***Go
      to* - **TABLE OF
      CONTENTS****


UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549





**FORM
      10-Q**





**ý**
                  **QUARTERLY
                      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                      ACT OF
                      1934****For
                      the quarterly period ended February 28, 2007****q**
                  **TRANSITION
                      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                      ACT OF
                      1934****For
                      the transition period from ____ to ____.**Commission
                      file number:**001-14608**




**SCHIFF
      NUTRITION INTERNATIONAL, INC.**


(Exact
      name of registrant as specified in its charter)




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





**(801)
      975-5000**


(Registrant’s
      telephone number, including area code)





Indicate
      by check
      mark whether the registrant (1) has filed all reports required to be filed
      by
      Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
      12 months (or for such shorter period that the registrant was required to file
      such reports), and (2) has been subject to such filing requirements for the
      past
      90 days. Yes ýNo
q





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer.  See definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange
      Act.





Large
      Accelerated Filerq                                                                Accelerated
      Filerq                                                      Non-Accelerated
      Filerý





Indicate
      by check
      mark whether the registrant is a shell company (as defined in Rule 12b-2 of
      the
      Exchange Act).  Yes qNo ý





As
      of April 12, 2007 the registrant had outstanding 11,663,784 shares of Class
      A common stock and 14,973,148 shares of Class B common stock.







**Schiff
              Nutrition International, Inc.**
 **Table
              of Contents**


**PART
          I. FINANCIAL INFORMATION**
 
 ITEM
                    1.
                FINANCIAL
                    STATEMENTS
 
 CONDENSED
                    CONSOLIDATED BALANCE
                    SHEETS
 CONDENSED
                    CONSOLIDATED STATEMENTS OF INCOME *(3
                    months)  (9
                    months)*
 CONDENSED
                    CONSOLIDATED STATEMENTS OF CASH
                    FLOWS
 NOTES
                    TO CONDENSED CONSOLIDATED FINANCIAL
                    STATEMENTS
 1.
                BASIS
                    OF PRESENTATION AND OTHER
                    MATTERS
 2.
                AVAILABLE-FOR-SALE
                    SECURITIES
 3.
                RECEIVABLES,
                    NET
 4.
                INVENTORIES
 5.
                GOODWILL
                    AND INTANGIBLE ASSETS,
                    NET
 6.
                ACCRUED
                    EXPENSES
 7.
                CONCENTRATION
                    RISK
 8.
                COMMITMENTS
                    AND
                    CONTINGENCIES
 9.
                RECENTLY
                    ISSUED ACCOUNTING
                    STANDARDS
 
 ITEM
                    2.
                MANAGEMENT’S
                    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS
  -    
          General
 -  Results
          of
          Operations (unaudited) *(3 months)  (9 months)*
 -  Liquidity
          and Capital Resources
 -  Critical
          Accounting Policies and Estimates
 -  Impact
          of Inflation
 -  Seasonality
 -  Forward-Looking
          Statements
 
 ITEM
                    3.
                QUANTITATIVE
                    AND QUALITATIVE DISCLOSURES ABOUT MARKET
                    RISK
 ITEM
                    4.
                CONTROLS
                    AND
                    PROCEDURES
 
 **PART
          II. OTHER INFORMATION**
 
 ITEM
                    1.
                LEGAL
                    PROCEEDINGS
 ITEM
                    1A.
                RISK
                    FACTORS
 ITEM
                    2.
                UNREGISTERED
                    SALES OF EQUITY SECURITIES AND USE OF
                    PROCEEDS
 ITEM
                    3.
                DEFAULTS
                    UPON SENIOR
                    SECURITIES
 ITEM
                    4.
                SUBMISSION
                    OF MATTERS TO A VOTE OF SECURITY
                    HOLDERS
 ITEM
                    5.
                OTHER
                    INFORMATION
 ITEM
                    6.
                EXHIBITS
 
 **SIGNATURES**
 
 **Exhibit
                    31.1**- Certification of
                    CEO pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002
 
 **Exhibit
                    31.2**- Certification of
                    CFO pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002
 
 **Exhibit
                    32.1** - CEO and CFO
                    Certifications pursuant to Section 906 of the Sarbanes-Oxley
                    Act of
                    2002




**PART
              I. FINANCIAL
              INFORMATION**




**ITEM
                1.**
            **FINANCIAL
                STATEMENTS**





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


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


*(in
      thousands, except share data)*





February
                    28, 2007
                
                
                May
                    31,2006*(unaudited)***ASSETS**Current
                    assets:Cash
                    and cash equivalents
                
                $
                30,530
                
                
                $
                24,899Available-for-sale
                    securities
                
                
                44,224
                
                
                
                40,120Receivables,
                    net
                
                
                20,507
                
                
                
                20,431Inventories
                
                
                23,915
                
                
                
                23,515Prepaid
                    expenses and other
                
                
                2,281
                
                
                
                2,444Deferred
                    taxes, net
                
                
                1,963
                
                
                
                2,419Total
                    current assets
                
                
                123,420
                
                
                
                113,828Property
                    and equipment, net
                
                
                14,762
                
                
                
                13,287Other
                    assets:Goodwill
                
                
                4,346
                
                
                
                4,346Deposits
                    and other assets
                
                
                124
                
                
                
                154Total
                    other assets
                
                
                4,470
                
                
                
                4,500Total
                    assets
                
                $
                142,652
                
                
                $
                131,615**LIABILITIES
                    AND STOCKHOLDERS' EQUITY**Current
                    liabilities:Accounts
                    payable
                
                $
                11,559
                
                
                $
                10,547Accrued
                    expenses
                
                
                9,950
                
                
                
                11,472Short-term
                    debt
                
                
                290
                
                
                
                —Income
                    taxes payable
                
                
                1,305
                
                
                
                1,293Total
                    current liabilities
                
                
                23,104
                
                
                
                23,312Deferred
                    taxes, net
                
                
                73
                
                
                
                796Commitments
                    and contingencies (Note 8)Stockholders'
                    equity:Preferred
                    stock, par value $.01 per share; shares authorized-10,000,000;
                    no shares
                    issued and outstanding
                
                
                —
                
                
                
                —Class
                    A
                    common stock, par value $.01 per share; shares authorized-50,000,000;
                    shares issued and outstanding-11,659,784 and 11,606,193
                
                
                116
                
                
                
                116Class
                    B common stock, par value $.01 per share; shares authorized-25,000,000;
                    shares issued and outstanding-14,973,148
                
                
                150
                
                
                
                150Additional
                    paid-in capital
                
                
                91,703
                
                
                
                88,488Retained
                    earnings
                
                
                27,506
                
                
                
                18,753Total
                    stockholders' equity
                
                
                119,475
                
                
                
                107,507Total
                    liabilities and stockholders' equity
                
                $
                142,652
                
                
                $
                131,615





See
      notes to condensed consolidated financial statements.




***Go
      to* -****TABLE OF
      CONTENTS**


-
            2 -
 **SCHIFF
              NUTRITION INTERNATIONAL, INC. AND
              SUBSIDIARIES**
 **CONDENSED
              CONSOLIDATED STATEMENTS OF INCOME**
 *(in
              thousands, except share data)*
 *(unaudited)*








Three
                      Months EndedFebruary
                      28,2007
                  
                  
                  2006Net
                      sales
                  
                  $
                  44,999
                  
                  
                  $
                  49,641Cost
                      of goods sold
                  
                  
                  28,570
                  
                  
                  
                  32,709Gross
                      profit
                  
                  
                  16,429
                  
                  
                  
                  16,932Operating
                      expenses:Selling
                      and marketing
                  
                  
                  8,060
                  
                  
                  
                  8,527General
                      and administrative
                  
                  
                  2,985
                  
                  
                  
                  3,609Research
                      and development
                  
                  
                  995
                  
                  
                  
                  667Amortization
                      of intangible assets
                  
                  
                  —
                  
                  
                  
                  6Reimbursement
                      of import costs
                  
                  
                  (96
                  )
                  
                  
                  (125
                  )Total
                      operating expenses
                  
                  
                  11,944
                  
                  
                  
                  12,684Income
                      from operations
                  
                  
                  4,485
                  
                  
                  
                  4,248Other
                      income (expense):Interest
                      income
                  
                  
                  760
                  
                  
                  
                  547Interest
                      expense
                  
                  
                  (43
                  )
                  
                  
                  (53
                  )Other,
                      net
                  
                  
                  (1
                  )
                  
                  
                  8Total
                      other income, net
                  
                  
                  716
                  
                  
                  
                  502Income
                      before income taxes
                  
                  
                  5,201
                  
                  
                  
                  4,750Income
                      tax expense
                  
                  
                  1,960
                  
                  
                  
                  1,561Net
                      income
                  
                  $
                  3,241
                  
                  
                  $
                  3,189Weighted
                      average shares outstanding:Basic
                  
                  
                  26,549,132
                  
                  
                  
                  26,336,274Diluted
                  
                  
                  27,353,200
                  
                  
                  
                  27,044,012Net
                      income per share-basic and diluted
                  
                  $
                  0.12
                  
                  
                  $
                  0.12Comprehensive
                      income
                  
                  $
                  3,241
                  
                  
                  $
                  3,189





See
      notes to condensed consolidated financial statements.


