Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2015 | Nov. 13, 2015 | Mar. 31, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | NBTY INC | ||
Entity Central Index Key | 70,793 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | Yes | ||
Entity Current Reporting Status | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 1,000 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Current assets: | ||||
Cash and cash equivalents | $ 303,350 | $ 139,488 | $ 198,561 | $ 315,136 |
Accounts receivable, net | 198,693 | 175,701 | ||
Inventories | 844,223 | 856,934 | ||
Deferred income taxes | 56,194 | 26,242 | ||
Other current assets | 59,831 | 64,761 | ||
Total current assets | 1,462,291 | 1,263,126 | ||
Property, plant and equipment, net | 605,708 | 597,202 | ||
Goodwill | 1,118,020 | 1,163,282 | 1,260,802 | |
Intangible assets, net | 1,664,538 | 1,791,592 | ||
Other assets | 17,852 | 8,207 | ||
Total assets | 4,868,409 | 4,823,409 | ||
Current liabilities: | ||||
Current portion long-term debt | 34,496 | 261 | ||
Accounts payable | 282,479 | 227,877 | ||
Accrued expenses and other current liabilities | 249,561 | 221,056 | ||
Total current liabilities | 566,536 | 449,194 | ||
Long-term debt, net of current portion | 2,129,158 | 2,099,487 | ||
Deferred income taxes | 701,694 | 707,962 | ||
Other liabilities | 39,275 | 53,386 | ||
Total liabilities | $ 3,436,663 | $ 3,310,029 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Common stock, successor, $0.01 par; one thousand shares authorized, issued and outstanding | ||||
Capital in excess of par | $ 1,542,584 | $ 1,561,014 | ||
Accumulated deficit | (1,136) | (18,431) | ||
Accumulated other comprehensive loss | (109,702) | (29,203) | (13,584) | (18,594) |
Total stockholders' equity | 1,431,746 | 1,513,380 | $ 1,629,126 | $ 1,709,519 |
Total liabilities and stockholders' equity | $ 4,868,409 | $ 4,823,409 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2015 | Sep. 30, 2014 |
Common stock, par (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000 | 1,000 |
Common stock, shares issued (in shares) | 1,000 | 1,000 |
Common stock, shares outstanding (in shares) | 1,000 | 1,000 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Consolidated Statements of Income and Comprehensive Income (Loss) | |||||||||||
Net sales | $ 796,867 | $ 815,610 | $ 787,876 | $ 852,771 | $ 792,686 | $ 806,961 | $ 779,026 | $ 827,105 | $ 3,226,124 | $ 3,205,778 | $ 3,163,041 |
Costs and expenses: | |||||||||||
Cost of sales (See Note 4) | 1,746,462 | 1,740,417 | 1,700,909 | ||||||||
Advertising, promotion and catalog | 198,203 | 202,754 | 189,485 | ||||||||
Selling, general and administrative | 978,265 | 952,533 | 910,187 | ||||||||
Goodwill and intangible asset impairment charges | 55,000 | 207,334 | |||||||||
Facility restructuring charges (See Note 4) | 29,493 | 32,695 | |||||||||
Total costs and expenses | 3,007,423 | 3,103,038 | 2,833,276 | ||||||||
Income from operations | 218,701 | 102,740 | 329,765 | ||||||||
Other income (expense): | |||||||||||
Interest | (132,930) | (136,038) | (147,100) | ||||||||
Miscellaneous, net | 1,734 | (709) | 1,693 | ||||||||
Total other income (expense) | (131,196) | (136,747) | (145,407) | ||||||||
Income (loss) before income taxes | (32,067) | 47,425 | 16,431 | 55,716 | (177,856) | 48,028 | 15,468 | 80,353 | 87,505 | (34,007) | 184,358 |
Provision for income taxes | 13,087 | 10,145 | 54,878 | ||||||||
Net Income (loss) | $ (5,974) | $ 33,878 | $ 10,609 | $ 35,906 | $ (141,140) | $ 33,267 | $ 9,900 | $ 53,821 | 74,418 | (44,152) | 129,480 |
Other comprehensive (loss) income, net of tax: | |||||||||||
Foreign currency translation adjustment, net of taxes of $(2,970), $1,603 and $958, respectively | (81,220) | (18,799) | 605 | ||||||||
Change in fair value of interest rate swaps, net of taxes of $(442), $(2,003) and $(2,790), respectively | 721 | 3,180 | 4,405 | ||||||||
Total other comprehensive (loss) income, net of tax | (80,499) | (15,619) | 5,010 | ||||||||
Comprehensive (loss) income | $ (6,081) | $ (59,771) | $ 134,490 |
Consolidated Statements of Inc5
Consolidated Statements of Income and Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Consolidated Statements of Income and Comprehensive Income (Loss) | |||
Foreign currency translation adjustment, tax expense (benefit) | $ (2,970) | $ 1,603 | $ 958 |
Change in fair value of interest rate swaps, tax expense (benefit) | $ (442) | $ (2,003) | $ (2,790) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Capital in Excess of Par | (Deficit) Retained Earnings | Other Comprehensive Income (Loss) | Total |
Increase (Decrease) in Stockholders' Equity | |||||
Revision (See Note 2) | Revision to Financial Statements | $ 4,287 | $ 4,287 | |||
Balance (As Presented) at Sep. 30, 2012 | $ 1,554,883 | 168,943 | $ (18,594) | 1,705,232 | |
Balance at Sep. 30, 2012 | 1,554,883 | 173,230 | (18,594) | 1,709,519 | |
Balance (in shares) (As Presented) at Sep. 30, 2012 | 1 | ||||
Balance (in shares) at Sep. 30, 2012 | 1 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 129,480 | 129,480 | |||
Other comprehensive income (loss), net of tax | 5,010 | 5,010 | |||
Dividend to Holdings | (216,926) | (216,926) | |||
Stock-based compensation | 2,043 | 2,043 | |||
Balance at Sep. 30, 2013 | 1,556,926 | 85,784 | (13,584) | 1,629,126 | |
Balance (in shares) at Sep. 30, 2013 | 1 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (44,152) | (44,152) | |||
Other comprehensive income (loss), net of tax | (15,619) | (15,619) | |||
Dividend to Holdings | (60,063) | (60,063) | |||
Stock-based compensation | 4,088 | 4,088 | |||
Balance (Revision to Financial Statements) | 4,287 | ||||
Balance at Sep. 30, 2014 | 1,561,014 | (18,431) | (29,203) | 1,513,380 | |
Balance (in shares) at Sep. 30, 2014 | 1 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 74,418 | 74,418 | |||
Other comprehensive income (loss), net of tax | (80,499) | (80,499) | |||
Dividend to Holdings | (21,275) | (57,123) | (78,398) | ||
Stock-based compensation | 2,845 | 2,845 | |||
Balance at Sep. 30, 2015 | $ 1,542,584 | $ (1,136) | $ (109,702) | $ 1,431,746 | |
Balance (in shares) at Sep. 30, 2015 | 1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flow - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities: | |||
Net Income (loss) | $ 74,418 | $ (44,152) | $ 129,480 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Impairments and disposals of assets | 63,781 | 214,813 | 5,269 |
Depreciation of property, plant and equipment | 89,850 | 60,530 | 64,883 |
Amortization of intangible assets | 45,556 | 46,027 | 45,753 |
Foreign currency transaction loss (gain) | 4,929 | 1,702 | (946) |
Amortization and write-off of deferred financing fees | 18,791 | 19,033 | 22,504 |
Stock-based compensation | 2,845 | 4,088 | 2,043 |
Allowance for doubtful accounts | 619 | 988 | (2,587) |
Amortization of incremental inventory fair value | 2,417 | ||
Inventory reserves | 6,475 | 6,006 | 2,042 |
Deferred income taxes | (30,261) | (48,881) | 5,293 |
Call premium on term loan | (15,075) | ||
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | (31,941) | (6,700) | (4,696) |
Inventories | (29,093) | (123,071) | (14,350) |
Other assets | 4,327 | 372 | (3,733) |
Accounts payable | 46,252 | (30,932) | 45,753 |
Accrued expenses and other liabilities | 23,971 | 2,921 | 27,526 |
Net cash provided by operating activities | 290,519 | 102,744 | 311,576 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (115,460) | (105,207) | (129,220) |
Proceeds from sale of buildings and equipment | 933 | 7,188 | 7,548 |
Cash paid for acquisitions, net of cash acquired | (82,473) | ||
Proceeds from sale of powder facility assets | 23,983 | ||
Net cash used in investing activities | (90,544) | (98,019) | (204,145) |
Cash flows from financing activities: | |||
Principal payments | (871) | (378) | (603) |
Proceeds from sale-leaseback | 52,826 | ||
Proceeds from borrowings under the revolver | 80,000 | ||
Paydowns of borrowings under the revolver | (80,000) | ||
Payments for financing fees | (611) | (7,387) | |
Dividends paid | (78,398) | (60,063) | (216,926) |
Net cash used in financing activities | (27,054) | (60,441) | (224,916) |
Effect of exchange rate changes on cash and cash equivalents | (9,059) | (3,357) | 910 |
Net increase (decrease) in cash and cash equivalents | 163,862 | (59,073) | (116,575) |
Cash and cash equivalents at beginning of year | 139,488 | 198,561 | 315,136 |
Cash and cash equivalents at end of year | $ 303,350 | $ 139,488 | $ 198,561 |
Nature of Business
Nature of Business | 12 Months Ended |
Sep. 30, 2015 | |
Nature of Business | |
Nature of Business | 1. Nature of Business NBTY, Inc., and together with its subsidiaries, (the "Company," "we," or "us") is the leading vertically integrated manufacturer, marketer, distributor and retailer of high-quality VMHS products in the United States, with operations worldwide. We currently market a broad portfolio of well-known brands and third party label products. Our key consumer product brands include Nature's Bounty®, Sundown®, Pure Protein®, Solgar®, Body Fortress®, Osteo Bi Flex®, MET Rx®, Balance Bar® and Ester C®. We also operate specialty retailers of health and wellness products, primarily focused on providing VMHS solutions to our end consumers. Our specialty retailer businesses primarily operate under the Holland & Barrett®, Puritan's Pride® and Vitamin World® banners. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation On October 1, 2010, pursuant to an Agreement and Plan of Merger, dated as of July 15, 2010, among NBTY, Holdings formed by an affiliate of TC Group, L.L.C. (d/b/a The Carlyle Group) and Alphabet Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Holdings ("Merger Sub") formed solely for the purpose of entering into the Merger, Merger Sub merged with and into NBTY with NBTY as the surviving corporation (also referred herein as the "Merger"). As a result of the Merger, NBTY became a wholly owned subsidiary of Holdings. Our financial statements are prepared in conformity with U.S. generally accepted accounting principles ("GAAP"). The consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions are eliminated in consolidation. Revision to Financial Statements During the preparation of the annual consolidated financial statements for the fiscal year ended September 30, 2015 ("fiscal 2015") the Company discovered a financial statement error attributable to the accounting for the accelerated depreciation of assets being sold in conjunction with the closure of its nutritional bar manufacturing plant. More specifically, the Company determined that accelerated depreciation had been understated for the three and nine months ended June 30, 2015 by $4,904 and $6,539, respectively. Accordingly, the Company restated those periods. Additionally, in prior interim periods during fiscal 2015 the Company had recorded and disclosed out-of-period adjustments that the Company concluded at the time of recording of those adjustments, based on its evaluation of both quantitative and qualitative factors, were not material to any of its previously issued consolidated financial statements. These adjustments included the following: • D uring the first quarter of fiscal 2015, the Company recorded an out-of-period adjustment to cost of sales and label inventory of $3,708. This immaterial adjustment is a result of the Company correcting its policy of expensing all labels upon receipt. Accordingly on-hand labels are now recorded as a part of ending inventory on the consolidated balance sheet. • D uring the second and third quarter of fiscal 2015, the Company recorded an out-of-period adjustment to selling, general and administrative expenses and cost of sales and prepaid rent totaling $3,252. This immaterial adjustment is a result of the Company correcting its policy of expensing rent, primarily at certain retail locations, at the payment date. Accordingly prepaid rent is now recorded on the consolidated balance sheet and expensed during the period of use. The Company concluded that the aggregate impact of these errors resulted in a material misstatement to its consolidated financial statements for the three and nine months ended June 30, 2015. In connection with the Company's restatement of those interim consolidated financial statements the Company revised its historical financial statements to reflect the impact of the correction of the accounting policies noted above. The impact of correcting these policies was recorded as an adjustment to shareholder's equity as of September 30, 2012. Therefore, the Consolidated Statement s of Shareholder's Equity and the Consolidated Balance Sheet have been revised to reflect this change. There was no change to the previously reported Consolidated Statement s of Operations and Comprehensive Income (Loss), as the impact to the Company's results of operations for all previously reported periods was de minimis. Furthermore, there was no change to the Consolidated Statement s of Cash Flows and no impact on any covenants contained in its debt agreements. Accordingly the C ompany has revised the following captions on the Consolidated Balance Sheet for September 30, 2014 as follows: increased Inventories by $3,708 ; increased Other Current Assets by $3,252; decreased Deferred income taxes by $2,673; increased each of Total Current assets, Total assets, and Total shareholder's equity by $4,287; and decreased accumulated deficit by $4,287. Segment Reporting During the fiscal year ended September 30, 2015, the Company changed the names of its four segments to more accurately portray the brands and markets in which we do business. There were no other changes in the presentation of our segments. The changes to the names are as follows: New Segment Name Previous Segment Name Consumer Products Group Wholesale Holland & Barrett International European Retail Puritan's Pride Direct Response/E-Commerce Vitamin World North American Retail 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 dates of the financial statements and reported amounts of revenues and expenses during the reporting periods. 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 that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our most significant estimates include: sales returns, promotions and other allowances; inventory valuation and obsolescence; valuation and recoverability of long-lived assets, including goodwill and intangible assets; income taxes; and accruals for the outcome of current litigation. Cash and Cash Equivalents We consider all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. Revenue Recognition We recognize product revenue when title and risk of loss have transferred to the customer, there is persuasive evidence of an arrangement to deliver a product, delivery has occurred, the sales price is fixed or determinable and collectibility is reasonably assured. The delivery terms for most sales within the Consumer Products Group and Puritan's Pride segments are F.O.B. destination. Generally, title and risk of loss transfer to the customer at the time the product is received by the customer. With respect to retail store operations, we recognize revenue upon the sale of products to customers. Net sales represent gross sales invoiced to customers, less certain related charges for discounts, returns and other promotional program incentive allowances. Sales Returns and Other Allowances Allowance for sales returns: Estimates for sales returns are based on a variety of factors, including actual return experience of specific products or similar products. We are able to make reasonable and reliable estimates of product returns based on our 40 plus year history in this business. We also review our estimates for product returns based on expected return data communicated to us by customers. Additionally, we monitor the levels of inventory at our largest customers to avoid excessive customer stocking of merchandise. Allowances for returns of new products are estimated by reviewing data of any prior relevant new product return information. We also monitor the buying patterns of the end-users of our products based on sales data received by our retail outlets in North America and Europe. Promotional program incentive allowances: We estimate our allowance for promotional program incentives based upon specific outstanding marketing programs and historical experience. The allowance for sales incentives offered to customers is based on various contractual terms or other arrangements agreed to in advance with certain customers. Generally, customers earn such incentives as specified sales volumes are achieved. We accrue these incentives as a reduction to sales either at the time of sale or over the period of time in which they are earned, depending on the nature of the program. Allowance for doubtful accounts: We perform on-going credit evaluations of our customers and adjust credit limits based upon payment history and the customer's current credit worthiness, as determined by our review of current credit information. We estimate bad debt expense based upon historical experience as well as specifically identified customer collection issues to adjust the carrying amount of the related receivable to its estimated net realizable value. Accounts receivable are presented net of the following reserves at September 30: 2015 2014 Promotional program incentive allowances $ $ Allowance for sales returns Allowance for doubtful accounts $ $ Inventories Inventories are stated at the lower of cost (first-in first-out method) or market. The cost elements of inventories include materials, labor and overhead. In evaluating whether inventories are stated at the lower of cost or market, we consider such factors as the amount of inventory on hand, estimated time required to sell such inventory, remaining shelf life and current and expected market conditions, including levels of competition. Based on this evaluation, we record an adjustment to cost of sales to reduce inventories to its estimated net realizable value. Property, Plant and Equipment Property, plant and equipment are carried at cost. Depreciation is charged on a straight-line basis over the estimated useful lives of the related assets. The costs of normal maintenance and repairs are charged to expense when incurred. Expenditures which significantly improve or extend the life of an asset are capitalized and depreciated over the asset's remaining useful life. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the estimated useful lives of the related assets or the remaining lease term. Upon sale or disposition, the related cost and accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is reflected in operations. Capitalized Lease The Company has a capital lease for a warehouse located in the UK, expiring in 2045. The capital lease asset is included in property, plant and equipment, net in the accompanying Consolidated Balance Sheets. Amortization expense on the capital lease asset is recorded as depreciation expense and is predominately included in cost of sales. Capital lease liabilities are recorded at the lesser of the estimated fair market value of the leased property or the net present value of the aggregate future minimum lease payments and are included in current portion of long-term debt and long-term debt, net of current portion in the accompanying Consolidated Balance Sheets. Interest on these obligations is included in interest expense in the Consolidated Statements of Operations. Capitalized Software Costs We capitalize certain costs related to the acquisition and development of software for internal use and amortize these costs using the straight-line method over the estimated useful life of the software. These costs are included in property, plant and equipment in the accompanying Consolidated Balance Sheets. Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized, but instead are tested for impairment annually or more frequently if impairment indicators are present. We consider the following to be some examples of important indicators that may trigger an impairment review: (i) a history of cash flow losses at retail stores; (ii) significant changes in the manner or use of the acquired assets in our overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; and (v) regulatory changes. Our annual impairment testing date is as of July 1, the first day of our fourth fiscal quarter. Goodwill is tested for impairment using a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying value. If the fair value of a reporting unit exceeds the carrying value of the net assets assigned to a reporting unit, goodwill is not considered impaired and no further testing is required. If the carrying amount of the reporting unit exceeds its fair value, a second step is performed to determine whether there is a goodwill impairment, and if so, the amount of the impairment. This step revalues all assets and liabilities of the reporting unit to their current fair value and then compares the implied fair value of the reporting unit's goodwill to the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. We use a combination of the income and market approaches, weighted equally, to estimate the fair value of our reporting units. The fair value of our indefinite-lived trademarks is generally determined based on the relief from royalty method under the income approach, which requires us to estimate a reasonable royalty rate, identify relevant projected revenues and expenses, and select an appropriate discount rate. The evaluation of indefinite-lived intangible assets for impairment requires management to use significant judgments and estimates including, but not limited to, projected future net sales, operating results, and cash flows of our business. We base our fair value estimates on assumptions we believe to be reasonable, but such assumptions are subject to inherent uncertainties. Accordingly, if actual results fall short of such estimates, significant future impairments could result. An impairment charge would reduce income from operations in the period it was determined that the charge was needed. Goodwill and intangible assets are further discussed in Note 7 to the Consolidated Financial Statements. Impairment of Long-Lived Assets We evaluate the need for an impairment charge relating to long-lived assets, including definite lived intangible assets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset group to its expected future net cash flows generated by the asset group. If the carrying amount of an asset group exceeds its estimated undiscounted future cash flows, the carrying amount is compared to its fair value and an impairment charge is recognized to the extent of the difference. Considerable management judgment is necessary to estimate projected future operating cash flows. Accordingly, if actual results fall short of such estimates, significant future impairments could result. Income Taxes We recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. We estimate the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined that such assets will, more likely than not, go unused. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reversed. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, we operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions. We believe adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. NBTY Inc. and its subsidiaries are included in the consolidated United States federal and certain state corporate income tax returns of Holdings. NBTY calculates the provision for income taxes by using a "separate return" method. Under this method, we are assumed to file separate returns with the tax authorities, thereby reporting our taxable income or loss and paying the applicable tax to or receiving the appropriate refund from Holdings. Our current provision is the amount of tax payable or refundable on the basis of hypothetical, current-year separate returns. We provide deferred taxes on temporary differences and on any carryforwards that we could claim on our hypothetical returns and assess the need for a valuation allowance on the basis of our projected separate return results. Any difference between the tax provision (or benefit) allocated to us under the separate return method and payments to be made to (or received from) Holdings for tax expense are recorded as either payable or receivable. Accordingly, our tax liability under the separate return method represents the amount payable in excess of Holdings consolidated obligation that is expected to be paid in the future to the extent permitted by our credit agreement. Accruals for Litigation and Other Contingencies We are subject to legal proceedings, lawsuits and other claims related to various matters. We are required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. We determine the amount of reserves needed, if any, for each individual issue based on our knowledge and experience and discussions with legal counsel. These reserves may change in the future due to new developments in each matter (including the enactment of new laws), the ultimate resolution of each matter or changes in approach, such as a change in settlement strategy. In some instances, we may be unable to make a reasonable estimate of the liabilities that may result from the final resolution of certain contingencies disclosed and accordingly, no reserve is recorded until such time that a reasonable estimate may be made. Shipping and Handling Costs We incur shipping and handling costs in all segments of our operations. These costs, included in selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive (Loss) Income, were $93,301, $97,382 and $92,062 for the fiscal years ended September 30, 2015, 2014 and 2013, respectively. Advertising, Promotion and Catalog We expense the production costs of advertising as incurred, except for the cost of mail order catalogs, which are capitalized and amortized over our expected period of future benefit, which typically approximates two months. Capitalized costs for mail order catalogs at September 30, 2015 and 2014 were $667 and $671, respectively. Total mail order catalog expense was $8,001, $9,093 and $7,713 for the fiscal years ended September 30, 2015, 2014 and 2013, respectively, and is included in advertising, promotion and catalog in the Consolidated Statements of Operations and Comprehensive (Loss) Income. Foreign Currency The functional currency of our foreign subsidiaries is the applicable local currency. The translation of the applicable foreign currencies into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts and cash flows using average rates of exchange prevailing during the year. Adjustments resulting from the translation of foreign currency financial statements are included in other Comprehensive Income (Loss) and accumulated in a separate component of Stockholders' Equity. Derivatives and Hedging Activities All derivative financial instruments are recognized at fair value as either assets or liabilities in the Consolidated Balance Sheets. Changes in the fair values of these derivatives are reported in operations or accumulated other comprehensive income (loss) depending on the designation of the derivative and whether it qualifies for hedge accounting. For derivatives that had been formally designated as cash flow hedges (interest rate swap agreements), the effective portion of changes in the fair value of the derivative was recorded in accumulated other comprehensive income (loss) and reclassified into operations when interest expense on the underlying borrowings was recognized. For hedges of the net investment in foreign subsidiaries (cross currency swap agreements), changes in fair value of the derivative are recorded in accumulated other comprehensive income (loss) to offset the change in the value of the net investment being hedged. We do not use derivative financial instruments for trading purposes. Recent Accounting Developments In May 2014, the Financial Accounting Standards Board ("FASB") issued guidance on revenue from contracts with customers that will supersede virtually all existing revenue recognition guidance, including industry-specific guidance, and is designed to create greater comparability for financial statement users across industries and jurisdictions. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The guidance would have been effective for us beginning October 1, 2017, however in July 2015, the FASB decided to defer the effective date of the new standard by one year. Early adoption would be permitted for us beginning October 1, 2017. The guidance permits the use of either a retrospective or cumulative effect transition method. We have not yet selected a transition method and are currently evaluating the impact of the amended guidance on our consolidated financial statements and related disclosures. In January 2015, the FASB issued guidance which eliminates from GAAP the concept of extraordinary items. The guidance is effective for us beginning October 1, 2016, and early adoption is permitted, provided that adoption is applied from the beginning of the fiscal year of adoption. This guidance may be applied prospectively or retrospectively to all prior periods presented in the financial statements. The adoption of this guidance is not expected to have an impact on our consolidated financial statements. In February 2015, the FASB issued guidance that amends the current consolidation guidance. The amendments affect both the variable interest entity and voting interest entity consolidation models. The new guidance is effective for the Company beginning October 1, 2016, with early adoption permitted. This new guidance is not expected to have a material impact on our consolidated financial statements. In April 2015, the FASB issued guidance which changes the presentation of debt issuance costs. Under the new guidance, debt issuance costs are presented as a reduction of the carrying amount of the related liability, rather than as an asset. This guidance was further clarified in August 2015 whereby the FASB explicitly stated that deferred financing costs related to line-of-credit arrangements could be deferred and treated as an asset and subsequently amortized ratably over the term of the line-of-credit. The guidance is effective for us beginning October 1, 2016, and early adoption is permitted. This guidance has been early adopted and applied retrospectively to the prior periods presented in the consolidated financial statements. See Note 9 "Long-Term Debt." In July 2015, the FASB issued guidance which applies to inventory for which cost is determined by methods other than the last-in first-out and the retail inventory method. Under the new guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance is effective for us beginning October 1, 2017, and should be applied prospectively with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements and related disclosures. In September 2015, the FASB issued guidance which requires the acquiring company in a business combination to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this guidance require that the acquiring company record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of a change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. This guidance is effective for us beginning October 1, 2016 and for interim periods therein. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements. |
