Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - NUTRACEUTICAL INTERNATIONAL CORPFinancial_Report.xls
EX-32.1 - EX-32.1 - NUTRACEUTICAL INTERNATIONAL CORPa2222808zex-32_1.htm
EX-31.1 - EX-31.1 - NUTRACEUTICAL INTERNATIONAL CORPa2222808zex-31_1.htm

Use these links to rapidly review the document
TABLE OF CONTENTS

Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

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

for the Quarterly Period Ended December 31, 2014

Commission file number 000-23731

LOGO

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

Delaware
(State of incorporation)
  87-0515089
(IRS Employer Identification No.)

1400 Kearns Boulevard, 2nd Floor, Park City, Utah

 

84060
(Address of principal executive offices)   (Zip code)

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

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ý    NO o

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

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

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

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

        At January 28, 2015, the registrant had 9,635,061 shares of common stock outstanding.

   


Table of Contents


NUTRACEUTICAL INTERNATIONAL CORPORATION

INDEX

Description
   
   
  Page No.  

Part I.

  Financial Information     3  



 


Item 1.


 


Financial Statements (unaudited)


 

 


3

 



 

 

 


Condensed Consolidated Balance Sheets—December 31, 2014 and September 30, 2014


 

 


3

 



 

 

 


Condensed Consolidated Statements of Operations and Comprehensive Income—Three Months Ended December 31, 2014 and 2013


 

 


4

 



 

 

 


Condensed Consolidated Statements of Cash Flows—Three Months Ended December 31, 2014 and 2013


 

 


5

 



 

 

 


Notes to Condensed Consolidated Financial Statements


 

 


6

 



 


Item 2.


 


Management's Discussion and Analysis of Financial Condition and Results of Operations


 

 


13

 



 


Item 3.


 


Quantitative and Qualitative Disclosures About Market Risk


 

 


20

 



 


Item 4.


 


Controls and Procedures


 

 


20

 


Part II.


 


Other Information


 

 


21

 



 


Item 1.


 


Legal Proceedings


 

 


21

 



 


Item 1A.


 


Risk Factors


 

 


21

 



 


Item 2.


 


Unregistered Sales of Equity Securities and Use of Proceeds


 

 


21

 



 


Item 6.


 


Exhibits


 

 


22

 

2


Table of Contents

PART I—FINANCIAL INFORMATION

Item 1.    Financial Statements

        


NUTRACEUTICAL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(dollars in thousands)

 
  December 31,
2014
  September 30,
2014(1)
 

ASSETS

             

Current assets:

             

Cash

  $ 3,923   $ 6,232  

Accounts receivable, net

    15,076     15,118  

Inventories

    57,036     57,914  

Prepaid expenses and other current assets

    3,382     3,364  

Deferred income taxes

    1,248     1,222  

Total current assets

    80,665     83,850  

Property, plant and equipment, net

   
79,870
   
79,244
 

Goodwill

    23,622     23,622  

Intangible assets, net

    21,213     21,965  

Other non-current assets

    1,587     1,203  

Deferred income taxes, net

    4,943     4,894  

Total assets

  $ 211,900   $ 214,778  

LIABILITIES AND STOCKHOLDERS' EQUITY

             

Current liabilities:

             

Accounts payable

  $ 12,557   $ 14,874  

Accrued expenses

    4,836     6,835  

Total current liabilities

    17,393     21,709  

Long-term debt

   
42,000
   
43,000
 

Other non-current liabilities

    310     456  

Total liabilities

    59,703     65,165  

Stockholders' equity:

             

Common stock

    97     97  

Additional paid-in capital

    10,544     11,112  

Retained earnings

    141,698     138,347  

Accumulated other comprehensive income

    (142 )   79  

Treasury stock

        (22 )

Total stockholders' equity

    152,197     149,613  

Total liabilities and stockholders' equity

  $ 211,900   $ 214,778  

(1)
The condensed consolidated balance sheet as of September 30, 2014 has been prepared using information from the audited financial statements at that date.

