**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** |
|------------|--------|----------------------------------------------------------------------------------------------|

 

**Forthe quarterly period ended February 28, 2003**

 
| **o** |   | **TRANSITION  REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|--------|-----------------------------------------------------------------------------------------------|

 

**For thetransition period from         to       .**

 

**Commissionfile number:**

**001-14608**

 

**WEIDER NUTRITION INTERNATIONAL, INC.**

(Exact name of Registrant asspecified 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)                            |

 

Registrant’stelephone number, including area code:

**(801) 975-5000**

 

Indicate by check markwhether the Registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the Registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast 90 days.  Yes ýNo o

 

Indicate by check markwhether the Registrant is an accelerated filer (as defined in Rule 126-2 of theExchange Act).  Yes oNo ý

 

Thenumber of shares outstanding of the Registrant’s common stock is 26,889,436 (asof April 1, 2003).

 

 

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**PART I.****                 FINANCIALINFORMATION**

**ITEM 1.****                  FINANCIALSTATEMENTS**

** **

**WEIDERNUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**

**CONDENSEDCONSOLIDATED BALANCE SHEETS**

**(inthousands, except share data)**

 
|                                                                                                                                    |   | **February  28,  2003** |    | **May 31,  2002** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|-------------------|--------|
|                                                                                                                                    |   | **(unaudited)**         |    |              |   |
| **ASSETS**                                                                                                                              |   |                    |    |              |   |
| Current  assets:                                                                                                                        |   |                    |    |              |   |
| Cash  and cash equivalents                                                                                                              |   | $                       | 3,217   |              | $      | 2,412 |   |
| Receivables,  net                                                                                                                       |   | 30,495                  |    | 44,587            |   |
| Inventories                                                                                                                             |   | 31,611                  |    | 29,232            |   |
| Prepaid  expenses and other                                                                                                             |   | 3,374                   |    | 2,489             |   |
| Deferred  taxes                                                                                                                         |   | 3,442                   |    | 4,100             |   |
| Net  assets held for sale                                                                                                               |   | —                  |    | 3,634             |   |
|                                                                                                                                    |   |                    |    |              |   |
| Total  current assets                                                                                                                   |   | 72,139                  |    | 86,454            |   |
|                                                                                                                                    |   |                    |    |              |   |
| Property  and equipment, net                                                                                                            |   | 27,755                  |    | 29,741            |   |
|                                                                                                                                    |   |                    |    |              |   |
| Other  assets:                                                                                                                          |   |                    |    |              |   |
| Intangible  assets, net                                                                                                                 |   | 9,835                   |    | 32,902            |   |
| Deposits  and other assets                                                                                                              |   | 5,127                   |    | 4,574             |   |
| Notes  receivable related to stock performance units, net                                                                               |   | 2,365                   |    | 3,206             |   |
| Deferred  taxes                                                                                                                         |   | 454                     |    | —            |   |
| Net  assets held for sale                                                                                                               |   | —                  |    | 1,766             |   |
|                                                                                                                                    |   |                    |    |              |   |
| Total  other assets                                                                                                                     |   | 17,781                  |    | 42,448            |   |
|                                                                                                                                    |   |                    |    |              |   |
| Total  assets                                                                                                                           |   | $                       | 117,675 |              | $      | 158,643 |   |
|                                                                                                                                    |   |                    |    |              |   |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                                           |   |                    |    |              |   |
| Current  liabilities:                                                                                                                   |   |                    |    |              |   |
| Accounts  payable                                                                                                                       |   | $                       | 17,299  |              | $      | 21,410 |   |
| Accrued  expenses                                                                                                                       |   | 16,393                  |    | 18,170            |   |
| Current  portion of long-term debt                                                                                                      |   | 13,606                  |    | 15,191            |   |
|                                                                                                                                    |   |                    |    |              |   |
| Total  current liabilities                                                                                                              |   | 47,298                  |    | 54,771            |   |
|                                                                                                                                    |   |                    |    |              |   |
| Long-term  debt                                                                                                                         |   | 725                     |    | 24,776            |   |
|                                                                                                                                    |   |                    |    |              |   |
| Deferred  taxes                                                                                                                         |   | —                  |    | 2,355             |   |
|                                                                                                                                    |   |                    |    |              |   |
| Commitments  and contingencies                                                                                                          |   |                    |    |              |   |
|                                                                                                                                    |   |                    |    |              |   |
| 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-11,916,288 and 11,276,288 |   | 119                     |    | 112               |   |
| Class  B common stock, par value $.01 per share; shares authorized-25,000,000;  shares issued and outstanding-14,973,148                |   | 150                     |    | 150               |   |
| Additional  paid-in capital                                                                                                             |   | 86,942                  |    | 85,912            |   |
| Deferred  compensation costs                                                                                                            |   | (924                    | )       | —            |   |
| Other  accumulated comprehensive loss                                                                                                   |   | (3,812                  | )       | (4,425            | )      |
| Retained  deficit                                                                                                                       |   | (12,823                 | )       | (5,008            | )      |
|                                                                                                                                    |   |                    |    |              |   |
| Total  stockholders’ equity                                                                                                        |   | 69,652                  |    | 76,741            |   |
|                                                                                                                                    |   |                    |    |              |   |
| Total  liabilities and stockholders’ equity                                                                                        |   | $                       | 117,675 |              | $      | 158,643 |   |

 

See notes tocondensed consolidated financial statements.

 

2

----

 

**WEIDERNUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**

**CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS**

**(inthousands, except share data)**

**(unaudited)**

 
|                                  |   | **Three  Months Ended  February 28,** |   |
|---------------------------------------|--------|---------------------------------------|--------|
|                                  |   | **2003**                              |   | **2002** |   |
|                                  |   |                                  |   |   |   |
| Net  sales                            |   | $                                     | 64,079 |   | $ | 74,759 |   |
|                                  |   |                                  |   |   |   |
| Cost  of goods sold                   |   | 40,512                                |   | 47,541 |   |
|                                  |   |                                  |   |   |   |
| Gross  profit                         |   | 23,567                                |   | 27,218 |   |
|                                  |   |                                  |   |   |   |
| Operating  expenses:                  |   |                                  |   |   |   |
| Selling  and marketing                |   | 13,169                                |   | 14,091 |   |
| General  and administrative           |   | 7,135                                 |   | 6,990 |   |
| Research  and development             |   | 1,249                                 |   | 1,105 |   |
| Amortization  of intangible assets    |   | 238                                   |   | 866 |   |
| Litigation  settlement                |   | —                                |   | (193 | ) |
|                                  |   |                                  |   |   |   |
| Total  operating expenses             |   | 21,791                                |   | 22,859 |   |
|                                  |   |                                  |   |   |   |
| Income  from operations               |   | 1,776                                 |   | 4,359 |   |
|                                  |   |                                  |   |   |   |
| Other  income (expense):              |   |                                  |   |   |   |
| Interest  income                      |   | 13                                    |   | 19 |   |
| Interest  expense                     |   | (578                                  | )      | (1,740 | ) |
| Other                                 |   | 164                                   |   | (108 | ) |
|                                  |   |                                  |   |   |   |
| Total  other expense                  |   | (401                                  | )      | (1,829 | ) |
|                                  |   |                                  |   |   |   |
| Income  before income taxes           |   | 1,375                                 |   | 2,530 |   |
|                                  |   |                                  |   |   |   |
| Provision  for income taxes           |   | 567                                   |   | 1,281 |   |
|                                  |   |                                  |   |   |   |
| Net  income                           |   | $                                     | 808    |   | $ | 1,249 |   |
|                                  |   |                                  |   |   |   |
| Weighted  average shares outstanding: |   |                                  |   |   |   |
|                                  |   |                                  |   |   |   |
| Basic                                 |   | 26,249,436                            |   | 26,249,436 |   |
|                                  |   |                                  |   |   |   |
| Diluted                               |   | 26,276,692                            |   | 26,249,436 |   |
|                                  |   |                                  |   |   |   |
| Net  income per share:                |   |                                  |   |   |   |
|                                  |   |                                  |   |   |   |
| Basic                                 |   | $                                     | 0.03   |   | $ | 0.05 |   |
|                                  |   |                                  |   |   |   |
| Diluted                               |   | $                                     | 0.03   |   | $ | 0.05 |   |
|                                  |   |                                  |   |   |   |
| Comprehensive  income                 |   | $                                     | 1,078  |   | $ | 551 |   |

 

See notes tocondensed consolidated financial statements.

