Tableof Contents

 

 

 

**UNITED STATES****SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,DC 20549**

 

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**FORM 10-Q**

 
| **x**                                                  | ** ** | **QUARTERLY REPORT PURSUANT TO SECTION 13  OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**  |
|--------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------|
| ** **                                             | ** ** | ** **                                                                                              |
| **For the quarterly period ended June 30,  2008** |
| ** **                                             | ** ** | ** **                                                                                              |
| **OR**                                                 |
| ** **                                             | ** ** | ** **                                                                                              |
| **o**                                                  | ** ** | **TRANSITION REPORT PURSUANT TO SECTION 13  OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

 

**For thetransition period from             to              **

 

**CommissionFile Number:  333-114102**

 

**Merisant Worldwide, Inc.**

(Exact Name of Registrant asSpecified in its Charter)

 
| **Delaware**                                                    | ** ** | **52-2219000**                           |
|-----------------------------------------------------------------|------------|------------------------------------------|
| (State  or Other Jurisdiction of Incorporation or Organization) |       | (I.R.S.  Employer Identification Number) |
|                                                            |       |                                     |
| **33 North Dearborn  Chicago, Illinois**                        | ** ** | **60602**                                |
| (Address  of Principal Executive Offices)                       |       | (Zip  Code)                              |

 

Registrant’s telephone number,including area code: **(312) 840-6000**

 

Former name, former address andformer fiscal year, if changed since last report:

**Notapplicable.**

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days.   Yes  o   No  x

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company. See definitions of “largeaccelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2of the Exchange Act. (Check one):

 
| Large accelerated filer o                      |   | Accelerated filer o         |
|------------------------------------------------|--------|----------------------------------|
|                                           |   |                             |
| Non-accelerated filer x                        |   | Smaller reporting company o |
| (Do not check if a smaller reporting  company) |   |                             |

 

Indicate by check mark whether the registrantis a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes  o   No  x

 

Indicate the number of shares outstanding ofeach of the issuer’s classes of common stock, as of the latest practicabledate.

 

As of August 13, 2008, the registranthad 9,086,495 shares of common stock, par value $0.01 per share, outstanding.

 

This Quarterly Report is being filed pursuant to a requirementcontained in the indenture governing Merisant Worldwide, Inc.’s 121⁄4% Senior Subordinated Discount Notes due 2014.

 

 

 

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**MERISANTWORLDWIDE, INC.**

 

**INDEX TOREPORT**

 

**FOR THEQUARTER ENDED JUNE 30, 2008**

 
|                                             | ** **                                                                                                                                                      | **Page** |
|---------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| **PART I—FINANCIAL  INFORMATION** |                                                                                                                                                            | 3        |
|                                        |                                                                                                                                                            |     |
| Item 1.                                     | Financial Statements of  Merisant Worldwide, Inc.                                                                                                          |     | 3 |
|                                        |                                                                                                                                                            |     |   |
|                                        | Unaudited  Consolidated Balance Sheets at December 31, 2007 and June 30, 2008                                                                         |     | 3 |
|                                        |                                                                                                                                                            |     |   |
|                                        | Unaudited  Consolidated Statements of Operations and Comprehensive Income (Loss) for the  Three Months and Six Ended June 30, 2007 and 2008 |     | 4 |
|                                        |                                                                                                                                                            |     |   |
|                                        | Unaudited  Consolidated Statement of Stockholders’ Deficit for the Six Months Ended June 30,  2008                                                    |     | 5 |
|                                        |                                                                                                                                                            |     |   |
|                                        | Unaudited  Consolidated Statements of Cash Flows for the Six Months Ended June 30,  2007 and 2008                                                          |     | 6 |
|                                        |                                                                                                                                                            |     |   |
|                                        | Notes to Unaudited Consolidated Financial Statements                                                                                                            |     | 7 |
|                                        |                                                                                                                                                            |     |   |
| Item 2.                                     | Management’s  Discussion and Analysis of Financial Condition and Results of Operations                                                                     |     | 14 |
|                                        |                                                                                                                                                            |     |   |
| Item 3.                                     | Quantitative  and Qualitative Disclosures About Market Risk                                                                                                     |     | 30 |
|                                        |                                                                                                                                                            |     |   |
| Item 4T.                                    | Controls and Procedures                                                                                                                                         |     | 30 |
|                                        |                                                                                                                                                            |     |   |
| PART II—OTHER  INFORMATION        |                                                                                                                                                            | 31       |
|                                        |                                                                                                                                                            |     |
| Item 1.                                     | Legal Proceedings                                                                                                                                               |     | 31 |
|                                        |                                                                                                                                                            |     |   |
| Item 1A.                                    | Risk Factors                                                                                                                                                    |     | 31 |
|                                        |                                                                                                                                                            |     |   |
| Item 4.                                     | Submission  of Matters to a Vote of Security Holders                                                                                                            |     | 31 |
|                                        |                                                                                                                                                            |     |   |
| Item 6.                                     | Exhibits                                                                                                                                                        |     | 31 |

 

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**PART I**—**FINANCIAL INFORMATION**

 

**Item 1. Financial Statements of Merisant Worldwide, Inc.**

 

**MERISANTWORLDWIDE, INC.**

**UnauditedConsolidated Balance Sheets**

**(DollarsIn Thousands, Except Per Share Amount)**

 
| ** **                                                                                                                    | ** ** | **At December  31, 2007** | ** ** | **At  June 30,  2008** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------|------------|-----------------------------|------------|
| **ASSETS**                                                                                                                    |       |                                |       |                        |       |
| Cash and cash equivalents                                                                                                     |       | $                                   | 51,050     |                        | $          | 12,834 |   |
| Trade accounts receivable, net of  allowances of $854 and $803, respectively                                                  |       | 74,410                              |       | 66,421                      |       |
| Other receivables                                                                                                             |       | 9,128                               |       | 12,672                      |       |
| Inventories                                                                                                                   |       | 13,540                              |       | 26,523                      |       |
| Prepaid expenses and other assets                                                                                             |       | 6,270                               |       | 5,563                       |       |
| Current portion of note receivable from  director                                                                             |       | 970                                 |       | 1,970                       |       |
| Deferred income tax assets                                                                                                    |       | 1,620                               |       | 1,721                       |       |
| Total current assets                                                                                                          |       | 156,988                             |       | 127,704                     |       |
| Property and equipment, net                                                                                                   |       | 23,509                              |       | 28,622                      |       |
| Trademarks and other intangible assets,  less accumulated amortization and impairment of $164,022 and $174,550,  respectively |       | 160,697                             |       | 153,205                     |       |
| Goodwill                                                                                                                      |       | 107,209                             |       | 107,209                     |       |
| Deferred financing costs, less accumulated  amortization of $11,186 and $14,738 respectively                                  |       | 11,464                              |       | 9,742                       |       |
| Non-current portion of note receivable from  director                                                                         |       | 1,822                               |       | 881                         |       |
| Investment in equity affiliate                                                                                                |       | 264                                 |       | 373                         |       |
| Other non-current assets                                                                                                      |       | 880                                 |       | 1,354                       |       |
| Total assets                                                                                                                  |       | $                                   | 462,832    |                        | $          | 429,090 |   |
| **LIABILITIES AND STOCKHOLDERS’ DEFICIT**                                                                                |       |                                |       |                        |       |
| Accounts payable                                                                                                              |       | $                                   | 22,618     |                        | $          | 18,768 |   |
| Income taxes payable                                                                                                          |       | 1,031                               |       | 817                         |       |
| Accrued interest expense                                                                                                      |       | 12,727                              |       | 11,809                      |       |
| Accrued trade marketing and consumer  promotions                                                                              |       | 14,353                              |       | 17,379                      |       |
| Accrued incentives                                                                                                            |       | 8,024                               |       | 3,230                       |       |
| Accrued expenses and other liabilities                                                                                        |       | 11,039                              |       | 12,266                      |       |
| Current maturities of long-term obligations                                                                                   |       | 12,178                              |       | 22,341                      |       |
| Total current liabilities                                                                                                     |       | 82,000                              |       | 86,610                      |       |
| Long-term obligations, net of current  maturities                                                                             |       | 540,446                             |       | 520,519                     |       |
| Deferred income tax liabilities                                                                                               |       | 23,701                              |       | 26,060                      |       |
| Other liabilities                                                                                                             |       | 6,954                               |       | 8,206                       |       |
| Total liabilities                                                                                                             |       | 653,101                             |       | 641,395                     |       |
| Commitments and contingencies (Note 7)                                                                                   |       |                                |       |                        |       |
| Stockholders’ Deficit:                                                                                                   |       |                                |       |                        |       |
| Common stock, $0.01 par value, 10,000,000  shares authorized, 9,169,552 shares issued and 9,086,495 shares outstanding.       |       | 91                                  |       | 91                          |       |
| Due for purchase of shares in Merisant  Worldwide, Inc.                                                                  |       | (107                                | )          | (64                         | )          |
| Retained deficit                                                                                                              |       | (185,434                            | )          | (210,169                    | )          |
| Accumulated other comprehensive loss                                                                                          |       | (3,038                              | )          | (382                        | )          |
|                                                                                                                          |       | (188,488                            | )          | (210,524                    | )          |
| Less cost of treasury stock (83,057 shares)                                                                                   |       | (1,781                              | )          | (1,781                      | )          |
| Total stockholders’ deficit                                                                                              |       | (190,269                            | )          | (212,305                    | )          |
| Total liabilities and stockholders’ deficit                                                                              |       | $                                   | 462,832    |                        | $          | 429,090 |   |

 

The accompanying notes are anintegral part of these unaudited consolidated financial statements.

 

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**MERISANTWORLDWIDE, INC.**

**UnauditedConsolidated Statements of Operations and**

**ComprehensiveIncome (Loss)**

**(DollarsIn Thousands)**

 
| ** **                        | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|-----------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                        | ** ** | **2007**                                        | ** ** | **2008**                                      | ** ** | **2007** | ** ** | **2008** | ** ** |
| Net sales                         |       | $                                               | 71,090     |                                          | $          | 67,046 |   | $ | 140,403 |   | $ | 135,966 |   |
| Cost of sales                     |       | 31,860                                          |       | 32,904                                        |       | 62,602 |   | 65,829 |   |
| Gross profit                      |       | 39,230                                          |       | 34,142                                        |       | 77,801 |   | 70,137 |   |
| Operating expenses:               |       |                                            |       |                                          |       |   |   |   |   |
| Marketing and selling expenses    |       | 17,034                                          |       | 19,431                                        |       | 32,281 |   | 33,816 |   |
| Administration expenses           |       | 13,429                                          |       | 8,783                                         |       | 25,365 |   | 18,806 |   |
| Amortization of intangible assets |       | 5,727                                           |       | 5,264                                         |       | 11,454 |   | 10,528 |   |
| Restructuring expenses            |       | 314                                             |       | 993                                           |       | 874 |   | 1,108 |   |
| Total operating expenses          |       | 36,504                                          |       | 34,471                                        |       | 69,974 |   | 64,258 |   |
| Income (loss) from operations     |       | 2,726                                           |       | (329                                          | )          | 7,827 |   | 5,879 |   |
| Other expense (income):           |       |                                            |       |                                          |       |   |   |   |   |
| Interest income                   |       | (160                                            | )          | (154                                          | )          | (365 | ) | (458 | ) |
| Interest expense                  |       | 14,944                                          |       | 13,433                                        |       | 30,337 |   | 27,356 |   |
| Costs of refinancing              |       | 5,791                                           |       | —                                        |       | 5,791 |   | — |   |
| Other expense (income), net       |       | (30,218                                         | )          | (167                                          | )          | (30,079 | ) | 634 |   |
| Total other expense (income)      |       | (9,643                                          | )          | 13,112                                        |       | 5,684 |   | 27,532 |   |
| Income (loss) before income taxes |       | 12,369                                          |       | (13,441                                       | )          | 2,143 |   | (21,653 | ) |
| Provision for income taxes        |       | 1,854                                           |       | 994                                           |       | 3,700 |   | 3,082 |   |
| Net income (loss)                 |       | $                                               | 10,515     |                                          | $          | (14,435 | ) | $ | (1,557 | ) | $ | (24,735 | ) |
|                              |       |                                            |       |                                          |       |   |   |   |   |
| Net income (loss) from above      |       | $                                               | 10,515     |                                          | $          | (14,435 | ) | $ | (1,557 | ) | $ | (24,735 | ) |
| Other comprehensive income        |       | 408                                             |       | 680                                           |       | 711 |   | 2,656 |   |
| Total comprehensive income (loss) |       | $                                               | 10,923     |                                          | $          | (13,755 | ) | $ | (846 | ) | $ | (22,079 | ) |

 

The accompanying notes are anintegral part of these unaudited consolidated financial statements.

 

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**MERISANTWORLDWIDE, INC.**

**UnauditedConsolidated Statement of Stockholders’ Deficit**

**(DollarsIn Thousands)**

 
| ** **                                | ** ** | **Common  Stock** | ** ** | **Due for  Purchase of  Shares in  Merisant  Worldwide,  Inc.** | ** ** | **Retained  Earnings  (Deficit)** | ** ** | **Accumulated  Other  Comprehensive  Loss** | ** ** | **Treasury  Stock at  cost** | ** ** | **Total** | ** ** |
|-------------------------------------------|------------|-------------------|------------|--------------------------------------------------------------------------------|------------|-----------------------------------|------------|---------------------------------------------|------------|-----------------------------------|------------|-----------|------------|
| Balance at December 31, 2007.        |       | $                 | 91         |                                                                           | $          | (107                              | )          | $                                           | (185,434   | )                                 | $          | (3,038    | )          | $ | (1,781 | ) | $ | (190,269 | ) |
| Foreign currency translation adjustment   |       | —            |       | —                                                                         |       | —                            |       | 2,656                                       |       | —                            |       | 2,656     |       |
| Settlement of loan for purchase of shares |       | —            |       | 43                                                                             |       | —                            |       | —                                      |       | —                            |       | 43        |       |
| Net loss                                  |       | —            |       | —                                                                         |       | (24,735                           | )          | —                                      |       | —                            |       | (24,735   | )          |
| Balance at June 30, 2008             |       | $                 | 91         |                                                                           | $          | (64                               | )          | $                                           | (210,169   | )                                 | $          | (382      | )          | (1,781 | ) | $ | (212,305 | ) |
|                                           |            |                   |            |                                                                                |            |                                   |            |                                             |            |                                   |            |           |            |  |  |  |  |  |  |

 

The accompanying notes are anintegral part of these unaudited consolidated financial statements.