   

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

3


Table of Contents


NUTRACEUTICAL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME

(unaudited)

(dollars in thousands, except per share data)

 
  Three months ended
December 31,
 
 
  2014   2013  

Net sales

  $ 53,044   $ 51,550  

Cost of sales

    27,189     25,488  

Gross profit

    25,855     26,062  

Operating expenses

             

Selling, general and administrative

    19,554     18,581  

Amortization of intangible assets

    732     584  

Income from operations

    5,569     6,897  

Interest and other expense, net

    297     318  

Income before provision for income taxes

    5,272     6,579  

Provision for income taxes

    1,921     2,444  

Net income

  $ 3,351   $ 4,135  

Other comprehensive income (loss)

   
 
   
 
 

Foreign currency translation adjustment, net of tax

    (221 )   12  

Comprehensive income

  $ 3,130   $ 4,147  

Net income per common share

             

Basic

  $ 0.35   $ 0.42  

Diluted

    0.35     0.42  

Weighted average common shares outstanding

   
 
   
 
 

Basic

    9,653,113     9,837,631  

Dilutive effect of stock options

    6,894     10,028  

Diluted

    9,660,007     9,847,659  

   

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

4


Table of Contents


NUTRACEUTICAL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(dollars in thousands)

 
  Three months ended
December 31,
 
 
  2014   2013  

Cash flows from operating activities:

             

Net income

  $ 3,351   $ 4,135  

Adjustments to reconcile net income to net cash provided by operating activities:

             

Depreciation and amortization

    3,239     2,638  

Amortization of deferred financing fees

    36     46  

Losses on disposals of property, plant and equipment

    1     1  

Tax benefit from stock option exercises

        (51 )

Deferred income taxes, net

    (75 )   97  

Changes in assets and liabilities, net of effects of acquisitions:

             

Accounts receivable, net

    47     1,254  

Inventories

    907     (2,582 )

Prepaid expenses and other current assets

    (11 )   (174 )

Other non-current assets

    60     (22 )

Accounts payable

    (2,817 )   (322 )

Accrued expenses

    (1,735 )   460  

Other non-current liabilities

    4     16  

Net cash provided by operating activities

    3,007     5,496  

Cash flows from investing activities:

             

Acquisitions of businesses

    (81 )   (6,227 )

Purchases of property, plant and equipment

    (2,634 )   (3,077 )

Net cash used in investing activities

    (2,715 )   (9,304 )

Cash flows from financing activities:

             

Proceeds from debt

    1,000     7,500  

Payments on debt

    (2,000 )   (5,500 )

Payments of deferred financing fees

    (420 )    

Proceeds from issuances of common stock

    25     152  

Purchases of common stock for treasury

    (1,074 )   (521 )

Tax benefit from stock option exercises

        51  

Net cash provided by (used in) financing activities

    (2,469 )   1,682  

Effect of exchange rate changes on cash

    (132 )   (2 )

Net decrease in cash

    (2,309 )   (2,128 )

Cash at beginning of period

    6,232     8,235  

Cash at end of period

  $ 3,923   $ 6,107  

   

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

5


Table of Contents


NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share data)

1. BASIS OF PRESENTATION

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

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

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

        In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all necessary adjustments, consisting of normal recurring adjustments, to state fairly the consolidated financial position of the Company as of December 31, 2014, the results of its operations for the three months ended December 31, 2014 and 2013 and its cash flows for the three months ended December 31, 2014 and 2013, in conformity with accounting principles generally accepted in the United States of America ("US GAAP") for interim financial information applied on a consistent basis. Results for the three months ended December 31, 2014 are not necessarily indicative of the results to be expected for the full fiscal year.

        Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with US GAAP have been omitted. Accordingly, these financial statements should be read in conjunction with the Company's Form 10-K for the fiscal year ended September 30, 2014, which was filed with the Securities and Exchange Commission on November 20, 2014.

Use of Estimates

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

6


Table of Contents


NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

1. BASIS OF PRESENTATION (Continued)

New Accounting Standards

        In May 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance, which is included in Accounting Standards Codification 606, "Revenue from Contracts with Customers." This guidance provides a single, comprehensive revenue recognition model for all contracts with customers and requires that a company recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This guidance is effective for the Company as of October 1, 2017. The Company is currently evaluating the impact this standard may have on its consolidated financial statements.