 

3

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|                                                                          |   | **Nine  Months Ended  February 28,** |    |
|-------------------------------------------------------------------------------|--------|--------------------------------------|---------|
|                                                                          |   | **2003**                             |    | **2002** |   |
|                                                                          |   |                                 |    |   |   |
| Net  sales                                                                    |   | $                                    | 204,389 |   | $ | 231,701 |   |
|                                                                          |   |                                 |    |   |   |
| Cost  of goods sold                                                           |   | 126,534                              |    | 152,659 |   |
|                                                                          |   |                                 |    |   |   |
| Gross  profit                                                                 |   | 77,855                               |    | 79,042 |   |
|                                                                          |   |                                 |    |   |   |
| Operating  expenses:                                                          |   |                                 |    |   |   |
| Selling  and marketing                                                        |   | 38,579                               |    | 45,407 |   |
| General  and administrative                                                   |   | 19,222                               |    | 19,877 |   |
| Research  and development                                                     |   | 3,351                                |    | 3,628 |   |
| Amortization  of intangible assets                                            |   | 770                                  |    | 2,483 |   |
| Severance  and reorganization costs                                           |   | —                               |    | 1,724 |   |
| Litigation  settlement                                                        |   | —                               |    | (442 | ) |
|                                                                          |   |                                 |    |   |   |
| Total  operating expenses                                                     |   | 61,922                               |    | 72,677 |   |
|                                                                          |   |                                 |    |   |   |
| Income  from operations                                                       |   | 15,933                               |    | 6,365 |   |
|                                                                          |   |                                 |    |   |   |
| Other  income (expense):                                                      |   |                                 |    |   |   |
| Interest  income                                                              |   | 42                                   |    | 72 |   |
| Interest  expense                                                             |   | (2,604                               | )       | (5,919 | ) |
| Financing  fees and OID write-off                                             |   | (1,147                               | )       | — |   |
| Other                                                                         |   | 433                                  |    | (667 | ) |
|                                                                          |   |                                 |    |   |   |
| Total  other expense                                                          |   | (3,276                               | )       | (6,514 | ) |
|                                                                          |   |                                 |    |   |   |
| Income  (loss) before income taxes                                            |   | 12,657                               |    | (149 | ) |
|                                                                          |   |                                 |    |   |   |
| Provision  for income taxes                                                   |   | 5,080                                |    | 2,840 |   |
|                                                                          |   |                                 |    |   |   |
| Net  income (loss) before cumulative effect of change in accounting principle |   | 7,577                                |    | (2,989 | ) |
|                                                                          |   |                                 |    |   |   |
| Cumulative  effect of change in accounting principle, net of tax benefit      |   | (15,392                              | )       | — |   |
|                                                                          |   |                                 |    |   |   |
| Net  loss                                                                     |   | $                                    | (7,815  | ) | $ | (2,989 | ) |
|                                                                          |   |                                 |    |   |   |
| Weighted  average shares outstanding:                                         |   |                                 |    |   |   |
|                                                                          |   |                                 |    |   |   |
| Basic                                                                         |   | 26,249,436                           |    | 26,249,436 |   |
|                                                                          |   |                                 |    |   |   |
| Diluted                                                                       |   | 26,249,436                           |    | 26,249,436 |   |
|                                                                          |   |                                 |    |   |   |
| Net  income (loss) per share - basic and diluted:                             |   |                                 |    |   |   |
|                                                                          |   |                                 |    |   |   |
| Net  income (loss) before cumulative effect of change in accounting principle |   | $                                    | 0.29    |   | $ | (0.11 | ) |
|                                                                          |   |                                 |    |   |   |
| Cumulative  effect of change in accounting principle                          |   | (0.59                                | )       | — |   |
|                                                                          |   |                                 |    |   |   |
| Net  loss                                                                     |   | $                                    | (0.30   | ) | $ | (0.11 | ) |
|                                                                          |   |                                 |    |   |   |
| Comprehensive  loss                                                           |   | $                                    | (7,202  | ) | $ | (3,085 | ) |

 

See notes tocondensed consolidated financial statements.

 

4

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**WEIDERNUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**

**CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS**

**(dollarsin thousands)**

**(unaudited)**

 
|                                                                             |   | **Nine  Months Ended  February 28,** |   |
|----------------------------------------------------------------------------------|--------|--------------------------------------|--------|
|                                                                             |   | **2003**                             |   | **2002** |   |
| Cash  flows from operating activities:                                           |   |                                 |   |   |   |
| Net  loss                                                                        |   | $                                    | (7,815 | ) | $ | (2,989 | ) |
| Adjustments  to reconcile net loss to net cash provided by operating activities: |   |                                 |   |   |   |
| Provision  for bad debts                                                         |   | 439                                  |   | 974 |   |
| Deferred  taxes                                                                  |   | (2,151                               | )      | 2,487 |   |
| Depreciation,  amortization and asset impairment                                 |   | 27,974                               |   | 7,591 |   |
| Amortization  and write-off of financing fees, including original issue discount |   | 1,775                                |   | 930 |   |
| Amortization  of deferred compensation costs                                     |   | 160                                  |   | — |   |
| Changes  in operating assets and liabilities:                                    |   |                                 |   |   |   |
| Receivables                                                                      |   | 13,843                               |   | 9,801 |   |
| Inventories                                                                      |   | (2,379                               | )      | 14,056 |   |
| Prepaid  expenses and other                                                      |   | (885                                 | )      | 1,170 |   |
| Deposits  and other assets                                                       |   | (588                                 | )      | 625 |   |
| Accounts  payable                                                                |   | (4,111                               | )      | (16,056 | ) |
| Accrued  expenses                                                                |   | (2,905                               | )      | 2,212 |   |
|                                                                             |   |                                 |   |   |   |
| Net  cash provided by operating activities                                       |   | 23,357                               |   | 20,801 |   |
|                                                                             |   |                                 |   |   |   |
| Cash  flows from investing activities:                                           |   |                                 |   |   |   |
| Purchase  of property and equipment                                              |   | (1,198                               | )      | (2,214 | ) |
| Purchase  of intangibles                                                         |   | (212                                 | )      | (101 | ) |
| Proceeds  from disposition of assets held for sale                               |   | 5,400                                |   | — |   |
| Proceeds from sale of available-for-sale  securities                             |   | 1,496                                |   | 1,004 |   |
| Collection  of notes receivable                                                  |   | 140                                  |   | — |   |
| Increase  in notes receivable                                                    |   | (701                                 | )      | — |   |
|                                                                             |   |                                 |   |   |   |
| Net  cash provided by (used in) investing activities                             |   | 4,925                                |   | (1,311 | ) |
|                                                                             |   |                                 |   |   |   |
| Cash  flows from financing activities:                                           |   |                                 |   |   |   |
| Dividends  paid                                                                  |   | —                               |   | (2,954 | ) |
| Net  change in revolving line-of-credit                                          |   | (12,917                              | )      | (11,466 | ) |
| Proceeds  from debt                                                              |   | 4,317                                |   | 1,832 |   |
| Payments  on debt                                                                |   | (19,216                              | )      | (7,074 | ) |
|                                                                             |   |                                 |   |   |   |
| Net  cash used in financing activities                                           |   | (27,816                              | )      | (19,662 | ) |
|                                                                             |   |                                 |   |   |   |
| Effect  of exchange rate changes on cash                                         |   | 339                                  |   | (51 | ) |
|                                                                             |   |                                 |   |   |   |
| Increase  (decrease) in cash and cash equivalents                                |   | 805                                  |   | (223 | ) |
|                                                                             |   |                                 |   |   |   |
| Cash  and cash equivalents, beginning of period                                  |   | 2,412                                |   | 2,293 |   |
|                                                                             |   |                                 |   |   |   |
| Cash  and cash equivalents, end of period                                        |   | $                                    | 3,217  |   | $ | 2,070 |   |

 

See notes tocondensed consolidated financial statements.

 

5

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

**NOTES TO CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS**

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

**(unaudited)**

 

 

**1.****             BASISOF PRESENTATION AND OTHER MATTERS**

 

The accompanyingunaudited interim condensed consolidated financial statements (“interimfinancial statements”) do not include all disclosures provided in our annualconsolidated financial statements. These interim financial statements should be read in conjunction withthe consolidated financial statements and the footnotes thereto contained inour Annual Report on Form 10-K for the year ended May 31, 2002 as filed withthe Securities and Exchange Commission. The May 31, 2002 consolidated balance sheet was derived from auditedfinancial statements, but all disclosures required by generally acceptedaccounting principles are not provided in the accompanying footnotes.  We are a majority-owned subsidiary of WeiderHealth and Fitness (“WHF”).

 

In our opinion, theaccompanying interim financial statements contain all adjustments (which are ofa normal recurring nature) necessary for a fair presentation of our financialposition and results of operations. Certain prior period amounts have been reclassified to conform with thecurrent interim period presentation. The results of operations and cash flows for any interim period are notnecessarily indicative of the results of operations and cash flows that we mayachieve for any other interim period or for the entire year.

 

Effective August 16,2002, we issued 640,000 restricted shares of Class A common stock to certainofficers and employees.  The aggregatevalue of the restricted shares was approximately $1.0 million, which will beexpensed over the accompanying five-year vesting period.

 

On July 26, 2002, we soldsubstantially all of the assets and certain associated liabilities relating toour American Body Building® and Science Foods® brands, which are included innet assets held-for-sale in the accompanying condensed consolidated balancesheet at May 31, 2002.  The impact ofthe sale on the fiscal 2003 operating results was not significant.

 

Effective June 1, 2002,we adopted Statement of Financial Accounting Standards (“SFAS”) No. 142,“Goodwill and Other Intangible Assets”, which establishes new accounting andreporting standards for goodwill and other intangible assets.  (See Note 4 to Condensed ConsolidatedFinancial Statements).

 

Effective March 1, 2002,we adopted Emerging Issues Task Force No. 01-9 (“EITF No. 01-9”) andreclassified certain prior period amounts to apply its provisions in theaccompanying financial statements. While the adoption of EITF No. 01-9 did not impact our overall resultsof operations, gross profit for the fiscal 2002 three and nine month periodsdecreased approximately $4.5 million and $12.9 million, respectively, andselling and marketing expenses decreased by similar amounts.