 

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**MERISANTWORLDWIDE, INC.**

**UnauditedConsolidated Statements of Cash Flows**

**(DollarsIn Thousands)**

 
| ** **                                                                                 | ** ** | **Six Months Ended  June 30,** | ** ** |
|--------------------------------------------------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                                                                 | ** ** | **2007**                                      | ** ** | **2008** | ** ** |
| **Operating Activities**                                                                   |       |                                          |       |   |   |
| Net loss                                                                                   |       | $                                             | (1,557     | ) | $ | (24,735 | ) |
| Adjustments to reconcile net loss to net  cash provided by (used in) operating activities: |       |                                          |       |   |   |
| Depreciation                                                                               |       | 3,329                                         |       | 2,275 |   |
| Amortization of intangible assets                                                          |       | 11,454                                        |       | 10,528 |   |
| Amortization of deferred financing costs                                                   |       | 1,834                                         |       | 1,822 |   |
| Interest accretion on senior subordinated  discount notes                                  |       | 6,722                                         |       | 7,570 |   |
| Write off of deferred financing costs                                                      |       | 3,241                                         |       | — |   |
| Euro-denominated loan foreign exchange loss                                                |       | 503                                           |       | 992 |   |
| Equity in income of affiliate                                                              |       | (88                                           | )          | (108 | ) |
| Deferred income tax provision                                                              |       | 2,318                                         |       | 2,297 |   |
| Changes in operating assets and  liabilities, (net of business acquisition):               |       |                                          |       |   |   |
| Trade accounts receivable                                                                  |       | 5,454                                         |       | 9,773 |   |
| Other receivables                                                                          |       | (1,575                                        | )          | (3,175 | ) |
| Inventories                                                                                |       | (996                                          | )          | (11,643 | ) |
| Prepaid expenses and other assets                                                          |       | (272                                          | )          | 289 |   |
| Accounts payable                                                                           |       | 7,945                                         |       | (4,662 | ) |
| Accrued expenses and other                                                                 |       | (4,404                                        | )          | (2,593 | ) |
| Net cash provided by (used in) operating  activities                                       |       | 33,908                                        |       | (11,369 | ) |
| **Investing Activities**                                                                   |       |                                          |       |   |   |
| Proceeds from sale of property and  equipment                                              |       | 183                                           |       | 28 |   |
| Purchase of business                                                                       |       | —                                        |       | (3,400 | ) |
| Purchases of property and equipment                                                        |       | (859                                          | )          | (5,692 | ) |
| Net cash used in investing activities                                                      |       | (676                                          | )          | (9,064 | ) |
| **Financing Activities**                                                                   |       |                                          |       |   |   |
| Net borrowings under revolving credit  facility                                            |       | —                                        |       | 2,000 |   |
| Borrowings under long-term obligations                                                     |       | 85,000                                        |       | 11 |   |
| Principal payments on long-term obligations                                                |       | (89,284                                       | )          | (20,317 | ) |
| Payment of deferred financing costs                                                        |       | (2,539                                        | )          | (100 | ) |
| Settlement of loans for purchase of shares                                                 |       | 449                                           |       | 43 |   |
| Net cash used in financing activities                                                      |       | (6,374                                        | )          | (18,363 | ) |
| Effect of exchange rate on cash and cash  equivalents                                      |       | 383                                           |       | 580 |   |
| Net increase (decrease) in cash and cash  equivalents                                      |       | 27,241                                        |       | (38,216 | ) |
| Cash and cash equivalents at beginning of  period                                          |       | 23,753                                        |       | 51,050 |   |
| Cash and cash equivalents at end of period                                                 |       | $                                             | 50,994     |   | $ | 12,834 |   |

 

The accompanying notes are anintegral part of these unaudited consolidated financial statements.

 

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** **

**MERISANTWORLDWIDE, INC.**

**Notes toUnaudited Consolidated Financial Statements**

**(DollarsIn Thousands)**

 

**1.****                       ****Principles of Consolidation**

 

The consolidated financial statementsand notes do not contain certain information included in the annualconsolidated financial statements and notes of Merisant Worldwide, Inc.and subsidiaries. Unless otherwise indicated or unless the context otherwiserequires, all references to the “Company” mean Merisant Worldwide, Inc.and its consolidated subsidiaries. The consolidated balance sheet at December 31,2007 was derived from the Company’s audited consolidated financial statements,but does not include all disclosures required by generally accepted accountingprinciples in the United States of America (“GAAP”). The remaining consolidatedfinancial statements are unaudited. In the opinion of management, all normal,recurring adjustments necessary for a fair presentation of such unauditedfinancial statements have been included therein. For interim reportingpurposes, certain marketing and advertising expenses are charged to results ofoperations as a percentage of sales. Interim results may not be indicative ofresults for a full year. These unaudited consolidated financial statements andnotes should be read in conjunction with the Company’s annual consolidatedfinancial statements.

 

The preparation of consolidated financialstatements in conformity with generally accepted accounting principles requiresmanagement to make estimates and assumptions that affect the reported amountsof assets and liabilities, disclosure of contingent assets and liabilities atthe date of the consolidated financial statements and the reported amounts ofrevenues and expenses during the reporting period. Actual results could differfrom those estimates.

 

**2.****                       ****Segment Information**

 

The Company manufactures and marketsprimarily low-calorie tabletop sweeteners globally. Therefore, the Company’sreportable segments are organized and managed principally by geographicregion:  North America;Europe/Africa/Middle East, referred to as EAME; Latin America; andAsia/Pacific. The Company’s management reviews Operating EBITDA to evaluatesegment performance and allocate resources. Operating EBITDA consists ofsegment earnings before interest expense, income tax expense, depreciation andamortization as well as items such as expenses related to restructuringcharges, certain significant charges related to new product development andlaunch costs, certain litigation costs and certain other non-cash or excludablecharges or losses. Other expense (income), net, as reported in the unauditedconsolidated financial statements, is included in Operating EBITDA of therespective reportable segments, except for the portion of other expense(income), net that relates to the foreign currency transaction gains or lossesassociated with the Company’s euro-denominated debt (see Note 5) and unrealizedgains or losses on derivative instruments. Corporate expenses include corporatestaff and related amounts. Corporate expenses, interest and other expenses andthe provision for income taxes are centrally managed and, accordingly, suchitems are not presented by segment since they are excluded from the measure ofsegment performance reviewed by management. The Company launched a new productline in North America in the first quarter of 2006 which management evaluatesand manages separately from its other North American operations. As such, thisitem is also excluded from the measure of segment performance reviewed bymanagement. The Company’s definition of Operating EBITDA is largely driven bysimilar definitions of Bank EBITDA under its primary credit facilities. Thedefinition of Bank EBITDA was adjusted in the May 2007 amendment of thosefacilities and that change is reflected prospectively in the Company’scomputation of Operating EBITDA. The Company’s assets, which are principally inthe United States and Europe, are also managed geographically. A summary of theCompany’s results of operations by reportable segment for the three and sixmonths ended June 30, 2007 and 2008 is as follows:

 

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**For theThree Months Ended June 30, 2007**

 
| ** **                                                                      | ** ** | **North  America** | ** ** | **EAME** | ** ** | **Latin  America** | ** ** | **Asia/  Pacific** | ** ** | **Consolidated** | ** ** |
|---------------------------------------------------------------------------------|------------|--------------------|------------|----------|------------|--------------------|------------|--------------------|------------|------------------|------------|
| Total net sales for reportable segments                                         |       | $                  | 27,591     |     | $          | 30,081             |       | $                  | 8,050      |             | $          | 5,375 |   | $ | 71,097 |   |
| Plus: Net sales related to new product  launch                                  |       |               |       |     |       |               |       |               |       | (7               | )          |
| Total consolidated net sales                                                    |       |               |       |     |       |               |       |               |       | $                | 71,090     |   |
|                                                                            |       |               |       |     |       |               |       |               |       |             |       |
| Operating EBITDA                                                                |       | $                  | 10,123     |     | $          | 8,730              |       | $                  | 1,906      |             | $          | 1,366 |   | $ | 22,125 |   |
| Less (plus):                                                                    |       |               |       |     |       |               |       |               |       |             |       |
| Corporate expenses                                                              |       |               |       |     |       |               |       |               |       | 7,603            |       |
| Restructuring expense                                                           |       |               |       |     |       |               |       |               |       | 314              |       |
| Depreciation expense                                                            |       |               |       |     |       |               |       |               |       | 1,771            |       |
| Amortization expense                                                            |       |               |       |     |       |               |       |               |       | 5,727            |       |
| Currency loss on euro debt                                                      |       |               |       |     |       |               |       |               |       | 202              |       |
| Loss related to new product launch                                              |       |               |       |     |       |               |       |               |       | 995              |       |
| Litigation costs and lease termination  charge excludable from Operating EBITDA |       |               |       |     |       |               |       |               |       | 2,542            |       |
| Gain from receipt of one-time payment  excludable from Operating EBITDA         |       |               |       |     |       |               |       |               |       | (30,000          | )          |
| Other non-cash expense                                                          |       |               |       |     |       |               |       |               |       | 27               |       |
| Other income, net                                                               |       |               |       |     |       |               |       |               |       | 30,218           |       |
| Income from operations                                                          |       |               |       |     |       |               |       |               |       | 2,726            |       |
| Interest expense, net                                                           |       |               |       |     |       |               |       |               |       | 14,784           |       |
| Costs of refinancing                                                            |       |               |       |     |       |               |       |               |       | 5,791            |       |
| Other income, net                                                               |       |               |       |     |       |               |       |               |       | (30,218          | )          |
| Income before income taxes                                                      |       |               |       |     |       |               |       |               |       | $                | 12,369     |   |

 

**For theThree Months Ended June 30, 2008**

 
| ** **                                                            | ** ** | **North  America** | ** ** | **EAME** | ** ** | **Latin  America** | ** ** | **Asia/  Pacific** | ** ** | **Consolidated** | ** ** |
|-----------------------------------------------------------------------|------------|--------------------|------------|----------|------------|--------------------|------------|--------------------|------------|------------------|------------|
| Total net sales for reportable segments                               |       | $                  | 23,808     |     | $          | 30,296             |       | $                  | 9,068      |             | $          | 3,902 |   | $ | 67,074 |   |
| Plus: Net sales related to new product  launch                        |       |               |       |     |       |               |       |               |       | (28              | )          |
| Total consolidated net sales                                          |       |               |       |     |       |               |       |               |       | $                | 67,046     |   |
|                                                                  |       |               |       |     |       |               |       |               |       |             |       |
| Operating EBITDA                                                      |       | $                  | 8,722      |     | $          | 5,962              |       | $                  | 981        |             | $          | (122 | ) | $ | 15,543 |   |
| Less (plus):                                                          |       |               |       |     |       |               |       |               |       |             |       |
| Corporate expenses                                                    |       |               |       |     |       |               |       |               |       | 5,367            |       |
| Restructuring and specified project  implementation costs        |       |               |       |     |       |               |       |               |       | 2,268            |       |
| Depreciation expense                                                  |       |               |       |     |       |               |       |               |       | 1,049            |       |
| Amortization expense                                                  |       |               |       |     |       |               |       |               |       | 5,264            |       |
| Currency loss on euro debt                                            |       |               |       |     |       |               |       |               |       | 31               |       |
| Loss related to new product launch                                    |       |               |       |     |       |               |       |               |       | 1,722            |       |
| Expenses (income) related to credit  agreement amendments and waivers |       |               |       |     |       |               |       |               |       | (31              | )          |
| Other non-cash expense                                                |       |               |       |     |       |               |       |               |       | 35               |       |
| Other expense, net                                                    |       |               |       |     |       |               |       |               |       | 167              |       |
| Loss from operations                                                  |       |               |       |     |       |               |       |               |       | (329             | )          |
| Interest expense, net                                                 |       |               |       |     |       |               |       |               |       | 13,279           |       |
| Other expense, net                                                    |       |               |       |     |       |               |       |               |       | (167             | )          |
| Loss before income taxes                                              |       |               |       |     |       |               |       |               |       | $                | (13,441    | ) |

 

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**For theSix Months Ended June 30, 2007**

 
| ** **                                                              | ** ** | **North  America** | ** ** | **EAME** | ** ** | **Latin  America** | ** ** | **Asia/  Pacific** | ** ** | **Consolidated** | ** ** |
|-------------------------------------------------------------------------|------------|--------------------|------------|----------|------------|--------------------|------------|--------------------|------------|------------------|------------|
| Total net sales for reportable segments                                 |       | $                  | 56,528     |     | $          | 56,657             |       | $                  | 13,347     |             | $          | 13,903 |   | $ | 140,435 |   |
| Plus: Net sales related to new product  launch                          |       |               |       |     |       |               |       |               |       | (32              | )          |
| Total consolidated net sales                                            |       |               |       |     |       |               |       |               |       | $                | 140,403    |   |
|                                                                    |       |               |       |     |       |               |       |               |       |             |       |
| Operating EBITDA                                                        |       | $                  | 20,405     |     | $          | 15,707             |       | $                  | 3,000      |             | $          | 5,457 |   | $ | 44,569 |   |
| Less (plus):                                                            |       |               |       |     |       |               |       |               |       |             |       |
| Corporate expenses                                                      |       |               |       |     |       |               |       |               |       | 14,045           |       |
| Restructuring expense                                                   |       |               |       |     |       |               |       |               |       | 874              |       |
| Depreciation expense                                                    |       |               |       |     |       |               |       |               |       | 3,329            |       |
| Amortization expense                                                    |       |               |       |     |       |               |       |               |       | 11,454           |       |
| Currency loss on euro debt                                              |       |               |       |     |       |               |       |               |       | 503              |       |
| Loss related to new product launch                                      |       |               |       |     |       |               |       |               |       | 1,538            |       |
| Other non-cash charge and net gain  excludable from Operating EBITDA    |       |               |       |     |       |               |       |               |       | 4,869            |       |
| Gain from receipt of one-time payment  excludable from Operating EBITDA |       |               |       |     |       |               |       |               |       | (30,000          | )          |
| Other non-cash expense                                                  |       |               |       |     |       |               |       |               |       | 51               |       |
| Other income, net                                                       |       |               |       |     |       |               |       |               |       | 30,079           |       |
| Income from operations                                                  |       |               |       |     |       |               |       |               |       | 7,827            |       |
| Interest expense, net                                                   |       |               |       |     |       |               |       |               |       | 29,972           |       |
| Costs of refinancing                                                    |       |               |       |     |       |               |       |               |       | 5,791            |       |
| Other income, net                                                       |       |               |       |     |       |               |       |               |       | (30,079          | )          |
| Income before income taxes                                              |       |               |       |     |       |               |       |               |       | $                | 2,143      |   |

 

**For theSix Months Ended June 30, 2008**

 
| ** **                                                     | ** ** | **North  America** | ** ** | **EAME** | ** ** | **Latin  America** | ** ** | **Asia/  Pacific** | ** ** | **Consolidated** | ** ** |
|----------------------------------------------------------------|------------|--------------------|------------|----------|------------|--------------------|------------|--------------------|------------|------------------|------------|
| Total net sales for reportable segments                        |       | $                  | 47,002     |     | $          | 62,478             |       | $                  | 16,703     |             | $          | 9,796 |   | $ | 135,979 |   |
| Plus: Net sales related to new product  launch                 |       |               |       |     |       |               |       |               |       | (13              | )          |
| Total consolidated net sales                                   |       |               |       |     |       |               |       |               |       | $                | 135,966    |   |
|                                                           |       |               |       |     |       |               |       |               |       |             |       |
| Operating EBITDA                                               |       | $                  | 14,937     |     | $          | 16,542             |       | $                  | 3,182      |             | $          | 2,378 |   | $ | 37,039 |   |
| Less (plus):                                                   |       |               |       |     |       |               |       |               |       |             |       |
| Corporate expenses                                             |       |               |       |     |       |               |       |               |       | 11,592           |       |
| Restructuring and specified project  implementation costs |       |               |       |     |       |               |       |               |       | 2,879            |       |
| Depreciation expense                                           |       |               |       |     |       |               |       |               |       | 2,275            |       |
| Amortization expense                                           |       |               |       |     |       |               |       |               |       | 10,528           |       |
| Currency loss on euro debt                                     |       |               |       |     |       |               |       |               |       | 992              |       |
| Loss related to new product launch                             |       |               |       |     |       |               |       |               |       | 3,028            |       |
| Expenses related to credit agreement  amendments and waivers   |       |               |       |     |       |               |       |               |       | 435              |       |
| Other non-cash expense                                         |       |               |       |     |       |               |       |               |       | 65               |       |
| Other expense, net                                             |       |               |       |     |       |               |       |               |       | (634             | )          |
| Income from operations                                         |       |               |       |     |       |               |       |               |       | 5,879            |       |
| Interest expense, net                                          |       |               |       |     |       |               |       |               |       | 26,898           |       |
| Other expense, net                                             |       |               |       |     |       |               |       |               |       | 634              |       |
| Loss before income taxes                                       |       |               |       |     |       |               |       |               |       | $                | (21,653    | ) |

 

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**3.****                       ****Restructuring Expenses**

 

During the six months ended June 30, 2008, the Company continuedto evaluate opportunities to increase efficiency and reduce costs. This reviewresulted in the continuation of workforce reductions and planned changes in theCompany’s global business model. These actions are designed to improve bothfinancial results and the long-term value of the business. Restructuringexpenses for workforce reductions of $314 and $993 were recorded for the threemonths ended June 30, 2007 and June 30, 2008, respectively, and $874and $1,108 were recorded for the six months ended June 30, 2007 and 2008,respectively. The 2008 charges principally related to planned termination costsfor employees including charges related to 7 additional personnel that werenotified of their termination during the six months ended June 30, 2008. Severancepayments and benefits are scheduled to be made over the next six months.