***Go
        to* -****TABLE OF
        CONTENTS**


-
            3 -
 **SCHIFF
              NUTRITION INTERNATIONAL, INC. AND
              SUBSIDIARIES**
 **CONDENSED
              CONSOLIDATED STATEMENTS OF INCOME**
 *(in
              thousands, except share data)*
 *(unaudited)*








Nine
                    Months EndedFebruary
                    28,2007
                
                
                2006Net
                    sales
                
                $
                129,468
                
                
                $
                133,114Cost
                    of goods sold
                
                
                79,746
                
                
                
                92,263Gross
                    profit
                
                
                49,722
                
                
                
                40,851Operating
                    expenses:Selling
                    and marketing
                
                
                25,138
                
                
                
                20,603General
                    and administrative
                
                
                10,839
                
                
                
                11,252Research
                    and development
                
                
                2,675
                
                
                
                1,978Amortization
                    of intangible assets
                
                
                —
                
                
                
                17Reimbursement
                    of import costs
                
                
                (394
                )
                
                
                (2,413
                )Total
                    operating expenses
                
                
                38,258
                
                
                
                31,437Income
                    from operations
                
                
                11,464
                
                
                
                9,414Other
                    income (expense):Interest
                    income
                
                
                2,261
                
                
                
                1,322Interest
                    expense
                
                
                (146
                )
                
                
                (129
                )Foreign
                    currency translation gain
                
                
                —
                
                
                
                1,584Other,
                    net
                
                
                14
                
                
                
                (21
                )Total
                    other income, net
                
                
                2,129
                
                
                
                2,756Income
                    from continuing operations before income taxes
                
                
                13,593
                
                
                
                12,170Income
                    tax expense
                
                
                4,840
                
                
                
                2,384Income
                    from continuing operations
                
                
                8,753
                
                
                
                9,786Loss
                    from discontinued operations, net of income taxes
                
                
                —
                
                
                
                (127
                )Net
                    income
                
                $
                8,753
                
                
                $
                9,659Weighted
                    average shares outstanding:Basic
                
                
                26,524,365
                
                
                
                26,229,774Diluted
                
                
                27,332,732
                
                
                
                26,894,878Net
                    income per share-basic:Income
                    from continuing operations
                
                $
                0.33
                
                
                $
                0.37Loss
                    from discontinued operations
                
                
                —
                
                
                
                —Net
                    income
                
                $
                0.33
                
                
                $
                0.37Net
                    income per share-diluted:Income
                    from continuing operations
                
                $
                0.32
                
                
                $
                0.36Loss
                    from discontinued operations
                
                
                —
                
                
                
                —Net
                    income
                
                $
                0.32
                
                
                $
                0.36Comprehensive
                    income
                
                $
                8,753
                
                
                $
                9,492




See
      notes to condensed consolidated financial statements.


***Go
          to* -****TABLE OF
          CONTENTS**


-
            4 -
 **SCHIFF
              NUTRITION INTERNATIONAL, INC. AND
              SUBSIDIARIES**
 **CONDENSED
              CONSOLIDATED STATEMENTS OF CASH FLOWS**
 *(in
              thousands)*
 *(unaudited)*








Nine
                      Months
                      EndedFebruary
                      28,2007
                  
                  
                  2006Cash
                      flows from operating activities:Net
                      income
                  
                  $
                  8,753
                  
                  
                  $
                  9,659Adjustments
                      to reconcile net income to net cash provided by operating
                      activities:Changes
                      in provision for bad debts
                  
                  
                  (54
                  )
                  
                  
                  —Deferred
                      taxes
                  
                  
                  (267
                  )
                  
                  
                  3,038Depreciation
                      and amortization
                  
                  
                  2,474
                  
                  
                  
                  2,240Amortization
                      of financing fees
                  
                  
                  35
                  
                  
                  
                  41Stock-based
                      compensation
                  
                  
                  2,962
                  
                  
                  
                  117Excess
                      tax
                      benefit from equity instruments
                  
                  
                  (141
                  )
                  
                  
                  —Foreign
                      currency translation (gain) loss
                  
                  
                  2
                  
                  
                  
                  (1,584
                  )Other
                  
                  
                  (15
                  )
                  
                  
                  23Changes
                      in operating assets and liabilities:Receivables
                  
                  
                  (422
                  )
                  
                  
                  (1,551
                  )Inventories
                  
                  
                  (400
                  )
                  
                  
                  3,513Prepaid
                      expenses and other
                  
                  
                  163
                  
                  
                  
                  517Deposits
                      and other assets
                  
                  
                  (5
                  )
                  
                  
                  (115
                  )Accounts
                      payable
                  
                  
                  361
                  
                  
                  
                  1,911Other
                      current liabilities
                  
                  
                  (1,369
                  )
                  
                  
                  (4,017
                  )Net
                      cash provided by operating activities
                  
                  
                  12,077
                  
                  
                  
                  13,792Cash
                      flows from investing activities:Purchase
                      of property and equipment
                  
                  
                  (3,305
                  )
                  
                  
                  (1,755
                  )Proceeds
                      from sale of property and equipment
                  
                  
                  19
                  
                  
                  
                  4Proceeds
                      from sale of Haleko Unit, net (Note 1)
                  
                  
                  —
                  
                  
                  
                  13,683Purchase
                      of available-for-sale securities
                  
                  
                  (28,053
                  )
                  
                  
                  (38,330
                  )Proceeds
                      from sale of available-for-sale securities
                  
                  
                  23,949
                  
                  
                  
                  27,794Collection
                      of notes receivable
                  
                  
                  400
                  
                  
                  
                  450Net
                      cash provided by (used in) investing activities
                  
                  
                  (6,990
                  )
                  
                  
                  1,846Cash
                      flows from financing activities:Proceeds
                      from stock options exercised
                  
                  
                  282
                  
                  
                  
                  801Acquisition
                      and retirement of common stock
                  
                  
                  (170
                  )
                  
                  
                  (143
                  )Excess
                      tax
                      benefit from equity instruments
                  
                  
                  141
                  
                  
                  
                  —Proceeds
                      from
                      short-term debt
                  
                  
                  1,996
                  
                  
                  
                  1,693Payments
                      on
                      short-term debt
                  
                  
                  (1,706
                  )
                  
                  
                  (1,949
                  )Net
                      cash provided by financing activities
                  
                  
                  543
                  
                  
                  
                  402Effect
                      of exchange rate changes on cash
                  
                  
                  1
                  
                  
                  
                  (83
                  )Increase
                      in cash and cash equivalents
                  
                  
                  5,631
                  
                  
                  
                  15,957Cash
                      and cash equivalents, beginning of period
                  
                  
                  24,899
                  
                  
                  
                  11,358Cash
                      and cash equivalents, end of period
                  
                  $
                  30,530
                  
                  
                  $
                  27,315




See
      notes to condensed consolidated financial statements.


***Go
          to* -****TABLE OF
          CONTENTS**


-
            5 -
 **SCHIFF
              NUTRITION INTERNATIONAL, INC. AND
              SUBSIDIARIES**
 **NOTES
              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 *(in
              thousands, except share data)* *(unaudited)*





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





The
      accompanying unaudited interim condensed consolidated financial statements
      (“interim financial statements”) do not include all disclosures provided in our
      annual consolidated financial statements.  These interim financial
      statements should be read in conjunction with the consolidated financial
      statements and the footnotes thereto contained in our Annual Report on Form
      10-K
      for the year ended May 31, 2006 as filed with the Securities and Exchange
      Commission.  The May 31, 2006 condensed consolidated balance sheet,
      included herein, was derived from audited financial statements, but all
      disclosures required by generally accepted accounting principles are not
      provided in the accompanying footnotes.  We are a majority-owned
      subsidiary of Weider Health and Fitness (“WHF”).





In
      our opinion, the accompanying interim financial statements contain all material
      adjustments necessary for a fair presentation of our financial position and
      results of operations.  Results of operations and cash flows for any
      interim period are not necessarily indicative of the results of operations
      and
      cash flows that we may achieve for any other interim period or for the entire
      year.





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





On
      April 1, 2005, we announced the sale of certain assets of our Active Nutrition
      Unit relating to our Weider branded business domestically and internationally
      to
      Weider Global Nutrition, LLC (“WGN”), a wholly-owned subsidiary of
      WHF.  The terms of the transaction provided for a cash payment of
      approximately $12,900 and a note receivable of $1,100 in exchange for assets
      relating to the domestic Weider branded business, including inventory,
      receivables, and intangible and intellectual property, the capital stock of
      certain of our international subsidiaries related to the international Weider
      branded business (including the working capital of those subsidiaries), and
      the
      assumption of certain associated liabilities by WGN.  The transaction
      closed on April 1, 2005, with an effective date of March 1, 2005.





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





Historical
      operating results for the Haleko Unit are reflected as discontinued operations
      in our condensed consolidated financial statements, including the notes
      thereto.  We believe our remaining business, which consists of the
      aggregation of several product-based operating segments, represents our only
      reportable segment.  Accordingly, beginning with the fiscal 2006 first
      quarter, we have reported one business unit.





On
      March 17, 2006, the Compensation Committee of our Board of Directors, pursuant
      to our 2004 Incentive Award Plan, approved the adoption of a long term incentive
      plan involving the grant of performance based restricted stock units (the
“Units”).  On March 20, 2006, a total of 1,437,200 Units were issued
      to certain officers and employees.  Each Unit represents the right to
      receive one share of the Company’s Class A common stock, subject to certain
      performance based vesting requirements.  The Units will vest, if at
      all, based on the Company’s performance in relation to certain specified
      pre-established performance criteria targets over a performance period beginning
      on January 1, 2006 and expiring on May 31, 2008.  The performance
      criteria upon which the Units may vest is based upon a “Business Value Created”
formula, which is comprised of two performance criteria components: operating
      earnings and return on net capital.  The grant date fair value of each
      Unit was $5.11.  We recognize compensation expense, net of
      forfeitures, over the performance period based on a periodic assessment of
      the
      probability that the performance criteria will be achieved.  For the
      three and nine month periods ended February 28, 2007, respectively, we
      recognized net compensation expense of $742 and $2,552, and the related tax
      benefit was approximately $280 and $909.  At February 28, 2007, total
      unrecognized compensation expense, based on our assessment of the probability
      that the performance criteria will be achieved, was approximately $4,058, which
      is expected to be recognized over a weighted average period of 1.3
      years.