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

2. ACCOUNTS RECEIVABLE

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

 
  December 31,
2014
  September 30,
2014
 

Accounts receivable

  $ 16,124   $ 16,352  

Less allowances

    (1,048 )   (1,234 )

  $ 15,076   $ 15,118  

3. INVENTORIES

        Inventories were comprised of the following:

 
  December 31,
2014
  September 30,
2014
 

Raw materials

  $ 20,919   $ 20,559  

Work-in-process

    6,792     6,909  

Finished goods

    29,325     30,446  

  $ 57,036   $ 57,914  

4. ACQUISITIONS

        During the three months ended December 31, 2014, the Company made one acquisition of a business. On November 18, 2014, the Company acquired certain operating assets of Agape Health Products for $81 in cash.

7


Table of Contents


NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

4. ACQUISITIONS (Continued)

        During the three months ended December 31, 2013, the Company made three acquisitions of businesses. On October 16, 2013, the Company acquired certain operating assets of TCCD International, Inc. On November 25, 2013, the Company acquired certain operating assets of Green Luxury Brands, Inc. On December 19, 2013, the Company acquired certain operating assets of Twinlab Corporation. The aggregate purchase price of these acquisitions was $6,227 in cash.

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

        These acquisitions are in keeping with the Company's business strategy of consolidating the fragmented industry where it competes. These acquisitions were accounted for using the acquisition method of accounting. Accordingly, the aggregate purchase price was assigned to the assets acquired based on their fair values at their respective dates of acquisition. The excess of aggregate purchase price over the fair values of the assets acquired was classified as goodwill. The goodwill relates to expected synergies from these acquisitions. The following reflects the final allocation of the aggregate purchase price for these acquisitions to the aggregate assets acquired:

 
  Fiscal 2015
Acquisition
  Fiscal 2014
Acquisitions
 

Aggregate assets acquired:

             

Current assets

  $ 41   $ 1,072  

Goodwill

        2,822  

Intangible assets

    40     2,333  

  $ 81   $ 6,227  

        The fiscal 2015 and fiscal 2014 acquired intangible assets totaling $40 and $2,333, respectively, related to trademarks, tradenames and customer relationships, and are being amortized over periods of two to twelve years for financial statement purposes. The fiscal 2015 and fiscal 2014 acquired intangible assets are expected to be deductible for tax purposes over fifteen years. Goodwill, which is not subject to amortization for financial statement purposes, of $2,822 for fiscal 2014 is expected to be deductible for tax purposes over fifteen years.

8


Table of Contents


NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

5. GOODWILL AND INTANGIBLE ASSETS

        During the three months ended December 31, 2014, there was no change in the carrying value of goodwill.

        The carrying amounts of intangible assets at December 31, 2014 and September 30, 2014 were as follows:

 
  December 31, 2014   September 30, 2014    
 
  Weighted-
Average
Amortization
Period (Years)
 
  Gross
Carrying
Amount(1)
  Accumulated
Amortization(1)
  Net
Carrying
Amount
  Gross
Carrying
Amount(1)
  Accumulated
Amortization(1)
  Net
Carrying
Amount

Intangible assets subject to amortization:

                                       

Trademarks/tradenames/patents

  $ 5,435   $ (1,600 ) $ 3,835   $ 5,418   $ (1,480 ) $ 3,938   11

Customer relationships/distribution rights/ non-compete agreements

    16,557     (8,002 )   8,555     16,517     (7,390 )   9,127   7

Developed software and technology

    772     (772 )       772     (772 )     5

    22,764     (10,374 )   12,390     22,707     (9,642 )   13,065    

Intangible assets not subject to amortization:

   
 
   
 
   
 
   
 
   
 
   
 
 

 

Trademarks/tradenames/licenses

    8,823         8,823     8,900         8,900    

  $ 31,587   $ (10,374 ) $ 21,213   $ 31,607   $ (9,642 ) $ 21,965    

(1)
Amounts include the impact of foreign currency translation adjustments.

        Estimated future amortization expense related to the December 31, 2014 net carrying amount of $12,390 for intangible assets subject to amortization is as follows:

Year Ending September 30,
  Estimated
Amortization
Expense
 

2015(1)

  $ 2,133  

2016

    2,156  

2017

    1,797  

2018

    1,607  

2019

    1,180  

Thereafter

    3,517  

  $ 12,390  

(1)
Estimated amortization expense for the year ending September 30, 2015 includes only amortization to be recorded after December 31, 2014.