 

Reconciliation of the restructuringliability at June 30, 2008 is as follows:

 
| Restructuring liability at  December 31, 2007                  |   | $     | 182    |   |
|---------------------------------------------------------------------|--------|-------|--------|--------|
| Restructuring expenses for the six months  ended June 30, 2008 |   | 1,108 |   |
| Cash payments for the six months ended  June 30, 2008          |   | (920  | )      |
| Restructuring liability at June 30,  2008                      |   | $     | 370    |   |

 

The restructuring liability at December 31, 2007and June 30, 2008 is included in the line item “Accrued expenses and otherliabilities” in the accompanying consolidated balance sheets.

 

The following table represents restructuring expensesincluded in each segment and corporate expenses for the three and six monthsended June 30, 2007 and 2008:

 
| ** **    | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|---------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **    | ** ** | **2007**                                        | ** ** | **2008**                                      | ** ** | **2007** | ** ** | **2008** | ** ** |
| North America |       | $                                               | —     |                                          | $          | — |   | $ | — |   | $ | — |   |
| EAME          |       | 180                                             |       | 822                                           |       | 298 |   | 822 |   |
| Latin America |       | 22                                              |       | 8                                             |       | 86 |   | 8 |   |
| Asia/Pacific  |       | 112                                             |       | 16                                            |       | 330 |   | 131 |   |
| Corporate     |       | —                                          |       | 147                                           |       | 160 |   | 147 |   |
| Total         |       | $                                               | 314        |                                          | $          | 993 |   | $ | 874 |   | $ | 1,108 |   |

 

**4.****                       ****Inventories**

 

Inventories consisted of thefollowing at December 31, 2007 and June 30, 2008:

 
| ** **                      | ** ** | **December 31, 2007** | ** ** | **June 30, 2008** | ** ** |
|---------------------------------|------------|---------------------------------|------------|-----------------------------|------------|
| Raw materials and supplies      |       | $                               | 5,767      |                        | $          | 5,977 |   |
| Work in process                 |       | 383                             |       | 1,058                       |       |
| Finished goods                  |       | 7,924                           |       | 20,324                      |       |
| Inventory obsolescence reserves |       | (534                            | )          | (836                        | )          |
| Total                           |       | $                               | 13,540     |                        | $          | 26,523 |   |

 

The increase in finished goods is due to planned buildup of contingency stock related to upcoming changes in our foreignmanufacturing operations as described further in Note 7.

 

**5.****                       ****Debt**

 

The Company is highlyleveraged. At June 30, 2008, the Company and its subsidiaries, includingMerisant Company (“Merisant”), had $542,756 of long-term debt outstanding,consisting of $131,179 aggregate principal amount of Merisant Worldwide’s 12 1⁄4%senior subordinated discount notes due 2014 (the “Discount Notes”), $225,000aggregate principal amount of Merisant’s 9 1⁄2% senior subordinated notes due2013 (the “Notes”), $186,577 aggregate principal amount outstanding underMerisant’s senior credit agreement (the “Senior Credit Agreement” or as amendedand restated, the “Amended and Restated Credit Agreement”), excluding capitallease obligations of $104 and unused commitments on the revolving portion ofthe Senior Credit Agreement of $31,000.

 

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At June 30, 2008,borrowings under the Senior Credit Agreement included $10,131 (“Term A”)aggregate principal amount of term loans bearing annual interest of 8.35%,$174,446 (“Term B”) aggregate principal amount of term loans bearing annualinterest of 6.40% and $2,000 aggregate principal amount in revolvercommitments. The Term A loans are euro-denominated and are translated into U.S.dollars at the spot rate as of June 30, 2008.

 

The Term A loans and the revolver commitmentare scheduled to terminate in January 2009 and all amounts there under arescheduled to be repaid. Most of the Term B loans ($171,803) are due at itsfinal maturity in January 2010. Additionally, interest on MerisantWorldwide’s Discount Notes will become payable in cash commencing on May 15,2009. Semiannual interest payments of $8.6 million are required. The indenturegoverning the Notes limits Merisant’s ability to pay dividends or loan cash to theCompany, which has no operations of its own.

 

On June 23, 2006, Merisant entered intoan $85,000 senior secured term loan agreement (the “Second Lien CreditAgreement”), the borrowings under which were secured by a second lien on allthe assets that secured loans outstanding under the then existing Senior CreditAgreement. The Second Lien Credit Agreement consisted of an aggregate of$85,000 principal amount of term loans, the net proceeds of which were used toprepay $9,540 of euro-denominated Term A loans, prepay $53,320 of Term B loansand to repay $15,000 of revolving loans, in each case, outstanding under theSenior Credit Agreement.

 

On May 9, 2007, the Company, Merisantand certain of Merisant’s subsidiaries entered into the Amended and RestatedCredit Agreement, which, among other things, increased by $85,000 the principalamount of Term B loans that may be borrowed by Merisant under the Senior CreditAgreement. Merisant paid $2,505 in fees and expenses related to this amendmentand restatement which it deferred and is amortizing over the term of therelated debt. Upon closing, Merisant borrowed the full $85,000 of additionalTerm B loans available under the Amended and Restated Credit Agreement and usedthe proceeds plus cash on hand to prepay the principal of all loans outstandingunder the Second Lien Credit Agreement totaling $85,000, plus all outstandinginterest of $1,438 and a premium of $2,550, or $88,988. The Second Lien CreditAgreement was terminated as a result of the transaction and there was noincrease in Merisant’s long-term debt as a result of this transaction. Inaddition to the incurrence of fees, this transaction also resulted in awrite-off of existing deferred financing fees relating to the extinguishment ofpreviously outstanding debt under the Second Lien Credit Agreement of $3,241.

 

Upon closing of the above transaction andexecution of the related amendment, the interest rate on all term loans andrevolving loans outstanding under the Amended and Restated Credit Agreementincreased from euro-LIBOR and LIBOR plus 325 basis points per annum toeuro-LIBOR and LIBOR plus 350 basis points per annum. As a result of thetermination of the Second Lien Credit Agreement, Merisant’s effective interestrate on variable interest rate debt decreased from 10.63% per annum prior tothe closing of this transaction to 8.73% per annum subsequent to thistransaction.

 

Merisant paid interest on borrowingsunder the Senior Credit Agreement, the Second Lien Credit Agreement, and on theNotes totaling $20,618 and $18,798 for the six months ended June 30, 2007and 2008, respectively.

 

The Amended and Restated Credit Agreementpreserves prior amendments, amends future financial covenant  ratios and levels and contains a number ofadditional amendments, including to the definition of Bank EBITDA, that giveMerisant more flexibility to operate its business and de-leverage its balancesheet.

 

The Amended and Restated Credit Agreementcontains covenants, including financial covenants that must be met on aquarterly basis. “Bank EBITDA” is the measure by which the financial covenantscontained in the Amended and Restated Credit Agreement are measured. However,Bank EBITDA is not a measure of liquidity under GAAP. Accordingly, whileproviding useful information with respect to an assessment of liquidity asmeasured in accordance with the covenants in Merisant’s primary debtobligations, this measure should not be considered in isolation from, or as asubstitute for, consolidated statement of cash flow data prepared in accordancewith GAAP as an indication of liquidity. In addition, the Bank EBITDA measurepresented may differ from, and may not be comparable to, similarly titledmeasures used by other companies.

 

Merisant was in compliance with its covenantsunder the Amended and Restated Credit Agreement as of June 30, 2008.

 

Merisant was required to prepay $15,226 ofthe principal amount of term loans outstanding under the Amended and RestatedCredit Agreement five business days after filing the annual financialstatements with excess cash as required and calculated under the terms of theAmended and Restated Credit Agreement. The prepayment was completed on April 4,2008.

 

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**6.****                       ****Transactions with Related Parties**

 

Merisant has a deferred compensation payableto Arnold Donald, its former Chairman and a current director, and a notereceivable in the same amount from Mr. Donald. Merisant recorded $43 and$30 of interest income on the note receivable for the three months ended June 30,2007 and 2008, respectively, and $86 and $59 of interest income on the notereceivable for the six months ended June 30, 2007 and 2008, respectively,and an equal amount of interest expense in the respective periods.

 

Merisant is party to an agreement with BrandArchitecture International (“Brand Architecture”) pursuant to which BrandArchitecture has agreed to provide consulting services relating to thedevelopment of brand architecture for Merisant’s brands. Merisant paidapproximately $224 and $138 to Brand Architecture for the three months ended June 30,2007 and 2008, respectively, and approximately $300 and $197 for the six monthsended June 30, 2007 and 2008, respectively, including the reimbursement toBrand Architecture for expenses relating to its work. Adam Stagliano, amember of the Company’s board of directors, is a founding director and thePresident and Chief Strategic Officer of Brand Architecture.

 

**7.**                        Commitmentsand Contingencies

** **

The Company has an investment in an affiliatelocated in the Philippines that is accounted for using the equity method. Theaffiliate, a 50/50 joint venture, distributes sugar substitute sweeteners forthe international consumer food markets, primarily under the *Equal®* brand. In addition to itsinvestment in the joint venture, the Company is committed to a 50% share in anynew borrowings of the joint venture. As of December 31, 2007 and June 30,2008, there were no additional joint venture borrowings.

 

On January 29, 2008, the Companydelivered notice to ACH Food Companies, Inc. (“ACH”) that the distributionagreement between Merisant US, Inc. and ACH would terminate on July 27,2008 with respect only to the retail grocery channel. The Company partiallyterminated the distribution agreement so that it can pursue a directdistribution model for retail customers in the United States. The Company willhandle order processing, warehousing and trade marketing internally and througha third-party broker and logistics providers for retail grocery and drugcustomers in the United States which the Company anticipates will reduce itsoperating costs,  improve the efficiencyof its inventory management and distribution capabilities, and provide moretransparency in customer relations. On March 4, 2008, the Company and ACHagreed that the Company will pay $300 to ACH and that commissions will notincrease in connection with the partial termination of the distributionagreement. This expense is included in operating expenses for the six monthsended June 30, 2008.

 

The Company is pursuing a multi-sitemanufacturing strategy for EAME. In connection with this strategy, the Companyformed CzechPak Manufacturing s.r.o. to operate a new manufacturing facilitylocated in the Czech Republic. The Company intends to shift a portion of itscurrent production and equipment to this new facility from Krüger GmbH &Co. KG, its current contract manufacturer located in Germany. In connectionwith this transition, the Company is engaged in discussions with Krüger toamend the parties’ manufacturing agreement. There is no assurance that theCompany will be able to negotiate amendments to the agreement favorable to theCompany or in a timely manner, and the parties may be required to arbitrate anydisagreements between them. The Company believes it has sufficient inventory offinished products to meet anticipated market demand over the next three to sixmonths, and management has established a number of contingency plans in theevent of any disruptions in production. Nevertheless, any prolonged negotiationor arbitration with Krüger could cause disruptions in production or increasethe amount of its projected capital expenditures.

 

The Company is subject to various otherclaims, pending and possible legal actions for product liability and otherdamages, and other matters arising out of the conduct of the Company’sbusiness, including tax uncertainties arising from doing business in variousEuropean and Latin American jurisdictions. The Company believes, based on currentknowledge and consultation with counsel, that the outcome of such claims andactions will not have a material adverse effect on the Company’s consolidatedfinancial position or results of operations.

 

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**8.**                        Income Taxes

 

In June 2006, the FinancialAccounting Standards Board (“FASB”) issued Interpretation No. 48,Accounting for Uncertainty in Income Taxes - an interpretation of FASBStatement No. 109 (“FIN 48”), that clarifies the accounting andrecognition for income tax positions taken or expected to be taken in theCompany’s tax returns. The Company adopted FIN 48 on January 1, 2007, andrecorded the cumulative effect of a change in accounting principle by recordinga decrease in the liability for uncertain tax positions of $5,757, that wasaccounted for as a credit to opening retained earnings. At December 31,2007 and June 30, 2008, the total liability, including interest andpenalties of $715 and $854, respectively for uncertain tax positions recordedin the Company’s balance sheet in non-current Other liabilities was $2,815 and$3,185, respectively. No uncertain tax position reserves were reversed orsettled during the six months ended June 30, 2008. The entire amount ofthis consolidated worldwide liability for uncertain tax positions would affectthe Company’s effective tax rate upon favorable resolution of the uncertain taxpositions. Absent new experience in defending these uncertain tax positions inthe various jurisdictions to which they relate, the Company cannot currentlyestimate a range of possible change of the June 30, 2008 liability overthe next twelve months.

 

The Company files a consolidated U.S.income tax return and tax returns in various state and local jurisdictions. TheCompany’s subsidiaries also file tax returns in various foreign jurisdictions.In addition to the U.S., the Company’s major taxing jurisdictions includeSwitzerland, France, the United Kingdom, Belgium, Australia, Argentina andMexico. In the U.S., all tax years from inception in 2000 through the presentare open. The Company’s Switzerland subsidiary operates under a tax holiday,resulting in no uncertain tax positions for that entity for any tax year. Localaudits of the tax returns for the Company’s France subsidiary have beencompleted through 2004. In the United Kingdom, the Company assumes that taxyears through 2005 are closed due to local practice. In Belgium and Australia,tax years through 2003 and 2001, respectively, are closed due to the localstatute of limitations. In Argentina and Mexico only 2000 and 2001 areconsidered closed tax years due to the local statute of limitations.

 

Interest and penalties related to taxpositions taken in the Company’s tax returns are recorded in income tax expensein the consolidated statements of operations.

