NBTY swings to steep loss for fiscal year

Ronkonkoma-based NBTY Inc. swung to an annual loss of more than $44 million from a $129 million profit the prior fiscal year after researchers questioned the benefits of dietary supplements.

Officials at the maker, distributor and retailer of vitamins and nutritional supplements, with brands including Vitamin World, Nature's Bounty, Ester-C, Osteo Bi-Flex and GNC, spoke on a conference call Tuesday and blamed the loss on what they called "the lingering impact of negative press." The company reported its earnings late Monday.

In December 2013, the Annals of Internal Medicine, a medical journal, published an editorial that accompanied two studies and an expert panel's report on research into dietary supplements. "Most supplements do not prevent chronic disease or death, their use is not justified, and they should be avoided," the editorial said.

NBTY's sales rose to $3.2 billion during the fiscal year, an increase of 1 percent from $3.16 billion reported in the previous year. Gross profit remained flat at $1.5 billion.

"There is no way getting around that 2014 was a very disappointing year, but the business performance is really a tale of two cities," said Steve Cahillane, the new president and chief executive. Cahillane, a former top Coca-Cola Co. executive, was hired in August to succeed Jeff Nagel, who had headed NBTY since 2010.

"The performance of the wholesale business in the United States weighed down the entire company," Cahillane said during the conference call. "The European retail business generated double digit sales growth and the international wholesale business also demonstrated very strong momentum."

NBTY posted net sales for the fourth quarter of $793 million, a decrease of 3 percent over the same quarter a year ago. Gross profit in the fourth quarter decreased 6 percent to $356 million, NBTY chief financial officer Dipak Golechha said during the conference call.

"While 2014 has been a challenging year . . . We expect continued growth in developed countries, driven by favorable demographic shifts and increase and focus on health and wellness," Cahillane said.

NBTY is owned by the Carlyle Group, a Washington, D.C.-based investment fund. Because the company's debt is publicly traded, it discloses its financial results. The Carlyle Group bought NBTY in 2010 for $3.64 billion. NBTY has more than 1,000 company owned and franchise stores. Its products are sold in more than 100 countries.