had taken place on October 1, 2007:

	Three months ended June 30, 2008 Pro Forma		Nine months ended June 30, 2008 Pro Forma
Net sales	$	629,735	$	1,910,846
Net income	$	24,176	$	62,757
Net income per share
Basic	$	0.39	$	0.98
Diluted	$	0.38	$	0.95
Weighted average common shares outstanding
Basic		61,280		64,105
Diluted		62,830		65,826

        The above unaudited pro forma financial information has been prepared for comparative purposes only and includes certain adjustments to actual financial results, such as imputed interest costs, and estimated additional depreciation and amortization expense as a result of property, plant and equipment and intangible assets acquired. The pro forma financial information does not purport to be indicative of the results of operations that would have been achieved had the acquisition taken place on the date indicated or that may result in the future.

        The above unaudited pro forma information includes certain non-recurring charges related to Leiner's bankruptcy reorganization and impairments on its Fort Mill, South Carolina facility, which we did not acquire. These non-recurring charges do not relate to the acquisition and were not part of the activities that were acquired by NBTY. The amount of these non-recurring charges included in the

11

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

2. Acquisitions (Continued)

above unaudited pro forma financial information for the three months and nine months ended June 30, 2008 was $11,838 and $31,658, respectively.

Julian Graves

        On September 16, 2008, our subsidiary, NBTY Europe Limited, acquired Julian Graves, a UK independent retailer of nuts, seeds and confectionaries for approximately $25,000. Julian Graves has a network of 350 stores throughout the UK and Ireland. The preliminary allocation of net assets acquired primarily consisted of inventory, property, plant and equipment and goodwill. Since we acquired the outstanding share capital of Julian Graves, the goodwill associated with this acquisition is not deductible for tax purposes. The purchase agreement stipulates an adjustment to the purchase price between the buyer and seller for the excess or shortfall of the final working capital threshold as stated in the agreement. During June 2009, the final working capital adjustment to the purchase price of approximately $3,044, representing a shortfall in working capital, was received by our subsidiary. This resulted in a reduction of the purchase price and goodwill. The allocation of net assets acquired is based on preliminary estimates. Finalization of the valuation of the net assets acquired and working capital balance at the date of closing are subject to change during the purchase price allocation period (generally one year from the acquisition date).

        In September 2008, the UK Office of Fair Trading commenced an investigation under the merger control provisions of the Enterprise Act 2002 into the completed acquisition by NBTY Europe Limited of Julian Graves. In March 2009, this investigation was referred to the UK Competition Commission for potential anti-trust implications. In July 2009, the UK Competition Commission provisionally approved the acquisition. The final decision by the UK Competition Commission is expected on or before September 3, 2009. Pending the final decision by the UK Competition Commission, NBTY Europe Limited has not integrated the Julian Graves business with its existing UK operations.

        During the three and nine months ended June 30, 2009 we incurred legal costs of $3,722 and $4,822, respectively, related to the review of the Julian Graves acquisition by the Competition Commission in the UK. These costs are included under the caption "selling, general and administrative" expense in the consolidated statements of income.

        Proforma financial information related to Julian Graves is not provided as its impact was not material to our consolidated financial statements.

3. Inventories

        The components of inventories were as follows:

	June 30, 2009			September 30, 2008
Raw materials	$	149,106		$	180,330
Work-in-process		24,547			33,941
Finished goods		483,834			388,176
Valuation and obsolescence reserves		(22,874	)		(17,208	)
	$	634,613		$	585,239

12

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

4. Goodwill and Intangible Assets

Goodwill

        The changes in the carrying amount of goodwill by segment were as follows:

	Wholesale / US Nutrition			North American Retail		European Retail			Direct Response/ E-Commerce		Consolidated
Balance at September 30, 2008	$	175,690		$	—	$	150,584		$	16,105	$	342,379
Foreign currency translation		(386	)		6		(10,270	)		—		(10,650	)
Purchase price adjustments		6,567			123		(431	)		—		6,259
Balance at June 30, 2009	$	181,871		$	129	$	139,883		$	16,105	$	337,988

        The purchase price adjustments included in the Wholesale/US Nutrition segment relate to Leiner acquisition adjustments of $2,366 for the finalization of working capital balances, $730 of additional transaction costs, an adjustment for inventory reserves of $1,189 and a $2,549 increase in the tax accrual. The purchase price adjustments included in the European Retail segment relate to Julian Graves acquisition adjustments of a decrease of $3,044 for the finalization of working capital balances, partially offset by opening balance sheet adjustments of $2,473.

        In March 2009, due principally to a decline in the Company's stock price since the date of our annual goodwill impairment test, we performed an interim test as of February 28, 2009. The fair value of our reporting units exceeded their respective carrying values and therefore no impairment to goodwill was deemed necessary.

Other Intangible Assets

        The carrying amounts of intangible assets as were as follows:

		June 30, 2009				September 30, 2008
		Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization		Amortization period (years)
Definite lived intangible assets:
Brands		$	98,002	$	24,956	$	98,566	$	21,374		20
Customer lists			64,965		42,723		65,007		39,882		2 - 15
Private label and customer relationships			122,753		12,753		123,435		8,068		10 - 20
Trademarks and licenses			16,529		7,229		17,308		6,847		2 - 20
Covenants not to compete			3,527		3,189		3,545		3,066		3 - 5
			305,776		90,850		307,861		79,237
Indefinite lived intangible asset:
Trademark			1,800		—		1,800		—
	Total intangible assets	$	307,576	$	90,850	$	309,661	$	79,237

13

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

4. Goodwill and Intangible Assets (Continued)

        Aggregate amortization expense of other intangible assets included in the consolidated statements of income under the caption "selling, general and administrative" expenses for the three months ended June 30, 2009 and 2008 was approximately $4,018 and $3,094, respectively. Amortization expense for the nine months ended June 30, 2009 and 2008 was approximately $12,042 and $9,329, respectively.

        Assuming no changes in our definite lived intangible assets, estimated amortization expense for each of the five succeeding fiscal years is as follows:

For the fiscal year ending September 30,
2009	$	16,122
2010	$	15,869
2011	$	15,827
2012	$	15,697
2013	$	15,598

5. IT Project Termination Costs and Impairments

North American and European Retail segments

        During June 2009, management terminated a new point of sale system project for retail operations as it was determined to be ineffective and uneconomical. As a result, previously capitalized software configuration, coding and other related costs and expenses of $11,070 were written-off during the three months ended June 30, 2009. In addition, prepaid maintenance costs of $586 were written off during the same period.

Direct Response segment

        During December 2008, management determined that certain information technology projects relating to the Direct Response segment would be terminated as they were determined to be ineffective and uneconomical. As a result, in December 2008, we recorded a charge to operations of $8,647, consisting of costs and future lease obligations not expected to provide any future economical benefit. During the three months ended June 30, 2009, $1,529 of these termination costs were reversed due to favorable negotiations with previous service providers.

Impairment of Idle Plant

        We own a plant (land and building) located in Augusta, Georgia which is idle. We have marketed the plant for sale, however, due to the continued deterioration of the commercial real estate and credit markets, we have been unable to complete a sale transaction. During June 2009, we determined that the carrying value of the land and building exceeded its estimated fair value, less costs to sell, and recorded an impairment charge of $3,270. This impairment charge is included in the consolidated statements of income under the caption "selling, general and administrative" expenses for the three and nine months ended June 30, 2009.

14

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

6. Accrued Expenses and Other Current Liabilities

        The components of accrued expenses and other current liabilities were as follows:

	June 30, 2009		September 30, 2008
Accrued compensation and related taxes	$	31,926	$	32,909
Accrued purchases		16,502		41,320
Income taxes payable		23,150		11,040
Other		74,154		86,766
	$	145,732	$	172,035

7. Long-Term Debt

        The components of long-term debt were as follows:

			June 30, 2009		September 30, 2008
Credit Agreement:
	$300 million, five-year Term Loan		$	277,500	$	300,000
	$325 million, Revolving Credit Facility			—		60,000
Senior Subordinated Notes				188,818		188,708
Multi-currency Term Loan				15,861		17,222
Mortgage				1,180		1,599
Capital Leases				1,730		4,182
				485,089		571,711
		Less: current portion		31,635		33,309
		Total	$	453,454	$	538,402

8. Litigation Summary

Prohormone products

        In March 2004, a putative class-action lawsuit was filed in New Jersey against MET-Rx USA, Inc. ("Met-Rx"), a subsidiary of the Company, claiming that the advertising and marketing of certain prohormone supplements were false and misleading and that plaintiff and the putative class of New Jersey purchasers of these products were entitled to damages and injunctive relief. Because these allegations were virtually identical to allegations made in a putative nationwide class-action previously filed against Met-Rx in California, we moved in 2004 to dismiss or stay the New Jersey action pending the outcome of the California action. The motion was granted, and the New Jersey action is stayed at this time. The California action against Met-Rx had been dismissed in 2008.

15

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

8. Litigation Summary (Continued)

Nutrition Bars

        Our subsidiary, Rexall Sundown, Inc. ("Rexall"), and certain of its subsidiaries are defendants in a class-action lawsuit brought in 2002 on behalf of all California consumers who bought various nutrition bars. Plaintiffs allege misbranding of nutrition bars and violations of California unfair competition statutes, misleading advertising and other similar causes of action. Plaintiffs seek restitution, legal fees and injunctive relief. We have defended this action vigorously.

        This case was initially stayed for all purposes in early 2005 pending resolution of relevant cases before the California Supreme Court. In December 2007, after these cases were resolved and while Rexall's and the other defendants' renewed motion for judgment on the pleadings was pending, the Court again stayed the case for all purposes, pending rulings on other relevant cases before the California Supreme Court. The California Supreme Court issued a ruling in those other cases on February 11, 2008, and that ruling became final on January 12, 2009. Nevertheless, in light of still more relevant cases pending before the California Supreme Court, all parties to this case have agreed that the stay should remain in place. Based upon the information currently available, no determination can be made at this time as to the final outcome of this case, nor can its materiality be accurately ascertained.

        In addition to the foregoing, other regulatory inquiries, claims, suits and complaints (including product liability and intellectual property claims) arise in the ordinary course of our business. We believe that such other inquiries, claims, suits and complaints would not have a material adverse effect on our consolidated financial condition or results of operations, if adversely determined against us.

9. Income Taxes

        Our provision for income taxes is impacted by a number of factors, including federal taxes, our international tax structure, state tax rates in the jurisdictions where we conduct business, and our ability to utilize state tax credits that expire between 2013 and 2016. Therefore, our overall effective income tax rate could vary as a result of these factors.

        The effective income tax rate for the three months ended June 30, 2009 and 2008 was 35.5% and 34.0%, respectively. The effective income tax rate for the nine months ended June 30, 2009 and 2008 was 35.5% and 33.6%, respectively. The effective income tax rate was higher for the three and nine months ended June 30, 2009 as compared to the prior comparable periods due to a higher effective state rate as a result of increased operations in California from the Leiner acquisition, a lower domestic production deduction in the current year due to lower domestic income and lower tax-free interest income in the current year.

        We accrue interest and penalties related to unrecognized tax benefits in income tax expense. This methodology is consistent with previous periods. At June 30, 2009, we had $1,756 and $889 accrued for the potential payment of interest and penalties, respectively. As of June 30, 2009, we were subject to U.S. Federal Income Tax examinations for the tax years 2005 - 2008, and to non-US examinations for the tax years of 2003 - 2008. In addition, we are generally subject to state and local examinations for fiscal years 2005 - 2008.