Acquisitions
Acquisitions | 12 Months Ended |
Sep. 30, 2015 | |
Acquisitions | |
Acquisitions | 3. Acquisitions Balance Bar On November 26, 2012, NBTY acquired all of the outstanding shares of Balance Bar Company ("Balance Bar"), a company that markets and sells nutritional bars, for a purchase price of $77,978 of cash. NBTY used funds drawn from the revolving portion of its senior secured credit facilities to finance this acquisition. Essenza In June 2013, our subsidiary, NBTY Europe Limited, acquired Essenza N.V. ("Essenza"), a Belgian company operating 13 retail stores, for a net purchase price of approximately $4,163 (€3,200 euros). The allocation of net assets acquired consisted of cash, inventory, property, plant and equipment, tradename, goodwill, accounts payable and accrued liabilities and long term debt. The goodwill of approximately $4,200 associated with this acquisition is not currently deductible for tax purposes. Proforma financial information and actual year to date results related to Essenza and Balance Bar are not provided as their impact was not material to our consolidated financial statements, individually or in the aggregate. |
Sale of Nutritional Bar Assets
Sale of Nutritional Bar Assets and Powder Facility; Facility Restructuring Charges | 12 Months Ended |
Sep. 30, 2015 | |
Sale of Nutritional Bar Assets and Powder Facility; Facility Restructuring Charges. | |
Sale of Nutritional Bar Assets and Powder Facility; Facility Restructuring Charges | 4. Sale of Nutritional Bar Assets and Powder Facility; Facility Restructuring Charges Sale of Nutritional Bar Assets and Powder Facility In March 2015, NBTY and Nellson Nutraceutical, LLC ("Nellson") entered into (i) a bar asset purchase agreement, (the "Bar APA") and (ii) a powder asset purchase agreement (the "Powder APA" and, together with the Bar APA, the "APAs"), pursuant to which NBTY agreed to sell certain production assets, raw materials, packaging, labeling, in process products, component inventories and contracts (the "Transferred Assets") associated with NBTY's nutritional bar and powder manufacturing operations (the "Divested Manufacturing Operations"). The closing of the sale pursuant to the Powder APA occurred on June 26, 2015. The sales price for the production assets and transferred contracts was $4,228. The sales price for the raw materials, packaging, labels, work-in-process and component inventories was $16,722, net of closing adjustments. The sale pursuant to the Bar APA is expected to be completed by the end of the first half of fiscal 2016, and is subject to customary closing conditions. The aggregate sales price for the production assets to be sold pursuant to the Bar APA is approximately $12,000, which resulted in accelerated depreciation as noted below. The sales price for the raw materials, packaging, labels, work-in-process and component inventories to be transferred pursuant to the Bar APA will be equal to NBTY's book value for such assets, as estimated by NBTY prior to the closing of the transactions, and subject to post-closing adjustments. As of September 30, 2015, the production assets within the bar plant are recorded in Property plant and equipment, as they are currently being used for manufacturing operations and are not readily available to be sold in their existing condition. As a result of these arrangements, we will incur cumulative net charges of approximately $34,000 before tax over the period in which these transactions are completed, of which non-cash charges will consist primarily of accelerated depreciation and a write-off of Goodwill of approximately $28,000; costs related to workforce reductions will be approximately $2,500 and other costs will be approximately $5,192, partially offset by a gain of $1,692 on the sale of a contract. All costs associated with the Divested Manufacturing Operations will be reflected in Corporate / Manufacturing. Charges related to these divestitures of $29,493 for fiscal 2015 were $5,541 for a write-off of Goodwill associated with the fair value of the business related to the powder facility, $20, 203 for accelerated depreciation, $2,510 for severance and employee related costs and $2, 931 of other costs, partially offset by a gain on a transferred contract of $1,692. Facility Restructuring Charges On March 12, 2013, NBTY initiated a restructuring plan to streamline its operations and improve the profitability and return on invested capital of its manufacturing/packaging and distribution facilities. The restructuring involved the sale or closure of seven of NBTY's manufacturing/packaging and distribution facilities. The restructuring plan commenced in the second quarter of fiscal 2013 and was completed in fiscal 2014. The restructuring resulted in cumulative charges of $32,695 before tax over that period, of which non-cash charges consisted primarily of accelerated depreciation of approximately $12,588. |
Inventories
Inventories | 12 Months Ended |
Sep. 30, 2015 | |
Inventories. | |
Inventories | 5. Inventories The components of inventories are as follows at September 30: 2015 2014 (As Revised) Raw materials $ $ Work-in-process Finished goods Total $ $ |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment. | |
Property, Plant and Equipment | 6. Property, Plant and Equipment Property, plant and equipment is as follows at September 30: 2015 2014 Depreciation and amortization period (years) Land $ $ Buildings and leasehold improvements 4–40 Building under capital lease arrangement — Machinery and equipment 3–13 Furniture and fixtures 3–10 Computer software and equipment 3–7 Transportation equipment 3–4 Construction in progress Less accumulated depreciation and amortization ) ) Less accumulated amortization for asset under capital lease arrangement ) — $ $ Included in construction in pro gr ess are assets primarily related to implementing a new world-wide ERP system and assets related to new stores to be opened in Holland & Barrett International. Depreciation and amortization of property, plant and equipment for the fiscal years ended September 30, 2015, 2014 and 2013 was approximately $89,850, $60,530 and $64,883, respectively. The 2015 amount includes $20, 203 of accelerated depreciation related to the sale of the nutritional bar assets production assets (see Note 4). In July 2015, the Company sold a facility related to the Holland & Barrett International segment for £34,200 British pounds sterling ($52,826) and entered into a 30 year lease for this facility. The lease is accounted for as a capital lease, which resulted in an obligation of approximately $998 and $46,442 recorded within current portion of long-term debt and long-term debt, net of current portion, respectively, in the accompanying Consolidated Balance Sheet as of September 30, 2015. The deferred gain associated with this sale-lease-back of $16,972 has been recorded in Property, plant and equipment and is being amortized ratably over the term of the lease. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets The Company's goodwill and intangible assets relate primarily to assets valued as a result of the Merger on October 1, 2010. The Company does not amortize its goodwill or indefinite lived intangible assets. Instead, the Company performs an assessment to test these assets for impairment annually, or more frequently if events or changes in circumstances indicate they may be impaired. On a quarterly basis, we monitor the key drivers of fair value to detect events or other changes that would warrant an interim impairment test of our goodwill and intangibles. The key assumptions that drive the cash flows of our reporting units and intangible assets are estimated revenue growth rates and levels of profitability. Terminal value growth rate assumptions, weighted average cost of capital rates ("WACC") as well as royalty rates are used in conjunction with these key assumptions in order to derive the estimated fair value. These assumptions are subject to uncertainty, including our ability to grow revenue and improve or maintain profitability levels. Relatively small declines in the future performance and cash flows of a reporting unit or asset group or small changes in other key assumptions may result in the recognition of significant asset impairment charges. Goodwill and Other Intangible Asset Impairment Charges During the fourth quarter of fiscal 2015, the Vitamin World segment recorded an impairment charge of $55,000, on its indefinite-lived tradenames. This was in connection with our annual impairment assessment and the completion of a strategic planning process relating to the rates of growth of sales, profit and cash flow and expectations for future performance. During the fourth fiscal quarter of 2014, the Puritan's Pride and Vitamin World segments recorded impairment charges of $61,590 and $25,744, respectively, related to goodwill. This was in connection with our annual impairment assessment and the completion of a strategic planning process relating to the rates of growth of sales, profit and cash flow and expectations for future performance. In addition, as a part of this process, we recorded impairment charges of $110,000 and $10,000 on the indefinite lived tradenames of the Puritan's Pride and Vitamin World segments, respectively. Goodwill The changes in the carrying amount of goodwill by segment for the fiscal years ended September 30, 2015 and 2014 are as follows: Consumer Products Group Holland & Barrett International Puritan's Pride Vitamin World Consolidated Balance at September 30, 2013 $ $ $ $ $ Purchase price adjustments — — — Impairment of goodwill — — ) ) ) Foreign currency translation ) ) — — ) Balance at September 30, 2014 — Write-off due to sale of powder facility ) — ) — ) Foreign currency translation ) ) — — ) Balance at September 30, 2015 $ $ $ $ — $ Other Intangible Assets The carrying amounts of acquired other intangible assets are as follows at September 30: 2015 2014 Gross carrying amount Accumulated amortization Gross carrying amount Accumulated amortization Amortization period (years) Definite lived intangible assets Brands and customer relationships $ $ $ $ 17–25 Tradenames and other 20–30 Indefinite lived intangible asset Tradenames — — Total intangible assets $ $ $ $ Aggregate amortization expense of other definite lived intangible assets included in the Consolidated Statements of Operations and Comprehensive (Loss) Income in selling, general and administrative expenses in fiscal 2015, 2014 and 2013 was $45,556, $46,027 and $45,753, respectively. Assuming no changes in our other intangible assets, estimated amortization expense for each of the five succeeding years will be approximately $46,000 per year. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Sep. 30, 2015 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | 8. Accrued Expenses and Other Current Liabilities The components of accrued expenses and other current liabilities are as follows at September 30: 2015 2014 Accrued compensation and benefits $ $ Accrued interest Income taxes payable Other $ $ |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Sep. 30, 2015 | |
Long-Term Debt | |
Long-Term Debt | 9. Long-Term Debt As a result of adopting the new guidance related to the presentation of debt issuance costs (see Note 2), our September 30, 2014 Consolidated Balance Sheet has been retrospectively adjusted to reduce long-term debt by $80,410, reduce other assets by $55,677 and reduce other current assets by $24,733. Debt issuance costs relating to unused revolving lines of credit will remain in other assets and other current assets. Long-term debt consists of the following at September 30: 2015 2014 Senior Secured Credit Facilities: Term loan B-2 Principal amount $ $ Less unamortized debt issuance costs ) ) Notes Principal amount Less unamortized debt issuance costs ) ) Long-term obligations under capital lease — Other — Less current portion, including obligations under capital lease ) ) Total $ $ Senior secured credit facilities On October 1, 2010, NBTY entered into its senior secured credit facilities with Barclays Bank PLC, as administrative agent (the "Original Credit Agreement"). The Original Credit Agreement was amended pursuant to the First Amendment and Refinancing Agreement, dated as of March 1, 2011, and further amended pursuant to that Second Amendment Agreement, dated as of October 11, 2012. On March 21, 2013, NBTY, Holdings, Barclays Bank PLC, as administrative agent, and several other lenders entered into the Third Amendment and Second Refinancing Agreement (the "Second Refinancing") pursuant to which NBTY repriced its term loan B-1 under its then existing credit agreement. Under the terms of the Second Refinancing, the $1,750,000 term loan B-1 was replaced with a new $1,507,500 term loan B-2. Borrowings under term loan B-2 and the revolving credit facility bear interest at a floating rate which can be, at NBTY's option, either (i) eurodollar (LIBOR) rate plus an applicable margin, or (ii) base rate plus an applicable margin, in each case, subject to a eurodollar (LIBOR) rate floor of 1.00% or a base rate floor of 2.00%, as applicable. The applicable margin for term loan B-2 is 2.50% per annum for eurodollar (LIBOR) loans and 1.50% per annum for base rate loans. The applicable margin for the revolving credit facility remained at 3.25% per annum for eurodollar (LIBOR) loans and 2.25% per annum for base rate loans, with a step-down of 25 basis points upon the achievement of a total senior secured leverage ratio as set forth in the senior secured credit facilities. Substantially all other terms are consistent with the original term loan B-1, including the maturity dates. As a result of the Second Refinancing, $4,232 of previously capitalized deferred financing costs, as well as $1,151 of the call premium on term loan B-1, were expensed and included in interest expense. In addition, costs incurred and recorded as deferred financing costs were approximately $15,190, including $13,924 of the call premium paid on term loan B-1, and are being amortized using the effective interest method. In accordance with the provisions of the credit agreement governing the senior secured credit facilities, future scheduled payments of principal will not be required until the final balloon payment at maturity in October 2017. On November 20, 2014, NBTY amended its senior secured revolving credit facility, extending its maturity to September 2017 and reducing the commitment from $200,000 to $175,000. In connection with this amendment, deferred financing costs of $611 were incurred and are being amortized over the remaining period and $359 of previously capitalized financing costs were written off. The following fees are applicable under the revolving credit facility: (i) an unused line fee of 0.50% per annum, based on the unused portion of the revolving credit facility; (ii) a letter of credit participation fee on the aggregate stated amount of each letter of credit available to be drawn equal to the applicable margin for eurodollar rate loans; (iii) a letter of credit fronting fee equal to 0.25% per annum on the daily amount of each letter of credit available to be drawn; and (iv) certain other customary fees and expenses of our letter of credit issuers. As of September 30, 2015, there were no borrowings drawn from our $175,000 revolving credit facility and there was a letter of credit totaling $6,100, reducing the net availability to $168,900. NBTY may voluntarily prepay loans or reduce commitments under its senior secured credit facilities, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty. NBTY must make prepayments on the term loan B-2 facility with the net cash proceeds of certain asset sales, casualty and condemnation events, the incurrence or issuance of indebtedness (other than indebtedness permitted to be incurred under its senior secured credit facilities unless specifically incurred to refinance a portion of its senior secured credit facilities) and 50% of excess cash flow, as defined in the credit agreement (such percentage subject to reduction based on achievement of total senior secured leverage ratios), in each case, subject to certain reinvestment rights and other exceptions. For the fiscal year ended September 30, 2015, an excess cash flow payment of $33,498 is required and is included in current portion long-term debt. This computation of excess cash flow payment gives effect to approximately $58,000 held in escrow for a pending acquisition. NBTY is also required to make prepayments under its revolving credit facility at any time when, and to the extent that, the aggregate amount of the outstanding loans and letters of credit under the revolving credit facility exceeds the aggregate amount of commitments in respect of the revolving credit facility. Obligations under the senior secured credit facilities are guaranteed by Holdings and each of NBTY's current and future direct and indirect subsidiaries other than (i) foreign subsidiaries, (ii) unrestricted subsidiaries, (iii) non-wholly owned subsidiaries, (iv) certain receivables financing subsidiaries, (v) certain immaterial subsidiaries and (vi) certain holding companies of foreign subsidiaries, and are secured by a first lien on substantially all of their assets, including capital stock of subsidiaries (subject to certain exceptions). The senior secured credit facilities contain customary negative covenants, including, but not limited to, restrictions on NBTY and its restricted subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, prepay or modify terms of certain junior indebtedness, enter into transactions with affiliates, amend organizational documents, or change our line of business or fiscal year. In addition, NBTY's senior secured credit facilities require the maintenance of a maximum total senior secured leverage ratio on a quarterly basis, calculated with respect to Consolidated EBITDA, as defined therein, if at any time amounts are outstanding under the revolving credit facility, including swingline loans and letters of credit. NBTY was in compliance with all financial covenants under the senior secured credit facilities at September 30, 2015. The senior secured credit facilities provide that, upon the occurrence of certain events of default, the obligations thereunder may be accelerated and the lending commitments terminated. Such events of default include payment defaults to the lenders, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy proceedings, material money judgments, material ERISA/pension plan events, certain change of control events and other customary events of default. Holdco Notes On October 17, 2012, Holdings, our parent company, issued $550,000 in aggregate principal amount of 7.75%/8.50% contingent cash pay senior notes ("Holdco Notes") that mature on November 1, 2017. Interest on the Holdco Notes accrues at the rate of 7.75% per annum with respect to cash interest and 8.50% per annum with respect to any paid-in-kind interest ("PIK Interest"). Interest on the Holdco Notes is payable semi-annually in arrears on May 1 and November 1 of each year. All interest payments made to date have been in cash. Holdings is a holding company with no operations and has no ability to service interest or principal on the Holdco Notes, other than through dividends it may receive from NBTY. NBTY is restricted, in certain circumstances, from paying dividends to Holdings by the terms of the indenture governing NBTY's 9.00% Senior Notes due 2018 ("Notes") and the senior secured credit facilities. NBTY has not guaranteed the indebtedness of Holdings, nor pledged any of its assets as collateral. The proceeds from the offering of the Holdco Notes, along with $200,000 of cash on hand from NBTY, as described below, were used to pay transaction fees and expenses, including a consent fee of $17,345 and a $721,682 cash dividend to Holdings' shareholders in October 2012. On December 12, 2013, Holdings, our parent company, issued an additional $450,000 in aggregate principal amount of Holdco Notes that mature on November 1, 2017. The additional $450,000 Holdco Notes and the $550,000 of original Holdco Notes previously issued on October 17, 2012 have identical terms and are treated as a single class for all purposes under the indenture governing the Holdco Notes. The gross proceeds from the offering of the $450,000 additional Holdco Notes was $460,125, inclusive of a $10,125 premium, which were used to pay transaction fees and expenses, including a consent fee, totaling $18,560 and a $445,537 dividend to Holdings' shareholders in December 2013. Interest on the Holdco Notes is payable semi-annually in arrears on May 1 and November 1 of each year. Holdings is a holding company with no operations of its own and has no ability to service interest or principal on the Holdco Notes, other than through dividends it may receive from NBTY. NBTY is restricted, in certain circumstances, from paying dividends to Holdings by the terms of the indenture governing the Notes and the senior secured credit facilities. NBTY has not guaranteed the indebtedness of Holdings, nor pledged any of its assets as collateral and the Holdco Notes are not reflected on NBTY's balance sheet. Interest on the Holdco Notes shall be payable entirely in cash ("Cash Interest") to the extent that it is less than the maximum amount of allowable dividends and distributions plus any cash at Holdings ("Applicable Amount") as defined by the indenture governing the Holdco Notes. For any interest period after May 1, 2013 (other than the final interest period ending at stated maturity), if the Applicable Amount for such interest period will: (i) equal or exceed 75%, but be less than 100%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on (a) 25% of the then outstanding principal amount of the Holdco Notes by increasing the principal amount of the outstanding Holdco Notes or by issuing payment in kind notes ("PIK Notes") in a principal amount equal to such interest and (b) 75% of the then outstanding principal amount of the Holdco Notes as Cash Interest; (ii) equal or exceed 50%, but be less than 75%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on (a) 50% of the then outstanding principal amount of the Holdco Notes as PIK Interest and (b) 50% of the then outstanding principal amount of the Holdco Notes as Cash Interest; (iii) equal or exceed 25%, but be less than 50%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on (a) 75% of the then outstanding principal amount of the Holdco Notes as PIK Interest and (b) 25% of the then outstanding principal amount of the Holdco Notes as Cash Interest; or (iv) be less than 25% of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on the Holdco Notes as PIK Interest. As described above, Holdings' ability to pay PIK Interest depends on the calculation of the Applicable Amount regardless of the availability of cash at Holdings. All interest payments to date have been in cash and were funded by dividends from NBTY. Holdings may redeem the Holdco Notes, at its option, in whole at any time or in part from time to time, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on November 1 of the years set forth below: Period Redemption Price 2015 % 2016 and thereafter % Notes On October 1, 2010, NBTY issued $650,000 in aggregate principal amount of senior notes bearing interest at 9% in a private placement. On August 2, 2011, these privately placed notes were exchanged for substantially identical notes that were registered under the Securities Act of 1933, as amended, and therefore are freely tradable (the privately placed notes and such registered notes exchanged therefor, the "Notes"). The Notes are senior unsecured obligations and mature on October 1, 2018. Interest on the Notes is paid on April 1 and October 1 of each year, and commenced on April 1, 2011. NBTY may redeem the Notes, at its option, in whole at any time or in part from time to time, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on October 1 of the years set forth below: Period Redemption Price 2015 % 2016 and thereafter % The Notes are jointly and severally irrevocably and unconditionally guaranteed by each of NBTY's subsidiaries that is a guarantor under the credit agreement. The Notes are uncollateralized and rank senior in right of payment to existing and future indebtedness that is expressly subordinated to the Notes, rank equally in right of payment to NBTY and its subsidiary guarantors' senior unsecured debt, and are effectively junior to any of NBTY or its subsidiary guarantors' secured debt, to the extent of the value of the collateral securing such debt. The Notes contain certain customary covenants including, but not limited to, restrictions on NBTY and its restricted subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, or pay dividends. NBTY was in compliance with all financial covenants under the Notes at September 30, 2015. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Sep. 30, 2015 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 10. Fair Value of Financial Instruments 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 in an orderly transaction which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are 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. The following table summarizes the assets / (liabilities) measured at fair value on a recurring basis at September 30: 2015 2014 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Liabilities: Current (included in accrued expenses and other current liabilities): Interest rate swaps $ — $ — $ — $ ) $ — Cross currency swaps $ — $ — $ ) $ — $ — $ ) Non-current (included in other assets): Cross currency swaps $ — $ — $ $ — $ — $ — Non-current (included in other liabilities): Cross currency swaps $ — $ — $ — $ — $ — $ ) The Company's swap contracts are measured at fair value based on a market approach valuation technique. With the market approach, fair value is derived using prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Although non-performance risk of the Company and the counterparty is present in all swap contracts and is a component of the estimated fair values, we do not view non-performance risk to be a significant input to the fair value for the interest rate swap contracts. However, with respect to our cross currency swap contracts, we believe that non-performance risk is higher; therefore the Company classifies these swap contracts as "Level 3" in the fair value hierarchy and, accordingly, records estimated fair value adjustments based on internal projections and views of those contracts. The performance risk for the cross currency swap contracts as a percentage of the unadjusted liabilities ranged from 6.1% to 11.4% (9.5% weighted average) as of September 30, 2015 and 8.1% to 8.5% (8.3% weighted average) as of September 30, 2014. The following table shows the Level 3 activity related to our cross currency swaps for the fiscal years ended September 30: 2015 2014 Beginning balance: $ ) $ ) Unrealized gain on hedging instruments Ending balance: $ $ ) Interest Rate Swaps During March 2011, we entered into three interest rate swap contracts to fix the LIBOR indexed interest rates on a portion of our senior secured credit facilities until the indicated expiration dates of these swap contracts. Each swap contract had a declining notional amount with a fixed interest rate of 1.92% for a four-year term and matured in December 2014. Under the terms of the swap contracts, variable interest payments for a portion of our senior secured credit facilities were swapped for fixed interest payments. These interest rate swap contracts were designated as a cash flow hedge of the variable interest payments on a portion of our term loan debt. Hedge effectiveness was assessed based on the overall changes in the fair value of the interest rate swap contracts. Hedge ineffectiveness was insignificant, and was recorded in Miscellaneous, net. Cross Currency Swaps To manage the potential exposure from adverse changes in currency exchange rates, specifically the British pound, arising from our net investment in British pound denominated operations, during December 2010, we entered into three cross currency swap contracts to hedge a portion of the net investment in our British pound denominated foreign operations. The aggregate notional amount of the swap contracts is 194,200 British pounds (approximately $300,000 U.S. dollars), with a forward rate of 1.565, and a termination date of September 30, 2017. These cross currency contracts were designated as a net investment hedge to the net investment in our British pound denominated operations. Hedge effectiveness is assessed based on the overall changes in the fair value of the cross currency swap contracts. Any potential hedge ineffectiveness is measured using the hypothetical derivative method and is recognized in current operations. Hedge ineffectiveness for the years ended September 30, 2015, 2014 and 2013 resulted in gains (losses) of $(1,135), $966 and $1,611, respectively, and is recorded in Miscellaneous, net. The following table shows the effect of the Company's derivative instruments designated as cash flow and net investment hedging instruments for the years ended September 30, 2015 and 2014: Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Operations (Effective Portion) Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Operations (Effective Portion) 2015 2015 2014 2014 Cash Flow Hedges: Interest rate swaps $ ) $ ) $ ) $ ) Net Investment Hedges: Cross currency swaps — — Total $ $ ) $ ) $ ) Notes The fair value of the Notes, based on quoted market prices (Level 2), was approximately $663,000 as of September 30, 2015. Term loan B-2 The face amount of the term loan B-2 is $1,507,500, which approximates fair value based on Level 2 inputs, as this loan accrues interest at a variable interest rate. Other Fair Value Considerations During the fourth quarter of each year, the Company evaluates goodwill at the reporting unit level and indefinite-lived intangibles for impairment using market data and a cash flow model using Level 3 inputs. Additionally, on a nonrecurring basis, the Company uses fair value measures when analyzing asset impairment. Long-lived assets and certain identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair value. Measurements based on undiscounted cash flows are considered to be Level 3 inputs. |
