UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
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ý
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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For
the quarterly period ended August 31, 2007
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q
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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For
the transition period from ____ to ____.
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Commission
file number:
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001-14608
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SCHIFF
NUTRITION INTERNATIONAL, INC.
(Exact
name of
registrant as specified in its charter)
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Delaware
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87-0563574
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(State
or
other jurisdiction
of
incorporation or organization)
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(I.R.S.
Employer
Identification
No.)
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2002
South 5070 West
Salt
Lake City, Utah
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84104-4726
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(Address
of
principal
executive
offices)
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(Zip
Code)
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(801)
975-5000
(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
q
Indicate
by check
mark whether the registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. See definition of “accelerated filer and large
accelerated filer” in Rule 12b-2 of the Exchange Act.
Large
Accelerated
Filer
q
Accelerated
Filer
q
Non-Accelerated
Filer
ý
Indicate
by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the
Exchange Act). Yes
q
No
ý
As
of October 12,
2007 the registrant had outstanding 11,659,111 shares of Class A common stock
and 14,973,148 shares of Class B common stock.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(in
thousands,
except share data)
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|
August
31,
2007
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|
May
31,
2007
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|
(unaudited)
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ASSETS
|
|
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|
|
|
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|
Current
assets:
|
|
|
|
|
|
|
|
Cash
and cash
equivalents
|
|
$
|
15,109
|
|
|
$
|
34,463
|
|
|
Available-for-sale
securities
|
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|
24,005
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|
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|
45,817
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|
|
Receivables,
net
|
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|
18,032
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|
|
|
17,732
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Inventories
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|
25,475
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|
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|
23,698
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|
Prepaid
expenses and other
|
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|
1,343
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|
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|
2,151
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|
Deferred
taxes, net
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|
1,340
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|
|
|
1,992
|
|
|
|
|
|
|
|
|
|
|
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|
Total
current
assets
|
|
|
85,304
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|
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|
125,853
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|
|
|
|
|
|
|
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Property
and
equipment, net
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|
14,878
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14,438
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Other
assets:
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|
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Goodwill
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|
4,346
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4,346
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Deposits
and
other assets
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|
70
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|
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|
105
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|
Deferred
taxes, net
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|
1,291
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|
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|
337
|
|
|
|
|
|
|
|
|
|
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Total
other
assets
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|
5,707
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|
4,788
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|
|
|
|
|
|
|
|
|
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Total
assets
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$
|
105,889
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$
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145,079
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|
|
|
|
|
|
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LIABILITIES
AND STOCKHOLDERS' EQUITY
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Current
liabilities:
|
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|
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Accounts
payable
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|
$
|
7,693
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$
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7,962
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|
Accrued
expenses
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8,341
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10,542
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Dividends
payable
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1,075
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|
|
|
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Income
taxes
payable
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2,254
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2,480
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|
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|
|
|
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|
|
|
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Total
current
liabilities
|
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|
19,363
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20,984
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Long-term
liabilites:
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Dividends
payable
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1,224
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|
—
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Other
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|
487
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|
|
|
—
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|
|
|
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|
|
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Total
long-term liabilites
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1,711
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|
|
—
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Commitments
and contingencies (Note 8)
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Stockholders'
equity:
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Preferred
stock, par value $.01 per share; shares authorized-10,000,000; no
shares
issued and outstanding
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|
—
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—
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Class
A
common stock, par value $.01 per share; shares authorized-50,000,000;
shares issued and outstanding-11,658,111 and 11,664,284
|
|
|
116
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|
116
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|
Class
B
common stock, par value $.01 per share; shares authorized-25,000,000;
shares issued and outstanding-14,973,148
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|
|
150
|
|
|
|
150
|
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|
Additional
paid-in capital
|
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|
84,377
|
|
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92,640
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Retained
earnings
|
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|
172
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|
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|
31,189
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|
|
|
|
|
|
|
|
|
|
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Total
stockholders' equity
|
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|
84,815
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|
|
124,095
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|
|
|
|
|
|
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|
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Total
liabilities and stockholders' equity
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|
$
|
105,889
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|
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$
|
145,079
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|
See
notes to
condensed consolidated financial statements.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(in
thousands,
except share data)
(unaudited)
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|
Three
Months
Ended
August
31,
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|
2007
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|
2006
|
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Net
sales
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$
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40,727
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$
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45,652
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|
|
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Cost
of goods
sold
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24,306
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28,536
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|
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Gross