16

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

10. Stock-based Compensation

        During the three months ended June 30, 2009, the Company granted 925 stock options to directors and certain employees under the 2008 and 2000 Stock Option Plans. These stock options were granted with a weighted average exercise price of $22.90. All stock options were granted at a price equal to the fair market value of the Company's common stock on the date of grant. The vesting period for 261 of these options is over four years, with¹/2 vesting in 2010, and¹/6 vesting on the anniversary of the date of grant in 2011, 2012 and 2013. The vesting period for the remaining 664 options is over four years, with no vesting in 2010, and¹/3 vesting on the anniversary of the date of grant in 2011, 2012 and 2013. All stock options granted expire ten years from the date of grant.

        The weighted average fair value per share of the options granted was $11.48. The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton option pricing model. The following weighted average assumptions were used for the options granted during the three months ended June 30, 2009:

Risk-free rate(1)	2.8	%
Expected term(2)	6.5 years
Expected volatility(3)	48.7	%
Expected dividends	0.0	%

(1)

The risk-free rate is based upon the rate on a zero coupon U.S. Treasury bill, for the expected term of the option, in effect at the time of grant.

(2)

The expected term of the option is based on historical employee exercise behavior, the vesting terms of the respective option and a contractual life of ten years.

(3)

Expected volatility is primarily based on the daily historical volatility of our stock price, over a period similar to the expected term of the option.

11. Net Income Per Share

        Basic net income per share is based on the weighted average number of common shares outstanding during the three and nine month period ended June 30, 2009 and 2008. Diluted net income per share includes the dilutive effect of outstanding stock options, which resulted in a dilutive effect of approximately 1,468 and 1,550 shares for the three months ended June 30, 2009 and 2008, respectively, and 1,459 and 1,721 shares for the nine months ended June 30, 2009 and 2008, respectively. There were 910 and 871 outstanding stock options for the three and nine months ended June 30, 2009, respectively, that were not included in the calculation of diluted net income per share since they would have been anti-dilutive.

17

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

12. Comprehensive Income

        The components of comprehensive income were as follows:

		Three months ended June 30,				Nine months ended June 30,
		2009		2008		2009			2008
Net income, as reported		$	45,917	$	45,526	$	82,462		$	135,574
Foreign currency translation adjustments, net of taxes			43,516		546		(12,733	)		(3,781	)
Change in fair value of interest rate swaps, net of taxes			1,010		—		(4,797	)		—
	Total comprehensive income	$	90,443	$	46,072	$	64,932		$	131,793

13. Fair Value of Financial Instruments

        GAAP establishes a framework for measuring fair value and requires certain disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. GAAP also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

•

Level 1—Quoted prices in active markets for identical assets or liabilities.

•

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Interest Rate Swaps

        To manage the potential risk arising from changing interest rates and their impact on long-term debt, our policy is to maintain a combination of available fixed and variable rate financial instruments. In Fiscal 2008, we entered into two interest rate swap contracts to hedge the variability of future interest relating to a portion of the interest payments on our Term Loan. Each swap contract has a notional amount of $100 million. One swap contract has a fixed interest rate, before bank margin of 3.88% for a two year term and the other swap contract has a fixed interest rate, before bank margin of 4.195% for a three year term. Under the terms of the swap contracts, variable interest payments for a portion of our Term Loan are swapped for fixed interest payments.

        In accordance with GAAP, we have formally documented the relationship between the interest rate swap contracts and the Term Loan, as well as our risk management objective and strategy for undertaking the hedge transactions. This process includes linking the derivative which was designated as a cash flow hedge to the specific liability on the balance sheet. We record the change in the fair value

18

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

13. Fair Value of Financial Instruments (Continued)

of the swap contracts through Other Comprehensive Income ("OCI"), net of income tax. Since we expect these hedging relationships to be highly effective, both at inception of the hedges and on an ongoing basis, they are expected to be highly effective in achieving offsetting changes in fair value attributable to the hedged risk during the period that the hedges are designated. We have determined that there will be no ineffectiveness in the hedging relationships since the hedged forecasted interest payments are based on the same notional amount, have the same reset dates, and are based on the same benchmark interest rate designated under the variable rate Term Loan. We assess, at the inception of the hedges and on an ongoing basis, whether the derivatives used in the hedging transaction are highly effective in offsetting changes in the cash flows of the hedged item. The change in the fair value of the swap contracts for the nine months ended June 30, 2009 recorded through OCI, net of income tax was $4,797. At June 30, 2009, the swap contracts liability, included in other liabilities, was $10,032. The fair value of the swap contracts were valued using observable current market information such as the prevailing LIBOR interest rate and LIBOR yield curve rates (Level 2).

7¹/8% Senior Subordinated Notes

        The face value and the fair value of the 7¹/8% Senior Subordinated Notes at June 30, 2009, was $190,000 and $177,175, respectively. The fair value of the 7¹/8% Senior Subordinated Notes was determined based on then quoted market prices (Level 1).

14. Business and Credit Concentration

Financial Instruments

        Financial instruments which potentially subject us to credit risk consist primarily of cash and cash equivalents (the amounts of which may, at times, exceed Federal Deposit Insurance Corporation limits on insurable amounts), investments and trade accounts receivable. We mitigate our risk by investing in or through major financial institutions. At June 30, 2009, we had $3,075 of municipal auction rate securities, which were classified in non-current assets as available-for-sale investments.

Customers

        We perform on-going credit evaluations of our customers and adjust credit limits based upon payment history and the customers' current credit worthiness, as determined by review of their current credit information. Customers account activity is continuously monitored. As a result of this review process, we record bad debt expense, which is based upon historical experience as well as specific customer collection issues that have been identified, to adjust the carrying amount of the related receivable to its estimated realizable value. While such bad debt expenses have historically been within expectations and allowances established, if the financial condition of one or more of our customers were to deteriorate, additional bad debt provisions may be required.

19

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

14. Business and Credit Concentration (Continued)

        The following individual customers accounted for the following percentages of net sales for the three and nine months ended June 30, 2009 and 2008, respectively:

	Wholesale/US Nutrition Segment Net Sales Three months ended June 30,						Total Consolidated Net Sales Three months ended June 30,
	2009			2008			2009			2008
Customer A		29	%		20	%		18	%		10	%

	Wholesale/US Nutrition Segment Net Sales Three months ended June 30,						Total Consolidated Net Sales Three months ended June 30,
	2009			2008			2009			2008
Customer A		30	%		20	%		18	%		10	%

        The loss of this customer, or any other major customer, would have a material adverse effect on our consolidated results of operations if we were unable to replace such customer(s).

        The following individual customers accounted for 10% or more of the Wholesale/US Nutrition segment's gross accounts receivable as of June 30, 2009 and September 30, 2008, respectively:

	June 30, 2009			September 30, 2008
Customer A		21	%		19	%
Customer B		11	%		—

15. Supplemental Disclosure of Cash Flow Information

		Nine months ended June 30,
		2009		2008
Property, plant and equipment additions included in accounts payable		$	4,275	$	1,816
Non-cash investing and financing information:
Acquisitions accounted for under the purchase method:
	Fair value of assets acquired	$	264	$	5,072
	Liabilities assumed		—		—
	Less: Cash acquired		—		—
	Net cash paid	$	264	$	5,072

16. Segment Information

        We are organized by sales segments on a worldwide basis. We evaluate performance based on a number of factors; however, the primary measures of performance are the net sales, gross profit and

20

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

16. Segment Information (Continued)

income or loss from operations (prior to corporate allocations) of each segment, as these are the key performance indicators that we review. Operating income or loss for each segment does not include the impact of any intercompany transfer pricing mark-up, corporate general and administrative expenses, interest expense and other miscellaneous income/expense items. Corporate general and administrative expenses include, but are not limited to: human resources, legal, finance, and various other corporate level activity related expenses. Such unallocated expenses remain within corporate. During the three months ended June 30, 2009, we changed the way certain expenses are allocated to the segments. Specifically, certain shipping and warehouse costs, information technology and advertising costs previously included in the Corporate segment are now allocated to the other segments. All prior period segment information has been adjusted to conform with the current period presentation.

        All our products fall into one or more of these four segments:

•

Wholesale/US Nutrition—This segment is comprised of several divisions, each targeting specific market groups which include wholesalers, distributors, food, drug and mass merchandisers, pharmacies, health food stores, bulk and international customers.

•

North American Retail—This segment generates revenue through its 442 owned and operated Vitamin World and Nutrition Warehouse stores selling proprietary brand and third-party products, and through its Canadian operation of 86 owned and operated Le Naturiste stores.

•

European Retail—This segment generates revenue through its 534 Holland & Barrett stores, 346 Julian Graves stores and 31 GNC stores in the UK, 73 DeTuinen stores in the Netherlands and 24 Nature's Way and 4 Julian Graves stores in Ireland. Such revenue consists of sales of proprietary brand and third-party products, as well as franchise fees from 9 Holland & Barrett locations in South Africa.

•

Direct Response/E-Commerce—This segment generates revenue through the sale of proprietary brand and third-party products primarily through mail order catalog and the internet. Catalogs are strategically mailed to customers who order by mail, internet, or by phone.

21

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

16. Segment Information (Continued)

        The following table represents key financial information of our business segments:

		Wholesale / US Nutrition		North American Retail			European Retail		Direct Response/ E-Commerce		Corporate/ Manufacturing			Consolidated
Three months ended June 30, 2009:
	Net sales	$	396,162	$	51,223		$	151,293	$	53,029	$	—		$	651,707
	Income (loss) from operations		61,905		(2,274	)		14,070		18,166		(15,715	)		76,152
	Depreciation and amortization		3,681		758			3,634		1,245		7,486			16,804
	Capital expenditures		94		268			819		—		4,819			6,000
Three months ended June 30, 2008:
	Net sales	$	283,645	$	50,415		$	145,670	$	54,789	$	—		$	534,519
	Income (loss) from operations		49,136		1,873			28,249		6,044		(15,028	)		70,274
	Depreciation and amortization		2,587		750			3,049		1,248		5,749			13,383
	Capital expenditures		541		726			3,637		1,003		5,128			11,035
Nine months ended June 30, 2009:
	Net sales	$	1,152,930	$	151,577		$	441,757	$	161,549	$	—		$	1,907,813
	Income (loss) from operations		110,968		(4,160	)		60,559		38,119		(48,899	)		156,587
	Depreciation and amortization		10,991		2,255			10,598		3,777		23,983			51,604
	Capital expenditures		725		2,786			9,844		4,162		21,067			38,584
Nine months ended June 30, 2008:
	Net sales	$	801,943	$	158,501		$	462,337	$	155,114	$	—		$	1,577,895
	Income (loss) from operations		128,678		(1,733	)		97,582		25,699		(45,898	)		204,328
	Depreciation and amortization		7,858		2,404			9,081		3,988		17,707			41,038
	Capital expenditures		2,582		3,627			12,414		1,148		12,260			32,031

Net sales by location of customer were as follows:

		Three months ended June 30,				Nine months ended June 30,
		2009		2008		2009		2008
Net sales by location of customer
	United States	$	436,059	$	342,702	$	1,292,914	$	972,527
	United Kingdom		147,510		137,297		422,495		439,909
	Holland		13,537		14,796		40,923		45,663
	Ireland		5,333		5,806		15,211		17,593
	Canada		20,624		9,329		62,548		29,583
	Taiwan		6,458		949		15,307		2,679
	Other foreign countries		22,186		23,640		58,415		69,941
		$	651,707	$	534,519	$	1,907,813	$	1,577,895

22

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

16. Segment Information (Continued)

        Total assets by segment were as follows:

	June 30, 2009		September 30, 2008
Wholesale / US Nutrition	$	876,518	$	835,883
North American Retail		28,730		31,580
European Retail		386,153		389,794
Direct Response / E-Commerce		58,065		62,825
Corporate / Manufacturing		526,448		616,276
	$	1,875,914	$	1,936,358

        Approximately 29% and 35% of our net sales during the nine months ended June 30, 2009 and 2008, respectively, were denominated in currencies other than U.S. dollars, principally British Pounds, Euros and Canadian dollars. A significant weakening of such currencies versus the U.S. dollar could have a material adverse effect on our results of operations.