9


Table of Contents


NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

5. GOODWILL AND INTANGIBLE ASSETS (Continued)

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

6. DEBT

        Debt was comprised of the following:

 
  December 31,
2014
  September 30,
2014
 

Long-term debt—revolving credit facility

  $ 42,000   $ 43,000  

        The carrying value of the Company's debt approximates fair value at December 31, 2014 and September 30, 2014. Estimated fair values for debt have been determined based on borrowing rates currently available to the Company for bank loans with similar terms and maturities and are classified as Level 2 (significant observable inputs other than quoted prices) in the FASB's fair value hierarchy.

        On November 4, 2014, the Company amended its revolving credit facility (the "Credit Agreement"). The Credit Agreement extends the term of the credit facility to November 2019, increases the available credit borrowings to $100,000 with no automatic reductions and provides an accordion feature that can increase the available credit borrowings to $130,000 subject to approval by the lenders and compliance with certain covenants and conditions. The lenders under the Credit Agreement continue to be Rabobank International and Wells Fargo. To date, the Company has not experienced any difficulties in accessing the available funds under the Credit Agreement. Deferred financing fees of $420 related to the Credit Agreement are being amortized over the term of the Credit Agreement.

        At December 31, 2014, the Company had outstanding revolving credit borrowings of $42,000 under the Credit Agreement. Borrowings under the Credit Agreement are collateralized by substantially all assets of the Company. At the Company's election, borrowings bear interest at the applicable Eurodollar Rate plus a variable margin or at a Base Rate plus a variable margin. Base Rate is the higher of: i) the Prime Lending Rate, ii) the Federal Funds Rate plus 0.5% or iii) the one-month Eurodollar Rate multiplied by the Statutory Reserve Rate plus 1.0% (capitalized terms are defined in the Credit Agreement, a copy of which was filed with the Securities and Exchange Commission on November 5, 2014). At December 31, 2014, the applicable weighted-average interest rate for outstanding borrowings was 1.74%. The Company is also required to pay a variable quarterly fee on the unused balance under the Credit Agreement. At December 31, 2014, the applicable rate was 0.25%. Accrued interest on Eurodollar Rate borrowings is payable based on elected intervals of one, two or

10


Table of Contents


NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

6. DEBT (Continued)

three months. Accrued interest on Base Rate borrowings is payable quarterly. The Credit Agreement matures on November 4, 2019, and the Company is required to repay all principal and interest outstanding under the Credit Agreement on such date.

        The Credit Agreement contains restrictive covenants, including limitations on incurring other indebtedness and requirements that the Company maintain certain financial ratios. As of December 31, 2014, the Company was in compliance with the restrictive covenants. Upon the occurrence of a default, the lender has various remedies or rights, which may include proceeding against the collateral or requiring the Company to repay all amounts outstanding under the Credit Agreement.

7. SHARE PURCHASES

        During the three months ended December 31, 2014 and 2013, the Company purchased 48,562 and 21,705 shares of common stock for an aggregate price of $1,074 and $521, respectively. All of these shares of common stock held in treasury were retired prior to December 31 in the respective quarter of purchase. As of December 31, 2014, the Company was permitted to purchase up to 683,462 additional shares under its approved purchase plan, with no expiration date or restrictions. The Company accounts for treasury shares using the cost method.

8. STOCK OPTIONS AND OTHER EQUITY AWARDS

        As of December 31, 2014, the Company had 32,500 stock options outstanding at a weighted average exercise price of $14.22. These stock options expire on September 30, 2015. There were no stock options exercised during the three months ended December 31, 2014.

        No options to purchase shares of common stock for the three months ended December 31, 2014 and 2013 were excluded from the computation of diluted earnings per share because none of the stock options were anti-dilutive.

        During the three months ended December 31, 2013, the Company received proceeds of $115 related to the exercise of stock options. During this same period, the Company recorded a tax benefit of $51 and optionees realized an aggregate pre-tax gain of $133 from these stock option exercises.