 

**9.**                        Expansion ofOperations

** **

On April 9, 2008, NativiaGuarani, S.A., the Company’s indirect, wholly-owned subsidiary (“NativiaGuarani”), purchased a stevia processing facility and business located inParaguay and related tangible and intangible assets from Imperio Guarani, S.A.(“Imperio Guarani”) in an asset purchase transaction. The purchase price was$5.0 million, $0.6 million of which was paid in 2007 and $3.4 million of whichwas paid upon the closing of the acquisition on April 9, 2008. Theremaining $1.0 million of the purchase price may be paid to Imperio Guaraniover the next 30 months if Imperio Guarani continues to perform under relatedlong-term contracts during that period. This remaining purchase price liabilityis classified as current payables and other noncurrent liabilities asappropriate. In conjunction with the transaction, the Company paid $0.5 millionin value added tax which is classified as other receivables. The Company iscurrently analyzing the recovery period. None of the working capital of thebusiness was acquired, so the total cost of the acquisition was allocated tolong-lived fixed and intangible assets acquired based on their respective fairvalues (as decreased due to resulting “negative goodwill”) in accordance withFASB No. 141- Business Combinations. The preliminary allocation, pendingthird quarter finalization of valuation analyses, resulted in $2.1million offixed assets (predominately machinery and equipment), $2.2 million ofinternally-developed technology and $0.7 million of tradenames and customerrelationships.  Depreciation and amortization of these allocated balanceswill be deductible for income tax purposes over expected lives of two to tenyears. These assets will be tested for impairment as required under FASB No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets. The preliminaryvalues assigned to the intangible assets were based upon future discounted cashflows related to the existing products revenue streams.

 

The acquisition was accounted for bythe purchase method and the results of operations of the acquired business havebeen included in our Consolidated Statement of Operations since the date ofacquisition and are not yet material. Pro forma financial information is notpresented as the effect of this acquisition is not material to the Company’sresults of operations and financial position.

 

Upon the consummation of theacquisition, Whole Earth and Nativia Guarani entered into long-term contractswith Imperio Guarani and a consulting agreement with Sergio Chase, theprincipal of Imperio Guarani. Imperio Guarani will exclusively supply driedstevia leaves to Nativia Guarani and collaborate on research and developmentprojects. Management believes that the Nativia Guarani business and agreementswith Imperio Guarani and Mr. Chase will assist the Company in several ways.Whole Earth will directly participate in the production of its products fromthe farm to the ultimate consumer. A number of larger and better capitalizedcompanies will be competing for stevia leaves and extracts, and verticalintegration provides Whole Earth with more control over its supply of thisnatural 

 

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ingredient although the Company willcontinue to source high purity Reb A from suppliers. In addition, the Companybelieves that Nativia Guarani and our strategic relationship with ImperioGuarani will permit Whole Earth to promote sustainable farming practices anddevelop improved agricultural and processing methods and technologies that mayoffer competitive advantages.

 

**Item 2. Management’s Discussion and Analysisof Financial Condition and Results of Operations**

 

*The following discussion should be read inconjunction with our unaudited consolidated financial statements andaccompanying notes included elsewhere in this document. Our discussion ofresults by reportable segment should be read in conjunction with Note 2 tothe  unaudited consolidated financialstatements included elsewhere in this document, which illustrates thereconciliation of Operating EBITDA to income (loss) before income taxes. Unlessotherwise indicated or unless the context requires otherwise, all references inthis discussion to  “us”, “our” or “ourcompany” mean Merisant Worldwide, Inc. and its consolidated subsidiariesand all references to “Merisant” mean Merisant Company.*

 

**Overview**

 

Our company is a worldwide leader in themarketing of low-calorie tabletop sweeteners, with an estimated 22% dollarshare as of December 31, 2007 of a stable global retail market, which weestimate at $1.6 billion. We believe that our company has the leading dollarmarket share as of December 31, 2007 in almost half of what we estimate asthe top twenty geographic markets for low-calorie tabletop sweetener sales. Ourpremium-priced brands, *Equal*® and*Canderel*®, are among the mostrecognized low-calorie tabletop sweetener products in the world, with aidedbrand awareness estimated at between 90% and 95% in our four top markets. Inaddition to *Equal*® and *Canderel*®, we market our products under 18other regional brands that enjoy significant brand recognition in their targetmarkets. We sell our brands in over 90 countries.

 

Our business is the result of over 25years of history in the low-calorie tabletop sweetener industry, first as adivision of G.D. Searle & Co. (“Searle”) and later Monsanto Company (“Monsanto”).Searle invented the key sweetening ingredient in many of our products,aspartame, in 1965. Aspartame was first approved for consumer use in France in1979, where Searle marketed the product under the *Canderel*® brand. By the early 1980s, *Canderel*® was being marketed in much ofEurope. In 1981, the U.S. Food and Drug Administration approved the tabletopuse of aspartame. The following year, Searle launched *Equal*® in the United States. Monsanto enteredthe sweetener market in 1985 through its acquisition of Searle. Our company isa Delaware corporation that was formed in 2000 by an investor group led by anaffiliate of Pegasus Capital Advisors, L.P. to acquire Monsanto Company’stabletop sweetener business.

 

Our worldwide headquarters is located in Chicago,Illinois, and we have principal regional offices in Mexico City, Mexico,Neuchâtel, Switzerland, and Paris, France. We own and operate manufacturingfacilities in Manteno, Illinois, and Zarate, Argentina and own processing linesthat are operated exclusively for us at plants located in Bergisch and Stendal,Germany and Bankrason, Thailand. We have formed a new wholly-ownedsubsidiary, CzechPak Manufacturing s.r.o., to manufacture products at a facilitylocated in the Czech Republic which will commence production in August 2008.The CzechPak facility initially will produce *Canderel*®branded products for EAME region. As of August 13, 2008, we had 21 directand indirect active subsidiaries, including five subsidiaries in the UnitedStates, seven subsidiaries in Europe, six subsidiaries in Mexico, CentralAmerica and South America, and three subsidiaries in the Asia Pacific region,including Australia and India. In addition, our Swiss subsidiary holds a 50%interest in a joint venture in the Philippines.

 

Our core business continues to be productssweetened with aspartame, and the *Equal*®and *Canderel*® tabletop sweetenerproducts accounted for approximately 85% of our net sales in 2007. The majorityof our 18 other regional brands around the world are also sweetened withaspartame.

 

***Market Trends and Strategy***

** **

Our company’s premium-priced brands hadenjoyed a strong market position among low-calorie sweeteners in many of ourkey markets. In recent years, however, we have faced significant competitionfrom McNeil Nutritionals LLC, a subsidiary of Johnson & Johnson (“McNeil”),which markets and distributes the artificial sweetener*Splenda*®. *Splenda*® is sweetened with sucralose, which is produced byTate & Lyle PLC through a complex chemical process that convertssucrose molecules into a synthetic compound. From December 2002 to December 2007,*Splenda*®’s dollar share of theUnited States retail grocery market has grown from approximately 15% to 61% andhas surpassed that of *Equal*® tobecome the number one premium low-calorie sweetener in the United States. Whilewe believe that the introduction of *Splenda*®has increased the size of the market for low-calorie sweeteners in general, ournet sales have declined during this period, particularly in North America whichhad accounted for 46% and 40% of our net sales in 2003 and 2007, respectively. Asa result of declining net sales, we have experienced significant declines inour Bank EBITDA from $110.2 million in 2003 to a low of 

 

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$67.2 million in 2006, before increasing to $69.9 million in 2007. Fora description of Bank EBITDA and a reconciliation of Bank EBITDA to cash flowfrom operating activities, see “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations—Liquidity and Capital Resources”.

 

A new management team launched efforts to revitalize our company’sbusiness. Paul Block was appointed Chief Executive Officer in November 2004and has led an initiative to strengthen our company’s core brands, improve theefficiency of our operations, reduce costs and transform our company into asweetener and sweetened food company. Mr. Block has recruited individualsfrom outside our company and promoted individuals from within the organizationto form a new senior management team with the goal of developing a culture ofinnovation with a focus on the development and launch of new products designedto revitalize the existing customer base and attract new consumers.

 

Our company seeks to stabilize and then grow revenues through thefollowing five strategic initiatives:

 

·                  Promote newusage among existing consumers and expand the *Equal*®and *Canderel*® brand positioning to attractnew consumers through invasive marketing campaigns and improved salesexecution.

 

·                  Increase thepace of product innovation to bring new products and brand extensions to themarket, including products sweetened with high intensity sweeteners other thanaspartame.

 

·                  Develop and testproducts that have the potential to transform our company’s brand portfolio,including by building a platform for all natural, low-calorie sweeteners and sweetenedfoods.

 

·                  Dedicatesignificant resources to improving the efficiency of operations by, among otherthings, implementing programs to streamline manufacturing capabilities andimproving the efficiency of certain support services. We have successfullyreduced costs and made our business more efficient, which has significantlycontributed to the current stabilization of Bank EBITDA over the past twoyears.

 

·                  Offer privatelabel low-calorie sweeteners to retail and food service customers and leverage supplychain expertise globally.

 

We believe that these strategies takentogether have positioned our company to pursue opportunities for future growthin the low-calorie tabletop sweetener and sweetened food category. Many of ourmajor markets are increasingly competitive as more branded and private labeltabletop sweeteners compete for limited space on retail grocery shelves and inrestaurant caddies. Although our premium brands *Equal*®and *Canderel*® are among the most recognizedbrands in the world, our company must offer more than these quality products inorder to remain relevant to our customers and to consumers. Our strategiesallow us to offer our retail grocery and food service customers a suite ofbranded and private label low-calorie tabletop sweeteners that contain a rangeof synthetic and natural sweeteners. We seek to offer our retail grocery andfood service customers a range of quality products and the benefits of ourmanufacturing capabilities.

 

***Recent Developments***

 

*Launch of PureViaTMBrand and RelatedAgreements*

 

On July 31, 2008, Whole Earth SweetenerCompany LLC, a wholly-owned subsidiary of Merisant (“Whole Earth”), announcedthat PepsiCo, Inc. (“PepsiCo”) and Whole Earth had formed an unprecedentedpartnership to jointly own the *PureVia*TMtrademark and market the *PureVia*TM brandglobally. Whole Earth owns the *PureVia*trademark for tabletop sweeteners, and PepsiCo owns the trademark for beveragesand certain other food categories. Whole Earth anticipates that it will launcha *PureVia*TM all-natural, zero calorietabletop sweetener in the United States in the fall of 2008.

 

*PureVia*TM brandedproducts will be sweetened with high purity Reb A, an all-natural, purifiedextract of the stevia plant that is approximately 200 times sweeter than sugar.PepsiCo and Whole Earth have entered into an ingredient branding agreement withPureCircle Limited, a supplier of high purity Reb A (“PureCircle”). Among otherthings, the parties will collaborate on marketing high purity Reb A under the *PureVia*TM brand. PureCircle will be permitted to license thetrademark on an exclusive and royalty-free basis from either PepsiCo or WholeEarth in order to identify the branded ingredient in product categories to beagreed to by the parties. PureCircle will be permitted to sublicense thetrademark to customers approved by PepsiCo and Whole Earth for the purpose ofidentifying the ingredient in the agreed upon product categories.

 

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Whole Earth has entered into a non-exclusivesupply agreement with PureCircle pursuant to which PureCircle will supply highpurity Reb A to Whole Earth. The supply agreement has an initial term offive-years.

 

The active sweetening ingredient in *PureVia*TM tabletop sweetener is high purity Reb A. Thisingredient differs from most stevia products sold as dietary supplements in theUnited States because it is a highly pure form of only one of several steviolglycosides found in the stevia plant and because of its purity the ingredientcontains little or no residual plant material.

 

Whole Earth believes that it has demonstratedthat high purity Reb A is generally recognized as safe (referred to as “GRAS”)and that the ingredient may therefore be sold as a food in the United States. Ingeneral, the Food, Drug, and Cosmetic Act provides that any substance that isadded to food must be pre-approved by U.S. Food and Drug Administration, unlessthe substance is generally recognized, among qualified experts, as having beenadequately shown to be safe under the conditions of its intended use. Managementbelieves that Whole Earth has demonstrated the GRAS status of high purity Reb Athrough scientific procedures in accordance with FDA regulations. Theseprocedures require the same quantity and quality of scientific evidence as isrequired to obtain approval of the substance as a food additive and ordinarilyis based upon published studies. Companies may elect to use GRAS ingredients ona self-affirmed basis or they may submit a notification and supportingdocumentation to the FDA for review. In May 2008, Whole Earth submitted anotification and supporting scientific data to the FDA that high purity Reb Ais GRAS for use in beverages, foods and tabletop sweeteners. The FDA could askquestions and seek additional information from Whole Earth or it may provide aletter indicating that it has no objections. It is anticipated that the FDAcould deliver a no objection letter in the fall of 2008.

 

Cargill submitted a GRAS notification to theFDA for high purity Reb A after Whole Earth’s submission, and the globalingredient company is currently selling a tabletop sweetener in the UnitedStates that is sweetened with high purity Reb A without first receiving a noobjection letter from the FDA, as is permitted under applicable regulations.

 

*Vertical Integration of Stevia Supply*

 

On April 9, 2008, Whole Earth acquired thestevia processing business and related assets in Paraguay through its indirect,wholly-owned subsidiary, Nativia Guarani, S.A. In connection with thisacquisition, Whole Earth and Nativia Guarani entered into long-termagricultural supply, research and development, purchase option and consultingagreements with its local partner Imperio Guarani, S.A. and Sergio Chase, theprincipal owner of Imperio Guarani. Imperio Guarani has developed a network ofsmall, independent farmers from whom the company acquires stevia leaves, andImperio Guarani will sell dried stevia leaves exclusively to Nativia Guarani. Amongother things, Imperio Guarani and Whole Earth will collaborate on furtherextending this network of farmers, improving stevia varieties as well asdeveloping improved stevia growing, harvesting and processing technologies. ImperioGuarani has granted Whole Earth an exclusive option to acquire its business andthe land currently leased by Nativia Guarani from affiliates of ImperioGuarani.

 

The Nativia Guarani facility currently millsdried stevia leaves and produces a stevia extract that has not yet beenpurified into high purity Reb A. Pending the results of its current researchand development efforts and the commercialization of those technologies, WholeEarth may use this stevia extract for its own products where steviol glycosidesmay be used, offer the extract for sale as an ingredient or further purify theextract into high purity Reb A.

 

Management believes that the Nativia Guaranibusiness and agreements with Imperio Guarani and Mr. Chase will assist thecompany in several ways. Whole Earth will directly participate in theproduction of its products from the farm to the ultimate consumer. A number oflarger and better capitalized companies will be competing for stevia leaves andextracts, and vertical integration provides Whole Earth with more control overits supply of this natural ingredient although Whole Earth will continue tosource high purity Reb A from PureCircle and other suppliers. In addition,management believes that the formation of Nativia Guarani and our company’sstrategic relationship with Imperio Guarani will permit Whole Earth to promotesustainable farming practices and develop improved agricultural and processingmethods and technologies that may offer competitive advantages.

 

*CzechPak Manufacturing Facility*

 

We have built a new manufacturing facility inthe Czech Republic which will be operated by our newly formed subsidiaryCzechPak Manufacturing s.r.o. The CzechPak facility initially will employapproximately 90 people and produce *Canderel*®branded products for EAME region. We expect that the facility will commence production in August 2008. Weanticipate that the CzechPak facility will reduce our manufacturing costs,allow us to introduce new products more rapidly, test new products on a limitedbasis and improve both operational efficiency and working capital by reducinglead times and the amount of inventory held by our distributors.

