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SCHIFF NUTRITION ACQUIRES AIRBORNE INC LEADING

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SCHIFF NUTRITION ACQUIRES AIRBORNE INC LEADING Powered By Docstoc
					                                    	
  	
  	
  	
  
    SCHIFF	
  NUTRITION	
  ACQUIRES	
  AIRBORNE,	
  INC.,	
  A	
  LEADING	
  BRAND	
  IN	
  
                              IMMUNITY	
  SUPPORT	
  	
  
  –	
  Airborne	
  complements	
  strategies	
  to	
  build	
  premium	
  brands	
  and	
  lead	
  innovation	
  –	
  
                          –	
  Company	
  to	
  hold	
  conference	
  call	
  today	
  at	
  1:00	
  p.m.	
  ET	
  –	
  
                                                                           	
  
Salt	
   Lake	
   City,	
   Utah,	
   April	
   2,	
   2012:	
   Schiff	
   Nutrition	
   International,	
   Inc.,	
   (NYSE:	
   WNI),	
  
acquired	
  Airborne,	
  Inc.,	
  a	
  leading	
  provider	
  of	
  immune	
  support	
  products	
  on	
  March	
  30,	
  2012	
  
for	
  $150	
  million	
  in	
  cash,	
  subject	
  to	
  certain	
  adjustments.	
  	
  	
  

“Schiff	
   is	
   focused	
   on	
   building	
   premium	
   brands	
   and	
   leading	
   innovation,”	
   stated	
   Tarang	
  
Amin,	
  president	
  and	
  chief	
  executive	
  officer.	
  “We	
  are	
  excited	
  about	
  the	
  Airborne	
  acquisition,	
  
which	
  fits	
  well	
  with	
  our	
  strategy	
  and	
  establishes	
  Schiff	
  as	
  a	
  leader	
  in	
  the	
  immune	
  support	
  
segment.	
   Airborne	
   is	
   a	
   strong	
   brand	
   and	
   will	
   make	
   an	
   excellent	
   addition	
   to	
   Schiff’s	
  
portfolio,	
   and	
   we	
   plan	
   to	
   leverage	
   our	
   science,	
   innovation,	
   marketing	
   and	
   sales	
   capabilities	
  
to	
  further	
  its	
  growth.”	
  	
  

Airborne	
  develops	
  and	
  sells	
  innovative	
  dietary	
  supplements	
  throughout	
  the	
  United	
  States	
  
and	
   Canada,	
   as	
   well	
   as	
   online.	
   Its	
   Airborne	
   health	
   formula	
   is	
   designed	
   to	
   support	
  
customers’	
   immune	
   systems	
   through	
   its	
   unique	
   combination	
   of	
   vitamins,	
   nutrients	
   and	
  
proprietary	
   blend	
   of	
   herbal	
   extracts.	
   Its	
   immune	
   support	
   products	
   include	
   iconic	
  
effervescent	
   tablets,	
   new	
   chewable	
   tablets	
   and	
   on-­‐the-­‐go	
   packets,	
   all	
   in	
   a	
   variety	
   of	
   flavors.	
  
Airborne	
  can	
  be	
  visited	
  online	
  at	
  www.airbornehealth.com.	
  
	
  
Marti	
  Morfitt,	
  Airborne,	
  Inc.’s	
  chief	
  executive	
  officer,	
  stated:	
  “I	
  am	
  very	
  proud	
  of	
  the	
  work	
  
the	
   Airborne	
   team	
   has	
   done	
   over	
   the	
   past	
   three	
   years	
   to	
   re-­‐establish	
   the	
   growth	
   of	
   the	
  
brand	
   and	
   to	
   develop	
   a	
   strong	
   pipeline	
   of	
   new	
   products	
   and	
   marketing	
   programs	
   designed	
  
to	
  support	
  the	
  future	
  growth	
  of	
  the	
  business.	
  We	
  are	
  happy	
  to	
  see	
  our	
  business	
  move	
  to	
  the	
  
team	
  at	
  Schiff	
  –	
  they	
  bring	
  great	
  talent	
  and	
  resources	
  to	
  the	
  business	
  and	
  share	
  our	
  passion	
  
for	
  building	
  a	
  leading	
  immune	
  support	
  brand.”	
  
	
  
“Schiff	
   intends	
   to	
   couple	
   Airborne’s	
   leading	
   brand	
   and	
   product	
   portfolio	
   with	
   our	
   strong	
  
capabilities	
   in	
   science	
   and	
   innovation,”	
   continued	
   Amin.	
   “For	
   example,	
   there	
   has	
   been	
  
promising	
  scientific	
  research	
  into	
  the	
  potential	
  relationship	
  between	
  BC30,	
  the	
  proprietary	
  
probiotics	
  technology	
  we	
  acquired	
  rights	
  to	
  last	
  year,	
  and	
  supporting	
  the	
  immune	
  system.	
  