***Go
          to* -****TABLE OF
          CONTENTS**


-
            6 -
 **SCHIFF
              NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**
 **NOTES
              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –
*(continued)***
 *(in
              thousands, except share data)*
 *(unaudited)*





Effective
      August
      16, 2002, we issued 640,000 restricted shares of Class A common stock to certain
      officers and employees.  The aggregate value of these restricted
      shares was approximately $1,038, which we are expensing on a straight-line
      basis
      over the accompanying five-year vesting (service) period.  During the
      fiscal 2007 first quarter, 86,200 restricted shares vested.  During
      the fiscal 2007 third quarter, 2,400 shares were cancelled as a result of the
      termination of an employee.  During the fiscal 2006 first quarter,
      98,200 restricted shares vested, and as a result of the voluntary termination
      of
      an employee, 12,000 restricted shares were cancelled.  During the
      fiscal 2007 and 2006 first quarters, concurrent with the annual vesting, we
      reacquired (and ultimately retired) 23,443 and 27,201 shares, respectively,
      from
      certain employees in connection with the payment of individual income
      taxes.  As of February 28, 2007, of the 640,000 restricted shares
      originally issued, 445,000 shares have vested, of which 80,662 shares were
      reacquired (and retired), 111,200 shares have been cancelled and 83,800 shares
      are subject to future vesting.





Effective
      March 1, 2006, we adopted Statement of Financial Accounting Standards (“SFAS”)
      No. 123R, "Share-Based Payment," using the modified prospective method and
      began recognizing compensation expense for all awards granted after March 1,
      2006, and for the unvested portion of previously granted awards that were
      outstanding at March 1, 2006.  Compensation expense is recognized over
      the vesting period based on the computed fair value on the grant date of the
      award.





Prior
      to March 1, 2006, we disclosed the effect of SFAS No. 123, “Accounting for
      Stock-Based Compensation,” on a proforma basis and continued to follow
      Accounting Principles Board (“APB”) Opinion No. 25 (as permitted by SFAS No.
      123) as it relates to stock based compensation.





Proforma
      information regarding net income and net income per share is required by SFAS
      No. 123R and has been determined as if we had accounted for our employee stock
      options under the fair value method of SFAS No. 123R.  For the
      purposes of proforma disclosure, the estimated fair value of the stock options
      is amortized to expense over the options’ vesting period.  Our
      proforma net income and net income per share are as follows for the nine months
      ended February 28, 2006:





Net
                    income, as reported
                
                $
                9,659Deduct
                    stock-based employee compensation expense determined under fair-value
                    based method, net of related tax effects
                
                
                (232
                )Net
                    income, proforma
                
                $
                9,427Basic
                    net income per share, as reported
                
                $
                0.37Diluted
                    net income per share, as reported
                
                $
                0.36Basic
                    net income per share, proforma
                
                $
                0.36Diluted
                    net income per share, proforma
                
                $
                0.35





Net
      cash paid for
      income taxes was approximately $4,934 and $4,394, respectively, for the nine
      months ended February 28, 2007 and 2006.





**2.**
            **AVAILABLE-FOR-SALE
                SECURITIES**





Available-for-sale
      securities consist primarily of auction rate securities, long-term variable
      rate
      bonds tied to short-term interest rates that are reset through a “dutch auction”
process which occurs every 7 to 35 days, and other variable rate debt and equity
      securities.





Available-for-sale
      securities at fair value, which approximates unamortized cost, consist of the
      following:





February
                              28,
                              2007
                          
                          
                          May
                              31,2006Federal,
                              state and municipal debt securities
                          
                          $
                          31,391
                          
                          
                          $
                          29,114Corporate
                              debt securities
                          
                          
                          8,583
                          
                          
                          
                          7,306Corporate
                              equity securities
                          
                          
                          4,250
                          
                          
                          
                          3,700$
                          44,224
                          
                          
                          $
                          40,120


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            7 -
 **SCHIFF
              NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**
 **NOTES
              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –
*(continued)***
 *(in
              thousands, except share data)*
 *(unaudited)*







Despite
      the
      long-term nature of these auction rate securities’ stated contractual
      maturities, there is a ready liquid market for these securities based on the
      interest reset mechanism.  These securities are classified as current
      assets in the accompanying consolidated balance sheets because we have the
      ability and intent to sell these securities as necessary to meet our current
      liquidity needs.  Contractual maturities of debt securities are as
      follows at February 28, 2007:




Less
                      than one year
                  
                  $
                  2,272One
                      to five years
                  
                  
                  850Over
                      five years
                  
                  
                  36,852$
                  39,974
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 -
              8 -




The
      amount of
      unrealized gains or losses for the first nine months of fiscal 2007 and 2006
      was
      not significant.





**3.**
            **RECEIVABLES,
                NET**





Receivables,
                        net, consist of the following:February
                        28,
                        2007
                    
                    
                    May
                        31,2006Trade
                        accounts
                    
                    $
                    22,277
                    
                    
                    $
                    23,103Note
                        receivable due from WGN
                    
                    
                    —
                    
                    
                    
                    400Other
                    
                    
                    840
                    
                    
                    
                    24823,117
                    
                    
                    
                    23,751Less
                        allowances for doubtful accounts, sales returns and
                        discounts
                    
                    
                    (2,610
                    )
                    
                    
                    (3,320
                    )Total
                    
                    $
                    20,507
                    
                    
                    $
                    20,431





**4.**
            **INVENTORIES**





Inventories
                      consist of the following:February
                      28,
                      2007
                  
                  
                  May
                      31,2006Raw
                      materials
                  
                  $
                  12,058
                  
                  
                  $
                  9,694Work
                      in process
                  
                  
                  2,456
                  
                  
                  
                  1,275Finished
                      goods
                  
                  
                  9,401
                  
                  
                  
                  12,546Total
                  
                  $
                  23,915
                  
                  
                  $
                  23,515





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




Goodwill
                    and intangible assets, net, consist of the following:February
                    28,
                    2007
                
                May
                    31, 2006Gross
                    Carrying Amount
                
                Accumul.
                    Amortiz.
                
                Net
                    Book Value
                
                Gross
                    Carrying Amount
                
                Accumul.
                    Amortiz.
                
                Net
                    Book ValueGoodwill
                
                $
                4,346
                
                $
                —
                
                $
                4,346
                
                $
                4,346
                
                $
                —
                
                $
                4,346Intangible
                    assets-patents and trademarks
                
                $
                2,090
                
                $
                (2,090
                )
                $
                —
                
                $
                2,090
                
                $
                (2,090
                )
                $
                —




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-
            9 -
 **SCHIFF
              NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**
 **NOTES
              TO
              CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –
*(continued)***
 *(in
              thousands, except share data)*
 *(unaudited)*





Estimated
      amortization expense, assuming no change in the gross carrying amount of our
      intangible assets, is zero for all future fiscal years.





The
      carrying amount
      of goodwill did not change during the first nine months of fiscal 2007 or during
      fiscal 2006.





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





Accrued
                    expenses consist of the following:February
                    28,
                    2007
                
                
                May
                    31,2006Accrued
                    personnel related costs
                
                $
                2,838
                
                
                $
                3,477Accrued
                    promotional costs
                
                
                5,029
                
                
                
                5,260Other
                
                
                2,083
                
                
                
                2,735Total
                
                $
                9,950
                
                
                $
                11,472




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





The
      combined net
      sales to our two largest customers are significant.  For the first
      nine months of fiscal 2007 and 2006, respectively, Customer A accounted for
      approximately 35% and 32% and Customer B accounted for approximately 35% and
      39%
      of total net sales.  At February 28, 2007, and May 31, 2006,
      respectively, amounts due from Customer A represented approximately 41% and
      30%
      and amounts due from Customer B represented approximately 28% and 27% of total
      trade accounts receivable.  Net sales of our Schiff® Move Free® brand
      accounted for approximately 49% and 48%, respectively, of total net sales for
      the first nine months of fiscal 2007 and 2006.





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





In
      July 2003, we were named as a defendant in *Cain v. Metabolife, Inc., Weider
      Nutrition International, Inc., et. al.* filed in Texas state
      court.  In connection with the bankruptcy filing of another defendant
      company, the case was removed to a United States Bankruptcy Court in New Jersey.
      The lawsuit alleged that the consumption of various products containing ephedra
      (distributed by several different companies) caused injuries and damages to
      the
      plaintiff.  We disputed the allegations and opposed the
      lawsuit.





In
      connection with the recent bankruptcy filing of a second defendant, the matter
      subsequently was removed to the United States Bankruptcy Court for the Southern
      District of California (the “Bankruptcy Proceedings”).  In the
      Bankruptcy Proceedings, the various parties reached a global settlement
      agreement in March 2007, which settlement agreement is subject to court
      approval.  The settlement agreement, which has been circulated to the
      parties for signature, resolves over 250 individual cases and claims (including
      the Cain litigation described above).  The settlement agreement
      provides for the dismissal with prejudice of all of the cases and claims
      (including the Cain litigation described above), whether or not the defendants
      are contributing parties.  We did not contribute any amounts to the
      settlement of this matter, and we did not have insurance coverage for this
      matter.





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





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





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


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            10 -
 **SCHIFF
              NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**
 **NOTES
              TO
              CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –
*(continued)***
 *(in
              thousands, except share data)*
 *(unaudited)*





In
      December 2004, the FASB issued SFAS No. 123R, which replaces SFAS No. 123,
      supersedes APB Opinion No. 25 and amends SFAS No. 95, “Statement of Cash
      Flows.”  SFAS No. 123R eliminates the ability for public companies to
      measure share-based compensation transactions at the intrinsic value as allowed
      by APB Opinion No. 25, and requires that such transactions be accounted for
      based on the grant date fair value of the award.  SFAS No. 123R also
      amends SFAS No. 95, to require that excess tax benefits be reported as a
      financing cash inflow rather than as a reduction of taxes paid.  Under
      the intrinsic value method allowed under APB Opinion No. 25, the difference
      between the quoted market price as of the date of the grant and the contractual
      purchase price of the share is charged to operations over the vesting period,
      and no compensation expense is recognized for fixed stock options with exercise
      prices equal to the market price of the stock on the dates of
      grant.  Under the fair value based method as prescribed by SFAS No.
      123R, we are required to charge the value of all newly granted stock-based
      compensation to expense over the vesting period based on the computed fair
      value
      on the grant date of the award.  Effective March 1, 2006, we adopted
      SFAS No. 123R using the modified prospective method, recording compensation
      expense for all awards granted after the date of adoption and for the unvested
      portion of previously granted awards that remain outstanding at the date of
      adoption.  The adoption of SFAS No. 123R resulted in incremental
      stock-based compensation expense of approximately $29 and $254, respectively,
      for the three and nine month periods ended February 28, 2007.  The
      incremental stock-based compensation expense caused income from continuing
      operations to decrease by $29 and $254, respectively, and net income to decrease
      by $18 and $164, respectively, for the three and nine month periods ended
      February 28, 2007.  The impact on basic and diluted earnings per share
      was less than $.01 per share for the three and nine months ended February 28,
      2007.  Cash provided by operating activities decreased and cash
      provided by financing activities increased by $141 related to excess tax
      benefits from stock-based payment arrangements.