profit
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16,421
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17,116
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Operating
expenses:
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|
|
|
|
|
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Selling
and
marketing
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|
6,756
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|
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|
8,289
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|
General
and
administrative
|
|
|
6,787
|
|
|
|
3,699
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|
Research
and
development
|
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|
1,026
|
|
|
|
816
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|
|
Reimbursement
of import costs
|
|
|
—
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|
(20
|
)
|
|
|
|
|
|
|
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|
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Total
operating expenses
|
|
|
14,569
|
|
|
|
12,784
|
|
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|
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|
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Income
from
operations
|
|
|
1,852
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|
4,332
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|
|
|
|
|
|
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Other
income
(expense):
|
|
|
|
|
|
|
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Interest
income
|
|
|
821
|
|
|
|
743
|
|
|
Interest
expense
|
|
|
(27
|
)
|
|
|
(58
|
)
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|
Other,
net
|
|
|
4
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
other
income, net
|
|
|
798
|
|
|
|
685
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before
income taxes
|
|
|
2,650
|
|
|
|
5,017
|
|
|
Income
tax
expense
|
|
|
1,002
|
|
|
|
1,754
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
1,648
|
|
|
$
|
3,263
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
26,622,423
|
|
|
|
26,482,198
|
|
|
Diluted
|
|
|
27,426,939
|
|
|
|
27,314,718
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
per share-basic and diluted
|
|
$
|
0.06
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
$
|
1,648
|
|
|
$
|
3,263
|
|
See
notes to
condensed consolidated financial statements.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
thousands)
(unaudited)
|
|
|
Three
Months
Ended
August
31,
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Cash
flows
from operating activities:
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
1,648
|
|
|
$
|
3,263
|
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Deferred
taxes
|
|
|
(264
|
)
|
|
|
(62
|
)
|
|
Depreciation
and amortization
|
|
|
886
|
|
|
|
779
|
|
|
Amortization
of financing fees
|
|
|
4
|
|
|
|
14
|
|
|
Stock-based
compensation
|
|
|
3,937
|
|
|
|
846
|
|
|
Excess
tax
benefit from equity instruments
|
|
|
(262
|
)
|
|
|
(148
|
)
|
|
Other
|
|
|
2
|
|
|
|
2
|
|
|
Changes
in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
(300
|
)
|
|
|
(2,209
|
)
|
|
Inventories
|
|
|
(1,777
|
)
|
|
|
(976
|
)
|
|
Prepaid
expenses and other
|
|
|
808
|
|
|
|
1,536
|
|
|
Deposits
and
other assets
|
|
|
31
|
|
|
|
(139
|
)
|
|
Accounts
payable
|
|
|
67
|
|
|
|
(2,117
|
)
|
|
Other
current
liabilities
|
|
|
(1,850
|
)
|
|
|
933
|
|
|
Other
long-term liabilites
|
|
|
10
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash
provided by operating activities
|
|
|
2,940
|
|
|
|
1,722
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows
from investing activities:
|
|
|
|
|
|
|
|
|
|
Purchase
of
property and equipment
|
|
|
(1,664
|
)
|
|
|
(1,183
|
)
|
|
Purchase
of
available-for-sale securities
|
|
|
(6,040
|
)
|
|
|
(7,255
|
)
|
|
Proceeds
from
sale of available-for-sale securities
|
|
|
27,852
|
|
|
|
3,807
|
|
|
Collection
of
notes receivable
|
|
|
—
|
|
|
|
150
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash
provided by (used in) investing activities
|
|
|
20,148
|
|
|
|
(4,481
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows
from financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds
from
stock options exercised
|
|
|
34
|
|
|
|
35
|
|
|
Purchase
and
retirement of common stock
|
|
|
(120
|
)
|
|
|
(170
|
)
|
|
Excess
tax
benefit from equity instruments
|
|
|
262
|
|
|
|
148
|
|
|
Dividends
paid
|
|
|
(42,618
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash
provided by (used in) financing activities
|
|
|
(42,442
|
)
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect
of
exchange rate changes on cash
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Decrease
in
cash and cash equivalents
|
|
|
(19,354
|
)
|
|
|
(2,748
|
)
|
|
Cash
and cash
equivalents, beginning of period
|
|
|
34,463
|
|
|
|
24,899
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash
equivalents, end of period
|
|
$
|
15,109
|
|
|
$
|
22,151
|
|
See
notes to
condensed consolidated financial statements.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars
in
thousands, except share data)
The
accompanying
unaudited interim condensed consolidated financial statements (“interim
financial statements”) of Schiff Nutrition International, Inc. and it’s
subsidiaries (the “Company,” “we,” “us” and “our”) do not include all
disclosures provided in our annual consolidated financial statements. These
interim financial statements should be read in conjunction with the consolidated
financial statements and the footnotes thereto contained in our Annual Report
on
Form 10-K for the year ended May 31, 2007 as filed with the Securities
and Exchange Commission (“SEC”). The May 31, 2007 condensed consolidated
balance sheet, included herein, was derived from our audited financial
statements, but all disclosures required by generally accepted accounting
principles are not provided in the accompanying footnotes. We are a
majority-owned subsidiary of Weider Health and Fitness (“WHF”).
In
our opinion, the
accompanying interim financial statements contain all material adjustments
necessary for a fair presentation of our financial position and results of
operations. Results of operations and cash flows for any interim period are
not
necessarily indicative of the results of operations and cash flows that we
may
achieve for any other interim period or for the entire year.
In
July 2007, our
Board of Directors approved a $1.50 per share special cash dividend, which
was
paid on August 13, 2007 to shareholders of record at the close of business
on July 31, 2007. In connection with the declaration of the special dividend,
our Board of Directors approved certain dividend equivalent rights, allowing
holders (employees and directors) of certain equity awards, including stock
options and restricted stock units, to receive cash dividends on each share
of
common stock underlying the stock options and restricted stock units. In
aggregate, at July 31, 2007, the record date, the Company had outstanding
approximately 29.9 million shares of common stock (including shares of common
stock underlying equity awards subject to dividend equivalent rights), including
approximately 26.6 million shares of outstanding Class A and Class B common
stock, approximately 1.8 million shares of Class A common stock underlying
outstanding stock options and approximately 1.5 million shares of Class A common
stock underlying outstanding restricted stock units. The aggregate amount of
the
special dividend was approximately $44,900, presuming 100% vesting of shares
underlying stock awards (approximately 54% had vested as of August 31, 2007).
To
the extent outstanding stock options and restricted stock units were unvested
at
August 31, 2007, the $1.50 per share dividend was not, and will not be,
distributed until after such equity awards become vested.
In
connection with
the dividends paid or payable on the dividend equivalent rights received by
holders (employees and directors) of stock options and certain restricted stock
units, we recognized a non-cash compensation expense, and a corresponding
increase in additional paid-in capital, of $3,003 during the fiscal 2008 first
quarter. Subject to future vesting of these equity awards, additional
compensation expense of approximately $2,000, together with a corresponding
increase in additional paid-in capital, will be recognized ratably over the
remaining three quarters of fiscal 2008.
On
March 17, 2006,
the Compensation Committee of our Board of Directors, pursuant to our 2004
Incentive Award Plan, approved the adoption of a long term incentive plan
involving the grant of performance based restricted stock units (the “Units”).
On March 20, 2006, a total of 1,437,200 Units were issued to certain officers
and employees. Each Unit represents the right to receive one share of the
Company’s Class A common stock, subject to certain performance based vesting
requirements. The Units will vest, if at all, based on the Company’s performance
in relation to certain specified pre-established performance criteria targets
over a performance period beginning on January 1, 2006 and expiring on
May 31, 2008. The performance criteria upon which the Units may vest is
based upon a “Business Value Created” formula, which is comprised of two
performance criteria components: operating earnings and return on net capital.
The grant date fair value of each Unit was $5.11. We recognize compensation
expense over the performance period based on a periodic assessment of the
probability that the performance criteria will be achieved. For the fiscal
2008
and 2007 first quarters, respectively, we recognized compensation expense of
$812 and $661, and the related tax benefit was approximately $324 and $231.
At
August 31, 2007, total unrecognized compensation expense, based on our
assessment of the probability that the performance criteria will be achieved,
was approximately $2,435, which is expected to be recognized over a weighted
average period of approximately 0.8 years.
Effective
August
16, 2002, we issued 640,000 restricted shares of Class A common stock to certain
officers and employees. The aggregate grant date fair value of these restricted
shares was approximately $1,038, which we expensed on a straight-line basis
over
the accompanying five-year vesting period. During the fiscal 2008 and 2007
first
quarters, respectively, 83,800 and 86,200 restricted shares vested and,
concurrent with the annual vesting, we reacquired (and ultimately retired)
22,676 and 23,443 shares from certain employees in connection with the payment
of individual income taxes. As of August 31, 2007, of the 640,000 restricted
shares originally issued, 528,800 shares ultimately vested, from
which 103,338
shares were reacquired (and retired) in connection with the payment of
individual income taxes, and 111,200 shares were
cancelled.