We	
   are	
   currently	
   conducting	
   a	
   study	
   with	
   Dr.	
   Glenn	
   R.	
   Gibson	
   at	
   The	
   University	
   of	
   Reading	
  
in	
  the	
  UK	
  on	
  the	
  effects	
  of	
  BC30	
  on	
  the	
  immune	
  function	
  of	
  healthy	
  elderly	
  persons.	
  This	
  is	
  
but	
  one	
  of	
  the	
  many	
  potential	
  opportunities	
  to	
  bring	
  science	
  and	
  innovation	
  to	
  Airborne.”	
  	
  
             	
  
Terms	
  of	
  Deal	
  and	
  Financial	
  Impact	
  
Under	
  the	
  terms	
  of	
  the	
  purchase	
  agreement,	
  Schiff	
  acquired	
  100%	
  of	
  Airborne’s	
  stock	
  from	
  
GF	
  Capital	
  Private	
  Equity	
  Fund,	
  LP	
  for	
  $150	
  million,	
  subject	
  to	
  certain	
  adjustments.	
  Schiff	
  
funded	
  the	
  all-­‐cash	
  transaction	
  through	
  a	
  combination	
  of	
  a	
  new	
  debt	
  facility	
  and	
  cash	
  on	
  its	
  
balance	
  sheet.	
  
	
  
Airborne,	
  Inc.	
  generated	
  net	
  revenue	
  of	
  approximately	
  $70	
  million	
  for	
  the	
  twelve	
  months	
  
ended	
   February	
   29,	
   2012.	
   Preliminarily,	
   the	
   company	
   expects	
   to	
   recognize	
   transaction	
  
related	
   costs	
   of	
   approximately	
   $4.5	
   million	
   in	
   fiscal	
   2012,	
   of	
   which	
   $0.9	
   million	
   was	
  
recognized	
  during	
  the	
  third	
  fiscal	
  quarter.	
  	
  
	
  
The	
   transaction	
   is	
   expected	
   to	
   become	
   accretive	
   during	
   the	
   first	
   half	
   of	
   fiscal	
   year	
   2014.	
  	
  
The	
   company	
   is	
   in	
   the	
   process	
   of	
   finalizing	
   its	
   overall	
   cost	
   of	
   capital,	
   completing	
   its	
  
valuation	
   of	
   the	
   acquired	
   business,	
   including	
   allocation	
   of	
   purchase	
   price	
   to	
   primarily	
  
intangible	
  assets,	
  and	
  determining	
  the	
  expected	
  timing	
  of	
  certain	
  synergies.	
  	
   Management	
  
expects	
  to	
  further	
  address	
  the	
  overall	
  impact	
  of	
  the	
  acquisition	
  on	
  its	
  financial	
  results	
  and	
  
future	
  outlook	
  when	
  it	
  announces	
  its	
  fourth	
  quarter	
  and	
  fiscal	
  2012	
  financial	
  results.	
  	
  
	
  
Houlihan	
  Lokey	
  acted	
  as	
  financial	
  advisor	
  to	
  Schiff	
  in	
  connection	
  with	
  the	
  transaction.	
  	
  	
  
	
  
Conference	
  Call	
  Information	
  
Schiff	
  will	
  hold	
  a	
  conference	
  call	
  today,	
  April	
  2nd,	
  at	
  1:00	
  p.m.	
  ET.	
  The	
  event	
  will	
  be	
  webcast	
  
at	
   the	
   company’s	
   website	
   at	
   www.schiffnutrition.com.	
   The	
   webcast	
   replay	
   will	
   be	
   available	
  
for	
  90	
  days.	
  If	
  you	
  do	
  not	
  have	
  Internet	
  access,	
  the	
  dial-­‐in	
  number	
  will	
  be	
  1-­‐866-­‐700-­‐0161	
  
for	
   domestic	
   callers	
   and	
   1-­‐617-­‐213-­‐8832	
   for	
   international	
   callers.	
   The	
   participant	
   pass	
  
code	
   is	
   86364520.	
   A	
   replay	
   of	
   the	
   call	
   will	
   be	
   available	
   by	
   dialing	
   1-­‐888-­‐286-­‐8010	
   for	
  
domestic	
   callers	
   and	
   1-­‐617-­‐801-­‐6888	
   for	
   international	
   callers,	
   and	
   entering	
   pass	
   code	
  
35086433.	
  The	
  telephone	
  replay	
  will	
  be	
  available	
  through	
  April	
  9,	
  2012.	
  	
  
	
  
About	
  Schiff	
  Nutrition	
  	
  
Schiff	
   Nutrition	
   International,	
   Inc.	
   is	
   a	
   leading	
   nutritional	
   supplement	
   company	
   offering	
  
vitamins,	
   nutritional	
   supplements	
   and	
   nutrition	
   bars	
   in	
   the	
   United	
   States	
   and	
   abroad.	
  
