Back
      to Index





**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**








**FORM
      10-Q**





**ý**
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934****For
                the quarterly period ended February 28, 2006****q**
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934****For
                the transition period from ____ to ____.**Commission
                file number:**001-14608**








**SCHIFF
      NUTRITION INTERNATIONAL, INC.**


(Exact
      name of Registrant as specified in its charter)





**Delaware**
            
            **87-0563574**(State
                or other jurisdiction
              of
                incorporation or organization)
            
            (I.R.S.
                Employer
              Identification
                No.)**2002
                South 5070 West**
              **Salt
                Lake City, Utah**
            
            **84104-4726**(Address
                of principal
              executive
                offices)
            
            (Zip
                Code)





**(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





The
      number of shares outstanding of the Registrant’s Class A and Class B common
      stock is 26,509,174 (as of April 1, 2006).











Back
      to
      Index


**PART
      I. FINANCIAL INFORMATION**




**ITEM
      1. FINANCIAL STATEMENTS**





**SCHIFF
      NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCESHEETS**


**(in
      thousands, except share data)**





February
                28,
              2006
            
            May
                31,
              2005(unaudited)**ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            27,315
            
            $
            11,358Investment
                securities
            
            
            34,748
            
            
            24,212Trade
                and other receivables, net
            
            
            17,992
            
            
            29,300Inventories
            
            
            20,864
            
            
            32,419Prepaid
                expenses and other
            
            
            2,536
            
            
            4,297Deferred
                taxes, net
            
            
            2,750
            
            
            2,857Total
                current assets
            
            
            106,205
            
            
            104,443Property
                and equipment, net
            
            
            12,841
            
            
            16,714Other
                assets:Goodwill
            
            
            4,346
            
            
            4,346Intangible
                assets, net
            
            
            6
            
            
            23Deposits
                and other assets
            
            
            514
            
            
            1,310Deferred
                taxes, net
            
            
            —
            
            
            1,430Total
                other assets
            
            
            4,866
            
            
            7,109Total
                assets
            
            $
            123,912
            
            $
            128,266**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current
                liabilities:Accounts
                payable
            
            $
            9,995
            
            $
            16,566Accrued
                expenses
            
            
            12,069
            
            
            13,577Short-term
                debt
            
            
            245
            
            
            3,020Income
                taxes payable
            
            
            —
            
            
            5,268Total
                current liabilities
            
            
            22,309
            
            
            38,431Deferred
                taxes, net
            
            
            1,501
            
            
            —Commitments
                and contingencies (Note 8)Stockholders’
                equity:Preferred
                stock, par value $.01 per share; shares authorized-10,000,000;no
                shares issued and outstanding
            
            
            —
            
            
            —Class
                A common stock, par value $.01 per share; shares authorized-50,000,000;shares
                issued and outstanding-11,535,526 and 11,309,910
            
            
            115
            
            
            113Class
                B common stock, par value $.01 per share; shares authorized-25,000,000;shares
                issued and outstanding-14,973,148
            
            
            150
            
            
            150Additional
                paid-in capital
            
            
            87,468
            
            
            86,857Deferred
                compensation costs
            
            
            (204
            )
            
            (366
            )Other
                accumulated comprehensive income
            
            
            —
            
            
            167Retained
                earnings
            
            
            12,573
            
            
            2,914Total
                stockholders’ equity
            
            
            100,102
            
            
            89,835Total
                liabilities and stockholders’ equity
            
            $
            123,912
            
            $
            128,266






See
      notes to condensed consolidated financial statements.


2


Back
      to
      Index




**SCHIFF
      NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF INCOME**


**(in
      thousands, except share data)**


**(unaudited)**





Three
                Months Ended February 28,2006
            
            2005Net
                sales
            
            $
            49,641
            
            $
            45,185Cost
                of goods sold
            
            
            32,709
            
            
            30,988Gross
                profit
            
            
            16,932
            
            
            14,197Operating
                expenses:Selling
                and marketing
            
            
            8,527
            
            
            7,736General
                and administrative
            
            
            3,609
            
            
            2,882Research
                and development
            
            
            667
            
            
            689Amortization
                of intangible assets
            
            
            6
            
            
            7Reimbursement
                of import costs
            
            
            (125
            )
            
            —Total
                operating expenses
            
            
            12,684
            
            
            11,314Income
                from operations
            
            
            4,248
            
            
            2,883Other
                income (expense):Interest
                income
            
            
            547
            
            
            115Interest
                expense
            
            
            (53
            )
            
            (43
            )Other,
                net
            
            
            8
            
            
            (35
            )Total
                other income, net
            
            
            502
            
            
            37Income
                from continuing operations before income taxes
            
            
            4,750
            
            
            2,920Income
                tax expense
            
            
            1,561
            
            
            1,124Income
                from continuing operations
            
            
            3,189
            
            
            1,796Loss
                from discontinued operations, net of income taxes
            
            
            —
            
            
            (577
            )Net
                income
            
            $
            3,189
            
            $
            1,219Weighted
                average shares outstanding:Basic
            
            
            26,336,274
            
            
            25,764,664Diluted
            
            
            27,044,012
            
            
            26,583,336Net
                income per share-basic and diluted:Income
                from continuing operations
            
            $
            0.12
            
            $
            0.07Loss
                from discontinued operations
            
            
            —
            
            
            (0.02
            )Net
                income
            
            $
            0.12
            
            $
            0.05Comprehensive
                income
            
            $
            3,189
            
            $
            1,255





See
      notes to condensed consolidated financial statements.


3


Back
      to Index




**SCHIFF
      NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF INCOME**


**(in
      thousands, except share data)**


**(unaudited)**





Nine
                Months Ended February 28,2006
            
            2005Net
                sales
            
            $
            133,114
            
            $
            133,148Cost
                of goods sold
            
            
            92,263
            
            
            86,105Gross
                profit
            
            
            40,851
            
            
            47,043Operating
                expenses:Selling
                and marketing
            
            
            20,603
            
            
            21,093General
                and administrative
            
            
            11,252
            
            
            9,974Research
                and development
            
            
            1,978
            
            
            2,503Amortization
                of intangible assets
            
            
            17
            
            
            20Reimbursement
                of import costs
            
            
            (2,413
            )
            
            —Total
                operating expenses
            
            
            31,437
            
            
            33,590Income
                from operations
            
            
            9,414
            
            
            13,453Other
                income (expense):Interest
                income
            
            
            1,322
            
            
            212Interest
                expense
            
            
            (129
            )
            
            (225
            )Foreign
                currency translation
            
            
            1,584
            
            
            —Other,
                net
            
            
            (21
            )
            
            (136
            )Total
                other income (expense), net
            
            
            2,756
            
            
            (149
            )Income
                from continuing operations before income taxes
            
            
            12,170
            
            
            13,304Income
                tax expense
            
            
            2,384
            
            
            5,121Income
                from continuing operations
            
            
            9,786
            
            
            8,183Income
                (loss) from discontinued operations, net of income taxes
            
            
            (127
            )
            
            188Net
                income
            
            $
            9,659
            
            $
            8,371Weighted
                average shares outstanding:Basic
            
            
            26,229,774
            
            
            25,743,251Diluted
            
            
            26,894,878
            
            
            26,544,561Net
                income per share-basic:Income
                from continuing operations
            
            $
            0.37
            
            $
            0.32Income
                from discontinued operations
            
            
            —
            
            
            0.01Net
                income
            
            $
            0.37
            
            $
            0.33Net
                income per share-diluted:Income
                from continued operations
            
            $
            0.36
            
            $
            0.31Income
                from discontinued operations
            
            
            —
            
            
            0.01Net
                income
            
            $
            0.36
            
            $
            0.32Comprehensive
                income
            
            $
            9,492
            
            $
            8,704







See
      notes to condensed consolidated financial statements.