 

6

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**2.****             RECEIVABLES,NET**

 

Receivables, net, consistof the following:

 
|                                                    |   | **February  28,  2003** |   | **May 31,  2002** |   |
|---------------------------------------------------------|--------|-------------------------|--------|-------------------|--------|
|                                                    |   |                    |   |              |   |
| Trade  accounts                                         |   | $                       | 39,523 |              | $      | 46,567 |   |
| Other,  including income taxes                          |   | 1,103                   |   | 7,586             |   |
|                                                    |   |                    |   |              |   |
|                                                    |   | 40,626                  |   | 54,153            |   |
| Less  allowance for doubtful accounts and sales returns |   | (10,131                 | )      | (9,566            | )      |
|                                                    |   |                    |   |              |   |
| Total                                                   |   | $                       | 30,495 |              | $      | 44,587 |   |

 

**2.****             INVENTORIES**

 

Inventories consist ofthe following:

 
|             |   | **February  28,  2003** |   | **May 31,  2002** |   |
|------------------|--------|-------------------------|--------|-------------------|--------|
|             |   |                    |   |              |   |
| Raw  materials   |   | $                       | 10,430 |              | $      | 11,275 |   |
| Work  in process |   | 2,303                   |   | 2,208             |   |
| Finished  goods  |   | 18,878                  |   | 15,749            |   |
|             |   |                    |   |              |   |
| Total            |   | $                       | 31,611 |              | $      | 29,232 |   |

 

**4.****             INTANGIBLEASSETS, NET**

 

SFAS No. 142 requiresthat goodwill and other intangible assets with indefinite useful lives not beamortized but, instead, tested for impairment at least annually.  Accordingly, effective June 1, 2002, westopped amortizing goodwill, which is our only intangible asset with anindefinite useful life.  We continue toamortize other intangible assets, consisting primarily of patents andtrademarks, using the straight line method over their estimated useful lives offive to twenty years.

 

Intangible assets, net,consist of the following:

 
|                    |   | **February  28, 2003**      |   | **May 31,  2002**             |   |
|-------------------------|--------|-----------------------------|--------|-------------------------------|--------|
|                    |   | **Gross  Carrying  Amount** |   | **Accumulated  Amortization** |   | **Gross  Carrying  Amount** |   | **Accumulated  Amortization** |   |
|                    |   |                        |   |                          |   |   |   |   |   |
| Patents  and trademarks |   | $                           | 9,575  |                          | $      | (4,086 | ) | $ | 8,388 |   | $ | (3,153 | ) |
| Goodwill                |   | 4,346                       |   | —                        |   | 40,354 |   | (12,687 | ) |
|                    |   |                        |   |                          |   |   |   |   |   |
|                    |   | $                           | 13,921 |                          | $      | (4,086 | ) | $ | 48,742 |   | $ | (15,840 | ) |

 

7

----

 

Estimated amortizationexpense, assuming no changes in our intangible assets, for each of the five succeedingfiscal years, beginning with fiscal 2003, is $947 (2003), $567 (2004), $405(2005), $389 (2006), and $366 (2007).

 

Upon the implementationof SFAS No. 142, we tested goodwill for impairment by comparing the carryingamount, including goodwill, for each of our business units at June 1, 2002 tothe fair value for each of the business units. We assessed the fair value of the business units by evaluating theircurrent cash flows in comparison to our overall market capitalization.  Based on this comparison, we concluded thatthe net book carrying value for two of our business units, Active Nutrition andHaleko, exceeded their respective fair values. For those two reporting units, we then compared the implied fair valueof their respective goodwill to their respective net book carrying values todetermine the asset impairment amount. Based on this comparison, effective June 1, 2002, we recognized animpairment loss of $23.3 million, or an after-tax charge of $15.4 million, as acumulative effect of a change in accounting principle.

 

The changes in thecarrying amount of goodwill, broken down by business unit, for fiscal 2002 andfor the first nine months of fiscal 2003 are as follows:

 
|                            |   | **Schiff®  Specialty** |   | **Active  Nutrition** |   | **Haleko** |   | **Total** |   |
|---------------------------------|--------|-----------------------------|--------|-----------------------|--------|------------|--------|-----------|--------|
|                            |   |                        |   |                  |   |       |   |      |   |
| Balance  at June 1, 2001        |   | $                           | 4,851  |                  | $      | 9,258      |   | $         | 21,975 |   | $ | 36,084 |   |
| Amortization                    |   | (505                        | )      | (1,225                | )      | (685       | )      | (2,415    | )      |
| Impairment  loss                |   | —                      |   | (6,193                | )      | —     |   | (6,193    | )      |
| Currency  translation and other |   | —                      |   | 3                     |   | 188        |   | 191       |   |
|                            |   |                        |   |                  |   |       |   |      |   |
| Balance  at May 31, 2002        |   | 4,346                       |   | 1,843                 |   | 21,478     |   | 27,667    |   |
| Adoption  of SFAS No. 142       |   | —                      |   | (1,843                | )      | (21,478    | )      | (23,321   | )      |
|                            |   |                        |   |                  |   |       |   |      |   |
| Balance  at February 28, 2003   |   | $                           | 4,346  |                  | $      | —     |   | $         | — |   | $ | 4,346 |   |

 

Actual results ofoperations for the three and nine month periods ended February 28, 2003, andproforma results of operations, had we applied the non-amortization provisionsof SFAS No. 142, for the three and nine month periods ending February 28, 2002are as follows:

 
|                                                                                   |   | **Three  Months Ended  February 28,** |   | **Nine  Months Ended  February 28,** |   |
|----------------------------------------------------------------------------------------|--------|---------------------------------------|--------|--------------------------------------|--------|
|                                                                                   |   | **2003**                              |   | **2002**                             |   | **2003** |   | **2002** |   |
| Reported  net income (loss) before cumulative effect of change in accounting principle |   | $                                     | 808    |                                 | $      | 1,249 |   | $ | 7,577 |   | $ | (2,989 | ) |
| Add  back goodwill amortization, net of tax                                            |   | —                                |   | 445                                  |   | — |   | 1,312 |   |
|                                                                                   |   |                                  |   |                                 |   |   |   |   |   |
| Adjusted  net income (loss) before cumulative effect of change in accounting principle |   | 808                                   |   | 1,694                                |   | 7,577 |   | (1,677 | ) |
| Cumulative  effect of change in accounting principle, net of tax benefit               |   | —                                |   | —                               |   | (15,392 | ) | — |   |
|                                                                                   |   |                                  |   |                                 |   |   |   |   |   |
| Adjusted  net income (loss)                                                            |   | $                                     | 808    |                                 | $      | 1,694 |   | $ | (7,815 | ) | $ | (1,677 | ) |

 

8

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|                                                                                   |   | **Three  Months Ended  February 28,** |   | **Nine  Months Ended  February 28,** |   |
|----------------------------------------------------------------------------------------|--------|---------------------------------------|--------|--------------------------------------|--------|
|                                                                                   |   | **2003**                              |   | **2002**                             |   | **2003** |   | **2002** |   |
| Net  income (loss) per share-basic and diluted:                                        |   |                                  |   |                                 |   |   |   |   |   |
| Reported  net income (loss) before cumulative effect of change in accounting principle |   | $                                     | 0.03   |                                 | $      | 0.05 |   | $ | 0.29 |   | $ | (0.11 | ) |
| Add  back goodwill amortization, net of tax                                            |   | —                                |   | 0.02                                 |   | — |   | 0.05 |   |
|                                                                                   |   |                                  |   |                                 |   |   |   |   |   |
| Adjusted  net income (loss) before cumulative effect of change in accounting principle |   | 0.03                                  |   | 0.07                                 |   | 0.29 |   | (0.06 | ) |
| Cumulative  effect of change in accounting principle, net of tax benefit               |   | —                                |   | —                               |   | (0.59 | ) | — |   |
|                                                                                   |   |                                  |   |                                 |   |   |   |   |   |
| Adjusted  net income (loss)                                                            |   | $                                     | 0.03   |                                 | $      | 0.07 |   | $ | (0.30 | ) | $ | (0.06 | ) |

 

**5.****             NOTESRECEIVABLE RELATED TO STOCK PERFORMANCE UNITS, NET**

 

We previously made loansavailable to certain individuals for the payment of income taxes associatedwith vested performance units.  Notesreceivable (including accrued interest), net, were approximately $2.4 millionand $3.2 million, respectively, at February 28, 2003, and May 31, 2002.  The original notes receivable are generallycollateralized by debtors’ shares of the Company’s Class A common stock and arerepayable beginning in June of 2002 and ending December of 2006.  In addition, a portion of notes receivabledue from one debtor is effectively guaranteed by WHF.  Certain allowances for unrealizable amounts are recognized toadjust the outstanding balances to the underlying collateral value and/or toconsider other factors that may impact the valuation of the notes receivable.

 

At present, in connectionwith collection efforts and in consideration of potential unrealizable amounts,we are pursuing negotiations with certain of the debtors who are no longeremployed by the company.  As a result ofthese discussions, the terms of certain notes, including maturity, interestrate, required collateral, etc., have been, or may be modified.

 

Recognition of futureprovision(s) for unrealizable amounts will depend on, among otherconsiderations, the closing price of our Class A common stock.  In the event that shares of common stock arereceived in lieu of cash payment, a portion of, or the entire net book value ofthe notes receivable may subsequently be reclassified as treasury stock andreflected as a reduction to stockholders’ equity.  Notes receivable balances are reflected net of aggregateallowances for unrealizable amounts of $1.9 million and $2.4 million,respectively, at February 28, 2003, and May 31, 2002.

 

**6.****             OPERATINGSEGMENTS**

 

During fiscal 2002, wereorganized our operations, previously reported as domestic and internationalsegments, into three business units. These business units are the Schiff® Specialty Unit, the ActiveNutrition Unit and the Haleko Unit (our primary European subsidiary).  The business units are managedindependently, each with its own sales and marketing resources, and supportedby product research and development, operations and technical services andadministrative functions.

 

9

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We manufacture and marketnutritional products, including a full line of vitamins, joint-related andother nutraceuticals through our Schiff® Specialty Unit.  Schiff® Specialty Unit products are marketedprimarily in the United States through mass-market distribution channels.  We manufacture and market a variety ofsports nutrition and weight management products through our Active NutritionUnit.  Active Nutrition Unit productsare marketed domestically and internationally primarily through mass market andhealth club and gym distribution channels. We also manufacture and market nutritional and other products, includinga full line of sports nutrition supplements and sportswear, together with certainother nutraceuticals within our Haleko Unit. Haleko Unit products are marketed primarily in Europe through massmarket and health club and gym distribution channels.