Property
and
equipment additions included in accounts payable amounted to $336 and $128,
respectively, for the fiscal 2008 and 2007 first quarters.
SCHIFF
NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES
TO
CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
–
(continued)
(dollars
in
thousands, except share data)
Available-for-sale
securities consist primarily of auction rate securities, long-term variable
rate
bonds tied to short-term interest rates that are reset through a “dutch auction”
process which occurs every 7 to 35 days, and other variable rate debt and equity
securities.
Available-for-sale
securities at fair value, which approximates unamortized cost, consist of the
following:
|
|
|
August
31,
2007
|
|
|
May
31,
2007
|
|
|
|
|
|
|
|
|
|
|
Federal,
state and municipal debt securities
|
|
$
|
17,872
|
|
|
$
|
32,529
|
|
|
Corporate
debt securities
|
|
|
2,583
|
|
|
|
9,038
|
|
|
Corporate
equity securities
|
|
|
3,550
|
|
|
|
4,250
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
24,005
|
|
|
$
|
45,817
|
|
Despite
the
long-term nature of these auction rate securities’ stated contractual
maturities, there is a ready liquid market for these securities based on the
interest reset mechanism. These securities are classified as current assets
in
the accompanying consolidated balance sheets because we have the ability and
intent to sell these securities as necessary to meet any current liquidity
needs. Contractual maturities of debt securities are as follows at August 31,
2007:
|
Less
than one
year
|
|
$
|
4,010
|
|
|
One
to five
years
|
|
|
600
|
|
|
Over
five
years
|
|
|
15,845
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
20,455
|
|
The
amount of
unrealized gains or losses for the first quarter of fiscal 2008 and 2007 was
not
significant.
Receivables,
net,
consist of the following:
|
|
|
August
31,
2007
|
|
|
May
31,
2007
|
|
|
|
|
|
|
|
|
|
|
Trade
accounts
|
|
$
|
19,820
|
|
|
$
|
19,467
|
|
|
Other
|
|
|
282
|
|
|
|
426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,102
|
|
|
|
19,893
|
|
|
Less
allowances for doubtful accounts, sales returns and
discounts
|
|
|
(2,070
|
)
|
|
|
(2,161
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
18,032
|
|
|
$
|
17,732
|
|
Inventories
consist
of the following:
|
|
|
August
31,
2007
|
|
|
May
31,
2007
|
|
|
|
|
|
|
|
|
|
|
Raw
materials
|
|
$
|
8,753
|
|
|
$
|
8,960
|
|
|
Work
in
process
|
|
|
1,942
|
|
|
|
2,340
|
|
|
Finished
goods
|
|
|
14,780
|
|
|
|
12,398
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
25,475
|
|
|
$
|
23,698
|
|
SCHIFF
NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES
TO
CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
–
(continued)
(dollars
in
thousands, except share data)
Goodwill
and
intangible assets, net, consist of the following:
|
|
|
August
31,
2007
|
|
|
May
31,
2007
|
|
|
|
|
Gross
Carrying Amount
|
|
|
Accumul.
Amortiz.
|
|
|
Net
Book
Value
|
|
|
Gross
Carrying Amount
|
|
|
Accumul.
Amortiz.
|
|
|
Net
Book
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
$
|
4,346
|
|
|
$
|
—
|
|
|
$
|
4,346
|
|
|
$
|
4,346
|
|
|
$
|
—
|
|
|
$
|
4,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
assets-patents and trademarks
|
|
$
|
2,090
|
|
|
$
|
(2,090
|
)
|
|
$
|
—
|
|
|
$
|
2,090
|
|
|
$
|
(2,090
|
)
|
|
$
|
—
|
|
Estimated
amortization expense, assuming no changes in our intangible assets, is zero
for
all future fiscal years.
The
carrying amount
of goodwill did not change during the fiscal 2008 first quarter or during fiscal
2007.
Accrued
expenses
consist of the following:
|
|
|
August
31, 2007
|
|
|
May
31,
2007
|
|
|
|
|
|
|
|
|
|
|
Accrued
personnel related costs
|
|
$
|
1,616
|
|
|
$
|
3,495
|
|
|
Accrued
promotional costs
|
|
|
4,469
|
|
|
|
4,642
|
|
|
Other
|
|
|
2,256
|
|
|
|
2,405
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
8,341
|
|
|
$
|
10,542
|
|
The
combined net
sales to our two largest customers are significant. At August 31, 2007, and
May
31, 2007, respectively, amounts due from Customer A represented approximately
32% and 40% and amounts due from Customer B represented approximately 33% and
24% of total trade accounts receivable. For the first quarter of fiscal 2008
and
2007, respectively, Customer A accounted for approximately 39% and 31% and
Customer B accounted for approximately 34% and 42% of total net sales. Net
sales
of our Schiff® Move Free® brand accounted for approximately 51% and 53%,
respectively, of total net sales for the fiscal 2008 and 2007 first
quarters.
From
time to time,
we are involved in claims, legal actions and governmental proceedings that
arise
from our business operations. Although ultimate liability cannot be determined
at the present time, based on available information, we do not believe the
resolution of these matters will have a material adverse effect on our results
of operations and financial condition. However, it is possible that future
litigation could arise, or that developments could occur in existing litigation,
that could have a material adverse effect on our results of operations and
financial condition.
In
September 2006,
the SEC issued Staff Accounting Bulletin (“SAB”) No.
108,
“Financial Statements — Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements.” SAB No.
108 provides interpretive guidance on how the effects of prior-year uncorrected
misstatements should be considered when quantifying misstatements in the current
year financial statements. SAB No. 108 requires registrants to quantify
misstatements using both the income statement and balance sheet approach and
evaluate whether either approach results in a misstatement that, when all
relevant quantitative and qualitative factors are considered, is material.
SAB
No.
108 is effective for annual
financial statements covering the first fiscal year ending after November 15,
2006. The adoption of SAB No. 108 did not have a material impact on our results
of operations and financial condition.