4


Back
      to Index




SCHIFF
      NUTRITION
      INTERNATIONAL, INC. AND SUBSIDIARIES


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASHFLOW**


**(in
      thousands)**


**(unaudited)**





Nine
                Months Ended February 28,2006
            
            2005Cash
                flows from operating activities:Net
                income
            
            $
            9,659
            
            $
            8,371Adjustments
                to reconcile net income to net cash provided
              by
                operating activities:Provision
                for bad debts
            
            
            —
            
            
            (69
            )Deferred
                taxes
            
            
            3,038
            
            
            4,648Depreciation
                and amortization
            
            
            2,240
            
            
            4,057Foreign
                currency translation
            
            
            (1,584
            )
            
            —Amortization
                of financing fees
            
            
            41
            
            
            128Amortization
                of deferred compensation costs
            
            
            117
            
            
            148Other
            
            
            23
            
            
            (25
            )Changes
                in operating assets and liabilities:Receivables
            
            
            (1,551
            )
            
            3,578Inventories
            
            
            3,513
            
            
            (3,329
            )Prepaid
                expenses and other
            
            
            517
            
            
            (205
            )Deposits
                and other assets
            
            
            (115
            )
            
            276Accounts
                payable
            
            
            1,911
            
            
            2,670Accrued
                expenses
            
            
            1,958
            
            
            (3,260
            )Income
                taxes
            
            
            (5,975
            )
            
            558Net
                cash provided by operating activities
            
            
            13,792
            
            
            17,546Cash
                flows from investing activities:Purchase
                of property and equipment
            
            
            (1,755
            )
            
            (1,677
            )Purchase
                of intangibles
            
            
            —
            
            
            (7
            )Proceeds
                from sale of property and equipment and assets held for
                sale
            
            
            4
            
            
            926Proceeds
                from sale of Haleko Unit, net (Note 1)
            
            
            13,683
            
            
            —Purchase
                of investment securities
            
            
            (38,330
            )
            
            —Proceeds
                from sale of investment securities
            
            
            27,794
            
            
            —Collection
                of notes receivable
            
            
            450
            
            
            —Net
                cash provided by (used in) investing activities
            
            
            1,846
            
            
            (758
            )Cash
                flows from financing activities:Issuance
                of common stock from exercise of options
            
            
            801
            
            
            66Acquisition
                and retirement of common stock
            
            
            (143
            )
            
            (108
            )Proceeds
                from debt
            
            
            1,693
            
            
            2,561Payments
                on debt
            
            
            (1,949
            )
            
            (2,100
            )Net
                cash provided by financing activities
            
            
            402
            
            
            419Effect
                of exchange rate changes on cash
            
            
            (83
            )
            
            263Increase
                in cash and cash equivalents
            
            
            15,957
            
            
            17,470Cash
                and cash equivalents, beginning of period
            
            
            11,358
            
            
            7,449Cash
                and cash equivalents, end of period
            
            $
            27,315
            
            $
            24,919







See
      notes to condensed consolidated financial statements.


5


Back
      to
      Index




**SCHIFF
      NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS**


**(in
        thousands, except share data)**
 **(unaudited)**


**1.**
            **BASIS
                OF PRESENTATION AND OTHER
                MATTERS**





The
      accompanying unaudited interim condensed consolidated financial statements
      (“interim financial statements”) 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
      notes thereto contained in our Annual Report on Form 10-K for the year ended
      May
      31, 2005 as filed with the Securities and Exchange Commission (“SEC”). The May
      31, 2005 consolidated balance sheet, included herein, was derived from 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. Certain prior period amounts have been reclassified
      to
      conform with the current interim period presentation. 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.





On
      October 28, 2005, we announced the formal name change of the Company to Schiff
      Nutrition International, Inc. (previously Weider Nutrition International, Inc.).
      Our shareholders approved the name change at our annual meeting held October
      25,
      2005.





On
      June 17, 2005, we announced the sale of our Haleko Unit to Atlantic Grupa of
      Zagreb, Croatia and certain of its subsidiaries for approximately $15,089 in
      cash. The transaction included the sale of the capital stock and partnership
      interests of the international subsidiaries that operate the Haleko business.
      In
      connection with the sale, we incurred transaction related costs of approximately
      $687 and relinquished cash of approximately $719. The transaction closed on
      June
      17, 2005, with an effective date of May 1, 2005 (the first day of Haleko’s
      fiscal year 2006). The impact of the sale on fiscal 2006 first quarter operating
      income was not material.





On
      April 1, 2005, we announced the sale of certain assets of our Active Nutrition
      Unit relating to our Weider branded business, domestically and internationally,
      to Weider Global Nutrition, LLC (“WGN”), a wholly-owned subsidiary of WHF. The
      terms of the transaction provided for a cash payment of $12,877, and a note
      receivable for $1,100 in exchange for assets relating to the domestic Weider
      branded business, including inventory, receivables, and intangible and
      intellectual property, the capital stock of certain of our international
      subsidiaries related to the international Weider branded business (including
      the
      working capital of those subsidiaries), and the assumption of certain associated
      liabilities by WGN. The transaction closed on April 1, 2005, with an effective
      date of March 1, 2005.





In
      connection with the sale of the Weider branded business, we also entered into
      two separate agreements (domestic and European) whereby we agreed to provide
      certain general and administrative, research and development, and logistics
      services to WGN for an annual fee. The domestic service agreement provided
      for a
      one year term, with an option by either party to extend the term for one
      additional year. The parties exercised this option for the second year and
      have
      further extended the term of the agreement through March 1, 2008. In connection
      with the sale of our Haleko Unit, the European service agreement was transferred
      to the purchaser of the Haleko Unit. We also received a license to use the
      Weider name for corporate purposes prior to transitioning to the new name for
      our company.





The
      operating results for our Haleko Unit and Weider branded business are reflected
      as discontinued operations in our condensed consolidated financial statements,
      including the notes thereto. The remaining assets and related operations for
      the
      Active Nutrition Unit, including our Tiger’s Milk ® and Fi-Bar ® brands, have been consolidated into our Schiff ® Specialty Unit. We believe our remaining Schiff Specialty Unit, which consists
      of the aggregation of several product-based operating segments, represents
      our
      only reportable segment.





Effective
      August 16, 2002, we issued 640,000 restricted shares of Class A common stock
      to
      certain officers and employees. The aggregate value of these restricted shares
      was approximately $1,038, which we are expensing on a straight-line basis over
      the accompanying five-year vesting period. During the fiscal 2006 second
      quarter, as a result of the termination of certain employees, 8,000 restricted
      shares vested, 16,000 restricted shares were cancelled, and, concurrent with
      the
      vesting, we reacquired (and ultimately retired) 2,612 shares in connection
      with
      the payment of individual income taxes. During the fiscal 2006 first quarter,
      98,200 restricted shares vested and, as a result of the voluntary termination
      of
      an employee, 12,000 restricted shares were cancelled. During the fiscal 2005
      first quarter, 124,600 restricted shares vested. During the fiscal 2006 and
      2005
      first quarters, concurrent with the annual vesting, we reacquired (and
      ultimately retired) 27,201 and 27,406 shares,





6


Back
        to
        Index
  **SCHIFF
        NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
*(continued)***
 **(in
          thousands, except share data)**
 **(unaudited)**


respectively,
      from certain employees in connection with the payment of individual income
      taxes. To date, of the 640,000 restricted shares originally issued, 358,800
      shares have vested, of which 57,219 shares were reacquired (and retired) from
      certain employees in connection with the payment of individual income taxes,
      172,400 shares are subject to future vesting and 108,800 shares have been
      cancelled.





At
      May 31, 2005, other accumulated comprehensive income consisted only of foreign
      currency translation adjustments.





We
      disclose the effect of Statement of Financial Accounting Standards (“SFAS”) No.
      123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”) on a proforma
      basis and continue to follow Accounting Principles Board (“APB”) Opinion No. 25,
“Accounting for Stock Issued to Employees” (“APB Opinion No. 25”) (as permitted
      by SFAS No. 123) as it relates to stock-based compensation. See Note 9,
“Recently Issued Accounting Standards,” regarding our accounting for stock-based
      compensation in future periods.





Proforma
      information regarding net income and net income per share is required by SFAS
      No. 123, as amended by SFAS No. 148, “Accounting for Stock-Based Compensation -
      Transition and Disclosure”, and has been determined as if we had accounted for
      our employee stock options under the fair-value method of SFAS No. 123. For
      the
      purposes of proforma disclosure, the estimated fair value of the stock options
      is amortized to expense over the options’ vesting period. Our proforma net
      income and net income per share are as follows:


Three
                  Months Ended February 28,
              
              Nine
                  Months Ended February 28,2006
              
              2005
              
              2006
              
              2005Net
                  income, as reported
              
              $
              3,189
              
              $
              1,219
              
              $
              9,659
              
              $
              8,371Deduct
                  stock-based employee compensation expense determined under fair-value
                  based method, net of related tax effects
              
              
              (80
              )
              
              (86
              )
              
              (232
              )
              
              (299
              )Net
                  income, proforma
              
              $
              3,109
              
              $
              1,133
              
              $
              9,427
              
              $
              8,072Basic
                  net income per share, as reported
              
              $
              0.12
              
              $
              0.05
              
              $
              0.37
              
              $
              0.33Diluted
                  net income per share, as reported
              
              
              0.12
              
              
              0.05
              
              
              0.36
              
              
              0.32Basic
                  net income per share, proforma
              
              
              0.12
              
              
              0.04
              
              
              0.37
              
              
              0.31Diluted
                  net income per share, proforma
              
              
              0.11
              
              
              0.04
              
              
              0.35
              
              
              0.30




**2.**
            **INVESTMENT
                SECURITIES**





Investment
      securities at fair value, which approximates unamortized cost, consist of the
      following:


February
                28, 2006
            
            May
                31,
              2005State
                and municipality debt securities
            
            $
            22,330
            
            $
            12,112Corporate
                debt securities
            
            
            8,718
            
            
            5,600Corporate
                equity securities
            
            
            3,700
            
            
            6,500Total
            
            $
            34,748
            
            $
            24,212








7


Back
        to
        Index
  **SCHIFF
        NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
*(continued)***
 **(in
          thousands, except share data)**
 **(unaudited)**


All
      securities are available for immediate sale. Contractual maturities of aggregate
      debt securities at February 28, 2006 are as follows:


Less
                than one year
            
            $
            —One
                to five years
            
            
            300Over
                five years
            
            
            30,748$
            31,048





Proceeds
      from the sale of investment securities, which approximated the unamortized
      cost
      of the securities sold, totaled $27,794 for the nine months ended February
      28,
      2006.