        Foreign subsidiaries accounted for the following percentages of total assets and total liabilities:

	June 30, 2009			September 30, 2008
Total Assets		27	%		26	%
Total Liabilities		11	%		12	%

17. Condensed Consolidating Financial Statements of Guarantors of Senior Subordinated Notes

        The 7¹/8% Senior Subordinated Notes due 2015 are guaranteed by all of our domestic subsidiaries, which are wholly-owned by the Company. 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, 2009 and September 30, 2008 and for the three and nine months ended June 30, 2009 and 2008 of (a) NBTY, Inc., 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, Inc., 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.

23

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

17. Condensed Consolidating Financial Statements of Guarantors of Senior Subordinated Notes (Continued)

Condensed Consolidating Balance Sheet
As of June 30, 2009

					Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
	Cash and cash equivalents				$	9,440	$	—	$	60,377		$	—		$	69,817
	Accounts receivable, net					—		111,533		20,221			—			131,754
	Intercompany					—		95,210		724,753			(819,963	)		—
	Inventories					—		512,547		122,066			—			634,613
	Deferred income taxes					—		24,178		1,175			—			25,353
	Other current assets					—		8,979		27,566			—			36,545
				Total current assets		9,440		752,447		956,158			(819,963	)		898,082
Property, plant and equipment, net						38,555		251,620		97,683			—			387,858
Goodwill						—		199,701		138,287			—			337,988
Intangible assets, net						—		192,661		24,065			—			216,726
Other assets						—		21,385		13,875			—			35,260
Intercompany loan receivable						351,670		40,733		—			(392,403	)		—
Investments in subsidiaries						1,988,098		—		—			(1,988,098	)		—
		Total assets			$	2,387,763	$	1,458,547	$	1,230,068		$	(3,200,464	)	$	1,875,914
Liabilities and Stockholders' Equity
Current liabilities:
	Current portion of long-term debt				$	30,656	$	326	$	653		$	—		$	31,635
	Accounts payable					—		68,168		38,831			—			106,999
	Intercompany					819,963		—		—			(819,963	)		—
	Accrued expenses and other current liabilities					—		125,674		20,058			—			145,732
				Total current liabilities		850,619		194,168		59,542			(819,963	)		284,366
Intercompany loan payable						—		—		392,403			(392,403	)		—
Long-term debt, net of current portion						414,167		—		39,287			—			453,454
Deferred income taxes						33,963		—		4,774			—			38,737
Other liabilities						22,381		2,640		7,703			—			32,724
				Total liabilities		1,321,130		196,808		503,709			(1,212,366	)		809,281
Commitments and contingencies
Stockholders' Equity:
	Common stock					495		—		—			—			495
	Capital in excess of par					144,493		352,019		301,271			(653,290	)		144,493
	Retained earnings					921,530		909,720		434,453			(1,344,173	)		921,530
	Accumulated other comprehensive income (loss)					115		—		(9,365	)		9,365			115
				Total stockholders' equity		1,066,633		1,261,739		726,359			(1,988,098	)		1,066,633
			Total liabilities and stockholders' equity		$	2,387,763	$	1,458,547	$	1,230,068		$	(3,200,464	)	$	1,875,914

24

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

17. Condensed Consolidating Financial Statements of Guarantors of Senior Subordinated Notes (Continued)

Condensed Consolidating Balance Sheet
As of September 30, 2008

					Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
	Cash and cash equivalents				$	49,662	$	—	$	40,518		$	—		$	90,180
	Accounts receivable, net					—		92,396		30,482			—			122,878
	Intercompany					—		72,949		626,499			(699,448	)		—
	Inventories					—		449,128		136,111			—			585,239
	Deferred income taxes					—		24,124		974			—			25,098
	Other current assets					—		47,559		28,412			—			75,971
				Total current assets		49,662		686,156		862,996			(699,448	)		899,366
Property, plant and equipment, net						38,120		255,225		125,721			—			419,066
Goodwill						—		180,067		162,312			—			342,379
Intangible assets, net						—		186,399		44,025			—			230,424
Other assets						—		28,584		16,539			—			45,123
Intercompany loan receivable						359,720		40,733		—			(400,453	)		—
Investments in subsidiaries						1,859,852		—		—			(1,859,852	)		—
		Total assets			$	2,307,354	$	1,377,164	$	1,211,593		$	(2,959,753	)	$	1,936,358
Liabilities and Stockholders' Equity
Current liabilities:
	Current portion of long-term debt				$	30,784	$	1,738	$	787		$	—		$	33,309
	Accounts payable					—		80,973		39,647			—			120,620
	Intercompany					699,448		—		—			(699,448	)		—
	Accrued expenses and other current liabilities					—		126,890		45,145			—			172,035
				Total current liabilities		730,232		209,601		85,579			(699,448	)		325,964
Intercompany loan payable						—		—		400,453			(400,453	)		—
Long-term debt, net of current portion						519,775		115		18,512			—			538,402
Deferred income taxes						44,109		—		5,030			—			49,139
Other liabilities						15,042		2,664		6,951			—			24,657
				Total liabilities		1,309,158		212,380		516,525			(1,099,901	)		938,162
Commitments and contingencies
Stockholders' Equity:
	Common stock					493		—		—			—			493
	Capital in excess of par					140,990		352,019		301,271			(653,290	)		140,990
	Retained earnings					839,068		812,765		408,967			(1,221,732	)		839,068
	Accumulated other comprehensive income (loss)					17,645		—		(15,170	)		15,170			17,645
				Total stockholders' equity		998,196		1,164,784		695,068			(1,859,852	)		998,196
			Total liabilities and stockholders' equity		$	2,307,354	$	1,377,164	$	1,211,593		$	(2,959,753	)	$	1,936,358

25

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

17. Condensed Consolidating Financial Statements of Guarantors of Senior Subordinated Notes (Continued)

Condensed Consolidating Statements of Income
Three Months Ended June 30, 2009

			Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales			$	—		$	483,797	$	189,498		$	(21,588	)	$	651,707
Costs and expenses:
	Cost of sales			—			292,517		88,311			(21,588	)		359,240
	Advertising, promotion and catalog			—			17,804		5,766			—			23,570
	Selling, general and administrative			15,382			86,880		80,356			—			182,618
	IT project termination costs			—			4,299		5,828			—			10,127
				15,382			401,500		180,261			(21,588	)		575,555
Income from operations				(15,382	)		82,297		9,237			—			76,152
Other income (expense):
		Equity in income of subsidiaries		59,809			—		—			(59,809	)		—
		Intercompany interest		2,993			—		(2,993	)		—			—
		Interest		(8,078	)		—		(324	)		—			(8,402	)
		Miscellaneous, net		217			1,064		2,115			—			3,396
				54,941			1,064		(1,202	)		(59,809	)		(5,006	)
Income before provision for income taxes				39,559			83,361		8,035			(59,809	)		71,146
(Benefit)/ provision for income taxes				(6,358	)		29,176		2,411			—			25,229
Net income			$	45,917		$	54,185	$	5,624		$	(59,809	)	$	45,917

26

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

17. Condensed Consolidating Financial Statements of Guarantors of Senior Subordinated Notes (Continued)

Condensed Consolidating Statements of Income
Three Months Ended June 30, 2008

			Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales			$	—		$	365,798	$	188,018		$	(19,297	)	$	534,519
Costs and expenses:
	Cost of sales			—			203,119		78,633			(19,297	)		262,455
	Advertising, promotion and catalog			—			30,435		5,297			—			35,732
	Selling, general and administrative			26,324			64,706		75,028			—			166,058
				26,324			298,260		158,958			(19,297	)		464,245
Income from operations				(26,324	)		67,538		29,060			—			70,274
Other income (expense):
		Equity in income of subsidiaries		60,112			—		—			(60,112	)		—
		Intercompany interest		7,531			—		(7,531	)		—			—
		Interest		(3,421	)		—		(300	)		—			(3,721	)
		Miscellaneous, net		407			1,111		899			—			2,417
				64,629			1,111		(6,932	)		(60,112	)		(1,304	)
Income before provision for income taxes				38,305			68,649		22,128			(60,112	)		68,970
(Benefit)/ provision for income taxes				(7,221	)		24,027		6,638			—			23,444
Net income			$	45,526		$	44,622	$	15,490		$	(60,112	)	$	45,526

27

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

17. Condensed Consolidating Financial Statements of Guarantors of Senior Subordinated Notes (Continued)

Condensed Consolidating Statements of Income
Nine Months Ended June 30, 2009

			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales			$	—		$	1,414,913		$	553,222		$	(60,322	)	$	1,907,813
Costs and expenses:
	Cost of sales			—			906,352			245,356			(60,322	)		1,091,386
	Advertising, promotion and catalog			—			72,444			15,445			—			87,889
	Selling, general and administrative			47,790			271,455			233,932			—			553,177
	IT project termination costs			—			12,946			5,828			—			18,774
				47,790			1,263,197			500,561			(60,322	)		1,751,226
Income from operations				(47,790	)		151,716			52,661			—			156,587
Other income (expense):
		Equity in income of subsidiaries		122,441			—			—			(122,441	)		—
		Intercompany interest		15,603			—			(15,603	)		—			—
		Interest		(25,279	)		(2	)		(1,499	)		—			(26,780	)
		Miscellaneous, net		(255	)		(2,553	)		849			—			(1,959	)
				112,510			(2,555	)		(16,253	)		(122,441	)		(28,739	)
Income before provision for income taxes				64,720			149,161			36,408			(122,441	)		127,848
(Benefit)/ provision for income taxes				(17,742	)		52,206			10,922			—			45,386
Net income			$	82,462		$	96,955		$	25,486		$	(122,441	)	$	82,462

28

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

17. Condensed Consolidating Financial Statements of Guarantors of Senior Subordinated Notes (Continued)

Condensed Consolidating Statements of Income
Nine Months Ended June 30, 2008

			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales			$	—		$	1,051,491		$	588,535		$	(62,131	)	$	1,577,895
Costs and expenses:
	Cost of sales			—			578,312			247,888			(62,131	)		764,069
	Advertising, promotion and catalog			—			89,964			18,944			—			108,908
	Selling, general and administrative			75,532			197,888			227,170			—			500,590
				75,532			866,164			494,002			(62,131	)		1,373,567
Income from operations				(75,532	)		185,327			94,533			—			204,328
Other income (expense):
		Equity in income of subsidiaries		175,137			—			—			(175,137	)		—
		Intercompany interest		23,685			—			(23,685	)		—			—
		Interest		(10,323	)		(2	)		(914	)		—			(11,239	)
		Miscellaneous, net		2,587			4,599			3,903			—			11,089
				191,086			4,597			(20,696	)		(175,137	)		(150	)
Income before provision for income taxes				115,554			189,924			73,837			(175,137	)		204,178
(Benefit)/ provision for income taxes				(20,020	)		66,473			22,151			—			68,604
Net income			$	135,574		$	123,451		$	51,686		$	(175,137	)	$	135,574