Litigation Summary
Litigation Summary | 12 Months Ended |
Sep. 30, 2015 | |
Litigation Summary | |
Litigation Summary | 11. Litigation Summary Herbal Dietary Supplements In February 2015, the State of New York Office of the Attorney General (the "NY AG") began an investigation concerning the authenticity and purity of herbal supplements and associated marketing. As part of this investigation, the NY AG is reviewing the sufficiency of the measures that several manufacturers and retailers, including NBTY, are taking to independently assess the validity of their representations and advertising in connection with the sale of herbal supplements. On September 9, 2015, the NY AG sent letters to fourteen separate companies, including NBTY, concerning an additional herbal product. NBTY has fully cooperated with the NY AG; however until these investigations are concluded, no final determination can be made as to its ultimate outcome or the amount of liability, if any, on the part of NBTY. Following the NY AG investigation, starting in February 2015, numerous putative class actions were filed in various jurisdictions against NBTY, certain of its customers and/or other companies as to which there may be a duty to defend and indemnify, challenging the authenticity and purity of herbal supplements and associated marketing, under various states' consumer protection statutes. Motions for transfer and consolidation of all of the federal actions as multidistrict litigation into a single district before a single judge were granted on June 9, 2015, and the cases are consolidated before Judge John W. Darrah of the United States District Court, North District of Illinois—Eastern Division (the "MDL Case"). Three class actions against one of our customers to which we may have a duty to indemnify have not been transferred and consolidated with the MDL Case, and are at the initial stages of litigation. At this time, no determination can be made as to the ultimate outcome of the investigation and related litigation or the amount of liability, if any, on the part of NBTY. Glucosamine-Based Dietary Supplements Beginning in June 2011, certain putative class actions have been filed in various jurisdictions against NBTY, its subsidiary Rexall Sundown, Inc. ("Rexall"), and/or other companies as to which there may be a duty to defend and indemnify, challenging the marketing of glucosamine-based dietary supplements, under various states' consumer protection statutes. The lawsuits against NBTY and its subsidiaries are: Cardenas v. NBTY, Inc. and Rexall Sundown, Inc. (filed June 14, 2011) in the United States District Court for the Eastern District of California, on behalf of a putative class of California consumers seeking unspecified compensatory damages based on theories of restitution and disgorgement, plus punitive damages and injunctive relief; Jennings v. Rexall Sundown, Inc. (filed August 22, 2011) in the United States District Court for the District of Massachusetts, on behalf of a putative class of Massachusetts consumers seeking unspecified trebled compensatory damages; and Nunez v. NBTY, Inc. et al. (filed March 1, 2013) in the United States District Court for the Southern District of California (the "Nunez Case"), on behalf of a putative class of California consumers seeking unspecified compensatory damages based on theories of restitution and disgorgement, plus injunctive relief, as well as other cases in California and Illinois against certain Consumer Products Group customers as to which we may have certain indemnification obligations. In March 2013, NBTY agreed upon a proposed settlement with the plaintiffs, which included all cases and resolved all pending claims without any admission of or concession of liability by NBTY, and which provided for a release of all claims in return for payments to the class, together with attorneys' fees, and notice and administrative costs. Fairness Hearings took place on October 4, 2013 and November 20, 2013. On January 3, 2014, the court issued an opinion and order approving the settlement as modified (the "Order"). The final judgment was issued on January 22, 2014 (the "Judgment"). Certain objectors filed a notice of appeal of the Order and the Judgment on January 29, 2014 and the plaintiffs filed a notice of appeal on February 3, 2014. In fiscal 2013, NBTY recorded a provision of $12,000 reflecting its best estimate of exposure for payments to the class together with attorney's fees and notice and administrative costs in connection with this class action settlement. As a result of the court's approval of the settlement and the closure of the claims period, NBTY reduced its estimate of exposure to $6,100. This reduction in the estimated exposure was reflected in the Company's first quarter results for fiscal 2014. On November 19, 2014, the appellate court issued a decision granting the objectors' appeal. The appellate court reversed and remanded the matter to the district court for further proceedings consistent with the appellate court's decision. In April 2015, NBTY agreed upon a revised proposed settlement with certain plaintiffs which includes all cases and resolves all pending claims without any admission of or concession of liability by NBTY. The parties have signed settlement documentation providing for a release of all claims in return for payments to the class, together with attorneys' fees, and notice and administrative costs estimated to be in the amount of $9,000, which resulted in an additional charge of $4,300 in the second quarter results for fiscal 2015. On May 14, 2015, the settlement was submitted to the court for preliminary approval and a preliminary conference was held before the court on July 22, 2015. Until the cases are resolved, no final determination can be made as to the ultimate outcome of the litigation or the amount of liability on the part of NBTY. Telephone Consumer Protection Act Claim NBTY, and certain of its subsidiaries, are defendants in a class-action lawsuit, captioned John H. Lary Jr. v. Rexall Sundown, Inc.; Rexall Sundown 3001, LLC; Rexall, Inc.; NBTY, Inc.; Corporate Mailings, Inc. d/b/a CCG Marketing Solutions ("CCG") and John Does 1-10 (originally filed October 22, 2013), brought in the United States District Court, Eastern District of New York. The plaintiff alleges that the defendants faxed advertisements to plaintiff and others without invitation or permission, in violation of the Telephone Consumer Protection Act ("TCPA"). On May 2, 2014, NBTY and its named subsidiary defendants cross-claimed against CCG, who was a third party vendor engaged by NBTY, and CCG cross-claimed against NBTY and named subsidiary defendants on June 13, 2014. CCG brought a third party complaint against an unrelated entity, Healthcare Data Experts, LLC, on June 27, 2014. On July 21, 2014, CCG filed a motion to dismiss the amended complaint and on February 11, 2015 the court issued an Order and Opinion dismissing the class-action. On February 27, 2015, the plaintiff filed an appeal to the court's dismissal of the action and that appeal is pending. The court has scheduled oral arguments for December 10, 2015. At this time, no determination can be made as to the ultimate outcome of the litigation or the amount of liability on the part of NBTY. Claims in the Ordinary Course In addition to the foregoing, other regulatory inquiries, audits, investigations, claims, suits and complaints (including false advertising, product liability, escheat laws, intellectual property and Proposition 65 claims) arise from time to time in the ordinary course of our business. We currently believe that such other inquiries, claims, suits and complaints would not have a material adverse effect on our consolidated financial statements, if adversely determined against us. Over the past several years, we have been served with various false advertising putative class action cases in various U.S. jurisdictions, as have various other companies in the industry. Over the past few years, the number of these cases has increased, such that at any given time we are defending several suits concerning a variety of products. These cases challenge the marketing of the subject dietary supplements under various states' consumer protection statutes and generally seek unspecified compensatory damages based on theories of restitution and disgorgement, plus punitive damages and injunctive relief. Until these cases are resolved, no determination can be made as to the ultimate outcome of the litigation or the amount of liability on our part. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Income Taxes | Income (loss) before income taxes consists of the following components for the fiscal years ended September 30: 2015 2014 2013 United States $ ) $ ) $ Foreign $ $ ) $ Provision (benefit) for income taxes consists of the following for the fiscal years ended September 30: 2015 2014 2013 Federal Current $ ) $ $ Deferred ) ) State Current Deferred ) ) ) Foreign Current Deferred ) ) Total provision (benefit) $ $ $ The following is a reconciliation of the (benefit) provision for income taxes computed using the statutory Federal income tax rate to the actual income tax expense (benefit) and the effective income tax rate for the fiscal years ended September 30: 2015 2014 2013 Amount Percent of pretax income Amount Percent of pretax income Amount Percent of pretax income Income tax expense at statutory rate $ % $ ) % $ % State income taxes, net of federal income tax benefit ) )% ) % ) )% Change in valuation allowance ) )% — % ) )% Effect of international operations, including foreign export benefit and earnings indefinitely reinvested ) )% ) % ) )% Domestic manufacturing deduction ) )% ) % ) )% Goodwill Impairment % )% — % Change in tax reserves ) )% ) % — % Other % )% % $ % $ )% $ % The difference in the effective rate in fiscal 2015 as compared to the statutory rate is mainly attributable to the benefit related to the Company's assertion to reinvest $130,000 of foreign earnings indefinitely. The difference in the effective rate in fiscal 2014 as compared to the statutory rate is mainly attributable to the impact of the goodwill impairment during fiscal 2014 for which no income tax benefit was recorded. The difference in the effective rate in fiscal 2013 as compared to the statutory rate is mainly attributable to the restructuring which had a favorable impact on our state tax rate due to the closing of facilities in California (a relatively high tax state) and the partial indefinite reinvestment of foreign earnings. The components of deferred tax assets and liabilities are as follows as of September 30: 2015 2014 (as revised) Deferred tax assets: Inventory reserves and UNICAP $ $ Accrued expenses and reserves not currently deductible Other comprehensive income R&D tax credit carryforward — Foreign and state tax credits Foreign and state net operating losses Valuation allowance ) ) Total deferred income tax assets, net of valuation allowance Deferred tax liabilities: Depreciation ) ) Intangibles ) ) Prepaid rent ) ) Undistributed foreign earnings ) ) Total deferred income tax liabilities ) ) Total net deferred income tax liabilities ) ) Less current deferred income tax assets ) ) Long-term deferred income tax liabilities $ ) $ ) At September 30, 2015 and 2014, we had the following : 2015 2014 Foreign net operating losses $ $ Deferred foreign tax credit on unremitted foreign earnings R&D tax credit carryforward — NYS investment tax credit carryforwards At September 30, 2015 and 2014, we maintained the following valuation allowances: 2015 2014 NYS investment tax credit carryforwards $ $ Foreign loss carryforwards The NYS investment tax credits expire primarily between 2016 and 2029 and the foreign net operating loss carryforwards expire in accordance with applicable tax law. We provide a valuation allowance for these credit and loss carryforwards because we do not consider realization of such assets to be more likely than not. We continue to monitor the need for these valuation allowances on an on-going basis. At September 30, 2015, we had $241,547 of undistributed international earnings on which we have not provided any U.S. tax expense as we intend to permanently reinvest these earnings outside of the U.S. If these earnings are repatriated to the United States, or if the Company determines that such earnings will be remitted in the foreseeable future, additional tax provisions may be required. Due to the complexities in the tax laws and the assumptions that would have to be made, it is not practicable to estimate the amounts of income tax provisions that may be required. The following table summarizes the changes in the valuation allowance for the fiscal years ended September 30: 2015 2014 2013 Beginning balance $ ) $ ) $ ) NYS investment tax credit carryforwards utilized/(generated) ) Foreign net operating losses utilized/(generated) Foreign net operating losses acquired — — ) Balance at September 30 $ ) $ ) $ ) The following table summarizes the activity related to gross unrecognized tax benefits for the fiscal years ended September 30: 2015 2014 2013 Beginning balance $ $ $ Increases related to current year tax positions — Increases related to prior year tax positions — Decreases related to settlements with taxing authorities ) ) ) Decreases related to lapsing of statute of limitations ) ) ) Balance as of September 30 $ $ $ These liabilities are primarily included as a component of other liabilities in our Consolidated Balance Sheet s because we generally do not anticipate that settlement of the liabilities will require payment of cash within the next twelve months. Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $3,760 and $5,961 as of September 30, 2015 and 2014, respectively. We do not believe that the amount will significantly change in the next 12 months. We accrue interest and penalties related to unrecognized tax benefits in provision (benefit) for income tax es . This methodology is consistent with previous periods. At September 30, 2015, we had accrued $215 and $137 for the potential payment of interest and penalties, respectively. As of September 30, 2015, we were subject to U.S. Federal Income Tax examinations for the tax years 2012 through 2015, and to non-US examinations for the tax years of 2009 through 2015. In addition, we are generally subject to state and local examinations for fiscal years 2012 through 2015. In fiscal 2015 t he Company finalized its IRS exam for tax years 2007 through 2010 which resulted in a reduction of its unrecognized tax benefit. |
Stock-Based Compensation and Em
Stock-Based Compensation and Employee Benefit Plans | 12 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation and Employee Benefit Plans | |
Stock-Based Compensation and Employee Benefit Plans | 13. Stock-Based Compensation and Employee Benefit Plans On November 30, 2010, Holdings adopted the Equity Incentive Plan of Alphabet Holding Company, Inc. (the "Plan"), pursuant to which Holdings may grant options to selected employees and directors of the Company. The aggregate number of shares which may be issued under the Plan is 19,367 shares of the Class A common stock and 239,305 shares of the Class B common stock. Options granted under the Plan expire no later than 10 years from the date of grant and the exercise price may not be less than the fair market value of the common stock on the date of grant. During fiscal 2015, 2014 and 2013, Holdings granted 106,530, 13,430 and 19,180, respectively, of Class B common stock options to certain Company employees under the Plan. Vesting of the awards is based on the passage of time, in equal installments over five years /or the achievement of a performance condition (i.e., a liquidity event as defined in the plan agreement) and market conditions (i.e., the achievement of a minimum investor rate of return). The fair value of each of the Holdings time-based stock option awards is expensed in the Company's records on a straight-line basis over the requisite service period, which is generally the five year vesting period of the options. However, for options granted with a performance condition, compensation expense is recognized when it is probable that the performance condition will be met. As the Company has determined it is not probable the performance condition will be achieved, no compensation cost has been recognized relating to the performance based awards. Pursuant to the Plan, Holdings is required to modify all options in an equitable manner under certain circumstances. The dividends of $445,537 and $721,682 in fiscal 2014 and 2013, respectively, as described in the Long-Term Debt Note, required this modification. The weighted-average grant date fair value per share of options granted in fiscal 2015 was $125 for time based vesting and $66 for performance based vesting. The weighted-average grant date fair value per share of options granted in fiscal 2014 was $147 for time based vesting and $98 for performance based vesting. The weighted-average grant date fair value per share of options granted in fiscal 2013 was $167 for time based vesting and $96 for performance based vesting. The fair value of each option award is estimated on the date of grant utilizing a Monte Carlo simulation model. The following weighted-average assumptions were used for the options granted: Fiscal year ended September 30, 2015 2014 2013 Significant assumptions: Time based vesting Risk-free rate (1) .01%–3.07 % .02%–3.65 % .11%–4.59 % Expected term (2) 6.5 years 6.5 years 6.5 years Expected volatility (3) Expected dividends Performance based vesting Risk-free rate (1) .01%–3.07 % .02%–3.65 % .11%–4.59 % Expected term (4) 4.3 years 3.1 years 4.5 years Expected volatility (3) Expected dividends (1) The risk free interest rate assumption was based on yields of U.S. Treasury securities in effect at the date of grant with terms similar to the expected term. (2) The expected term of the options was estimated utilizing the simplified method. We utilize the simplified method because the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The simplified method was used for all stock options that require only a service vesting condition. (3) Expected volatility was estimated based on historical volatility of peer companies over a period equivalent to the expected term. Peer companies are determined based on relevant industry and/or market capitalization. (4) The expected term of the options was estimated utilizing a Monte Carlo simulation model. A summary of stock option activity follows: Fiscal Year Ended September 30, 2015 2014 Number of shares Weighted average exercise price Number of shares Weighted average exercise price Outstanding at beginning of period $ $ Granted $ $ Exercised ) $ ) $ Forfeited ) $ ) $ Outstanding at end of period $ $ Exercisable at end of period $ $ Number of shares available for future grant As stock- based compensation expense recognized is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures of 0% and 5% per year for senior management and other management, respectively. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on historical and forecasted turnover. The following table summarizes information about stock options outstanding at September 30, 2015: Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Shares Exercisable Weighted Average Exercise Price Intrinsic Value $124 $ $ $ $298 $ $ $ $373 $ $ $ — $396 $ $ $ — $473 $ $ $ — As of September 30, 2015, $7,580 of total unrecognized compensation cost related to the non-vested time-based vesting options is expected to be recognized over the weighted average period of 3.7 years. As of September 30, 2015, the total potential unrecognized compensation cost related to the performance-based vesting options is $6,665 and no compensation cost will be recognized until the related performance condition is deemed probable of occurring. Employee Benefit Plans We sponsor a Retirement Savings Plan consisting of a 401(k) plan covering substantially all employees with more than six months of service. As allowed under Section 401(k) of the Internal Revenue Code, the Plan provides tax-deferred salary deductions for eligible employees. Employees may contribute from one to fifty percent of their annual eligible compensation to the Plan, limited to a maximum annual amount as set, and periodically updated, by the Internal Revenue Service. We provide a Company match of 100% of employee contributions, up to three percent of the employee's gross eligible earnings and 50% match of the next two percent of eligible earnings, limited to an annual match contribution of $11 per employee. Employees become fully vested in employer match contributions immediately. We also have an Associate Profit Sharing Plan ("PSP"), which is allocated among participants who have completed at least 1,000 hours of service in the plan year end and who were employed on the last day of the plan year, based upon their relative compensation for the year. Contributions are discretionary and are based on performance targets set forth by management. For the years ended September 30, 2015, 2014 and 2013, the amount expensed for the PSP was approximately $3,295, $0 and $3,723, respectively. Employees become fully vested in employer match contributions after three years of service. |
Commitments
Commitments | 12 Months Ended |
Sep. 30, 2015 | |
Commitments | |
Commitments | 14. Commitments Leases 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. The Company also has a capital lease for a warehouse/manufacturing facility located in the UK, expiring in 2045. Future minimum rental payments (excluding real estate tax and maintenance costs) for retail locations and other operating leases that have initial or non-cancelable lease terms as well as the aformentioned capital lease are as follows for the fiscal year ending September 30: Operating Leases Captial Lease 2016 $ $ 2017 2018 2019 2020 Thereafter Total $ Less amount representing interest ) Net present value of minimum lease payments Less current installments ) Long-term capital lease obligations less current installments $ Operating lease rent expense (including real estate taxes and maintenance costs) and leases on a month to month basis were approximately $148,766, $154,889 and $146,843 during fiscal years ended September 30, 2015, 2014 and 2013, respectively. Purchase Commitments We were committed to make future purchases primarily for inventory related items, such as raw materials and finished goods, under various purchase arrangements with fixed price provisions aggregating approximately $273,734 at September 30, 2015. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions | |
Related Party Transactions | 15. Related Party Transactions Consulting Agreement—Carlyle NBTY entered into a consulting agreement with Carlyle under which it pays Carlyle a fee for consulting services Carlyle provides to it and its subsidiaries. Under this agreement, subject to certain conditions, NBTY expects to pay an annual consulting fee to Carlyle of $3,000; NBTY will reimburse them for out-of-pocket expenses, and may pay Carlyle additional fees associated with other future transactions. For the years ended September 30, 2015, 2014 and 2013 these fees totaled $3,000 and are recorded in Selling, general and administrative expenses. Reimbursements of obligations paid on behalf of the Company as well as out of pocket expenditures paid to Carlyle for the years ended September 30, 2015, 2014 and 2013 were $1,927, $915 and $311, respectively. Services from Portfolio Companies of Funds Affiliated with Carlyle From time to time, we receive services from other portfolio companies of funds that are affiliated with Carlyle, but these services are not significant and such services are provided on what we believe is an arms-length basis which i nclud es payments for services to one such vendor in the amounts of $5,398, $391 and $139 for the years ended September 30, 2015, 2014 and 2013, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss). | |
Accumulated Other Comprehensive Income (Loss) | 16. Accumulated Other Comprehensive Income (Loss) Additions to and reclassifications out of accumulated other comprehensive income (loss) attributable to the Company were as follows: Fiscal year ended September 30, 2015 (1) Foreign currency translation adjustments Gains and losses on cash flow hedges Total Balance at September 30, 2014 $ ) $ ) $ ) Other comprehensive income (loss) before reclassifications ) ) ) Amounts reclassified from accumulated other comprehensive income (loss) (2) — Balance at September 30, 2015 $ ) $ — $ ) (1) All amounts are net of tax, amounts in parentheses indicate debits. (2) These (gains) losses are reclassified into Interest expense. See Note 10, Fair Value of Financial Instruments. Fiscal year ended September 30, 2014 (1) Foreign currency translation adjustments Gains and losses on cash flow hedges Total Balance at September 30, 2013 $ ) $ ) $ ) Other comprehensive income (loss) before reclassifications ) ) ) Amounts reclassified from accumulated other comprehensive income (loss) (2) — Balance at September 30, 2014 $ ) $ ) $ ) (1) All amounts are net of tax, amounts in parentheses indicate debits. (2) These (gains) losses are reclassified into Interest expense. See Note 10, Fair Value of Financial Instruments. Fiscal year ended September 30, 2013 (1) Foreign currency translation adjustments Gains and losses on cash flow hedges Total Balance at September 30, 2012 $ ) $ ) $ ) Other comprehensive income (loss) before reclassifications ) ) Amounts reclassified from accumulated other comprehensive income (loss) (2) — Balance at September 30, 2013 $ ) $ ) $ ) (1) All amounts are net of tax, amounts in parentheses indicate debits. (2) These (gains) losses are reclassified into Interest expense. See Note 10, Fair Value of Financial Instruments. During the fiscal years ended September 30, 2015, 2014 and 2013 we recorded decreases in our deferred tax liability relating to other comprehensive income (loss) incurred during the year of $6,327, $7,722 and $240, respectively. |
Business and Credit Concentrati
Business and Credit Concentration | 12 Months Ended |
Sep. 30, 2015 | |
Business and Credit Concentration | |
Business and Credit Concentration | 17. 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. Customers We perform on-going credit evaluations of our customers and adjust credit limits based upon payment history and the customers' current creditworthiness, 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 historically have been within expectations and the allowances established, if the financial condition of one or more of our customers were to deteriorate, additional bad debt provisions may be required. One customer accounted for the following percentages of net sales for the fiscal years ended September 30: Consumer Products Group Segment Net Sales Total Consolidated Net Sales 2015 2014 2013 2015 2014 2013 Customer A % % % % % % The loss of this customer, or any of our other major customers, would have a material adverse effect on our consolidated results of operations if we were unable to replace such customer(s). The following customers accounted for the following percentages of the Consumer Products Group Segment's gross accounts receivable at fiscal years ended: 2015 2014 Customer A % % Customer B % % Suppliers During fiscal 2015, 2014 and 2013, no one supplier provided more 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. |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Information | 12 Months Ended |
Sep. 30, 2015 | |
Supplemental Disclosure of Cash Flow Information | |
Supplemental Disclosure of Cash Flow Information | 18. Supplemental Disclosure of Cash Flow Information 2015 2014 2013 Cash interest paid $ $ $ Cash income taxes paid $ $ $ Non-cash investing and financing information: Acquisitions accounted for under the acquisition method: Fair value of assets acquired $ — $ — $ Liabilities assumed — — ) Less: Cash acquired — — ) Net cash paid $ — $ — $ Property, plant and equipment additions included in accounts payable $ $ $ Property, plant and equipment disposals included in other current assets $ $ — $ — |
Segment Information
Segment Information | 12 Months Ended |
Sep. 30, 2015 | |
Segment Information | |