**3.**
            **TRADE
                AND OTHER RECEIVABLES, NET**




Trade
        and other receivables, net, consist of the following:


February
                28, 2006
            
            May
                31,
              2005Trade
                accounts
            
            $
            21,146
            
            $
            32,886Income
                taxes
            
            
            760
            
            
            —Income
                tax refund due from WHF
            
            
            361
            
            
            361Current
                portion of note receivable due from WGN
            
            
            550
            
            
            600Other
            
            
            261
            
            
            21523,078
            
            
            34,062Less
                allowances for doubtful accounts, sales returns and
                discounts
            
            
            (5,086
            )
            
            (4,762
            )Total
            
            $
            17,992
            
            $
            29,300





**4.**
            **INVENTORIES**




Inventories
        consist of the following:


February
                28, 2006
            
            May
                31,
              2005Raw
                materials
            
            $
            10,345
            
            $
            11,419Work
                in process
            
            
            1,765
            
            
            1,887Finished
                goods
            
            
            8,754
            
            
            19,113Total
            
            $
            20,864
            
            $
            32,419





**5.**
            **GOODWILL
                AND INTANGIBLE ASSETS, NET**


Goodwill
        and intangible assets, net, consist of the following:


February
                28, 2006
            
            May
                31, 2005Gross
                Carrying Amount
            
            Accumul.
                Amortiz.
            
            Net
                Book Value
            
            Gross
                Carrying Amount
            
            Accumul.
                Amortiz.
            
            Net
                Book ValueGoodwill
            
            $
            4,346
            
            $
            —
            
            $
            4,346
            
            $
            4,346
            
            $
            —
            
            $
            4,346Intangible
                assets-patents and trademarks
            
            $
            5,479
            
            $
            (5,473
            )
            $
            6
            
            $
            5,479
            
            $
            (5,456
            )
            $
            23








8


Back
        to
        Index
  **SCHIFF
        NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
*(continued)***
 **(in
          thousands, except share data)**
 **(unaudited)**





Estimated
      amortization expense, assuming no changes in our intangible assets, is $23
      for
      fiscal 2006 and zero thereafter.





The
      carrying amount of goodwill did not change during the first nine months of
      fiscal 2006 or during fiscal 2005.





**6.**
            **ACCRUED
                EXPENSES**




Accrued
        expenses consist of the following:


February
                28, 2006
            
            May
                31,
              2005Accrued
                personnel related costs
            
            $
            3,590
            
            $
            4,564Accrued
                promotional costs
            
            
            5,738
            
            
            3,927Other
            
            
            2,741
            
            
            5,086Total
            
            $
            12,069
            
            $
            13,577





**7.**
            **CONCENTRATION
                RISK**





The
      combined net sales to our two largest customers, are significant. As a result
      of
      recent divestitures (see Note 1), our concentration risk has increased. At
      February 28, 2006, and May 31, 2005, respectively, amounts due from Customer
      A
      represented approximately 35% and 21% and amounts due from Customer B
      represented approximately 27% and 15% of total trade accounts receivable. For
      the nine months ended February 28, 2006 and 2005, respectively, Customer A
      accounted for approximately 32% and 40% and Customer B accounted for
      approximately 39% and 33% of total net sales. Net sales of our Schiff Move
      Free ® brand accounted for approximately 48% and 41%, respectively, of total net sales
      for the nine months ended February 28, 2006 and 2005.





**8.**
            **COMMITMENTS
                AND CONTINGENCIES**





We
      are currently named as a defendant in one lawsuit alleging that consumption
      of
      certain of our discontinued products containing ephedra caused or contributed
      to
      injuries and damages. We dispute the allegations, and are opposing the lawsuit.
      This case is not covered by insurance.





From
      time to time, we are involved in other claims, legal actions and governmental
      proceedings that arise from our business operations. Although ultimate liability
      cannot be determined at the present time, we believe that any liability
      resulting from these matters, if any, after taking into consideration our
      insurance coverage will not have a material adverse effect on our results of
      operations and financial condition.





**9.**
            **RECENTLY
                ISSUED ACCOUNTING
                STANDARDS**





In
      November 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      151, “Inventory Costs”, (“SFAS No. 151”), which amends the guidance in
      Accounting Research Bulletin No. 43, Chapter 4, “Inventory Pricing”, to clarify
      that abnormal amounts of idle facility expense, freight, handling costs and
      wasted material (spoilage) should be recognized as a current-period expense.
      In
      addition, SFAS No. 151 requires that allocation of fixed production overheads
      to
      the costs of conversion be based on the normal capacity of the production
      facilities. The inventory costing provisions of SFAS No. 151 are effective
      for
      inventory costs incurred during fiscal years beginning after June 15, 2005.
      We
      do not believe that the adoption of SFAS No. 151 will have a material impact
      on
      our results of operations and financial condition.




In
      December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based
      Payment” (“SFAS No. 123R”), which replaces SFAS No. 123, and supersedes APB
      Opinion No. 25. SFAS No. 123R requires that costs resulting from all share-based
      payment transactions, transactions in which an entity exchanges its equity
      instruments for goods or services, be recognized in the financial statements.
      Costs resulting from all share-based payment transactions will be determined
      by
      applying a fair-value-based measurement method at the date of the grant, with
      limited exceptions. Costs will be recognized over the period in which the goods
      or services are received. The recognition and measurement provisions of SFAS
      No.
      123R are effective for all share-based payment transactions entered into during
      fiscal years beginning after June 15, 2005. Effective March 1, 2006, we adopted
      the recognition and measurement provisions of SFAS No. 123R using the modified
      prospective method. As a





9


Back
      to
      Index




**SCHIFF
      NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**


**NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
*(continued)***
 **(in
            thousands, except share data)**
 **(unaudited)**


result,
      we will recognize compensation expense for all awards granted after the date
      of
      adoption and for the unvested portion of previously granted awards that are
      outstanding at March 1, 2006. The adoption of SFAS No. 123R is not expected
      to
      have a material adverse effect on our results of operations and financial
      condition for stock awards granted prior to the date of adoption.





**10.**
            **SUBSEQUENT
                EVENT**





On
      March 17, 2006, the Compensation Committee of our Board of Directors, pursuant
      to the Company’s 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. Recognition of
      compensation cost relating to the grant will begin in the fiscal 2006 fourth
      quarter and will be based on a periodic assessment of the probability that
      the
      performance criteria will be achieved.














10


Back
      to
      Index


**ITEM2.**
            **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. We disclaim any
      obligation to update any forward-looking statements whether as a result of
      new
      information, future events or otherwise.





**General**





Schiff
      Nutrition International, Inc. (formerly Weider 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 ® ,
      primarily consists of specialty supplements, vitamins, minerals and nutrition
      bars, which are marketed primarily through mass market and health food store
      distribution channels.





On
      March 17, 2006, the Compensation Committee of our Board of Directors, pursuant
      to the Company’s 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. Recognition of
      compensation cost relating to the grant will begin in the fiscal 2006 fourth
      quarter and will be based on a periodic assessment of the probability that
      the
      performance criteria will be achieved.





On
      October 28, 2005, we announced the formal name change of the Company to Schiff
      Nutrition International, Inc. (previously Weider Nutrition International, Inc.).
      Our shareholders approved the name change at our annual meeting held October
      25,
      2005.





During
      fiscal 2005 and continuing through the first nine months of fiscal 2006, we
      experienced margin volatility due to several factors, including significant
      raw
      material pricing changes in the joint care category and a continuing strong
      competitive environment for both branded and private label products. During
      fiscal 2005 and early fiscal 2006, as a result of raw material pricing increases
      and the inability to secure acceptable price increases from our customers,
      we
      discontinued certain private label (contract manufacturing) business. During
      the
      fiscal 2006 second and third quarters, raw material pricing in the joint care
      category decreased and appears to have stabilized. While we believe the fiscal
      2006 fourth quarter gross profit margin may continue to improve compared to
      the
      fiscal 2006 third quarter, competitive retail pricing conditions may negatively
      impact long-term margin levels.





