NBTY Reports Record Second Quarter Sales and Net Income

-Wholesale Sales Up 51%, Net Income Up 43% -

BOHEMIA, N.Y., April 22 /PRNewswire/ -- NBTY, Inc. (Nasdaq: NBTY) (http://www.NBTY.com), a leading manufacturer and marketer of nutritional supplements, today announced results for the fiscal second quarter and six months ended March 31, 2002.

For the second quarter ended March 31, 2002, net sales increased 12% to $252 million from net sales of $225 million for the same quarter last year. Net income for the second quarter increased 43% to $26 million, or $0.38 per diluted share compared to net income of $18 million or $0.27 per diluted share for the second quarter last year. Included in the pre-tax results for the current quarter is a $5.5 million payment received by NBTY as a partial settlement of ongoing price fixing litigation in which the Company is a plaintiff.

For the six months ended March 31, 2002, net sales were $467 million, an increase of 19% from $392 million for the same period last year. Net income for the current six-month period increased 98% to $37 million, or $0.54 cents per diluted share, compared with net income of $19 million, or $0.28 cents per diluted share for the comparative period last year.

For the six months ended March 31, 2002, the Company increased working capital by $18 million to $149 million, while at the same time reduced bank debt by $37 million.

Operations for the Second Quarter
Sales for the Nature's Bounty wholesale operation were $72 million compared with $48 million for the previous like quarter, an increase of 51%. The increase reflects greater sales of core products and strong sales response to new product introductions and promotions. Products such as Apple Cider Vinegar, Flex-A-Min and the Knox NutraJoint products continue to help Nature's Bounty strengthen its leading market position.

While industry sales have remained stagnant, NBTY has outperformed its competitors and continues to increase its market share in mass market and chain drug retailers. By utilizing consumer sales information received from its Vitamin World and direct response/e-commerce operations, the Company continues to provide its mass-market customers with tools to drive sales. The Company has responded to consumer preferences and monitors the market for trends and ideas, which translate into increased sales for the mass market and drug chains. The Nature's Bounty brand continues to be recognized for its ability to generate greater sales than competing brands.

Information Resources Inc. (IRI), which tracks industry-wide sales in the food, drug and mass market sectors for comparative four-week periods, has been reporting vitamin sales decreases in these sectors. However, for the first time in almost two years, IRI recently reported a 2.2% increase in vitamin sales in the drug sector for a four-week period. This increase occurred for the four-week period ended March 24, 2002. The Company is encouraged by this increase and continues to focus its energies on gaining greater market share in this sector.

Vitamin World sales increased 14% from the prior like quarter with same store sales increasing 9.7%. While this operation is still not yet profitable, it continues to be cash flow positive; EBITDA before corporate overhead allocation was $1.7 million. Holland & Barrett sales decreased 3% with same store sales down 5.2%. A sales promotion that ran the prior year was not repeated this current period. Direct response/e-commerce sales were down 3%.

Commenting on the results, NBTY Chairman and CEO, Scott Rudolph, stated: "Once again our commitment to the wholesale business has contributed substantially to the overall rise in revenue. We are encouraged by the most recent data reported by IRI for the drug sector. Our financial strength has allowed us to reduce our debt level and capitalize on our market leadership. The expertise of our management team enables us to quickly react to market conditions and capitalize on opportunities, including acquisitions. We remain optimistic for the long term outlook for the Company."


NBTY is a leading vertically integrated U.S. manufacturer and distributor of a broad line of high-quality, value-priced nutritional supplements in the United States and throughout the world. The Company markets more than 1,500 products under several brands, including Nature's Bounty(R), Vitamin World(R), Puritan's Pride(R), Holland & Barrett(R), Nutrition Headquarters(R), American Health(R), Nutrition Warehouse(R) and Dynamic Essentials(R).

This release contains certain 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. All of these forward-looking statements, which can be identified by the use of terminology such as "subject to," "believe," "expects," "may," "will," "should," "can," or "anticipates," or the negative thereof, or variations thereon, or comparable terminology, or by discussions of strategy which, although believed to be reasonable, are inherently uncertain. Factors that may affect such forward-looking statements include (i) slow or negative growth in the nutritional supplement industry; (ii) disruptions of business or negative impact on sales and earnings due to acts of war, terrorism, bio-terrorism, or civil unrest; (iii) adverse publicity regarding the consumption of nutritional supplements; (iv) inability to retain customers of companies (or mailing lists) recently acquired; (v) increased competition; (vi) increased costs; (vii) loss or retirement of key members of management; (viii) increases in the cost of borrowings and unavailability of additional debt or equity capital; (ix) unavailability of, or inability to consummate, advantageous acquisitions in the future or the inability of the Company to assimilate acquisitions into the mainstream of its business; (x) changes in general worldwide economic and political conditions in the markets in which the Company may compete from time to time; (xi) the inability of the Company to gain and/or hold market share of its wholesale and retail customers; (xii) unavailability of electricity in certain geographical areas; (xiii) exposure to, expense of defending and resolving, product liability claims and other litigation; (xiv) the ability of the Company to successfully implement its business strategy; (xv) the inability of the Company to manage its retail operations efficiently; (xvi) consumer acceptance of the Company's products; (xvii) uncertainty in negotiating and consummating acquisitions which may be subject to bankruptcy court approval; (xviii) the inability of the Company to renew leases on its retail locations; (xix) inability of the Company's retail stores to attain profitability; (xx) the absence of clinical trials for many of the Company's products; (xxi) sales and earnings volatility; (xxii) the Company's ability to manufacture its products efficiently; (xxiii) the rapidly changing nature of the Internet and on-line commerce; (xxiv) fluctuations in foreign currencies, and more particularly the British Pound; (xxv) import-export controls on sales to foreign countries; (xxvi) the inability of the Company to secure favorable new sites for, and delays in opening, new retail locations; (xxvii) adverse federal, state or foreign legislation or regulation or adverse determinations by regulators; (xxviii) the mix of the Company's products and the profit margins thereon; (xxix) the availability and pricing of raw materials; (xxx) risk factors discussed in the Company's filings with the Securities and Exchange Commission; and (xxxi) other factors beyond the Company's control.

Readers are cautioned not to place undue reliance on forward-looking statements. The Company undertakes no obligation to republish or revise forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrences of unanticipated events.

The Company cannot guarantee future results, events, and levels of activity, performance or achievements. The Company does not assume a duty to update or revise any of the forward-looking statements as a result of new information, future events or otherwise.

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