In
      May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
      Corrections," which replaces APB Opinion No. 20, "Accounting Changes," and
      SFAS
      No. 3, "Reporting Accounting Changes in Interim Financial
      Statements."  SFAS No. 154 requires changing the accounting and
      reporting requirements of voluntary and mandatory (unless the pronouncement
      provides other transition requirements) changes in accounting principle by
      requiring retroactive application of the change in accounting principle to
      prior
      periods' financial statements, unless it is not practical to do so, rather
      than
      recording a cumulative catch-up adjustment in net income in the year of the
      change.  Reporting error corrections will be handled similarly to a
      change in accounting principle.  The accounting and reporting
      requirements of SFAS No. 154 are effective for accounting changes and error
      corrections made in fiscal years beginning after December 15, 2005.





In
      November 2005, the FASB issued Staff Position No. 123R-3, “Transition Election
      Related to Accounting for Tax Effects of Share-Based Payment Awards,” that
      allows for a simplified method to establish the beginning balance of the
      additional paid-in capital pool (“APIC Pool”) related to the tax effects of
      employee stock-based compensation, and to determine the subsequent impact on
      the
      APIC Pool and consolidated statements of cash flows of the tax effects of
      employee stock-based compensation awards that are outstanding upon adoption
      of
      SFAS No. 123R. We are still in the process of calculating the APIC Pool and
      have
      not yet determined if we will elect to adopt the simplified method.





In
      July 2006, the FASB issued Interpretation No. 48, “Uncertainty in Income Taxes,”
(“FIN No. 48”), which establishes guidelines for recognizing, measuring and
      disclosing uncertainties relating to tax benefits reflected in an enterprise’s
      financial statements.  FIN No. 48 establishes a “more-likely-than-not”
recognition threshold that must be met before a tax benefit, relative to a
      tax
      position in which the enterprise may be uncertain as to whether it will
      ultimately be sustained as filed in its tax return, can be recognized in the
      financial statements.  The tax benefit recognizing, measuring and
      disclosing provisions of FIN No. 48 are effective at the beginning of the first
      fiscal year that begins after December 15, 2006.  We have not yet
      determined the impact of adopting FIN No. 48 on our results of operations and
      financial condition.





In
      September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," that
      defines fair value, establishes a framework for measuring fair value, and
      expands disclosures about fair value measurements.  SFAS No. 157
      retains the exchange price notion in defining fair value and clarifies that
      the
      exchange price is the price in an orderly transaction between market
      participants to sell the asset or transfer the liability in the market in which
      the reporting entity would transact for the asset or liability.  The
      definition focuses on the price that would be received to sell the asset or
      paid
      to transfer the liability (an exit price), not the price that would be paid
      to
      acquire the asset or received to assume the liability (an entry
      price).  SFAS No. 157 expands disclosure about the use of fair value
      to measure assets and liabilities in interim and annual periods subsequent
      to
      initial recognition.  The additional disclosure focuses on the inputs
      used to measure fair value and the effect of the measurements on net income
      for
      the reporting period.  The fair value measurement and disclosure
      provisions of SFAS No. 157 are effective for financial statements issued for
      fiscal years beginning
      after
      November 15, 2007.  We have not yet determined the impact of adopting
      SFAS No. 157 on our results of operations and financial
      condition.


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            11 -
 **SCHIFF
              NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES**
 **NOTES
              TO
              CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –
*(continued)***
 *(in
              thousands, except share data)*
 *(unaudited)*







In
        September 2006, the Securities and Exchange Commission (the “SEC”) issued Staff
        Accounting Bulletin (SAB) No. 108, “Financial Statements —Considering the Effects of Prior Year Misstatements when Quantifying
        Misstatements in Current Year Financial Statements.”  SAB No. 108
        provides interpretive guidance on how the effects of prior-year uncorrected
        misstatements should be considered when quantifying misstatements in the
        current
        year financial statements.  SAB No. 108 requires registrants to
        quantify misstatements using both the income statement and balance sheet
        approach and evaluate whether either approach results in a misstatement that,
        when all relevant quantitative and qualitative factors are considered, is
        material.  SAB No. 108 is effective for annual financial statements
        covering the first fiscal year ending after November 15, 2006.  We
        have not yet determined the impact of adopting SAB No. 108 on our results
        of
        operations and financial condition.




In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities,” which permits entities to choose to
      measure many financial instruments and certain other items at fair value that
      are not currently required to be measured at fair value.  SFAS No. 159
      also establishes presentation and disclosure requirements designed to facilitate
      comparisons between entities that choose different measurement attributes for
      similar types of assets and liabilities.  The measurement and
      disclosure provisions of SFAS No. 159 are effective as of the beginning of
      an
      entity’s first fiscal year that begins after November 15, 2007.  We have
      not yet determined the impact of adopting SAB No. 108 on our results of
      operations and financial condition.





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**ITEM
                2.**
            **MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                RESULTS OF OPERATIONS**





The
      following discussion and analysis should be read in conjunction with the
      condensed consolidated financial statements, including the notes thereto,
      appearing elsewhere in this Quarterly Report on Form 10-Q and other reports
      filed with the SEC.  We disclaim any obligation to update any
      forward-looking statements whether as a result of new information, future events
      or otherwise.





**General**





Schiff
      Nutrition International, Inc. develops, manufactures, markets and distributes
      branded and private label vitamins, nutritional supplements and nutrition bars
      in the United States and throughout the world.  We offer a broad range
      of capsules, tablets and nutrition bars.  Our portfolio of recognized
      brands, including Schiff and Tiger’s Milk®, is marketed primarily through the
      mass market (including club) and, to a lesser extent, health food store
      distribution channels.





Prior
      to fiscal 2006, we were organized into three business units: the Schiff
      Specialty Unit, the Active Nutrition Unit and the Haleko Unit.  The
      business units generally were managed independently, each with its own sales
      and
      marketing resources, and supported by common product research and development,
      operations and technical services and administrative functions.  The
      Schiff Specialty Unit included the Schiff brand, as well as private label
      (contract manufacturing) business limited to customers that otherwise carry
      our
      products.  The Active Nutrition Unit included our Weider branded
      global business and the Tiger's Milk brand.  The Haleko Unit, our
      primary European operations, included the Multipower and Multaben nutritional
      supplement brands and private label businesses.





On
      June 17, 2005, we announced the sale of our Haleko Unit to Atlantic Grupa of
      Zagreb, Croatia and certain of its subsidiaries for approximately $15.1 million
      in cash.  The transaction included the sale of the capital stock and
      partnership interests of the international subsidiaries that operate the Haleko
      Unit.  The transaction closed on June 17, 2005, with an effective date
      of May 1, 2005 (the first day of Haleko’s fiscal year 2006).





On
      April 1, 2005, we announced the sale of certain assets of our Active Nutrition
      Unit relating to our Weider branded business domestically and internationally
      to
      Weider Global Nutrition, LLC (“WGN”), a wholly-owned subsidiary of Weider Health
      and Fitness, a privately held company headquartered in California and our
      majority stockholder.  The terms of the transaction provided for a
      cash payment of approximately $12.9 million and a note receivable of $1.1
      million in exchange for assets relating to our domestic Weider branded business,
      including inventory, receivables, and intangible and intellectual property,
      the
      capital stock of certain of our international subsidiaries related to our
      international Weider branded business (including the working capital of those
      subsidiaries), and the assumption of certain associated liabilities by WGN.
      The
      transaction closed on April 1, 2005, with an effective date of March 1,
      2005.





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





Historical
      operating results for the Haleko Unit are reflected as discontinued operations
      in our condensed consolidated financial statements, including the notes
      thereto.  We believe our remaining business, which consists of the
      aggregation of several product-based operating segments, represents our only
      reportable segment.  Accordingly, beginning with the fiscal 2006 first
      quarter, we have reported one business segment.





During
      fiscal 2006
      and the first nine months of fiscal 2007, we continued to provide selling and
      marketing support intended both to defend our Move Free business against
      competition, including private label, and ultimately to increase our market
      share in the joint care product category.  Our primary initiative was
      the introduction of our Move Free Advanced product, which we believe is an
      improved, more effective version of our existing Move Free
      product.  We began implementing the Move Free Advanced initiative
      during the latter part of the fiscal 2006 second quarter.  The
      introduction of Move Free Advanced into substantially all of our significant
      retail accounts continued during the second half of fiscal 2006 and was
      substantially completed in the fiscal 2007 first quarter.  We provided
      incremental selling and marketing support for our Move Free Advanced product
      during the second half of fiscal 2006 and continuing in the first nine months
      of
      fiscal 2007.  Subject to the impact of Move Free Advanced marketing
      initiatives and competitive joint care category pricing pressures, including
      private label, we believe our fiscal 2007 net sales may reflect a modest
      decrease, as compared to fiscal 2006 net sales.