29

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

17. Condensed Consolidating Financial Statements of Guarantors of Senior Subordinated Notes (Continued)

Condensed Consolidating Statement of Cash Flows
Nine Months Ended June 30, 2009

						Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
	Net income					$	82,462		$	96,955		$	25,486		$	(122,441	)	$	82,462
	Adjustments to reconcile net income to net cash & cash equivalents provided by operating activities:
			Equity in earnings of subsidiaries				(122,441	)		—			—			122,441			—
			Impairments and disposals of assets				45			3,773			702			—			4,520
			Depreciation and amortization				3,693			35,215			12,696			—			51,604
			IT project termination costs				—			10,693			5,828			—			16,521
			Foreign currency transaction loss				4,194			789			130			—			5,113
			Stock-based compensation				1,837			29			147			—			2,013
			Amortization of deferred charges				951			—			—			—			951
			Allowance for doubtful accounts				—			(770	)		404			—			(366	)
			Inventory reserves				—			5,666			—			—			5,666
			Deferred income taxes				—			876			12			—			888
			Excess income tax benefit from exercise of stock options				(55	)		—			—			—			(55	)
			Changes in operating assets and liabilities, net of acquisitions:
				Accounts receivable			—			(10,980	)		(149	)		—			(11,129	)
				Inventories			—			(41,524	)		(21,704	)		—			(63,228	)
				Other assets			—			10,401			(1,239	)		—			9,162
				Accounts payable			—			(10,535	)		3,474			—			(7,061	)
				Accrued expenses and other liabilities			—			3,623			(12,538	)		—			(8,915	)
					Net cash (used in) provided by operating activities		(29,314	)		104,211			13,249			—			88,146
Cash flows from investing activities:
	Intercompany accounts						62,939			(77,860	)		14,921			—			—
	Purchase of property, plant and equipment						(4,124	)		(24,730	)		(9,730	)		—			(38,584	)
	Cash paid for acquisitions, net of cash acquired						—			—			(264	)		—			(264	)
	Escrow refund, net of purchase price adjustments						11,904			—			2,556			—			14,460
					Net cash provided by (used in) investing activities		70,719			(102,590	)		7,483			—			(24,388	)
Cash flows from financing activities:
	Principal payments under long-term debt agreements
		and capital leases					(23,119	)		(1,621	)		(436	)		—			(25,176	)
	Proceeds from borrowings under the Revolving Credit Facility						95,000			—			—			—			95,000
	Principal payments under the Revolving Credit Facility						(155,000	)		—			—			—			(155,000	)
	Excess income tax benefit from exercise of stock options						55			—			—			—			55
	Proceeds from stock options exercised						1,437			—			—			—			1,437
																—
					Net cash used in financing activities		(81,627	)		(1,621	)		(436	)		—			(83,684	)
Effect of exchange rate changes on cash and cash equivalents							—			—			(437	)		—			(437	)
Net (decrease) increase in cash and cash equivalents							(40,222	)		—			19,859			—			(20,363	)
Cash and cash equivalents at beginning of period							49,662			—			40,518			—			90,180
Cash and cash equivalents at end of period						$	9,440		$	—		$	60,377		$	—		$	69,817

30

NBTY, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands, except per share amounts)

17. Condensed Consolidating Financial Statements of Guarantors of Senior Subordinated Notes (Continued)

Condensed Consolidating Statement of Cash Flows
Nine Months Ended June 30, 2008

					Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
	Net income				$	135,574		$	123,451		$	51,686		$	(175,137	)	$	135,574
	Adjustments to reconcile net income to net cash & cash equivalents provided by operating activities:
		Equity in earnings of subsidiaries				(175,137	)		—			—			175,137			—
		Impairments and disposals of assets				282			382			(223	)		—			441
		Depreciation and amortization				3,426			27,623			9,989			—			41,038
		Foreign currency transaction (gain) loss				(1,248	)		(1,310	)		964			—			(1,594	)
		Stock-based compensation				930			156			90			—			1,176
		Amortization and write-off of deferred charges				562			—			—			—			562
		Allowance for doubtful accounts				—			(547	)		4			—			(543	)
		Inventory reserves				—			4,979			697			—			5,676
		Deferred income taxes				—			1,402			(30	)		—			1,372
		Excess income tax benefit from exercise of stock options				(4,984	)		—			—			—			(4,984	)
		Changes in operating assets and liabilities, net of acquisitions:
			Accounts receivable			—			(2,654	)		(722	)		—			(3,376	)
			Inventories			—			(22,394	)		(4,044	)		—			(26,438	)
			Other assets			—			10,701			1,043			—			11,744
			Accounts payable			—			900			(225	)		—			675
			Accrued expenses and other liabilities			—			13,295			(12,823	)		—			472
				Net cash (used in) provided by operating activities		(40,595	)		155,984			46,406			—			161,795
Cash flows from investing activities:
	Intercompany accounts					154,834			(138,644	)		(16,190	)		—			—
	Purchase of property, plant and equipment					(4,457	)		(16,985	)		(10,589	)		—			(32,031	)
	Purchase of available-for-sale investments					(364,917	)		—			—			—			(364,917	)
	Proceeds from sale of available-for-sale investments					460,013			—			3,074			—			463,087
	Cash paid for acquisitions, net of cash acquired					(5,072	)		—			—			—			(5,072	)
	Acquisition deposit					(11,500	)		—			—			—			(11,500	)
				Net cash provided by (used in) investing activities		228,901			(155,629	)		(23,705	)		—			49,567
Cash flows from financing activities:
	Principal payments under long-term debt agreements and capital leases					(619	)		(101	)		—			—			(720	)
	Excess income tax benefit from exercise of stock options					4,984			—			—			—			4,984
	Proceeds from stock options exercised					3,852			—			—			—			3,852
	Purchase of treasury stock (subsequently retired)					(188,432	)		—			—			—			(188,432	)
									—
				Net cash used in financing activities		(180,215	)		(101	)		—			—			(180,316	)
Effect of exchange rate changes on cash and cash equivalents						—			(254	)		(1,718	)		—			(1,972	)
Net increase in cash and cash equivalents						8,091			—			20,983			—			29,074
Cash and cash equivalents at beginning of period						22,239			—			70,663			—			92,902
Cash and cash equivalents at end of period					$	30,330		$	—		$	91,646		$	—		$	121,976

31

NBTY, Inc.

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

(in thousands, except per share amounts)

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this report, the words "subject to," "believe," "expect," "plan," "project," "estimate," "intend," "may," "should," "can," or "anticipate," or the negative thereof, or variations thereon, or similar expressions are intended to identify forward-looking statements, which are inherently uncertain. Similarly, discussions of strategy although believed to be reasonable, are also forward-looking statements and are inherently uncertain.

All forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from projected results. Factors which may materially affect such forward-looking statements include:

•

slow or negative growth in the nutritional supplement industry;

•

interruption of business or negative impact on sales and earnings due to acts of God, acts of war, terrorism, bio-terrorism, civil unrest or disruption of mail service;

•

our inability to retain customers of companies (or mailing lists) recently acquired;

•

increased competition;

•

increased costs;

•

loss or retirement of key members of our management;

•

increases in the cost of borrowings or unavailability of additional debt or equity capital, or both;

•

unavailability of, or inability to consummate, advantageous acquisitions in the future, including those that may be subject to bankruptcy court approval or our inability to integrate acquisitions into the mainstream of our business;

•

changes in general economic and political conditions in the markets in which we may compete from time to time or worldwide;

•

our inability to gain or hold market share of our wholesale or retail customers anywhere in the world;

•

our inability to obtain or renew insurance or to manage insurance costs;

•

our exposure to and expense of defending and resolving product liability claims, intellectual property claims and other litigation;

•

our ability to implement our business strategy successfully;

•

our inability to manage our retail, wholesale, manufacturing and other operations efficiently;

•

consumer acceptance of our products due to adverse publicity regarding nutritional supplements;

•

our inability to renew leases for our retail locations;

•

the inability of our retail stores to attain or maintain profitability;

•

the absence of clinical trials for many of our products;

•

sales and earnings volatility or trends for us and our market segments;

32

NBTY, Inc.

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

(in thousands, except per share amounts)

•

the efficacy of our internet and on-line sales and marketing strategies;

•

fluctuations in foreign currencies, including the British pound, the euro, the Canadian dollar and the Chinese yuan;

•

import-export controls on sales to foreign countries;

•

our inability to secure favorable new sites for, and delays in opening, new retail and manufacturing locations;

•

introduction of, and compliance with, new federal, state, local or foreign legislation or regulation, or adverse determinations by regulators anywhere in the world (including the banning of products) and, more particularly, Good Manufacturing Practices in the United States and the Food Supplements Directive and Traditional Herbal Medicinal Products Directive in Europe;

•

the mix of our products and the profit margins thereon;

•

the availability and pricing of raw materials;

•

risk factors discussed elsewhere in this report and in our Form 10-K for the fiscal year ended September 30, 2008;

•

adverse effects on us of increased energy prices and potentially reduced traffic flow to our retail locations;

•

adverse tax determinations;

•

the loss of a significant customer;

•

potential investment losses as a result of liquidity conditions; and

•

other factors beyond our control.

Consequently, such forward-looking statements should be regarded solely as our current plans, estimates and beliefs. Readers are cautioned not to place undue reliance on forward-looking statements. We cannot guarantee future results, events, levels of activity, performance or achievements. We do not undertake and specifically decline any obligation to update, republish or revise forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrences of unanticipated events.

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.

The following discussion should also be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere herein and our 2008 Form 10-K.

Overview

        NBTY, Inc. (together with its subsidiaries, the "Company," "NBTY," "we," or "us") is a leading global vertically integrated manufacturer, marketer and retailer of a broad line of high quality, value-priced nutritional supplements in the United States and throughout the world. We market approximately 25,000 products under numerous brands, including Nature's Bounty®, Osteo Bi-Flex®, Body Fortress®, Pure Protein®, Solgar®, Sundown®, Vitamin World®, Holland & Barrett®, Puritan's Pride®, Rexall®, Flex-A-Min®, Knox®, MET-Rx®, WORLDWIDE Sport Nutrition®, American Health®,

33

NBTY, Inc.

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

(in thousands, except per share amounts)

DeTuinen®, Le Naturiste™, SISU®, Physiologics® and Ester-C®. Our vertical integration includes the purchase of raw materials, formulation and manufacture of products, which we then market through the following four channels of distribution:

•

Wholesale/US Nutrition operations—distribute products under various US Nutrition brand names and third party private labels, each targeting specific market groups that include mass market retailers, supermarkets, drugstore chains, pharmacies, health and natural food stores, bulk healthcare practitioners, wholesalers, distributors and international customers;

•

North American Retail operations—include 442 Vitamin World and Nutrition Warehouse stores selling proprietary brand and third-party products in the United States and our Canadian operation of 86 Le Naturiste stores;

•

European Retail operations—include 534 Holland & Barrett stores, 346 Julian Graves stores, and 31 GNC stores in the UK; 73 DeTuinen stores in the Netherlands; and 24 Nature's Way and 4 Julian Graves stores in Ireland, as well as 9 Holland & Barrett franchised locations in South Africa, each selling proprietary brand and third-party products; and

•

Direct Response/E-Commerce operations—include the sale of proprietary brand and third-party products primarily through mail order catalogs and the internet.

Critical Accounting Policies

        Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2008. A discussion of our critical accounting policies and estimates are included in Management's Discussion and Analysis of Results of Operations and Financial Condition in our Annual Report on Form 10-K for the fiscal year ended September 30, 2008. Management has discussed the development and selection of these policies with the Audit Committee of the Company's Board of Directors, and the Audit Committee of the Board of Directors has reviewed the Company's disclosures of these policies. There have been no material changes to the critical accounting policies or estimates reported in the Management's Discussion and Analysis section of the audited financial statements for the fiscal year ended September 30, 2008 as filed with the Securities and Exchange Commission.

Results of Operations

        Operating results in all periods presented include the results of acquisitions. The timing of acquisitions and the changing mix of our businesses may affect the comparability of results from one period to another.

34

NBTY, Inc.