Segment Information | 19. Segment Information We are organized by segments on a worldwide basis. We evaluate performance based on a number of factors; however, the primary measures of performance are the net sales and income or loss from operations (before 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/Manufacturing. All of our products fall into one or more of these four segments: • Consumer Products Group —This segment sells products worldwide under various brand names and third-party private labels. Our products are sold to the major mass merchandisers, club stores, drug store chains and supermarkets, as well as to online retailers, independent pharmacies, health food stores, the military and other retailers. • Holland & Barrett International —This segment operates 843 Holland & Barrett stores (including 744 company-owned stores in the UK and Ireland; and franchised stores in the following countries: 33 in China, 28 in Singapore, 16 in United Arab Emirates, 10 in Cyprus, five in Malta, four in Kuwait, two in Spain and one in Gibraltar). Holland & Barrett International also operated 161 De Tuinen stores (including cobranded stores) in the Netherlands (of which five were franchises), 18 Essenza stores in Belgium, and 49 GNC/MET-Rx stores in the UK. Holland & Barrett International operates Holland & Barrett retail websites in the UK, Ireland, the Netherlands and Belgium, as well as retail websites for De Tuinen in the Netherlands and the GNC/MET-Rx brands in the UK. The revenue generated by this segment consists of sales of its branded products and third-party products as well as franchise fees. We are in the process of rebranding or cobranding our De Tuinen and Essenza stores to leverage consumer awareness of our Holland & Barrett brand. We are also in the process of rebranding our GNC brand stores to MET-Rx. • Puritan's Pride —This segment generates revenue through the sale of its branded products and third-party products primarily through the internet and mail order catalogs under the Puritan's Pride tradename. Catalogs are strategically mailed to customers who order by mail, internet, or phone. • Vitamin World —This segment generates revenue through its 385 owned and operated Vitamin World stores selling proprietary brand and third-party products, as well as internet-based sales from www.vitaminworld.com . The following table represents key financial information of our business segments: Total Reportable Business Segments Consumer Products Group Holland & Barrett International Puritan's Pride Vitamin World Total Corporate / Manufacturing Consolidated Fiscal 2015: Net sales $ $ $ $ $ $ — $ Income (loss) from operations (1)(2) ) ) Depreciation and amortization Capital expenditures Fiscal 2014: Net sales $ $ $ $ $ $ — $ Income (loss) from operations (3) ) ) ) Depreciation and amortization Capital expenditures Fiscal 2013: Net sales $ $ $ $ $ $ — $ Income (loss) from operations (4) ) Depreciation and amortization Capital expenditures (1) Includes charges within Corporate / Manufacturing of $23, 952 related to the sale of the nutritional bar assets and powder facility (see Note 4) and charges of $4,308 related to the Glucosamine settlement (see Note 11). Also includes charges in the Consumer Products Group and Puritan's Pride segments of $4,892 and $649, respectively, related to the write-off of goodwill in relation to the sale of the powder facility (see Note 7). (2) Includes a charge within the Vitamin World segment of $55,000 related to the impairment on its indefinite-lived tradenames (see Note 7). (3) Includes charges within the Puritan's Pride and Vitamin World segments of $171,590 and $35,744, respectively, related to the goodwill and intangible asset impairment charges (see Note 7). (4) Includes charges within Corporate / Manufacturing of $32,695 relating to the facility restructuring (see Note 4) and $12,000 related to the accrual of the Glucosamine settlement (see Note 11). Total assets by segment as of September 30 are as follows: 2015 2014 (As revised) Reportable Business Segments: Consumer Products Group $ $ Holland & Barrett International Puritan's Pride Vitamin World Total Reportable Business Segments: Corporate / Manufacturing Consolidated assets $ $ Assets by segment as of September 30, 2014 were revised to reflect the correction of the Company's policy with respect to its labels inventory and prepaid rent (as described in Note 2). This revision resulted in an increase in assets as follows: $3,743 for Consumer Products Group segment; $576 Puritan's Pride segment and $2,520 for Vitamin World segment, partially offset by a decrease of $2,552 for Corporate / Manufacturing. Total net sales by location of customer for the fiscal years ended September 30, are as follows: 2015 2014 2013 United States $ $ $ United Kingdom Canada Netherlands Ireland Other foreign countries Consolidated net sales $ $ $ Long-lived assets—Property, plant and equipment as of September 30, are as follows: 2015 2014 United States $ $ United Kingdom Netherlands Ireland Canada Other foreign countries Consolidated long-lived assets $ $ Approximately 36%, 35% and 32% of our net sales for the fiscal years ended September 30, 2015, 2014 and 2013, respectively, were denominated in currencies other than U.S. dollars, principally British pounds, euros, Renminbi and Canadian dollars. A significant weakening of such currencies versus the U.S. dollar could have a material adverse effect on the Company, as this would result in a decrease in our consolidated operating results. Foreign subsidiaries accounted for the following percentages of total assets and total liabilities as of September 30: 2015 2014 Total Assets % % Total Liabilities % % |
Condensed Consolidating Financi
Condensed Consolidating Financial Statements of Guarantors | 12 Months Ended |
Sep. 30, 2015 | |
Condensed Consolidating Financial Statements of Guarantors | |
Condensed Consolidating Financial Statements of Guarantors | 20. Condensed Consolidating Financial Statements of Guarantors The Notes were issued by NBTY and are guaranteed by each of its current and future direct and indirect 100% owned subsidiaries, subject to certain exceptions. These guarantees are full, unconditional and joint and several. The following condensed consolidating financial information presents: 1. Condensed consolidating financial statements as of September 30, 2015 and 2014 and for the years ended September 30, 2015, 2014 and 2013 of (a) NBTY, the parent and issuer, (b) the guarantor subsidiaries, (c) the non-guarantor subsidiaries and (d) NBTY on a consolidated basis; and 2. Elimination entries necessary to consolidate NBTY, the parent, with guarantor and non-guarantor subsidiaries. The condensed consolidating financial statements are presented using the equity method of accounting for investments in wholly owned subsidiaries. Under this method, the investments in subsidiaries are recorded at cost and adjusted for our share of the subsidiaries' cumulative results of operations, other comprehensive income, capital contributions, distributions and other equity changes. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. For cashflow presentation purposes, cash transfers between the Guarantors and Nonguarantors (the "Operating Entities") are presented as operating activities and cash transfers between the Parent and the Operating Entities are presented as financing cashflows, unless the cash transfers relate to a statutorily recorded dividend or a formally documented loan agreement. Cash transfers which are statutorily recorded as dividends are presented as a financing outflow by the remitting entity and an operating inflow for the receiving entity, provided that the dividends remitted do not exceed the cumulative earnings of the remitting entity at the time the dividend is remitted. Cash transfers related to formally documented loans are treated as financing activities for all entities that are party to the transfer. This financial information should be read in conjunction with the financial statements and other notes related thereto. Condensed Consolidating Balance Sheet As of September 30, 2015 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ $ $ $ — $ Accounts receivable, net — — Intercompany — ) — Inventories — — Deferred income taxes — — Other current assets — Total current assets ) Property, plant and equipment, net — Goodwill — — Other intangible assets, net — — Other assets — Intercompany loan receivable — ) — Investments in subsidiaries — ) — Total assets $ $ $ $ ) $ Liabilities and Stockholder's Equity Current liabilities: Current portion of long-term debt $ $ — $ $ — $ Accounts payable — — Intercompany — — ) — Accrued expenses and other current liabilities — Total current liabilities ) Intercompany loan payable ) — Long-term debt, net of current portion — — Deferred income taxes — — Other liabilities — — Total liabilities ) Commitments and contingencies Stockholder's Equity: Common stock — — — — — Capital in excess of par ) (Accumulated deficit) retained earnings ) ) ) Accumulated other comprehensive income (loss) ) ) ) ) Total stockholder's equity ) Total liabilities and stockholder's equity $ $ $ $ ) $ Condensed Consolidating Balance Sheet As of September 30, 2014 (as revised) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ $ $ $ — $ Accounts receivable, net — — Intercompany — ) — Inventories — — Deferred income taxes — — Other current assets — Total current assets ) Property, plant and equipment, net — Goodwill — — Other intangible assets, net — — Other assets — — Intercompany loan receivable — ) — Investments in subsidiaries — ) — Total assets $ $ $ $ ) $ Liabilities and Stockholder's Equity Current liabilities: Current portion of long-term debt $ — $ — $ $ — $ Accounts payable — — Intercompany — — ) — Accrued expenses and other current liabilities — Total current liabilities ) Intercompany loan payable ) — Long-term debt, net of current portion — — Deferred income taxes — Other liabilities — Total liabilities ) Commitments and contingencies Stockholder's Equity: Common stock — — — — — Capital in excess of par ) (Accumulated deficit) retained earnings ) ) ) Accumulated other comprehensive income (loss) ) ) ) ) Total stockholder's equity ) Total liabilities and stockholder's equity $ $ $ $ ) $ Consolidated Statements of Operations and Comprehensive (Loss) Income For the fiscal year ended September 30, 2015 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ $ $ ) $ Costs and expenses: Cost of sales — ) Advertising, promotion and catalog — — Selling, general and administrative — Goodwill and intangible asset impairment charges — — — Facility restructuring charges — — — ) Income (loss) from operations ) — Other income (expense): Intercompany interest ) ) — — Interest ) ) — ) Miscellaneous, net ) — ) ) — ) Income (loss) before income taxes ) ) — Provision (benefit) for income taxes ) ) — Equity in income of subsidiaries — ) — Net income (loss) ) Other comprehensive (loss) income, net of tax: Foreign currency translation adjustment, net of taxes ) ) ) ) Change in fair value of interest rate swaps, net of taxes — ) Total other comprehensive (loss) income, net of tax ) ) ) ) Comprehensive (loss) income $ ) $ ) $ $ ) $ ) Consolidated Statements of Operations and Comprehensive Income (Loss) Year Ended September 30, 2014 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ $ $ ) $ Costs and expenses: Cost of sales — ) Advertising, promotion and catalog — — Selling, general and administrative — Goodwill and intangible asset impairment charges — — — ) Income (loss) from operations ) ) — Other income (expense): Intercompany interest ) ) — — Interest ) — ) Miscellaneous, net ) ) — ) ) ) — ) Income (loss) before income taxes ) ) — ) Provision (benefit) for income taxes ) ) — Equity in income of subsidiaries — ) — Net income (loss) ) ) ) ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of taxes ) ) ) ) Change in fair value of interest rate swaps net of taxes — ) Total other comprehensive income (loss), net of tax ) ) ) Comprehensive income (loss) $ ) $ ) $ $ ) $ ) Consolidated Statements of Operations and Comprehensive Income (Loss) Year Ended September 30, 2013 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ $ $ ) $ Costs and expenses: Cost of sales — ) Advertising, promotion and catalog — — Selling, general and administrative — Merger expenses — ) Income (loss) from operations ) — Other income (expense): Intercompany interest ) ) — — Interest ) — — ) Miscellaneous, net ) ) — ) ) — ) Income (loss) before income taxes ) — Provision (benefit) for income taxes ) — Equity in income of subsidiaries — ) — Net income (loss) ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of taxes ) Change in fair value of interest rate swaps net of taxes — ) Total other comprehensive income (loss), net of tax ) Comprehensive income (loss) $ $ $ $ ) $ NBTY, INC. AND SUBSIDIARIES Condensed Consolidating Statement of Cash Flows Fiscal Year Ended September 30, 2015 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net (loss) income $ $ $ $ ) $ Adjustments to reconcile net (loss) income to net cash provided by operating activities: Equity in earnings of subsidiaries ) ) — — Impairments and disposals of assets — — Depreciation of property, plant and equipment — Amortization of intangible assets — — Foreign currency transaction loss (gain) — — Amortization and write-off of financing fees — — — Stock-based compensation — Allowance for doubtful accounts — — Inventory reserves — — Deferred income taxes — ) ) — ) Changes in operating assets and liabilities, net of acquisitions: Accounts receivable — ) ) — ) Inventories — ) — ) Other assets — ) — Accounts payable — — Accrued expenses and other liabilities — — Dividends received — ) — Intercompany accounts — ) — — Cash (used in) provided by operating activities $ $ $ $ ) $ Cash flows from investing activities: Purchase of property, plant and equipment ) ) ) — ) Proceeds from sale of building — — — Proceeds from sale of powder facility assets Investment in subsidiary ) — — — Net cash used in investing activities ) ) ) Cash flows from financing activities: Principal payments under long-term agreements — — ) — ) Proceeds from sale-leaseback — — Payments for financing fees ) — — — ) Dividends paid ) — ) ) Capital contribution — — ) — Intercompany accounts ) — — Net cash used in financing activities ) ) ) Effect of exchange rate changes on cash — — ) — ) Net increase in cash and cash equivalents — Cash and cash equivalents at beginning of period — Cash and cash equivalents at end of period $ $ $ $ — $ NBTY, INC. AND SUBSIDIARIES Condensed Consolidating Statement of Cash Flows Fiscal Year Ended September 30, 2014 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net (loss) income $ ) $ ) $ $ ) $ ) Adjustments to reconcile net (loss) income to net cash provided by operating activities: Equity in earnings of subsidiaries ) ) — — Impairments and disposals of assets — — Depreciation of property, plant and equipment — Amortization of intangible assets — — Foreign currency transaction loss (gain) — — Amortization and write-off of financing fees — — — Stock-based compensation — Allowance for doubtful accounts — — Inventory reserves — — Deferred income taxes — ) — ) Changes in operating assets and liabilities, net of acquisitions: — Accounts receivable — ) ) — ) Inventories — ) ) — ) Other assets — ) — Accounts payable — ) — ) Accrued expenses and other liabilities — ) — Dividends received — ) — Intercompany accounts — ) — — Cash (used in) provided by operating activities $ $ ) $ $ ) $ Cash flows from investing activities: Purchase of property, plant and equipment ) ) ) — ) Proceeds from sale of building — — Investment in subsidiary ) — — — Net cash used in investing activities ) ) ) ) Cash flows from financing activities: Principal payments under long-term agreements — — ) — ) Dividends paid ) — ) ) Capital contribution — — ) — Intercompany accounts ) ) — — Net cash used in financing activities ) ) ) ) Effect of exchange rate changes on cash — — ) — ) Net decrease in cash and cash equivalents ) ) ) — ) Cash and cash equivalents at beginning of period — Cash and cash equivalents at end of period $ $ $ $ — $ NBTY, INC. AND SUBSIDIARIES Condensed Consolidating Statement of Cash Flows Fiscal Year Ended September 30, 2013 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net (loss) income $ $ $ $ ) $ Adjustments to reconcile net (loss) income to net cash provided by operating activities: Equity in earnings of subsidiaries ) ) — — Impairments and disposals of assets — — Depreciation of property, plant and equipment — Amortization of intangible assets — — Foreign currency transaction loss (gain) ) — ) — ) Amortization and write-off of financing fees — — — Stock-based compensation — Allowance for doubtful accounts — ) — — ) Amortization of incremental inventory fair value — — — Inventory reserves — — — Deferred income taxes — — — Call premium on term loan ) — — — ) Changes in operating assets and liabilities, net of acquisitions: — Accounts receivable — ) — ) Inventories — ) ) — ) Other assets — ) — ) Accounts payable — — Accrued expenses and other liabilities — — Dividends received — ) — Intercompany accounts — ) — — Net cash provided by operating activities ) Cash flows from investing activities: Purchase of property, plant and equipment ) ) ) — ) Proceeds from sale of building — — — Cash paid for acquisitions, net of cash acquired ) ) — — ) Cash used in investing activities ) ) ) — ) Cash flows from financing activities: Principal payments under long-term agreements — — ) — ) Proceeds from borrowings under the revolver — — — Paydowns of borrowings under the revolver ) — — — ) Payments for financing fees ) — — — ) Dividends paid ) — ) ) Intercompany ) — — — Net cash used in financing activities ) ) ) ) Effect of exchange rate changes on cash and cash equivalents — — — Net (decrease) increase in cash and cash equivalents ) ) — ) Cash and cash equivalents at beginning of period — Cash and cash equivalents at end of period $ $ $ $ — $ |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Sep. 30, 2015 | |
Quarterly Results of Operations (Unaudited) | |
Quarterly Results of Operations (Unaudited) | 21. Quarterly Results of Operations (Unaudited) The following is a summary of the unaudited quarterly results of operations for fiscal 2015 and 2014 (amounts may not equal fiscal year totals due to rounding): Quarter ended December 31, 2014 (As revised) March 31, 2015 (1) (As revised) June 30, 2015 (1) September 30, 2015 (1)(2) Fiscal 2015: Net sales $ $ $ $ Gross profit (4) Income (loss) before income taxes ) Net income (loss) ) Quarter ended December 31, 2013 March 31, 2014 June 30, 2014 September 30, 2014 (3) Fiscal 2014: Net sales $ $ $ $ Gross profit Income (loss) from continuing operations before income taxes ) Net income (loss) ) (1) Includes charges of $6,537 for the quarter ended March 31, 2015, $14,437 for the quarter ended June 30, 2015 and $8,519 for the quarter ended September 30, 2015, related to the sale of the nutritional bar assets and powder facility (see Note 4). (2) Includes a charge of $55,000 for the quarter ended September 30, 2015, related to the impairment on indefinite-lived tradenames (see Note 7). (3) Includes charges of $207,334 related to the goodwill and intangible asset impairment charges (see Note 7). (4) Gross Profit includes accelerated depreciation resulting from the sale of our nutritional bar manufacturing facility assets of $3,282, $9,846 and $7,207 for the quarters ended March 31, 2015, June 30, 2015 and September 30, 2015, respectively (See Note 4). Revision to quarterly information (See Note 2) The quarter ended December 31, 2014 was revised to reflect the correction of the Company's policy with respect to its labels inventory. This revision resulted in the reduction of Gross profit and Income (loss) before income taxes by $3,70 8 and the reduction of Net income (loss) by $2,284. The quarter ended March 31, 2015 was revised to reflect the correction of the Company's policy with respect to prepaid rent, primarily related to certain retail locations, as well as to correct an error to record additional accelerated depreciation expense associated with the sale of assets from our bar plant (as described more fully in Note 4). This revision resulted in the reduction of Gross Profit by $1,635, Income (loss) before income taxes by $4,297 and Net income (loss) by $2, 647 . |
Subsequent Event
Subsequent Event | 12 Months Ended |
Sep. 30, 2015 | |
Subsequent Event. | |
Subsequent Event | 22. Subsequent Event Dr. Organic Limited In August 2015, NBTY (2015) Limited, a private limited company incorporated in England and Wales and an indirect subsidiary of Holdings ("NBTY (2015)"), and Holland & Barrett Group Limited, a company incorporated in England and Wales and an indirect subsidiary of Alphabet Holding Company, Inc. ("H&B") entered into an agreement to purchase Dr. Organic Limited (the "Share Purchase Agreement") pursuant to which NBTY (2015) agreed to acquire all of the ordinary shares in Dr. Organic Limited, a manufacturer, marketer and distributor of a broad line of naturally-inspired personal care products. The purchase price for the ordinary shares of Dr. Organic Limited is approximately £53,000 ($83,000), payable in (i) cash of £33,000 ($50,000) (the "cash consideration"), (ii) loan notes in an aggregate principal amount of approximately £20,000 ($30,000) (the "completion loan notes") to be issued by NBTY (2015) to the sellers, which mature 18 months after issuance and are redeemable at any time after six months at the option of the holders, (iii) 399,000 class B ordinary shares, par value £0.01 (the "rollover shares"), to be issued by NBTY (2015) to the sellers and (iv) 100,000 class C ordinary shares, par value £0.01, to be issued by NBTY (2015) to certain of the sellers at a premium of £0.04 each (which will be redeemed by NBTY (2015) for £0.05 each 18 months after issuance), each payable or issued on the closing date of the acquisition. Holders of the rollover shares may require us to repurchase them for an amount based on the future earnings of Dr. Organic Limited and its subsidiaries (the "repurchase amount"), which amount is payable, at the election of holders, in cash or through the issuance of loan notes by NBTY (2015) with terms similar to the completion loan notes. To the extent the holders do not exercise their put right, we will have the right to call the rollover shares at the repurchase amount. The completion of the transaction is subject to certain closing conditions, including regulatory clearance in the United Kingdom. The closing of the Dr. Organic Limited acquisition is expected to occur during the second half of calendar 2015. |
SCHEDULE II Valuation and Quali
SCHEDULE II Valuation and Qualifying Accounts | 12 Months Ended |
Sep. 30, 2015 | |
SCHEDULE II Valuation and Qualifying Accounts | |
SCHEDULE II Valuation and Qualifying Accounts | Column A Column B Column C Column D Column E Additions Description Balance at beginning of period Charged to costs and expenses Charged to other accounts Deductions Balance at end of period Fiscal year ended September 30, 2015: Inventory reserves $ $ $ — $ Allowance for doubtful accounts $ $ $ — $ ) (a) $ Promotional program incentive allowance $ $ $ — $ ) $ Allowance for sales returns $ $ $ — $ ) (b) $ Valuation allowance for deferred tax assets $ $ — $ — $ ) $ Fiscal year ended September 30, 2014: Inventory reserves $ $ $ — $ — $ Allowance for doubtful accounts $ $ $ — $ ) (a) $ Promotional program incentive allowance $ $ $ — $ ) $ Allowance for sales returns $ $ $ — $ ) (b) $ Valuation allowance for deferred tax assets $ $ ) $ — $ ) $ Fiscal year ended September 30, 2013: Inventory reserves $ $ $ — $ — $ Allowance for doubtful accounts $ $ ) $ — $ ) (a) $ Promotional program incentive allowance $ $ $ — $ ) $ Allowance for sales returns $ $ $ — $ ) (b) $ Valuation allowance for deferred tax assets $ $ $ — $ ) $ (a) Uncollectible accounts written off. (b) Represents actual product returns. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation On October 1, 2010, pursuant to an Agreement and Plan of Merger, dated as of July 15, 2010, among NBTY, Holdings formed by an affiliate of TC Group, L.L.C. (d/b/a The Carlyle Group) and Alphabet Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Holdings ("Merger Sub") formed solely for the purpose of entering into the Merger, Merger Sub merged with and into NBTY with NBTY as the surviving corporation (also referred herein as the "Merger"). As a result of the Merger, NBTY became a wholly owned subsidiary of Holdings. Our financial statements are prepared in conformity with U.S. generally accepted accounting principles ("GAAP"). The consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions are eliminated in consolidation. |
Revision to Financial Statements | Revision to Financial Statements During the preparation of the annual consolidated financial statements for the fiscal year ended September 30, 2015 ("fiscal 2015") the Company discovered a financial statement error attributable to the accounting for the accelerated depreciation of assets being sold in conjunction with the closure of its nutritional bar manufacturing plant. More specifically, the Company determined that accelerated depreciation had been understated for the three and nine months ended June 30, 2015 by $4,904 and $6,539, respectively. Accordingly, the Company restated those periods. Additionally, in prior interim periods during fiscal 2015 the Company had recorded and disclosed out-of-period adjustments that the Company concluded at the time of recording of those adjustments, based on its evaluation of both quantitative and qualitative factors, were not material to any of its previously issued consolidated financial statements. These adjustments included the following: • D uring the first quarter of fiscal 2015, the Company recorded an out-of-period adjustment to cost of sales and label inventory of $3,708. This immaterial adjustment is a result of the Company correcting its policy of expensing all labels upon receipt. Accordingly on-hand labels are now recorded as a part of ending inventory on the consolidated balance sheet. • D uring the second and third quarter of fiscal 2015, the Company recorded an out-of-period adjustment to selling, general and administrative expenses and cost of sales and prepaid rent totaling $3,252. This immaterial adjustment is a result of the Company correcting its policy of expensing rent, primarily at certain retail locations, at the payment date. Accordingly prepaid rent is now recorded on the consolidated balance sheet and expensed during the period of use. The Company concluded that the aggregate impact of these errors resulted in a material misstatement to its consolidated financial statements for the three and nine months ended June 30, 2015. In connection with the Company's restatement of those interim consolidated financial statements the Company revised its historical financial statements to reflect the impact of the correction of the accounting policies noted above. The impact of correcting these policies was recorded as an adjustment to shareholder's equity as of September 30, 2012. Therefore, the Consolidated Statement s of Shareholder's Equity and the Consolidated Balance Sheet have been revised to reflect this change. There was no change to the previously reported Consolidated Statement s of Operations and Comprehensive Income (Loss), as the impact to the Company's results of operations for all previously reported periods was de minimis. Furthermore, there was no change to the Consolidated Statement s of Cash Flows and no impact on any covenants contained in its debt agreements. Accordingly the C ompany has revised the following captions on the Consolidated Balance Sheet for September 30, 2014 as follows: increased Inventories by $3,70 8 ; increased Other Current Assets by $3,252; decreased Deferred income taxes by $2,673; increased each of Total Current assets, Total assets, and Total shareholder's equity by $4,287; and decreased accumulated deficit by $4,287. |
Segment Reporting | Segment Reporting During the fiscal year ended September 30, 2015, the Company changed the names of its four segments to more accurately portray the brands and markets in which we do business. There were no other changes in the presentation of our segments. The changes to the names are as follows: New Segment Name Previous Segment Name Consumer Products Group Wholesale Holland & Barrett International European Retail Puritan's Pride Direct Response/E-Commerce Vitamin World North American Retail |
Estimates | 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 dates of the financial statements and reported amounts of revenues and expenses during the reporting periods. 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 that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our most significant estimates include: sales returns, promotions and other allowances; inventory valuation and obsolescence; valuation and recoverability of long-lived assets, including goodwill and intangible assets; income taxes; and accruals for the outcome of current litigation. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. |
Revenue Recognition | Revenue Recognition We recognize product revenue when title and risk of loss have transferred to the customer, there is persuasive evidence of an arrangement to deliver a product, delivery has occurred, the sales price is fixed or determinable and collectibility is reasonably assured. The delivery terms for most sales within the Consumer Products Group and Puritan's Pride segments are F.O.B. destination. Generally, title and risk of loss transfer to the customer at the time the product is received by the customer. With respect to retail store operations, we recognize revenue upon the sale of products to customers. Net sales represent gross sales invoiced to customers, less certain related charges for discounts, returns and other promotional program incentive allowances. |
Sales Returns and Other Allowances | Sales Returns and Other Allowances Allowance for sales returns: Estimates for sales returns are based on a variety of factors, including actual return experience of specific products or similar products. We are able to make reasonable and reliable estimates of product returns based on our 40 plus year history in this business. We also review our estimates for product returns based on expected return data communicated to us by customers. Additionally, we monitor the levels of inventory at our largest customers to avoid excessive customer stocking of merchandise. Allowances for returns of new products are estimated by reviewing data of any prior relevant new product return information. We also monitor the buying patterns of the end-users of our products based on sales data received by our retail outlets in North America and Europe. Promotional program incentive allowances: We estimate our allowance for promotional program incentives based upon specific outstanding marketing programs and historical experience. The allowance for sales incentives offered to customers is based on various contractual terms or other arrangements agreed to in advance with certain customers. Generally, customers earn such incentives as specified sales volumes are achieved. We accrue these incentives as a reduction to sales either at the time of sale or over the period of time in which they are earned, depending on the nature of the program. Allowance for doubtful accounts: We perform on-going credit evaluations of our customers and adjust credit limits based upon payment history and the customer's current credit worthiness, as determined by our review of current credit information. We estimate bad debt expense based upon historical experience as well as specifically identified customer collection issues to adjust the carrying amount of the related receivable to its estimated net realizable value. Accounts receivable are presented net of the following reserves at September 30: 2015 2014 Promotional program incentive allowances $ $ Allowance for sales returns Allowance for doubtful accounts $ $ |
Inventories | Inventories Inventories are stated at the lower of cost (first-in first-out method) or market. The cost elements of inventories include materials, labor and overhead. In evaluating whether inventories are stated at the lower of cost or market, we consider such factors as the amount of inventory on hand, estimated time required to sell such inventory, remaining shelf life and current and expected market conditions, including levels of competition. Based on this evaluation, we record an adjustment to cost of sales to reduce inventories to its estimated net realizable value. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are carried at cost. Depreciation is charged on a straight-line basis over the estimated useful lives of the related assets. The costs of normal maintenance and repairs are charged to expense when incurred. Expenditures which significantly improve or extend the life of an asset are capitalized and depreciated over the asset's remaining useful life. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the estimated useful lives of the related assets or the remaining lease term. Upon sale or disposition, the related cost and accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is reflected in operations. |