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

11


Table of Contents


NUTRACEUTICAL INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(dollars in thousands, except per share data)

9. SEGMENTS

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

        Net sales attributed to customers in the United States and foreign countries for the three months ended December 31, 2014 and 2013 were as follows:

 
  Three months ended
December 31,
 
 
  2014   2013  

United States

  $ 46,725   $ 45,323  

Foreign countries

    6,319     6,227  

  $ 53,044   $ 51,550  

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

        The Company's net sales by product group for the three months ended December 31, 2014 and 2013 were as follows:

 
  Three months ended
December 31,
 
 
  2014   2013  

Branded nutritional supplements and other natural products

  $ 47,877   $ 46,972  

Other(1)

    5,167     4,578  

  $ 53,044   $ 51,550  

(1)
Net sales for any other product or group of similar products are less than 10% of consolidated net sales.

12


Table of Contents

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

General

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

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

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

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

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

Critical Accounting Policies

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

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

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

13


Table of Contents

adjustments for slow moving, obsolete and/or damaged inventory may be required, which could have a material impact on the consolidated financial statements.

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

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

        Goodwill and Intangible Assets—Goodwill and intangible assets require estimates and judgments in determining the initial recognition and measurement, including factors and assumptions used in determining fair values and useful lives. Intangible assets with finite useful lives are amortized, while intangible assets with indefinite useful lives are not amortized. Amortizable intangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill and indefinite-lived intangible assets are tested annually for impairment and when events or changes in circumstances indicate the carrying value may not be recoverable. The appropriateness of the indefinite-life classification of non-amortizable intangible assets is also reviewed as part of the annual testing or when circumstances warrant a change to a finite life. We perform our annual impairment testing as of September 30 each year, which is the last day of our fiscal year.

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

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

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

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

14


Table of Contents

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

        Our estimates and judgments related to our critical accounting policies, including factors and assumptions considered in making these estimates and judgments, did not vary significantly for the periods presented and had no material impact on the consolidated financial statements as reported.

New Accounting Standards

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

Results of Operations

        The following table sets forth certain consolidated statements of operations data as a percentage of net sales for the periods indicated:

 
  Three Months
Ended
December 31,
 
 
  2014   2013  

Net sales

    100.0 %   100.0 %

Cost of sales

    51.3 %   49.4 %

Gross profit

    48.7 %   50.6 %

Selling, general and administrative

    36.9 %   36.1 %

Amortization of intangible assets

    1.4 %   1.2 %

Income from operations

    10.4 %   13.3 %

Interest and other expense, net

    0.5 %   0.6 %

Income before provision for income taxes

    9.9 %   12.7 %

Provision for income taxes

    3.6 %   4.7 %

Net income

    6.3 %   8.0 %

Adjusted EBITDA(1)

    16.6 %   18.5 %

(1)
See "—Adjusted EBITDA."

Comparison of the Three Months Ended December 31, 2014 to the Three Months Ended December 31, 2013

        Net Sales.    Net sales increased by $1.4 million, or 2.9%, to $53.0 million for the three months ended December 31, 2014 ("first quarter of fiscal 2015") from $51.6 million for the three months ended December 31, 2013 ("first quarter of fiscal 2014"). Net sales of branded nutritional supplements and other natural products increased by $0.9 million, or 1.9%, to $47.9 million for the first quarter of fiscal 2015 compared to $47.0 million for the first quarter of fiscal 2014. The increase in net sales of branded nutritional supplements and other natural products primarily related to the net sales

15


Table of Contents

contributions of the fiscal 2014 acquisitions, partially offset by a decrease in sales volume of branded products to certain customers. The impact on net sales of branded products attributable to price changes was not material. Other net sales increased by $0.5 million, or 12.9%, to $5.1 million for the first quarter of fiscal 2015 compared to $4.6 million for the first quarter of fiscal 2014. The increase in other net sales was primarily related to the net sales contributions of the fiscal 2014 acquisitions.

        Gross Profit.    Gross profit was $25.9 million for the first quarter of fiscal 2015 and $26.1 million for the first quarter of fiscal 2014. As a percentage of net sales, gross profit was 48.7% for the first quarter of fiscal 2015 compared to 50.6% for the first quarter of fiscal 2014. This decrease in gross profit percentage was primarily related to an increase in manufacturing overhead costs.