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

(in thousands, except per share amounts)

Three Months Ended June 30, 2009 Compared to the Three Months Ended June 30, 2008:

Net Sales

        Net sales by segment for the three months ended June 30, 2009 as compared with the prior comparable period were as follows:

		Net Sales by Segment Three months ended June 30,
		2009					2008					Comparison 2009 vs. 2008
Segment		Net Sales		% of total			Net Sales		% of total			$ change			% change
Wholesale / US Nutrition		$	396,162		60.8	%	$	283,645		53.1	%	$	112,517			39.7	%
North American Retail			51,223		7.9	%		50,415		9.4	%		808			1.6	%
European Retail			151,293		23.2	%		145,670		27.3	%		5,623			3.9	%
Direct Response / E-Commerce			53,029		8.1	%		54,789		10.2	%		(1,760	)		(3.2	)%
	Net sales	$	651,707		100.0	%	$	534,519		100.0	%	$	117,188			21.9	%

Wholesale / US Nutrition

        Net sales for the Wholesale / US Nutrition segment increased $112,517 or 39.7% to $396,162 for the three months ended June 30, 2009. This increase was due to higher net sales of domestic private label products, which increased $100,600 primarily resulting from our acquisition of Leiner. Some of the major brands in this segment include Nature's Bounty, Solgar, Osteo Bi-Flex, Ester C and Sundown. Collectively, domestic sales of these brands increased $3,710. Additionally, net sales from our sports nutrition brands increased $8,125. We continue to adjust shelf space allocation among the US Nutrition brands to provide the best overall product mix and to respond to changing market conditions. These efforts have helped to strengthen US Nutrition's position in the mass market. US Nutrition continues to leverage valuable consumer sales information obtained from our Vitamin World retail stores and Puritan's Pride Direct Response/E-Commerce operations in order to provide its mass-market customers with data and analyses to drive mass market sales.

        We continue to use targeted promotions to grow overall net sales. Promotional programs and rebates as a percentage of sales were 9.8% for the three months ended June 30, 2009 as compared to 8.7% for the prior comparable period.

        Product returns were $7,982 or 1.8% of sales for the three months ended June 30, 2009 as compared to $3,593 or 1.1% of sales for the prior comparable period. We expect sales returns relating to normal operations to trend at approximately 2% of Wholesale / US Nutrition sales in future quarters.

        One customer represented 29% and 20% of the Wholesale / US Nutrition segment's net sales for the three months ended June 30, 2009 and 2008, respectively. This customer also represented 18% and 10% of total consolidated net sales for the three months ended June 30, 2009 and 2008, respectively. The loss of this customer, or any one of our major customers, would have a material adverse effect on our results of operations if we were unable to replace such customers.

35

NBTY, Inc.

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

(in thousands, except per share amounts)

North American Retail

        Net sales for this segment increased 1.6% primarily due to an increase in sales by stores open for more than one year (same store sales) of 1.4%.

        The following is a summary of North American Retail store activity for the three months ended June 30, 2009 and 2008:

		Three months ended June 30,
North American Retail stores:		2009			2008
Vitamin World
	Open at beginning of the period		444			450
	Opened during the period		1			1
	Closed during the period		(3	)		(4	)
	Open at end of the period		442			447
Le Naturiste
	Open at beginning of the period		87			80
	Opened during the period		—			—
	Closed during the period		(1	)		—
	Open at end of the period		86			80

        We anticipate opening an additional 2 Vitamin World stores and closing up to 2 under-performing Vitamin World stores during the remainder of this fiscal year.

European Retail

        Net sales for the European Retail segment increased $5,623 or 3.9% to $151,293 for the three months ended June 30, 2009. The increase in net sales for this segment is primarily due to the acquisition of Julian Graves, which contributed net sales of $27,002 for the three months ended June 30, 2009, partially offset by the result of unfavorable foreign currency translation. Same store sales in U.S. dollars decreased 16.8% or $24,293 as compared to the prior comparable period. However, same store sales in local currency increased 5.8% from the prior like period.

36

NBTY, Inc.

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

(in thousands, except per share amounts)

        The following is a summary of European Retail store activity for the three months ended June 30, 2009 and 2008:

	Three months ended June 30,
European Retail stores:	2009			2008
Company-owned stores
Open at beginning of the period		984			614
Opened during the period		9			2
Closed during the period		(1	)		—
Open at end of the period		992			616
Franchised stores
Open at beginning of the period		27			22
Opened during the period		2			—
Closed during the period		—			—
Open at end of the period		29			22

        We anticipate opening an additional 6 stores during the remainder of this fiscal year.

Direct Response / E-Commerce

        Direct Response/E-Commerce net sales decreased $1,760 or 3.2% for the three months ended June 30, 2009 as compared to the prior comparable period. The average order size increased approximately 18% for the three months ended June 30, 2009 as compared to the prior comparable period. We remain the vitamin and nutritional supplements leader in the direct response and e-commerce sectors and continue to increase the number of products available via our catalog and websites.

        This division continues to vary its promotional strategy throughout the fiscal year, utilizing highly promotional catalogs which are not offered in every quarter. Historical results reflect this pattern and therefore this division should be viewed on an annual, and not quarterly, basis.

Gross Profit

        Gross Profit by segment for the three months ended June 30, 2009 as compared with the prior comparable period was as follows:

		Gross Profit by Segment Three months ended June 30,
		2009					2008					Comparison 2009 vs. 2008
				% of sales					% of sales
Segment		Gross Profit					Gross Profit					$ change		% change
Wholesale / US Nutrition		$	131,587		33.2	%	$	116,199		41.0	%	$	15,388		13.2	%
North American Retail			34,493		67.3	%		33,355		66.2	%		1,138		3.4	%
European Retail			92,698		61.3	%		90,792		62.3	%		1,906		2.1	%
Direct Response / E-Commerce			33,689		63.5	%		31,718		57.9	%		1,971		6.2	%
	Gross Profit	$	292,467		44.9	%	$	272,064		50.9	%	$	20,403		7.5	%

37

NBTY, Inc.

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

(in thousands, except per share amounts)

        The Wholesale/US Nutrition segment's gross profit percentage decreased to 33.2% for the three months ended June 30, 2009 as compared to 41.0% for the prior comparable period. The decline in gross margin was mainly due to a larger concentration of sales of private label products which traditionally have a lower margin.

        The increase in the North American Retail segment's gross profit percentage to 67.3% for the three months ended June 30, 2009 as compared to 66.2% for the prior comparable period reflects a shift in promotional strategy as well as a focus on rationalizing SKU's and store modernization. The increase in the Direct Response/E-Commerce segment's gross profit percentage to 63.5% for the three months ended June 30, 2009 as compared to 57.9% for the prior comparable period reflects a decrease in promotional activity.

Advertising, Promotion and Catalog Expenses

        Total advertising, promotion and catalog expenses by segment for the three months ended June 30, 2009 as compared with the prior comparable period were as follows:

		Three months ended June 30,						Dollar Change			Percentage Change
		2009			2008			2009 vs. 2008			2009 vs. 2008
Wholesale / US Nutrition		$	15,054		$	22,523		$	(7,469	)		(33	)%
North American Retail			869			1,127			(258	)		(23	)%
European Retail			3,644			2,891			753			26	%
Direct Response / E-Commerce			3,919			9,112			(5,193	)		(57	)%
Corporate			84			79			5			6	%
	Total	$	23,570		$	35,732		$	(12,162	)		(34	)%
	Percentage of net sales		3.6	%		6.7	%

        The decrease in the Wholesale/US Nutrition segment's advertising, promotions and catalogs is due to a $3,651 decrease in television and radio campaigns as well as a decrease of $3,208 in magazine and newspaper advertising as compared to the prior comparable period. The decrease in the Direct Response/E-commerce segment relates to a decrease in catalog costs of $2,410 due to fewer catalogs in circulation as well as a decrease in postcard mailings and internet advertising of $2,394 as compared to the prior comparable period.

        We create our own advertising materials through our in-house staff of advertising associates. In the U.K. and Ireland, both Holland & Barrett and Nature's Way advertise on television and in national newspapers. GNC (UK) and De Tuinen also advertise in newspapers. SISU advertises in trade journals and magazines.

38

NBTY, Inc.

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

(in thousands, except per share amounts)

Selling, General and Administrative Expenses

        Selling, general and administrative expenses by segment for the three months ended June 30, 2009 as compared with the prior comparable period were as follows:

		Three months ended June 30,						Dollar Change			Percentage Change
		2009			2008			2009 vs. 2008			2009 vs. 2008
Wholesale / US Nutrition		$	54,629		$	44,540		$	10,089			23	%
North American Retail			30,069			30,355			(286	)		(1	)%
European Retail			69,156			59,652			9,504			16	%
Direct Response / E-Commerce			13,133			16,562			(3,429	)		(21	)%
Corporate			15,631			14,949			682			5	%
	Total	$	182,618		$	166,058		$	16,560			10	%
	Percentage of net sales		28.0	%		31.1	%

        Certain expenses historically included in the Corporate segment have been re-allocated to other segments. The prior year amounts have been reclassified to conform to the current year presentation.

        The Wholesale/US Nutrition's selling, general and administrative expense ("SG&A") increased $10,089 for the three months ended June 30, 2009 as compared to the prior comparable period. This increase includes an asset impairment charge of $3,270 for the three months ended June 30, 2009. Other increases related to expanded operations as compared to the prior period include payroll and payroll related costs of $2,589 and building costs of $1,351. In addition, freight costs increased $1,482 but were slightly lower as a percentage of sales.

        The European Retail's SG&A increased $9,504 for the three months ended June 30, 2009 as compared to the prior comparable period due to the acquisition of Julian Graves, which added $15,962 to total SG&A. In addition, legal costs of $3,722 were incurred in the current period in connection with the review of the Julian Graves acquisition by the Competition Commission in the UK. These increases were partially offset by a decrease in costs due to foreign currency translation. In local currency, and excluding the impact of the Julian Graves acquisition, SG&A costs increased approximately 5% primarily due to increased occupancy expenses related to rent increases and new stores.

        The Direct Response/E-Commerce SG&A decreased $3,429 due to a decrease in freight costs of $991, a decrease in outside services and temporary labor of $777 and decreases across most expense categories due to the staff reorganization of this segment during the first quarter of fiscal 2009.

IT Project Termination Costs

        During June 2009, management terminated a new point of sale system project for retail operations as it was determined to be ineffective and uneconomical. As a result, $11,656 previously capitalized costs were written-off during the three months ended June 30, 2009. In addition, $1,529 of termination costs incurred in the first quarter of fiscal 2009 relating to Direct Response projects were reversed in the period based on favorable negotiations with previous service providers.

39

NBTY, Inc.

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

(in thousands, except per share amounts)

Interest Expense

        Interest expense increased $4,681 primarily due to interest on the Term Loan which was not outstanding during the prior comparable period.

Miscellaneous, net

        The components of miscellaneous, net were as follows:

	Three months ended June 30,				Dollar Change
	2009		2008		2009 vs. 2008
Foreign exchange gains	$	2,672	$	333	$	2,339
Rental income		308		444		(136	)
Investment income		118		1,433		(1,315	)
Other		298		207		91
Total	$	3,396	$	2,417	$	979

        Miscellaneous, net increased primarily due to unrealized foreign exchange gains on intercompany balances associated with the weakening of the U.S. dollar against the British Pound and Canadian dollar for the three months ended June 30, 2009 offset by lower investment income earned on lower cash and investment balances.