 

The accounting policiesof these business units are the same as those described in Note 1 to theconsolidated financial statements in our Annual Report on Form 10-K.  We evaluate the performance of our businessunits based on actual and expected operating results of the respective businessunits.  Certain domestic assets are notallocated to the Schiff® Specialty and Active Nutrition Units.  Accordingly, asset segment information isprovided on a total domestic and non-domestic basis consistent with the mannerin which management evaluates the business.

 

Segmentinformation for the three months ended February 28, 2003 and 2002 is summarizedas follows:

 
|                    |   | **Net  Sales** |   | **Income  (Loss)  From  Operations** |   | **Interest  Expense** |   |
|-------------------------|--------|----------------|--------|--------------------------------------|--------|-----------------------|--------|
| 2003:                   |   |           |   |                                 |   |                  |   |
| Schiff®  Specialty |   | $              | 36,506 |                                 | $      | 2,416                 |   | $ | 253 |   |
| Active  Nutrition       |   | 7,474          |   | (954                                 | )      | 24                    |   |
| Haleko                  |   | 20,658         |   | 314                                  |   | 301                   |   |
| Eliminations            |   | (559           | )      | —                               |   | —                |   |
|                    |   | $              | 64,079 |                                 | $      | 1,776                 |   | $ | 578 |   |
|                    |   |           |   |                                 |   |                  |   |
| 2002:                   |   |           |   |                                 |   |                  |   |
| Schiff®  Specialty |   | $              | 37,356 |                                 | $      | 5,826                 |   | $ | 1,097 |   |
| Active  Nutrition       |   | 12,038         |   | (1,860                               | )      | 245                   |   |
| Haleko                  |   | 25,645         |   | 200                                  |   | 398                   |   |
| Unallocated             |   | —         |   | 193                                  |   | —                |   |
| Eliminations            |   | (280           | )      | —                               |   | —                |   |
|                    |   | $              | 74,759 |                                 | $      | 4,359                 |   | $ | 1,740 |   |

 

10

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Segmentinformation for the nine months ended February 28, 2003 and 2002 is summarizedas follows:

 
|                   |   | **Net  Sales** |    | **Income  (Loss)  From  Operations** |   | **Interest  Expense** |   |
|------------------------|--------|----------------|---------|--------------------------------------|--------|-----------------------|--------|
| 2003:                  |   |           |    |                                 |   |                  |   |
| Schiff® Specialty |   | $              | 112,284 |                                 | $      | 15,865                |   | $ | 1,520 |   |
| Active Nutrition       |   | 26,932         |    | 306                                  |   | 171                   |   |
| Haleko                 |   | 67,228         |    | (238                                 | )      | 913                   |   |
| Eliminations           |   | (2,055         | )       | —                               |   | —                |   |
|                   |   | $              | 204,389 |                                 | $      | 15,933                |   | $ | 2,604 |   |
| 2002:                  |   |           |    |                                 |   |                  |   |
| Schiff® Specialty |   | $              | 110,452 |                                 | $      | 16,735                |   | $ | 3,639 |   |
| Active Nutrition       |   | 42,134         |    | (4,666                               | )      | 997                   |   |
| Haleko                 |   | 80,838         |    | (4,338                               | )      | 1,283                 |   |
| Unallocated            |   | —         |    | (1,282                               | )      | —                |   |
| Eliminations           |   | (1,723         | )       | (84                                  | )      | —                |   |
|                   |   | $              | 231,701 |                                 | $      | 6,365                 |   | $ | 5,919 |   |

 

Reconciliation of totalassets for domestic and international operations is as follows: 

 
|                        |   | **February  28,  2003** |    | **May 31,  2002** |   |
|-----------------------------|--------|-------------------------|---------|-------------------|--------|
| Total  domestic assets      |   | $                       | 128,048 |              | $      | 155,471 |   |
| Total  international assets |   | 50,524                  |    | 68,862            |   |
| Eliminations                |   | (60,897                 | )       | (65,690           | )      |
| Total                       |   | $                       | 117,675 |              | $      | 158,643 |   |

 

Capital expenditures fordomestic and international operations were $769 and $429, respectively, for thenine months ended February 28, 2003, and $1,592 and $622, respectively, for thenine months ended February 28, 2002.

 

**7.****             SALESTO MAJOR CUSTOMERS**

 

Our two largest customerscombined, accounted for approximately 47% and 42%, respectively, of net salesfor the nine months ended February 28, 2003 and 2002.  At February 28, 2003, and May 31, 2002, amounts due from thesecustomers represented approximately 34% and 39%, respectively, of total tradeaccounts receivable.

 

**8.****             CONTINGENCIES**

 

We are currently named asa defendant in four lawsuits alleging that consumption of certain of our formerproducts containing ephedra caused injuries and damages to certainindividuals.  We dispute the allegationsand have tendered the matters to our insurance carriers, which have assumed thedefense of the matters.

 

We are also currentlynamed as a defendant, along with numerous other dietary supplement companies,in purported class actions in certain state courts alleging that the defendantssold androstenedione and other purportedly similar products in violation ofcertain statutes and utilizing

 

11

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false and misleadingclaims and advertising.  We dispute theallegations and are opposing the lawsuits.

 

In September 2002, wewere named as a defendant in a California state court alleging unfair businesspractices regarding the inclusion of Vitamin D in certain of our nutrition barproducts.  Similar lawsuits have beenfiled against other companies regarding the sale of nutrition barproducts.  We dispute the allegationsand are opposing the lawsuit.

 

From time to time, we areinvolved in other claims, legal actions and governmental proceedings that arisefrom our business operations. Although ultimate liability cannot be determinedat the present time, we believe that liability resulting from these matters, ifany, after taking into consideration our insurance coverage, will not have amaterial adverse effect on our financial position or cash flows.

 

**9.****             RECENTLYISSUED ACCOUNTING STANDARDS**

 

Effective June 1,2002, we adopted SFAS No. 144, “Accounting for the Impairment on Disposal ofLong-Lived Assets,” which supercedes SFAS No. 121, “Accounting for theImpairment of Long-Lived Assets and for Long-Lived Assets to Be DisposedOf.”  SFAS No. 144 removes goodwill fromits scope and retains the requirements of SFAS No. 121 regarding therecognition of impairment losses on long-lived assets held for use.  SFAS No. 144 also supercedes the accountingand reporting provisions of APB Opinion No. 30, “Reporting the Results ofOperations - Reporting the Effects of Disposal of Segment of a Business, andExtraordinary, Unusual and Infrequently Occurring Events and Transactions,” forthe disposal of a segment of a business. The adoption of SFAS No. 144 did not materially impact our consolidatedfinancial statements.

 

In June 2002, theFASB issued SFAS No. 146, “Accounting for Costs Associated With Exit orDisposal Activities,” which requires that a liability for a cost associatedwith an exit or disposal activity be recognized when the liability is incurredand nullifies EITF No. 94-3.  SFAS No.146 is effective for any exit or disposal activities occurring after December31, 2002.  We have not determined theimpact, if any, SFAS No. 146 will have on our consolidated financialstatements.

 

**ITEM 2.****                  MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

*The following discussion andanalysis should be read in conjunction with the consolidated financialstatements, including the notes thereto, appearing elsewhere in this QuarterlyReport on Form 10-Q. We disclaim any obligation to update any forward-lookingstatements whether as a result of new information, future events or otherwise.*

 

**General**

 

Weider NutritionInternational, Inc. develops, manufactures, markets, distributes and sellsbranded and private label nutritional supplements and sports nutrition productsin the United States and throughout the world. We offer a broad range ofcapsules and tablets, powdered drink mixes, ready-to-drink beverages andnutrition bars consisting of approximately 800 stock keeping units (“SKUs”)domestically and internationally.  Ourportfolio of

 

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brands, includingSchiff®, Weider®, Tiger’s Milk®, Multipower® and Multaben are primarilymarketed through mass market, health food store and health club and gymdistribution channels.  We market ourbranded nutritional supplement products, both domestically and internationally,in five principal categories: specialty supplements; vitamins and minerals;sports nutrition; weight management; and nutrition bars.  We also market a line of sportswear in Europe,primarily in Germany, under the Venice Beach® brand.

 

Our principal executiveoffices are located at 2002 South 5070 West, Salt Lake City, Utah 84104 and ourtelephone number is (801) 975-5000.

 

Looking forward, ourpriorities include initiatives to defend our Schiff® Move Free® business againstthe competition, including private label, and ultimately to increase our marketshare in the joint care product category. Accordingly, we expect to continue implementation of these initiativesfor our Schiff® Move Free® business during the fiscal 2003 fourth quarter.  These initiatives may require considerableresources and result in significant transition and marketing costs.  Fiscal 2003 fourth quarter operating marginsin our Schiff® Specialty business unit may be significantly below fiscal 2003year-to-date results.