 

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* *

*North America Distribution Model*

 

We have commenced our direct distributionmodel for the retail grocery channel in the United States. Effective July 28,2008, our retail grocery customers now place orders through our national brokerAdvantage Sales & Marketing LLC which processes the order and we shipproducts through a third-party warehouse, logistics and shipping providers. Webelieve that this direct distribution model in the United States will give usmore access to our customers, improve demand forecasting and planning andreduce costs. We have experienced some anticipated disruptions resulting fromthis transition, but these have been relatively minor. ACH Food Companies (“ACH”), Inc.will continue to serve as our exclusive distributor in the United States foodservice channel.

 

**CapitalConstraints and Need to Refinance or Restructure**

 

We believe that the development andintroduction of new products under our *Equal*® and *Canderel*® brands may help to stabilize our core businesswhile*PureVia*TM and other innovative,all-natural sweeteners and sweetened food products from Whole Earth presentgrowth opportunities for us. However, we may be constrained in our ability torealize fully the value of these new products as a result of our currentcapital structure. The successful launch of new products and marketing of ourcore brands requires capital, and we must use a significant portion of our cashflows from operations to service our outstanding debt. We had an aggregate of$542.9 million of long-term debt outstanding at June 30, 2008, includingcapital lease obligations and borrowings from Merisant’s revolving creditfacility. We paid $18.8 million in interest costs for the six months ended June 30,2008, $10.7 million of which represented interest payments on Merisant’s 9 1⁄2%senior subordinated notes due 2013 (the “Notes”). If we cannot generate cashflows from operations significantly in excess of our debt obligations, we maynot have the resources required to fully realize the value of our strategicinitiatives.

 

In order to maximize value, management isfocused on refinancing or restructuring all or part of our debt obligations. OnJanuary 11, 2009, approximately $4.1 million principal amount of the TermA loans and any revolving loans outstanding under our senior credit facilitywill become due and payable, and we will no longer be able to draw revolvingloans or issue letters of credit under Merisant’s senior credit facility. Inaddition, interest on our 12 1⁄4% senior subordinated discount notes due 2014(the “Discount Notes”), will become payable in cash commencing on May 15,2009. The indenture governing the Notes limits Merisant’s ability to paydividends or loan cash to our company, which has no operations of its own.

 

On March 17, 2008, Merisant launchedefforts to arrange a new $245 million senior secured credit facility, comprisedof $210 million of term loans and a $35 million revolving loan facility (the “NewCredit Facility”). On April 2, 2008, Merisant ceased these particularrefinancing efforts due to adverse market conditions that prevented it fromobtaining favorable terms. We may engage in discussions from time to time withour noteholders on ways to restructure all or part of our other debtobligations.

 

**Results of Operations**

 

For each of the periods discussed below, theinformation set forth under the caption “Consolidated Results” represents anoverview of our company’s results of operations on a consolidated basis.Additional detail regarding the results of operations can be found under thecaption “Segment Results” for each period discussed below.

 

***Three Months Ended June 30, 2008 Compared to Three Months Ended June 30,2007***

 

The following table sets forth certain of ourcompany’s financial data for the three month periods ended June 30, 2007and 2008 (totals may not foot due to rounding).

 
| ** **                        | ** ** | **Three Months Ended  June 30,** | ** ** | **Three Months Ended  June 30,** | ** ** |
|-----------------------------------|------------|-------------------------------------------------|------------|-------------------------------------------------|------------|
| ** **                        | ** ** | **2007**                                        | ** ** | **2008**                                        | ** ** | **2007** | ** ** | **2008** | ** ** | **Better/(Worse)  than Prior Year** | ** ** |
| ** **                        | ** ** | **(in millions)**                          | ** ** | **As % of Net Sales**       | ** ** | **Dollars** | ** ** | **%** | ** ** |
| Net sales                         |       | $                                               | 71.1       |                                            | $          | 67.0 |   | 100 | % | 100 | % | $ | (4.0 | ) | (6 | )% |
| Cost of sales                     |       | 31.9                                            |       | 32.9                                            |       | 45 | % | 49 | % | (1.0 | ) | (3 | )% |
| Gross profit                      |       | 39.2                                            |       | 34.1                                            |       | 55 | % | 51 | % | (5.1 | ) | (13 | )% |
| Operating expenses:               |       |                                            |       |                                            |       |   |   |   |   |   |   |   |   |
| Marketing and selling expenses    |       | 17.0                                            |       | 19.4                                            |       | 24 | % | 29 | % | (2.4 | ) | (14 | )% |
| Administration expenses           |       | 13.1                                            |       | 8.1                                             |       | 18 | % | 12 | % | 5.0 |   | 38 | % |
| Research and development costs    |       | 0.4                                             |       | 0.7                                             |       | 1 | % | 1 | % | (0.4 | ) | (104 | )% |
| Amortization of intangible assets |       | 5.7                                             |       | 5.3                                             |       | 8 | % | 8 | % | 0.5 |   | 8 | % |
| Restructuring expenses            |       | 0.3                                             |       | 1.0                                             |       | 0 | % | 1 | % | (0.7 | ) | (216 | )% |
| Total operating expenses          |       | 36.5                                            |       | 34.5                                            |       | 51 | % | 51 | % | 2.0 |   | 6 | % |
| Income (loss) from operations     |       | 2.7                                             |       | (0.3                                            | )          | 4 | % | 0 | % | (3.1 | ) | (112 | )% |
| Other expenses (income):          |       |                                            |       |                                            |       |   |   |   |   |   |   |   |   |
| Interest income                   |       | (0.2                                            | )          | (0.2                                            | )          | (0 | )% | (0 | )% | 0.0 |   | (4 | )% |
| Interest expense                  |       | 14.9                                            |       | 13.4                                            |       | 21 | % | 20 | % | 1.5 |   | 10 | % |
| Cost of refinancing               |       | 5.8                                             |       | —                                          |       | 8 | % | — |   | 5.8 |   | 100 | % |
| Other expense (income), net       |       | (30.2                                           | )          | (0.2                                            | )          | (43 | )% | (0 | )% | (30.1 | ) | (100 | )% |
| Total other expenses              |       | (9.6                                            | )          | 13.1                                            |       | (14 | )% | 20 | % | (22.8 | ) | (236 | )% |
| Income (loss) before income taxes |       | 12.4                                            |       | (13.4                                           | )          | 17 | % | (20 | )% | (25.8 | ) | (209 | )% |
| Provision for income taxes        |       | 1.9                                             |       | 1.0                                             |       | 3 | % | 2 | % | 0.9 |   | 45 | % |
| Net income (loss)                 |       | $                                               | 10.5       |                                            | $          | (14.4 | ) | 15 | % | (22 | )% | $ | (25.0 | ) | (237 | )% |

 

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**Consolidated Results**

 

*Net sales.*Overall,net sales declined in the second quarter of 2008 compared to the second quarterof 2007. The decline was related to lower sales in North America andAsia/Pacific partially offset by higher sales in EAME and Latin America. InNorth America, net sales declined as a result of a decline in consumerconsumption and a decline in inventory levels maintained by our distributor inthe retail channel. These negative impacts on net sales were slightly offset bydecreased trade marketing spending. In Asia/Pacific, we are implementing achange in our supply chain that decreased shipments to our distributor inAustralia. Offsetting these declines slightly was improved performance in theEAME and Latin America regions along with the consolidated sales impact of thedevaluation of the U.S. dollar and the resulting currency translation whichaccounted for approximately $3.1 million of incremental net sales in the secondquarter of 2008. In the EAME region, the UK sales continued the momentumachieved in the second half of 2007 as the impact of the late 2006 diversionhas subsided. In Latin America, Argentina implemented a price increase whichpositively impacted the net sales compared to the same quarter in 2007. InMexico, we continue to maintain high brand awareness, though our competitor, *Splenda*®, has invested heavily inadvertising over the past eighteen months. This has resulted in a decrease inconsumer demand for our products along with pricing pressure particularly inthe club channel.

 

*Cost of sales.* Costof sales increased, despite the slight decline in sales, due to one-time startup costs related to our manufacturing plant in the Czech Republic, salesincreases in lower margin products, the impact of purchasing product in eurofor sales in countries with weaker currencies and unfavorable raw materialpurchase prices. Overall, gross profit as a percentage of net sales declinedfrom 55% for the three months ended June 30, 2007 to 51% for the threemonths ended June 30, 2008 due to the increases in costs discussed aboveas well as increased trade marketing in France.

 

*Operating expenses.*Marketingand selling expenses increased due to higher brand support in EAME and LatinAmerica and unfavorable currency impacts, and increased costs related to ournew product launch. These unfavorable variances were partially offset by lowerbrand support and lower commissions in North America. Administration expensesdecreased mainly due to lower litigation and facility related costs.

 

During the second quarter of 2008, wecontinued our restructuring initiatives to improve both financial results andthe long-term value of the business. As a result of these actions, we recordedrestructuring charges for workforce reductions of $1.0 million in the secondquarter of 2008 as compared to $0.3 million in the second quarter of 2007. Therestructuring charges incurred in the second quarter of 2008 relate primarily tonew employee termination costs and are expected to be substantially paidby December 31, 2008. Additional information regarding restructuringcharges and the related liability can be found in Note 3 to the unauditedconsolidated financial statements located elsewhere in this document.

 

*Costs of refinancing.*Costsof refinancing for the three months ended June 30, 2007 related to theextinguishment of debt under the Second Lien Credit Agreement. As a result ofthis transaction, a premium of $2.6 million was incurred to pay all debt andinterest outstanding under the Second Lien Credit Agreement and $3.2 million ofexisting deferred financing fees was written off.

 

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*Interest.*Ourinterest expense decreased as a net result of lower interest bearing loansunder our Amended and Restated Credit Agreement compared to the higher interestbearing loans under our Second Lien Credit Agreement, as well as overalldecreases in interest rates on variable interest debt instruments. Ourborrowings under the Senior Credit Agreement and Second Lien Credit Agreementhad a weighted average interest rate of approximately 10.3% per annum upon theclosing of the Second Lien Credit Agreement. In May 2007, we refinancedand therefore terminated the Second Lien Credit Agreement as described below. Offsettingthis decrease was interest calculated on a higher accreted balance on ourDiscount Notes during the second quarter of 2008.

 

*Other expense, net*.In the second quarter of 2007, we experienced an unusually high level of otherincome as compared to the more typical other expenses realized in 2008. Theother income in the second quarter of 2007 was primarily the result of aone-time cash payment received pursuant to an agreement with a third party. Thisevent did not repeat in 2008. Also inthe second quarter of 2008, a less than $0.1 million currency loss on theeuro-denominated debt was more than offset by favorable balance sheetremeasurement impacts. In the second quarter of 2007, we recorded a loss on theeuro-denominated debt of $0.2 million.

 

*Taxes.*For the threemonths ended June 30, 2008, we recorded a $1.0 million tax provision on aloss before income taxes of $13.4 million. The unusual relationship of our taxprovision to the pre-tax loss in the second quarter of 2008 relates to acombination of factors. These factors include increased tax loss carryforwards,primarily generated in the United States, for which we have not recorded a taxbenefit, as well as **provisions for future tax costs which may beincurred upon the potential repatriation of certain 2008 foreign earningsthat are not deemed to be permanently reinvested. **Withregard to the deferred income tax assets on the tax loss carryforwards, wedetermined that we have not satisfied the “more likely than not” test and weincreased our total valuation allowance by $5.7 million in the second quarterof 2008 to a total of $95.0 million. We will continue to assess the valuationallowances, and, to the extent we determine that such allowances are no longerrequired, these deferred income tax assets will be recognized in the future. Thesimilar unusual relationship in 2007 is due to the same factors.

 

**Segment Results**

 

The following table presents net sales andOperating EBITDA expressed in millions of dollars for each reportablesegment (totals may not foot due to rounding):

 
|                    |       |                                        |       |                                          |       |                                        |       |                                          |       |       |       |       |       |       |       |       |       |
|-------------------------|------------|---------------------------------------------|------------|-----------------------------------------------|------------|---------------------------------------------|------------|-----------------------------------------------|------------|------------|------------|------------|------------|------------|------------|------------|------------|
| ** **              | ** ** | **Net Sales**                          | ** ** | **Operating EBITDA (1)**            | ** ** |
| ** **              | ** ** | **Three Months  Ended  June 30,** | ** ** | **Better/(Worse)  than Prior Year** | ** ** | **Three Months  Ended  June 30,** | ** ** | **Better/(Worse)  than Prior Year** | ** ** |
| ** **              | ** ** | **2007**                                    | ** ** | **2008**                                      | ** ** | **$**                                       | ** ** | **%**                                         | ** ** | **2007**   | ** ** | **2008**   | ** ** | **$**      | ** ** | **%**      | ** ** |
| ** **              | ** ** | **(in millions)**                      | ** ** | **(in millions)**                        | ** ** |
| ** **              | ** ** | ** **                                  | ** ** | ** **                                    | ** ** | ** **                                  | ** ** | ** **                                    | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| North America (2)       |       | $                                           | 27.6       |                                          | 23.8       |                                        | $          | (3.8                                          | )          | (14        | )%         | $          | 10.1       |       | 8.7        |       | $          | (1.4 | ) | (14 | )% |
| Operating EBITDA Margin |       |                                        |       |                                          |       |                                        |       |                                          |       | 37         | %          | 37         | %          | (0         | )%         |       |       |
| EAME                    |       | 30.1                                        |       | 30.3                                          |       | 0.2                                         |       | 1                                             | %          | 8.7        |       | 6.0        |       | (2.7       | )          | (31        | )%         |
| Operating EBITDA Margin |       |                                        |       |                                          |       |                                        |       |                                          |       | 29         | %          | 20         | %          | (9         | )%         |       |       |
| Latin America           |       | 8.1                                         |       | 9.1                                           |       | 1.0                                         |       | 13                                            | %          | 1.9        |       | 1.0        |       | (0.9       | )          | (49        | )%         |
| Operating EBITDA Margin |       |                                        |       |                                          |       |                                        |       |                                          |       | 24         | %          | 11         | %          | (13        | )%         |       |       |
| Asia/Pacific            |       | 5.4                                         |       | 3.9                                           |       | (1.5                                        | )          | (27                                           | )%         | 1.4        |       | (0.1       | )          | (1.5       | )          | (109       | )%         |
| Operating EBITDA Margin |       |                                        |       |                                          |       |                                        |       |                                          |       | 25         | %          | (3         | )%         | (29        | )%         |       |       |
|                         |            |                                             |            |                                               |            |                                             |            |                                               |            |            |            |            |            |            |            |            |            |  |  |  |  |

 

----

| (1) | “Operating  EBITDA” as used with respect to our operating segments is a measure upon  which we assess the financial performance of these segments. Operating EBITDA  excludes interest expense, income tax expense and depreciation and  amortization, as well as items such as restructuring expenses, certain  significant charges related to new product development and launch costs,  certain litigation costs, costs related to the transition to a new exclusive  distributor in the United States and certain other non-cash items. Our definition  of Operating EBITDA largely mirrors the definition of Bank EBITDA under our  Senior Credit Facility. That definition changed in the May 2007  amendment of those credit facilities, and that change is reflected  prospectively in our computation of Operating EBITDA for the 2007 period. See  Note 2 to the unaudited consolidated financial statements for a description  of Operating EBITDA and a reconciliation of |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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|   | Operating  EBITDA to income (loss) before income taxes. Operating EBITDA margin  represents Operating EBITDA as a percentage of net sales.                                                                                                                         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                               |
| (2)    | North America  segment results exclude immaterial sales and $1.7 million of negative  Operating EBITDA related to a new product launch which management evaluates  separately from this geographical segment for the three month period ended  June 30, 2008. |

 

***North America***

 

*Net sales.*In NorthAmerica, the net sales decline was driven by a significant decrease inshipments to our distributor as planned to prepare for our transition to adirect sales distribution model. Our distributor inventory levels atJune 30, 2008 were at the lowest levels they have been since we begandoing business with ACH. Also contributing to the decline was decreased salesvolume in the food service and discount channel and a decrease in consumerconsumption in the retail and food service channels. These negative varianceswere partially offset by decreased trade spending in the food service andretail channels.