SCHIFF
NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES
TO
CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS –
(continued)
(dollars
in
thousands, except share data)
In
July 2006, the
Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48,
“Accounting for Uncertainty in Income Taxes,” (“FIN No. 48”), which establishes
guidelines for recognizing, measuring and disclosing uncertainties relating
to
tax benefits reflected in an enterprise’s financial statements. FIN No. 48
establishes a “more-likely-than-not” recognition threshold that must be met
before a tax benefit, relative to a tax position in which the enterprise may
be
uncertain as to whether it will ultimately be sustained as filed in its tax
return, can be recognized in the financial statements. We were required to
apply
the provisions of FIN No. 48 on June 1, 2007. The cumulative effect of adopting
FIN No. 48 resulted in a decrease in retained earnings of approximately
$88. The total amount of unrecognized tax benefits at June 1, 2007 was $473,
which includes unrecognized tax benefits of $88 that, if recognized, would
favorably affect the effective tax rate. The remaining unrecognized tax benefits
relate to temporary items that would not affect the annual effective tax rate.
We recognize any interest and penalties accrued related to unrecognized tax
benefits in income tax expense. We had approximately $29 for the payment of
interest accrued in the balance sheet at June 1, 2007. We do not believe it
is
reasonably possible that we will have any significant increases or decreases
to
the liability for unrecognized tax benefits within the next twelve months.
We
file income tax returns in the U.S. federal jurisdiction, and in various state
and local jurisdictions. We are no longer subject to U.S. federal income tax
examinations for years prior to fiscal 2003 and we are no longer subject to
state and local income tax examinations for years prior to fiscal
2002.
In
September 2006,
the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 157,
"Fair Value Measurements," that defines fair value, establishes a framework
for
measuring fair value, and expands disclosures about fair value measurements.
SFAS No. 157 retains the exchange price notion in defining fair value and
clarifies that the exchange price is the price in an orderly transaction between
market participants to sell the asset or transfer the liability in the market
in
which the reporting entity would transact for the asset or liability. The
definition focuses on the price that would be received to sell the asset or
paid
to transfer the liability (an exit price), not the price that would be paid
to
acquire the asset or received to assume the liability (an entry price). SFAS
No.
157 expands disclosure about the use of fair value to measure assets and
liabilities in interim and annual periods subsequent to initial recognition.
The
additional disclosure focuses on the inputs used to measure fair value and
the
effect of the measurements on net income for the reporting period. The fair
value measurement and disclosure provisions of SFAS No. 157 are effective for
financial statements issued for fiscal years beginning after November 15, 2007.
We have not yet determined the impact of adopting SFAS No. 157 on our results
of
operations and financial condition.
In
February 2007,
the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and
Financial Liabilities,” which permits entities to choose to measure many
financial instruments and certain other items at fair value that are not
currently required to be measured at fair value. SFAS No. 159 also establishes
presentation and disclosure requirements designed to facilitate comparisons
between entities that choose different measurement attributes for similar types
of assets and liabilities. The measurement and disclosure provisions of SFAS
No.
159 are effective as of the beginning of an entity’s first fiscal year that
begins after November 15, 2007. We have not yet determined the impact of
adopting SFAS No. 159 on our results of operations and financial
condition.
|
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
The
following
discussion and analysis should be read in conjunction with the condensed
consolidated financial statements, including the notes thereto, appearing
elsewhere in this Quarterly Report on Form 10-Q and other reports filed with
the
SEC. This Form 10-Q contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These statements relate to our future plans,
objectives, expectations, intentions and financial performance and the
assumptions that underlie these statements. These statements involve known
and
unknown risks, uncertainties and other factors that may cause actual results,
level of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed
or
implied by these statements. Important factors that may cause results to differ
from these forward-looking statements include, but are not limited to, the
factors indicated from time to time in our SEC reports, copies of which are
available upon request from our investor relations group or which may be
obtained at the SEC’s website (
www.sec.gov
). We disclaim any obligation
to update any forward-looking statements whether as a result of new information,
future events or otherwise.
Schiff
Nutrition
International, Inc. develops, manufactures, markets and distributes branded
and
private label vitamins, nutritional supplements and nutrition bars in the United
States and throughout the world. We offer a broad range of capsules, tablets
and
nutrition bars. Our portfolio of recognized brands, including Schiff and Tiger’s
Milk®, is marketed primarily through the mass market (including club) and, to a
lesser extent, health food store distribution channels.
During
fiscal 2007
and the fiscal 2008 first quarter, we continued to provide selling and marketing
support intended both to defend our Move Free business against competition,
including private label, and ultimately to increase our market share in the
joint care product category. The introduction of Move Free Advanced into
substantially all of our significant retail accounts during the second half
of
fiscal 2006 was substantially completed in the fiscal 2007 first quarter. During
fiscal 2007 and continuing into fiscal 2008, we are attempting to increase
our
distribution of our joint care products in international markets. Subject to
the
impact of our Move Free Advanced marketing initiatives and competitive joint
care product category pricing pressures, including private label, and the
success of increasing our distribution in international markets, we believe
our
fiscal 2008 net sales will be relatively constant, as compared to fiscal 2007
net sales. We believe any incremental sales volume in fiscal 2008 for our
existing business may be offset by incremental promotional
activity.
Our
operating
results for the fiscal 2007 first quarter were impacted by profit margin
volatility due to several factors, including significant raw material pricing
fluctuations, particularly in the joint care product category, and a strong
competitive environment. During fiscal 2006, joint care product category raw
material prices, which increased significantly during fiscal 2005, returned
to
pre-fiscal 2005 levels. However, our gross profit percentage for fiscal 2007
was
impacted by previous raw material purchase commitments.
Our
operating
results for the fiscal 2008 first quarter were impacted by the declaration
of a
special cash dividend in July 2007. In connection with the declaration of the
special dividend, our Board of Directors approved certain dividend equivalent
rights allowing holders (employees and directors) of certain equity awards,
including stock options and restricted stock units, to receive cash dividends
on
each share of common stock underlying the stock options and restricted stock
units. As a result, we recognized a non-cash compensation expense, and a
corresponding increase in additional paid-in capital, of approximately $3.0
million during the fiscal 2008 first quarter. Subject to future vesting of
these
equity awards, additional compensation expense of approximately $2.0 million,
together with a corresponding increase in additional paid-in capital, will
be
recognized ratably over the remaining three quarters of fiscal
2008.
Factors
affecting
our historical results, including the previous implementation of strategic
initiatives as well as continuing refinement of our growth and business
strategies, are ongoing considerations and processes. While the focus of these
considerations is to improve future profitability, we cannot assure you that
our
decisions relating to these initiatives will not adversely impact our results
of
operations and financial condition.
Our
principal
executive offices are located at 2002 South 5070 West, Salt Lake City, Utah
84104, and our telephone number is (801) 975-5000.