 

13

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**Results of Operations (Unaudited)**

*Three Months Ended February 28, 2003 Compared to ThreeMonths Ended February 28, 2002*

 

The following tables showcomparative operating results, by business unit, for the three months endedFebruary 28, 2003 and 2002.  Certainindirect costs, including primarily general and administrative and research anddevelopment expenses, are charged to the business units based on variousallocation methodologies.

 
|                               |   | **Schiff®  Specialty** |   | **Active  Nutrition** |   | **Haleko** |   | **Other  (1)** |   | **Total** |   |
|------------------------------------|--------|-----------------------------|--------|-----------------------|--------|------------|--------|----------------|--------|-----------|--------|
| 2003:                              |   |                        |   |                  |   |       |   |           |   |      |   |
| Net  sales                         |   | $                           | 36,506 |                  | $      | 7,474      |   | $              | 20,658 |      | $      | (559 | ) | $ | 64,079 |   |
| Cost  of goods sold                |   | 24,123                      |   | 4,745                 |   | 12,203     |   | (559           | )      | 40,512    |   |
| Gross  profit                      |   | 12,383                      |   | 2,729                 |   | 8,455      |   | —         |   | 23,567    |   |
| Operating  expenses:               |   |                        |   |                  |   |       |   |           |   |      |   |
| Selling  and marketing             |   | 5,162                       |   | 2,691                 |   | 5,316      |   | —         |   | 13,169    |   |
| General  and administrative        |   | 3,906                       |   | 765                   |   | 2,464      |   | —         |   | 7,135     |   |
| Research  and development          |   | 811                         |   | 148                   |   | 290        |   | —         |   | 1,249     |   |
| Amortization of  intangible assets |   | 88                          |   | 79                    |   | 71         |   | —         |   | 238       |   |
| Total  operating expenses          |   | 9,967                       |   | 3,683                 |   | 8,141      |   | —         |   | 21,791    |   |
|                               |   |                        |   |                  |   |       |   |           |   |      |   |
| Income  (loss) from operations     |   | $                           | 2,416  |                  | $      | (954       | )      | $              | 314    |      | $      | — |   | $ | 1,776 |   |
|                               |   |                        |   |                  |   |       |   |           |   |      |   |
| 2002:                              |   |                        |   |                  |   |       |   |           |   |      |   |
| Net  sales                         |   | $                           | 37,356 |                  | $      | 12,038     |   | $              | 25,645 |      | $      | (280 | ) | $ | 74,759 |   |
| Cost  of goods sold                |   | 22,575                      |   | 8,378                 |   | 16,868     |   | (280           | )      | 47,541    |   |
| Gross  profit                      |   | 14,781                      |   | 3,660                 |   | 8,777      |   | —         |   | 27,218    |   |
| Operating  expenses:               |   |                        |   |                  |   |       |   |           |   |      |   |
| Selling  and marketing             |   | 5,125                       |   | 3,494                 |   | 5,472      |   | —         |   | 14,091    |   |
| General  and administrative        |   | 3,095                       |   | 1,390                 |   | 2,505      |   | —         |   | 6,990     |   |
| Research  and development          |   | 559                         |   | 175                   |   | 371        |   | —         |   | 1,105     |   |
| Amortization  of intangible assets |   | 176                         |   | 461                   |   | 229        |   | —         |   | 866       |   |
| Litigation  settlement             |   | —                      |   | —                |   | —     |   | (193           | )      | (193      | )      |
| Total  operating expenses          |   | 8,955                       |   | 5,520                 |   | 8,577      |   | (193           | )      | 22,859    |   |
|                               |   |                        |   |                  |   |       |   |           |   |      |   |
| Income  (loss) from operations     |   | $                           | 5,826  |                  | $      | (1,860     | )      | $              | 200    |      | $      | 193 |   | $ | 4,359 |   |

 

----

(1)      Amounts include inter-business unit saleseliminations and unallocated amounts.

 

**Net Sales.**  Net sales decreased approximately 14.3% to$64.1 million for the fiscal 2003 third quarter, from $74.8 million for thefiscal 2002 third quarter.  The decreasein net sales was attributable primarily to reduced net sales in our ActiveNutrition and Haleko business units.

 

Schiff® Specialty netsales decreased approximately 2.3% to $36.5 million for the fiscal 2003 thirdquarter, from $37.4 million for the fiscal 2002 third quarter. A decrease insales of Schiff® Move Free®, which was primarily attributable to private labelcompetition, was substantially offset by the increase in our private labelsales.  Net sales of Schiff® Move Free®were $14.7 million for the fiscal 2003 third quarter, compared to $17.7 millionfor the fiscal 2002 third quarter. Private label net sales were $12.5 million for the fiscal 2003 thirdquarter, compared to $10.7 million for the fiscal 2002 third quarter.

 

Active Nutrition netsales decreased approximately 37.9% to $7.5 million for the fiscal 2003 thirdquarter, from $12.0 million for the fiscal 2002 third quarter.  The decrease is primarily attributable to areduction in sales under our American Body Building® and Science Foods® brands,which were

 

14

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sold to an unaffiliatedthird party in July 2002. Excluding American Body Building® and Science Foods®sales, Active Nutrition net sales remained relatively constant for the fiscal2003 and 2002 third quarters.  Salesincreases in certain international accounts were substantially offset by reduceddistribution in certain domestic mass-market accounts.

 

Haleko net salesdecreased approximately 19.4% to $20.7 million for the fiscal 2003 thirdquarter, from $25.6 million for the fiscal 2002 third quarter.  The decrease primarily resulted from a declinein private label and Venice Beach® sales. Private label sales were $2.1 million for the fiscal 2003 third quarter,compared to $5.6 million for the fiscal 2002 third quarter, primarily due todiscontinuation of a significant private label account.  Venice Beach® sportswear sales were $6.4million for the fiscal 2003 third quarter, compared to $8.8 million for thefiscal 2002 third quarter.  The decreasewas primarily attributable to elimination of lower margin SKUs and contractionof certain distribution channels. Economic conditions in Germany continue to decline and may negativelyimpact operating results in our Haleko business unit for the foreseeablefuture.

 

**Gross Profit. **Gross profit decreasedapproximately 13.4% to $23.6 million for the fiscal 2003 third quarter, from$27.2 million for the fiscal 2002 third quarter, primarily resulting from adecrease in sales.  Gross profit, as apercentage of net sales, was 36.8% for the fiscal 2003 third quarter, comparedto 36.4% for the fiscal 2002 third quarter. Gross profit percentage increased in our Active Nutrition and Halekobusiness units and decreased in our Schiff® Specialty business unit.

 

Schiff® Specialty grossprofit decreased approximately 16.2% to $12.4 million for the fiscal 2003 thirdquarter, from $14.8 million for the fiscal 2002 third quarter.  Gross profit, as a percentage of net sales,was 33.9% for the fiscal 2003 third quarter, compared to 39.6% for the fiscal2002 third quarter.  The decreaseresulted primarily from a change in product sales mix, including an increase inlower margin private label sales volume and a decrease in higher margin Schiff®Move Free® sales.  The impact of thereduction in gross profit percentage due to product sales mix was partiallyoffset by a decrease in sales incentives and promotion costs classified asreductions in gross sales and improved net raw material costs.  As a result of further changes in productsales mix, private label pricing pressures and increased production costs,among other factors, Schiff® Specialty gross profit percentage may continue todecrease in subsequent periods.

 

Active Nutrition grossprofit decreased approximately 25.4% to $2.7 million for the fiscal 2003 thirdquarter, from $3.7 million for the fiscal 2002 third quarter, primarilyresulting from a decrease in sales. Gross profit, as a percentage of net sales, was 36.5% for the fiscal2003 third quarter, compared to 30.4% for the fiscal 2002 third quarter.  The increase was primarily attributable tochanges in product sales mix, including the elimination of lower-marginAmerican Body Building® and Science Foods® brands, and reductions in domesticsales credits.

 

Haleko gross profitremained relatively constant for the fiscal 2003 and 2002 third quarters.  Gross profit, as a percentage of net sales,was 40.9% for the fiscal 2003 third quarter, compared to 34.2% for the fiscal2002 third quarter.  The increaseprimarily resulted from a reduction in lower-margin private label sales and improvedmargins on branded nutritional products and Venice Beach® sales.

 

**Operating Expenses. **Operating expensesdecreased approximately 4.7% to $21.8 million for the fiscal 2003 thirdquarter, from $22.9 million for the fiscal 2002 third quarter.  Fiscal 2002 third quarter includedlitigation settlement income of $0.2 million. Operating expenses, as a percentage of net sales, were 34.0% and 30.6%,respectively, for the fiscal 2003 and 2002

15

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third quarters.  The increase in operating expenses, as apercentage of net sales, was primarily attributable to the impact of sellingand marketing expenses classified as reductions in gross sales, the impact ofcertain fixed costs and an increase in certain personnel related costs.  The percentage increase was partially offsetby the adoption of SFAS No. 142 (see Note 4 to the Condensed ConsolidatedFinancial Statements), which resulted in the discontinuance of goodwillamortization.

 

Selling and marketingexpenses, including sales, marketing, advertising, freight and other costs,were $13.2 million for the fiscal 2003 third quarter, compared to $14.1 millionfor the fiscal 2002 third quarter.  Thedecrease in selling and marketing expenses resulted primarily from decreasedpromotional costs due to the reduction in branded sales in our Schiff®Specialty and Active Nutrition business units, and a temporary delay in certainSchiff® Specialty promotions, partially offset by an increase in certainpersonnel related costs.  As apercentage of branded gross sales, promotional costs decreased to approximately12.2% for the third quarter of fiscal 2003, from 15.8% for the third quarter offiscal 2002. We expect Schiff® Specialty promotional spending to significantlyincrease in the fiscal 2003 fourth quarter.

 

General andadministrative expenses were $7.1 million for the fiscal 2003 third quarter,compared to $7.0 million for the fiscal 2002 third quarter, primarily resultingfrom an increase in certain personnel related costs.

 

Research and developmentcosts were $1.2 million for the fiscal 2003 third quarter, compared to $1.1million for the fiscal 2002 third quarter, primarily resulting from increasednew product testing costs.  The adoptionof SFAS No. 142 and the fiscal 2003 first quarter sale of American Body Building®and Science Foods® resulted in a decrease in amortization expense in the ActiveNutrition and Haleko business units.