During
      the first nine months of fiscal 2006, 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. During the fiscal 2005 second quarter,
      we launched our Lubriflex 3 TM
      product and supported the introduction with significant selling and marketing
      support, which continued into fiscal 2006. We believe our joint care category
      net sales for fiscal 2005 and the first nine months of fiscal 2006 benefited
      from this support. At the end of our fiscal 2006 second quarter, we began to
      ship our new Move Free Advanced product, which we believe is an improved, more
      effective version of our existing Move Free product. During our fiscal 2006
      third quarter, we continued to introduce Move Free Advanced into many of our
      accounts. In support of the launch of Move Free Advanced and other new joint
      care initiatives, we expect our selling and marketing expenses as a percentage
      of net sales to increase significantly in the fiscal 2006 fourth quarter, as
      compared to the 17.2% of net sales for the fiscal 2006 third
      quarter.





On
      June 17, 2005, we announced the sale of our Haleko Unit to Atlantic Grupa of
      Zagreb, Croatia and certain of its subsidiaries for approximately $15.1 million
      in cash. The transaction included the sale of the capital stock and partnership
      interests of the international subsidiaries that operate the Haleko business.
      In
      connection with the sale, we incurred transaction related costs of approximately
      $0.7 million and relinquished cash of approximately $0.7 million. The
      transaction closed on June 17, 2005, with an effective date of May 1, 2005
      (the
      first day of Haleko’s fiscal year 2006). The impact of the sale on fiscal 2006
      first quarter operating income was not material.





On
      April 1, 2005, we announced the sale of certain assets of our Active Nutrition
      Unit relating to our Weider branded business, domestically and internationally,
      to WGN, a wholly-owned subsidiary of WHF. The terms of the transaction provided
      for a cash payment of approximately $12.9 million, and a note receivable for
      $1.1 million in





11


Back
      to
      Index


exchange
      for assets relating to the domestic Weider branded business, including
      inventory, receivables, and intangible and intellectual property, the capital
      stock of certain of our international subsidiaries related to our international
      Weider branded business (including the working capital of those subsidiaries),
      and the assumption of certain associated liabilities by WGN. The transaction
      closed on April 1, 2005, with an effective date of March 1, 2005.





In
      connection with the sale of the Weider branded business, we also entered into
      two separate agreements (domestic and European) whereby we agreed to provide
      certain general and administrative, research and development, and logistics
      services to WGN for an annual fee. The domestic service agreement provided
      for a
      one year term, with an option by either party to extend the term for one
      additional year. The parties exercised this option for the second year and
      have
      further extended the term of the agreement through March 1, 2008. In connection
      with the sale of our Haleko Unit, the European service agreement was transferred
      to the purchaser of the Haleko Unit. We also received a license to use the
      Weider name for corporate purposes prior to transitioning to the new name for
      our company.





The
      operating results for our Haleko Unit and Weider branded business are reflected
      as discontinued operations in our condensed consolidated financial statements,
      including the notes thereto. The remaining assets and related operations for
      the
      Active Nutrition Unit, including our Tiger’s Milk and Fi-Bar brands, have been
      consolidated into our Schiff Specialty Unit. We believe our remaining Schiff
      Specialty Unit, which consists of the aggregation of several product-based
      operating segments, represents our only reportable segment.





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, no assurance can
      be
      given 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.





**Results
      of Operations
      (unaudited)**


*Three
      Months Ended February 28, 2006 Compared to Three Months*


*Ended
      February 28, 2005*





The
      following tables show comparative results for selected items as reported and
      as
      a percentage of net sales for the three months ended February 28, *(dollars
      in thousands):*


2006
              
              2005Net
                  sales
              
              $
              49,641
              
              
              100.0
              %
              $
              45,185
              
              
              100.0
              %Cost
                  of goods sold
              
              
              32,709
              
              
              65.9
              
              
              30,988
              
              
              68.6Gross
                  profit
              
              
              16,932
              
              
              34.1
              
              
              14,197
              
              
              31.4Operating
                  expenses:Selling
                  and marketing
              
              
              8,527
              
              
              17.2
              
              
              7,736
              
              
              17.1General
                  and administrative
              
              
              3,609
              
              
              7.3
              
              
              2,882
              
              
              6.4Research
                  and development
              
              
              667
              
              
              1.3
              
              
              689
              
              
              1.5Amortization
                  of intangible assets
              
              
              6
              
              
              —
              
              
              7
              
              
              —Reimbursement
                  of import costs
              
              
              (125
              )
              
              (0.3
              )
              
              —
              
              
              —Total
                  operating expenses
              
              
              12,684
              
              
              25.5
              
              
              11,314
              
              
              25.0Income
                  from operations
              
              
              4,248
              
              
              8.6
              
              
              2,883
              
              
              6.4Other
                  income, net
              
              
              502
              
              
              1.0
              
              
              37
              
              
              —Income
                  tax expense
              
              
              (1,561
              )
              
              (3.2
              )
              
              (1,124
              )
              
              (2.4
              )Income
                  from continuing operations
              
              $
              3,189
              
              
              6.4
              %
              $
              1,796
              
              
              4.0
              %




**Net
      Sales.** Net
      sales increased approximately 9.9% to $49.6 million for the fiscal 2006 third
      quarter, from $45.2 million for the fiscal 2005 third quarter. Overall, the
      increase in net sales was primarily attributable to an increase in branded
      net
      sales, partially offset by an expected decrease in private label sales.





Aggregate
      branded net sales increased approximately 29.0% to $42.1 million for the fiscal
      2006 third quarter, from $32.7 million for the fiscal 2005 third quarter. The
      branded sales volume increase of approximately $10.9 million, or 25.5%, was
      partially offset by a $1.3 million increase in branded sales price reductions
      related to incremental promotional incentives and a $0.2 million increase in
      allowances for potential product returns. Classification of promotional costs
      as
      a sales reduction is





12


Back
      to
      Index


required
      when the promotion effectively represents a price reduction. We are utilizing
      more price-discount like promotions directed towards defending our products
      against the competition, including private label, and ultimately increasing
      our
      market share. Move Free net sales were $24.9 million and $17.7 million,
      respectively, for the fiscal 2006 and 2005 third quarters.





Private
      label sales were $7.5 million and $12.5 million, respectively, for the fiscal
      2006 and 2005 third quarters. During fiscal 2005 and early fiscal 2006, as
      a
      result of significant volatility in raw material costing and the inability
      to
      secure an acceptable price increase from the customers, we discontinued certain
      private label (contract manufacturing) business. Net sales for the discontinued
      private label business amounted to approximately $6.2 million for the fiscal
      2005 third quarter. Net sales for our continuing private label business
      increased by approximately $1.2 million, or 19.2%, quarter over
      quarter.





**Gross
      Profit.** Gross
      profit increased approximately 19.3% to $16.9 million for the fiscal 2006 third
      quarter, from $14.2 million for the fiscal 2005 third quarter. Gross profit,
      as
      a percentage of net sales, was 34.1% for the fiscal 2006 third quarter, compared
      to 31.4% for the fiscal 2005 third quarter. The percentage increase was
      primarily attributable to an approximate $2.2 million increase from higher
      margin joint category branded sales coupled with a decrease in raw material
      costs, partially offset by a $1.0 million increase in sales price reductions,
      free goods and allowances for product returns. While we believe the fiscal
      2006
      fourth quarter gross profit margin may continue to improve compared to the
      fiscal 2006 third quarter, competitive retail pricing conditions may negatively
      impact long-term gross margin levels.





**Operating
      Expenses.** Operating
      expenses increased approximately 12.1% to $12.7 million for the fiscal 2006
      third quarter, from $11.3 million for the fiscal 2005 third quarter. Operating
      expenses, as a percentage of net sales, were 25.5% and 25.0%, respectively,
      for
      the fiscal 2006 and 2005 third quarters. The fiscal 2006 third quarter operating
      expenses include approximately $0.1 million in reimbursements from suppliers
      of
      previously incurred costs associated with imported raw materials.





Selling
      and marketing expenses, including sales, marketing, advertising, freight and
      other costs, increased approximately 10.2% to $8.5 million for the fiscal 2006
      third quarter, from $7.7 million for the fiscal 2005 third quarter, primarily
      as
      a result of increased promotional spending in support of incremental sales
      volume. Selling and marketing expenses, as a percentage of net sales, remained
      relatively constant at 17.2% and 17.1%, respectively, for the fiscal 2006 and
      2005 third quarters. In support of the launch of Move Free Advanced and other
      joint care initiatives, we expect our selling and marketing expenses as a
      percentage of net sales to increase significantly in the fiscal 2006 fourth
      quarter, as compared to the spending level during the fiscal 2006 third quarter.