        Selling, General and Administrative.    Selling, general and administrative expenses increased by $1.0 million, or 5.2%, to $19.6 million for the first quarter of fiscal 2015 from $18.6 million for the first quarter of fiscal 2014. As a percentage of net sales, selling, general and administrative expenses were 36.9% for the first quarter of fiscal 2015 and 36.1% for the first quarter of fiscal 2014. This increase in selling, general and administrative expenses was primarily attributable to operational and transition costs related to the fiscal 2014 acquisitions.

        Amortization of Intangible Assets.    Amortization of intangible assets was $0.7 million for the first quarter of fiscal 2015 and $0.6 million for the first quarter of fiscal 2014. For each period, amortization expense was primarily related to intangible assets recorded in connection with acquisitions.

        Interest and Other Expense, Net.    Net interest and other expense was $0.3 million for both the first quarter of fiscal 2015 and fiscal 2014 and primarily consisted of interest expense on indebtedness under our revolving credit facility.

        Provision for Income Taxes.    Our effective tax rate was 36.4% for the first quarter of fiscal 2015 and 37.1% for the first quarter of fiscal 2014. In each period, our effective tax rate was higher than the federal statutory rate primarily due to state taxes.

Adjusted EBITDA

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

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

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

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

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

16


Table of Contents

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

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

      Board of Directors and Executive Management—who use EBITDA-based metrics for evaluating management performance relative to our operating budget and bank covenant compliance, as well as our ability to service debt and raise capital for growth opportunities, including acquisitions, which are a critical component of our stated strategy. Generally, we have recorded a monthly accrual for incentive compensation as a percentage of Adjusted EBITDA, which has been paid out to executive management, as well as other employees, upon completion of our annual audit.

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

 
  Three Months Ended
December 31,
 
 
  2014   2013  
 
  (dollars in thousands)
 

Net income

  $ 3,351   $ 4,135  

Provision for income taxes

    1,921     2,444  

Interest and other expense, net(1)

    297     318  

Depreciation and amortization

    3,239     2,638  

Adjusted EBITDA

  $ 8,808   $ 9,535  

(1)
Includes amortization of deferred financing fees.

        Our Adjusted EBITDA decreased to $8.8 million for the first quarter of fiscal 2015 from $9.5 million for the first quarter of fiscal 2014. Adjusted EBITDA as a percentage of net sales decreased to 16.6% for the first quarter of fiscal 2015 from 18.5% for the first quarter of fiscal 2014.

Seasonality

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

Liquidity and Capital Resources

        We had working capital of $63.3 million as of December 31, 2014 compared to $62.1 million as of September 30, 2014. The increase in working capital was primarily the result of decreases in accounts payable and accrued expenses, partially offset by a decrease in cash.

        Net cash provided by operating activities for the three months ended December 31, 2014 was $3.0 million compared to $5.5 million for the comparable period in fiscal 2014. This decrease in net cash provided by operating activities for the three months ended December 31, 2014 was primarily attributable to changes in operating assets and liabilities.

17


Table of Contents

        Net cash used in investing activities was $2.7 million for the three months ended December 31, 2014 compared to $9.3 million for the comparable period in fiscal 2014. Our investing activities consisted of acquisitions of businesses and capital expenditures. The capital expenditures primarily related to buildings, building improvements, distribution and manufacturing equipment and information systems.

        During the three months ended December 31, 2014, we made one acquisition of a business. On November 18, 2014, we acquired certain operating assets of Agape Health Products for $0.1 million in cash.

        During the three months ended December 31, 2013, we made three acquisitions of businesses. On October 16, 2013, we acquired certain operating assets of TCCD International, Inc. On November 25, 2013, we acquired certain operating assets of Green Luxury Brands, Inc. On December 19, 2013, we acquired certain operating assets of Twinlab Corporation. The aggregate purchase price of these acquisitions was $6.2 million in cash.

        Net cash used in financing activities was $2.5 million for the three months ended December 31, 2014 and net cash provided by financing activities was $1.7 million for the comparable period in fiscal 2014. During these periods, financing activities primarily related to borrowings and repayments under our revolving credit facility, payments of deferred financing fees, purchases of common stock for treasury and proceeds from the issuance of common stock related to stock option exercises and the direct stock purchase plan.