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            13 -





In
      addition to the ongoing impact of competitive pricing pressures, our operating
      results for the first half of fiscal 2006 were impacted by significant raw
      material pricing fluctuations, particularly in the joint care
      category.  During fiscal 2006, joint care category raw material
      prices, which increased significantly during fiscal 2005, returned to pre-fiscal
      2005 levels.  However, our gross profit throughout fiscal 2006 was
      impacted by previous raw material purchase commitments.  During fiscal
      2005 and early fiscal 2006, as a result of the significant volatility in raw
      material costs and the inability to secure an acceptable price increase from
      customers, we discontinued certain private label (contract manufacturing)
      business.





Our
      operating
      results for the first nine months of fiscal 2006, as compared to the first
      nine
      months of fiscal 2007, were favorably impacted by the recognition of
      approximately $2.0 million (net difference) in reimbursement of import related
      costs, the recognition of approximately $1.6 million of non-taxable foreign
      currency related gain and an overall effective tax rate of approximately
      19.6%.





Factors
      affecting our historical results, including the previous implementation of
      strategic initiatives as well as continuing refinement of our growth and
      business strategies, are ongoing considerations and processes.  While
      the focus of these considerations is to improve future profitability, no
      assurance can be given that our decisions relating to these initiatives will
      not
      adversely impact our results of operations and financial condition.





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





**Results
      of Operations *(unaudited)***


*Three
      Months
      Ended February 28, 2007 Compared to Three Months*


*Ended
      February
      28, 2006*





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





2007
                
                
                2006Net
                    sales
                
                $
                44,999
                
                
                
                100.0
                %
                
                $
                49,641
                
                
                
                100.0
                %Cost
                    of goods sold
                
                
                28,570
                
                
                
                63.5
                
                
                
                32,709
                
                
                
                65.9Gross
                    profit
                
                
                16,429
                
                
                
                36.5
                
                
                
                16,932
                
                
                
                34.1Operating
                    expenses:Selling
                    and marketing
                
                
                8,060
                
                
                
                17.9
                
                
                
                8,527
                
                
                
                17.2General
                    and administrative
                
                
                2,985
                
                
                
                6.6
                
                
                
                3,609
                
                
                
                7.3Research
                    and development
                
                
                995
                
                
                
                2.2
                
                
                
                667
                
                
                
                1.3Amortization
                    of intangible assets
                
                
                —
                
                
                
                —
                
                
                
                6
                
                
                
                —Reimbursement
                    of import costs
                
                
                (96
                )
                
                
                (0.2
                )
                
                
                (125
                )
                
                
                (0.3
                )Total
                    operating expenses
                
                
                11,944
                
                
                
                26.5
                
                
                
                12,684
                
                
                
                25.5Income
                    from operations
                
                
                4,485
                
                
                
                10.0
                
                
                
                4,248
                
                
                
                8.6Other
                    income, net
                
                
                716
                
                
                
                1.6
                
                
                
                502
                
                
                
                1.0Income
                    tax expense
                
                
                (1,960
                )
                
                
                (4.4
                )
                
                
                (1,561
                )
                
                
                (3.2
                )Net
                    income
                
                $
                3,241
                
                
                
                7.2
                %
                
                $
                3,189
                
                
                
                6.4
                %





**Net
      Sales.**Net sales decreased approximately 9.4% to $45.0 million for the fiscal
      2007 third quarter, from $49.6 million for the fiscal 2006 third quarter,
      primarily resulting from a decrease in branded net sales, partially offset
      by an
      increase in private label sales.





Aggregate
      branded
      net sales decreased approximately 17.7% to $34.6 million for the fiscal 2007
      third quarter, from $42.1 million for the fiscal 2006 third
      quarter.  Branded joint care product net sales decreased approximately
      18.5% to $29.7 million for the fiscal 2007 third quarter, from $36.4 million
      for
      the fiscal 2006 third quarter.  Move Free net sales were $22.2 million
      and $24.9 million, respectively, for the fiscal 2007 and 2006 third
      quarters.  Other branded net sales decreased approximately 13.0% to
      $5.0 million for the fiscal 2007 third quarter, from $5.7 million for the fiscal
      2006 third quarter.  The decrease in net sales, in both branded joint
      care products and other branded products, primarily resulted from an aggregate
      decrease in sales volume of approximately $5.4 million, or 10.0%, coupled with
      a
      $2.5 million increase in promotional incentives classified as sales price
      reductions.  Classification of promotional costs as a sales reduction
      is required
      when the promotion effectively represents a price reduction.  The
      decrease in net sales was partially offset by an approximate $0.4 million
      decrease in adjustments for product returns.


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Private
      label net
      sales increased approximately 37.6% to $10.4 million for the fiscal 2007 third
      quarter, from $7.5 million for the fiscal 2006 third quarter.  The
      increase in private label sales was primarily due to a volume increase from
      securing incremental private label business in the latter part of fiscal 2006
      and the early part of fiscal 2007.





**Gross
      Profit.**Gross profit decreased approximately 3.0% to $16.4 million for
      the fiscal 2007 third quarter, from $16.9 million for the fiscal 2006 third
      quarter.  Gross profit, as a percentage of net sales, was 36.5% for
      the fiscal 2007 third quarter, compared to 34.1% for the fiscal 2006 third
      quarter.  The increase in gross profit, as a percentage of net sales,
      primarily resulted from an approximate $6.0 million decrease in joint care
      raw
      material costs and an approximate $0.7 million decrease in net adjustments
      for
      product returns, partially offset by the $2.5 million in incremental sales
      incentives, a $0.5 million increase in inventory valuation adjustments and
      a
      higher mix of lower margin private label sales.





**Operating
      Expenses.**Operating expenses decreased approximately 5.8% to $11.9
      million for the fiscal 2007 third quarter, from $12.7 million for the fiscal
      2006 third quarter.  Operating expenses, as a percentage of net sales,
      were 26.5% and 25.5%, respectively, for the fiscal 2007 and 2006 third
      quarters.  The decrease in operating expenses resulted primarily from
      a decrease in selling and marketing and general and administrative expenses,
      partially offset by an increase in research and development
      expenses.





Selling
      and
      marketing expenses, including sales, marketing, advertising, freight and other
      costs, decreased to approximately $8.1 million for the fiscal 2007 third
      quarter, from $8.5 million for the fiscal 2006 third quarter.  The
      decrease was primarily due to a shift in overall marketing spending towards
      price discount-like promotional costs classified as a reduction of
      sales.  Classification of promotional costs as a sales reduction is
      required when the promotion effectively represents a price
      reduction.





General
      and
      administrative expenses decreased to approximately $3.0 million for the fiscal
      2007 third quarter, from $3.6 million for the fiscal 2006 third
      quarter.  The decrease was primarily attributable to the settlement of
      certain litigation matters and a reduction in legal costs, partially offset
      by
      an approximate $0.7 million increase in personnel related costs primarily due
      to
      the adoption of a long-term management incentive plan involving the grant of
      performance based restricted stock units (see Note 1 of Notes to Condensed
      Consolidated Financial Statements).  The fiscal 2007 third quarter
      includes litigation settlements resulting in the reversal of approximately
      $0.6
      million in contingent liabilities and the recognition of approximately $0.7
      million in reimbursements of certain insurance premiums and other expenses
      paid
      in prior fiscal years.





Research
      and
      development costs increased to approximately $1.0 million for the fiscal 2007
      third quarter, from $0.7 million for the fiscal 2006 third quarter, primarily
      resulting from an increase in personnel related costs and expenses associated
      with product research.





**Other
      Income/Expense.**Other income/expense, net, was $0.7 million income for
      the fiscal 2007 third quarter, compared to $0.5 million income for the fiscal
      2006 third quarter.  During the fiscal 2007 third quarter, we
      recognized approximately $0.2 million of incremental interest income resulting
      from an increase in cash and available-for-sale securities.





**Provision
      for Income Taxes.**Provision for income taxes was $2.0 million for the
      fiscal 2007 third quarter, compared to $1.6 million for the fiscal 2006 third
      quarter.  During the fiscal 2006 third quarter, we reduced certain
      valuation allowances relating to capital loss carry forwards by approximately
      $0.5 million.  In addition, an increase in our overall projected
      fiscal 2006 tax rate at February 28, 2006, resulted in an approximate $0.2
      million increase in income tax expense for the fiscal 2006 third
      quarter.  As a result, our effective tax rate was 32.9% for the fiscal
      2006 third quarter, compared to 37.7% for the fiscal 2007 third
      quarter.


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**Results
      of Operations (unaudited)**


*Nine
      Months
      Ended February 28, 2007 Compared to Nine Months*


*Ended
      February
      28, 2006*





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





2007
                  
                  
                  2006Net
                      sales
                  
                  $
                  129,468
                  
                  
                  
                  100.0
                  %
                  
                  $
                  133,114
                  
                  
                  
                  100.0
                  %Cost
                      of goods sold
                  
                  
                  79,746
                  
                  
                  
                  61.6
                  
                  
                  
                  92,263
                  
                  
                  
                  69.3Gross
                      profit
                  
                  
                  49,722
                  
                  
                  
                  38.4
                  
                  
                  
                  40,851
                  
                  
                  
                  30.7Operating
                      expenses:Selling
                      and marketing
                  
                  
                  25,138
                  
                  
                  
                  19.4
                  
                  
                  
                  20,603
                  
                  
                  
                  15.5General
                      and administrative
                  
                  
                  10,839
                  
                  
                  
                  8.3
                  
                  
                  
                  11,252
                  
                  
                  
                  8.4Research
                      and development
                  
                  
                  2,675
                  
                  
                  
                  2.1
                  
                  
                  
                  1,978
                  
                  
                  
                  1.5Amortization
                      of intangible assets
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  17
                  
                  
                  
                  —Reimbursement
                      of import costs
                  
                  
                  (394
                  )
                  
                  
                  (0.3
                  )
                  
                  
                  (2,413
                  )
                  
                  
                  (1.8
                  )Total
                      operating expenses
                  
                  
                  38,258
                  
                  
                  
                  29.5
                  
                  
                  
                  31,437
                  
                  
                  
                  23.6Income
                      from operations
                  
                  
                  11,464
                  
                  
                  
                  8.9
                  
                  
                  
                  9,414
                  
                  
                  
                  7.1Other
                      income, net
                  
                  
                  2,129
                  
                  
                  
                  1.6
                  
                  
                  
                  2,756
                  
                  
                  
                  2.1Income
                      tax expense
                  
                  
                  (4,840
                  )
                  
                  
                  (3.7
                  )
                  
                  
                  (2,384
                  )
                  
                  
                  (1.8
                  )Income
                      from continuing operations
                  
                  $
                  8,753
                  
                  
                  
                  6.8
                  %
                  
                  $
                  9,786
                  
                  
                  
                  7.4
                  %





**Net
      Sales.**Net sales decreased approximately 2.7% to $129.5 million for the nine
      months ended February 28, 2007, from $133.1 million for the nine months ended
      February 28, 2006, primarily resulting from a decrease in branded net sales,
      partially offset by an increase in private label sales.