Provision for Income Taxes

        Our provision for income taxes is impacted by a number of factors, including federal income taxes, our international tax structure, state income tax rates in the jurisdictions where we conduct business, and our ability to utilize state tax credits that expire between 2013 and 2016. Therefore, our overall effective income tax rate could vary as a result of these factors. The effective income tax rate for the three months ended June 30, 2009 and June 30, 2008 was 35.5% and 34.0%, respectively. The effective income tax rate was higher for the three months ended June 30, 2009 as compared to the prior comparable period due to a higher effective state rate as a result of increased operations in California from the Leiner acquisition, a lower domestic production deduction in the current year due to lower domestic income and lower tax-free interest income in the current year.

40

NBTY, Inc.

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

(in thousands, except per share amounts)

Nine months Ended June 30, 2009 Compared to the Nine months Ended June 30, 2008:

Net Sales

        Net sales by segment for the nine months ended June 30, 2009 as compared with the prior comparable period were as follows:

		Net Sales by Segment Nine months ended June 30,
		2009					2008					Comparison 2009 vs. 2008
Segment		Net Sales		% of total			Net Sales		% of total			$ change			% change
Wholesale / US Nutrition		$	1,152,930		60.4	%	$	801,943		50.8	%	$	350,987			43.8	%
North American Retail			151,577		7.9	%		158,501		10.1	%		(6,924	)		(4.4	)%
European Retail			441,757		23.2	%		462,337		29.3	%		(20,580	)		(4.5	)%
Direct Response / E-Commerce			161,549		8.5	%		155,114		9.8	%		6,435			4.1	%
	Net sales	$	1,907,813		100.0	%	$	1,577,895		100.0	%	$	329,918			20.9	%

Wholesale / US Nutrition

        Net sales for the Wholesale / US Nutrition segment increased $350,987 or 43.8% to $1,152,930 for the nine months ended June 30, 2009. This increase was due to net sales from domestic private label brands, which increased $321,557 primarily resulting from our acquisition of Leiner. Some of the major brands in this segment include Nature's Bounty, Solgar, Osteo Bi-Flex, Ester C and Sundown. Collectively, domestic sales of these brands decreased $9,836. Net sales from our sports nutrition brands increased $18,487 over the prior comparable period. We continue to adjust shelf space allocation among the US Nutrition brands to provide the best overall product mix and to respond to changing market conditions. These efforts have helped to strengthen US Nutrition's position in the mass market. US Nutrition continues to leverage valuable consumer sales information obtained from our Vitamin World retail stores and Puritan's Pride Direct Response/E-Commerce operations in order to provide its mass-market customers with data and analyses to drive mass market sales.

        We continue to use targeted promotions to grow overall net sales. Promotional programs and rebates as a percentage of sales were 9.6% for the nine months ended June 30, 2009 as compared to 9.7% for the prior comparable period.

        Product returns remained consistent as a percentage of sales at 2.0% of sales for the nine months ended June 30, 2009 as compared to 1.9% of sales for the prior comparable period. We expect sales returns relating to normal operations to trend at approximately 2% of Wholesale / US Nutrition sales in future quarters.

        One customer represented 30% and 20% of the Wholesale / US Nutrition segment's net sales for the nine months ended June 30, 2009 and 2008, respectively. This customer also represented 18% and 10% of total consolidated net sales for the nine months ended June 30, 2009 and 2008, respectively. The loss of this customer, or any one of our major customers, would have a material adverse effect on our results of operations if we were unable to replace such customers.

North American Retail

        Net sales for this segment decreased $6,924 or 4.4% to $151,577 for the nine months ended June 30, 2009. Sales for stores open more than one year (same store sales) decreased 3.0%. This decline in net sales is partially attributable to a shift in our Vitamin World stores strategy from reliance on promotional discounting to drive sales to an everyday low price for its customers.

41

NBTY, Inc.

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

(in thousands, except per share amounts)

        The following is a summary of North American Retail store activity for the nine months ended June 30, 2009 and 2008:

		Nine months ended June 30,
North American Retail stores:		2009			2008
Vitamin World
	Open at beginning of the period		441			457
	Opened during the period		8			6
	Closed during the period		(7	)		(16	)
	Open at end of the period		442			447
Le Naturiste
	Open at beginning of the period		81			80
	Opened during the period		6			—
	Closed during the period		(1	)		—
	Open at end of the period		86			80

        We anticipate opening an additional 2 Vitamin World stores and closing up to 2 under-performing Vitamin World stores during the remainder of this fiscal year.

European Retail

        The decrease in net sales for this segment is primarily the result of unfavorable foreign currency translation. The decline in net sales was partially offset by an increase in net sales from the acquisition of Julian Graves. Same store sales in U.S. dollars decreased 24.9% or $113,485 as compared to the prior comparable period. Same store sales in local currency declined 1.3% from the prior like period. This decrease was partially offset by the acquisition of Julian Graves, which contributed net sales of $85,316 for the nine months ended June 30, 2009.

42

NBTY, Inc.

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

(in thousands, except per share amounts)

        The following is a summary of European Retail store activity for the nine months ended June 30, 2009 and 2008:

	Nine months ended June 30,
European Retail stores:	2009			2008
Company-owned stores
Open at beginning of the period		975			604
Opened during the period		17			12
Acquired during the period		2			—
Closed during the period		(2	)		—
Open at end of the period		992			616
Franchised stores
Open at beginning of the period		22			22
Opened during the period		9			—
Closed during the period		(2	)		—
Open at end of the period		29			22

        We anticipate opening an additional 6 stores during the remainder of this fiscal year.

Direct Response / E-Commerce

        Direct Response/E-Commerce net sales increased $6,435 or 4.1% for the nine months ended June 30, 2009 as compared to the prior comparable period. These results reflect a lowering of prices to garner greater market share in a highly competitive environment.

        The average order size increased approximately 18% for the nine months ended June 30, 2009 as compared to the prior comparable period. We remain the vitamin and nutritional supplements leader in the direct response and e-commerce sectors and continue to increase the number of products available via our catalog and websites.

        This division continues to vary its promotional strategy throughout the fiscal year, utilizing highly promotional catalogs which are not offered in every quarter. Historical results reflect this pattern and therefore this division should be viewed on an annual, and not quarterly, basis.

43

NBTY, Inc.

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

(in thousands, except per share amounts)

Gross Profit

        Gross Profit by segment for the nine months ended June 30, 2009 as compared with the prior comparable period was as follows:

		Gross Profit by Segment Nine months ended June 30,
		2009					2008					Comparison 2009 vs. 2008
Segment		Gross Profit		% of sales			Gross Profit		% of sales			$ change			% change
Wholesale / US Nutrition		$	339,060		29.4	%	$	335,300		41.8	%	$	3,760			1.1	%
North American Retail			101,267		66.8	%		98,647		62.2	%		2,620			2.7	%
European Retail			275,667		62.4	%		287,657		62.2	%		(11,990	)		(4.2	)%
Direct Response / E-Commerce			100,433		62.2	%		92,222		59.5	%		8,211			8.9	%
	Gross Profit	$	816,427		42.8	%	$	813,826		51.6	%	$	2,601			0.3	%

        The Wholesale/US Nutrition segment's gross profit percentage decreased to 29.4% for the nine months ended June 30, 2009 as compared to 41.8% for the prior comparable period. The decline in gross margin was mainly due to higher raw material and other manufacturing costs and a larger concentration of sales of private label products which traditionally have a lower margin.

        The increase in the North American Retail segment's gross profit percentage to 66.8% for the nine months ended June 30, 2009 as compared to 62.2% for the comparable prior period reflects a shift in promotional strategy as well as a focus on rationalizing SKU's and enhanced visual merchandising. The decrease in the European Retail segment's gross profit dollars is the result of unfavorable foreign currency translation partially offset by the acquisition of Julian Graves. The increase in the Direct Response/E-Commerce segment's gross profit percentage to 62.2% for the nine months ended June 30, 2009 as compared to 59.5% for the prior comparable period reflects a decrease in promotional activity.

Advertising, Promotion and Catalog Expenses

        Total advertising, promotion and catalog expenses by segment for the nine months ended June 30, 2009 as compared with the prior comparable period were as follows:

		Nine months ended June 30,						Dollar Change			Percentage Change
		2009			2008			2009 vs. 2008			2009 vs. 2008
Wholesale / US Nutrition		$	58,176		$	72,816		$	(14,640	)		(20	)%
North American Retail			6,925			4,988			1,937			39	%
European Retail			9,128			10,223			(1,095	)		(11	)%
Direct Response / E-Commerce			13,343			20,595			(7,252	)		(35	)%
Corporate			317			286			31			11	%
	Total	$	87,889		$	108,908		$	(21,019	)		(19	)%
	Percentage of net sales		4.6	%		6.9	%

        The decrease in the Wholesale/US Nutrition segment's advertising, promotions and catalogs is due to a $5,044 decrease in television and radio campaigns as well as a decrease of $8,228 in magazine and newspaper advertising as compared to the prior comparable period. The increase in North American

44

NBTY, Inc.

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

(in thousands, except per share amounts)

Retail advertising relates to new promotions through free standing inserts in newspapers and magazines of $1,728. The decrease in the European Retail segment relates to the effect of foreign currency translation. The decrease in the Direct Response/E-commerce segment relates to a decrease in catalog costs of $1,999 due to fewer catalogs in circulation as well as a decrease in postcard mailings and internet advertising of $4,434 as compared to the prior period.

        We create our own advertising materials through our in-house staff of advertising associates. In the U.K. and Ireland, both Holland & Barrett and Nature's Way advertise on television and in national newspapers. GNC (UK) and De Tuinen also advertise in newspapers. SISU advertises in trade journals and magazines.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses by segment for the nine months ended June 30, 2009 as compared with the prior comparable period were as follows:

		Nine months ended June 30,						Dollar Change			Percentage Change
		2009			2008			2009 vs. 2008			2009 vs. 2008
Wholesale / US Nutrition		$	169,917		$	133,805		$	36,112			27	%
North American Retail			92,673			95,393			(2,720	)		(3	)%
European Retail			200,152			179,852			20,300			11	%
Direct Response / E-Commerce			41,853			45,927			(4,074	)		(9	)%
Corporate			48,582			45,613			2,969			7	%
	Total	$	553,177		$	500,590		$	52,587			11	%
	Percentage of net sales		29.0	%		31.7	%

        Certain expenses historically included in the Corporate segment have been re-allocated to other segments. The prior year amounts have been reclassified to conform to the current year presentation.

        The Wholesale/US Nutrition's selling, general and administrative expense ("SG&A") increased $36,112 for the nine months ended June 30, 2009 as compared to the prior comparable period. This increase includes an asset impairment charge of $3,270 for the nine months ended June 30, 2009. Other increases related to expanded operations as compared to the prior period include payroll and payroll related costs of $7,722 (which includes $1,797 for severance), building costs of $1,268 and depreciation and amortization of $3,133. In addition, freight costs increased $9,865 but remained consistent as a percentage of sales.

        The decrease in SG&A in the North American Retail segment is the result of cost reduction efforts across substantially all categories. In addition, the prior period included a charge of approximately $350 for asset impairments, which did not recur in the nine months ended June 30, 2009.

        The European Retail's SG&A increased $20,300 for the nine months ended June 30, 2009 as compared to the prior comparable period due to the acquisition of Julian Graves, which added $48,150 to total SG&A costs. In addition, legal costs of $4,822 were incurred in the current period in connection with the review of the Julian Graves acquisition by the Competition Commission in the UK. These increases were partially offset by a decrease due to foreign currency translation. In local

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

(in thousands, except per share amounts)

currency, and excluding the impact of the Julian Graves acquisition, SG&A costs increased approximately 7% due to increased occupancy expenses related to rent increases and new stores.

        The Direct Response/E-Commerce SG&A decreased $4,074 due to a decrease in outside services and temporary labor of $1,668, a decrease in freight costs of $519 and decreases across most expense categories due to the staff reorganization of this segment during the first quarter of fiscal 2009.