 

*Operating EBITDA.*Thedecrease in Operating EBITDA was primarily related to the margin impact oflower net sales and unfavorable sales mix. These unfavorable impacts werepartially offset by lower overall brand support and lower sales and marketingadministration costs. Operating EBITDA margin was stable.

 

***EAME***

 

*Net sales.*In theEAME region, the slight increase in net sales was driven primarily by the UKalong with the positive currency translation impact which offset sales declinesin France and in contract manufacturing sales. In the first quarter of 2007, asa result of diversion of product into the retail channel, we discontinued salesto certain UK distributors in an effort to stop the diversion. In the secondquarter of 2008, sales in the UK continued to perform at levels realized in thesecond half of 2007 after stopping the diversion of product and we haveexperienced a strong market. Continued softness in consumer demand as well asincreased trade spending reduced sales in France. The devaluation of the U.S.dollar and the resulting currency translation effect on our financialstatements accounted for approximately $2.8 million of the net sales increasein the EAME region.

 

*Operating EBITDA.*OperatingEBITDA and Operating EBITDA margin decreases are mainly due to higher brandsupport in France and the UK, along with an unfavorable sales mix and theunfavorable currency impacts related to cost of goods sold. These negativeimpacts were slightly offset by reduced general administrative costs due mainlyto savings from restructuring actions and facility related changes in France.

 

Our CzechPak facility will commenceproduction in August 2008 and will manufacture *Canderel*®products for the EAME region. We anticipate that the CzechPak facility willreduce our manufacturing costs, allow us to introduce new products morerapidly, test new products on a more limited basis and improve both operationalefficiency and working capital by reducing lead times and the amount ofinventory held by our distributors in the region.

 

Until the start-up of the CzechPak facility,most of our *Canderel*® products for the EAME regionhad been manufactured by Krüger GmbH & Co. KG under a long-termcontract manufacturing agreement. We intend to shift a portion of theproduction currently handled by Krüger to the CzechPak facility. We are seekingto negotiate amendments to our contract manufacturing agreement with Krügerthat will facilitate the implementation of our manufacturing strategy. There isno assurance that we will be able to negotiate amendments on terms favorable tous or in a timely manner, and the parties may be required to arbitrate anydisagreements between them. We believe that we have sufficient inventory offinished products to meet anticipated market demand over the next three to sixmonths, and management has established a number of contingency plans in theevent of any disruptions in production. Nevertheless, any prolonged negotiationor arbitration with Krüger could cause disruptions in production or increasethe amount of our projected capital expenditures.

 

***Latin America***

 

*Net sales.*Improvedsales in the second quarter of 2008 relates primarily to a price increaseimplemented in Argentina. In addition, Peru sales volume increased due tostrong performance from a new distributor selling both locally and exportingwithin the region.

 

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*Operating EBITDA.*OperatingEBITDA and Operating EBITDA margin decreased despite the increase in net salesdue to higher raw material costs and brand support.

 

***Asia/Pacific***

 

*Net sales.*Net salesin the Asia/Pacific region decreased due to lower shipments to our distributorin Australia related to a change in manufacturing locations. We will commencemanufacturing operations at a local facility in the third quarter and havedecreased inventory levels at our distributor in preparation for thetransition.

 

*Operating EBITDA.*OperatingEBITDA and Operating EBITDA margin decreased primarily due to the decreasedsales coupled with higher cost of goods sold and slightly lower brand supportagainst significantly lower sales.

 

**Corporate Expenses**

 

Corporate expenses decreased from $7.6million in the second quarter of 2007 to $5.4 million in the second quarter of2008, primarily due to lower litigation costs relating to our lawsuit againstMcNeil along with lower employee related costs.

 

***Six Months EndedJune 30, 2008 Compared to Six Months Ended June 30, 2007***

 

The following table sets forth certain of ourcompany’s financial data for the six month periods ended June 30, 2007 and2008 (totals may not foot due to rounding).

 
| ** **                        | ** ** | ** **                     | ** ** | **Six Months Ended**      | ** ** |
|-----------------------------------|------------|--------------------------------|------------|-------------------------------------|------------|
| ** **                        | ** ** | **Six Months Ended** | ** ** | **June 30,**                   | ** ** |
| ** **                        | ** ** | **June 30,**              | ** ** | ** **                          | ** ** | ** ** | ** ** | **Better/(Worse)** | ** ** |
| ** **                        | ** ** | **2007**                       | ** ** | **2008**                            | ** ** | **2007** | ** ** | **2008** | ** ** | **than Prior Year** | ** ** |
| ** **                        | ** ** | **(in millions)**         | ** ** | **As% of Net Sales** | ** ** | **Dollars** | ** ** | **%** | ** ** |
| Net sales                         |       | $                              | 140.4      |                                | 136.0      |   | 100 | % | 100 | % | (4.4 | ) | (3 | )% |
| Cost of sales                     |       | 62.6                           |       | 65.8                                |       | 45 | % | 48 | % | (3.2 | ) | (5 | )% |
| Gross profit                      |       | 77.8                           |       | 70.1                                |       | 55 | % | 52 | % | (7.7 | ) | (10 | )% |
| Operating expenses:               |       |                           |       |                                |       |   |   |   |   |   |   |   |   |
| Marketing and selling expenses    |       | 32.3                           |       | 33.8                                |       | 23 | % | 25 | % | (1.5 | ) | (5 | )% |
| Administration expenses           |       | 24.6                           |       | 17.5                                |       | 18 | % | 13 | % | 7.1 |   | 29 | % |
| Research and development expenses |       | 0.7                            |       | 1.3                                 |       | 1 | % | 1 | % | (0.6 | ) | (79 | )% |
| Amortization of intangible assets |       | 11.5                           |       | 10.5                                |       | 8 | % | 8 | % | 0.9 |   | 8 | % |
| Restructuring expenses            |       | 0.9                            |       | 1.1                                 |       | 1 | % | 1 | % | (0.2 | ) | (27 | )% |
| Total operating expenses          |       | 70.0                           |       | 64.3                                |       | 50 | % | 47 | % | 5.7 |   | 8 | % |
| Income from operations            |       | 7.8                            |       | 5.9                                 |       | 6 | % | 4 | % | (1.9 | ) | (25 | )% |
| Other expenses (income):          |       |                           |       |                                |       |   |   |   |   |   |   |   |   |
| Interest income                   |       | (0.4                           | )          | (0.5                                | )          | (0 | )% | (0 | )% | 0.1 |   | 25 | % |
| Interest expense                  |       | 30.3                           |       | 27.4                                |       | 22 | % | 20 | % | 3.0 |   | 10 | % |
| Costs of refinancing              |       | 5.8                            |       | 0.0                                 |       | 4 | % | 0 | % | 5.8 |   | 100 | % |
| Other expense (income), net       |       | (30.1                          | )          | 0.6                                 |       | (21 | )% | 0 | % | (30.7 | ) | (102 | )% |
| Total other expense (income)      |       | 5.7                            |       | 27.5                                |       | 4 | % | 20 | % | (21.8 | ) | (384 | )% |
| Income (loss) before income taxes |       | 2.1                            |       | (21.7                               | )          | 2 | % | (16 | )% | (25.8 | ) | (1,110 | )% |
| Provision for income taxes        |       | 3.7                            |       | 3.1                                 |       | 3 | % | 2 | % | 0.6 |   | 17 | % |
| Net income (loss)                 |       | $                              | (1.6       | )                                   | (24.7      | ) | (1 | )% | (18 | )% | (23.2 | ) | (1,489 | )% |

 

**Consolidated Results**

 

*Net sales.*Overall,net sales declined in the first half of 2008 compared to the first half of2007. The decline was related to lower sales in North America and Asia/Pacificoffset by higher sales in EAME and Latin America. In North America, net salesdeclined as a result of a decline in consumer consumption and a decline ininventory levels maintained by our distributor in the food service and retailchannels. These negative impacts on net sales were slightly offset by decreasedtrade marketing spending. In Asia/Pacific, we had high net sales in the firstquarter of 2007 related to shipments to new distributors to establish beginninginventory levels which did not repeat in 2008. Offsetting these declines wereimproved performance in the EAME and Latin America regions along with theconsolidated sales impact of the devaluation of the U.S. 

 

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dollar and the resulting currency translation impact which accountedfor approximately $6.8 million of incremental net sales. In the EAME region,the UK sales continued the momentum achieved in the second half of 2007 as theimpact of the late 2006 diversion has subsided. Additionally, Belgium salesincreased partially as a result of strong consumer market trends. In LatinAmerica, though Mexico reported an increase in net sales for the first half of2008 versus the same period of 2007, overall trends in Mexico indicate adecrease in consumer demand for our product as our competitor, *Splenda*®, experiences positive results from its heavyconsumer and trade promotion spending. Unusually low sales were reported in Mexico in the first half of 2007 aswe converted to direct distribution model for the grocery channel.

 

*Cost of sales.* Costof sales increased, despite the slight decline in sales, due to sales increasesin lower margin products, such as contract manufacturing, one time costsrelated to the start up of new manufacturing operations, the impact ofpurchasing product in euro for sales in countries with weaker currencies andunfavorable raw material purchase prices. Overall, gross profit as a percentageof net sales declined from 55% for the six months ended June 30, 2007 to52% for the six months ended June 30, 2008 due to the increases in costsdiscussed above, and to a lesser extent increased trade marketing in France.

 

*Operating expenses.*Marketingand selling expenses increased due to higher brand support in Latin America,unfavorable currency impacts, and increased costs related to our new productlaunch. These unfavorable impacts were partially offset by lower brand supportin North America, EAME and Asia/Pacific along with lower commissions and lowerperformance based incentives in North America. Administration expensesdecreased mainly due to lower litigation and facility costs.

 

During the six months ended June 30,2008, we continued our restructuring initiatives to improve both financialresults and the long-term value of the business. As a result of these actions,we recorded restructuring charges for workforce reductions of $1.1 million inthe first half of 2008 as compared to $0.9 million in the first half of 2007.The restructuring charges incurred in 2008 relate primarily to new employeetermination costs and are expected to be substantially paid byDecember 31, 2008. Additional information regarding restructuring chargesand the related liability can be found in Note 3 to the unaudited consolidatedfinancial statements located elsewhere in this document.

 

*Interest.*Ourinterest expense decreased as a net result of lower interest bearing loansunder our Amended and Restated Credit Agreement compared to the higher interestbearing loans under our Second Lien Credit Agreement in 2007, as well asoverall decreases in interest rates on variable interest debt instruments. Ourborrowings under the Senior Credit Agreement and Second Lien Credit Agreementhad a weighted average interest rate of approximately 10.3% per annum upon theclosing of the Second Lien Credit Agreement. In May 2007, we refinancedand therefore terminated the Second Lien Credit Agreement as described below.Offsetting this decrease was interest calculated on a higher accreted balanceon our Discount Notes during the first half of 2008.

 

*Costs of refinancing.*Costsof refinancing for the six months ended June 30, 2007 related to theextinguishment of debt under the Second Lien Credit Agreement. As a result ofthis transaction, a premium of $2.6 million was incurred to pay all debt andinterest outstanding under the Second Lien Credit Agreement and $3.2 million ofexisting deferred financing fees was written off.

 

*Other expense, net*.In the second quarter of 2007, we experienced an unusually high level of otherincome as compared to the more typical other expenses realized in 2008. Theother income in the second quarter of 2007 was primarily the result of aone-time cash payment received pursuant to an agreement with a third party. Inthe first half of 2008 we recorded a$1.0 million currency loss on the euro-denominated debt compared to a loss of$0.5 million incurred in 2007. Both losses were partially offset by favorablebalance sheet remeasurement impacts in the respective years.

 

*Taxes.*For the threemonths ended June 30, 2008, we recorded a $3.1 million tax provision on aloss before income taxes of $21.7 million. The unusual relationship of our tax provisionto the pre-tax loss in the first half of 2008 relates to a combination offactors. These factors include increased tax loss carryforwards, primarilygenerated in the United States, for which we have not recorded a tax benefit,as well as **provisions for future tax costs which may beincurred upon the potential repatriation of certain 2008 foreign earnings thatare not deemed to be permanently reinvested. **Withregard to the deferred income tax assets on the tax loss carryforwards, wedetermined that we have not satisfied the “more likely than not” test and weincreased our total valuation allowance by $7.5 million in the first six monthsof 2008 to a total of $95.0 million. We will continue to assess the valuationallowances, and, to the extent we determine that such allowances are no longerrequired, these deferred income tax assets will be recognized in the future.The similar unusual relationship in 2007 is due to the same factors.