 

**Other Expense. **Other expense, net, was$0.4 million for the fiscal 2003 third quarter, compared to $1.8 million forthe fiscal 2002 third quarter.  Thedecrease was primarily due to a reduction in interest expense resulting from anoverall lower effective borrowing rate on less total indebtedness, and incomerecognized in the fiscal 2003 third quarter on the sale of certain held-for-saleequity securities.

 

**Provision for Income Taxes.**Provisionfor income taxes was a $0.6 million expense for the fiscal 2003 third quarter,compared to a $1.3 million expense for the fiscal 2002 third quarter.  The change resulted primarily from thedecrease in pre-tax earnings.  Inaddition, we did not recognize income tax benefits on Haleko’s pre-tax loss forthe fiscal 2002 third quarter.

 

16

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**Results of Operations (Unaudited)**

*Nine Months Ended February 28, 2003 Compared to Nine MonthsEnded February 28, 2002*

 

The following tables showcomparative operating results, by business unit, for the nine months endedFebruary 28, 2003 and 2002.  Certainindirect costs, including primarily general and administrative and research anddevelopment expenses, are charged to the business units based on variousallocation methodologies.

 
|                                |   | **Schiff®  Specialty** |    | **Active  Nutrition** |   | **Haleko** |   | **Other  (1)** |   | **Total** |   |
|-------------------------------------|--------|-----------------------------|---------|-----------------------|--------|------------|--------|----------------|--------|-----------|--------|
| 2003:                               |   |                        |    |                  |   |       |   |           |   |      |   |
| Net  sales                          |   | $                           | 112,284 |                  | $      | 26,932     |   | $              | 67,228 |      | $      | (2,055 | ) | $ | 204,389 |   |
| Cost  of goods sold                 |   | 70,448                      |    | 15,905                |   | 42,236     |   | (2,055         | )      | 126,534   |   |
| Gross  profit                       |   | 41,836                      |    | 11,027                |   | 24,992     |   | —         |   | 77,855    |   |
| Operating  expenses:                |   |                        |    |                  |   |       |   |           |   |      |   |
| Selling  and marketing              |   | 13,834                      |    | 7,577                 |   | 17,168     |   | —         |   | 38,579    |   |
| General  and administrative         |   | 9,784                       |    | 2,432                 |   | 7,006      |   | —         |   | 19,222    |   |
| Research  and development           |   | 2,098                       |    | 400                   |   | 853        |   | —         |   | 3,351     |   |
| Amortization  of intangible assets  |   | 255                         |    | 312                   |   | 203        |   | —         |   | 770       |   |
| Total  operating expenses           |   | 25,971                      |    | 10,721                |   | 25,230     |   | —         |   | 61,922    |   |
|                                |   |                        |    |                  |   |       |   |           |   |      |   |
| Income  (loss) from operations      |   | $                           | 15,865  |                  | $      | 306        |   | $              | (238   | )         | $      | — |   | $ | 15,933 |   |
|                                |   |                        |    |                  |   |       |   |           |   |      |   |
| 2002:                               |   |                        |    |                  |   |       |   |           |   |      |   |
| Net  sales                          |   | $                           | 110,452 |                  | $      | 42,134     |   | $              | 80,838 |      | $      | (1,723 | ) | $ | 231,701 |   |
| Cost  of goods sold                 |   | 68,231                      |    | 28,971                |   | 57,096     |   | (1,639         | )      | 152,659   |   |
| Gross  profit (loss)                |   | 42,221                      |    | 13,163                |   | 23,742     |   | (84            | )      | 79,042    |   |
| Operating  expenses:                |   |                        |    |                  |   |       |   |           |   |      |   |
| Selling  and marketing              |   | 15,557                      |    | 11,529                |   | 18,321     |   | —         |   | 45,407    |   |
| General  and administrative         |   | 7,593                       |    | 4,223                 |   | 8,061      |   | —         |   | 19,877    |   |
| Research  and development           |   | 1,861                       |    | 780                   |   | 987        |   | —         |   | 3,628     |   |
| Amortization  of intangible assets  |   | 475                         |    | 1,297                 |   | 711        |   | —         |   | 2,483     |   |
| Severance  and reorganization costs |   | —                      |    | —                |   | —     |   | 1,724          |   | 1,724     |   |
| Litigation  settlement              |   | —                      |    | —                |   | —     |   | (442           | )      | (442      | )      |
| Total  operating expenses           |   | 25,486                      |    | 17,829                |   | 28,080     |   | 1,282          |   | 72,677    |   |
|                                |   |                        |    |                  |   |       |   |           |   |      |   |
| Income  (loss) from operations      |   | $                           | 16,735  |                  | $      | (4,666     | )      | $              | (4,338 | )         | $      | (1,366 | ) | $ | 6,365 |   |

 

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(1)      Amounts include inter-business unit saleseliminations and unallocated amounts.

 

**Net Sales.**  Net sales decreased approximately 11.8% to$204.4 million for the nine months ended February 28, 2003, from $231.7 millionfor the nine months ended February 28, 2002. The decrease in net sales was attributable primarily to reduced netsales in our Active Nutrition and Haleko business units, partially offset by anincrease in Schiff® Specialty net sales.

 

Schiff® Specialty netsales increased approximately 1.7% to $112.3 million for the nine months endedFebruary 28, 2003, from $110.5 million for the nine months ended February 28,2002. The increase was primarily due to the impact of sales incentives andpromotion costs classified as reductions in gross sales in the nine monthsended February 28, 2002, compared to the nine months ended February 28, 2003. Adecrease in sales of Schiff® Move Free®, which was primarily attributable toprivate label competition, was more than offset by an increase in private labelsales. Net sales of Schiff® Move Free® were $44.9 million for the nine monthsended February 28, 2003, compared to $52.7 million for the nine months endedFebruary 28, 2002.

 

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Private label sales were$39.4 million for the nine months ended February 28, 2003, compared to $30.7million for the nine months ended February 28, 2002.

 

Active Nutrition netsales decreased approximately 36.1% to $26.9 million for the nine months endedFebruary 28, 2003, from $42.1 million for nine months ended February 28,2002.  The decrease was primarilyattributable to a reduction in sales under our American Body Building® andScience Foods® brands, which were sold to an unaffiliated third party in July2002.  Net sales of American BodyBuilding® and Science Foods® brands were $3.1 million for the nine months endedFebruary 28, 2003, compared to $17.1 million for the nine months ended February28, 2002.  Excluding American BodyBuilding® and Science Foods® sales, Active Nutrition net sales decreased $1.2million, primarily attributable to reduced distribution in certain domesticmass market accounts partially offset by modest sales increases in certaininternational accounts.

 

Haleko net salesdecreased approximately 16.8% to $67.2 million for the nine months endedFebruary 28, 2003, from $80.8 million for the nine months ended February 28,2002.  The decrease primarily resultedfrom a decline in private label and Venice Beach® sales volume.  Private label sales volume was $9.0 millionfor the nine months ended February 28, 2003, compared to $21.0 million for thenine months ended February 28, 2002. The decrease was primarily due to discontinuation of a significantprivate label account.  Venice Beach®sportswear sales were $19.3 million for the nine months ended February 28 2003,compared to $23.7 million for the nine months ended February 28, 2002,primarily due to elimination of lower margin SKUs and contraction of certaindistribution channels.

 

**Gross Profit. **Gross profit decreasedapproximately 1.5% to $77.9 million for the nine months ended February 28,2003, from $79.0 million for the nine months ended February 28, 2002.  Gross profit, as a percentage of net sales,was 38.1% for the nine months ended February 28, 2003, compared to 34.1% forthe nine months ended February 28, 2002. The increase in the gross profit percentage was primarily attributableto significant increases in gross profit from sales of products in our ActiveNutrition and Haleko business units.

 

Schiff® Specialty grossprofit remained relatively constant for the nine months ended February 28, 2003compared to the nine months ended February 28, 2002.   Gross profit, as a percentage of net sales, was 37.3% for thenine months ended February 28, 2003, compared to 38.2% for the nine monthsended February 28, 2002.  The decreaseresulted primarily from a change in product sales mix, including an increase inlower margin private label sales volume and a decrease in higher margin Schiff®Move Free® sales.  The impact of thereduction in gross profit percentage due to product sales mix was partiallyoffset by a decrease in sales incentive and promotion costs classified asreductions in gross sales, improved net raw material costs and other costsavings, including the prior year business unit realignment.

 

Active Nutrition grossprofit decreased approximately 16.2% to $11.0 million for the nine months endedFebruary 28, 2003, from $13.2 million for the nine months ended February 28,2002, primarily resulting from a decrease in sales volume.  Gross profit, as a percentage of net sales,was 40.9% for the nine months ended February 28, 2003, compared to 31.2% forthe nine months ended February 28, 2002. The increase was primarily attributable to changes in product sales mix,including the elimination of lower-margin American Body Building® and ScienceFoods® brands, reductions in domestic sales credits and cost savings realizedin our domestic operations from the prior year business unit realignment.

 

Haleko gross profitincreased approximately 5.3% to $25.0 million for the nine months endedFebruary 28, 2003, from $23.7 million for the nine

 

18

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months ended February 28,2002.  Gross profit, as a percentage ofnet sales, was 37.2% for the nine months ended February 28, 2003, compared to29.4% for the nine months ended February 28, 2002.  The increase primarily resulted from a reduction in lower-marginprivate label sales and improved Venice Beach® margins.