Three
Months
Ended August 31, 2007 Compared to Three Months
Ended
August
31, 2006
The
following
tables show comparative results for selected items as reported and as a
percentage of net sales for the three months ended August 31, (dollars in
thousands):
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
40,727
|
|
|
|
100.0
|
%
|
|
$
|
45,652
|
|
|
|
100.0
|
%
|
|
Cost
of goods
sold
|
|
|
24,306
|
|
|
|
59.7
|
|
|
|
28,536
|
|
|
|
62.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
16,421
|
|
|
|
40.3
|
|
|
|
17,116
|
|
|
|
37.5
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
and
marketing
|
|
|
6,756
|
|
|
|
16.6
|
|
|
|
8,289
|
|
|
|
18.1
|
|
|
General
and
administrative
|
|
|
6,787
|
|
|
|
16.6
|
|
|
|
3,699
|
|
|
|
8.1
|
|
|
Research
and
development
|
|
|
1,026
|
|
|
|
2.5
|
|
|
|
816
|
|
|
|
1.8
|
|
|
Reimbursement
of import costs
|
|
|
—
|
|
|
|
—
|
|
|
|
(20
|
)
|
|
|
—
|
|
|
Total
operating expenses
|
|
|
14,569
|
|
|
|
35.7
|
|
|
|
12,784
|
|
|
|
28.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from
operations
|
|
|
1,852
|
|
|
|
4.6
|
|
|
|
4,332
|
|
|
|
9.5
|
|
|
Other
income,
net
|
|
|
798
|
|
|
|
2.0
|
|
|
|
685
|
|
|
|
1.5
|
|
|
Income
tax
expense
|
|
|
(1,002
|
)
|
|
|
(2.5
|
)
|
|
|
(1,754
|
)
|
|
|
(3.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
1,648
|
|
|
|
4.1
|
%
|
|
$
|
3,263
|
|
|
|
7.1
|
%
|
Net
Sales.
Net sales decreased approximately 10.8% to $40.7 million for the fiscal
2008 first quarter, from $45.7 million for the fiscal 2007 first quarter.
Overall, the decrease in net sales was primarily attributable to a decrease
in
branded joint care category product sales.
Aggregate
branded
net sales decreased approximately 13.0% to $32.3 million for the fiscal 2008
first quarter, from $37.1 million for the fiscal 2007 first quarter. The
decrease was primarily due to a decrease in branded joint care product sales
volume of approximately $6.1 million, or 14.3%, which was partially offset
by a
$0.5 million decrease in aggregate branded sales promotional incentives
classified as sales price reductions and a $0.8 million decrease in actual
and
potential product returns associated with branded sales. Classification of
promotional costs as a sales reduction is required when the promotion
effectively represents a price reduction. The decrease in branded joint care
product sales volume was primarily attributable to promotional timing
considerations. Move Free net sales were $20.8 million and $24.2 million,
respectively, for the fiscal 2008 and 2007 first quarters. Subject to the impact
of our marketing initiatives and joint care product category pricing pressures,
we believe the fiscal 2008 first quarter sales volume decline will be recovered
during the fiscal 2008 second and third quarters.
Private
label sales
remained relatively constant at $8.4 million and $8.5 million, respectively,
for
the fiscal 2008 and 2007 first quarters.
Gross
Profit.
Gross profit decreased approximately 4.1% to $16.4 million for
the fiscal 2008 first quarter, from $17.1 million for the fiscal 2007 first
quarter, primarily due to a decrease in net sales. Gross profit, as a percentage
of net sales, was 40.3% for the fiscal 2008 first quarter, compared to 37.5%
for
the fiscal 2007 first quarter. The increase in gross profit percentage was
primarily due to an approximate $3.1 million decrease in joint care product
raw
material costs.
Operating
Expenses.
Operating expenses increased approximately 14.0% to $14.6
million for the fiscal 2008 first quarter, from $12.8 million for the fiscal
2007 first quarter. Operating expenses, as a percentage of net sales, were
35.7%
and 28.0%, respectively, for the fiscal 2008 and 2007 first quarters. The
increase in operating expenses resulted primarily from the fiscal 2008 first
quarter recognition of approximately $3.0 million in incremental compensation
expense for the special dividend, primarily included in general and
administrative expenses, and moderate increases in other general and
administrative and research and development expenses, partially offset by a
decrease in selling and marketing expenses. The special dividend compensation
expense represents a non-cash charge for dividend equivalent rights received
by
holders (employees and directors) of certain equity awards, including stock
options and restricted stock units. Subject to future vesting of these equity
awards, additional compensation expense of approximately $2.0 million will
be
recognized ratably over the remaining three quarters of fiscal
2008.
Selling
and
marketing expenses, including sales, marketing, advertising, freight and other
costs, decreased to approximately $6.8 million for the fiscal 2008 first
quarter, from $8.3 million for the fiscal 2007 first quarter. The decrease
was
primarily due to a shift in the timing of certain customer promotions from
the
first quarter to the second and third quarters of fiscal 2008, and a $0.8
million reduction in advertising costs, partially offset by the recognition
of
an approximate $0.2 million in incremental compensation expense for the dividend
equivalent rights received by holders (employees and directors) of certain
equity awards in conjunction with the special dividend.
General
and
administrative expenses increased to approximately $6.8 million for the fiscal
2008 first quarter, from approximately $3.7 million for the fiscal 2007 first
quarter, primarily due to the fiscal 2008 first quarter recognition of
approximately $2.8 million in incremental compensation expense for the dividend
equivalent rights received by holders (employees and directors) of certain
equity awards in conjunction with the special dividend and the recognition
of
approximately $0.3 million for the favorable litigation settlement in the fiscal
2007 first quarter.
Research
and
development costs increased to approximately $1.0 million for the fiscal 2008
first quarter, from $0.8 million for the fiscal 2007 first quarter, primarily
due to an increase in expenses associated with product research.
Other
Income/Expense.
Other income/expense, net, was $0.8 million income for
the fiscal 2008 first quarter, compared to $0.7 million income for the fiscal
2007 first quarter. The increase was primarily due to the recognition of
incremental interest income resulting from an increase in cash and
available-for-sale securities. Interest income for future fiscal 2008 quarters
will reflect the impact of the special dividend which was funded from cash
and
liquidation of available-for-sale securities.
Provision
for Income Taxes.
Provision for income taxes was $1.0 million for the
fiscal 2008 first quarter, compared to $1.8 million for the fiscal 2007 first
quarter. The decrease primarily resulted from a reduction in pre-tax income,
partially offset by an increase in our effective tax rate primarily due to
an
increase in certain non-deductible officer compensation resulting from the
special dividend. The fiscal 2008 first quarter tax rate was 37.8%, compared
to
the fiscal 2007 first quarter tax rate of 35.0%.