Capitalized Lease | Capitalized Lease The Company has a capital lease for a warehouse located in the UK, expiring in 2045. The capital lease asset is included in property, plant and equipment, net in the accompanying Consolidated Balance Sheets. Amortization expense on the capital lease asset is recorded as depreciation expense and is predominately included in cost of sales. Capital lease liabilities are recorded at the lesser of the estimated fair market value of the leased property or the net present value of the aggregate future minimum lease payments and are included in current portion of long-term debt and long-term debt, net of current portion in the accompanying Consolidated Balance Sheets. Interest on these obligations is included in interest expense in the Consolidated Statements of Operations. |
Capitalized Software Costs | Capitalized Software Costs We capitalize certain costs related to the acquisition and development of software for internal use and amortize these costs using the straight-line method over the estimated useful life of the software. These costs are included in property, plant and equipment in the accompanying Consolidated Balance Sheets. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized, but instead are tested for impairment annually or more frequently if impairment indicators are present. We consider the following to be some examples of important indicators that may trigger an impairment review: (i) a history of cash flow losses at retail stores; (ii) significant changes in the manner or use of the acquired assets in our overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; and (v) regulatory changes. Our annual impairment testing date is as of July 1, the first day of our fourth fiscal quarter. Goodwill is tested for impairment using a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying value. If the fair value of a reporting unit exceeds the carrying value of the net assets assigned to a reporting unit, goodwill is not considered impaired and no further testing is required. If the carrying amount of the reporting unit exceeds its fair value, a second step is performed to determine whether there is a goodwill impairment, and if so, the amount of the impairment. This step revalues all assets and liabilities of the reporting unit to their current fair value and then compares the implied fair value of the reporting unit's goodwill to the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. We use a combination of the income and market approaches, weighted equally, to estimate the fair value of our reporting units. The fair value of our indefinite-lived trademarks is generally determined based on the relief from royalty method under the income approach, which requires us to estimate a reasonable royalty rate, identify relevant projected revenues and expenses, and select an appropriate discount rate. The evaluation of indefinite-lived intangible assets for impairment requires management to use significant judgments and estimates including, but not limited to, projected future net sales, operating results, and cash flows of our business. We base our fair value estimates on assumptions we believe to be reasonable, but such assumptions are subject to inherent uncertainties. Accordingly, if actual results fall short of such estimates, significant future impairments could result. An impairment charge would reduce income from operations in the period it was determined that the charge was needed. Goodwill and intangible assets are further discussed in Note 7 to the Consolidated Financial Statements. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We evaluate the need for an impairment charge relating to long-lived assets, including definite lived intangible assets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset group to its expected future net cash flows generated by the asset group. If the carrying amount of an asset group exceeds its estimated undiscounted future cash flows, the carrying amount is compared to its fair value and an impairment charge is recognized to the extent of the difference. Considerable management judgment is necessary to estimate projected future operating cash flows. Accordingly, if actual results fall short of such estimates, significant future impairments could result. |
Income Taxes | Income Taxes We recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. We estimate the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined that such assets will, more likely than not, go unused. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reversed. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, we operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions. We believe adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. NBTY Inc. and its subsidiaries are included in the consolidated United States federal and certain state corporate income tax returns of Holdings. NBTY calculates the provision for income taxes by using a "separate return" method. Under this method, we are assumed to file separate returns with the tax authorities, thereby reporting our taxable income or loss and paying the applicable tax to or receiving the appropriate refund from Holdings. Our current provision is the amount of tax payable or refundable on the basis of hypothetical, current-year separate returns. We provide deferred taxes on temporary differences and on any carryforwards that we could claim on our hypothetical returns and assess the need for a valuation allowance on the basis of our projected separate return results. Any difference between the tax provision (or benefit) allocated to us under the separate return method and payments to be made to (or received from) Holdings for tax expense are recorded as either payable or receivable. Accordingly, our tax liability under the separate return method represents the amount payable in excess of Holdings consolidated obligation that is expected to be paid in the future to the extent permitted by our credit agreement. |
Accruals for Litigation and Other Contingencies | Accruals for Litigation and Other Contingencies We are subject to legal proceedings, lawsuits and other claims related to various matters. We are required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. We determine the amount of reserves needed, if any, for each individual issue based on our knowledge and experience and discussions with legal counsel. These reserves may change in the future due to new developments in each matter (including the enactment of new laws), the ultimate resolution of each matter or changes in approach, such as a change in settlement strategy. In some instances, we may be unable to make a reasonable estimate of the liabilities that may result from the final resolution of certain contingencies disclosed and accordingly, no reserve is recorded until such time that a reasonable estimate may be made. |
Shipping and Handling Costs | Shipping and Handling Costs We incur shipping and handling costs in all segments of our operations. These costs, included in selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive (Loss) Income, were $93,301, $97,382 and $92,062 for the fiscal years ended September 30, 2015, 2014 and 2013, respectively. |
Advertising, Promotion and Catalog | Advertising, Promotion and Catalog We expense the production costs of advertising as incurred, except for the cost of mail order catalogs, which are capitalized and amortized over our expected period of future benefit, which typically approximates two months. Capitalized costs for mail order catalogs at September 30, 2015 and 2014 were $667 and $671, respectively. Total mail order catalog expense was $8,001, $9,093 and $7,713 for the fiscal years ended September 30, 2015, 2014 and 2013, respectively, and is included in advertising, promotion and catalog in the Consolidated Statements of Operations and Comprehensive (Loss) Income. |
Foreign Currency | Foreign Currency The functional currency of our foreign subsidiaries is the applicable local currency. The translation of the applicable foreign currencies into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts and cash flows using average rates of exchange prevailing during the year. Adjustments resulting from the translation of foreign currency financial statements are included in other Comprehensive Income (Loss) and accumulated in a separate component of Stockholders' Equity. |
Derivatives and Hedging Activities | Derivatives and Hedging Activities All derivative financial instruments are recognized at fair value as either assets or liabilities in the Consolidated Balance Sheets. Changes in the fair values of these derivatives are reported in operations or accumulated other comprehensive income (loss) depending on the designation of the derivative and whether it qualifies for hedge accounting. For derivatives that had been formally designated as cash flow hedges (interest rate swap agreements), the effective portion of changes in the fair value of the derivative was recorded in accumulated other comprehensive income (loss) and reclassified into operations when interest expense on the underlying borrowings was recognized. For hedges of the net investment in foreign subsidiaries (cross currency swap agreements), changes in fair value of the derivative are recorded in accumulated other comprehensive income (loss) to offset the change in the value of the net investment being hedged. We do not use derivative financial instruments for trading purposes. |
Recent Accounting Developments | Recent Accounting Developments In May 2014, the Financial Accounting Standards Board ("FASB") issued guidance on revenue from contracts with customers that will supersede virtually all existing revenue recognition guidance, including industry-specific guidance, and is designed to create greater comparability for financial statement users across industries and jurisdictions. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The guidance would have been effective for us beginning October 1, 2017, however in July 2015, the FASB decided to defer the effective date of the new standard by one year. Early adoption would be permitted for us beginning October 1, 2017. The guidance permits the use of either a retrospective or cumulative effect transition method. We have not yet selected a transition method and are currently evaluating the impact of the amended guidance on our consolidated financial statements and related disclosures. In January 2015, the FASB issued guidance which eliminates from GAAP the concept of extraordinary items. The guidance is effective for us beginning October 1, 2016, and early adoption is permitted, provided that adoption is applied from the beginning of the fiscal year of adoption. This guidance may be applied prospectively or retrospectively to all prior periods presented in the financial statements. The adoption of this guidance is not expected to have an impact on our consolidated financial statements. In February 2015, the FASB issued guidance that amends the current consolidation guidance. The amendments affect both the variable interest entity and voting interest entity consolidation models. The new guidance is effective for the Company beginning October 1, 2016, with early adoption permitted. This new guidance is not expected to have a material impact on our consolidated financial statements. In April 2015, the FASB issued guidance which changes the presentation of debt issuance costs. Under the new guidance, debt issuance costs are presented as a reduction of the carrying amount of the related liability, rather than as an asset. This guidance was further clarified in August 2015 whereby the FASB explicitly stated that deferred financing costs related to line-of-credit arrangements could be deferred and treated as an asset and subsequently amortized ratably over the term of the line-of-credit. The guidance is effective for us beginning October 1, 2016, and early adoption is permitted. This guidance has been early adopted and applied retrospectively to the prior periods presented in the consolidated financial statements. See Note 9 "Long-Term Debt." In July 2015, the FASB issued guidance which applies to inventory for which cost is determined by methods other than the last-in first-out and the retail inventory method. Under the new guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance is effective for us beginning October 1, 2017, and should be applied prospectively with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements and related disclosures. In September 2015, the FASB issued guidance which requires the acquiring company in a business combination to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this guidance require that the acquiring company record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of a change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. This guidance is effective for us beginning October 1, 2016 and for interim periods therein. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements. |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation | |
Schedule of segment names | New Segment Name Previous Segment Name Consumer Products Group Wholesale Holland & Barrett International European Retail Puritan's Pride Direct Response/E-Commerce Vitamin World North American Retail |
Schedule of accounts receivable reserves | 2015 2014 Promotional program incentive allowances $ $ Allowance for sales returns Allowance for doubtful accounts $ $ |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Inventories. | |
Schedule of components of inventories | 2015 2014 (As Revised) Raw materials $ $ Work-in-process Finished goods Total $ $ |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment. | |
Schedule of property, plant and equipment | 2015 2014 Depreciation and amortization period (years) Land $ $ Buildings and leasehold improvements 4–40 Building under capital lease arrangement — Machinery and equipment 3–13 Furniture and fixtures 3–10 Computer software and equipment 3–7 Transportation equipment 3–4 Construction in progress Less accumulated depreciation and amortization ) ) Less accumulated amortization for asset under capital lease arrangement ) — $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets | |
Schedule of change in carrying amount of goodwill by segment | Consumer Products Group Holland & Barrett International Puritan's Pride Vitamin World Consolidated Balance at September 30, 2013 $ $ $ $ $ Purchase price adjustments — — — Impairment of goodwill — — ) ) ) Foreign currency translation ) ) — — ) Balance at September 30, 2014 — Write-off due to sale of powder facility ) — ) — ) Foreign currency translation ) ) — — ) Balance at September 30, 2015 $ $ $ $ — $ |
Schedule of carrying amounts of acquired other intangible assets | 2015 2014 Gross carrying amount Accumulated amortization Gross carrying amount Accumulated amortization Amortization period (years) Definite lived intangible assets Brands and customer relationships $ $ $ $ 17–25 Tradenames and other 20–30 Indefinite lived intangible asset Tradenames — — Total intangible assets $ $ $ $ |
Accrued Expenses and Other Cu36
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Accrued Expenses and Other Current Liabilities | |
Schedule of components of accrued expenses and other current liabilities | 2015 2014 Accrued compensation and benefits $ $ Accrued interest Income taxes payable Other $ $ |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Schedule of components of long-term debt | 2015 2014 Senior Secured Credit Facilities: Term loan B-2 Principal amount $ $ Less unamortized debt issuance costs ) ) Notes Principal amount Less unamortized debt issuance costs ) ) Long-term obligations under capital lease — Other — Less current portion, including obligations under capital lease ) ) Total $ $ |
Holdco Notes | |
Schedule of redemption prices of Notes | Period Redemption Price 2015 % 2016 and thereafter % |
Notes | |
Schedule of redemption prices of Notes | Period Redemption Price 2015 % 2016 and thereafter % |
Fair Value of Financial Instr38
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Fair Value of Financial Instruments | |
Summary of the liabilities measured at fair value on a recurring basis | 2015 2014 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Liabilities: Current (included in accrued expenses and other current liabilities): Interest rate swaps $ — $ — $ — $ ) $ — Cross currency swaps $ — $ — $ ) $ — $ — $ ) Non-current (included in other assets): Cross currency swaps $ — $ — $ $ — $ — $ — Non-current (included in other liabilities): Cross currency swaps $ — $ — $ — $ — $ — $ ) |
Schedule of the Level 3 activity related to cross currency swaps | 2015 2014 Beginning balance: $ ) $ ) Unrealized gain on hedging instruments Ending balance: $ $ ) |
Schedule of effect of derivative instruments designated as cash flow and net investment hedging instruments | Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Operations (Effective Portion) Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Operations (Effective Portion) 2015 2015 2014 2014 Cash Flow Hedges: Interest rate swaps $ ) $ ) $ ) $ ) Net Investment Hedges: Cross currency swaps — — Total $ $ ) $ ) $ ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Schedule of (loss) income from continuing operations before provision for income taxes | 2015 2014 2013 United States $ ) $ ) $ Foreign $ $ ) $ |
Schedule of (benefit) provision for income taxes | 2015 2014 2013 Federal Current $ ) $ $ Deferred ) ) State Current Deferred ) ) ) Foreign Current Deferred ) ) Total provision (benefit) $ $ $ |
Schedule of reconciliation of (benefit) provision for income tax computed using statutory Federal income tax rate to actual income tax expense and effective income tax rate | 2015 2014 2013 Amount Percent of pretax income Amount Percent of pretax income Amount Percent of pretax income Income tax expense at statutory rate $ % $ ) % $ % State income taxes, net of federal income tax benefit ) )% ) % ) )% Change in valuation allowance ) )% — % ) )% Effect of international operations, including foreign export benefit and earnings indefinitely reinvested ) )% ) % ) )% Domestic manufacturing deduction ) )% ) % ) )% Goodwill Impairment % )% — % Change in tax reserves ) )% ) % — % Other % )% % $ % $ )% $ % |
Schedule of components of deferred tax assets and liabilities | 2015 2014 (as revised) Deferred tax assets: Inventory reserves and UNICAP $ $ Accrued expenses and reserves not currently deductible Other comprehensive income R&D tax credit carryforward — Foreign and state tax credits Foreign and state net operating losses Valuation allowance ) ) Total deferred income tax assets, net of valuation allowance Deferred tax liabilities: Depreciation ) ) Intangibles ) ) Prepaid rent ) ) Undistributed foreign earnings ) ) Total deferred income tax liabilities ) ) Total net deferred income tax liabilities ) ) Less current deferred income tax assets ) ) Long-term deferred income tax liabilities $ ) $ ) |
Summary of foreign net operating losses, foreign tax credit and New York State (NYS) investment tax credit carryforwards | 2015 2014 Foreign net operating losses $ $ Deferred foreign tax credit on unremitted foreign earnings R&D tax credit carryforward — NYS investment tax credit carryforwards |
Summary of valuation allowances | 2015 2014 NYS investment tax credit carryforwards $ $ Foreign loss carryforwards |
Schedule of change in the valuation allowance | 2015 2014 2013 Beginning balance $ ) $ ) $ ) NYS investment tax credit carryforwards utilized/(generated) ) Foreign net operating losses utilized/(generated) Foreign net operating losses acquired — — ) Balance at September 30 $ ) $ ) $ ) |
Summary of activity related to gross unrecognized tax benefits | 2015 2014 2013 Beginning balance $ $ $ Increases related to current year tax positions — Increases related to prior year tax positions — Decreases related to settlements with taxing authorities ) ) ) Decreases related to lapsing of statute of limitations ) ) ) Balance as of September 30 $ $ $ |
Stock-Based Compensation and 40
Stock-Based Compensation and Employee Benefit Plans (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation and Employee Benefit Plans | |
Schedule of weighted-average assumptions used for options granted | Fiscal year ended September 30, 2015 2014 2013 Significant assumptions: Time based vesting Risk-free rate (1) .01%–3.07 % .02%–3.65 % .11%–4.59 % Expected term (2) 6.5 years 6.5 years 6.5 years Expected volatility (3) Expected dividends Performance based vesting Risk-free rate (1) .01%–3.07 % .02%–3.65 % .11%–4.59 % Expected term (4) 4.3 years 3.1 years 4.5 years Expected volatility (3) Expected dividends (1) The risk free interest rate assumption was based on yields of U.S. Treasury securities in effect at the date of grant with terms similar to the expected term. (2) The expected term of the options was estimated utilizing the simplified method. We utilize the simplified method because the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The simplified method was used for all stock options that require only a service vesting condition. (3) Expected volatility was estimated based on historical volatility of peer companies over a period equivalent to the expected term. Peer companies are determined based on relevant industry and/or market capitalization. (4) The expected term of the options was estimated utilizing a Monte Carlo simulation model. |
Summary of stock option activity | Fiscal Year Ended September 30, 2015 2014 Number of shares Weighted average exercise price Number of shares Weighted average exercise price Outstanding at beginning of period $ $ Granted $ $ Exercised ) $ ) $ Forfeited ) $ ) $ Outstanding at end of period $ $ Exercisable at end of period $ $ Number of shares available for future grant |
Summary of information about stock options outstanding, by range of exercise prices | Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Shares Exercisable Weighted Average Exercise Price Intrinsic Value $124 $ $ $ $298 $ $ $ $373 $ $ $ — $396 $ $ $ — $473 $ $ $ — |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Commitments | |
Schedule of future minimum rental payments (excluding real estate tax and maintenance costs) | Operating Leases Captial Lease 2016 $ $ 2017 2018 2019 2020 Thereafter Total $ Less amount representing interest ) Net present value of minimum lease payments Less current installments ) Long-term capital lease obligations less current installments $ |
Accumulated Other Comprehensi42
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss). | |
Schedule of components of accumulated other comprehensive income (loss), net of income taxes | Fiscal year ended September 30, 2015 (1) Foreign currency translation adjustments Gains and losses on cash flow hedges Total Balance at September 30, 2014 $ ) $ ) $ ) Other comprehensive income (loss) before reclassifications ) ) ) Amounts reclassified from accumulated other comprehensive income (loss) (2) — Balance at September 30, 2015 $ ) $ — $ ) (1) All amounts are net of tax, amounts in parentheses indicate debits. (2) These (gains) losses are reclassified into Interest expense. See Note 10, Fair Value of Financial Instruments. Fiscal year ended September 30, 2014 (1) Foreign currency translation adjustments Gains and losses on cash flow hedges Total Balance at September 30, 2013 $ ) $ ) $ ) Other comprehensive income (loss) before reclassifications ) ) ) Amounts reclassified from accumulated other comprehensive income (loss) (2) — Balance at September 30, 2014 $ ) $ ) $ ) (1) All amounts are net of tax, amounts in parentheses indicate debits. (2) These (gains) losses are reclassified into Interest expense. See Note 10, Fair Value of Financial Instruments. Fiscal year ended September 30, 2013 (1) Foreign currency translation adjustments Gains and losses on cash flow hedges Total Balance at September 30, 2012 $ ) $ ) $ ) Other comprehensive income (loss) before reclassifications ) ) Amounts reclassified from accumulated other comprehensive income (loss) (2) — Balance at September 30, 2013 $ ) $ ) $ ) (1) All amounts are net of tax, amounts in parentheses indicate debits. (2) These (gains) losses are reclassified into Interest expense. See Note 10, Fair Value of Financial Instruments. |
Business and Credit Concentra43
Business and Credit Concentration (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Net sales | |
Business and Credit Concentration | |
Schedule of specified customers percentages accounted for | Consumer Products Group Segment Net Sales Total Consolidated Net Sales 2015 2014 2013 2015 2014 2013 Customer A % % % % % % |
Gross accounts receivable | |
Business and Credit Concentration | |
Schedule of specified customers percentages accounted for | 2015 2014 Customer A % % Customer B % % |
Supplemental Disclosure of Ca44
Supplemental Disclosure of Cash Flow Information (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Supplemental Disclosure of Cash Flow Information | |
Schedule of supplemental disclosure of cash flow information | 2015 2014 2013 Cash interest paid $ $ $ Cash income taxes paid $ $ $ Non-cash investing and financing information: Acquisitions accounted for under the acquisition method: Fair value of assets acquired $ — $ — $ Liabilities assumed — — ) Less: Cash acquired — — ) Net cash paid $ — $ — $ Property, plant and equipment additions included in accounts payable $ $ $ Property, plant and equipment disposals included in other current assets $ $ — $ — |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Segment Information | |
Schedule of financial information of business segments | Total Reportable Business Segments Consumer Products Group Holland & Barrett International Puritan's Pride Vitamin World Total Corporate / Manufacturing Consolidated Fiscal 2015: Net sales $ $ $ $ $ $ — $ Income (loss) from operations (1)(2) ) ) Depreciation and amortization Capital expenditures Fiscal 2014: Net sales $ $ $ $ $ $ — $ Income (loss) from operations (3) ) ) ) Depreciation and amortization Capital expenditures Fiscal 2013: Net sales $ $ $ $ $ $ — $ Income (loss) from operations (4) ) Depreciation and amortization Capital expenditures (1) Includes charges within Corporate / Manufacturing of $23, 952 related to the sale of the nutritional bar assets and powder facility (see Note 4) and charges of $4,308 related to the Glucosamine settlement (see Note 11). Also includes charges in the Consumer Products Group and Puritan's Pride segments of $4,892 and $649, respectively, related to the write-off of goodwill in relation to the sale of the powder facility (see Note 7). (2) Includes a charge within the Vitamin World segment of $55,000 related to the impairment on its indefinite-lived tradenames (see Note 7). (3) Includes charges within the Puritan's Pride and Vitamin World segments of $171,590 and $35,744, respectively, related to the goodwill and intangible asset impairment charges (see Note 7). (4) Includes charges within Corporate / Manufacturing of $32,695 relating to the facility restructuring (see Note 4) and $12,000 related to the accrual of the Glucosamine settlement (see Note 11). |
Schedule of total assets by segment | 2015 2014 (As revised) Reportable Business Segments: Consumer Products Group $ $ Holland & Barrett International Puritan's Pride Vitamin World Total Reportable Business Segments: Corporate / Manufacturing Consolidated assets $ $ |
Schedule of total net sales by location of customer | 2015 2014 2013 United States $ $ $ United Kingdom Canada Netherlands Ireland Other foreign countries Consolidated net sales $ $ $ |
Schedule of long-lived assets - Property, plant and equipment | 2015 2014 United States $ $ United Kingdom Netherlands Ireland Canada Other foreign countries Consolidated long-lived assets $ $ |
Schedule of foreign subsidiaries accounted for the percentages of total assets and total liabilities | 2015 2014 Total Assets % % Total Liabilities % % |
Condensed Consolidating Finan46
Condensed Consolidating Financial Statements of Guarantors (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Condensed Consolidating Financial Statements of Guarantors | |
Schedule of condensed consolidating balance sheet | Condensed Consolidating Balance Sheet As of September 30, 2015 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ $ $ $ — $ Accounts receivable, net — — Intercompany — ) — Inventories — — Deferred income taxes — — Other current assets — Total current assets ) Property, plant and equipment, net — Goodwill — — Other intangible assets, net — — Other assets — Intercompany loan receivable — ) — Investments in subsidiaries — ) — Total assets $ $ $ $ ) $ Liabilities and Stockholder's Equity Current liabilities: Current portion of long-term debt $ $ — $ $ — $ Accounts payable — — Intercompany — — ) — Accrued expenses and other current liabilities — Total current liabilities ) Intercompany loan payable ) — Long-term debt, net of current portion — — Deferred income taxes — — Other liabilities — — Total liabilities ) Commitments and contingencies Stockholder's Equity: Common stock — — — — — Capital in excess of par ) (Accumulated deficit) retained earnings ) ) ) Accumulated other comprehensive income (loss) ) ) ) ) Total stockholder's equity ) Total liabilities and stockholder's equity $ $ $ $ ) $ Condensed Consolidating Balance Sheet As of September 30, 2014 (as revised) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ $ $ $ — $ Accounts receivable, net — — Intercompany — ) — Inventories — — Deferred income taxes — — Other current assets — Total current assets ) Property, plant and equipment, net — Goodwill — — Other intangible assets, net — — Other assets — — Intercompany loan receivable — ) — Investments in subsidiaries — ) — Total assets $ $ $ $ ) $ Liabilities and Stockholder's Equity Current liabilities: Current portion of long-term debt $ — $ — $ $ — $ Accounts payable — — Intercompany — — ) — Accrued expenses and other current liabilities — Total current liabilities ) Intercompany loan payable ) — Long-term debt, net of current portion — — Deferred income taxes — Other liabilities — Total liabilities ) Commitments and contingencies Stockholder's Equity: Common stock — — — — — Capital in excess of par ) (Accumulated deficit) retained earnings ) ) ) Accumulated other comprehensive income (loss) ) ) ) ) Total stockholder's equity ) Total liabilities and stockholder's equity $ $ $ $ ) $ |