 

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**Segment Results**

 

The following table presents net sales andOperating EBITDA expressed in millions of dollars for each reportablesegment (totals may not foot due to rounding):

 
| ** **              | ** ** | **Net Sales**                        | ** ** | **Operating EBITDA (1)**            | ** ** |
|-------------------------|------------|-------------------------------------------|------------|-----------------------------------------------|------------|
| ** **              | ** ** | **Six Months  Ended  June 30,** | ** ** | **Better/(Worse)  than Prior Year** | ** ** | **Six Months  Ended  June 30,** | ** ** | **Better/(Worse)  than Prior Year** | ** ** |
| ** **              | ** ** | **2007**                                  | ** ** | **2008**                                      | ** ** | **$** | ** ** | **%** | ** ** | **2007** | ** ** | **2008** | ** ** | **$** | ** ** | **%** | ** ** |
| ** **              | ** ** | **(in millions)**                    | ** ** | **(in millions)**                        | ** ** |
| ** **              | ** ** | ** **                                | ** ** | ** **                                    | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| North America (2)       |       | $                                         | 56.5       |                                          | 47.0       |   | (9.5 | ) | (17 | )% | $ | 20.4 |   | 14.9 |   | (5.5 | ) | (27 | )% |
| Operating EBITDA Margin |       |                                      |       |                                          |       |   |   |   |   | 36 | % | 32 | % | (4 | )% |   |   |
| EAME                    |       | 56.7                                      |       | 62.5                                          |       | 5.8 |   | 10 | % | 15.7 |   | 16.5 |   | 0.8 |   | 5 | % |
| Operating EBITDA Margin |       |                                      |       |                                          |       |   |   |   |   | 28 | % | 26 | % | (1 | )% |   |   |
| Latin America           |       | 13.3                                      |       | 16.7                                          |       | 3.4 |   | 25 | % | 3.0 |   | 3.2 |   | 0.2 |   | 6 | % |
| Operating EBITDA Margin |       |                                      |       |                                          |       |   |   |   |   | 22 | % | 19 | % | (3 | )% |   |   |
| Asia/Pacific            |       | 13.9                                      |       | 9.8                                           |       | (4.1 | ) | (30 | )% | 5.5 |   | 2.4 |   | (3.1 | ) | (56 | )% |
| Operating EBITDA Margin |       |                                      |       |                                          |       |   |   |   |   | 39 | % | 24 | % | (15 | )% |   |   |
|                         |            |                                           |            |                                               |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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| (1)    | “Operating  EBITDA” as used with respect to our operating segments is a measure upon  which we assess the financial performance of these segments. Operating EBITDA  excludes interest expense, income tax expense and depreciation and  amortization, as well as items such as restructuring expenses, certain  significant charges related to new product development and launch costs,  certain litigation costs, costs related to the transition to a new exclusive  distributor in the United States and certain other non-cash items. Our  definition of Operating EBITDA largely mirrors the definition of Bank EBITDA  under our Senior Credit Facility. That definition changed in the  May 2007 amendment of those credit facilities, and that change is  reflected prospectively in our computation of Operating EBITDA for the 2007  period. See Note 2 to the unaudited consolidated financial statements for a  description of Operating EBITDA and a reconciliation of Operating EBITDA to  income (loss) before income taxes. Operating EBITDA margin represents Operating  EBITDA as a percentage of net sales. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (2)    | North America  segment results exclude immaterial sales and $3.0 million of negative  Operating EBITDA related to a new product launch which management evaluates  separately from this geographical segment for the six month period ended  June 30, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

 

***North America***

 

*Net sales.*In NorthAmerica, net sales declined due to a significant decrease in shipments to ourretail distributor as we prepared for our transition to a direct salesdistribution model. In addition, our distributor inventory levels were higherthan usual at December 31, 2007 in the food service channel which resultedin a decrease in shipments during the first half of 2008 compared to the firsthalf of 2007. To a lesser extent, we also experienced decreased consumerconsumption in the food service and retail channels slightly offset bydecreased trade marketing spending. In the club channel, though the timing ofour promotional activities varied when comparing the first six months of 2007to the first six months of 2008, we have experienced decreases in consumptionand sales volume.

 

On January 29, 2008, we delivered noticeto ACH that the distribution agreement between Merisant US, Inc. and ACHwould terminate on July 27, 2008 with respect only to the retail grocerychannel. We have partially terminated the distribution agreement so that we canpursue a direct distribution model for retail customers in the United States. Wewill handle order processing, warehousing and trade marketing internally andthrough a third-party broker and logistics providers for retail grocery anddrug customers in the United States which we anticipate will reduce ouroperating costs,  improve the efficiencyof our inventory management and distribution capabilities, and provide moretransparency in customer relations. On March 4, 2008, Merisant and ACHagreed that Merisant will pay $0.3 million to ACH and that commissions will notincrease in connection with the partial termination of the distributionagreement. This expense is included in operating expenses for the six monthsended June 30, 2008.

 

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*Operating EBITDA.*Thedecrease in Operating EBITDA and Operating EBITDA margin were primarily relatedto the margin impact of lower net sales. This unfavorable impact was partiallyoffset by lower overall brand support, commissions and lower sales andmarketing administration costs.

 

***EAME***

 

*Net sales.*In theEAME region, the increase in net sales was driven primarily by the UK andBelgium along with the positive currency translation impact. In the firstquarter of 2007, as a result of diversion of product into the retail channel,we discontinued sales to certain UK distributors in an effort to stop thediversion. In the first half of 2008, sales in the UK continued to perform atlevels realized in the second half of 2007 after stopping the diversion ofproduct and we have experienced a strong market demand. In Belgium, ourdistributor carried higher inventories than expected at December 31, 2006,negatively impacting sales in the first quarter of 2007 and thus reflecting afavorable period to period comparison along with recent market strengthening. Continuedsoftness in consumer demand as well as increased trade spending reduced salesin France. The devaluation of the U.S. dollar and the resulting currencytranslation effect on our financial statements accounted for approximately $5.7million of the net sales increase in the EAME region.

 

*Operating EBITDA.*OperatingEBITDA increased slightly due to higher net sales along with reduced brandsupport and general administrative costs due mainly to savings fromrestructuring actions and facility related changes in France. The slightdecrease in Operating EBITDA margin was primarily due to higher sales of lowermargin products in the first half of 2008 compared to the first half of 2007.

 

***Latin America***

 

*Net sales.*Net salesimprovement relates primarily to our transition in Mexico from a distributormodel to a direct model in the first quarter of 2007 which resulted in lowersales, in part because of delayed shipments. In addition, Argentina salesincreased due to a price increase implemented in the second quarter of 2008along with positive promotional program performance.

 

*Operating EBITDA.*OperatingEBITDA increased due to the positive impact of higher net sales. However,Operating EBITDA margin decreased slightly due to the impact of increased costof goods sold for certain raw materials and increased brand support in Mexico.

 

***Asia/Pacific***

 

*Net sales.*Net salesin the Asia/Pacific region decreased primarily due to unusually high sales inthe first quarter of 2007 related to shipments to new distributors in Australiaand India to establish beginning inventory levels which did not repeat in 2008along with a decrease in inventory levels at our Asia/Pacific distributorsrelated to the start-up of our local production as we shorten lead times

 

*Operating EBITDA.*OperatingEBITDA and Operating EBITDA margin decreased primarily due to the decreasedsales coupled with higher cost of goods sold and lower brand support againstsignificantly lower sales.

 

**Corporate Expenses**

 

Corporate expenses decreased from $14.0million in the six months ended June 30, 2007 to $11.6 million in the sixmonths ended June 30, 2008, primarily due to lower litigation costsrelating to our lawsuit against McNeil incurred in 2007 and lower consultingexpenses.

 

**Liquidity and Capital Resources**

 

Our liquidity needs are primarily met throughinternally generated cash flow supplemented in 2007 by a one-time  payment received pursuant to an agreementwith a third party. As needed, Merisant also borrows money under the revolvingcredit facility of the Amended and Restated Credit Agreement. Our primary usesof cash are cost of sales, operating expenses, debt service, capitalexpenditures and distributions to our stockholder and, in 2008, the acquisitionof Nativia Guarani. Foreign subsidiaries generated approximately 59% ofconsolidated net sales during the year ended December 31, 2007, and ourU.S. operations have relied upon the repatriation of cash from our foreignsubsidiaries to satisfy many of our domestic cash requirements. Historically,our U.S. operations had received a vast majority of funds from foreignsubsidiaries through our Swiss subsidiary in the form of payments pursuant to apromissory note. This promissory note was repaid in full 

 

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in January 2006. On March 30, 2006, Merisant issued arevolver note to our Swiss subsidiary, which will mature in 2011. Merisant mayborrow up to $200 million from our Swiss subsidiary during the term of therevolver note, and we expect to repatriate cash to the United States throughborrowings under this revolver note. The principal balance relating to thisrevolving note as of June 30, 2008 was $96 million.

 

We had $12.8million of cash and cash equivalents as of June 30, 2008 compared to $51.1million of cash and cash equivalents at December 31, 2007. The decrease isrelated to debt and interest payments along with first half operating cashexpenditures that included the purchase of Nativia Guarani and higher thanusual capital expenditures. Merisant was also required to prepay $15.2 millionof the principal amount of term loans outstanding under its Amended andRestated Credit Agreement five business days after filing its Annual Reportwith excess cash as required and calculated under the terms of our Amended andRestated Credit Agreement. This prepayment was made on April 4, 2008 anddecreased our cash balance accordingly. The decrease was offset with $2.0million in borrowings from our revolving credit facility. Our net cash outflowsin the second half of 2008 are expected to be less than in the first half of2008 as several one-time outflows are not expected to repeat. These itemsinclude a three to six month inventory build in the EAME, the purchase of theNativia Guarani business, and the prepayment of debt principal.

 

Accounts receivable levels, time to paymentand inventory levels impact the amount of internally generated cash flow. Thefollowing table shows information with respect to accounts receivable andinventory as of December 31, 2007 and June 30, 2008. Accountsreceivable decreased in the six months ended June 30, 2008 primarily dueto higher sales in the fourth quarter of 2007 compared to the second quarter of2008. Inventory levels increased in the six months ended June 30, 2008 ascompared to December 31, 2007, primarily due to planned increases infinished goods quantities on hand in our foreign subsidiaries related to supplychain synchronization efforts to decrease lead times and to prepare for thecommencement of operations at our manufacturing plant in the Czech Republic.

 
| ** **                        | ** ** | **December 31, 2007** | ** ** | **June 30, 2008** | ** ** |
|-----------------------------------|------------|---------------------------------|------------|-----------------------------|------------|
|                              |       |                            |       |                        |       |
| Accounts receivable (in millions) |       | $                               | 74.4       |                        | $          | 66.4 |   |
| Days sales outstanding            |       | 92                              |       | 84                          |       |
| Inventory (in millions)           |       | $                               | 13.5       |                        | $          | 26.5 |   |
| Days sales in inventory           |       | 38                              |       | 71                          |       |

 

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***Six Months Ended June 30,2008 Compared to Six Months Ended June 30, 2007***

 

For the six months ended June 30, 2008,net cash used by operating activities was $11.4 million compared to cashprovided of $33.9 million for the six months ended June 30, 2007.Operating cash flows decreased $45.3 million versus the six months ended June 30,2007, due to a decrease in the contribution from working capital of $18.2million and increased net income after adjusting for non-cash items of $27.1million primarily due to the gain related to a one-time payment received in2007 pursuant to an agreement with a third party.

 

Net cash used in investing activities totaled$9.1 million for the six months ended June 30, 2008 compared to $0.7million for the six months ended June 30, 2007 due to increased spendingon capital expenditures, primarily related to our new manufacturing operationsin the Czech Republic and a business acquisition in 2008.

 

For the six months ended June 30, 2008,financing activities used $18.4 million in cash as compared to using $6.4million in cash for the six months ended June 30, 2007. For the six monthsended June 30, 2008, Merisant used cash to pay scheduled and additionalrequired principal payments under its Amended and Restated Credit Agreement andborrowed $2.0 million under its revolving credit facility. In the six monthsended June 30, 2007, Merisant used cash to pay its scheduled principalpayments under the Amended and Restated Credit Agreement. Borrowings underMerisant’s revolving credit facility were $0 at December 31, 2007 and $2.0million at June 30, 2008.

 

***Capital Expenditures***

 

Capital expenditures in 2008 are expected tobe in the range of $16 million to $19 million, relating to forecastedpurchases of equipment and capital improvements necessary to further optimizeour manufacturing operations. The majority of the 2008 capital expendituresrelated to the establishment of our new manufacturing operations in the CzechRepublic. We believe that internally generated cash flow, together withborrowing available under Merisant’s Amended and Restated Credit Agreement,will be sufficient to fund capital expenditures during the remainder of 2008.We anticipate that Merisant will seek to refinance its existing Amended andRestated Credit Agreement prior to the scheduled maturity of its revolvingcredit facility in January 2009. If Merisant is unable to obtain a newrevolving credit facility or extend the maturity of its current credit facilitywe may be required to reduce our planned capital expenditures for 2009.

 

***Financing***

 

On November 12,2003, we issued $136.0 million stated aggregate principal amount at maturity ofour Discount Notes and on July 11, 2003, Merisant issued $225.0 millionprincipal amount of the Notes and refinanced our credit facility with theSenior Credit Agreement. A portion of the proceeds of the Discount Notes, theNotes and the Senior Credit Agreement were used to pay a dividend to ourstockholders.

 

The Discount Notes areunsecured obligations and are subordinated in right of payment to all of ourexisting and future senior indebtedness. The Discount Notes had an initialaccreted value of principal of $0.551 per $1 fully accreted stated principalamount at maturity. The accreted value of principal of each Discount Noteincreases from the date of issuance until November 15, 2008 at the rateequal to the interest rate then in effect. The stated rate of interest for theDiscount Notes is 12.25% per annum. Interest is payable semiannually in arrearson May 15th and November 15th, commencing on May 15, 2009.

 

The Notes are unsecuredobligations and are subordinated in right of payment to all existing and futuresenior indebtedness of Merisant. The Notes mature on July 15, 2013. Thestated rate of interest for the Notes is 91¤2% per annum. Interest is payable semi-annually inarrears on January 15th and July 15th.

 

The Senior Credit Agreement, as of June 30, 2008, provides foraggregate commitments of up to $310.0 million, consisting of a revolving loanfacility of $35.0 million, of which a portion is available at Merisant’s optionin euro or dollars or in the form of letters of credit denominated in dollarsor euro, as well as term loan facilities of $275.0 million, consisting of aeuro Term A loan of an original amount of $50.0 million, and a Term B loan ofan original amount of $225.0 million, denominated in dollars. The euro Term Aloan and the revolving loan facility mature in 2009 while the Term B loanmatures in 2010. The Senior Credit Agreement is guaranteed by our company andeach of Merisant’s domestic subsidiaries. The Senior Credit Agreement and theguarantees of the guarantors are secured by a first-priority security interestin substantially all of Merisant’s assets and the assets of the guarantors.

 

On June 23,2006, Merisant entered into the Second Lien Credit Agreement, the borrowingsunder which were substantially used to pay down amounts outstanding under theSenior Credit Agreement. The Second Lien Credit Agreement increased theaggregate principal amount of our indebtedness by $7.2 million and increasedour interest expense. Merisant’s 

 

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loans outstanding under the Senior Credit Agreement had a weightedaverage interest rate of approximately 9.0% per annum prior to the closing ofthe Second Lien Credit Agreement. Merisant’s borrowings under the Senior CreditAgreement and Second Lien Credit Agreement had a weighted average interest rateof approximately 10.3% per annum upon the closing of the Second Lien CreditAgreement.

 

On May 9, 2007, Merisant amended andrestated its Senior Credit Agreement (the “Amended and Restated CreditAgreement”), which, among other things, increased by $85.0 million theprincipal amount of Tranche B Term Loans that could be borrowed by Merisantunder the facility. Merisant paid $2.5 million in fees and expenses related tothis amendment and restatement which were deferred and are being amortized overthe term of the related debt. Upon closing, Merisant borrowed the full $85.0million of additional Tranche B Term Loans and used the proceeds plus cash onhand to prepay the principal of all loans outstanding under the Second LienCredit Agreement totaling $85.0 million, plus all outstanding interest of $1.4million and a premium of $2.6 million, or $89.0 million. The Second Lien CreditAgreement has been terminated as a result of the transaction and there was noincrease in Merisant’s long term debt. In addition to the incurrence of fees,this transaction resulted in a write-off of existing deferred financing feesrelating to the extinguishment of previously outstanding debt in the amount of$3.2 million.

 

Upon closing of the above transaction andexecution of the related amendment, the interest rate on all term loans andrevolving loans outstanding under the Amended and Restated Credit Agreementincreased from euro-LIBOR and LIBOR plus 325 basis points per annum toeuro-LIBOR and LIBOR plus 350 basis points per annum. As a result of thetermination of the Second Lien Credit Facility, Merisant’s effective interestrate on variable interest rate debt decreased from 10.63% per annum prior tothe closing of this transaction to 8.73% per annum subsequent to this transaction.As of June 30, 2008, Merisant had $184.6 million in borrowings outstandingunder the Amended and Restated Credit Agreement with an effective interest rateof 7.37%. As a result of the $15.2 million prepayment of term loans under theAmended and Restated Credit Agreement and a reduction of the LIBOR, weanticipate that our cash interest expense will decrease by approximately $4million for the year ending December 31, 2008 compared to the year ended December 31,2007.