Working
capital
decreased approximately $38.9 million to $66.0 million at August 31, 2007,
from
$104.9 million at May 31, 2007, primarily due to a decrease of approximately
$41.2 million in cash and available-for-sale securities due to the first quarter
payment or accrual of the special dividend. Inventories increased approximately
$1.8 million, which reflects an increase in finished goods for fiscal 2008
second quarter promotions. Prepaid expenses decreased by approximately $0.8
million, primarily due to a reduction in prepaid insurance as certain annual
insurance policies were renewed at September 1, 2007. Current
liabilites decreased approximately $2.2 million primarily due to the
payment of accrued management annual incentive costs, partially offset by
dividends payable on non-vested stock options and restricted stock
units.
On
June 30, 2004,
we entered into, through our wholly-owned direct operating subsidiary Schiff
Nutrition Group, Inc. (“SNG”), a $25.0 million revolving credit facility (the
“Credit Facility”) with KeyBank National Association, as Agent. In August 2006,
we extended the maturity of the Credit Facility from June 30, 2007 to June
30,
2009. The Credit Facility contains customary terms and conditions, including,
among others, financial covenants that may limit our ability to pay dividends
on
our common stock and certain other restrictions. Our obligations under the
Credit Facility are secured by a first priority security interest on all of
the
capital stock of SNG. If our total coverage ratio exceeds a certain limit,
our
obligations will also be secured by a first priority security interest in all
of
our domestic assets. In the event we exceed certain other ratio limits, we
will
be subject to a borrowing base and will be able to borrow up to a lesser of
$25.0 million or the sum of (i) 85% of eligible accounts receivable and (ii)
65%
of eligible inventory. Borrowings under the Credit Facility bear interest at
floating rates based on the KeyBank National Association prime rate or the
Federal Funds effective rate. The Credit Facility can be used to fund our normal
working capital and capital expenditure requirements, with availability to
fund
certain permitted strategic transactions. At August 31, 2007, there were no
amounts outstanding and $25.0 million was available for borrowing under the
Credit Facility.
In
July 2007, our
Board of Directors approved a $1.50 per share special cash dividend, which
was
paid on August 13, 2007 to shareholders of record at the close of business
on July 31, 2007. In connection with the declaration of the special dividend,
our Board of Directors approved certain dividend equivalent rights, allowing
holders (employees and directors) of certain equity awards, including stock
options and restricted stock units, to receive cash dividends on each share
of
common stock underlying the stock options and restricted stock units. In
aggregate, at July 31, 2007, the record date, the Company had outstanding
approximately 29.9 million shares of common stock (including shares of common
stock underlying equity awards subject to dividend equivalent rights), including
approximately 26.6 million shares of
outstanding
Class A
and Class B common stock, approximately 1.8 million shares of Class A common
stock underlying outstanding stock options and approximately 1.5 million shares
of Class A common stock underlying outstanding restricted stock units. The
aggregate amount of the special dividend was approximately $44.9 million,
presuming 100% vesting of shares underlying stock awards (approximately 54%
had
vested as of August 31, 2007). To the extent outstanding stock options and
restricted stock units were unvested at August 31, 2007, the $1.50 per share
dividend was not, and will not be, distributed until after such equity awards
become vested.
The
special
dividend was funded from cash and liquidation of available-for-sale securities.
Approximately $42.6 million of the distribution occurred in August 2007, and
the
remaining amount will be distributed, if at all, upon vesting of the stock
options and upon issuance of the shares underlying restricted stock
units.
We
believe that our
cash, cash flows from operations and the financing sources discussed above
will
be sufficient to meet our normal cash operating requirements during the next
twelve months. However, we continue to review opportunities to acquire or invest
in companies, product rights and other investments that are compatible with
or
complimentary to our existing business. We could use cash and financing sources
discussed herein, or financing sources that subsequently become available,
to
fund acquisitions or investments. In addition, we may consider issuing
additional debt or equity securities in the future to fund potential
acquisitions or growth, or to refinance existing debt. If a material
acquisition, divestiture or investment is completed, our operating results
and
financial condition could change materially in future periods. However, no
assurance can be given that additional funds will be available on satisfactory
terms, or at all, to fund such activities.
Our
Board of
Directors will determine dividend policy in the future based upon, among other
factors, results of operations, financial condition, contractual restrictions
and other factors deemed relevant at the time. In addition, our credit facility
contains certain customary financial covenants that may limit our ability to
pay
dividends on our common stock. We can give no assurance that we will pay
dividends in the future.
A
summary of our
outstanding contractual obligations at August 31, 2007 is as follows (in
thousands):
|
|
|
Total
Amounts
Committed
|
|
|
Less
than
1
Year
|
|
|
1-3
Years
|
|
|
3-5
Years
|
|
|
After
5
Years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
leases
|
|
$
|
13,245
|
|
|
$
|
2,538
|
|
|
$
|
4,734
|
|
|
$
|
4,625
|
|
|
$
|
1,348
|
|
|
Purchase
obligations
(1)
|
|
|
13,817
|
|
|
|
13,817
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total
obligations
|
|
$
|
27,062
|
|
|
$
|
16,355
|
|
|
$
|
4,734
|
|
|
$
|
4,625
|
|
|
$
|
1,348
|
|
|
|
(1)
|
Purchase
obligations consist primarily of open purchase orders for goods and
services, including primarily raw materials, packaging and outsourced
contract manufacturing commitments.
|
Critical
Accounting
Policies and
Estimates
In
preparing our
condensed consolidated financial statements, we make assumptions, estimates
and
judgments that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the condensed
consolidated financial statements and the reported amounts of net sales and
expenses during the reported periods. We periodically evaluate our estimates
and
judgments related to the valuation of inventories and intangible assets,
allowances for doubtful accounts, notes receivable, sales returns and discounts,
uncertainties related to certain tax benefits, valuation of deferred tax assets,
valuation of share-based payments and recoverability of long-lived assets.
Note
1 of Notes to the Consolidated Financial Statements contained in our Annual
Report on Form 10-K for the year ended May 31, 2007, filed with the SEC,
describes the accounting policies governing each of these matters. Our estimates
are based on historical experience and on our future expectations that are
believed to be reasonable. The combination of these factors forms the basis
for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from our
current estimates and those differences may be material.
We
believe the
following accounting policies affect some of our more significant estimates
and
judgments used in preparation of our condensed consolidated financial
statements:
|
·
|
We
provide
for inventory valuation adjustments for estimated obsolescence or
unmarketable inventory equal to the difference between the cost of
inventory and the estimated market value based upon assumptions about
future demand, market conditions and/or liquidation value. For the
fiscal
2008 and 2007 first quarters, inventory
valuation
adjustments resulted in a decrease in our gross profit and operating
income of approximately $0.1 million and $0.2 million, respectively.