General
      and administrative expenses increased to $3.6 million for the fiscal 2006 third
      quarter, from $2.9 million for the fiscal 2005 third quarter, primarily due
      to
      the recognition of incremental management annual incentive program costs.
      Research and development costs remained relatively constant quarter over
      quarter.





**Other
      Income/Expense.** Other
      income/expense, net, was $0.5 million income for the fiscal 2006 third quarter,
      compared to nominal income for the fiscal 2005 third quarter. We recognized
      approximately $0.4 million of incremental interest income for the fiscal 2006
      third quarter resulting from an increase in cash and investment
      securities.





**Provision
      for Income Taxes.** Provision
      for income taxes was $1.6 million for the fiscal 2006 third quarter, compared
      to
      $1.1 million for the fiscal 2005 third quarter. During the fiscal 2006 third
      quarter, we reduced certain valuation allowances relating to capital loss carry
      forwards by approximately $0.5 million. Furthermore, income tax expense
      increased approximately $0.2 million due to an increase in our overall projected
      fiscal 2006 tax rate. As a result of these items, and the favorable impact
      of
      tax-exempt interest income, our effective tax rate was 32.9% for the fiscal
      2006
      third quarter, compared to 38.5% for the fiscal 2005 third quarter.





13


Back
      to
      Index


**Results
      of Operations(unaudited)**


*Nine
      Months Ended February 28, 2006 Compared to Nine Months*


*Ended
      February 28, 2005*





The
      following tables show comparative results for selected items as reported and
      as
      a percentage of net sales for the nine months ended February 28, *(dollars
      in thousands):*


2006
              
              2005Net
                  sales
              
              $
              133,114
              
              
              100.0
              %
              
              
              
              $
              133,148
              
              
              100.0
              %Cost
                  of goods sold
              
              
              92,263
              
              
              69.3
              
              
              
              
              
              86,105
              
              
              64.7Gross
                  profit
              
              
              40,851
              
              
              30.7
              
              
              
              
              
              47,043
              
              
              35.3Operating
                  expenses:Selling
                  and marketing
              
              
              20,603
              
              
              15.5
              
              
              
              
              
              21,093
              
              
              15.8General
                  and administrative
              
              
              11,252
              
              
              8.4
              
              
              
              
              
              9,974
              
              
              7.5Research
                  and development
              
              
              1,978
              
              
              1.5
              
              
              
              
              
              2,503
              
              
              1.9Amortization
                  of intangible assets
              
              
              17
              
              
              —
              
              
              
              
              
              20
              
              
              —Reimbursement
                  of import costs
              
              
              (2,413
              )
              
              (1.8
              )
              
              
              
              
              —
              
              
              —Total
                  operating expenses
              
              
              31,437
              
              
              23.6
              
              
              
              
              
              33,590
              
              
              25.2Income
                  from operations
              
              
              9,414
              
              
              7.1
              
              
              
              
              
              13,453
              
              
              10.1Other
                  income (expense), net
              
              
              2,756
              
              
              2.1
              
              
              
              
              
              (149
              )
              
              (0.1
              )Income
                  tax expense
              
              
              (2,384
              )
              
              (1.8
              )
              
              
              
              
              (5,121
              )
              
              (3.9
              )Income
                  from continuing operations
              
              $
              9,786
              
              
              7.4
              %
              
              
              
              $
              8,183
              
              
              6.1
              %


**Net
      Sales.** Net
      sales remained relatively constant at $133.1 million for the nine months ended
      February 28, 2006 and 2005. An increase in aggregate branded net sales,
      primarily in our joint care category, was offset by an expected decrease in
      private label sales.





Aggregate
      branded net sales increased 15.2% to $109.0 million for the nine months ended
      February 28, 2006, from $94.6 million for the nine months ended February 28,
      2005. Branded joint care product sales volume, including Lubriflex 3 results, increased approximately $18.4 million, or 18.8%, which more than offset
      a $4.6 million increase in sales price reductions and a $0.4 million increase
      in
      allowances for potential product returns associated with branded sales. Move
      Free net sales were $64.5 million and $54.2 million, respectively, for the
      nine
      months ended February 28, 2006 and 2005.





Private
      label sales were $24.2 million and $38.6 million, respectively, for the nine
      months ended February 28, 2006 and 2005. During fiscal 2005 and early fiscal
      2006, as a result of significant volatility in raw material costing and the
      inability to secure an acceptable price increase from the customers, we
      discontinued certain private label (contract manufacturing) business. Net sales
      for the discontinued private label business amounted to approximately $1.7
      million and $20.9 million, respectively, for the nine months ended February
      28,
      2006 and 2005. Net sales for our continuing private label business increased
      approximately 26.9% to $22.5 million for the nine months ended February 28,
      2006, from $17.7 million for the nine months ended February 28,
      2005.





**Gross
      Profit.** Gross
      profit decreased approximately 13.2% to $40.9 million for the nine months ended February
      28, 2006, from $47.0 million for the nine months ended February 28, 2005. Gross
      profit, as a percentage of net sales, was 30.7% and 35.3%, respectively, for
      the
      nine months ended February 28, 2006 and 2005. The decrease in gross profit
      was
      primarily due to an approximate $3.4 million increase in raw material costs
      associated with our joint care category business, and a $5.8 million increase
      in
      sales price reductions. The decrease was partially offset by an approximate
      $3.1
      million increase due to a change in sales mix towards higher margin branded
      sales.





**Operating
      Expenses.** Operating
      expenses decreased approximately 6.4% to $31.4 million for the nine months
      ended
      February 28, 2006, from $33.6 million for the nine months ended February 28,
      2005. Operating expenses, as a percentage of net sales, were 23.6% and 25.2%,
      respectively, for the nine months ended February 28, 2006 and 2005. The fiscal
      2006 nine month results include approximately $2.4 million in reimbursements
      from suppliers of previously incurred costs associated with imported raw
      materials.





Selling
      and marketing expenses, including sales, marketing, advertising, freight and
      other costs, decreased to approximately $20.6 million for the nine months ended
      February 28, 2006, from $21.1 million for the nine months ended February 28,
      2005. Selling and marketing expenses, as a percentage of net sales, were 15.5%
      and





14


Back
      to
      Index


15.8%,
      respectively, for the nine months ended February 28, 2006 and 2005. The
      decrease, primarily due to a $3.7 million increase in price discount-like
      promotional costs classified as a reduction of sales, was substantially offset
      by the impact of the approximate $14.4 million decrease in private label sales
      for which promotional spending is nominal.





General
      and administrative expenses increased to $11.3 million for the nine months
      ended
      February 28, 2006, from $10.0 million for the nine months ended February 28,
      2005. An increase in personnel related costs of approximately $2.5 million,
      including severance expenses of approximately $0.4 million and the recognition
      of incremental management annual incentive program costs, was partially offset
      by a reduction in legal related costs.





Research
      and development costs decreased to approximately $2.0 million for the nine
      months ended February 28, 2006, from $2.5 million for the nine months ended
      February 28, 2005, primarily resulting from a decrease in contracted research
      relating to new product initiatives.





**Other
      Income/Expense.** Other
      income/expense, net, was $2.8 million income for the nine months ended February
      28, 2006, compared to $0.1 million expense for the nine months ended February
      28, 2005. We recognized approximately $1.1 million of incremental interest
      income for the nine months ended February 28, 2006, primarily resulting from
      an
      increase in cash and investment securities. Interest expense decreased as a
      result of a reduction in financing fees under our current credit facility.
      Finally, as a result of the divestiture of our Haleko Unit, certain
      international operating entities were substantially liquidated. Accordingly,
      we
      recognized a non-taxable net foreign currency translation gain, previously
      reported as other accumulated comprehensive income in stockholders’ equity, of
      approximately $1.6 million during the nine months ended February 28,
      2006.





**Provision
      for Income Taxes.** Provision
      for income taxes was $2.4 million for the nine months ended February 28, 2006,
      compared to $5.1 million for the nine months ended February 28, 2005. In
      addition to the favorable impact of the non-taxable net foreign currency
      translation gain noted in “Other Income/Expense” above, the fiscal 2006 first
      quarter sale of the Haleko Unit resulted in the recognition of a gain under
      Internal Revenue Code Section 987 (“Section 987”). We reduced our estimated
      deferred tax liability for Section 987 obligations by approximately $0.8
      million, which is reflected as a decrease in income tax expense for the nine
      months ended February 28, 2006. In addition, we reduced certain valuation
      allowances and contingent tax liabilities by approximately $0.7 million during
      the nine months ended February 28, 2006. As a result of these unusual items,
      and
      the favorable impact of significant tax-exempt interest income, our effective
      tax rate was 19.6% for the nine months ended February 28, 2006, compared to
      38.5% for the nine months ended February 28, 2005.