 

**Operating Expenses. **Operating expenses were$61.9 million for the nine months ended February 28, 2003, compared to $72.7million for the nine months ended February 28, 2002.  The nine months ended February 28, 2002 included severance andreorganization costs of $1.7 million associated with our fiscal 2002 secondquarter business unit realignment, and $0.4 million in litigation settlementincome.   Operating expenses, as apercentage of net sales, were 30.3% and 31.4%, respectively, for the fiscal2003 and 2002 nine-month periods.  Thereduction in operating expenses was primarily attributable to a decrease inselling and marketing costs, lower net sales (partially due to the sale ofAmerican Body Building® and Science Foods®), and cost savings associated withthe fiscal 2002 business unit realignment. The adoption of SFAS No. 142 (see Note 4 to the Condensed ConsolidatedFinancial Statements), resulting in the discontinuance of the amortization ofgoodwill, also contributed to the reduction in operating expenses.

 

Selling and marketingexpenses, including sales, marketing, advertising, freight and other costs,were $38.6 million for the nine months ended February 28, 2003, compared to$45.4 million for the nine months ended February 28, 2002.  The decrease in selling and marketingexpenses resulted primarily from lower net branded sales resulting in decreasedpromotional costs, and a temporary delay in certain Schiff® Specialty marketingprograms. As a percentage of branded gross sales, promotional costs decreasedto approximately 11.1% for the nine months ended February 28, 2003, from 16.0%for the nine months ended February 28, 2002.

 

General andadministrative expenses were $19.2 million for the nine months ended February28, 2003, compared to $19.9 million for the nine months ended February 28,2002.  Increases in professional feeswere more than offset by decreases in personnel and other costs resulting fromthe fiscal 2002 business unit realignment and the fiscal 2003 first quartersale of American Body Building® and Science Foods®.

 

Research and developmentcosts were $3.4 million for the nine months ended February 28, 2003, comparedto $3.6 million for the nine months ended February 28, 2002.  The decrease was primarily due to the fiscal2002 business unit realignment and the sale of American Body Building® andScience Foods®. The adoption of SFAS No. 142 and the fiscal 2003 first quartersale of American Body Building® and Science Foods® resulted in a decrease inamortization expense in the Active Nutrition and Haleko business units.

 

**Other Expense. **Other expense, net, was$3.3 million for the nine months ended February 28, 2003, compared to $6.5million for the nine months ended February 28, 2002.  In November 2002, we paid off the remaining $5.0 million insubordinated loan debt with borrowings available from our senior bank creditfacility.  The early pay-off resulted inan approximate $1.1 million write-off of previously capitalized financing fees,including original issue discount costs. The decrease in interest expense resulted from an overall lowereffective borrowing rate on less total indebtedness. Other expenses, net, wasalso impacted by fiscal year 2002 provisions for potentially unrealizableinterest accrued on notes receivable related to stock performance units, andincome recognized in fiscal 2003 on the sale of certain held-for-sale equitysecurities.

 

**Provision for Income Taxes.**Provisionfor income taxes was a $5.1 million expense for the nine months ended February28, 2003, compared to a $2.8 million expense for the nine months ended February28, 2002.  The

 

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increase resultedprimarily from the increase in pre-tax earnings partially offset by the neteffect of tax rate differences for our domestic and international operations.In addition, we did not recognize income tax benefits on Haleko’s pre-tax lossfor the nine months ended February 28, 2002.

 

**Liquidity and Capital Resources**

 

Working capitaldecreased $6.9 million to approximately $24.8 million at February 28, 2003,from $31.7 million at May 31, 2002.  Thedecrease in working capital resulted primarily from a decrease in netreceivables, partially offset by the sale of our American Body Building® andScience Foods® brands.  The decrease innet receivables resulted primarily from lower sales in the fiscal 2003 thirdquarter, as compared to the fiscal 2002 fourth quarter, and the collection ofapproximately $5.3 million in income tax refunds.

 

We entered into a seniorcredit facility (the “Credit Facility”) with Bankers Trust Company, effectiveJune 30, 2000, on behalf of our domestic subsidiaries.  The Credit Facility was originally comprisedof a $30.0 million amortizing term loan and a $60.0 million revolvingloan.  Effective May 31, 2002, weamended the Credit Facility whereby the outstanding balance of the term loanwas reduced to $11.1 million and the aggregate revolving loan availability wasreduced. During the fiscal 2003 second quarter, the outstanding balance of theterm loan was paid in full with funds available under our revolving loan.  Under the revolving loan, as amended, we mayborrow up to the lesser of $45.0 million or the sum of (i) 85% of eligibleaccounts receivable and (ii) the lesser of $22.5 million or 65% of the eligibleinventory.  The Credit Facility containscustomary terms and conditions, including, among others, financial covenantsregarding minimum cash flows and limitations on indebtedness and our ability topay dividends under certain circumstances. Our obligations under the Credit Facility are secured by a firstpriority lien on all owned or acquired tangible and intangible assets associatedwith our domestic subsidiaries.  TheCredit Facility is being used to fund our normal working capital and capitalexpenditure requirements.  Net proceedsfrom the sale of our American Body Building® and Science Foods® brands wereused to repay a portion of the outstanding indebtedness under the CreditFacility.  At February 28, 2003,available revolving loan funds were approximately $21.3 million.

 

Our domestic operationswere also supported by a subordinated loan (the “Subordinated Loan”) obtainedin conjunction with the Credit Facility. The Subordinated Loan, original amountof $10.0 million, contained customary terms and conditions, including, amongothers, financial covenants regarding minimum cash flows and limitations onindebtedness and our ability to pay dividends under certain circumstances.  Effective May 31, 2002, we used fundsavailable under our revolving loan to pay down $5.0 million of the SubordinatedLoan.  Effective November 27, 2002, weused funds available under our revolving loan to pay-off the remaining $5.0million of the Subordinated Loan.

 

Our European workingcapital needs (primarily our Haleko business unit) are supported by aGermany-based secured credit facility (the “Haleko Facility”) that is subjectto annual renewal in June.  Ourobligations under the Haleko Facility are secured by a first priority lien onsubstantially all Haleko tangible and intangible assets.  During June 2002, we renewed the HalekoFacility with Deutsche Bank AG in the approximate amount of $22.0 million (atrecent exchange rate).  At February 28,2003, the outstanding balance of the Haleko Facility was $11.9 million(included in current portion of long-term debt) and available revolving loanfunds were approximately $9.4 million.

 

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We believe thatour cash, cash flows from operations and the financing sources discussed abovewill be sufficient to meet our normal cash operating requirements during thenext twelve months.  However, wecontinue to review opportunities to acquire or invest in companies, productrights and other investments that are compatible with our existingbusiness.  We could use cash andfinancing sources discussed herein, or financing sources that subsequentlybecome available, to fund additional acquisitions or investments.  In addition, we may consider issuingadditional debt or equity securities in the future to fund potentialacquisitions or growth, or to refinance existing debt.  If a material acquisition or investment iscompleted, our operating results and financial condition could changematerially in future periods.  However,no assurance can be given that additional funds will be available onsatisfactory terms, or at all, to fund such activities.

 

In February 2002,we announced the suspension of the $0.0375 quarterly dividend on our commonstock.  Our Board of Directors willdetermine dividend policy in the future based upon, among other factors,results of operations, financial condition, contractual restrictions and otherfactors deemed relevant at the time.  Inaddition, our credit facilities contain certain customary financial covenantsthat may limit our ability to pay common stock dividends.  We can give no assurance that we will paydividends in the future.

 

A summary of ouroutstanding long-term debt and operating lease contractual obligations atFebruary 28, 2003 is as follows (in thousands):

 
| **Contractual  Cash Obligations** |   | **Total  Amounts  Committed** |   | **Less than   1 Year** |   | **1-3 Years** |   | **4-5 Years** |   | **After  5 Years** |   |
|-----------------------------------|--------|-------------------------------|--------|------------------------|--------|---------------|--------|---------------|--------|--------------------|--------|
|                              |   |                          |   |                   |   |          |   |          |   |               |   |
| Long-term  debt                   |   | $                             | 14,331 |                   | $      | 13,646        |   | $             | 685    |               | $      | — |   | $ | — |   |
| Operating  leases                 |   | 25,386                        |   | 2,949                  |   | 5,281         |   | 5,270         |   | 11,886             |   |
|                              |   |                          |   |                   |   |          |   |          |   |               |   |
| Total  obligations                |   | $                             | 39,717 |                   | $      | 16,595        |   | $             | 5,966  |               | $      | 5,270 |   | $ | 11,886 |   |

 

**CriticalAccounting Policies and Estimates**

 

In preparing ourconsolidated financial statements, we make assumptions, estimates and judgmentsthat affect the amounts reported.  Weperiodically evaluate our estimates and judgments related to valuation ofinventories, allowance for doubtful accounts, notes and sales returns,valuation of deferred tax assets and recoverability of long-lived assets.  Note 1 to the consolidated financialstatements contained in our Annual Report on Form 10-K for the year ended May 31,2002, filed with the Securities and Exchange Commission, describes theaccounting policies governing each of these matters.  Our estimates are based on historical experience and on ourfuture expectations that are believed to be reasonable.  The combination of these factors forms thebasis for making judgments about the carrying values of assets and liabilitiesthat are not readily apparent from other sources.  Actual results are likely to differ from our current estimatesand those differences may be material.

 

**Impact of Inflation**

 

Historically, we havebeen able to pass inflationary increases for raw materials and other costs ontoour customers through price increases and we anticipate that we will be able tocontinue to do so in the future.

 

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**Seasonality**

 

Our business can beseasonal, with fluctuations in sales resulting from timing of marketing andpromotional activities, customer buying patterns and consumer spendingpatterns.  In addition, as a result ofchanges in product sales mix and other factors, as discussed above, weexperience fluctuations in gross profit and operating margins on aquarter-to-quarter basis.