Schedule of condensed consolidating statement of operations and comprehensive income (loss) | Consolidated Statements of Operations and Comprehensive (Loss) Income For the fiscal year ended September 30, 2015 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ $ $ ) $ Costs and expenses: Cost of sales — ) Advertising, promotion and catalog — — Selling, general and administrative — Goodwill and intangible asset impairment charges — — — Facility restructuring charges — — — ) Income (loss) from operations ) — Other income (expense): Intercompany interest ) ) — — Interest ) ) — ) Miscellaneous, net ) — ) ) — ) Income (loss) before income taxes ) ) — Provision (benefit) for income taxes ) ) — Equity in income of subsidiaries — ) — Net income (loss) ) Other comprehensive (loss) income, net of tax: Foreign currency translation adjustment, net of taxes ) ) ) ) Change in fair value of interest rate swaps, net of taxes — ) Total other comprehensive (loss) income, net of tax ) ) ) ) Comprehensive (loss) income $ ) $ ) $ $ ) $ ) Consolidated Statements of Operations and Comprehensive Income (Loss) Year Ended September 30, 2014 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ $ $ ) $ Costs and expenses: Cost of sales — ) Advertising, promotion and catalog — — Selling, general and administrative — Goodwill and intangible asset impairment charges — — — ) Income (loss) from operations ) ) — Other income (expense): Intercompany interest ) ) — — Interest ) — ) Miscellaneous, net ) ) — ) ) ) — ) Income (loss) before income taxes ) ) — ) Provision (benefit) for income taxes ) ) — Equity in income of subsidiaries — ) — Net income (loss) ) ) ) ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of taxes ) ) ) ) Change in fair value of interest rate swaps net of taxes — ) Total other comprehensive income (loss), net of tax ) ) ) Comprehensive income (loss) $ ) $ ) $ $ ) $ ) Consolidated Statements of Operations and Comprehensive Income (Loss) Year Ended September 30, 2013 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ $ $ ) $ Costs and expenses: Cost of sales — ) Advertising, promotion and catalog — — Selling, general and administrative — Merger expenses — ) Income (loss) from operations ) — Other income (expense): Intercompany interest ) ) — — Interest ) — — ) Miscellaneous, net ) ) — ) ) — ) Income (loss) before income taxes ) — Provision (benefit) for income taxes ) — Equity in income of subsidiaries — ) — Net income (loss) ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of taxes ) Change in fair value of interest rate swaps net of taxes — ) Total other comprehensive income (loss), net of tax ) Comprehensive income (loss) $ $ $ $ ) $ |
Schedule of condensed consolidating statement of cash flows | NBTY, INC. AND SUBSIDIARIES Condensed Consolidating Statement of Cash Flows Fiscal Year Ended September 30, 2015 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net (loss) income $ $ $ $ ) $ Adjustments to reconcile net (loss) income to net cash provided by operating activities: Equity in earnings of subsidiaries ) ) — — Impairments and disposals of assets — — Depreciation of property, plant and equipment — Amortization of intangible assets — — Foreign currency transaction loss (gain) — — Amortization and write-off of financing fees — — — Stock-based compensation — Allowance for doubtful accounts — — Inventory reserves — — Deferred income taxes — ) ) — ) Changes in operating assets and liabilities, net of acquisitions: Accounts receivable — ) ) — ) Inventories — ) — ) Other assets — ) — Accounts payable — — Accrued expenses and other liabilities — — Dividends received — ) — Intercompany accounts — ) — — Cash (used in) provided by operating activities $ $ $ $ ) $ Cash flows from investing activities: Purchase of property, plant and equipment ) ) ) — ) Proceeds from sale of building — — — Proceeds from sale of powder facility assets Investment in subsidiary ) — — — Net cash used in investing activities ) ) ) Cash flows from financing activities: Principal payments under long-term agreements — — ) — ) Proceeds from sale-leaseback — — Payments for financing fees ) — — — ) Dividends paid ) — ) ) Capital contribution — — ) — Intercompany accounts ) — — Net cash used in financing activities ) ) ) Effect of exchange rate changes on cash — — ) — ) Net increase in cash and cash equivalents — Cash and cash equivalents at beginning of period — Cash and cash equivalents at end of period $ $ $ $ — $ NBTY, INC. AND SUBSIDIARIES Condensed Consolidating Statement of Cash Flows Fiscal Year Ended September 30, 2014 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net (loss) income $ ) $ ) $ $ ) $ ) Adjustments to reconcile net (loss) income to net cash provided by operating activities: Equity in earnings of subsidiaries ) ) — — Impairments and disposals of assets — — Depreciation of property, plant and equipment — Amortization of intangible assets — — Foreign currency transaction loss (gain) — — Amortization and write-off of financing fees — — — Stock-based compensation — Allowance for doubtful accounts — — Inventory reserves — — Deferred income taxes — ) — ) Changes in operating assets and liabilities, net of acquisitions: — Accounts receivable — ) ) — ) Inventories — ) ) — ) Other assets — ) — Accounts payable — ) — ) Accrued expenses and other liabilities — ) — Dividends received — ) — Intercompany accounts — ) — — Cash (used in) provided by operating activities $ $ ) $ $ ) $ Cash flows from investing activities: Purchase of property, plant and equipment ) ) ) — ) Proceeds from sale of building — — Investment in subsidiary ) — — — Net cash used in investing activities ) ) ) ) Cash flows from financing activities: Principal payments under long-term agreements — — ) — ) Dividends paid ) — ) ) Capital contribution — — ) — Intercompany accounts ) ) — — Net cash used in financing activities ) ) ) ) Effect of exchange rate changes on cash — — ) — ) Net decrease in cash and cash equivalents ) ) ) — ) Cash and cash equivalents at beginning of period — Cash and cash equivalents at end of period $ $ $ $ — $ NBTY, INC. AND SUBSIDIARIES Condensed Consolidating Statement of Cash Flows Fiscal Year Ended September 30, 2013 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net (loss) income $ $ $ $ ) $ Adjustments to reconcile net (loss) income to net cash provided by operating activities: Equity in earnings of subsidiaries ) ) — — Impairments and disposals of assets — — Depreciation of property, plant and equipment — Amortization of intangible assets — — Foreign currency transaction loss (gain) ) — ) — ) Amortization and write-off of financing fees — — — Stock-based compensation — Allowance for doubtful accounts — ) — — ) Amortization of incremental inventory fair value — — — Inventory reserves — — — Deferred income taxes — — — Call premium on term loan ) — — — ) Changes in operating assets and liabilities, net of acquisitions: — Accounts receivable — ) — ) Inventories — ) ) — ) Other assets — ) — ) Accounts payable — — Accrued expenses and other liabilities — — Dividends received — ) — Intercompany accounts — ) — — Net cash provided by operating activities ) Cash flows from investing activities: Purchase of property, plant and equipment ) ) ) — ) Proceeds from sale of building — — — Cash paid for acquisitions, net of cash acquired ) ) — — ) Cash used in investing activities ) ) ) — ) Cash flows from financing activities: Principal payments under long-term agreements — — ) — ) Proceeds from borrowings under the revolver — — — Paydowns of borrowings under the revolver ) — — — ) Payments for financing fees ) — — — ) Dividends paid ) — ) ) Intercompany ) — — — Net cash used in financing activities ) ) ) ) Effect of exchange rate changes on cash and cash equivalents — — — Net (decrease) increase in cash and cash equivalents ) ) — ) Cash and cash equivalents at beginning of period — Cash and cash equivalents at end of period $ $ $ $ — $ |
Quarterly Results of Operatio47
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Quarterly Results of Operations (Unaudited) | |
Summary of unaudited quarterly results of operations | Quarter ended December 31, 2014 (As revised) March 31, 2015 (1) (As revised) June 30, 2015 (1) September 30, 2015 (1)(2) Fiscal 2015: Net sales $ $ $ $ Gross profit (4) Income (loss) before income taxes ) Net income (loss) ) Quarter ended December 31, 2013 March 31, 2014 June 30, 2014 September 30, 2014 (3) Fiscal 2014: Net sales $ $ $ $ Gross profit Income (loss) from continuing operations before income taxes ) Net income (loss) ) (1) Includes charges of $6,537 for the quarter ended March 31, 2015, $14,437 for the quarter ended June 30, 2015 and $8,519 for the quarter ended September 30, 2015, related to the sale of the nutritional bar assets and powder facility (see Note 4). (2) Includes a charge of $55,000 for the quarter ended September 30, 2015, related to the impairment on indefinite-lived tradenames (see Note 7). (3) Includes charges of $207,334 related to the goodwill and intangible asset impairment charges (see Note 7). (4) Gross Profit includes accelerated depreciation resulting from the sale of our nutritional bar manufacturing facility assets of $3,282, $9,846 and $7,207 for the quarters ended March 31, 2015, June 30, 2015 and September 30, 2015, respectively (See Note 4). |
Summary of Significant Accoun48
Summary of Significant Accounting Policies (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Sep. 30, 2012USD ($) | |
Reserve information | ||||||||||
Total accounts receivable reserves | $ 103,768 | $ 103,768 | $ 101,741 | |||||||
Sales Returns and Other Allowances | ||||||||||
Number of past years history in business on which reasonable and reliable estimates of product returns is based | 40 years | |||||||||
Revision to Financial Statements. | ||||||||||
Accelerated depreciation charges | 7,207 | $ 9,846 | $ 3,282 | |||||||
Inventories | 844,223 | $ 844,223 | 856,934 | |||||||
Other current assets | 59,831 | 59,831 | 64,761 | |||||||
Deferred income taxes | 701,694 | 701,694 | 707,962 | |||||||
Total current assets | 1,462,291 | 1,462,291 | 1,263,126 | |||||||
Total assets | 4,868,409 | 4,868,409 | 4,823,409 | |||||||
Total stockholders' equity | 1,431,746 | 1,431,746 | 1,513,380 | $ 1,629,126 | $ 1,709,519 | |||||
(Accumulated deficit) retained earnings | (1,136) | $ (1,136) | (18,431) | |||||||
Segment Information | ||||||||||
Number of business segments | segment | 4 | |||||||||
Accruals for Litigation and Other Contingencies | ||||||||||
Litigation and other contingency reserve | 0 | $ 0 | ||||||||
Shipping and Handling Costs | ||||||||||
Shipping and handling costs | $ 93,301 | 97,382 | 92,062 | |||||||
Advertising, Promotion and Catalog | ||||||||||
Advertising cost amortization period | 2 months | |||||||||
Capitalized costs for mail order catalogs | 667 | $ 667 | 671 | |||||||
Total mail order catalog expense | 8,001 | 9,093 | 7,713 | |||||||
Goodwill and Intangible Assets | ||||||||||
Impairment adjustments | 207,334 | |||||||||
Revision to Financial Statements | ||||||||||
Revision to Financial Statements. | ||||||||||
Accelerated depreciation charges | $ 4,904 | $ 6,539 | ||||||||
Benefit from adjustment to correct inventory, which is included in income (loss) from operations | $ 3,708 | |||||||||
Benefit from adjustment to correct prepaid rent, which is included in income (loss) from operations | $ 3,252 | |||||||||
Inventories | 3,708 | |||||||||
Other current assets | 3,252 | |||||||||
Deferred income taxes | (2,673) | |||||||||
Total current assets | 4,287 | |||||||||
Total assets | 4,287 | |||||||||
Total stockholders' equity | 4,287 | |||||||||
(Accumulated deficit) retained earnings | (4,287) | |||||||||
Promotional program incentive allowances | ||||||||||
Reserve information | ||||||||||
Total accounts receivable reserves | 84,088 | 84,088 | 83,768 | 82,827 | 71,845 | |||||
Allowance for sales returns | ||||||||||
Reserve information | ||||||||||
Total accounts receivable reserves | 17,080 | 17,080 | 15,409 | 13,549 | 10,360 | |||||
Allowance for doubtful accounts | ||||||||||
Reserve information | ||||||||||
Total accounts receivable reserves | $ 2,600 | $ 2,600 | $ 2,564 | $ 2,472 | $ 5,244 |
Acquisitions (Details)
Acquisitions (Details) € in Thousands, $ in Thousands | Nov. 26, 2012USD ($) | Jun. 30, 2013EUR (€) | Jun. 30, 2013USD ($)item |
Balance Bar Company | |||
Acquisitions | |||
Cash consideration | $ 77,978 | ||
Essenza | |||
Acquisitions | |||
Goodwill not deductible for tax purposes | $ 4,200 | ||
Essenza | NBTY Europe Limited | |||
Acquisitions | |||
Number of stores | item | 13 | ||
Total net purchase price | € 3,200 | $ 4,163 |
Sale of Nutritional Bar Asset50
Sale of Nutritional Bar Assets and Powder Facility and Facility Restructuring Charges (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | Jun. 26, 2015 | |
Divestiture | ||||||
Charges related to divestiture | $ 8,519 | $ 14,437 | $ 6,537 | |||
Accelerated depreciation charges | $ 7,207 | 9,846 | 3,282 | |||
Bar APA | ||||||
Divestiture | ||||||
Sales price of assets and transferred contracts | $ 12,000 | $ 12,000 | ||||
Powder APA | ||||||
Divestiture | ||||||
Sales price of assets and transferred contracts | $ 4,228 | |||||
Sales price of inventory | $ 16,722 | |||||
APAs | ||||||
Divestiture | ||||||
Cumulative charges | 34,000 | |||||
Accelerated depreciation expense and write off of goodwill related to divestiture | 28,000 | |||||
Workforce reduction | 2,500 | |||||
Other costs | 5,192 | |||||
Charges related to divestiture | 29,493 | |||||
Loss on write-off of goodwill | 5,541 | |||||
Accelerated depreciation charges | 20,203 | $ 20,203 | ||||
Severance and employee related costs | 2,510 | |||||
Gain on transferred contract | $ 1,692 | 1,692 | ||||
Other costs | $ 2,931 |
Sale of Nutritional Bar Asset51
Sale of Nutritional Bar Assets and Powder Facility and Facility Restructuring Charges (Details 2) $ in Thousands | Mar. 12, 2013item | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2013USD ($) | Sep. 30, 2014USD ($) |
Facility restructuring charge | |||||||
Cumulative charges before tax over the period | $ 29,493 | $ 32,695 | |||||
Non-cash charges, primarily accelerated depreciation | $ 7,207 | $ 9,846 | $ 3,282 | ||||
Closure of facilities | |||||||
Facility restructuring charge | |||||||
Number of facilities eliminated | item | 7 | ||||||
Cumulative charges before tax over the period | $ 32,695 | ||||||
Accelerated depreciation | Closure of facilities | |||||||
Facility restructuring charge | |||||||
Non-cash charges, primarily accelerated depreciation | $ 12,588 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Sep. 30, 2014 |
Inventories. | ||
Raw materials | $ 178,464 | $ 221,405 |
Work-in-process | 20,265 | 20,898 |
Finished goods | 645,494 | 614,631 |
Total inventories | $ 844,223 | $ 856,934 |
Property, Plant and Equipment53
Property, Plant and Equipment (Details) £ in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jul. 31, 2015GBP (£) | Jul. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | |
Property, Plant and Equipment | ||||||||
Property, plant and equipment, gross | $ 866,341 | $ 866,341 | $ 800,482 | |||||
Less accumulated depreciation and amortization | (260,293) | (260,293) | (203,280) | |||||
Property, plant and equipment, net | 605,708 | 605,708 | 597,202 | |||||
Depreciation of property, plant and equipment | 89,850 | 60,530 | $ 64,883 | |||||
Accelerated depreciation charges | 7,207 | $ 9,846 | $ 3,282 | |||||
Proceeds from sale-leaseback | 52,826 | |||||||
Capital lease obligation, current | 998 | 998 | ||||||
Long-term capital lease obligation less current installments | 46,442 | 46,442 | ||||||
Holland & Barrett International | ||||||||
Property, Plant and Equipment | ||||||||
Proceeds from sale-leaseback | £ 34,200 | $ 52,826 | ||||||
Lease term | 30 years | 30 years | ||||||
Holland & Barrett International | Current portion of long-term debt | ||||||||
Property, Plant and Equipment | ||||||||
Capital lease obligation, current | 998 | 998 | ||||||
Holland & Barrett International | Long-term debt, net of current portion | ||||||||
Property, Plant and Equipment | ||||||||
Long-term capital lease obligation less current installments | 46,442 | 46,442 | ||||||
Holland & Barrett International | Property, plant and equipment | ||||||||
Property, Plant and Equipment | ||||||||
Deferred gain associated with sale-lease-back | $ 16,972 | |||||||
APAs | ||||||||
Property, Plant and Equipment | ||||||||
Accelerated depreciation charges | $ 20,203 | 20,203 | ||||||
Land | ||||||||
Property, Plant and Equipment | ||||||||
Property, plant and equipment, gross | 51,466 | 51,466 | 66,833 | |||||
Buildings and leasehold improvements | ||||||||
Property, Plant and Equipment | ||||||||
Property, plant and equipment, gross | 256,439 | $ 256,439 | 279,112 | |||||
Buildings and leasehold improvements | Minimum | ||||||||
Property, Plant and Equipment | ||||||||
Depreciation and amortization period | 4 years | |||||||
Buildings and leasehold improvements | Maximum | ||||||||
Property, Plant and Equipment | ||||||||
Depreciation and amortization period | 40 years | |||||||
Building under capital lease arrangement | ||||||||
Property, Plant and Equipment | ||||||||
Property, plant and equipment, gross | 30,564 | $ 30,564 | ||||||
Less accumulated depreciation and amortization | (340) | $ (340) | ||||||
Depreciation and amortization period | 30 years | |||||||
Machinery and equipment | ||||||||
Property, Plant and Equipment | ||||||||
Property, plant and equipment, gross | 153,561 | $ 153,561 | 163,095 | |||||
Machinery and equipment | Minimum | ||||||||
Property, Plant and Equipment | ||||||||
Depreciation and amortization period | 3 years | |||||||
Machinery and equipment | Maximum | ||||||||
Property, Plant and Equipment | ||||||||
Depreciation and amortization period | 13 years | |||||||
Furniture and fixtures | ||||||||
Property, Plant and Equipment | ||||||||
Property, plant and equipment, gross | 147,107 | $ 147,107 | 121,907 | |||||
Furniture and fixtures | Minimum | ||||||||
Property, Plant and Equipment | ||||||||
Depreciation and amortization period | 3 years | |||||||
Furniture and fixtures | Maximum | ||||||||
Property, Plant and Equipment | ||||||||
Depreciation and amortization period | 10 years | |||||||
Computer software and equipment | ||||||||
Property, Plant and Equipment | ||||||||
Property, plant and equipment, gross | 177,976 | $ 177,976 | 140,628 | |||||
Computer software and equipment | Minimum | ||||||||
Property, Plant and Equipment | ||||||||
Depreciation and amortization period | 3 years | |||||||
Computer software and equipment | Maximum | ||||||||
Property, Plant and Equipment | ||||||||
Depreciation and amortization period | 7 years | |||||||
Transportation equipment | ||||||||
Property, Plant and Equipment | ||||||||
Property, plant and equipment, gross | 7,874 | $ 7,874 | 6,138 | |||||
Transportation equipment | Minimum | ||||||||
Property, Plant and Equipment | ||||||||
Depreciation and amortization period | 3 years | |||||||
Transportation equipment | Maximum | ||||||||
Property, Plant and Equipment | ||||||||
Depreciation and amortization period | 4 years | |||||||
Construction in progress | ||||||||
Property, Plant and Equipment | ||||||||
Property, plant and equipment, gross | $ 41,354 | $ 41,354 | $ 22,769 |
Goodwill and Intangible Asset54
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Changes in goodwill | ||||
Balance at the beginning of the period | $ 1,163,282 | $ 1,260,802 | ||
Purchase price adjustments | 517 | |||
Impairment of goodwill | (87,334) | |||
Write off due to sale of powder facility | (5,541) | |||
Foreign currency translation | (39,721) | (10,703) | ||
Balance at the end of the period | $ 1,118,020 | $ 1,163,282 | 1,118,020 | 1,163,282 |
Impairment of indefinite lived tradenames | 55,000 | |||
Consumer Products Group | ||||
Changes in goodwill | ||||
Balance at the beginning of the period | 638,630 | 645,220 | ||
Write off due to sale of powder facility | (4,892) | |||
Foreign currency translation | (14,931) | (6,590) | ||
Balance at the end of the period | 618,807 | 638,630 | 618,807 | 638,630 |
Holland & Barrett International | ||||
Changes in goodwill | ||||
Balance at the beginning of the period | 321,257 | 324,853 | ||
Purchase price adjustments | 517 | |||
Foreign currency translation | (24,790) | (4,113) | ||
Balance at the end of the period | 296,467 | 321,257 | 296,467 | 321,257 |
Puritan's Pride | ||||
Changes in goodwill | ||||
Balance at the beginning of the period | 203,395 | 264,985 | ||
Impairment of goodwill | (61,590) | (61,590) | ||
Write off due to sale of powder facility | (649) | |||
Balance at the end of the period | 202,746 | 203,395 | $ 202,746 | 203,395 |
Impairment of indefinite lived tradenames | 110,000 | |||
Vitamin World | ||||
Changes in goodwill | ||||
Balance at the beginning of the period | 25,744 | |||
Impairment of goodwill | (25,744) | $ (25,744) | ||
Impairment of indefinite lived tradenames | $ 55,000 | $ 10,000 |
Goodwill and Intangible Asset55
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Definite lived intangible assets: | ||
Gross carrying amount | $ 1,073,614 | $ 1,088,072 |
Accumulated amortization | 221,450 | 178,420 |
Indefinite lived intangible asset: | ||
Tradenames | 812,374 | 881,940 |
Total intangible assets | 1,885,988 | 1,970,012 |
Brands and customer relationships | ||
Definite lived intangible assets: | ||
Gross carrying amount | 907,039 | 912,200 |
Accumulated amortization | $ 194,407 | 155,776 |
Brands and customer relationships | Minimum | ||
Definite lived intangible assets: | ||
Amortization period | 17 years | |
Brands and customer relationships | Maximum | ||
Definite lived intangible assets: | ||
Amortization period | 25 years | |
Tradenames and other | ||
Definite lived intangible assets: | ||
Gross carrying amount | $ 166,575 | 175,872 |
Accumulated amortization | $ 27,043 | $ 22,644 |
Tradenames and other | Minimum | ||
Definite lived intangible assets: | ||
Amortization period | 20 years | |
Tradenames and other | Maximum | ||
Definite lived intangible assets: | ||
Amortization period | 30 years |
Goodwill and Intangible Asset56
Goodwill and Intangible Assets (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Goodwill and Intangible Assets | |||
Aggregate amortization expense of definite lived intangible assets | $ 45,556 | $ 46,027 | $ 45,753 |
Estimated amortization expense | |||
2,015 | 46,000 | ||
2,016 | 46,000 | ||
2,017 | 46,000 | ||
2,018 | 46,000 | ||
2,019 | $ 46,000 |
Accrued Expenses and Other Cu57
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Sep. 30, 2014 |
Accrued compensation and benefits | $ 50,326 | $ 44,189 |
Accrued interest | 29,197 | 29,273 |
Income taxes payable | 45,259 | 37,147 |
Other | 124,779 | 110,447 |
Accrued expenses and other current liabilities | $ 249,561 | $ 221,056 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Thousands | Nov. 20, 2014 | Dec. 12, 2013 | Mar. 21, 2013 | Oct. 17, 2012 | Sep. 30, 2015 | Sep. 30, 2013 | Sep. 30, 2014 | Oct. 01, 2010 |
Long-Term Debt | ||||||||
Total Long-term debt | $ 2,163,654 | $ 2,099,748 | ||||||
Capital lease obligation | 47,440 | |||||||
Less: current portion, including obligations under capital lease | (34,496) | (261) | ||||||
Long-term debt, net of current portion | 2,129,158 | 2,099,487 | ||||||
Outstanding balance | 0 | |||||||
Write off deferred financing cost | $ 4,232 | |||||||
Call premium on term loan | $ (15,075) | |||||||
Borrowings of senior credit facilities to finance the acquisition | 80,000 | |||||||
Repayments of Debt | $ 80,000 | |||||||
Adjustments. | ||||||||
Other assets | 17,852 | 8,207 | ||||||
Other current assets | 59,831 | 64,761 | ||||||
New Accounting Pronouncement, Early Adoption | Accounting Standards Update 2015-03 | ||||||||
Long-Term Debt | ||||||||
Long-term debt, net of current portion | (80,410) | |||||||
Adjustments. | ||||||||
Other assets | (55,677) | |||||||
Other current assets | (24,733) | |||||||
Term loan B-2 | ||||||||
Long-Term Debt | ||||||||
Principal amount | 1,507,500 | 1,507,500 | ||||||
Less unamortized debt issuance costs | (31,046) | (45,539) | ||||||
Total Long-term debt | $ 1,476,454 | 1,461,961 | ||||||
Face amount of debt | 1,507,500 | |||||||
Portion of excess cash flow (as defined) as part of additional prepayments on term loan (as a percent) | 50.00% | |||||||
Excess cash payment required | $ 33,498 | |||||||
Amount held in escrow for a pending acquisition | $ 58,000 | |||||||
Financing costs capitalized | $ 15,190 | |||||||
Term loan B-2 | Eurodollar (LIBOR) | ||||||||
Long-Term Debt | ||||||||
Floor for reference rate (as a percent) | 1.00% | |||||||
Margin rate over reference rate (as a percent) | 2.50% | |||||||
Term loan B-2 | Base rate | ||||||||
Long-Term Debt | ||||||||
Floor for reference rate (as a percent) | 2.00% | |||||||
Margin rate over reference rate (as a percent) | 1.50% | |||||||
Notes | ||||||||
Long-Term Debt | ||||||||
Principal amount | $ 650,000 | 650,000 | ||||||
Less unamortized debt issuance costs | (10,240) | (13,061) | ||||||
Total Long-term debt | $ 639,760 | 636,939 | ||||||
Face amount of debt | $ 650,000 | |||||||
Interest rate on debt instrument (as a percent) | 9.00% | |||||||
Notes | On or after October 1, 2014 | ||||||||
Long-Term Debt | ||||||||
Redemption price as a percentage of principal amount | 102.25% | |||||||
Notes | On or after October 1, 2015 | ||||||||
Long-Term Debt | ||||||||
Redemption price as a percentage of principal amount | 100.00% | |||||||
Other | ||||||||
Long-Term Debt | ||||||||
Total Long-term debt | $ 848 | |||||||
Capital lease obligations. | ||||||||
Long-Term Debt | ||||||||
Capital lease obligation | $ 47,440 | |||||||
Revolving credit facility | ||||||||
Long-Term Debt | ||||||||
Borrowing capacity | $ 175,000 | 175,000 | ||||||
Letters of credit | 6,100 | |||||||
Net availability | $ 168,900 | |||||||
Step down percentage upon achievement of a total senior secured leverage ratio (as a percent) | 25.00% | |||||||
Write off deferred financing cost | 359 | |||||||
Financing costs capitalized | $ 611 | |||||||
Unused line fee percentage | 0.50% | |||||||
Fronting fee Percentage | 0.25% | |||||||
Revolving credit facility | Eurodollar (LIBOR) | ||||||||
Long-Term Debt | ||||||||
Margin rate over reference rate (as a percent) | 3.25% | |||||||
Revolving credit facility | Base rate | ||||||||
Long-Term Debt | ||||||||
Margin rate over reference rate (as a percent) | 2.25% | |||||||
Holdco Notes | Holdings | ||||||||
Long-Term Debt | ||||||||
Face amount of debt | $ 450,000 | $ 550,000 | ||||||
Cash interest rate (as a percent) | 7.75% | |||||||
PIK interest (as a percent) | 8.50% | |||||||
Cash on hand from Company used to pay transaction fees and expenses and a dividend | $ 200,000 | |||||||
Gross proceeds from issuance of debt | 460,125 | |||||||
Premium on issuance of debt | 10,125 | |||||||
Consent fee | 18,560 | 17,345 | ||||||
Dividend paid | $ 445,537 | $ 721,682 | ||||||
Holdco Notes | Holdings | Equal or exceed 75%, but less than 100% | ||||||||
Long-Term Debt | ||||||||
Percentage of outstanding principal amount in which interest is payable by increasing the principal amount of outstanding notes or by issuing PIK Notes equal to such interest | 25.00% | |||||||
Percentage of outstanding principal amount in which interest is payable in cash | 75.00% | |||||||
Holdco Notes | Holdings | Equal or exceed 50%, but less than 75% | ||||||||
Long-Term Debt | ||||||||
Percentage of outstanding principal amount in which interest is payable in kind | 50.00% | |||||||
Percentage of outstanding principal amount in which interest is payable in cash | 50.00% | |||||||
Holdco Notes | Holdings | Equal or exceed 25%, but less than 50% | ||||||||
Long-Term Debt | ||||||||
Percentage of outstanding principal amount in which interest is payable in kind | 75.00% | |||||||
Percentage of outstanding principal amount in which interest is payable in cash | 25.00% | |||||||
Holdco Notes | Minimum | Holdings | Equal or exceed 75%, but less than 100% | ||||||||
Long-Term Debt | ||||||||
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest | 75.00% | |||||||
Holdco Notes | Minimum | Holdings | Equal or exceed 50%, but less than 75% | ||||||||
Long-Term Debt | ||||||||
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest | 50.00% | |||||||
Holdco Notes | Minimum | Holdings | Equal or exceed 25%, but less than 50% | ||||||||
Long-Term Debt | ||||||||
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest | 25.00% | |||||||
Holdco Notes | Maximum | Holdings | Equal or exceed 75%, but less than 100% | ||||||||
Long-Term Debt | ||||||||
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest | 100.00% | |||||||
Holdco Notes | Maximum | Holdings | Equal or exceed 50%, but less than 75% | ||||||||
Long-Term Debt | ||||||||
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest | 75.00% | |||||||
Holdco Notes | Maximum | Holdings | Equal or exceed 25%, but less than 50% | ||||||||
Long-Term Debt | ||||||||
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest | 50.00% | |||||||
Holdco Notes | Maximum | Holdings | Less than 25% | ||||||||
Long-Term Debt | ||||||||
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest | 25.00% | |||||||
Holdco Notes | On or after November 1, 2015 | ||||||||
Long-Term Debt | ||||||||
Redemption price as a percentage of principal amount | 101.00% | |||||||
Holdco Notes | On or after November 1, 2016 and thereafter | ||||||||
Long-Term Debt | ||||||||
Redemption price as a percentage of principal amount | 100.00% | |||||||
Term loan B-1 | ||||||||
Long-Term Debt | ||||||||
Face amount of debt | $ 1,750,000 | |||||||
Call premium on term loan | 1,151 | |||||||
Remaining portion of the call premium capitalized | $ 13,924 |
Fair Value of Financial Instr59
Fair Value of Financial Instruments (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2015 | Sep. 30, 2014 |
Level 2 | Interest rate swaps | Accrued Expenses and Other Current Liabilities | ||
Fair value measurements | ||
Derivative liabilities | $ (1,151) | |
Level 3 | Interest rate swaps | Other Assets | ||
Fair value measurements | ||
Derivative assets | $ 6,852 | |
Level 3 | Cross currency swaps | Accrued Expenses and Other Current Liabilities | ||
Fair value measurements | ||
Derivative liabilities | $ (2,715) | (3,857) |
Level 3 | Cross currency swaps | Other Liabilities | ||
Fair value measurements | ||
Derivative liabilities | $ (14,773) |
Fair Value of Financial Instr60
Fair Value of Financial Instruments (Details 2) - Cross currency swaps - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Level 3 activity | ||
Beginning balance: | $ (18,630) | $ (22,254) |
Unrealized gain on cross currency swaps | 22,767 | 3,624 |
Ending balance: | $ 4,137 | $ (18,630) |
Minimum | Level 3 | ||