Aggregate
      branded
      net sales decreased approximately 7.0% to $101.4 million for the nine months
      ended February 28, 2007, from $109.0 million for the nine months ended February
      28, 2006.  Branded joint care product net sales decreased
      approximately 6.4% to $85.6 million for the nine months ended February 28,
      2007,
      from $91.4 million for the nine months ended February 28, 2006.  Move
      Free net sales were $63.8 million and $64.5 million, respectively, for the
      nine
      months ended February 28, 2007 and 2006.  Other branded net sales
      decreased approximately 9.8% to $15.8 million for the nine months ended February
      28, 2007, from $17.5 million for the nine months ended February 28,
      2006.  The decreases, in both branded joint care products and other
      branded products, primarily resulted from a moderate decrease in aggregate
      sales
      volume of approximately $2.0 million, or 1.5%, coupled with a $5.8 million
      increase in promotional incentives classified as sales price
      reductions.  Classification of promotional costs as a sales reduction
      is required when the promotion effectively represents a price
      reduction.  The decrease in net sales was partially offset by an
      approximate $0.2 million decrease in adjustments for product
      returns.





Private
      label net
      sales increased approximately 16.3% to $28.1 million for the nine months ended
      February 28, 2007, from $24.2 million for the nine months ended February 28,
      2006.  The increase in private label sales was primarily due to a
      volume increase from securing incremental private label business in the latter
      part of fiscal 2006 and the early part of fiscal 2007.





**Gross
      Profit.**Gross profit increased approximately 21.7% to $49.7 million for
      the nine months ended February 28, 2007, from $40.9 million for the nine months
      ended February 28, 2006.  Gross profit, as a percentage of net sales,
      was 38.4% and 30.7%, respectively, for the nine months ended February 28, 2007
      and 2006.  The increase was primarily due to an approximate $17.3
      million decrease in joint care raw material costs and an approximate $1.1
      million decrease in net adjustments for product returns, partially offset by
      the
      $5.8 million in incremental sales incentives, an approximate $1.0 million
      increase in inventory valuation adjustments and a higher mix of lower margin
      private label sales.





**Operating
      Expenses.**Operating expenses increased approximately 21.7% to $38.3
      million for the nine months ended February 28, 2007, from $31.4 million for
      the
      nine months ended February 28, 2006.  Operating expenses, as a
      percentage of net sales, were 29.5% and 23.6%, respectively, for the nine months
      ended February 28, 2007 and 2006.  The increase resulted primarily
      from an increase in selling and marketing and research and development expenses,
      partially offset by a decrease in general and administrative
      expenses.  In addition, the first nine months of fiscal 2006 includes
      approximately $2.4 million in reimbursement from certain suppliers of previously
      incurred costs associated with imported raw materials as compared to $0.4
      million in similar reimbursement for the first nine months of fiscal
      2007.  These reimbursements, resulting primarily from the favorable
      outcome of litigation between one of our suppliers and the U.S. Government,
      represent refunds of previously paid tariffs on imported raw
      materials.


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Selling
      and
      marketing expenses, including sales, marketing, advertising, freight and other
      costs, increased to approximately $25.1 million for the nine months ended
      February 28, 2007, from $20.6 million for the nine months ended February 28,
      2006.  The increase was primarily due to a $3.2 million increase in
      promotional expenses, primarily advertising in support of our Move Free Advanced
      product, a $0.4 million increase in management incentive program costs due
      to
      the adoption of a long-term management incentive plan involving the grant of
      performance based restricted stock units (see Note 1 of Notes to Condensed
      Consolidated Financial Statements), and an increase in consulting fees incurred
      in support of our export business and the marketing of new
      products.





General
      and administrative expenses decreased to approximately $10.8 million for the
      nine months ended February 28, 2007, compared to $11.3 million for the nine
      months ended February 28, 2006.  The decrease was primarily
      attributable to the settlement of certain litigation matters and a reduction
      in
      legal costs, partially offset by an increase in personnel related costs of
      approximately $1.4 million.  The first nine months of fiscal 2007
      includes favorable litigation settlements totaling approximately $1.6 million,
      including the recognition of approximately $1.0 million in reimbursements of
      insurance premiums and other expenses paid in prior fiscal years and the
      reversal of approximately $0.6 million in contingent liabilities.  In
      addition, legal fees decreased approximately $0.2 million for the nine months
      ended February 28, 2007, compared to the nine months ended February 28,
      2006.  The first nine months of fiscal 2007 includes approximately
      $1.6 million in incremental management incentive program costs consisting of
      an
      increase of approximately $2.2 million due to the adoption of a long-term
      management incentive plan involving the grant of performance based restricted
      stock units (see Note 1 of Notes to Condensed Consolidated Financial
      Statements), partially offset by a $0.6 million reduction in management annual
      incentive program costs.  The first nine months of fiscal 2007 also
      includes approximately $0.2 million in incremental stock-based compensation
      expense due to the adoption of SFAS 123R (see Note 1 of Notes to Condensed
      Consolidated Financial statements) while the first nine months of fiscal 2006
      includes approximately $0.4 million in severance expense.





Research
      and
      development costs increased to approximately $2.7 million for the nine months
      ended February 28, 2007, from $2.0 million for the nine months ended February
      28, 2006, primarily resulting from an increase in personnel related costs and
      expenses associated with product research.





**Other
      Income/Expense.**Other income/expense, net, was $2.1 million income for
      the nine months ended February 28, 2007, compared to $2.8 million income for
      the
      nine months ended February 28, 2006.  During the first nine months of
      fiscal 2007, we recognized approximately $0.9 million of incremental interest
      income resulting from an increase in cash and available-for-sale
      securities.  During the fiscal 2006 first quarter, as a result of the
      divestiture of our Haleko Unit, certain international operating entities were
      substantially liquidated.  Accordingly, we recognized a non-taxable
      net foreign currency translation gain, previously reported as other accumulated
      comprehensive income in stockholders' equity, of approximately $1.6 million
      during the fiscal 2006 first quarter.





**Provision
      for Income Taxes.**Provision for income taxes was $4.8 million for the
      nine months ended February 28, 2007, compared to $2.4 million for the nine
      months ended February 28, 2006.  In addition to an increase in pre-tax
      income and the fiscal 2006 non-taxable foreign currency translation gain noted
      in “Other Income/Expense” above, the fiscal 2006 first quarter sale of the
      Haleko Unit resulted in the recognition of a gain under Internal Revenue Code
      Section 987 (“Section 987”).  We reduced our estimated deferred tax
      liability for Section 987 obligations by approximately $0.8 million, which
      was
      reflected as a decrease in fiscal 2006 first quarter income tax
      expense.  Also, during our fiscal 2006 second and third quarters, we
      reduced certain valuation adjustments and contingent tax liabilities by
      approximately $0.7 million.  As a result of these items, our effective
      tax rate was 19.6% for the nine months ended February 28, 2006, compared to
      35.6% for the nine months ended February 28, 2007.





**Liquidity
      and Capital Resources**





Working
      capital
      increased approximately $9.8 million to $100.3 million at February 28, 2007,
      from $90.5 million at May 31, 2006, primarily due to a $5.6 million increase
      in
      cash and a $4.1 million increase in available-for-sale securities resulting
      primarily from operating cash flows for the first nine months of fiscal
      2007.





On
      June 30, 2004, we entered into, through our wholly-owned direct operating
      subsidiary Schiff Nutrition Group, Inc. (“SNG”), a $25.0 million revolving
      credit facility (the “Credit Facility”) with KeyBank National Association, as
      Agent.  In August 2006, we agreed to extend the maturity of the Credit
      Facility from June 30, 2007 to June 30, 2009.  The Credit Facility
      contains customary terms and conditions, including, among others, financial
      covenants that may limit our ability to


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pay
      dividends on
      our common stock and certain other restrictions.  Our obligations
      under the Credit Facility are secured by a first priority security interest
      on
      all of the capital stock of SNG.  If our total coverage ratio exceeds
      a certain limit, our obligations will also be secured by a first priority
      security interest in all of our domestic assets.  In the event we
      exceed certain other ratio limits, we will be subject to a borrowing base and
      will be able to borrow up to a lesser of $25.0 million or the sum of (i) 85%
      of
      eligible accounts receivable and (ii) 65% of eligible
      inventory.  Borrowings under the Credit Facility bear interest at
      floating rates based on the KeyBank National Association prime rate or the
      Federal Funds effective rate.  The Credit Facility can be used to fund
      our normal working capital and capital expenditure requirements, with
      availability to fund certain permitted strategic transactions.  At
      February 28, 2007, there were no amounts outstanding and $25.0 million was
      available for borrowing under the Credit Facility.