Schiff’s	
  portfolio	
  of	
  well-­‐known	
  brands	
  includes	
  Schiff	
  Move	
  Free®,	
  Schiff®	
  Vitamins,	
  Schiff	
  
MegaRed®,	
   Schiff	
   Mega-­‐D3®,	
   Tiger's	
   Milk®,	
   Schiff	
   Sustenex®,	
   and	
   Schiff	
   Digestive	
  
Advantage®.	
   Focused	
   on	
   quality	
   for	
   75	
   years,	
   Schiff’s	
   headquarters	
   and	
   award-­‐winning	
  
manufacturing	
   and	
   distribution	
   facility	
   are	
   based	
   in	
   Salt	
   Lake	
   City,	
   Utah.	
   To	
   learn	
   more	
  
about	
  Schiff,	
  please	
  visit	
  the	
  web	
  site	
  www.schiffnutrition.com.	
  
	
  
Forward-­‐Looking	
  Statements	
  	
  
This	
   press	
   release	
   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	
  that	
  
are	
  based	
  on	
  management’s	
  beliefs	
  and	
  assumptions,	
  current	
  expectations,	
  estimates,	
  and	
  
projections.	
  	
  These	
  statements	
  are	
  subject	
  to	
  known	
  and	
  unknown	
  risks	
  and	
  uncertainties,	
  
certain	
   of	
   which	
   are	
   beyond	
   the	
   company’s	
   ability	
   to	
   control	
   or	
   predict,	
   and	
   therefore,	
  
actual	
   results	
   may	
   differ	
   materially.	
   	
   For	
   example,	
   statements	
   concerning	
   future	
   benefits,	
  
opportunities	
   and	
   the	
   financial	
   impact	
   of	
   the	
   acquisition	
   of	
   Airborne	
   are	
   forward-­‐looking	
  
statements.	
  	
  Any	
  forward-­‐looking	
  statements	
  are	
  made	
  pursuant	
  to	
  the	
  Private	
  Securities	
  
Litigation	
   Reform	
   Act	
   of	
   1995	
   and,	
   as	
   such,	
   speak	
   only	
   as	
   of	
   the	
   date	
   hereof.	
   	
   Schiff	
  
disclaims	
  any	
  obligation	
  to	
  update	
  any	
  forward-­‐looking	
  statements	
  whether	
  as	
  a	
  result	
  of	
  
new	
  information,	
  future	
  events	
  or	
  otherwise.	
  You	
  are	
  cautioned	
  not	
  to	
  place	
  undue	
  reliance	
  
on	
  these	
  forward-­‐looking	
  statements.	
  
Important	
   factors	
   that	
   may	
   cause	
   actual	
   results	
   of	
   Schiff	
   to	
   differ	
   materially	
   from	
   those	
  
expressed	
   or	
   implied	
   by	
   such	
   forward-­‐looking	
   statements	
   include,	
   but	
   are	
   not	
   limited	
  
to:	
  the	
  inability	
  to	
  successfully	
  integrate	
  Airborne	
  into	
  Schiff’s	
  operations	
  or	
  to	
  achieve	
  the	
  
anticipated	
   synergies,	
   benefits	
   or	
   other	
   opportunities	
   of	
   the	
   Airborne	
   acquisition,	
   the	
  
inability	
   to	
   perform	
   obligations	
   under,	
   or	
   to	
   	
   operate	
   within	
   the	
   constraints	
   of,	
   the	
   new	
  
debt	
  facility,	
  dependence	
  on	
  sales	
  of	
  Schiff	
  Move	
  Free	
  product	
  and	
  the	
  joint	
  care	
  category,	
  
dependence	
   on	
   sales	
   of	
   Schiff	
   MegaRed	
   product,	
   dependence	
   on	
   individual	
   customers,	
  
adverse	
   publicity	
   or	
   consumer	
   perception	
   regarding	
   our	
   nutritional	
   supplements	
   and/or	
  
their	
   ingredients,	
   similar	
   products	
   distributed	
   by	
   other	
   companies	
   or	
   the	
   nutritional	
  
supplement	
   industry	
   generally,	
   the	
   impact	
   of	
   competitive	
   products	
   and	
   pricing	
   pressure	
  
