Natrol to launch network marketing division. October roll out of Annása subsidiary scheduled.

Chatsworth, California- (Business Wire)-September 4, 2002. Natrol Inc. (NASDAQ: NTOL –news), a manufacturer and distributor of high quality nutritional supplements, announced the broadening of its business operations into the direct-to-consumer multi-level marketing channel of distribution. Elliott Balbert, founder, chairman and CEO, announced the new business unit as a key element in Natrol’s overall growth strategy. “Ever since the 70’s, when I cut my business teeth on network marketing,” said Balbert, “I realized both the excitement and power of this channel of distribution. We spent 22 years developing an important and extremely valuable retail relationship throughout the country, and now we are excited to expand into the world of network marketing. We will be manufacturing entirely new and different items that will be sold exclusively through authorized distributors who in turn will sell direct to consumers as well as sponsor and train others to do the same. We believe our strong balance sheet; our reputation for products where “Quality Uncompromised” is the mantra and our entrepreneurial spirit translates well to this excellent distribution channel. This is a new beginning and so we are going to call the start-up Annása, a word that means “breath” or “new beginnings” in Greek.” Said Balbert.

“Annása has been in the development stages for nearly 12 months. We have assembled a professional management team with nearly 40 years of combined network marketing success. Carol Hukari, Annása’s Chief Operating Officer is a former Shaklee executive and brings with her a tremendous breadth of knowledge and expertise of the business. Mr. Jeff Gaal, Annása’s Vice President of Sales, has worked on both the corporate side as well as in the field, having recruited and trained more than 50,000 distributors in his career. Rounding out the executive team is Debbie Meyer who will function as Vice President of Operations with principal responsibility for customer and distributor service. I will serve as CEO and President.” He added.

“I am proud to have attracted such a truly excellent senior management team. The success of any venture rests primarily in the quality of its people both inside and out. If these people are an example of what the future might hold, then I would advise us all to hold on to our seat belts because these folks are fabulous and are going to give us one fantastic ride.”

In concluding, Balbert noted that “the Network Marketing sector has a long respected history of success here and around the world with such well known brands as Avon, Amway, Shaklee and Mary Kay Cosmetics to name a few. During the past few years when the nutritional sector as a whole experienced severe market pressures, the Network Marketing segment (U.S. only) delivered a 14.6% increase between 2001 over 2000. Natrol will apply its science-based approach to product development; its GMP certified manufacturing facilities, along with sound business principals and its ethical reputation into this dynamic distribution sector.”

Annása will launch with four unique nutritional products catering to cellular renewal and over all physical well-being. The mission of the new entity is “Empowering people to improve the quality of their lives in today’s environment”. The company will begin shipping to select distributors in the fourth quarter with a full national roll out in January. The company did not project when the new entity would be profitable other than ’03 would be the ramp up year with the following years building critical mass.

Interested candidates who wish to be considered as part of the initial group of select distributors should contact Mr. Jeff Gaal at Annása, or call him at 818-739-6000 x 110.

The statements made in this press release which are not historical facts including statements regarding expectations for future growth of revenue and profits and trends concerning net sales, are forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. As a result of a number of factors, including the factors described above that Natrol and its wholly owned subsidiary Annása, Inc. may not currently foresee, actual results could differ materially from those set forth in the forward looking statements. Certain factors that might cause actual results to differ materially from those set forth in the forward looking statements include adverse trends in the dietary supplements industry, intense competition from existing multi-level marketing company’s, adverse effects of unfavorable publicity regarding particular products or the supplement industry generally, Annása’s dependence on the introduction of successful new products, Annása’s ability to gain market share within its distribution channel, Annása’s experiencing high rates of product returns, and adverse government regulation, as well as those factors set forth under the heading “Risk Factors” in Natrol’s Annual Report on Form 10-K for the year ended December 31, 2001 and in the Company’s other filings with Securities and Exchange Commission.

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