 

**Bank EBITDA**. TheAmended and Restated Credit Agreement requires Merisant to maintain compliancewith a consolidated first-lien leverage ratio covenant, a consolidated leverageratio covenant and a consolidated interest coverage ratio covenant. Theseratios are measured on the basis of Bank EBITDA for the four fiscal quartersending at least 45 days prior to the payment date. Bank EBITDA is discussedhere because it is the measure upon which the covenants contained in theAmended and Restated Credit Agreement are measured. However, Bank EBITDA is nota measure of liquidity under GAAP. Accordingly, while providing usefulinformation with respect to assessing compliance with covenants under ourprimary debt obligations, this measure should not be considered in isolationfrom, or as a substitute for, consolidated statement of cash flow data preparedin accordance with GAAP as an indication of liquidity. In addition, the BankEBITDA measure presented may differ from, and may not be comparable to,similarly titled measures used by other companies.

 

On March 17, 2008, Merisant launchedefforts to arrange a new $245 million senior secured credit facility, comprisedof $210 million of term loans and a $35 million revolving loan facility (the “NewCredit Facility”). Under the terms contemplated, we anticipated that we wouldhave had more flexibility under its covenants to further stabilize our corebusiness, pursue our growth initiatives and address the challenges of ourcurrent capital structure. On April 2, 2008, Merisant ceased refinancingefforts due to adverse market conditions that prevented it from obtainingfavorable terms. We may engage in discussions from time to time with ournoteholders on ways to restructure all or part of our other debt obligations.

 

Bank EBITDA as defined under the Amended andRestated Credit Agreement excludes interest expense, income tax and grossreceipts tax expense, depreciation and amortization as well as certain otherexpenses and non-cash items, including:

 

·                                          anyextraordinary, unusual or non-recurring non-cash expenses or losses (includingnon-cash losses on sales of assets outside of the ordinary course of business);

 

·                                          non-cashcontributions and other non-cash compensation expense;

 

·                                          non-cashlosses attributable to equity in non-consolidated subsidiaries;

 

·                                          transactioncosts associated with the 2003 recapitalization transaction which are expensedand not amortized;

 

·                                          anycash expenses incurred in connection with any waiver of a Default or Event ofDefault and any amendment to the Amended and Restated Credit Agreement;

 

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·                                          anynon-cash foreign currency translation adjustments;

 

·                                          anyextraordinary or non-recurring cash losses or expenses arising fromrestructuring not to exceed in the aggregate (A) if such period ends prior to January 1, 2006, $14,600,000,or (B) if such period begins on or after January 1, 2006, (x) $11,000,000with respect to any such non-recurring cash losses or expenses arising from theimplementation of Merisant’s plan known as “Project Arrow” and relatedrestructuring, (y) $4,000,000 with respect to any such non-recurring cashlosses or expenses arising from the transition from Heinz to ACH as Merisant’sexclusive distributor in the United States; and (z) any cash expensesincurred in connection with (i) any waiver of a default or event ofdefault and any amendment to the Senior Credit Agreement including the fees andexpenses of any attorneys and financial advisers retained by the administrativeagent pursuant thereto with respect to any such waiver or amendment and (ii) thenegotiation, execution and closing of the Second Lien Credit Agreement and anywaiver of a default or event of default and any amendment to the Second LienCredit Agreement including the fees and expenses of any attorneys and financialadvisers retained by the administrative agent with respect to any such waiveror amendment;

 

·                                          expensesincurred by Merisant or any subsidiary prior to January 1, 2007 inconnection with the development and commercialization of the all-natural,zero-calorie sweetener to be marketed under the *SweetSimplicity®* trademark in an amount not to exceed in the aggregate$3,000,000 and prior to January 1, 2009 in an amount not to exceed in theaggregate $15,000,000; and

 

·                                          expensesincurred between January 1, 2007 and December 31, 2007 in connectionwith our litigation against McNeil and McNeil-PPC, Inc. in an amount notto exceed $4,000,000.

 

Bank EBITDA for the six months ended June 30,2008 under the Amended and Restated Credit Agreement was $25.5 million ascompared to $30.6 million for the six months ended June 30, 2007, adjustedto reflect litigation costs and *Sweet Simplicity®*product launch costs on a comparable basis with the current definition of BankEBITDA. Merisant was in compliance with the covenants under the Amended andRestricted Credit Agreement at June 30, 2008.

 

The following table illustrates thereconciliation of Bank EBITDA to cash flow from operating activities, whichmanagement believes is the most nearly equivalent GAAP measure:

 
| ** **                                                                   | ** ** | **Six Months  Ended  June 30, 2008** | ** ** |
|------------------------------------------------------------------------------|------------|-----------------------------------------------------|------------|
| ** **                                                                   | ** ** | **(in millions)**                              | ** ** |
| Net cash used by operating activities                                        |       | $                                                   | (11.4      | ) |
| Provision for income taxes, net of deferred  income tax provision            |       | 0.8                                                 |       |
| Interest expense, net of non-cash interest  expense                          |       | 17.5                                                |       |
| Restructuring expenses (a)                                                   |       | 2.9                                                 |       |
| Other non-cash items                                                         |       | 3.6                                                 |       |
| Equity in (income) loss of affiliates                                        |       | 0.1                                                 |       |
| Net change in operating assets and  liabilities, net of business acquisition |       | 12.0                                                |       |
| Bank EBITDA                                                                  |       | $                                                   | 25.5       |   |

 

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| (a) | The charges principally relate to planned  employee termination costs that have been announced in the period  presented and specified project implementation costs. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

***Forward Looking Statements***

 

Certain information included or incorporatedin this report may be deemed to be “forward-looking statements” within themeaning of Section 27A of the Securities Act of 1933 and Section 21Eof the Securities Exchange Act of 1934. All statements, other than statementsof historical facts, included or incorporated in this report, areforward-looking statements. In particular, statements made under the heading “Management’sDiscussion and Analysis of Financial Condition and Results of Operations,”relating to overall volume trends, pricing trends and industry forces,anticipated results, expectations for funding capital expenditures andoperations and increased market share and the sufficiency of capital to meetworking capital, capital expenditures requirements and strategies are forward-lookingstatements. When used in this document, the words “anticipate,” “estimate,” “project”and similar expressions are intended to identify forward-looking statements.

 

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These statements are based on assumptions andassessments made by management in light of their experience and theirperception of historical trends, current conditions, expected future developmentsand other factors they believe to be appropriate. Any forward-lookingstatements are not guarantees of future performance and are subject to risksand uncertainties that could cause actual results, developments and businessdecisions to differ materially from those contemplated by such forward-lookingstatements. We disclaim any duty to update any forward-looking statements,except as required by law. Some of the factors that may cause actual results,developments and business decisions to differ materially from thosecontemplated by such forward-looking statements include the following:  changes in consumer preferences andnutritional and health-related concerns; increased competition; changes in theterms on which we may obtain aspartame; damaged consumer confidence in ourproducts as a result of health-related allegations; product liability claims;fluctuations in exchange rates and other currency risks; disruptions in ourbusiness as a result of strikes or work stoppages; changes in our relationshipwith our largest distributor; and changes in economic and political conditionsin the countries in which we market and produce our products.

 

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**Item 3. Quantitative and QualitativeDisclosures About Market Risk**

 

***ForeignOperations***

 

With approximately 61% and 65% ofconsolidated total net sales generated by subsidiaries outside of the UnitedStates in the six months ended June 30, 2007 and June 30, 2008,respectively, our ability to obtain funds necessary to meet our domesticobligations is subject to applicable laws, foreign taxes and intercompanypricing laws, including those relating to the flow of funds between our foreignaffiliates pursuant to, for example, purchase agreements, licensing agreementsor other arrangements. Historically, our US operations have received a vastmajority of funds from foreign affiliates through our Swiss subsidiary in theform of payments pursuant to a promissory note. The note was repaid in full in January 2006.On March 30, 2006, Merisant issued a revolver note to our Swisssubsidiary, which will mature in 2011. Merisant may borrow up to $200 millionfrom our Swiss subsidiary during the term of the revolver note. Merisant isrepatriating cash to the United States through borrowings under this revolvernote, which total $96 million as of June 30, 2008. Regulators in theUnited States and other foreign countries where we operate may closely monitorour corporate structure and how it affects intercompany fund transfers.

 

In addition, as of June 30,2008, foreign affiliates comprised approximately 49% of our consolidated totalassets. Accordingly, we have experienced and will continue to be exposed toforeign exchange risk.

 

***ForeignCurrency and Interest Rate Risks***

 

Inherent in our operationsare certain risks related to changes in foreign currency exchange rates andinterest rates. We bear foreign exchange risk because a majority of our financingwas obtained in U.S. dollars although a significant portion of revenues areearned in the various currencies of our foreign subsidiaries’ operations. Underthe Amended and Restated Credit Agreement, a portion of our financing wasobtained in euro. This euro-denominated loan decreases our transactionalexposure to euro exchange fluctuations until the euro principal and interestare repaid. Decreases in sales and earnings from euro denominated countriesthat result from the euro weakening against the U.S. dollar are offset by thedecrease in the euro denominated debt obligations (i.e., foreign currencytransaction gain) and interest expense that also results from such a decreasein exchange rate. Likewise, any increase in sales and earnings from the eurodenominated countries that results from a strengthening euro against the U.S.dollar offsets the increase in the euro denominated debt obligations (i.e.,foreign currency transaction loss) and interest expense that results from suchan exchange rate increase.

 

A significant portion ofMerisant’s debt bears interest at a fixed rate. Interest rate exposure resultsfrom Merisant’s floating rate borrowings. For the six months ended June 30,2008, a 1.0% per annum increase or decrease in interest rates would haveresulted in an increase or decrease in cash interest costs for Merisant’svariable rate term loans of approximately $2.0 million.

 

In the normal course of business, we identifyrisks relating to foreign currency exchange rates and interest rates and mitigatetheir financial impact through corporate policies and, at times, through theuse of derivative financial instruments. We use derivatives only where there isan underlying exposure and do not use them for trading or speculative purposes.The counter parties to the hedging activities would be highly rated financialinstitutions. We did not have any foreign currency forward exchange contractsor interest rate derivatives outstanding at June 30, 2008.

 

***InflationRisk***

 

We anticipate that inflationwill increase our costs and inflation may also reduce consumption as moreconsumers reduce their discretionary spending. In prior periods, we generallyhave been able to offset the impact of inflation through a combination ofcost-cutting measures and price increases, but as the global economy weakens itwill likely become increasingly difficult to mitigate the impact of risingcosts.

 

**Item 4T. Controls and Procedures**

 

# *Evaluationof Disclosure Controls and Procedures*

#  

We conducted an evaluation, under the supervision of the ChiefExecutive Officer and Vice President, Finance, Controller (Principal FinancialOfficer), of the effectiveness as of June 30, 2008 of our disclosurecontrols and procedures (as defined in Exchange Act Rule 15d-15(e)). Basedon this evaluation, the Chief Executive Officer and Principal Financial Officerconcluded that, as of June 30, 2008, our disclosure controls andprocedures were effective.

 

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***Changes inInternal Control Over Financial Reporting***

 

There have been no changes in our internalcontrol over financial reporting during the most recently completed fiscalquarter that have materially affected, or are reasonably likely to materiallyaffect, our internal control over financial reporting.

 

**PART II**—**OTHER INFORMATION**

 

**Item 1. Legal Proceedings**

 

From time to time, our company is involved inlitigation concerning its business operations.

 

Our company is subject to various otherclaims, pending and possible legal actions for product liability and otherdamages, and other matters arising out of the conduct of our business,including tax uncertainties arising from doing business in various European andLatin American jurisdictions. We believe, based on current knowledge andconsultation with counsel, that the outcome of such claims and actions will nothave a material adverse effect on our consolidated financial position orresults of operations.

 

**Item 1A. Risks Related to Our Business**

 

The most significant risk factors applicableto our company are described in Part I, Item 1A “Risk Factors” of ourAnnual Report on Form 10-K for the year ended December 31, 2007.

 

***We may experience productiondisruptions and costs that are higher than projected in connection with ourCzechPak manufacturing facility if we cannot negotiate amendments to ourcurrent manufacturing agreement with Krüger GmbH & Co. KG on a timelybasis or on terms favorable to our company***. We intendto shift a portion of our current production and equipment to this new facilitylocated in the Czech Republic from Krüger, our current contract manufacturerlocated in Germany. In connection with this transition, we are engaged indiscussions with Krüger to amend our current contract manufacturing agreement. Thereis no assurance that we will be able to negotiate amendments to the currentagreement on terms favorable to our company or on a timely basis, and theparties may be required to arbitrate any disagreements between them. Anyprolonged negotiation or arbitration with Krüger could cause disruptions inproduction or increase the amount of our projected capital expenditures.

 

**Item 4. Submission of Matters to a Vote ofSecurity Holders**

 

The annual meeting of the stockholders ofMerisant Worldwide was held on June 24, 2008 at which the stockholderselected directors and ratified the appointment of BDO Seidman, LLP asindependent auditor for our company and Merisant. The stockholders elected PaulBlock, Robert Albus, Arnold Donald, Gregory Horn, David House, Alec Machielsand Adam Stagliano as directors of Merisant Worldwide for an additionalone-year term by a vote of 8,465,955 shares in favor and no shares opposed. Allstockholders voting on the issue of the appointment of BDO Seidman, LLP asindependent auditor voted in favor of that resolution.

 

On June 24, 2008, Merisant Worldwide, inits capacity as the sole stockholder of Merisant, elected Mr. Block, Mr. Albus,Mr. Horn, Mr. House, Mr. Donald, Mr. Machiels and Mr. Staglianoas the directors of Merisant for an additional one-year term.

 

**Item 6. Exhibits**

 
| **Exhibit  No.** | ** ** | **Description**                                                                                    |
|------------------|------------|----------------------------------------------------------------------------------------------------|
| 31.1             |       | Certificate of Paul  Block pursuant to Rule 15d-14 under the Securities Exchange Act of 1934. |
|             |       |                                                                                               |
| 31.2             |       | Certificate of Julie  Wool pursuant to Rule 15d-14 under the Securities Exchange Act of 1934. |
|             |       |                                                                                               |
| 32.1             |       | Certificate of Paul  Block pursuant to 18 U.S.C. Section 1350.                                |
|             |       |                                                                                               |
| 32.2             |       | Certificate of Julie  Wool pursuant to 18 U.S.C. Section 1350.                                |

 

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SIGNATURES

 

Pursuant to the requirements of theSecurities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.

 
|                        | MERISANT  WORLDWIDE, INC. |
|-----------------------------|---------------------------|
|                        |                      |   |
|                        |                      |   |
| Date:  August 13, 2008 | By:                       | /s/  Julie Wool |
|                        |                      | Julie  Wool |
|                        |                      | Vice  President, Finance, Controller |
|                        |                      | (on  behalf of the Company and in capacity |
|                        |                      | of  principal financial officer) |

 

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