(including	
  expansion	
  of	
  private	
  label	
  products),	
  the	
  inability	
  to	
  successfully	
  bid	
  on	
  new	
  and	
  
existing	
  private	
  label	
  business,	
  the	
  impact	
  of	
  raw	
  material	
  pricing,	
  availability	
  and	
  quality	
  
(particularly	
   relating	
   to	
   joint	
   care	
   products	
   and	
   ingredients	
   from	
   third-­‐party	
   suppliers	
  
outside	
   the	
   United	
   States,	
   including	
   China),	
   claims	
   that	
   our	
   products	
   infringe	
   the	
  
intellectual	
   property	
   rights	
   of	
   others,	
   the	
   inability	
   to	
   enforce	
   or	
   protect	
   our	
   intellectual	
  
property	
   rights	
   and	
   proprietary	
   techniques	
   against	
   infringement,	
   the	
   inability	
   to	
  
successfully	
  launch	
  and	
  maintain	
  sales	
  (especially	
  in	
  the	
  joint	
  care	
  and	
  omega-­‐3	
  categories)	
  
outside	
   of	
   the	
   United	
   States	
   while	
   maintaining	
   the	
   integrity	
   of	
   the	
   products	
   sold	
   and	
  
complying	
   with	
   local	
   regulations,	
   the	
   inability	
   to	
   appropriately	
   respond	
   to	
   changing	
  
consumer	
   preferences	
   and	
   demand	
   for	
   new	
   products,	
   the	
   inability	
   to	
   gain	
   or	
   maintain	
  
market	
  distribution	
  for	
  new	
  products	
  or	
  product	
  enhancements,	
  including	
  products	
  in	
  the	
  
probiotic	
   space,	
   litigation	
   and	
   government	
   or	
   administrative	
   regulatory	
   action	
   in	
   the	
  
United	
  States	
  and	
  internationally,	
  including	
  FDA	
  enforcement	
  and	
  product	
  liability	
  claims,	
  
the	
   inability	
   or	
   increased	
   cost	
   to	
   obtain	
   sufficient	
   levels	
   of	
   product	
   liability	
   and	
   general	
  
insurance,	
   the	
   inability	
   to	
   comply	
   with	
   existing	
   or	
   new	
   regulations,	
   both	
   in	
   the	
   United	
  
States	
   and	
   abroad,	
   and	
   adverse	
   actions	
   regarding	
   product	
   formulation,	
   claims	
   or	
  
advertising,	
   product	
   recalls	
   or	
   a	
   significant	
   amount	
   of	
   product	
   returns,	
   dependence	
   on	
   a	
  
single	
   manufacturing	
   facility	
   and	
   potential	
   disruptions	
   of	
   our	
   manufacturing	
   operations,	
  
the	
   inability	
   to	
   find	
   strategic	
   transaction	
   opportunities	
   or	
   the	
   inability	
   to	
   successfully	
  
consummate	
   or	
   integrate	
   a	
   strategic	
   transaction	
   (including	
   the	
   inability	
   to	
   successfully	
  
integrate	
  the	
  business	
  recently	
  acquired	
  from	
  Airborne),	
  the	
  inability	
  to	
  maintain	
  or	
  attract	
  
key	
   personnel,	
   interruptions	
   to	
   our	
   information	
   technology	
   systems,	
   control	
   by	
   our	
  
principal	
   stockholders,	
   and	
   other	
   factors	
   indicated	
   from	
   time	
   to	
   time	
   in	
   the	
   company’s	
   SEC	
  
reports,	
  copies	
  of	
  which	
  are	
  available	
  upon	
  request	
  from	
  the	
  company’s	
  investor	
  relations	
  
department	
   or	
   may	
   be	
   obtained	
   at	
   the	
   SEC's	
   web	
   site	
   (www.sec.gov).	
  	
  These	
   risks	
   and	
  
uncertainties	
   should	
   be	
   carefully	
   considered	
   before	
   making	
   an	
   investment	
   decision	
   with	
  
respect	
  to	
  shares	
  of	
  our	
  common	
  stock.	
  
	
  	
  
Schiff	
  Nutrition	
  Contact:	
                                              IR	
  Agency	
  Contact:	
  
Joseph	
  W.	
  Baty,	
  CFO	
                                                 Kirsten	
  Chapman	
  /	
  Becky	
  Herrick	
  	
  
(801)	
  975-­‐5186	
                                                          LHA	
  
email:	
  joeb@schiffnutrition.com	
                                           (415)	
  433-­‐3777	
  
www.schiffnutrition.com	
  	
                                                  email:	
  bherrick@lhai.com	
  	
  
                                                                          	
  
                                                                ⎯	
  ###	
  ⎯	
  

				
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