 

**Forward Looking Statements**

 

Investors are cautionedthat, except for the historical information contained herein, the matters discussedin this Quarterly Report contain forward-looking statements within the meaningof Section 27A of the Securities Act of 1933, as amended, and Section 21E ofthe Securities Exchange Act of 1934, as amended, that are based on management’sbeliefs and assumptions, current expectations, estimates, and projections.  Statements that are not historical facts,including without limitation statements which are preceded by, followed by orinclude the words “believes,” “anticipates,” “plans,” “expects,” “estimates,”“may,” “should” or similar expressions are forward-looking statements. Thesestatements are subject to risks and uncertainties, certain of which are beyondour control, and, therefore, actual results may differ materially.

 

Important factors that maycause these forward looking statements to be false include, but are not limitedto:

 

•                  theability to successfully and cost effectively implement initiatives to ourSchiff® Move Free® business against the competition;

•                  theinability to achieve cost savings and operational efficiencies;

•                  theinability to increase operating margins and increase revenues;

•                  dependenceon individual products and customers;

•                  theinability to successfully restructure the Haleko business unit and make itprofitable;

•                  theinability to successfully utilize available cash resulting from suspension ofour quarterly dividend;

•                  theimpact of competitive products and pricing (including private label);

•                  marketand industry conditions, including pricing, demand for products, level of tradeinventories and raw materials availability and pricing;

•                  thesuccess of product development and new product introductions into themarketplace;

•                  changesin laws and regulations, including recently proposed FDA regulations regardinggood manufacturing practices;

•                  litigationand government regulatory action;

•                  lackof available product liability insurance for products containing ephedra;

•                  adversepublicity regarding the consumption of nutritional supplements;

•                  changesin accounting standards; and

•                  otherfactors indicated from time to time in our SEC reports, copies of which areavailable upon request from our investor relations department or may beobtained at the SEC’s website (www.sec.gov).

 

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**ITEM 3.****                  QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUT MARKET RISK**

 

The followingdiscussion involves forward-looking statements of market risk which assume foranalytical purposes that certain adverse market conditions may occur.  Actual future market conditions may differmaterially from such assumptions. Accordingly, the forward-looking statements should not be considered ourprojections of future events or losses.

 

Our cash flows andnet earnings (losses) are subject to fluctuations resulting from changes ininterest rates and foreign exchange rates. We currently are not party to any significant derivative instruments andour current policy does not allow speculation in derivative instruments forprofit or execution of derivative instrument contracts for which there are nounderlying exposure.  We do not usefinancial instruments for trading purposes.

 

We measure marketrisk, related to our holdings of financial instruments, based on changes ininterest rates utilizing a sensitivity analysis.  We do not believe that a hypothetical 10% change in interestrates would have a material effect on our pretax earnings or cash flows.

 

**ITEM 4.****                  CONTROLS ANDPROCEDURES**

 

We maintain “disclosurecontrols and procedures”, as such term is defined under Rule 13a-14(c) promulgatedunder the Securities Exchange Act of 1934, as amended, that are designed toensure that information required to be disclosed in our Exchange Act reports isrecorded, processed, summarized and reported within the time periods specifiedin the SEC’s rules and forms, and that such information is accumulated andcommunicated to management, including our Chief Executive Officer and ChiefFinancial Officer, as appropriate, to allow timely decisions regarding requireddisclosures. In designing and evaluating the disclosure controls andprocedures, management recognized that any controls and procedures, no matterhow well designed and operated, can provide only reasonable assurance ofachieving the desired control objectives and management necessarily wasrequired to apply its judgment in evaluating the cost-benefit relationship ofpossible controls and procedures. We have carried out an evaluation, within the90 days prior to the date of filing of this report, under the supervision andwith the participation of management, including our Chief Executive Officer andChief Financial Officer, of the effectiveness of the design and operation ofour disclosure controls and procedures. Based upon their evaluation and subjectto the foregoing, the Chief Executive Officer and Chief Financial Officerconcluded that the company’s disclosure controls and procedures were effectivein ensuring that material information relating to the company is made known tothe Chief Executive Officer and Chief Financial Officer by others within thecompany during the period in which this report was being prepared.

 

There have been nosignificant changes in our internal controls or in other factors that couldsignificantly affect these controls subsequent to the date we completed our evaluation.

 

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**PART II.****                OTHERINFORMATION**

 

**Item 1.****                    LegalProceedings.**

 

The information set forthin Note 8 to Condensed Consolidated Financial Statements in Item 1 of thisQuarterly Report on Form 10-Q is incorporated herein by reference.

 

**Item 2.****                    Changes inSecurities.**

 

Not applicable.

 

**Item 3.****                    Defaults UponSenior Securities.**

 

Not applicable.

 

**Item 4.****                    Submission ofMatters to a Vote of Security Holders.**

 

Notapplicable.

 

**Item 5.****                    OtherInformation.**

 

Notapplicable.

 

**Item 6.****                    Exhibits andReports on Form 8-K**

 

(a)           Exhibits

 

(b)           Reports on Form 8-K

 

On January 14, 2003, wefiled a report on Form 8-K with the commission regarding Section 906certifications by certain company officers.

 

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**SIGNATURES**

 

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.

 
|                       |   |                                     | **WEIDER NUTRITION INTERNATIONAL, INC.** |   |
|----------------------------|--------|------------------------------------------|------------------------------------------|--------|
|                       |   |                                     |                                     |   |
|                       |   |                                     |                                     |   |   |
| Date:  April 14, 2003 |   | By:  /s/    Bruce J. Wood |                                     |   |
|                       |   |                                     | Bruce J. Wood                            |   |   |
|                       |   |                                     | President, Chief  Executive Officer      |   |   |
|                       |   |                                     | and Director                             |   |   |
|                       |   |                                     |                                     |   |   |
|                       |   |                                     |                                     |   |   |
| Date:  April 14, 2003 |   | By: /s/   Joseph W. Baty       |                                     |   |
|                       |   |                                     | Joseph W. Baty                           |   |   |
|                       |   |                                     | Executive Vice  President and            |   |   |
|                       |   |                                     | Chief Financial  Officer                 |   |   |

 

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I, Bruce J. Wood, certifythat:

 

1.  I have reviewed this quarterly report onForm 10-Q of Weider Nutrition International, Inc.;

 

2.  Based on my knowledge, this quarterly reportdoes not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading withrespect to the period covered by this quarterly report;

 

3.  Based on my knowledge, the financialstatements, and other financial information included in this quarterly report,fairly present in all material respects the financial condition, results ofoperations and cash flows of the registrant as of, and for, the periodspresented in this quarterly report;

 

4.  The registrant’s other certifying officerand I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for theregistrant and we have:

 

a) designed suchdisclosure controls and procedures to ensure that material information relatingto the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which thisquarterly report is being prepared;

 

b) evaluated theeffectiveness of the registrant’s disclosure controls and procedures as of adate within 90 days prior to the filing date of this quarterly report (the“Evaluation Date”); and

 

c) presented in thisquarterly report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation Date;

 

5.  The registrant’s other certifying officerand I have disclosed, based on our most recent evaluation, to the registrant’sauditors and the audit committee of the registrant’s board of directors (orpersons performing the equivalent function):

 

a) all significantdeficiencies in the design or operation of internal controls which couldadversely affect the registrant’s ability to record, process, summarize andreport financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

 

b) any fraud, whether ornot material, that involves management or other employees who have asignificant role in the registrant’s internal controls; and

 

6.  The registrant’s other certifying officerand I have indicated in this quarterly report whether or not there were significantchanges in internal controls or in other factors that could significantlyaffect internal controls subsequent to the date of our most recent evaluation,including any corrective actions with regard to significant deficiencies andmaterial weaknesses.

 
| Date:  | April 14, 2003                         |
|--------|----------------------------------------|
|   |                                   |
|   |                                   |
|   | /s/ Bruce J. Wood                      |   |
|   | Bruce J. Wood                          |
|   | President and Chief  Executive Officer |

 

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I, Joseph W. Baty,certify that:

 

1.  I have reviewed this quarterly report onForm 10-Q of Weider Nutrition International, Inc.;

 

2.  Based on my knowledge, this quarterly reportdoes not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading withrespect to the period covered by this quarterly report;

 

3.  Based on my knowledge, the financialstatements, and other financial information included in this quarterly report,fairly present in all material respects the financial condition, results ofoperations and cash flows of the registrant as of, and for, the periodspresented in this quarterly report;

 

4.  The registrant’s other certifying officerand I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for theregistrant and we have:

 

a) designed suchdisclosure controls and procedures to ensure that material information relatingto the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which thisquarterly report is being prepared;

 

b) evaluated theeffectiveness of the registrant’s disclosure controls and procedures as of adate within 90 days prior to the filing date of this quarterly report (the“Evaluation Date”); and

 

c) presented in thisquarterly report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation Date;

 

5.  The registrant’s other certifying officerand I have disclosed, based on our most recent evaluation, to the registrant’sauditors and the audit committee of the registrant’s board of directors (orpersons performing the equivalent function):

 

a)  all significant deficiencies in the designor operation of internal controls which could adversely affect the registrant’sability to record, process, summarize and report financial data and haveidentified for the registrant’s auditors any material weaknesses in internalcontrols; and

 

b) any fraud, whether ornot material, that involves management or other employees who have asignificant role in the registrant’s internal controls; and

 

6.  The registrant’s other certifying officerand I have indicated in this quarterly report whether or not there weresignificant changes in internal controls or in other factors that couldsignificantly affect internal controls subsequent to the date of our mostrecent evaluation, including any corrective actions with regard to significantdeficiencies and material weaknesses.

 
| Date:  | April 14, 2003                                         |
|--------|--------------------------------------------------------|
|   |                                                   |
|   |                                                   |
|   | /s/ Joseph W. Baty                                     |   |
|   | Joseph W. Baty                                         |
|   | Executive Vice  President and  Chief Financial Officer |
|        |                                                        |  |  |

 

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