**Liquidity
      and Capital Resources**





Working
      capital increased approximately $17.9 million to $83.9 million at February
      28,
      2006, from $66.0 million at May 31, 2005, primarily due to an increase in cash
      and investment securities primarily resulting from operating cash flows for
      the
      nine months ending February 28, 2006 and the sale of our Haleko Unit.





Effective
      June 30, 2000, we were party to a senior credit facility (the “Credit Facility”)
      with Bankers Trust Company, on behalf of our domestic subsidiaries. The Credit
      Facility, as subsequently amended, was comprised of a $45.0 million revolving
      loan. The Credit Facility, which was being used to fund normal working capital
      and capital expenditure requirements, was terminated on June 30, 2004 in favor
      of a new credit facility discussed below.





On
      June 30, 2004, we entered into, through our wholly-owned direct operating
      subsidiary Schiff Nutrition Group, Inc. (“SNG”) (formerly Weider Nutrition
      Group, Inc.), a new $25.0 million revolving credit facility (the “New Credit
      Facility”) with KeyBank National Association, as Agent. The New Credit Facility
      contains customary terms and conditions, including, among others, financial
      covenants and certain restrictions. Our obligations under the New 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 the lesser
      of
      $25.0 million or the sum of (i) 85% of eligible accounts receivable and (ii)
      65%
      of eligible inventory. Borrowings under the New Credit Facility bear interest
      at
      floating rates based on the KeyBank National Association prime rate or the
      Federal Funds effective rate. The New Credit Facility matures on June 30, 2007,
      with options for one-year extensions under certain circumstances. The New Credit
      Facility can be used to fund our normal working capital and capital expenditure
      requirements, with availability to fund certain permitted strategic
      transactions. At February 28, 2006, there were no amounts outstanding and $25.0
      million was available under the New Credit Facility.





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





15


Back
      to
      Index


with
      our existing business. We may use cash and financing sources discussed herein,
      or financing sources that subsequently become available, to fund additional
      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 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
      New
      Credit Facility contains certain customary financial covenants that may limit
      our ability to pay common stock dividends. We can give no assurance that we
      will
      pay dividends in the future.





Except
      as noted in the table below, we do not have any off-balance sheet arrangements
      that have or are reasonably likely to have a current or future effect on our
      financial condition, changes in financial condition, revenues or expenses,
      results of operations, liquidity, capital expenditures or capital resources
      that
      are material to our investors.





A
      summary of our outstanding contractual obligations at February 28, 2006 is
      as
      follows (in thousands):





ContractualCash
                Obligations
            
            Total
                Amounts Committed
            
            Less
                than
              1
                year
            
            1-3
              Years
            
            3-5
              Years
            
            After
              5
                YearsOperating
                leases
            
            $
            16,954
            
            $
            2,333
            
            $
            5,156
            
            $
            4,651
            
            $
            4,814Purchase
                obligations
            
            
            20,765
            
            
            20,765
            
            
            —
            
            
            —
            
            
            —Debt
                obligations, including interest
            
            
            246
            
            
            246
            
            
            —
            
            
            —
            
            
            —Total
                obligations
            
            $
            37,965
            
            $
            23,344
            
            $
            5,156
            
            $
            4,651
            
            $
            4,814





Purchase
      obligations primarily consist of open purchase orders for goods and services,
      including primarily raw materials, packaging and outsourced contract
      manufacturing commitments.





**CriticalAccounting
      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, valuation of deferred tax assets and recoverability of long-lived
      assets. Note 1 to the consolidated financial statements contained in our Annual
      Report on Form 10-K for the year ended May 31, 2005, 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 and market conditions. Inventory valuation adjustments
                did
                not materially impact our gross profit for the nine months ended
                February
                28, 2006 and 2005. At February 28, 2006 and May 31, 2005, our inventory
                valuation allowance amounted to approximately $0.9 million and $2.2
                million, respectively. The reduction in inventory valuation allowances
                resulted primarily from the sale of our Haleko Unit. 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 resulted in a decrease in our
                gross
                profit and operating income of approximately $1.1 million and $0.4
                million, respectively, for the nine months ended February 28, 2006
                and
                2005. At February 28, 2006 and May 31, 2005, our allowance for doubtful
                accounts, sales returns and discounts amounted to approximately $5.1
                million and $4.8 million, respectively. As a result of the sale of
                our
                Haleko Unit, our allowance for doubtful accounts, sales returns and
                discounts decreased by approximately $0.8 million. Actual results
                may
                differ from our current estimates, resulting in adjustment of the
                respective allowance(s).





16


Back
      to
      Index





·
            We
                currently have deferred tax assets resulting from certain loss carry
                forwards and other 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. To the extent
                that it
                is more likely than not that future operations will not generate
                sufficient profit to utilize the loss carry forwards, valuation allowances
                are established. Changes in these valuation allowances resulted in
                an
                increase in net income of approximately $0.3 million for the nine
                months
                ended February 28, 2006. At February 28, 2006 and May 31, 2005, our
                deferred tax asset valuation allowances, primarily relating to foreign
                net
                operating loss and tax credit carry forwards, amounted to approximately
                $0.7 million and $2.8 million, respectively. As a result of the sale
                of
                our Haleko Unit, our valuation allowance decreased by approximately
                $1.8
                million.





·
            We
                have certain intangible assets, primarily consisting of goodwill.
                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.





**Impact
      of Inflation**





Historically,
      we generally have been able to pass inflationary increases for raw materials
      and
      other costs on to our customers through price increases. While we will continue
      efforts to do so in the future, we cannot assure you that we will be successful.
      Recently, we have been unable to pass on to our customers increased raw material
      costs relating to our joint care products. See further discussion of raw
      material pricing matters in the “General” and “Results of Operations” sections
      above, and under “Forward-Looking Statements” below.





**Seasonality**





Our
      business can be seasonal, with 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.





**Forward-Looking
      Statements**





Investors
      are cautioned that, except for the historical information contained herein,
      the
      matters discussed in this Quarterly Report contain 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 (“Securities
      Exchange Act”), that are based on management’s beliefs and assumptions, current
      expectations, estimates and projections. Statements that are not historical
      facts, including without limitation statements which are preceded by, followed
      by or include the words “believes”, “anticipates”, “plans”, “expects”,
“estimates”, “may”, “should” or similar expressions, are forward-looking
      statements. These statements are subject to risks and uncertainties, certain
      of
      which are beyond our control, and, therefore, actual results may differ
      materially.





Important
      factors that may affect our future performance or cause these forward-looking
      statements to be false include, but are not limited to the
      following.





***Dependence
      on Significant Customers*** **.** Our largest customers are Costco and Wal-Mart. Combined, these two customers
      accounted for approximately 71% and 73%, respectively, of our total net sales
      (after giving effect to the divestitures of our Weider branded business and
      Haleko Unit) for the nine months ended February 28, 2006 and 2005. Due to the
      divestitures of our Weider branded business and Haleko Unit, the concentration
      in these customers for our remaining operations has increased. The loss of
      either Costco or Wal-Mart as a customer, or a significant reduction in purchase
      volume by Costco or Wal-Mart, could have a material adverse effect on our
      results of operations and financial condition. We do not have supply contracts
      with either Costco or Wal-Mart and therefore we cannot assure you that Costco
      and/or Wal-Mart will continue to be significant customers.





***Dependence
      on Individual Products and Product Lines*** **.** Certain products and product lines account for a significant amount of our
      total
      net sales. Net sales for our Schiff Move Free brand were approximately 48%
      and
      41%, respectively, of our total net sales (after giving effect to the
      divestitures of our Weider branded business





17


Back
      to
      Index


and
      Haleko Unit) for the nine months ended February 28, 2006 and 2005. Due to the
      divestitures of our Weider branded business and Haleko Unit, our concentration
      in this brand and the joint care category has increased. We cannot assure you
      that Schiff Move Free or other of our products currently experiencing strong
      popularity and growth will maintain sales levels over time. A significant
      decrease in Move Free or joint care category sales could have a material adverse
      effect on our results of operations and financial condition.