If
actual demand and/or market conditions are less favorable than those
projected by management, additional inventory write-downs would be
required.
|
|
·
|
We
maintain
allowances for doubtful accounts, sales returns and discounts for
estimated losses resulting from known customer exposures, including
among
others, product returns, inability to make payments and expected
utilization of offered discounts. Changes in our allowances for doubtful
accounts, sales returns and discounts did not significantly impact
our
gross profit and operating income for the fiscal 2008 first quarter.
Changes in these allowances resulted in a decrease in our gross
profit and operating income of approximately $0.4 million for the
fiscal
2007 first quarter. At August 31, 2007 and May 31, 2007, our allowances
for doubtful accounts, sales returns and discounts amounted to
approximately $2.1 million and $2.2 million, respectively. Actual
results
may differ from our current estimates, resulting in adjustment of
the
respective allowance(s).
|
|
·
|
We
recognize
tax benefits relative to certain tax positions in which we may be
uncertain as to whether that tax position will ultimately be sustained
as
filed in our tax return. The recognition or derecognition of these
tax
benefits is subject to periodic evaluation of the sustainability
of the
tax position based upon changes in facts, circumstances or available
information. Changes in the recognition of these tax benefits did
not
significantly impact net income for the fiscal 2008 and 2007 first
quarters.
|
|
·
|
We
currently
have deferred tax assets resulting from temporary differences between
financial and income tax reporting. These deferred tax assets are
subject
to periodic recoverability assessments. The realization of these
deferred
tax assets is primarily dependent on future operating results. Changes
in
these valuation allowances did not significantly impact net income
for the
fiscal 2008 and 2007 first quarters. At August 31, 2007 and May 31,
2007,
deferred tax asset valuation allowances were
nil.
|
|
·
|
We
recognize
compensation expense for certain performance based equity instrument
awards (share-based payments) over the performance period based on
a
periodic assessment of the probability that the performance criteria
will
be achieved. Our periodic assessment of the profitability that the
performance criteria will be achieved considers such factors as historical
financial results and future financial expectations, including an
analysis
of sales trends and operating margins; as well as changes in the
nutritional supplements industry and competitive environment. For
the
fiscal 2008 and 2007 first quarters, we recognized compensation expense
related to these awards of approximately $0.8 and $0.7 million,
respectively. At August 31, 2007, total unrecognized compensation
expense,
based on our assessment of the probability that the performance criteria
will be achieved, was approximately $2.5
million.
|
|
·
|
We
have
certain intangible assets, primarily consisting of goodwill which
are
tested for impairment at least annually. The determination of whether
or
not goodwill is impaired involves significant judgment. Changes in
strategy or market conditions could significantly impact our judgment
and
require adjustment to the recorded goodwill
balance.
|
Inflation
affects
the cost of raw materials, goods and services we use. In recent years, inflation
has been modest. We seek to mitigate the adverse effects of inflation primarily
through improved productivity, strategic buying initiatives, and cost
containment programs. However, the nutritional supplement industry competitive
environment limits our ability to recover higher costs resulting from inflation
by raising prices. See further discussion of raw material pricing matters in
the
“General” and “Results of Operations” sections above.
Our
business is not
inherently seasonal; however, we experience fluctuations in sales resulting
from
timing of marketing and promotional activities, customer buying patterns and
consumer spending patterns. In addition, as a result of changes in product
sales
mix, competitive conditions, raw material pricing pressures and other factors,
as discussed above, we experience fluctuations in gross profit and operating
margins on a quarter-to-quarter basis.
|
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
The
following
discussion involves forward-looking statements of market risk which assume
that
certain adverse market conditions may occur. Actual future market conditions
may
differ materially from such assumptions. Accordingly, the forward-looking
statements should not be considered our projections of future events or
losses.
Our
cash flows and
net earnings may be subject to fluctuations resulting from changes in interest
rates. Our current policy does not allow speculation in derivative instruments
for profit or execution of derivative instrument contracts for which there
is no
underlying exposure. We do not use financial instruments for trading purposes.
We measure market risk, related to our holdings of financial instruments, based
on changes in interest rates utilizing a sensitivity analysis. Our Credit
Facility, under which borrowings bear interest at floating rates, had no amounts
outstanding at August 31, 2007. We do not believe that a hypothetical 10% change
in interest rates would have a material effect on our pretax earnings or cash
flows.
We
maintain
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in our Securities Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the
SEC’s rules and forms and that such information is accumulated and communicated
to our management, including our Chief Executive Officer and Chief Financial
Officer, 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
Exchange Act Rule 13a-15(b), we carried out an evaluation, under the supervision
and with the participation of our management, including our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures as of the end of the fiscal
quarter covered by this report. Based on the foregoing, our Chief Executive
Officer and Chief Financial Officer have concluded that our disclosure controls
and procedures were effective.
There
has been no
change in our internal controls over financial reporting during our most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal controls over financial reporting.
Not
Applicable
The
information set
forth in Note 8 to the Notes to Condensed Consolidated Financial Statements
in
Item 1 of Part I of this Quarterly Report on Form 10-Q is incorporated herein
by
reference.
There
have been no
material changes to the risk factors previously disclosed by us in Part I,
Item 1A of our Annual Report on Form 10-K for the year ended May 31,
2007.
|
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
The
following table
presents information regarding repurchases of our Class A common stock during
the fiscal 2008 first quarter:
|
Period
|
|
Total
number
of
shares
purchased
|
|
Average
price
paid per share
|
|
Total
number
of shares
purchased as part of publicly
announced plans or
programs
|
|
Maximum
number of shares
that
may yet
be purchased
under
the
plans or programs
|
|
|
|
|
|
|
|
|
|
|
|
June
1 - June
30
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
July
1 - July
31
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
August
1 -
August 31
|
|
22,676
(1)
|
|
$5.29
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
22,676
|
|
$5.29
|
|
—
|
|
—
|
|
(1)
|
Repurchase
of
these shares was to satisfy employee tax withholding obligations
due upon
vesting of restricted shares. See Note 1 to the Notes to Condensed
Consolidated Financial Statements.
|
|
|
DEFAULTS
UPON SENIOR SECURITIES
|
None
|
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
None
Not
applicable
|
3.1.
|
Amended
and
Restated Certificate of Incorporation of Weider Nutrition International,
Inc. (1)
|
|
3.2.
|
Amended
and
Restated Bylaws of Weider Nutrition International, Inc.