        In October 2007, we registered a direct stock purchase plan with the Securities and Exchange Commission. The purpose of this direct stock purchase plan is to provide a convenient way for existing stockholders, as well as new investors, to purchase shares of our common stock. A total of 1,500,000 shares of our common stock were registered under the plan with 1,188 shares purchased during the three months ended December 31, 2014. As of December 31, 2014, there were 1,380,547 shares of common stock available for purchase.

        On November 4, 2014, we amended our revolving credit facility (the "Credit Agreement"). The Credit Agreement extends the term of the credit facility to November 2019, resets the available credit borrowings to $100.0 million with no automatic reductions and provides an accordion feature which can increase the available credit borrowings to $130.0 million subject to approval by the lenders and compliance with certain covenants and conditions. The lenders under the Credit Agreement continue to be Rabobank International and Wells Fargo. To date, we have not experienced any difficulties in accessing the available funds under the Credit Agreement. Deferred financing fees of $0.4 million related to the Credit Agreement are being amortized over the term of the Credit Agreement.

        At December 31, 2014, we had outstanding revolving credit borrowings of $42.0 million under the Credit Agreement. Borrowings under the Credit Agreement are collateralized by substantially all of our assets. At our election, borrowings bear interest at the applicable Eurodollar Rate plus a variable margin or at a Base Rate plus a variable margin. Base Rate is the higher of: i) the Prime Lending Rate, ii) the Federal Funds Rate plus 0.5% or iii) the one-month Eurodollar Rate multiplied by the Statutory Reserve Rate plus 1.0% (capitalized terms are defined in the Credit Agreement, a copy of which was filed with the Securities and Exchange Commission on November 5, 2014). At December 31, 2014, the applicable weighted-average interest rate for outstanding borrowings was 1.74%. We are also required to pay a quarterly fee on the unused balance under the Credit Agreement. At December 31, 2014, the applicable rate was 0.25%. Accrued interest on Eurodollar Rate borrowings is payable based on elected intervals of one, two or three months. Accrued interest on base rate borrowings is payable quarterly. The Credit Agreement matures on November 4, 2019, and we are required to repay all principal and interest outstanding under the Credit Agreement on such date.

18


Table of Contents

        The Credit Agreement contains restrictive covenants, including limitations on incurring certain other indebtedness and requirements that we maintain certain financial ratios. As of December 31, 2014, we were in compliance with the restrictive covenants. Upon the occurrence of a default, the lender has various remedies or rights, which may include proceeding against the collateral or requiring us to repay all amounts outstanding under the Credit Agreement.

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

Contractual Obligations and Other Commitments

        Our significant non-cancelable contractual obligations and other commitments as of December 31, 2014 were as follows:

 
  Payments Due By Period  
Contractual Obligations and Other Commitments
  Total   Less Than
1 Year
  1 - 3 Years   4 - 5 Years   After
5 Years
 
 
  (dollars in thousands)
 

Revolving credit facility

  $ 42,000   $   $   $ 42,000   $  

Interest on revolving credit facility(a)

    4,391     906     1,812     1,673      

Operating leases

    6,968     3,835     2,712     409     12  

Total

  $ 53,359   $ 4,741   $ 4,524   $ 44,082   $ 12  

(a)
Represents estimated interest obligations associated with our outstanding revolving credit facility balance of $42.0 million at December 31, 2014, assuming no principal payments are made before maturity, a weighted-average interest rate of 1.74% and an underutilization fee rate of 0.25%.

Inflation

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

Forward-Looking Statements

        This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations and business. These forward-looking statements can be identified by the use of terms such as "believe," "expects," "plan," "intend," "may," "will," "should," "can," or "anticipates," or the negative thereof, or variations thereon, or comparable terminology, or by discussions of strategy. These statements involve known and unknown risks, uncertainties and other factors that may cause industry trends or our actual results to be materially different from any future results expressed or implied by these statements. Important factors that may cause our results to differ from these forward-looking statements include,