***Availability
      and Cost of Raw Materials.*** We
      obtain all of our raw materials for the manufacture of our products from third
      parties. A significant portion of our raw materials relates to our joint care
      category. We cannot assure you that suppliers will provide the raw materials
      we
      need in the quantities requested, at a price we are willing to pay or that
      meet
      our quality standards and labeling requirements. We are also subject to
      potential delays in the delivery of raw materials caused by events beyond our
      control, including, among other factors, strikes or labor disputes,
      transportation interruptions, weather-related events, natural disasters or
      other
      catastrophic events, and changes in government regulations. Any significant
      delay in or disruption of the supply of raw materials could, among other things,
      substantially increase the cost of such materials, require reformulation or
      repackaging of products, require the qualification of new suppliers, or result
      in our inability to meet customer demands for certain products. During fiscal
      2005 and continuing into the first nine months of fiscal 2006, we experienced
      margin volatility due to several factors, including significant raw material
      pricing increases in the joint care category and a continuing strong competitive
      environment. During fiscal 2005 and early fiscal 2006, as a result of the raw
      material pricing volatility and the inability to secure acceptable price
      increases from the customers, we discontinued certain private label (contract
      manufacturing) business. During the fiscal 2006 second and third quarters,
      raw
      material pricing in the joint care category decreased and appears to have
      stabilized. As a result of previous purchase commitments, we anticipate that
      higher joint care raw material costs will continue to impact gross profit for
      at
      least the remainder of fiscal 2006.





In
      addition, we acquire a significant amount of ingredients for a number of our
      products (particularly joint care products) from suppliers outside of the United
      States, particularly in China. Accordingly, the acquisition of these ingredients
      is subject to the risks generally associated with importing raw materials,
      including, among other factors, delays in shipments, changes in economic and
      political conditions, quality assurance, tariffs, trade disputes and foreign
      currency fluctuations. The discovery of Bovine Spongiform Encephalopathy,
      commonly referred to as “mad cow disease”, in a country from which we obtain a
      significant amount of our raw materials (particularly related to the joint
      care
      category) derived from bovine sources could prevent us from purchasing such
      raw
      materials in the required quantities, at an acceptable price, if at all. The
      occurrence of any of the foregoing, particularly with respect to raw materials
      needed for our joint care products, could have a material adverse effect on
      our
      results of operations and financial condition.





***Dependence
      on New Products*** **.** We
      believe our ability to grow in existing markets is partially dependent upon
      our
      ability to introduce new and innovative products. Although we seek to introduce
      additional products each year, the success of new products is subject to a
      number of variables, including developing products that will appeal to customers
      and comply with applicable regulations. For example, if we are unable to
      successfully launch and/or gain distribution for Schiff Move Free Advanced,
      other product enhancements or new product offerings, our results of operations
      could suffer. In support of the launch of our new Move Free Advanced product
      and
      other joint care initiatives, we expect our selling and marketing support as
      a
      percentage of net sales to increase significantly in the fiscal 2006 fourth
      quarter, as compared to the 17.2% of net sales spending level during the fiscal
      2006 third quarter. The inability to successfully implement the marketing and
      spending programs or strategic initiatives in support of Schiff Move Free
      Advanced and other branded products could have a material adverse effect on
      our
      results of operations and financial condition. We cannot assure you that our
      efforts to develop and introduce new products or existing product innovations
      will be successful, or that customers will accept new products.





***Acquisitions
      and Investments.*** An
      element of our strategy going forward includes expanding our product offerings,
      enhancing business development and gaining access to new skills and other
      resources through strategic acquisitions and investments when attractive
      opportunities arise. There can be no assurance that attractive acquisition
      opportunities will be available to us, that we will be able to obtain financing
      for or otherwise consummate any acquisitions or that any acquisitions which
      are
      consummated will prove to be successful.





***Risks
      of Competition*** **.** The market for the sale of nutritional supplements is highly competitive.
      Certain of our principal competitors have greater financial and other resources
      available to them and possess extensive manufacturing, distribution and
      marketing capabilities. Private label products of our customers, which have
      been
      significantly increasing in certain nutrition categories, also create
      significant competition with our products. Pricing pressure could adversely
      affect our ability to pass on raw material price increases to customers and
      negatively impact our financial performance, as shown by the recent increases
      in
      our joint product raw material costs. During fiscal 2005 and early fiscal 2006,
      as a result of the raw material pricing volatility and the inability to secure
      acceptable price increases from the customers, we discontinued certain private
      label (contract manufacturing) business. Increased competition from competitors,
      including private label, or increased pricing pressure, could have a material
      adverse effect on our results of operations and financial
      condition.





18


Back
      to
      Index


***Effect
      of Unfavorable Publicity*** **.** We
      believe our sales depend on consumer perceptions of the safety, quality and
      efficacy of our products as well as related products distributed and sold by
      other companies. Consumer perceptions are influenced by national media attention
      regarding our products and other nutritional supplements. From time to time,
      there is some unfavorable publicity or scientific research regarding our
      industry. Future unfavorable reports or publicity could have a material adverse
      effect on our results of operations and financial condition.





***Product
      Liability and Availability of Related Insurance*** **.** As
      a manufacturer and distributor of products designed to be ingested, we face
      an
      inherent risk of exposure to product liability claims and
      litigation .
      Certain damages in litigation, such as punitive damages, are generally not
      covered by insurance. In the event that we do not have adequate insurance or
      other indemnification coverage, product liability claims and litigation could
      have a material adverse effect on our results of operations and financial
      condition.





We
      have been and are currently named as a defendant in a product liability lawsuit
      allegedly regarding certain of our former ephedra products. Subsequent to
      September 1, 2003, we have not maintained any insurance coverage regarding
      ephedra products. Our ongoing lawsuit regarding ephedra products is not covered
      by insurance. In connection with the sale of the American Body Building and
      Science Foods brands in July 2002, we discontinued the sale of products that
      contain ephedra. However, we cannot assure you that we will not be subject
      to
      further litigation with respect to ephedra products we have already
      sold.





***Impact
      of Government Regulation on Our Operations*** **.** Our operations, properties and products are subject to regulation by various
      foreign, federal, state and local government entities and agencies, particularly
      the Food and Drug Administration (“FDA”) and Federal Trade Commission (“FTC”) in
      the United States. Among other matters, government regulation covers statements
      and claims made in connection with the packaging, labeling, marketing and
      advertising of our products. Governmental agencies have a variety of processes
      and remedies available to them, including initiating investigations, issuing
      warning letters and cease and desist orders, requiring corrective labeling
      or
      advertising, requiring consumer redress, seeking injunctive relief or product
      seizure, imposing civil penalties or commencing criminal prosecution. As a
      result of our efforts to comply with applicable statutes and regulations, from
      time to time we have reformulated, eliminated or relabeled certain of our
      products and revised certain aspects of our sales, marketing and advertising
      programs. We cannot assure you that we will not have to make such changes or
      revisions in the future, which changes or revisions could have a material
      adverse effect on our results of operations and financial
      condition.





The
      FDA has proposed extensive good manufacturing practice regulations for dietary
      supplements. In addition, we may be subject to additional laws or regulations
      administered by federal, state, or foreign regulatory authorities, the repeal
      or
      amendment of laws or regulations which we consider favorable, such as the
      Dietary Supplement Health and Education Act of 1994, as amended, or more
      stringent interpretations of current laws or regulations. We are unable to
      predict the nature of such future laws, regulations, interpretations or
      applications, nor can we predict what effect additional governmental regulations
      or administrative orders, when and if promulgated, would have on our business
      in
      the future. Any or all of these requirements and the related costs to comply
      with such requirements could have a material adverse effect on our results
      of
      operations and financial condition.





***Restrictions
      Imposed by Terms of Our Indebtedness*** **.** Our borrowing arrangements impose certain financial and operating covenants,
      including, among others, requirements that we maintain, under certain
      circumstances, certain financial ratios and satisfy certain financial tests,
      limitations on capital expenditures and limitations on our ability to incur
      debt, pay dividends, or take certain other corporate actions, all of which
      may
      restrict our ability to expand or pursue our business strategies. Changes in
      economic or business conditions, results of operations or other factors could
      cause a violation of one or more covenants in our credit facility.





***Control
      by Principal Stockholder*** **.** WHF owns all of our outstanding shares of Class B common stock, representing
      over 90% of the aggregate voting power of all outstanding shares of our common
      stock. WHF is in a position to exercise control over us and to determine the
      outcome of all matters required to be submitted to stockholders for approval
      (except as otherwise provided by law or by our amended and restated certificate
      of incorporation or amended and restated bylaws) and otherwise to direct and
      control our operations. Accordingly, we cannot engage in any strategic
      transactions without the approval of WHF.





***Third-Party
      Intellectual Property Rights and Proprietary
      Techniques.*** Although the nutritional supplement industry has historically been characterized
      by products with naturally occurring ingredients in pill or tablet form,
      recently it is becoming more common for suppliers and competitors to apply
      for
      patents or develop proprietary technologies and processes. Although we seek
      to
      ensure that we do not infringe the intellectual property rights of others,
      there
      can be no assurance that third parties will not assert intellectual property
      infringement claims against us. To the extent that these developments prevent
      us
      from offering or supplying competitive products or ingredients in the
      marketplace, or result in litigation or threatened litigation against us related
      to alleged or actual infringement of third-party rights, these developments
      could have a material adverse effect on our results of operations and financial
      condition.