Fair Value Measurements | ||
Performance risk for derivative contracts as a percentage of unadjusted liabilities | 6.10% | 8.10% |
Maximum | Level 3 | ||
Fair Value Measurements | ||
Performance risk for derivative contracts as a percentage of unadjusted liabilities | 11.40% | 8.50% |
Weighted average | Level 3 | ||
Fair Value Measurements | ||
Performance risk for derivative contracts as a percentage of unadjusted liabilities | 9.50% | 8.30% |
Fair Value of Financial Instr61
Fair Value of Financial Instruments (Details 3) £ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Mar. 31, 2011contract | Sep. 30, 2015GBP (£) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Dec. 31, 2010contract | |
Interest rate swaps | ||||||
Derivative information | ||||||
Number of derivative contracts entered into by the entity | 3 | |||||
Fixed interest rate (as a percent) | 1.92% | |||||
Derivative term | 4 years | |||||
Cross currency swaps | ||||||
Derivative information | ||||||
Number of derivative contracts entered into by the entity | 3 | |||||
Notional amount of each derivative contract | £ 194,200 | $ 300,000 | ||||
Forward rate (as a percent) | 1.565 | 1.565 | ||||
Hedge ineffectiveness (gain) / loss | $ | $ (1,135) | $ 966 | $ 1,611 |
Fair Value of Financial Instr62
Fair Value of Financial Instruments (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Impact on income statement of derivative instruments designated as cash flow and net investment hedging instruments | ||
Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) | $ 14,721 | $ (900) |
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (1,159) | (5,346) |
Interest rate swaps | Cash Flow Hedges: | ||
Impact on income statement of derivative instruments designated as cash flow and net investment hedging instruments | ||
Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) | (438) | (2,166) |
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (1,159) | (5,346) |
Cross currency swaps | Net Investment Hedges: | ||
Impact on income statement of derivative instruments designated as cash flow and net investment hedging instruments | ||
Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) | $ 15,159 | $ 1,266 |
Fair Value of Financial Instr63
Fair Value of Financial Instruments (Details 5) - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 21, 2013 | Oct. 01, 2010 |
Term loan B-2 | |||
Fair value measurements | |||
Face value of debt instrument | $ 1,507,500 | ||
Notes | |||
Fair value measurements | |||
Face value of debt instrument | $ 650,000 | ||
Level 2 | Term loan B-2 | |||
Fair value measurements | |||
Face value of debt instrument | $ 1,507,500 | ||
Level 2 | Notes | |||
Fair value measurements | |||
Fair value of Notes | $ 663,000 |
Litigation Summary (Details)
Litigation Summary (Details) $ in Thousands | Sep. 09, 2015item | Mar. 31, 2015USD ($) | Sep. 30, 2015actioncustomer | Apr. 30, 2015USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2013USD ($) |
Herbal Dietary Supplements | ||||||
Employment class Actions | ||||||
Number of companies notified | item | 14 | |||||
Number of class actions | action | 3 | |||||
Number of customers against whom class actions are filed | customer | 1 | |||||
Glucosamine-Based Dietary Supplements | ||||||
Employment class Actions | ||||||
Potential payments under settlement agreement, maximum | $ 9,000 | |||||
Additional charges | $ 4,300 | |||||
Provision as per best estimate | $ 6,100 | $ 12,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income before provision for income taxes | |||||||||||
United States | $ (93,321) | $ (225,767) | $ 10,452 | ||||||||
Foreign | 180,826 | 191,760 | 173,906 | ||||||||
Income (loss) before income taxes | $ (32,067) | $ 47,425 | $ 16,431 | $ 55,716 | $ (177,856) | $ 48,028 | $ 15,468 | $ 80,353 | 87,505 | (34,007) | 184,358 |
Federal | |||||||||||
Current | (2,037) | 10,668 | 6,831 | ||||||||
Deferred | (17,628) | (43,708) | 10,231 | ||||||||
State | |||||||||||
Current | 3,335 | 3,495 | 2,727 | ||||||||
Deferred | (5,725) | (5,689) | (4,106) | ||||||||
Foreign | |||||||||||
Current | 42,050 | 44,863 | 40,027 | ||||||||
Deferred | (6,908) | 516 | (832) | ||||||||
Total provision (benefit) | $ 13,087 | $ 10,145 | $ 54,878 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Reconciliation of the income tax expense computed using the statutory Federal income tax rate to the actual income tax expense | |||
Income tax expense at statutory rate | $ 30,627 | $ (11,902) | $ 64,525 |
State income taxes, net of federal income tax benefit | (3,090) | (3,415) | (1,379) |
Change in valuation allowance | (1,559) | (1,259) | |
Effect of international operations, including foreign export benefit and earnings indefinitely reinvested | (12,950) | (38) | (5,645) |
Domestic manufacturing deduction | (2,700) | (1,071) | (1,715) |
Goodwill impairment | 1,925 | 30,567 | |
Change in tax reserves | (725) | (4,801) | |
Other | 1,559 | 805 | 351 |
Total provision (benefit) | $ 13,087 | $ 10,145 | $ 54,878 |
Reconciliation of the income tax expense computed using the statutory Federal income tax rate to the effective income tax rate | |||
Income tax expense at statutory rate (as a percent) | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal income tax benefit (as a percent) | (3.50%) | 10.00% | (0.70%) |
Change in valuation allowance (as a percent) | (1.70%) | 0.00% | (0.70%) |
Effect of international operations, including foreign export benefit and earnings indefinitely reinvested (as a percent) | (14.80%) | 0.10% | (3.10%) |
Domestic manufacturing deduction (as a percent) | (3.10%) | 3.10% | (0.90%) |
Goodwill impairment (as a percent) | 2.20% | (89.90%) | 0.00% |
Change in tax reserves (as a percent) | (0.80%) | 14.10% | 0.00% |
Other (as a percent) | 1.70% | (2.40%) | 0.20% |
Effective income tax rate (as a percent) | 15.00% | (29.80%) | 29.80% |
Foreign earnings reinvested indefinitely during the period | $ 130,000 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Deferred tax assets: | ||||
Inventory reserves and UNICAP | $ 20,175 | $ 12,851 | ||
Accrued expenses and reserves not currently deductible | 21,545 | 21,184 | ||
Other comprehensive income | 2,343 | 8,670 | ||
R&D tax credit carryforward | 1,048 | |||
Foreign and state tax credits | 54,928 | 107,460 | ||
Foreign and state net operating losses | 8,865 | 8,434 | ||
Valuation allowance | (7,984) | (9,543) | $ (14,116) | $ (14,867) |
Total deferred income tax assets, net of valuation allowance | 100,920 | 149,056 | ||
Deferred tax liabilities: | ||||
Depreciation | (40,996) | (50,307) | ||
Intangibles | (623,268) | (656,843) | ||
Prepaid rent | (1,064) | (1,248) | ||
Undistributed foreign earnings | (81,092) | (122,378) | ||
Total deferred income tax liabilities | (746,420) | (830,776) | ||
Total net deferred income tax liabilities | 645,500 | 681,720 | ||
Less current deferred income tax assets | (56,194) | (26,242) | ||
Long-term deferred income tax liabilities | $ (701,694) | $ (707,962) |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Thousands | Sep. 30, 2015 | Sep. 30, 2014 |
Income Taxes | ||
R&D tax credit carryforward | $ 1,048 | |
Valuation allowances | ||
NYS investment tax credit carryforwards | 1,901 | $ 2,537 |
Foreign loss carryforwards | 6,083 | 7,005 |
Foreign | ||
Income Taxes | ||
Net operating losses | 17,022 | 19,600 |
Deferred foreign tax credit carryover on unremitted earnings | ||
Income Taxes | ||
Tax credit carryforwards | 53,027 | 104,218 |
New York State (NYS) | Investment tax credit | ||
Income Taxes | ||
Tax credit carryforwards | $ 1,901 | $ 2,537 |
Income Taxes (Details 5)
Income Taxes (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Taxes | |||
Undistributed international earnings | $ 241,547 | ||
Change in the valuation allowance | |||
Beginning balance | (9,543) | $ (14,116) | $ (14,867) |
Balance at the end of the period | (7,984) | (9,543) | (14,116) |
New York State (NYS) | Investment tax credit | |||
Change in the valuation allowance | |||
NYS investment tax credit carryforwards expired/(generated) | 636 | 1,269 | (321) |
Foreign | |||
Change in the valuation allowance | |||
Foreign net operating losses utilized/(generated) | $ 923 | $ 3,304 | 1,580 |
Foreign net operating losses acquired | $ (508) |
Income Taxes (Details 6)
Income Taxes (Details 6) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Changes in gross unrecognized tax benefits | |||
Beginning balance | $ 8,029 | $ 13,635 | $ 12,888 |
Increase related to current year tax positions | 1,005 | 1,260 | |
Increases related to prior year tax positions | 85 | 1,512 | |
Decreases related to settlements with taxing authorities | (1,821) | (5,305) | (249) |
Decreases related to lapsing of statute of limitations | (1,985) | (1,646) | (516) |
Balance at the end of the period | $ 5,228 | $ 8,029 | $ 13,635 |
Income Taxes (Details 7)
Income Taxes (Details 7) - USD ($) $ in Thousands | Sep. 30, 2015 | Sep. 30, 2014 |
Income Taxes | ||
Unrecognized tax benefits, recognition of which would have an effect on provision for income taxes and effective income tax rate | $ 3,760 | $ 5,961 |
Accrued interest | 215 | |
Accrued penalties | $ 137 |
Stock-Based Compensation and 72
Stock-Based Compensation and Employee Benefit Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2010 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Holdings | ||||
Stock-Based Compensation and Employee Benefit Plans | ||||
Dividend paid | $ 445,537 | $ 721,682 | ||
Senior management | ||||
Additional disclosures | ||||
Reduction in percentage of share-based compensation expense for estimated forfeitures | 0.00% | |||
Other management | ||||
Additional disclosures | ||||
Reduction in percentage of share-based compensation expense for estimated forfeitures | 5.00% | |||
Stock option | ||||
Stock-Based Compensation and Employee Benefit Plans | ||||
Expiration period | 10 years | |||
Vesting period | 5 years | |||
Number of shares | ||||
Outstanding at beginning of period (in shares) | 139,647 | 173,183 | ||
Granted (in shares) | 106,530 | 13,430 | ||
Exercised (in shares) | (9,554) | (614) | ||
Forfeited (in shares) | (18,220) | (46,352) | ||
Outstanding at end of period (in shares) | 218,403 | 139,647 | 173,183 | |
Exercisable at end of period (in shares) | 57,923 | 50,360 | ||
Number of shares available for future grant (in shares) | 32,676 | |||
Weighted average exercise price | ||||
Outstanding at beginning of period (in dollars per share) | $ 212 | $ 179 | ||
Granted (in dollars per share) | 373 | 473 | ||
Exercised (in dollars per share) | 150 | 133 | ||
Forfeited (in dollars per share) | 268 | 153 | ||
Outstanding at end of period (in dollars per share) | 289 | 212 | $ 179 | |
Exercisable at end of period (in dollars per share) | $ 190 | 152 | ||
Stock option | Time-based awards | ||||
Stock-Based Compensation and Employee Benefit Plans | ||||
Vesting period | 5 years | |||
Weighted-average grant date fair value (in dollars per share) | $ 125 | $ 147 | $ 167 | |
Weighted-average assumptions used for the options granted | ||||
Risk-free rate, minimum (as a percent) | 0.01% | 0.00% | 0.11% | |
Risk-free rate, maximum (as a percent) | 3.07% | 3.65% | 4.59% | |
Expected term | 6 years 6 months | 6 years 6 months | 6 years 6 months | |
Expected volatility (as a percent) | 37.00% | 37.00% | 36.00% | |
Expected dividends (as a percent) | 0.00% | 0.00% | 0.00% | |
Stock option | Performance based awards | ||||
Stock-Based Compensation and Employee Benefit Plans | ||||
Compensation deduction for tax purposes | $ 0 | $ 0 | ||
Weighted-average grant date fair value (in dollars per share) | $ 66 | $ 98 | $ 96 | |
Weighted-average assumptions used for the options granted | ||||
Risk-free rate, minimum (as a percent) | 0.01% | 0.02% | 0.11% | |
Risk-free rate, maximum (as a percent) | 3.07% | 3.65% | 4.59% | |
Expected term | 4 years 3 months 18 days | 3 years 1 month 6 days | 4 years 6 months | |
Expected volatility (as a percent) | 33.00% | 33.00% | 37.00% | |
Expected dividends (as a percent) | 0.00% | 0.00% | 0.00% | |
Class A Common stock | ||||
Stock-Based Compensation and Employee Benefit Plans | ||||
Aggregate number of shares which may be issued | 19,367 | |||
Class B Common stock | ||||
Stock-Based Compensation and Employee Benefit Plans | ||||
Aggregate number of shares which may be issued | 239,305 | |||
Class B Common stock | Stock option | ||||
Number of shares | ||||
Granted (in shares) | 106,530 | 13,430 | 19,180 |
Stock-Based Compensation and 73
Stock-Based Compensation and Employee Benefit Plans (Details 2) $ / shares in Units, $ in Thousands | 12 Months Ended |
Sep. 30, 2015USD ($)$ / sharesshares | |
124 | |
Stock-Based Compensation and Employee Benefit Plans | |
Exercise price (in dollars per share) | $ 124 |
Options Outstanding | |
Shares Outstanding | shares | 72,098 |
Weighted Average Remaining Contractual Life | 4 years 1 month 6 days |
Weighted Average Exercise Price (in dollars per share) | $ 124 |
Options Exercisable | |
Shares Exercisable | shares | 41,210 |
Weighted Average Exercise Price (in dollars per share) | $ 124 |
Intrinsic value | $ | $ 10,278 |
298 | |
Stock-Based Compensation and Employee Benefit Plans | |
Exercise price (in dollars per share) | $ 298 |
Options Outstanding | |
Shares Outstanding | shares | 22,650 |
Weighted Average Remaining Contractual Life | 6 years 8 months 12 days |
Weighted Average Exercise Price (in dollars per share) | $ 298 |
Options Exercisable | |
Shares Exercisable | shares | 6,950 |
Weighted Average Exercise Price (in dollars per share) | $ 298 |
Intrinsic value | $ | $ 517 |
373 | |
Stock-Based Compensation and Employee Benefit Plans | |
Exercise price (in dollars per share) | $ 373 |
Options Outstanding | |
Shares Outstanding | shares | 106,080 |
Weighted Average Remaining Contractual Life | 9 years 3 months 18 days |
Weighted Average Exercise Price (in dollars per share) | $ 373 |
Options Exercisable | |
Shares Exercisable | shares | 6,015 |
Weighted Average Exercise Price (in dollars per share) | $ 373 |
396 | |
Stock-Based Compensation and Employee Benefit Plans | |
Exercise price (in dollars per share) | $ 396 |
Options Outstanding | |
Shares Outstanding | shares | 6,830 |
Weighted Average Remaining Contractual Life | 6 years 7 months 6 days |
Weighted Average Exercise Price (in dollars per share) | $ 396 |
Options Exercisable | |
Shares Exercisable | shares | 2,251 |
Weighted Average Exercise Price (in dollars per share) | $ 396 |
473 | |
Stock-Based Compensation and Employee Benefit Plans | |
Exercise price (in dollars per share) | $ 473 |
Options Outstanding | |
Shares Outstanding | shares | 10,745 |
Weighted Average Remaining Contractual Life | 8 years 6 months |
Weighted Average Exercise Price (in dollars per share) | $ 473 |
Options Exercisable | |
Shares Exercisable | shares | 1,497 |
Weighted Average Exercise Price (in dollars per share) | $ 473 |
Stock-Based Compensation and 74
Stock-Based Compensation and Employee Benefit Plans (Details 3) - Stock option - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Time-based awards | ||
Stock-Based Compensation and Employee Benefit Plans | ||
Total unrecognized compensation cost | $ 7,580 | |
Weighted average period for recognition of unrecognized compensation cost | 3 years 8 months 12 days | |
Performance based awards | ||
Stock-Based Compensation and Employee Benefit Plans | ||
Total unrecognized compensation cost | $ 6,665 | |
Compensation cost recognized | $ 0 | $ 0 |
Stock-Based Compensation and 75
Stock-Based Compensation and Employee Benefit Plans (Details 4) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Stock-Based Compensation and Employee Benefit Plans | |||
Share-based Compensation | $ 2,845 | $ 4,088 | $ 2,043 |
Stock option | |||
Stock-Based Compensation and Employee Benefit Plans | |||
Granted (in shares) | 106,530 | 13,430 | |
Vesting period | 5 years | ||
Stock option | Time-based awards | |||
Stock-Based Compensation and Employee Benefit Plans | |||
Vesting period | 5 years | ||
Total unrecognized compensation cost | $ 7,580 | ||
Stock option | Performance based awards | |||
Stock-Based Compensation and Employee Benefit Plans | |||
Total unrecognized compensation cost | 6,665 | ||
Compensation cost recognized | $ 0 | $ 0 | |
Class B Common stock | Stock option | |||
Stock-Based Compensation and Employee Benefit Plans | |||
Granted (in shares) | 106,530 | 13,430 | 19,180 |
Stock-Based Compensation and 76
Stock-Based Compensation and Employee Benefit Plans (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Defined contribution plan | |||
Employer match of employee contributions up to three percent of the employee's gross earnings under the 401 (k) plan (as a percent) | 100.00% | ||
Employer match of employee contributions for the next two percent of employee's gross earnings under 401 (k) plan (as a percent) | 50.00% | ||
Percentage of employee's gross earnings matched 50% by the employer (as a percent) | 2.00% | ||
Annual match contribution per employee under 401 (k) plan | $ 11 | ||
Period of service required for employees to become fully vested in employer match contributions | 3 years | ||
Amount accrued for PSP | $ 3,295 | $ 0 | $ 3,723 |
Minimum | |||
Defined contribution plan | |||
Period of service required by employees to become eligible to participate under the 401 (k) plan | 6 months | ||
Percentage of contribution by employees under 401 (k) plan | 1.00% | ||
Period of service required to be completed by employees to become eligible to participate under PSP | 1000 hours | ||
Maximum | |||
Defined contribution plan | |||
Percentage of contribution by employees under 401 (k) plan | 50.00% | ||
Percentage of employee's gross earnings matched 100% by the employer | 3.00% |
Commitments (Details)
Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Commitments | |||
Rent expense | $ 148,766 | $ 154,889 | $ 146,843 |
Future minimum rental payments | |||
2,016 | 126,494 | ||
2,017 | 109,869 | ||
2,018 | 97,434 | ||
2,019 | 87,803 | ||
2,020 | 76,710 | ||
Thereafter | 284,792 | ||
Total future minimum rental payments | 783,102 | ||
Capital Lease | |||
2,016 | 2,405 | ||
2,017 | 2,405 | ||
2,018 | 2,405 | ||
2,019 | 2,405 | ||
2,020 | 2,405 | ||
Thereafter | 59,767 | ||
Total future capital lease payments | 71,792 | ||
Less amount representing interest | 24,352 | ||
Net present value of minimum lease payments | 47,440 | ||
Less current installments | (998) | ||
Long-term capital lease obligation less current installments | 46,442 | ||
Inventories | |||
Commitments | |||
Future purchase commitments | $ 273,734 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Carlyle | |||
Related party transactions | |||
Expected annual consulting fee | $ 3,000 | ||
Expenses incurred from transactions with related party | 3,000 | ||
Out of pocket expenditures paid to related party | 1,927 | $ 915 | $ 311 |
Vendor affiliated with Carlyle | |||
Related party transactions | |||
Expenses incurred from transactions with related party | $ 5,398 | $ 391 | $ 139 |
Accumulated Other Comprehensi79
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Additions to and reclassifications out of accumulated other comprehensive income (loss) | |||
Balance at beginning of period | $ (29,203) | $ (13,584) | $ (18,594) |
Other comprehensive income (loss) before reclassifications | (81,658) | (20,965) | (2,894) |
Balance at end of period | (109,702) | (29,203) | (13,584) |
(Increase) decrease in deferred tax liability relating to other comprehensive income (loss) | (6,327) | (7,722) | (240) |
Reclassifications out of accumulated other comprehensive income (loss) | |||
Additions to and reclassifications out of accumulated other comprehensive income (loss) | |||
Amount reclassified from accumulated other comprehensive income (loss) | 1,159 | 5,346 | 7,904 |
Foreign currency translation adjustment | |||
Additions to and reclassifications out of accumulated other comprehensive income (loss) | |||
Balance at beginning of period | (28,482) | (9,683) | (10,288) |
Other comprehensive income (loss) before reclassifications | (81,220) | (18,799) | 605 |
Balance at end of period | (109,702) | (28,482) | (9,683) |
Gains and losses on cash flow hedges | |||
Additions to and reclassifications out of accumulated other comprehensive income (loss) | |||
Balance at beginning of period | (721) | (3,901) | (8,306) |
Other comprehensive income (loss) before reclassifications | (438) | (2,166) | (3,499) |
Balance at end of period | (721) | (3,901) | |
Gains and losses on cash flow hedges | Reclassifications out of accumulated other comprehensive income (loss) | |||
Additions to and reclassifications out of accumulated other comprehensive income (loss) | |||
Amount reclassified from accumulated other comprehensive income (loss) | $ 1,159 | $ 5,346 | $ 7,904 |
Business and Credit Concentra80
Business and Credit Concentration (Details) - item | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Net sales | One customer | |||
Business and Credit Concentration | |||
Number of customers | 1 | 1 | 1 |
Net sales | Customer concentration risk | Customer A | |||
Business and Credit Concentration | |||
Percentage of concentration risk | 11.00% | 11.00% | 13.00% |
Net sales | Customer concentration risk | Customer A | Wholesale | |||
Business and Credit Concentration | |||
Percentage of concentration risk | 18.00% | 19.00% | 21.00% |
Gross accounts receivable | Customer concentration risk | Customer A | Wholesale | |||
Business and Credit Concentration | |||
Percentage of concentration risk | 11.00% | 13.00% | |
Gross accounts receivable | Customer concentration risk | Customer B | Wholesale | |||
Business and Credit Concentration | |||
Percentage of concentration risk | 12.00% | 11.00% |
Supplemental Disclosure of Ca81
Supplemental Disclosure of Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Cash interest paid | $ 112,766 | $ 116,988 | $ 125,803 |
Cash income taxes paid | 43,035 | 48,824 | 43,241 |
Acquisitions accounted for under the purchase method: | |||
Fair value of assets acquired | 111,141 | ||
Liabilities assumed | (28,537) | ||
Less: Cash acquired | (131) | ||
Net cash paid | 82,473 | ||
Accounts Payable | |||
Acquisitions accounted for under the purchase method: | |||
Property, plant and equipment additions included in total liabilities | 24,551 | $ 9,488 | $ 8,242 |
Other Current Assets | |||
Acquisitions accounted for under the purchase method: | |||
Property, plant and equipment deposits inlcuded in other current assets | $ 3,749 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015USD ($)storeitem | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2015USD ($)segmentstoreitem | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | |
Segment Information | |||||||||||
Number of business segments | segment | 4 | ||||||||||
Net sales | $ 796,867 | $ 815,610 | $ 787,876 | $ 852,771 | $ 792,686 | $ 806,961 | $ 779,026 | $ 827,105 | $ 3,226,124 | $ 3,205,778 | $ 3,163,041 |
Income (loss) from operations | 218,701 | 102,740 | 329,765 | ||||||||
Depreciation and amortization | 135,406 | 106,557 | 110,636 | ||||||||
Capital expenditures | 115,460 | 105,207 | 129,220 | ||||||||
Charges related to divestiture | 8,519 | $ 14,437 | $ 6,537 | ||||||||
Write off due to sale of powder facility | 5,541 | ||||||||||
Goodwill and intangible asset impairment charges | 55,000 | 207,334 | |||||||||
Impairment of indefinite lived tradenames | $ 55,000 | ||||||||||
Facility restructuring charges (See Note 4) | 29,493 | 32,695 | |||||||||
U.K. | |||||||||||
Segment Information | |||||||||||
Net sales | 812,685 | 767,173 | 675,378 | ||||||||
Netherlands | |||||||||||
Segment Information | |||||||||||
Net sales | 112,205 | 116,107 | 98,673 | ||||||||
Ireland | |||||||||||
Segment Information | |||||||||||
Net sales | 35,820 | 40,235 | 36,655 | ||||||||
Operating segments | |||||||||||
Segment Information | |||||||||||
Net sales | 3,226,124 | 3,205,778 | 3,163,041 | ||||||||
Income (loss) from operations | 345,215 | 199,641 | 465,933 | ||||||||
Depreciation and amortization | 73,535 | 68,803 | 63,682 | ||||||||
Capital expenditures | 63,055 | 58,348 | 38,137 | ||||||||
Corporate/Manufacturing | |||||||||||
Segment Information | |||||||||||
Income (loss) from operations | (126,514) | (96,901) | (136,168) | ||||||||
Depreciation and amortization | 61,871 | 37,754 | 46,954 | ||||||||
Capital expenditures | 52,405 | 46,859 | 91,083 | ||||||||
Charges related to divestiture | 23,952 | ||||||||||
Additional charges | 4,308 | ||||||||||
Facility restructuring charges (See Note 4) | 32,695 | ||||||||||
Provision as per best estimate | 12,000 | ||||||||||
Consumer Products Group | |||||||||||
Segment Information | |||||||||||
Write off due to sale of powder facility | 4,892 | ||||||||||
Consumer Products Group | Operating segments | |||||||||||
Segment Information | |||||||||||
Net sales | 1,883,164 | 1,879,481 | 1,938,921 | ||||||||
Income (loss) from operations | 186,348 | 177,069 | 231,812 | ||||||||
Depreciation and amortization | 36,057 | 36,092 | 36,517 | ||||||||
Capital expenditures | 1,469 | 482 | 971 | ||||||||
Write off due to sale of powder facility | 4,892 | ||||||||||
Holland & Barrett International | Operating segments | |||||||||||
Segment Information | |||||||||||
Net sales | 885,872 | 850,797 | 743,861 | ||||||||
Income (loss) from operations | 185,984 | 191,207 | 170,479 | ||||||||
Depreciation and amortization | 22,279 | 18,048 | 14,320 | ||||||||
Capital expenditures | $ 55,227 | 42,315 | 27,198 | ||||||||
Holland & Barrett International | Operating segments | Holland & Barrett | |||||||||||
Segment Information | |||||||||||
Number of stores | item | 843 | 843 | |||||||||
Holland & Barrett International | Operating segments | Holland & Barrett | UK and IRELAND | |||||||||||
Segment Information | |||||||||||
Number of stores | store | 744 | 744 | |||||||||
Holland & Barrett International | Operating segments | Holland & Barrett | China | |||||||||||
Segment Information | |||||||||||
Number of franchised stores | store | 33 | 33 | |||||||||
Holland & Barrett International | Operating segments | Holland & Barrett | Singapore | |||||||||||
Segment Information | |||||||||||
Number of franchised stores | store | 28 | 28 | |||||||||
Holland & Barrett International | Operating segments | Holland & Barrett | United Arab Emirates | |||||||||||
Segment Information | |||||||||||
Number of franchised stores | store | 16 | 16 | |||||||||
Holland & Barrett International | Operating segments | Holland & Barrett | Cyprus | |||||||||||
Segment Information | |||||||||||
Number of franchised stores | store | 10 | 10 | |||||||||
Holland & Barrett International | Operating segments | Holland & Barrett | Malta | |||||||||||
Segment Information | |||||||||||
Number of franchised stores | store | 5 | 5 | |||||||||
Holland & Barrett International | Operating segments | Holland & Barrett | Kuwait | |||||||||||
Segment Information | |||||||||||
Number of franchised stores | store | 4 | 4 | |||||||||
Holland & Barrett International | Operating segments | Holland & Barrett | Gibraltar | |||||||||||
Segment Information | |||||||||||
Number of franchised stores | store | 1 | 1 | |||||||||
Holland & Barrett International | Operating segments | Holland & Barrett | Spain | |||||||||||
Segment Information | |||||||||||
Number of franchised stores | store | 2 | 2 | |||||||||
Holland & Barrett International | Operating segments | Holland & Barrett | Netherlands | |||||||||||
Segment Information | |||||||||||
Number of franchised stores | item | 5 | 5 | |||||||||
Holland & Barrett International | Operating segments | De Tuinen | Netherlands | |||||||||||
Segment Information | |||||||||||
Number of stores | store | 161 | 161 | |||||||||
Holland & Barrett International | Operating segments | GNC (UK) stores | |||||||||||
Segment Information | |||||||||||
Number of stores | store | 49 | 49 | |||||||||
Holland & Barrett International | Operating segments | Essenza | Belgium | |||||||||||
Segment Information | |||||||||||
Number of stores | store | 18 | 18 | |||||||||
Puritan's Pride | |||||||||||
Segment Information | |||||||||||
Write off due to sale of powder facility | $ 649 | ||||||||||
Impairment of indefinite lived tradenames | 110,000 | ||||||||||
Puritan's Pride | Operating segments | |||||||||||
Segment Information | |||||||||||
Net sales | 248,982 | 250,224 | 246,731 | ||||||||
Income (loss) from operations | 26,107 | (141,660) | 39,104 | ||||||||
Depreciation and amortization | 11,423 | 11,319 | 10,137 | ||||||||
Capital expenditures | 1,771 | 1,456 | 4,411 | ||||||||
Write off due to sale of powder facility | $ 649 | ||||||||||
Goodwill and intangible asset impairment charges | 171,590 | ||||||||||
Vitamin World | |||||||||||
Segment Information | |||||||||||
Impairment of indefinite lived tradenames | $ 55,000 | $ 10,000 | |||||||||
Vitamin World | Operating segments | |||||||||||
Segment Information | |||||||||||
Number of stores | item | 385 | 385 | |||||||||
Net sales | $ 208,106 | 225,276 | 233,528 | ||||||||
Income (loss) from operations | (53,224) | (26,975) | 24,538 | ||||||||
Depreciation and amortization | 3,776 | 3,344 | 2,708 | ||||||||
Capital expenditures | 4,588 | 14,095 | $ 5,557 | ||||||||
Goodwill and intangible asset impairment charges | $ 35,744 | ||||||||||
Impairment of indefinite lived tradenames | $ 55,000 |
Segment Information (Details 2)
Segment Information (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated net sales | $ 796,867 | $ 815,610 | $ 787,876 | $ 852,771 | $ 792,686 | $ 806,961 | $ 779,026 | $ 827,105 | $ 3,226,124 | $ 3,205,778 | $ 3,163,041 |
Consolidated long-lived assets | 605,708 | 597,202 | 605,708 | 597,202 | |||||||
Consolidated assets | 4,868,409 | 4,823,409 | 4,868,409 | 4,823,409 | |||||||
United States | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated net sales | 1,934,729 | 1,934,668 | 2,024,178 | ||||||||
Consolidated long-lived assets | 387,376 | 399,296 | 387,376 | 399,296 | |||||||
U.K. | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated net sales | 812,685 | 767,173 | 675,378 | ||||||||
Consolidated long-lived assets | 160,131 | 146,814 | 160,131 | 146,814 | |||||||
Canada | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated net sales | 116,296 | 118,814 | 129,476 | ||||||||
Consolidated long-lived assets | 6,419 | 10,687 | 6,419 | 10,687 | |||||||
Netherlands | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated net sales | 112,205 | 116,107 | 98,673 | ||||||||
Consolidated long-lived assets | 22,969 | 15,778 | 22,969 | 15,778 | |||||||
Ireland | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated net sales | 35,820 | 40,235 | 36,655 | ||||||||
Consolidated long-lived assets | 8,937 | 4,454 | 8,937 | 4,454 | |||||||
Other foreign countries | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated net sales | 214,389 | 228,781 | 198,681 | ||||||||