(2)
|
|
4.1.
|
Revolving
Credit Agreement dated as of June 30, 2004 between Weider Nutrition
Group,
Inc. and KeyBank National Association. (3)
|
|
4.2.
|
Form
of
specimen Class A common stock certificate. (4)
|
|
10.1.
|
Build-To-Suit
Lease Agreement, dated March 20, 1996, between SCI Development Services
Incorporated and Weider Nutrition Group, Inc. (2)
|
|
10.2.
|
1997
Equity
Participation Plan of Weider Nutrition International,
Inc. (2)
|
|
10.3.
|
Form
of Tax
Sharing Agreement by and among Weider Nutrition International, Inc.
and
its subsidiaries and Weider Health and Fitness and its
subsidiaries. (2)
|
|
10.4.
|
License
Agreement between Mariz Gestao E Investmentos Limitada and Weider
Nutrition Group, Limited. (2)
|
|
10.5.
|
Amendments
to
1997 Equity Participation Plan of Weider Nutrition International,
Inc. (5)*
|
|
10.6.
|
Consulting
Agreement between Weider Nutrition Group, Inc. and Gustin Foods,
LLC dated
as of February 1, 2004. (6)
|
|
10.7.
|
Schiff
Nutrition International, Inc. 2004 Incentive Award
Plan. (7)*
|
|
10.8.
|
Amendment
effective as of March 1, 2005 to License Agreement between Mariz
Gestao E
Investmentos Limitada and Weider Nutrition Group,
Inc. (8)
|
|
10.9.
|
Stock
and
Asset Purchase Agreement effective as of March 1, 2005 among Weider
Nutrition International, Inc., Weider Nutrition Group, Inc. and Weider
Global Nutrition, LLC. (8)
|
|
10.10.
|
Promissory
Note of Weider Global Nutrition, LLC payable to Weider Nutrition
Group,
Inc. (8)
|
|
10.11.
|
Guarantee
by
Weider Health and Fitness in favor of Weider Nutrition International,
Inc.
and Weider Nutrition Group, Inc. (8)
|
|
10.12.
|
Share
Sale
and Transfer Agreement dated June 17, 2005 among Weider Nutrition
GmbH,
Haleko Management GmbH, Atlantic Grupa d.o.o., Hopen Investments
BV and
Svalbard Investments GmbH. (9)
|
|
10.13.
|
Form
of
Indemnification Agreement between Weider Nutrition Group, Inc. and
certain
of its executives and directors. (10)*
|
|
10.14.
|
Form
of
Restricted Stock Unit Award Grant Notice, Restricted Stock Unit Award
Agreement and Deferral Election between Schiff Nutrition International,
Inc. and certain of its executives. (11)*
|
|
10.15.
|
Amendment
No.
1 to the Schiff Nutrition International, Inc. 2004 Incentive Award
Plan.
(12)*
|
|
10.16.
|
Amended
and
Restated License and Product Supply Agreement dated as of October
13, 2006
between Unigen Pharmaceuticals, Inc. and Schiff Nutrition Group,
Inc. (13)
|
|
10.17.
|
Form
of
Director Restricted Stock Unit Agreement and Deferral Election.
(14)*
|
|
10.18.
|
Form
of
Director Restricted Stock Agreement. (14)*
|
|
10.19.
|
License
Agreement dated as of September 19, 2007 between Mariz Gestao E
Investimentos Limitada and Schiff Nutrition Group, Inc.
(15)
|
|
10.20.
|
Employment
and Change in Control Agreement dated as of June 1, 2007 between
Schiff
Nutrition Group, Inc. and Bruce J. Wood. (15)*
|
|
10.21.
|
Form
of
Amended and Restated Agreement between Schiff Nutrition Group, Inc.
and
certain of its executive officers. (15)*
|
|
21.1.
|
Subsidiaries
of Weider Nutrition International, Inc. (4)
|
|
31.1.
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act. (16)
|
|
31.2.
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act. (16)
|
|
32.1.
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to
Section
906 of the Sarbanes-Oxley
Act. (17)
|
|
(1)
|
Previously
field in the Company’s Quarterly Report on Form 10-Q filed on January 17,
2006 and incorporated herein by reference.
|
|
(2)
|
Previously
filed in the Company's Registration Statement on Form S-1 (File No.
333-12929) and incorporated herein by reference.
|
|
(3)
|
Previously
filed in the Company's Current Report on Form 8-K filed on July 8,
2004
and incorporated herein by reference.
|
|
(4)
|
Previously
filed in the Company’s Annual Report on Form 10-K filed on August 29, 2006
and incorporated herein by reference.
|
|
(5)
|
Previously
filed in the Company's Quarterly Report on Form 10-Q filed on January
14,
2002 and incorporated herein by reference.
|
|
(6)
|
Previously
filed in the Company's Quarterly Report on Form 10-Q filed on April
14,
2004 and incorporated herein by reference.
|
|
(7)
|
Previously
filed in the Company's Definitive Proxy Statement on Form 14A filed
on
September 28, 2004 and incorporated herein by
reference.
|
|
(8)
|
Previously
filed in the Company's Current Report on Form 8-K filed on April
4, 2005
and incorporated herein by reference.
|
|
(9)
|
Previously
filed in the Company's Current Report on Form 8-K filed on June 23,
2005
and incorporated herein by reference.
|
|
(10)
|
Previously
filed in the Company's Current Report on Form 8-K filed on August
10, 2005
and incorporated herein by reference.
|
|
(11)
|
Previously
filed in the Company’s Current Report on Form 8-K filed March 23, 2006 and
incorporated herein by reference.
|
|
(12)
|
Previously
filed in the Company’s Definitive Proxy Statement on Form 14A filed on
September 27, 2006 and incorporated herein by
reference.
|
|
(13)
|
Previously
filed in the Company's Quarterly Report on Form 10-Q filed on October
16,
2006 and incorporated herein by reference.
|
|
(14)
|
Previously
filed in the Company’s Current Report on Form 8-K filed on October 30,
2006 and incorporated herein by reference.
|
|
(15)
|
Previously
filed in the Company’s Current Report on Form 8-K filed September 25, 2007
and incorporated herein by reference.
|
|
(16)
|
Filed
herewith.
|
|
(17)
|
Furnished
herewith.
|
|
|
|
*
|
Management
contract.
|
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.
SCHIFF
NUTRITION INTERNATIONAL, INC.
|
Date:
October
15, 2007
|
By:
/s/
Bruce J. Wood
|
|
|
Bruce
J.
Wood
|
|
|
President,
Chief Executive Officer and
Director
|
|
Date:
October
15, 2007
|
By:
/s/
Joseph W. Baty
|
|
|
Joseph
W.
Baty
|
|
|
Executive
Vice President and Chief Financial
Officer
|
Schiff Nutrit (NYSE:WNI)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
Schiff Nutrit (NYSE:WNI)
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