        The Corporate segment's SG&A increased $2,969 primarily due to an increase of $1,614 for severance costs.

IT Project Termination Costs

        During December 2008, management determined that certain information technology projects relating to the Direct Response segment would be terminated as they were determined to be ineffective and uneconomical. As a result, in December 2008, we recorded a charge to operations of $8,647, consisting of costs and future lease obligations not expected to provide any future economical benefit. During the three months ended June 30, 2009, $1,529 of these termination costs were reversed due to favorable negotiations with previous service providers.

        During June 2009, management terminated a new point of sale system project for retail operations as it was determined to be ineffective and uneconomical. As a result, previously capitalized software configuration, coding and other related costs and expenses of $11,070 were written-off during the three months ended June 30, 2009. In addition, prepaid maintenance costs of $586 were written off during the same period.

Interest Expense

        Interest expense increased $15,541 due to interest on the Term Loan and outstanding borrowings under the Revolving Credit Facility which were not outstanding during the prior comparable period.

Miscellaneous, net

        The components of miscellaneous, net were as follows:

	Nine months ended June 30,					Dollar Change
	2009			2008		2009 vs. 2008
Foreign exchange (losses) gains	$	(5,068	)	$	2,407	$	(7,475	)
Rental income		1,445			1,089		356
Investment income		977			6,839		(5,862	)
Other		687			754		(67	)
Total	$	(1,959	)	$	11,089	$	(13,048	)

        Miscellaneous, net decreased primarily due to unrealized foreign exchange losses on intercompany balances for the nine months ended June 30, 2009 associated with the strengthening of the U.S. dollar against the British Pound and Canadian dollar as compared to unrealized foreign exchange gains in the prior comparable period as well as lower investment income earned on lower cash and investment balances.

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

(in thousands, except per share amounts)

Provision for Income Taxes

        Our provision for income taxes is impacted by a number of factors, including federal taxes, our international tax structure, state tax rates in the jurisdictions where we conduct business, and our ability to utilize state tax credits that expire between 2013 and 2016. Therefore, our overall effective income tax rate could vary as a result of these factors. The effective income tax rate for the nine months ended June 30, 2009 and June 30, 2008 was 35.5% and 33.6%, respectively. The effective income tax rate was higher for the nine months ended June 30, 2009 as compared to the prior comparable period due to a higher effective state rate as a result of increased operations in California from the Leiner acquisition, a lower domestic production deduction in the current year due to lower domestic income and lower tax-free interest income in the current year.

Seasonality

        Although we believe that our business is not seasonal in nature, historically, we have experienced, and expect to continue to experience, a substantial variation in our net sales and operating results from quarter to quarter. We believe that the factors that influence this variability of quarterly results include general economic and industry conditions affecting consumer spending, changing consumer demands and current news on nutritional supplements, the timing of our introduction of new products, promotional program incentives offered to customers, the timing of catalog promotions, the level of consumer acceptance of new products and actions of competitors. Accordingly, a comparison of our results of operations from consecutive periods is not necessarily meaningful, and our results of operations for any period are not necessarily indicative of future performance. Additionally, we may experience higher net sales in a quarter depending upon when we have engaged in significant promotional activities.

Liquidity and Capital Resources

        Our primary sources of liquidity and capital resources are cash generated from operations and our revolving credit facility. The facility provides for revolving credit loans in the aggregate principal amount of up to $325,000 to be used for working capital and other general corporate purposes, and acquisitions. At June 30, 2009, no borrowings were outstanding under the revolving credit facility. We have used cash from operations and our revolving credit facility to finance working capital, facility expansions, acquisitions, capital expenditures and debt service requirements. We anticipate these uses will continue to be our principal uses of cash in future quarters.

        The following table sets forth, for the periods indicated, cash balances and working capital:

	As of June 30, 2009		As of September 30, 2008
Cash and cash equivalents at end of the period	$	69,817	$	90,180
Working capital	$	613,716	$	573,402

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

(in thousands, except per share amounts)

        The following table sets forth, for the period indicated, net cash flows provided by (used in) operating, investing and financing activities and other operating measures:

	Nine months ended June 30,
	2009			2008
Cash flow provided by operating activities	$	88,146		$	161,795
Cash flow (used in) provided by investing activities	$	(24,388	)	$	49,567
Cash flow used in financing activities	$	(83,684	)	$	(180,316	)
Total inventory turnover		2.38			2.60
Finished goods inventory turnover (excluding bulk)		5.06			4.39
Days sales outstanding in accounts receivable		33			37

        We monitor current and anticipated future levels of cash and cash equivalents in relation to anticipated operating, financing and investing requirements. Cash and cash equivalents held by our foreign subsidiaries are subject to U.S. income taxes upon repatriation to the U.S. We generally repatriate all earnings from our foreign subsidiaries where permitted under local law.

        The increase in working capital of $40,314 as compared to September 30, 2008 was primarily due to an increase in inventory and decreases in accrued purchases and accounts payable. The annualized total inventory turnover rate was approximately 2.38 times during the current period ended June 30, 2009 compared to 2.60 during the prior like period. The annualized finished goods inventory turnover (excluding bulk inventory) was approximately 5.06 times during the current period ended June 30, 2009 compared to 4.39 during the prior like period. At the time of the Leiner acquisition in July 2008, Leiner inventory levels were not adequate to maintain customer fulfillment levels. The increase in inventory reflects our ongoing efforts to maintain a sufficient supply of product to respond to our increased sales levels.

        Cash provided by operating activities during the nine month period ended June 30, 2009 was mainly attributable to net income and non-cash charges, offset by changes in operating assets and liabilities.

        During the nine month period ended June 30, 2009, cash flows used in investing activities consisted primarily of purchases of property, plant and equipment, offset by an escrow refund in connection with the Leiner acquisition.

        For the nine month period ended June 30, 2009 cash flows used in financing activities related to the net principal payments under long-term debt agreements and the revolving credit facility, as well as principal payments under capital lease obligations.

        We believe our cash generated from operations, as well as our undrawn borrowings under our $325,000 revolving credit facility, will be sufficient to fund our operations and meet our cash requirements to satisfy our working capital needs, capital expenditure needs, outstanding commitments, and other liquidity requirements associated with our existing operations over the next 18 to 24 months. Our ability to fund these requirements and comply with financial covenants under our debt agreements will depend on our cash flow from future operations and is subject to prevailing economic conditions and financial, business and other factors, some of which are beyond our control. In addition, as part of our strategy, we may pursue acquisitions and investments that are complementary to our business. Any material future acquisitions or investments will likely require additional capital and, therefore, we

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

(in thousands, except per share amounts)

cannot predict or assure that additional funds from existing sources will be sufficient for such future events.

Off-Balance Sheet Arrangements

        We have no off-balance sheet arrangements. For additional information relating to certain contractual cash obligations see below.

Contractual Cash Obligations and Other Commercial Commitments

        We conduct retail operations under operating leases, which expire at various dates through 2034. Some of the leases contain escalation clauses, as well as renewal options, and provide for contingent rent based upon sales plus certain tax and maintenance costs. At June 30, 2009, we had $647,172 in future minimum rental payments (excluding real estate tax and maintenance costs) for retail locations and other leases that have initial or noncancelable lease terms in excess of one year.

        We were committed to make future purchases for inventory related items, such as raw materials and finished goods, under various purchase arrangements with fixed price provisions aggregating $153,095 at June 30, 2009. Such purchase commitments are generally cancelable at our discretion until the order has been shipped, but require repayment of all expenses incurred through the date of cancellation. During the nine months ended June 30, 2009 no one supplier individually represented greater than 10% of our raw material purchases. We do not believe that the loss of any single supplier would have a material adverse effect on our consolidated financial condition or results of operations.

        We had $6,944 in open capital commitments at June 30, 2009, primarily related to furniture and fixtures related to store renovations, as well as other manufacturing equipment and computer hardware and software.

        At June 30, 2009, we had $9,542 in unrecognized tax benefits, the recognition of which would have an effect of $6,364 on income tax expense and the effective income tax rate. We do not believe that the amount will change significantly in the next 12 months. At this time, we are unable to make a reasonably reliable estimate of the timing of payments in individual years beyond 12 months due to uncertainties in the timing of tax audit outcomes.

        We have employment agreements with two of our executive officers. The agreements, entered into on March 1, 2008, each have a term of three years and are automatically renewed each year thereafter unless either party notifies the other to the contrary. These agreements provide for minimum salary levels and contain provisions regarding severance and change in control of the Company. The remaining commitment for salaries to these two officers as of June 30, 2009 was approximately $2,542. In addition, five members of Holland & Barrett's senior executive staff have service contracts terminable by us upon twelve months notice. The annual aggregate commitment for such senior executive staff as of June 30, 2009 was approximately $1,525.

        We maintain a consulting agreement with Rudolph Management Associates, Inc. for the services of Arthur Rudolph, one of our directors and the father of Scott Rudolph, our Chief Executive Officer. The agreement requires Mr. Rudolph to provide consulting services to us through December 31, 2009, in exchange for a consulting fee of $450 per year, payable monthly. In addition, Mr. Rudolph receives certain fringe benefits accorded to our other executives.

        We have grown our business through acquisitions, and under proper conditions, may continue to seek to acquire entities in similar or complementary businesses. Such acquisitions are likely to require

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

(in thousands, except per share amounts)

the incurrence and/or assumption of indebtedness and/or obligations, the issuance of equity securities or some combination thereof. In addition, we may from time to time determine to sell or otherwise dispose of certain of our existing assets or businesses; we cannot predict if any such transactions will be consummated, nor the terms or forms of consideration which might be required in any such transactions.

Inflation

        Inflation affects the cost of raw materials, goods and services we use. High energy costs and fluctuations in commodity prices can affect the cost of all raw materials and components. The competitive environment somewhat limits our ability to recover higher costs resulting from inflation by raising prices. However, we anticipate passing these costs to our customers, to the extent possible. We seek to mitigate the adverse effects of inflation primarily through improved productivity and strategic buying initiatives.

Financial Covenants and Credit Rating

        Our credit arrangements impose certain restrictions regarding capital expenditures and limit our ability to: incur additional indebtedness, dispose of assets, make repayments of indebtedness or amendments of debt instruments, pay distributions, create liens on assets and enter into sale and leaseback transactions, investments, loans or advances and acquisitions. Such restrictions could limit our ability to respond to market conditions, to provide for unanticipated capital investments or to take advantage of business or acquisition opportunities. We were in compliance with all covenants under our credit arrangements at June 30, 2009.

        At June 30, 2009, credit ratings were as follows:

Credit Rating Agency	Secured Debt	71/8% Notes	Overall
Standard and Poors	BBB-	BB	BB/Stable
Moody's	Ba1/LGD3	B1/LGD6	Ba2

Recent Accounting Developments

        In June 2009, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 168, "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162", ("SFAS 168"), which is effective for us on July 1, 2009. SFAS 168 does not alter current GAAP, but rather integrates existing accounting standards with other authoritative guidance. Under SFAS 168 there will be a single source of authoritative GAAP for nongovernmental entities and will supersede all other previously issued non-SEC accounting and reporting guidance. The adoption of SFAS 168 will not have any impact on our financial position or results of operations.

        In June 2009, FASB issued SFAS No. 167, "Amendments to FASB Interpretation No. 46(R)" ("SFAS 167"). SFAS 167 amends FIN 46(R), "Consolidation of Variable Interest Entities (revised December 2003)—an interpretation of ARB No. 51" to require an enterprise to perform an analysis to determine whether the enterprise's variable interest or interests give it a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as one with the power to direct the activities of a variable interest entity that most significantly impacts the entity's economic performance and the obligation to absorb losses of the entity that could

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NBTY, Inc.