We
      believe that our cash, available-for-sale securities, cash flows from operations
      and the Credit Facility will be sufficient to meet our normal cash operating
      requirements during the next twelve months.  However, we continue to
      review opportunities to acquire or invest in companies, product rights and
      other
      investments that are compatible with or complementary to our existing
      business.  We could use cash and financing sources discussed herein,
      or financing sources that subsequently become available, to fund additional
      acquisitions or investments.  In addition, we may consider issuing
      additional debt or equity securities in the future to fund potential
      acquisitions or growth, or to refinance existing debt.  If a material
      acquisition, divestiture or investment is completed, our operating results
      and
      financial condition could change materially in future
      periods.  However, no assurance can be given that additional funds
      will be available on satisfactory terms, or at all, to fund such
      activities.





Our
      Board of Directors will determine dividend policy in the future based upon,
      among other factors, results of operations, financial condition, contractual
      restrictions and other factors deemed relevant at the time.  In
      addition, the Credit Facility contains certain customary financial covenants
      that may limit our ability to pay dividends on our common stock.  We
      can give no assurance that we will pay dividends in the future.





A
      summary of our outstanding contractual obligations at February 28, 2007 is
      as
      follows (in thousands):




ContractualCash
                      Obligations
                  
                  Total
                      Amounts Committed
                  
                  
                  Less
                      than 1Year
                  
                  
                  1-3Years
                  
                  
                  3-5Years
                  
                  
                  After
                      5 YearsOperating
                      leases
                  
                  $
                  14,471
                  
                  
                  $
                  2,512
                  
                  
                  $
                  4,820
                  
                  
                  $
                  4,635
                  
                  
                  $
                  2,504Purchase
                      obligations
                  
                  
                  7,768
                  
                  
                  
                  7,768
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —Debt
                      obligations
                  
                  
                  290
                  
                  
                  
                  290
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —Total
                      obligations
                  
                  $
                  22,529
                  
                  
                  $
                  10,570
                  
                  
                  $
                  4,820
                  
                  
                  $
                  4,635
                  
                  
                  $
                  2,504






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





**Critical
      Accounting Policies and
      Estimates**





In
      preparing our condensed consolidated financial statements, we make assumptions,
      estimates and judgments that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the dates
      of
      the condensed consolidated financial statements and the reported amounts of
      net
      sales and expenses during the reported periods.  We periodically
      evaluate our estimates and judgments related to the valuation of inventories
      and
      intangible assets, allowances for doubtful accounts, notes receivable, sales
      returns and discounts, valuation of deferred tax assets, valuation of
      share-based payments and recoverability of long-lived assets.  Note 1
      of Notes to the Consolidated Financial Statements contained in our Annual Report
      on Form 10-K for the year ended May 31, 2006, filed with the SEC, describes
      the
      accounting policies governing each of these matters.  Our estimates
      are based on historical experience and on our future expectations that are
      believed to be reasonable.  The combination of these factors forms the
      basis for making judgments about the carrying values of assets and liabilities
      that are not readily apparent from other sources.  Actual results may
      differ from our current estimates and those differences may be
      material.





We
      believe the following accounting policies affect some of our more significant
      estimates and judgments used in preparation of our condensed consolidated
      financial statements:





·
            We
                provide
                for inventory valuation adjustments for estimated obsolescence or
                unmarketable inventory equal to the difference between the cost of
                inventory and the estimated market value based upon assumptions about
                future demand, market conditions and/or liquidation value.  For
                the nine months ended February 28, 2007, inventory valuation adjustments
                resulted in a decrease in our gross profit and operating income of
                approximately $0.9 million.  Inventory valuation adjustments did
                not materially impact our gross profit and operating income for the
                nine
                months ended February 28, 2006.  If actual demand and/or market
                conditions are less favorable than those projected by management,
                additional inventory write-downs would be
                required.




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·
            We
                maintain
                allowances for doubtful accounts, sales returns and discounts for
                estimated losses resulting from known customer exposures, including
                among
                others, product returns, inability to make payments and expected
                utilization of offered discounts.  Changes in our allowances for
                doubtful accounts, sales returns and discounts resulted in an increase
                in
                our gross profit and operating income of approximately $0.7 million
                for
                the nine months ended February 28, 2007, and a decrease in our gross
                profit and operating income of approximately $1.1 million for the
                nine
                months ended February 28, 2006.  At February 28, 2007 and May
                31, 2006, our allowances for doubtful accounts, sales returns and
                discounts amounted to approximately $2.6 million and $3.3 million,
                respectively.  Actual results may differ from our current
                estimates, resulting in adjustment of the respective
                allowance(s).




·
            We
                currently
                have deferred tax assets resulting from certain tax credit carryforwards
                and other temporary differences between financial and income tax
                reporting.  These deferred tax assets are subject to periodic
                recoverability assessments.  The realization of these deferred
                tax assets is primarily dependent on future operating
                results.  To the extent that it is more likely than not that
                future operations will not generate sufficient profit to utilize
                the tax
                credit carryforwards, valuation allowances are
                established.  Changes in these valuation allowances did not
                significantly impact net income for the nine months ended February
                28,
                2007.  For the nine months ended February 28, 2006, changes in
                these valuation allowances resulted in an increase in net income
                of
                approximately $0.5 million.  At both February 28, 2007 and May
                31, 2006, our deferred tax asset valuation allowances, primarily
                relating
                to foreign tax credit carryforwards, amounted to approximately $0.7
                million.




·
            We
                recognize
                compensation expense for certain performance based equity instrument
                awards (share-based payments) over the performance period based on
                a
                periodic assessment of the probability that the performance criteria
                will
                be achieved.  For the nine months ended February 28, 2007, we
                recognized compensation expense related to these awards, net of
                forfeitures, of approximately $2.6 million.  At February 28,
                2007, total unrecognized compensation expense, based on our assessment
                of
                the probability that the performance criteria will be achieved, was
                approximately $4.2 million.




·
            We
                have certain intangible assets, primarily consisting of
                goodwill.  The determination of whether or not goodwill is
                impaired involves significant judgment.  Changes in strategy or
                market conditions could significantly impact our judgment and require
                adjustment to the recorded goodwill
                balance.





**Impactof
      Inflation**





Inflation
      affects the cost of raw materials, goods and services we use.  In
      recent years, inflation has been modest.  We seek to mitigate the
      adverse effects of inflation primarily through improved productivity, strategic
      buying initiatives, and cost containment programs.  However, the
      nutritional supplement industry competitive environment limits our ability
      to
      recover higher costs resulting from inflation by raising
      prices.  During fiscal 2005 and early fiscal 2006, we were unable to
      pass on increases in raw material costs relating to our joint care products
      to
      our customers.  See further discussion of raw material pricing matters
      in the “General” and “Results of Operations” sections above, and under
“Forward-Looking Statements” below.





**Seasonality**





Our
      business can be seasonal, with fluctuations in sales resulting from timing
      of
      marketing and promotional activities, customer buying patterns and consumer
      spending patterns.  In addition, as a result of changes in the amount
      of sales price reductions utilized for promotional incentives, product sales
      mix, competitive conditions, raw material pricing pressures and other factors
      discussed in our SEC reports, we experience fluctuations in gross profit and
      operating margins on a quarter-to-quarter basis.





**Forward-Looking
      Statements**





This
      Form 10-Q contains forward-looking statements within the meaning of Section
      27A
      of the Securities Act of 1933, as amended, and Section 21E of the Securities
      Exchange Act of 1934, as amended, that are based on management’s beliefs and
      assumptions, current expectations, estimates, and projections.  These
      statements are subject to risks and uncertainties, certain of which are beyond
      the company’s ability to control or predict, and, therefore, actual results may
      differ materially.  We disclaim any obligation to update any
      forward-looking statements whether as a result of new information, future events
      or otherwise.


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Important
      factors
      that may cause these forward-looking statements to be false include, but are
      not
      limited to: the level of customer and consumer acceptance of Move Free Advanced,
      the inability to successfully implement marketing and spending programs behind
      our Move Free brand and other new branded products, the impact of raw material
      pricing, availability and quality (particularly relating to joint care products
      and ingredients from suppliers outside the United States), the mix between
      branded and private label products, the ability to grow and/or maintain branded
      and private label sales, the inability to enforce or protect our intellectual
      property rights against infringement, the inability to achieve cost savings
      and
      operational efficiencies, the inability to increase operating margins and
      increase revenues, dependence on individual products, dependence on individual
      customers, the impact of competitive products and pricing (including private
      label), market and industry conditions (including pricing, demand for products
      and level of trade inventories), the impact of clinical studies regarding
      nutritional supplements, particularly relating to the joint care category,
      the
      success of product development, the inability to obtain customer acceptance
      of
      new product introductions, changes in laws and regulations, litigation and
      government regulatory action in the United States and internationally, the
      inability or increased cost to obtain product liability and general insurance,
      the uncertainty of market acceptance of new products, adverse publicity
      regarding the consumption of nutritional supplements, the inability to find
      strategic acquisitions or the inability to successfully consummate or integrate
      an acquisition, changes in accounting standards, and other factors indicated
      from time to time in the company’s SEC reports, copies of which are available
      upon request from the company’s investor relations department or may be obtained
      at the SEC's web site (www.sec.gov). These risks and uncertainties should
      be carefully considered before making an investment decision with respect to
      shares of our common stock.





**ITEM
                3.**
            **QUANTITATIVE
                AND QUALITATIVE DISCLOSURES ABOUT MARKET
                RISK**





The
      following discussion involves forward-looking statements of market risk which
      assume that certain adverse market conditions may occur.  Actual
      future market conditions may differ materially from such
      assumptions.  Accordingly, the forward-looking statements should not
      be considered our projections of future events or losses.





Our
      cash flows and net earnings may be subject to fluctuations resulting from
      changes in interest rates.  Our current policy does not allow
      speculation in derivative instruments for profit or execution of derivative
      instrument contracts for which there is no underlying exposure.  We do
      not use financial instruments for trading purposes.  We measure market
      risk, related to our holdings of financial instruments, based on changes in
      interest rates utilizing a sensitivity analysis.  We do not believe
      that a hypothetical 10% change in interest rates would have a material effect
      on
      our pretax earnings or cash flows.