Consolidated long-lived assets | 19,876 | 20,173 | 19,876 | 20,173 | |||||||
Revision to Financial Statements | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated assets | 4,287 | 4,287 | |||||||||
Operating segments | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated net sales | 3,226,124 | 3,205,778 | 3,163,041 | ||||||||
Consolidated assets | 4,054,443 | 4,075,592 | 4,054,443 | 4,075,592 | |||||||
Corporate/Manufacturing | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated assets | 813,966 | 747,817 | 813,966 | 747,817 | |||||||
Corporate/Manufacturing | Revision to Financial Statements | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated assets | 2,552 | 2,552 | |||||||||
Consumer Products Group | Revision to Financial Statements | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated assets | 3,743 | 3,743 | |||||||||
Consumer Products Group | Operating segments | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated net sales | 1,883,164 | 1,879,481 | 1,938,921 | ||||||||
Consolidated assets | 2,542,942 | 2,504,402 | 2,542,942 | 2,504,402 | |||||||
Holland & Barrett International | Operating segments | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated net sales | 885,872 | 850,797 | 743,861 | ||||||||
Consolidated assets | 944,825 | 948,010 | 944,825 | 948,010 | |||||||
Puritan's Pride | Revision to Financial Statements | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated assets | 576 | 576 | |||||||||
Puritan's Pride | Operating segments | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated net sales | 248,982 | 250,224 | 246,731 | ||||||||
Consolidated assets | 514,795 | 513,218 | 514,795 | 513,218 | |||||||
Vitamin World | Revision to Financial Statements | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated assets | 2,520 | 2,520 | |||||||||
Vitamin World | Operating segments | |||||||||||
Total net sales by location of customer and long-lived assets-property, plant and equipment | |||||||||||
Consolidated net sales | 208,106 | 225,276 | $ 233,528 | ||||||||
Consolidated assets | $ 51,881 | $ 109,962 | $ 51,881 | $ 109,962 |
Segment Information (Details 3)
Segment Information (Details 3) | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Segment Information | |||
Percentage of net sales that were denominated in currencies other than U.S. dollars | 36.00% | 35.00% | 32.00% |
Foreign subsidiaries that accounted for the specified percentages of total assets and total liabilities | |||
Total Assets (as a percent) | 29.00% | 28.00% | |
Total Liabilities (as a percent) | 7.00% | 6.00% |
Condensed Consolidating Finan85
Condensed Consolidating Financial Statements of Guarantors (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Current assets: | ||||
Cash and cash equivalents | $ 303,350 | $ 139,488 | $ 198,561 | $ 315,136 |
Accounts receivable, net | 198,693 | 175,701 | ||
Inventories | 844,223 | 856,934 | ||
Deferred income taxes | 56,194 | 26,242 | ||
Other current assets | 59,831 | 64,761 | ||
Total current assets | 1,462,291 | 1,263,126 | ||
Property, plant and equipment, net | 605,708 | 597,202 | ||
Goodwill | 1,118,020 | 1,163,282 | 1,260,802 | |
Other intangible assets, net | 1,664,538 | 1,791,592 | ||
Other assets | 17,852 | 8,207 | ||
Total assets | 4,868,409 | 4,823,409 | ||
Current liabilities: | ||||
Current portion long-term debt | 34,496 | 261 | ||
Accounts payable | 282,479 | 227,877 | ||
Accrued expenses and other current liabilities | 249,561 | 221,056 | ||
Total current liabilities | 566,536 | 449,194 | ||
Long-term debt, net of current portion | 2,129,158 | 2,099,487 | ||
Deferred income taxes | 701,694 | 707,962 | ||
Other liabilities | 39,275 | 53,386 | ||
Total liabilities | $ 3,436,663 | $ 3,310,029 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Common stock | ||||
Capital in excess of par | $ 1,542,584 | $ 1,561,014 | ||
(Accumulated deficit) retained earnings | (1,136) | (18,431) | ||
Accumulated other comprehensive income (loss) | (109,702) | (29,203) | (13,584) | (18,594) |
Total stockholders' equity | 1,431,746 | 1,513,380 | 1,629,126 | 1,709,519 |
Total liabilities and stockholders' equity | 4,868,409 | 4,823,409 | ||
As Presented | ||||
Stockholders' equity: | ||||
Total stockholders' equity | 1,705,232 | |||
Reportable Legal Entities | Parent Company | ||||
Current assets: | ||||
Cash and cash equivalents | 164,443 | 77,550 | 81,356 | 183,661 |
Intercompany | 29,258 | 30,425 | ||
Other current assets | 876 | 2,618 | ||
Total current assets | 194,577 | 110,593 | ||
Property, plant and equipment, net | 120,977 | 95,022 | ||
Other assets | 7,728 | |||
Intercompany loan receivable | 2,497,035 | 2,438,743 | ||
Investments in subsidiaries | 2,078,945 | 2,100,050 | ||
Total assets | 4,899,262 | 4,744,408 | ||
Current liabilities: | ||||
Current portion long-term debt | 33,498 | |||
Accrued expenses and other current liabilities | 31,971 | 34,282 | ||
Total current liabilities | 65,469 | 34,282 | ||
Intercompany loan payable | 1,319,331 | 1,060,793 | ||
Long-term debt, net of current portion | 2,082,716 | 2,098,900 | ||
Deferred income taxes | 22,280 | |||
Other liabilities | 14,773 | |||
Total liabilities | $ 3,467,516 | $ 3,231,028 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Common stock | ||||
Capital in excess of par | $ 1,542,584 | $ 1,561,014 | ||
(Accumulated deficit) retained earnings | (1,136) | (18,431) | ||
Accumulated other comprehensive income (loss) | (109,702) | (29,203) | ||
Total stockholders' equity | 1,431,746 | 1,513,380 | ||
Total liabilities and stockholders' equity | 4,899,262 | 4,744,408 | ||
Reportable Legal Entities | Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 1,344 | 751 | 35,357 | 14,589 |
Accounts receivable, net | 149,423 | 130,749 | ||
Inventories | 630,013 | 654,192 | ||
Deferred income taxes | 56,119 | 24,329 | ||
Other current assets | 24,148 | 21,300 | ||
Total current assets | 861,047 | 831,321 | ||
Property, plant and equipment, net | 266,401 | 304,274 | ||
Goodwill | 720,813 | 726,354 | ||
Other intangible assets, net | 1,341,784 | 1,439,374 | ||
Other assets | 10,066 | 8,116 | ||
Intercompany loan receivable | 1,319,331 | 1,060,793 | ||
Investments in subsidiaries | 146,539 | 148,921 | ||
Total assets | 4,665,981 | 4,519,153 | ||
Current liabilities: | ||||
Accounts payable | 188,599 | 140,761 | ||
Intercompany | 114,771 | 62,527 | ||
Accrued expenses and other current liabilities | 137,817 | 112,136 | ||
Total current liabilities | 441,187 | 315,424 | ||
Intercompany loan payable | 2,116,214 | 2,098,900 | ||
Deferred income taxes | 613,165 | 586,116 | ||
Other liabilities | 12,731 | 13,732 | ||
Total liabilities | $ 3,183,297 | $ 3,014,172 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Common stock | ||||
Capital in excess of par | $ 1,404,431 | $ 1,417,462 | ||
(Accumulated deficit) retained earnings | 96,025 | 93,552 | ||
Accumulated other comprehensive income (loss) | (17,772) | (6,033) | ||
Total stockholders' equity | 1,482,684 | 1,504,981 | ||
Total liabilities and stockholders' equity | 4,665,981 | 4,519,153 | ||
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 137,563 | 61,187 | $ 81,848 | $ 116,886 |
Accounts receivable, net | 49,270 | 44,952 | ||
Intercompany | 85,513 | 32,102 | ||
Inventories | 214,210 | 202,742 | ||
Deferred income taxes | 75 | 1,913 | ||
Other current assets | 34,807 | 40,843 | ||
Total current assets | 521,438 | 383,739 | ||
Property, plant and equipment, net | 218,330 | 197,906 | ||
Goodwill | 397,207 | 436,928 | ||
Other intangible assets, net | 322,754 | 352,218 | ||
Other assets | 58 | 91 | ||
Total assets | 1,459,787 | 1,370,882 | ||
Current liabilities: | ||||
Current portion long-term debt | 998 | 261 | ||
Accounts payable | 93,880 | 87,116 | ||
Accrued expenses and other current liabilities | 79,773 | 74,638 | ||
Total current liabilities | 174,651 | 162,015 | ||
Intercompany loan payable | 380,821 | 339,843 | ||
Long-term debt, net of current portion | 46,442 | 587 | ||
Deferred income taxes | 88,529 | 99,566 | ||
Other liabilities | 26,544 | 24,881 | ||
Total liabilities | $ 716,987 | $ 626,892 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Common stock | ||||
Capital in excess of par | $ 746,911 | $ 739,911 | ||
(Accumulated deficit) retained earnings | 92,282 | 24,570 | ||
Accumulated other comprehensive income (loss) | (96,393) | (20,491) | ||
Total stockholders' equity | 742,800 | 743,990 | ||
Total liabilities and stockholders' equity | 1,459,787 | 1,370,882 | ||
Eliminations | ||||
Current assets: | ||||
Intercompany | (114,771) | (62,527) | ||
Total current assets | (114,771) | (62,527) | ||
Intercompany loan receivable | (3,816,366) | (3,499,536) | ||
Investments in subsidiaries | (2,225,484) | (2,248,971) | ||
Total assets | (6,156,621) | (5,811,034) | ||
Current liabilities: | ||||
Intercompany | (114,771) | (62,527) | ||
Total current liabilities | (114,771) | (62,527) | ||
Intercompany loan payable | (3,816,366) | (3,499,536) | ||
Total liabilities | $ (3,931,137) | $ (3,562,063) | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Common stock | ||||
Capital in excess of par | $ (2,151,342) | $ (2,157,373) | ||
(Accumulated deficit) retained earnings | (188,307) | (118,122) | ||
Accumulated other comprehensive income (loss) | 114,165 | 26,524 | ||
Total stockholders' equity | (2,225,484) | (2,248,971) | ||
Total liabilities and stockholders' equity | $ (6,156,621) | $ (5,811,034) |
Condensed Consolidating Finan86
Condensed Consolidating Financial Statements of Guarantors (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Condensed Parent Company Statements of Operations and Comprehensive Income (Loss) | |||||||||||
Net sales | $ 796,867 | $ 815,610 | $ 787,876 | $ 852,771 | $ 792,686 | $ 806,961 | $ 779,026 | $ 827,105 | $ 3,226,124 | $ 3,205,778 | $ 3,163,041 |
Costs and expenses: | |||||||||||
Cost of sales (See Note 4) | 1,746,462 | 1,740,417 | 1,700,909 | ||||||||
Advertising, promotion and catalog | 198,203 | 202,754 | 189,485 | ||||||||
Selling, general and administrative | 978,265 | 952,533 | 910,187 | ||||||||
Goodwill and intangible asset impairment charges | 55,000 | 207,334 | |||||||||
Facility restructuring charges (See Note 4) | 29,493 | 32,695 | |||||||||
Total costs and expenses | 3,007,423 | 3,103,038 | 2,833,276 | ||||||||
Income from operations | 218,701 | 102,740 | 329,765 | ||||||||
Other income (expense): | |||||||||||
Interest | (132,930) | (136,038) | (147,100) | ||||||||
Miscellaneous, net | 1,734 | (709) | 1,693 | ||||||||
Total other income (expense) | (131,196) | (136,747) | (145,407) | ||||||||
Income (loss) before income taxes | (32,067) | 47,425 | 16,431 | 55,716 | (177,856) | 48,028 | 15,468 | 80,353 | 87,505 | (34,007) | 184,358 |
Provision for income taxes | 13,087 | 10,145 | 54,878 | ||||||||
Net Income (loss) | $ (5,974) | $ 33,878 | $ 10,609 | $ 35,906 | $ (141,140) | $ 33,267 | $ 9,900 | $ 53,821 | 74,418 | (44,152) | 129,480 |
Other comprehensive (loss) income, net of tax: | |||||||||||
Foreign currency translation adjustment, net of tax | (81,220) | (18,799) | 605 | ||||||||
Change in fair value of interest rate swaps, net of tax | 721 | 3,180 | 4,405 | ||||||||
Total other comprehensive (loss) income, net of tax | (80,499) | (15,619) | 5,010 | ||||||||
Comprehensive (loss) income | (6,081) | (59,771) | 134,490 | ||||||||
Reportable Legal Entities | Parent Company | |||||||||||
Costs and expenses: | |||||||||||
Selling, general and administrative | 101,669 | 96,771 | 103,625 | ||||||||
Total costs and expenses | 101,669 | 96,771 | 103,625 | ||||||||
Income from operations | (101,669) | (96,771) | (103,625) | ||||||||
Other income (expense): | |||||||||||
Intercompany interest | 214,186 | 157,567 | 162,091 | ||||||||
Interest | (194,846) | (137,589) | (147,676) | ||||||||
Miscellaneous, net | 567 | 1,497 | (341) | ||||||||
Total other income (expense) | 19,907 | 21,475 | 14,074 | ||||||||
Income (loss) before income taxes | (81,762) | (75,296) | (89,551) | ||||||||
Provision for income taxes | (23,320) | (10,816) | (26,871) | ||||||||
Equity in income of subsidiaries | 132,860 | 20,328 | 192,160 | ||||||||
Net Income (loss) | 74,418 | (44,152) | 129,480 | ||||||||
Other comprehensive (loss) income, net of tax: | |||||||||||
Foreign currency translation adjustment, net of tax | (81,220) | (18,799) | 605 | ||||||||
Change in fair value of interest rate swaps, net of tax | 721 | 3,180 | 4,405 | ||||||||
Total other comprehensive (loss) income, net of tax | (80,499) | (15,619) | 5,010 | ||||||||
Comprehensive (loss) income | (6,081) | (59,771) | 134,490 | ||||||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||||
Condensed Parent Company Statements of Operations and Comprehensive Income (Loss) | |||||||||||
Net sales | 2,124,299 | 2,158,213 | 2,226,010 | ||||||||
Costs and expenses: | |||||||||||
Cost of sales (See Note 4) | 1,300,944 | 1,339,925 | 1,343,613 | ||||||||
Advertising, promotion and catalog | 146,813 | 163,894 | 153,418 | ||||||||
Selling, general and administrative | 464,500 | 459,309 | 458,065 | ||||||||
Goodwill and intangible asset impairment charges | 55,000 | 207,334 | |||||||||
Facility restructuring charges (See Note 4) | 29,493 | 32,695 | |||||||||
Total costs and expenses | 1,996,750 | 2,170,462 | 1,987,791 | ||||||||
Income from operations | 127,549 | (12,249) | 238,219 | ||||||||
Other income (expense): | |||||||||||
Intercompany interest | (194,846) | (137,589) | (147,676) | ||||||||
Interest | 62,394 | 1,106 | |||||||||
Miscellaneous, net | (7,075) | (1,665) | 9,532 | ||||||||
Total other income (expense) | (139,527) | (138,148) | (138,144) | ||||||||
Income (loss) before income taxes | (11,978) | (150,397) | 100,075 | ||||||||
Provision for income taxes | (4,371) | (24,416) | 33,075 | ||||||||
Equity in income of subsidiaries | 18,870 | 24,086 | 20,010 | ||||||||
Net Income (loss) | 11,263 | (101,895) | 87,010 | ||||||||
Other comprehensive (loss) income, net of tax: | |||||||||||
Foreign currency translation adjustment, net of tax | (12,460) | (2,503) | (2,950) | ||||||||
Change in fair value of interest rate swaps, net of tax | 721 | 3,180 | 4,405 | ||||||||
Total other comprehensive (loss) income, net of tax | (11,739) | 677 | 1,455 | ||||||||
Comprehensive (loss) income | (476) | (101,218) | 88,465 | ||||||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||||||
Condensed Parent Company Statements of Operations and Comprehensive Income (Loss) | |||||||||||
Net sales | 1,172,050 | 1,160,397 | 1,040,601 | ||||||||
Costs and expenses: | |||||||||||
Cost of sales (See Note 4) | 515,743 | 513,324 | 460,866 | ||||||||
Advertising, promotion and catalog | 51,390 | 38,860 | 36,067 | ||||||||
Selling, general and administrative | 412,096 | 396,453 | 348,497 | ||||||||
Total costs and expenses | 979,229 | 948,637 | 845,430 | ||||||||
Income from operations | 192,821 | 211,760 | 195,171 | ||||||||
Other income (expense): | |||||||||||
Intercompany interest | (19,340) | (19,978) | (14,415) | ||||||||
Interest | (478) | 445 | 576 | ||||||||
Miscellaneous, net | 8,242 | (541) | (7,498) | ||||||||
Total other income (expense) | (11,576) | (20,074) | (21,337) | ||||||||
Income (loss) before income taxes | 181,245 | 191,686 | 173,834 | ||||||||
Provision for income taxes | 40,778 | 45,377 | 48,674 | ||||||||
Net Income (loss) | 140,467 | 146,309 | 125,160 | ||||||||
Other comprehensive (loss) income, net of tax: | |||||||||||
Foreign currency translation adjustment, net of tax | (75,902) | (21,722) | 2,191 | ||||||||
Total other comprehensive (loss) income, net of tax | (75,902) | (21,722) | 2,191 | ||||||||
Comprehensive (loss) income | 64,565 | 124,587 | 127,351 | ||||||||
Eliminations | |||||||||||
Condensed Parent Company Statements of Operations and Comprehensive Income (Loss) | |||||||||||
Net sales | (70,225) | (112,832) | (103,570) | ||||||||
Costs and expenses: | |||||||||||
Cost of sales (See Note 4) | (70,225) | (112,832) | (103,570) | ||||||||
Total costs and expenses | (70,225) | (112,832) | (103,570) | ||||||||
Other income (expense): | |||||||||||
Equity in income of subsidiaries | (151,730) | (44,414) | (212,170) | ||||||||
Net Income (loss) | (151,730) | (44,414) | (212,170) | ||||||||
Other comprehensive (loss) income, net of tax: | |||||||||||
Foreign currency translation adjustment, net of tax | 88,362 | 24,225 | 759 | ||||||||
Change in fair value of interest rate swaps, net of tax | (721) | (3,180) | (4,405) | ||||||||
Total other comprehensive (loss) income, net of tax | 87,641 | 21,045 | (3,646) | ||||||||
Comprehensive (loss) income | $ (64,089) | $ (23,369) | $ (215,816) |
Condensed Consolidating Finan87
Condensed Consolidating Financial Statements of Guarantors (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities: | |||||||||||
Net income | $ (5,974) | $ 33,878 | $ 10,609 | $ 35,906 | $ (141,140) | $ 33,267 | $ 9,900 | $ 53,821 | $ 74,418 | $ (44,152) | $ 129,480 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Impairments and disposals of assets | 63,781 | 214,813 | 5,269 | ||||||||
Depreciation of property, plant and equipment | 89,850 | 60,530 | 64,883 | ||||||||
Amortization of intangible assets | 45,556 | 46,027 | 45,753 | ||||||||
Foreign currency transaction loss (gain) | 4,929 | 1,702 | (946) | ||||||||
Amortization and write-off of deferred financing fees | 18,791 | 19,033 | 22,504 | ||||||||
Stock-based compensation | 2,845 | 4,088 | 2,043 | ||||||||
Allowance for doubtful accounts | 619 | 988 | (2,587) | ||||||||
Amortization of incremental inventory fair value | 2,417 | ||||||||||
Inventory reserves | 6,475 | 6,006 | 2,042 | ||||||||
Deferred income taxes | (30,261) | (48,881) | 5,293 | ||||||||
Call premium on term loan | (15,075) | ||||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | (31,941) | (6,700) | (4,696) | ||||||||
Inventories | (29,093) | (123,071) | (14,350) | ||||||||
Other assets | 4,327 | 372 | (3,733) | ||||||||
Accounts payable | 46,252 | (30,932) | 45,753 | ||||||||
Accrued expenses and other liabilities | 23,971 | 2,921 | 27,526 | ||||||||
Cash (used in) provided by operating activities | 290,519 | 102,744 | 311,576 | ||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property, plant and equipment | (115,460) | (105,207) | (129,220) | ||||||||
Proceeds from sale of buildings and equipment | 933 | 7,188 | 7,548 | ||||||||
Proceeds from sale of powder facility assets | 23,983 | ||||||||||
Cash paid for acquisitions, net of cash acquired | (82,473) | ||||||||||
Net cash used in investing activities | (90,544) | (98,019) | (204,145) | ||||||||
Cash flows from financing activities: | |||||||||||
Principal payments under long-term agreements | (871) | (378) | (603) | ||||||||
Proceeds from borrowings under the revolver | 80,000 | ||||||||||
Paydowns of debt under the revolver | (80,000) | ||||||||||
Proceeds from sale-leaseback | 52,826 | ||||||||||
Payments for financing fees | (611) | (7,387) | |||||||||
Dividends paid | (78,398) | (60,063) | (216,926) | ||||||||
Net cash used in financing activities | (27,054) | (60,441) | (224,916) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (9,059) | (3,357) | 910 | ||||||||
Net increase (decrease) in cash and cash equivalents | 163,862 | (59,073) | (116,575) | ||||||||
Cash and cash equivalents at beginning of year | 139,488 | 198,561 | 139,488 | 198,561 | 315,136 | ||||||
Cash and cash equivalents at end of year | 303,350 | 139,488 | 303,350 | 139,488 | 198,561 | ||||||
Reportable Legal Entities | Parent Company | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | 74,418 | (44,152) | 129,480 | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Equity in earnings of subsidiaries | 132,860 | 20,328 | 192,160 | ||||||||
Depreciation of property, plant and equipment | 16,796 | 11,956 | 8,213 | ||||||||
Foreign currency transaction loss (gain) | (745) | ||||||||||
Amortization and write-off of deferred financing fees | 18,791 | 19,033 | 22,504 | ||||||||
Stock-based compensation | 2,461 | 3,521 | 1,845 | ||||||||
Call premium on term loan | (15,075) | ||||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Dividends received | 63,966 | 126,596 | 62,010 | ||||||||
Cash (used in) provided by operating activities | 43,572 | 96,626 | 16,072 | ||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property, plant and equipment | (33,420) | (22,031) | (35,186) | ||||||||
Proceeds from sale of buildings and equipment | 7,548 | ||||||||||
Investment in subsidiary | 7,000 | 6,500 | |||||||||
Cash paid for acquisitions, net of cash acquired | (77,936) | ||||||||||
Net cash used in investing activities | (40,420) | (28,531) | (105,574) | ||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from borrowings under the revolver | 80,000 | ||||||||||
Paydowns of debt under the revolver | (80,000) | ||||||||||
Payments for financing fees | (611) | (7,387) | |||||||||
Dividends paid | (78,398) | (60,063) | (216,926) | ||||||||
Intercompany | 162,750 | (11,838) | 211,510 | ||||||||
Net cash used in financing activities | 83,741 | (71,901) | (12,803) | ||||||||
Net increase (decrease) in cash and cash equivalents | 86,893 | (3,806) | (102,305) | ||||||||
Cash and cash equivalents at beginning of year | 77,550 | 81,356 | 77,550 | 81,356 | 183,661 | ||||||
Cash and cash equivalents at end of year | 164,443 | 77,550 | 164,443 | 77,550 | 81,356 | ||||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | 11,263 | (101,895) | 87,010 | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Equity in earnings of subsidiaries | 18,870 | 24,086 | 20,010 | ||||||||
Impairments and disposals of assets | 62,239 | 213,314 | 5,014 | ||||||||
Depreciation of property, plant and equipment | 48,257 | 28,234 | 40,124 | ||||||||
Amortization of intangible assets | 42,590 | 42,590 | 42,341 | ||||||||
Foreign currency transaction loss (gain) | 4,907 | 1,372 | |||||||||
Stock-based compensation | 140 | 185 | 72 | ||||||||
Allowance for doubtful accounts | 598 | 407 | (2,587) | ||||||||
Amortization of incremental inventory fair value | 2,417 | ||||||||||
Inventory reserves | 1,728 | 2,874 | 2,042 | ||||||||
Deferred income taxes | (19,773) | (49,158) | 5,293 | ||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | (23,422) | (3,956) | 9,126 | ||||||||
Inventories | 1,115 | (88,597) | (11,297) | ||||||||
Other assets | (885) | 7,451 | 1,721 | ||||||||
Accounts payable | 32,774 | (56,196) | 42,331 | ||||||||
Accrued expenses and other liabilities | 8,405 | (973) | 20,544 | ||||||||
Dividends received | 8,789 | 25,341 | 27,589 | ||||||||
Intercompany accounts | 6,111 | 545 | (44,124) | ||||||||
Cash (used in) provided by operating activities | 153,744 | (3,638) | 295,854 | ||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property, plant and equipment | (15,317) | (34,701) | (59,039) | ||||||||
Proceeds from sale of buildings and equipment | 933 | 7,178 | |||||||||
Proceeds from sale of powder facility assets | 23,983 | ||||||||||
Cash paid for acquisitions, net of cash acquired | (4,537) | ||||||||||
Net cash used in investing activities | 9,599 | (27,523) | (63,576) | ||||||||
Cash flows from financing activities: | |||||||||||
Intercompany | (162,750) | (3,445) | (211,510) | ||||||||
Net cash used in financing activities | (162,750) | (3,445) | (211,510) | ||||||||
Net increase (decrease) in cash and cash equivalents | 593 | (34,606) | 20,768 | ||||||||
Cash and cash equivalents at beginning of year | 751 | 35,357 | 751 | 35,357 | 14,589 | ||||||
Cash and cash equivalents at end of year | 1,344 | 751 | 1,344 | 751 | 35,357 | ||||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | 140,467 | 146,309 | 125,160 | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Impairments and disposals of assets | 1,542 | 1,499 | 255 | ||||||||
Depreciation of property, plant and equipment | 24,797 | 20,340 | 16,546 | ||||||||
Amortization of intangible assets | 2,966 | 3,437 | 3,412 | ||||||||
Foreign currency transaction loss (gain) | 22 | 330 | (201) | ||||||||
Stock-based compensation | 244 | 382 | 126 | ||||||||
Allowance for doubtful accounts | 21 | 581 | |||||||||
Inventory reserves | 4,747 | 3,132 | |||||||||
Deferred income taxes | (10,488) | 277 | |||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | (8,519) | (2,744) | (13,822) | ||||||||
Inventories | (30,208) | (34,474) | (3,053) | ||||||||
Other assets | 5,212 | (7,079) | (5,454) | ||||||||
Accounts payable | 13,478 | 25,264 | 3,422 | ||||||||
Accrued expenses and other liabilities | 15,566 | 3,894 | 6,982 | ||||||||
Intercompany accounts | (6,111) | (545) | 44,124 | ||||||||
Cash (used in) provided by operating activities | 165,958 | 161,693 | 89,249 | ||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property, plant and equipment | (66,723) | (48,475) | (34,995) | ||||||||
Proceeds from sale of buildings and equipment | 10 | ||||||||||
Net cash used in investing activities | (66,723) | (48,465) | (34,995) | ||||||||
Cash flows from financing activities: | |||||||||||
Principal payments under long-term agreements | (871) | (378) | (603) | ||||||||
Proceeds from sale-leaseback | 52,826 | ||||||||||
Dividends paid | (72,755) | (151,937) | (89,599) | ||||||||
Capital contribution | 7,000 | (6,500) | |||||||||
Intercompany | 15,283 | ||||||||||
Net cash used in financing activities | (13,800) | (130,532) | (90,202) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (9,059) | (3,357) | 910 | ||||||||
Net increase (decrease) in cash and cash equivalents | 76,376 | (20,661) | (35,038) | ||||||||
Cash and cash equivalents at beginning of year | $ 61,187 | $ 81,848 | 61,187 | 81,848 | 116,886 | ||||||
Cash and cash equivalents at end of year | $ 137,563 | $ 61,187 | 137,563 | 61,187 | 81,848 | ||||||
Eliminations | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | (151,730) | (44,414) | (212,170) | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Equity in earnings of subsidiaries | (151,730) | (44,414) | (212,170) | ||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Dividends received | (72,755) | (151,937) | (89,599) | ||||||||
Cash (used in) provided by operating activities | (72,755) | (151,937) | (89,599) | ||||||||
Cash flows from investing activities: | |||||||||||
Investment in subsidiary | (7,000) | (6,500) | |||||||||
Net cash used in investing activities | 7,000 | 6,500 | |||||||||
Cash flows from financing activities: | |||||||||||
Dividends paid | 72,755 | 151,937 | 89,599 | ||||||||
Capital contribution | (7,000) | 6,500 | |||||||||
Net cash used in financing activities | $ 65,755 | $ 145,437 | $ 89,599 |
Quarterly Results of Operatio88
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Net sales | $ 796,867 | $ 815,610 | $ 787,876 | $ 852,771 | $ 792,686 | $ 806,961 | $ 779,026 | $ 827,105 | $ 3,226,124 | $ 3,205,778 | $ 3,163,041 | |
Gross profit | 361,487 | 375,226 | 345,730 | 376,884 | 356,272 | 375,757 | 347,945 | 385,387 | ||||
Income (loss) before income taxes | (32,067) | 47,425 | 16,431 | 55,716 | (177,856) | 48,028 | 15,468 | 80,353 | 87,505 | (34,007) | 184,358 | |
Net income (loss) | (5,974) | 33,878 | 10,609 | 35,906 | $ (141,140) | $ 33,267 | $ 9,900 | $ 53,821 | $ 74,418 | $ (44,152) | 129,480 | |
Impairment adjustments | $ 207,334 | |||||||||||
Charges related to divestiture | 8,519 | 14,437 | 6,537 | |||||||||
Impairment of indefinite lived tradenames | 55,000 | |||||||||||
Accelerated depreciation charges | $ 7,207 | 9,846 | 3,282 | |||||||||
Revision to Financial Statements | ||||||||||||
Gross profit | 1,635 | 3,708 | ||||||||||
Income (loss) before income taxes | 4,297 | 3,708 | ||||||||||
Net income (loss) | $ 2,647 | $ 2,284 | ||||||||||
Accelerated depreciation charges | $ 4,904 | $ 6,539 |
Subsequent Event (Details)
Subsequent Event (Details) £ / shares in Units, $ / shares in Units, £ in Thousands, $ in Thousands | 6 Months Ended | |||
Dec. 31, 2015GBP (£)£ / sharesshares | Dec. 31, 2015USD ($)shares | Sep. 30, 2015$ / shares | Sep. 30, 2014$ / shares | |
Subsequent Events | ||||
Common stock, par (in GBP per share) | $ / shares | $ 0.01 | $ 0.01 | ||
Subsequent event | NBTY (2015) | Forecast | Dr Organic Limited | ||||
Subsequent Events | ||||
Total purchase price | £ 53,000 | $ 83,000 | ||
Cash consideration | 33,000 | 50,000 | ||
Completion loan notes | £ 20,000 | $ 30,000 | ||
Debt term | 18 months | 18 months | ||
Period of time after after issuance the notes can be redeemed | 6 months | 6 months | ||
Subsequent event | NBTY (2015) | Forecast | Dr Organic Limited | Class B Common stock | ||||
Subsequent Events | ||||
Number of shares issued | shares | 399,000 | 399,000 | ||
Common stock, par (in GBP per share) | £ 0.01 | |||
Subsequent event | NBTY (2015) | Forecast | Dr Organic Limited | Class C Common stock | ||||
Subsequent Events | ||||
Number of shares issued | shares | 100,000 | 100,000 | ||
Common stock, par (in GBP per share) | £ 0.01 | |||
Common stock premium (in GBP per share) | 0.04 | |||
Common stock redemption price (in GBP per share) | £ 0.05 | |||
Period of time after issuance of share that they will be redeemed | 18 months | 18 months |
SCHEDULE II Valuation and Qua90
SCHEDULE II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Changes in valuation and qualifying accounts | |||
Balance at beginning of period | $ 101,741 | ||
Balance at end of period | 103,768 | $ 101,741 | |
Inventory reserves | |||
Changes in valuation and qualifying accounts | |||
Balance at beginning of period | 30,654 | 24,648 | $ 22,607 |
Additions, Charged to costs and expenses | 6,475 | 6,006 | 2,041 |
Balance at end of period | 37,129 | 30,654 | 24,648 |
Allowance for doubtful accounts | |||
Changes in valuation and qualifying accounts | |||
Balance at beginning of period | 2,564 | 2,472 | 5,244 |
Additions, Charged to costs and expenses | 619 | 988 | (2,588) |
Deductions | (583) | (896) | (184) |
Balance at end of period | 2,600 | 2,564 | 2,472 |
Promotional program incentive allowances | |||
Changes in valuation and qualifying accounts | |||
Balance at beginning of period | 83,768 | 82,827 | 71,845 |
Additions, Charged to costs and expenses | 373,509 | 329,562 | 329,683 |
Deductions | (373,189) | (328,621) | (318,701) |
Balance at end of period | 84,088 | 83,768 | 82,827 |
Allowance for sales returns | |||
Changes in valuation and qualifying accounts | |||
Balance at beginning of period | 15,409 | 13,549 | 10,360 |
Additions, Charged to costs and expenses | 36,813 | 37,521 | 31,087 |
Deductions | (35,142) | (35,661) | (27,898) |
Balance at end of period | 17,080 | 15,409 | 13,549 |
Valuation allowance for deferred tax assets | |||
Changes in valuation and qualifying accounts | |||
Balance at beginning of period | 9,543 | 14,116 | 14,867 |
Additions, Charged to costs and expenses | (1,269) | 829 | |
Deductions | (1,559) | (3,304) | (1,580) |
Balance at end of period | $ 7,984 | $ 9,543 | $ 14,116 |