19


Table of Contents

but are not limited to: (i) changes in or new government regulations or increased enforcement of the same, (ii) unavailability of desirable acquisitions, inability to complete them or inability to integrate them (iii) increased costs, including from increased raw material or energy prices, (iv) changes in general worldwide economic or political conditions, (v) adverse publicity or negative consumer perception regarding nutritional supplements, (vi) issues with obtaining raw materials of adequate quality or quantity, (vii) litigation and claims, including product liability, intellectual property and other types, (viii) disruptions from or following acquisitions including the loss of customers, (ix) increased competition, (x) slow or negative growth in the nutritional supplement industry or the healthy foods channel, (xi) the loss of key personnel or the inability to manage our operations efficiently, (xii) problems with information management systems, manufacturing efficiencies and operations, (xiii) insurance coverage issues, (xiv) the volatility of the stock market generally and of our stock specifically, (xv) increases in the cost of borrowings or unavailability of additional debt or equity capital, or both, or fluctuations in foreign currencies, and (xvi) interruption of business or negative impact on sales and earnings due to acts of God, acts of war, terrorism, bio-terrorism, civil unrest and other factors outside of our control.

        We undertake no obligation to update or revise publicly any forward-looking statements to reflect new information, events or circumstances occurring after the date of this Form 10-Q.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

        At our election, borrowings bear interest at the applicable Eurodollar Rate plus a variable margin or at a Base Rate plus a variable margin. Base Rate is the higher of: i) the Prime Lending Rate, ii) the Federal Funds Rate plus 0.5% or iii) the one-month Eurodollar Rate multiplied by the Statutory Reserve Rate plus 1.0%. At December 31, 2014, the applicable weighted-average interest rate for borrowings was 1.74% and we had total borrowings outstanding of $42.0 million. A hypothetical 100 basis point change in interest rates would not have had a material impact on our reported net income or cash flows for the three months ended December 31, 2014 and 2013.

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

Item 4.    Controls and Procedures

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

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

        As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision of and with the participation of our management, including our principal executive and principal financial officers, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2014. Based on the foregoing, our principal executive and principal financial officers have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2014.

        Changes in Internal Control Over Financial Reporting.    There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

20


Table of Contents

PART II—OTHER INFORMATION

Item 1.    Legal Proceedings

        As discussed in our other filings, we are subject to regulation by a number of federal, state and foreign agencies and are involved in various legal matters arising in the ordinary course of business.

        We carry insurance coverage in the types and amounts that we consider reasonably adequate to cover the risks we face in the industry in which we compete.

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

Item 1A.    Risk Factors

        There have been no material changes in our risk factors from those disclosed in our 2014 Annual Report on Form 10-K.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

        We did not sell any unregistered equity securities during the quarterly period ended December 31, 2014.

        Prior to fiscal 2015, our Board of Directors approved a share purchase program authorizing us to buy up to 4,500,000 shares of our common stock. As of December 31, 2014, there were 683,462 shares available for purchase under this program. The shares available for purchase under this program have no expiration date. Purchases under this program during the three months ended December 31, 2014 occurred in October, November and December as follows:

Period
  Total Number
of Shares
Purchased
  Average Price
Paid Per
Share
  Total
Number
of Shares
Purchased as
Part of
Publicly
Announced
Plan
  Maximum
Number of
Shares that
May Yet Be
Purchased Under
the Plan
 

October 1 - 31, 2014

    22,700   $ 22.03     22,700        

November 1 - 30, 2014

    18,162     22.65     18,162        

December 1 - 31, 2014

    7,700     21.13     7,700        

    48,562     22.12     48,562     683,462  

21


Table of Contents

Item 6.    Exhibits

  31.1   Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

32.1

 

Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

101.INS

 

XBRL Instance Document(1)

 

101.SCH

 

XBRL Taxonomy Extension Schema Document(1)

 

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase Document(1)

 

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase Document(1)

 

101.LAB

 

XBRL Taxonomy Extension Labels Linkbase Document(1)

 

101.PRE

 

XBRL Taxonomy Extension Presentation Linkbase Document(1)

(1)
Filed herewith.

22


Table of Contents


SIGNATURE

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


NUTRACEUTICAL INTERNATIONAL CORPORATION
(Registrant)

Date: January 29, 2015   By:   /s/ CORY J. MCQUEEN

Cory J. McQueen
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer and
Duly Authorized Officer)

23