Previously,
      our cash flows and net earnings were also subject to fluctuations resulting
      from
      changes in foreign currency exchange rates.  However, as a result of
      the divestitures of our Weider branded business and Haleko Unit, we no longer
      have operating subsidiaries whose net sales and expenses are denominated in
      foreign currencies.  Therefore, changes in foreign currency exchange
      rates are not expected to have a material impact on future cash flows and net
      earnings.





**ITEM
                4.**
            **CONTROLS
                AND
                PROCEDURES**





We
      maintain disclosure controls and procedures that are designed to ensure that
      information required to be disclosed in our Securities Exchange Act reports
      is
      recorded, processed, summarized and reported within the time periods specified
      in the SEC’s rules and forms and that such information is accumulated and
      communicated to our management, including our Chief Executive Officer and Chief
      Financial Officer, as appropriate, to allow for timely decisions regarding
      required disclosure.  In designing and evaluating the disclosure
      controls and procedures, we recognize that any controls and procedures, no
      matter how well designed and operated, can provide only reasonable assurance
      of
      achieving the desired control objectives, and we are required to apply our
      judgment in evaluating the cost-benefit relationship of possible controls and
      procedures.





As
      required by SEC Rule 13a-15(b), we carried out an evaluation, under the
      supervision and with the participation of our management, including our Chief
      Executive Officer and Chief Financial Officer, of the effectiveness of the
      design and operation of our disclosure controls and procedures as of the end
      of
      the period covered by this report.  Based on the foregoing, our Chief
      Executive Officer and Chief Financial Officer have concluded that our disclosure
      controls and procedures were effective.





There
      has been no change in our internal controls over financial reporting during
      our
      most recent fiscal quarter that has materially affected, or is reasonably likely
      to materially affect, our internal controls over financial
      reporting.


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**PART
      II. OTHER INFORMATION**





**ITEM
                1.**
            **LEGAL
                PROCEEDINGS**





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





**ITEM
                1A.**
            **RISK
                FACTORS**





We
      attempt to identify, manage and mitigate the risks and uncertainties that are
      associated with our business to the extent practical.  However, some
      level of risk and uncertainty will always be present.  Item1A of our
      Annual Report on Form 10-K for the fiscal year ended May 31, 2006 describes
      some
      of the risks and uncertainties associated with our business.  These
      risks and uncertainties have the potential to materially affect our business,
      financial condition, results of operations, cash flows, projected results and
      future prospects.  Other than as set forth in any subsequent Quarterly
      Report on Form 10-Q we have filed, there has been no material change from the
      risk factors previously disclosed in our Annual Report on Form 10-K for the
      year
      ended May 31, 2006.





**ITEM
                2.**
            **UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF
                PROCEEDS**





Not
      applicable





**ITEM
                3.**
            **DEFAULTS
                UPON SENIOR
                SECURITIES**





Not
      applicable





**ITEM
                4.**
            **SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY
                HOLDERS**





Not
      applicable





**ITEM
                5.**
            **OTHER
                INFORMATION**





Not
      applicable


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**ITEM
                6.**
            **EXHIBITS**





3.1.
            Amended
                and Restated Certificate of Incorporation of Schiff Nutrition
                International, Inc. (1)3.2.
            Amended
                and
                Restated Bylaws of Weider Nutrition International, Inc.
                (2)4.1.
            Revolving
                Credit Agreement dated as of June 30, 2004 between Schiff Nutrition
                Group,
                Inc. and KeyBank National Association. (3)4.2.
            Form
                of specimen Class A common stock certificate. (4)10.1.
            Build-To-Suit
                Lease Agreement dated March 20, 1996, between SCI Development Services
                Incorporated and Weider Nutrition Group, Inc. (2)10.2.
            1997
                Equity Participation Plan of Weider Nutrition International, Inc.
                (2)*10.3.
            Form
                of Tax Sharing Agreement by and among Weider Nutrition International,
                Inc.
                and its subsidiaries and Weider Health and Fitness and its subsidiaries.
                (2)10.4.
            License
                Agreement dated as of December 1, 1996 between Mariz Gestao E Investmentos
                Limitada and Weider Nutrition Group, Inc. (2)10.5.
            Amendments
                to
                1997 Equity Participation Plan of Weider Nutrition International,
                Inc.
                (5)*10.6.
            Employment
                Agreement dated as of June 1, 2002 between Weider Nutrition Group,
                Inc.
                and Bruce J. Wood. (6)*10.7.
            Consulting
                Agreement dated as of February 1, 2004 between Weider Nutrition Group,
                Inc. and Gustin Foods, LLC. (7)10.8.
            Schiff
                Nutrition International, Inc. 2004 Incentive Award Plan.
                (8)*10.9.
            Amendment
                effective as of March 1, 2005 to License Agreement between Mariz
                Gestao E
                Investmentos Limitada and Weider Nutrition Group, Inc.
                (9)10.10.
            Stock
                and
                Asset Purchase Agreement effective as of March 1, 2005 among Weider
                Nutrition International, Inc., Weider Nutrition Group, Inc. and Weider
                Global Nutrition, LLC. (9)10.11.
            Promissory
                Note of Weider Global Nutrition, LLC payable to Weider Nutrition
                Group,
                Inc. (9)10.12.
            Guarantee
                by
                Weider Health and Fitness in favor of Weider Nutrition International,
                Inc.
                and Weider Nutrition Group, Inc. (9)10.13.
            Share
                Sale
                and Transfer Agreement dated June 17, 2005 among Weider Nutrition
                GmbH,
                Haleko Management GmbH, Atlantic Grupa d.o.o., Hopen Investments
                BV and
                Svalbard Investments GmbH. (10)10.14.
            Form
                of
                Indemnification Agreement between Weider Nutrition Group, Inc. and
                certain
                of its executives and directors. (11)*10.15.
            Agreement
                dated as of October 1, 2005 between Schiff Nutrition Group, Inc.
                and Bruce
                J. Wood. (12)*10.16.
            Form
                Agreement between Schiff Nutrition Group, Inc. and certain of its
                executives. (12)*10.17.
            Form
                of Restricted Stock Unit Award Grant Notice, Restricted Stock Unit
                Award
                Agreement and Deferral Election between Schiff Nutrition International,
                Inc. and certain of its executives. (13)*10.18.
            Amendment
                No.
                1 to the Schiff Nutrition International, Inc. 2004 Incentive Award
                Plan.
                (14)*10.19.
            Amended
                and
                Restated License and Product Supply Agreement dated as of October
                13, 2006
                between Unigen Pharmaceuticals, Inc. and Schiff Nutrition Group,
                Inc.
                (15)10.20.
            Form
                of Director Restricted Stock Unit Agreement and Deferral Election.
                (16)*10.21.
            Form
                of Director Restricted Stock Agreement. (16)*21.1.
            Subsidiaries
                of Schiff Nutrition International, Inc. (4)31.1.
            Certification
                of Chief Executive Officer pursuant
                to Section 302 of the Sarbanes-Oxley Act. (17)31.2.
            Certification
                of Chief Financial Officer pursuant
                to Section 302 of the Sarbanes-Oxley Act. (17)32.1.
            Certification
                of Chief Executive Officer and Chief
                Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.
                (17)





(1)
            Previously
                filed in the Company’s Quarterly Report on Form 10-Q filed on January 17,
                2006 and incorporated herein by reference.(2)
            Previously
                filed in the Company's Registration Statement on Form S-1 (File No.
                333-12929) and incorporated herein by reference.(3)
            Previously
                filed in the Company's Current Report on Form 8-K filed on July 8,
                2004
                and incorporated herein by reference.(4)
            Previously
                filed in the Company’s Annual Report on Form 10-K filed on August 29, 2006
                and incorporated herein by reference.(5)
            Previously
                filed in the Company's Quarterly Report on Form 10-Q filed on January
                14,
                2002 and incorporated herein by reference.(6)
            Previously
                filed in the Company's Annual Report on Form 10-K filed on August
                29, 2002
                and incorporated herein by reference.(7)
            Previously
                filed in the Company's Quarterly Report on Form 10-Q filed on April
                14,
                2004 and incorporated herein by reference.(8)
            Previously
                filed in the Company's Definitive Proxy Statement on Form 14A filed
                on
                September 28, 2004 and incorporated herein by
                reference.


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(9)
            Previously
                filed in the Company's Current Report on Form 8-K filed on April
                4, 2005
                and incorporated herein by reference.(10)
            Previously
                filed in the Company's Current Report on Form 8-K filed on June 23,
                2005
                and incorporated herein by reference.(11)
            Previously
                filed in the Company's Current Report on Form 8-K filed on August
                10, 2005
                and incorporated herein by reference.(12)
            Previously
                filed in the Company's Current Report on Form 8-K filed on February
                3,
                2006 and incorporated herein by reference.(13)
            Previously
                filed in the Company’s Current Report on Form 8-K filed on March 23, 2006
                and incorporated herein by reference.(14)
            Previously
                filed in the Company’s Definitive Proxy Statement on Form 14A filed on
                September 27, 2006 and incorporated herein by
                reference.(15)
            Previously
                filed in the Company’s Quarterly Report on Form 10-Q filed on October 16,
                2006 and incorporated herein by reference.(16)
            Previously
                filed in the Company’s Current Report on Form 8-K filed on October 30,
                2006 and incorporated herein by reference.(17)
            Filed
                herewith.*
            Management
                contract.





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**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this report to be signed on its behalf by the undersigned thereunto
      duly authorized.










**SCHIFF
      NUTRITION INTERNATIONAL, INC.**








Date:
                          April
                          13, 2007
                      By:
                          */s/*      *Bruce J.
                          Wood*Bruce
                          J. WoodPresident,
                          Chief Executive Officer and
                          Director








Date:
                      April
                      13, 2007
                  By:*/s/**Joseph W.
                      Baty*Joseph
                      W. BatyExecutive
                      Vice President and Chief Financial
                      Officer





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