19


Back
      to
      Index





**ITEM3.**
            **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 are subject to fluctuations resulting from changes
      in interest rates. Previously, our cash flows and net earnings were also subject
      to fluctuations resulting from changes in foreign currency exchange rates.
      However, as a result of the recent divestitures of our Weider branded business
      and Haleko Unit, we no longer have operating subsidiaries whose net sales and
      expenses are denominated in foreign currencies. Therefore, changes in foreign
      currency exchange rates are not expected to have a material impact on future
      cash flows and net earnings. 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. We do not believe
      that a hypothetical 10% change in interest rates would have a material effect
      on
      our pretax earnings or cash flows.





**ITEM4.**
            **CONTROLS
                AND PROCEDURES**





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 Securities Exchange Act Rule 13a-15(b), we carried out an
      evaluation, under the supervision and with the participation of 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 quarter covered by this report. Based on the
      foregoing, the Chief Executive Officer and Chief Financial Officer have
      concluded that our disclosure controls and procedures were effective at the
      reasonable assurance level.





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.





20


Back
      to
      Index


**PARTII.
      OTHER INFORMATION**







**ITEM1.**
            **LEGAL
                PROCEEDINGS**





The
      information set forth in Note 8 to Condensed Consolidated Financial Statements
      in Item 1 of Part I of this Quarterly Report on Form 10-Q is incorporated herein
      by reference.





**ITEM2.**
            **UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF
                PROCEEDS**





Not
      applicable





**ITEM3.**
            **DEFAULTS
                UPON SENIOR SECURITIES**





Not
      applicable





**ITEM4.**
            **SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY
                HOLDERS**





Not
      applicable





**ITEM5.**
            **OTHER
                INFORMATION**





Not
      applicable


**ITEM6.**
              **EXHIBITS**
 
 3.1.
              Amended
                  and Restated Certificate of Incorporation of Schiff Nutrition
                  International, Inc. (1)3.2.
              Amended
                  and Restated Bylaws of Weider Nutrition International, Inc.
                  (2)4.1.
              Credit
                  Agreement dated as of June 30, 2004 between Weider Nutrition Group,
                  Inc.
                  and KeyBank National Association. (3)10.1.
              Build-To-Suit
                  Lease Agreement, dated March 20, 1996, between SCI Development
                  Services
                  Incorporated and Weider Nutrition Group, Inc. (2)10.2.
              Agreement
                  by and between Joseph Weider and Weider Health and Fitness.
                  (2)10.3.
              1997
                  Equity Participation Plan of Weider Nutrition International, Inc.
                  (2)10.4.
              Form
                  of Tax Sharing Agreement by and among Weider Nutrition International,
                  Inc.
                  and its subsidiaries and Weider Health and Fitness and its subsidiaries.
                  (2)10.5.
              License
                  Agreement between Mariz Gestao E Investmentos Limitada and Weider
                  Nutrition Group, Limited. (2)10.6.
              Agreement
                  between Weider Nutrition Group, Inc. and Bruce J. Wood.
                  (4)*10.7.
              Form
                  Agreement between Weider Nutrition Group, Inc. and certain of its
                  executives. (4)*10.8.
              Amendments
                  to 1997 Equity Participation Plan of Weider Nutrition International,
                  Inc.
                  (5)10.9.
              Employment
                  Agreement between Weider Nutrition Group, Inc. and Bruce J. Wood.
                  (6)*10.10.
              Consulting
                  Agreement between Weider Nutrition Group, Inc. and Gustin Foods,
                  LLC dated
                  as of February 1, 2004. (7)10.11.
              Weider
                  Nutrition International, Inc. 2004 Incentive Award Plan.
                  (8)10.12.
              Amendment
                  effective as of March 1, 2005 to License Agreement between Mariz
                  Gestao E
                  Investmentos Limitada and Weider Nutrition Group, Inc.
                  (9)10.13.
              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. (9)10.14.
              Promissory
                  Note of Weider Global Nutrition, LLC payable to Weider Nutrition
                  Group,
                  Inc. (9)10.15.
              Guarantee
                  by Weider Health and Fitness in favor of Weider Nutrition International,
                  Inc. and Weider Nutrition Group, Inc. (9)10.16.
              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. (10)10.17.
              Form
                  of Indemnification Agreement between Weider Nutrition Group, Inc.
                  and
                  certain of its executives and directors. (11)*10.18.
              Form
                  of Restricted Stock Unit Award Grant Notice, Restricted Stock Unit
                  Award
                  Agreement and Deferral Election between Schiff Nutrition Group,
                  Inc. and
                  certain of its executives. (12)*21.1.
              Subsidiaries
                  of Schiff Nutrition International, Inc. (13)31.1.
              Certification
                  of Chief Executive Officer pursuant
                  to Section 302 of the Sarbanes-Oxley Act. (14)31.2.
              Certification
                  of Chief Financial Officer pursuant
                  to Section 302 of the Sarbanes-Oxley Act. (14)32.1.
              Certification
                  of Chief Executive Officer and Chief
                  Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
                  Act.
                  (14)
 
 (1)
              Previously
                  filed 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), filed on October 16, 1996 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 Current Report on Form 8-K filed on February 3,
                  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 Annual Report on Form 10-K filed on August 29, 2002
                  and incorporated herein by reference.(7)
              Previously
                  filed in the Company’s Quarterly Report on Form 10-Q filed on April
                  14,
                  2004 and incorporated herein by reference.(8)
              Previously
                  filed in the Company’s Definitive Proxy Statement on Form 14A filed on
                  September 28, 2004 and incorporated herein by
                  reference.(9)
              Previously
                  filed in the Company’s Current Report on Form 8-K filed on April 4, 2005
                  and incorporated herein by reference.(10)
              Previously
                  filed in the Company’s Current Report on Form 8-K filed on June 23, 2005
                  and incorporated herein by reference.(11)
              Previously
                  filed in the Company’s Current Report on Form 8-K filed on August 10, 2005
                  and incorporated herein by reference.(12)
              Previously
                  filed in the Company’s Current Report on Form 8-K filed on March 23, 2006
                  and incorporated herein by reference.(13)
              Previously
                  filed in the Company’s Annual Report on Form 10-K filed on August 29, 2005
                  and incorporated herein by reference.(14)
              Filed
                  herewith.*
              Management
                  contract.





21


Back
      to
      Index


**SIGNATURES**





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:
                April 14, 2006
            By:
            /s/
                BRUCE J. WOODBruce
                J. WoodPresident,
                Chief Executive Officer and
                Director











Date:
                April 14, 2006
            By:
            /s/
                JOSEPH W. BATYJoseph
                W. BatyExecutive
                Vice President and Chief Financial
                Officer





22


**SchiffNutrition
        International, Inc.**
 **Index**
 
 **Part
        I.** **Financial
        Information**
 Item
        1. Financial Statements
 Condensed
        Consolidated Balance Sheets
 Condensed
        Consolidated Statements Of Income*(3
        Month)*
 Condensed
        Consolidated Statements Of Income*(9
        Month)*
 Condensed
        Consolidated Statements Of Cash Flows
 Notes
        To Condensed Consolidated Financial
        Statements
 1.
            Basis
                Of Presentation And Other
                Matters 2.
            Investment
                Securities 3.
            Trade
                and other receivables,
                Net 4.
            Inventories 5.
            Goodwill
                And Intangible Assets,
                Net 6.
            Accrued
                Expenses 7.
            Concentration
                Risk 8.
            Commitments
                And
                Contingencies 9.
            Recently
                Issued Accounting
                Standards 10.
            Subsequent
                Event Item
        2. Management’s Discussion And Analysis Of Financial
        Condition And Results Of Operations
 -
            General ●
            Results
                Of
                Operations (Unaudited)*(3
                Month)* ●
            Results
                Of
                Operations (Unaudited)*(9
                Month)* -
            Liquidity
                And Capital
                Resources -
            Critical
                Accounting Policies And
                Estimates -
            Impact
                Of Inflation -
            Seasonality -
            Forward-Looking
                Statements Item
        3.Quantitative
        And
        Qualitative Disclosures About Market Risk
 Item
        4. Controls
        And Procedures
 **Part
        II.** **Other
        Information**
 Item
        1. Legal Proceedings
 Item
        2.Unregistered
        Sales
        Of Equity Securities And Use Of Proceeds
 Item
        3.Defaults
        Upon
        Senior Securities
 Item
        4.Submission
        Of
        Matters To A Vote Of Security Holders
 Item
        5.Other
        Information
 Item
        6.Exhibits
  **Signatures**
 
 **Exhibit
        31.1**- Certification of CEO
        pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  **Exhibit
        31.2**- Certification of CFO
        pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  **Exhibit
        32.1** - CEO and CFO
        Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
        2002