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

(in thousands, except per share amounts)

potentially be significant to the variable interest. SFAS 167 will become effective for us October 1, 2010. We anticipate that the adoption of SFAS 167 will not have a significant impact on our consolidated financial position or results of operations since we currently do not have any variable interest entities.

        In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" ("SFAS 165"). SFAS 165 establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. We adopted SFAS 165 on June 30, 2009. The adoption of SFAS 165 had no impact on our financial position or results of operations.

        In April 2009, the FASB issued FSP No. 141R-1 "Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies" ("FSP 141R-1"). FSP 141R-1 amends the provisions in SFAS 141(R) for the initial recognition and measurement, subsequent measurement and accounting, and disclosures for assets and liabilities arising from contingencies in business combinations. FSP 141R-1 eliminates the distinction between contractual and non-contractual contingencies, including the initial recognition and measurement criteria in SFAS 141(R) and instead carries forward most of the provisions in SFAS 141 for acquired contingencies. FSP 141R-1 is effective for all business acquisitions occurring on or after October 1, 2009. The impact of the adoptions will be dependent upon the extent and nature of any future acquisitions.

        In April 2009, the FASB issued FASB Staff Position SFAS No. 107-1 and APB No. 28-1, "Interim Disclosures about Fair Value of Financial Instruments" ("FSP 107-1 and APB 28-1"). This FSP amends SFAS No. 107, "Disclosures about Fair Value of Financial Instruments" and APB Opinion No. 28, "Interim Financial Reporting", to require disclosures about fair value of financial instruments not measured on the balance sheet at fair value in interim financial statements as well as in annual financial statements. FSP 107-1 and APB 28-1 applies to all financial instruments within the scope of SFAS 107 and requires all entities to disclose the methods and significant assumptions used to estimate the fair value of financial instruments. FSP 107-1 and APB 28-1 became effective for us on June 30, 2009. The adoption of this FSP did not have a significant impact on our consolidated financial statements.

        In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" ("SFAS 162"). This statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States (the GAAP hierarchy). This Statement was effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles." The adoption of this statement did not have a material effect on our consolidated financial statements.

        In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133" ("SFAS 161"). SFAS 161 requires enhanced disclosures regarding an entity's derivative and hedging activities. These enhanced disclosures include information regarding how and why an entity uses derivative instruments; how derivative instruments and related hedge items are accounted for under SFAS 133, "Accounting for Derivative Instruments and Hedging Activities", and its related interpretations; and how derivative instruments and related hedge items affect an entity's financial position, financial performance and cash flows. We

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NBTY, Inc.

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

(in thousands, except per share amounts)

adopted SFAS 161 as of January 1, 2009. The adoption of SFAS 161 had no impact on our financial position or results of operations.

        In December 2007, the FASB issued SFAS No. 141 (revised 2007), ("SFAS 141R"), "Business Combinations", which replaces SFAS No. 141. The statement retains the purchase method of accounting for acquisitions, however, it includes changes in the way assets and liabilities are recognized in purchase accounting. It also changes the recognition of assets acquired and liabilities assumed arising from contingencies, requires the capitalization of in-process research and development at fair value, and requires the expensing of acquisition-related costs as incurred. SFAS 141R will become effective for us beginning October 1, 2009 and will apply prospectively to business combinations completed on or after that date. The impact of the adoption of SFAS 141R will be dependent on the extent and nature of any future acquisitions.

        In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159 permits companies to choose to measure certain financial instruments and other eligible items at fair value when the items are not otherwise currently required to be measured at fair value. Under SFAS 159, the decision to measure items at fair value is made at specified election dates on an irrevocable instrument-by-instrument basis. Companies electing the fair value option would be required to recognize changes in fair value in earnings and to expense upfront cost and fees associated with the item for which the fair value option is elected. Companies electing the fair value option are required to distinguish, on the face of the statement of financial position, the fair value of assets and liabilities for which the fair value option has been elected and similar assets and liabilities measured using another measurement attribute. SFAS 159 became effective for us on October 1, 2008. The adoption of SFAS 159 did not have any impact on our consolidated financial position or results of operations as we did not elect the fair value option.

        In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157"). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and enhances disclosures about fair value measurements. SFAS 157 applies when other accounting pronouncements require fair value measurements; it does not require new fair value measurements. We adopted SFAS 157 on October 1, 2008 for financial assets and liabilities carried at fair value and non financial assets and liabilities that are recognized or disclosed on a recurring basis. The adoption did not have a material effect on our consolidated financial statements. In February 2008, the FASB issued FASB Staff Position 157-2, which provides for a one-year deferral of the provisions of SFAS 157 for non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a non-recurring basis. FASB Staff Position 157-2 will become effective for us beginning October 1, 2009. We anticipate that the adoption of FASB Staff Position SFAS 157-2 will not have a significant impact on our consolidated financial position or results of operations.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

(in thousands)

Quantitative and Qualitative Disclosures About Market Risk

        We are subject to currency fluctuations and interest rate risks that arise from normal business operations. We regularly assess these risks.

        We have subsidiaries whose operations are denominated in foreign currencies (primarily the British pound sterling, the euro, the Canadian dollar and the Chinese yuan). We consolidate the earnings of our international subsidiaries by translating them into U.S. dollars. The statements of income of our international operations are translated into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar weakens against foreign currencies, the remeasurement of these foreign currencies denominated transactions results in increased net sales, operating expenses and net income. Similarly, our net sales, operating expenses and net income will decrease when the U.S. dollar strengthens against foreign currencies.

        The U.S. dollar volume of net sales denominated in foreign currencies was approximately $553,222, or 29.0% of total net sales, for the nine months ended June 30, 2009. A majority of our foreign currency exposure is denominated in the British pound sterling and Canadian dollars. For the nine months ended June 30, 2009, as compared to the prior comparable period, the change in currency rates between British pound sterling and Canadian dollar as compared to the U.S. dollar was a decline of 24% and 17%, respectively, resulting in a decrease of $128,414 and $19,217 in net sales and operating income, respectively. The total impact of all currency fluctuations on net income was a reduction of approximately $0.24 per diluted share for the nine months ended June 30, 2009.

        To manage the potential risk arising from changing interest rates and their impact on long-term debt, our policy is to maintain a combination of available fixed and variable rate financial instruments. We are exposed to changes in interest rates on our floating rate $325,000 revolving credit facility, our multicurrency term facility, and our Term Loan. With respect to the interest on the Term Loan, in August 2008, we entered into two interest rate swap contracts, each with a notional amount of $100 million. Under the terms of the swap contracts, variable interest payments will be swapped for fixed interest payments. The interest rate exposure on the multicurrency term facility is mitigated by the interest earned on the cash collateral securing the loan. Therefore, a hypothetical 10% change in interest rates would not have a material effect on our consolidated pretax income or cash flow. At June 30, 2009, there were no borrowings outstanding under our revolving credit facility. Therefore, a hypothetical 10% change in interest rates would not have a material effect on our consolidated pretax income or cash flow.

        The 7¹/8% Senior Subordinated Notes had a fair value at June 30, 2009, based on then quoted market prices, of $177,175. At June 30, 2009, based solely on a hypothetical 10% change in interest rates related to our fixed rate Notes, we estimate that the hypothetical fair value of our fixed rate debt would have changed approximately $5,000. We believe that the carrying value of all of our other financial instruments approximates fair value due to their short maturities and variable interest rates.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

        Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, have concluded, based on their respective evaluations as of the end of the period covered by this Report, that our disclosure controls and procedures are effective as of June 30, 2009.

Changes in Internal Control Over Financial Reporting

        There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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NBTY, Inc.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Prohormone products

        In March 2004, a putative class-action lawsuit was filed in New Jersey against MET-Rx USA, Inc. ("Met-Rx"), a subsidiary of the Company, claiming that the advertising and marketing of certain prohormone supplements were false and misleading and that plaintiff and the putative class of New Jersey purchasers of these products were entitled to damages and injunctive relief. Because these allegations were virtually identical to allegations made in a putative nationwide class-action previously filed against Met-Rx in California, we moved in 2004 to dismiss or stay the New Jersey action pending the outcome of the California action. The motion was granted, and the New Jersey action is stayed at this time. The California action against Met-Rx had been dismissed in 2008.

Nutrition Bars

        Our subsidiary, Rexall Sundown, Inc. ("Rexall"), and certain of its subsidiaries are defendants in a class-action lawsuit brought in 2002 on behalf of all California consumers who bought various nutrition bars. Plaintiffs allege misbranding of nutrition bars and violations of California unfair competition statutes, misleading advertising and other similar causes of action. Plaintiffs seek restitution, legal fees and injunctive relief. We have defended this action vigorously.

        This case was initially stayed for all purposes in early 2005 pending resolution of relevant cases before the California Supreme Court. In December 2007, after these cases were resolved and while Rexall's and the other defendants' renewed motion for judgment on the pleadings was pending, the Court again stayed the case for all purposes, pending rulings on other relevant cases before the California Supreme Court. The California Supreme Court issued a ruling in those other cases on February 11, 2008, and that ruling became final on January 12, 2009. Nevertheless, in light of still more relevant cases pending before the California Supreme Court, all parties to this case have agreed that the stay should remain in place. Based upon the information currently available, no determination can be made at this time as to the final outcome of this case, nor can its materiality be accurately ascertained.

        In addition to the foregoing, other regulatory inquiries, claims, suits and complaints (including product liability and intellectual property claims) arise in the ordinary course of our business. We believe that such other inquiries, claims, suits and complaints would not have a material adverse effect on our consolidated financial condition or results of operations, if adversely determined against us.

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NBTY, Inc.

Item 1A. Risk Factors

Risk Factors

        In addition to the other information set forth in this Report, you should carefully consider the risk factors disclosed under part 1—"Item 1A. Risk Factors" in our annual report on Form 10-K for the year ended September 30, 2008, which could materially adversely affect our business, financial condition, operating results and cash flows. The risks and uncertainties described in our Form 10-K for the year ended September 30, 2008 are not the only ones we face. Risks and uncertainties not currently known to us or that we currently deem immaterial also may materially adversely affect our business, financial condition operating results or cash flows. Since September 30, 2008, there have been no significant changes relating to risk factors.

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Item 6. Exhibits

Exhibit No.		Description
	10.1	Seventh Amendment to Executive Consulting Agreement, effective January 1, 2009, by and between NBTY, Inc. and Rudolph Management Associates, Inc.(1)
	10.2	NBTY, Inc. Year 2009 Equity Awards Plan(2)
	10.3	Indenture of Lease made as of the 20th day of August, 2003, by and between WARWICK MALL L.L.C. and Vitamin World, Inc.(3)
	10.4	NBTY Retirement Benefits Policy for Certain Eligible Members of the Board of Directors(3)
	31.1	Rule 13a-14(a) Certification of Chief Executive Officer*
	31.2	Rule 13a-14(a) Certification of Chief Financial Officer*
	32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
	32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

*

Filed herewith

(1)

Incorporated by reference to NBTY, Inc.'s Form 10-Q filed February 9, 2009 (File #001-31788).

(2)

Incorporated by reference to NBTY, Inc.'s Proxy Statement, filed January 14, 2009, for the Annual Meeting of Stockholders held on February 27, 2009 (File #001-31788).

(3)

Incorporated by reference to NBTY, Inc.'s Form 10-Q filed May 8, 2009 (File #001-31788).

57

SIGNATURES

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

	NBTY, INC. (Registrant)
Date: August 7, 2009	By:	/s/ SCOTT RUDOLPH Scott Rudolph Chairman and Chief Executive Officer (Principal Executive Officer)
Date: August 7, 2009	By:	/s/ HARVEY KAMIL Harvey Kamil President and Chief Financial Officer (Principal Financial and Accounting Officer)

58