NBTY (NYSE: NTY) is the largest nutritional supplements manufacturer in the United States by sales, and it sells a portfolio of over 22,000 products through mass merchandisers, drug stores, and company-owned retail outlets in North America and Europe.
Unlike many of its competitors, NBTY owns its own retail outlets. However, much of what its factories produce does not go to NBTY's stores; instead, it is sold wholesale to third party distributors. Supermarkets, pharmacies, and other retailers sell products under about a dozen of NBTY's brand names. Over the coming decades, NBTY stands to benefit from the aging of the US population as this demographic turns to nutritional products for their perceived health benefits.
NBTY has also expanded wholesale operations across Europe, Latin America, and Asia as well. Since the company does a large percentage of its business in Europe (roughly 30% of revenues), a weakening dollar actually benefits the company by increasing the value of its international earnings.
Brand names such as Nature’s Bounty, Solgar, Sundown, Osteo-Bi-Flex, Ester-C, and Rexall represent 20% of the company's sales and are sold at mass merchandisers, drug store chains, drug wholesalers, supermarket chains and wholesalers throughout the U.S. 
In 2009, NBTY earned a total of $2.58 billion, an increase from the previous year of $2.18 billion. It marked the 15th straight year that revenues for NBTY increased. However, its net income has been less stable. Between 2008 and 2009, its net income declined from $153.2 million to $145.7 million.
The company is divided into four segments: i) WholeSale/US Nutrition, ii) Retail, iii) European Retail, and iv) Direct Response/E-Commerce Retail.
The WholeSale/US Nutrition distributes many of the company's products under brand names such as Nature's Bounty, Rexall, Sundown, Osteo-Bi-Flex, MET-Rx, Flex-a-min, Knox, and Ester-C. About 65% of sales in the WholeSale/US Nutrition division consist of sales to the mass market. NBTY serves many large-scale retailers including CVS, Wal-Mart, Walgreen Company (WAG), Target, and Eckerd Drugs.
Shoot, who would have thuohgt that it was that easy?
The North American Retail Segment generates revenue through 537 stores open in North America. NBTY has been focusing on closing non-profitable stores and opening new ones in more favorable markets.
NBTY offers discounted nutritional supplements and vitamins through mail order and e-commerce. It operates puritan.com, vitamins.com, and vitaminworld.com. Growing US online sales represents an opportunity for the segment to boost its revenues.
The aging of much of the world's population is sure to have a significant impact on many companies in the health sector, including NBTY. The United Nations estimates that by 2030, people over age 60 will account for 17% of the total world population as compared to 10% today. In the United States, estimates project that there will be 71.5 million seniors by 2030, are compared to nearly 40 million today. The U.S. government is bracing for an influx of patients into the Medicare system - and as an increasing number of senior citizens consume more healthcare dollars, many of these elderly consumers will also preventive medicines, including the dietary supplements made by NBTY.
Two customers unidentified by NBTY accounted for a combined 26% of the WholeSale/US Nutrition Division’s revenues. Since NBTY's largest division is dependent on these two customers, it risks a major disruption to its balance sheet if one of these clients chooses another supplier, brings production in-house, or goes out of business.
Leiner Health Products is a major manufacturer of vitamins, minerals, and nutritional supplements. The company had revenues of 735 million in fiscal year 2007. However, the company filed for bankruptcy on March 11, 2008 following a quarterly loss and a product recall.  If the company does not re-emerge from bankruptcy, its competitors, including NBTY, will try to increase their market share in the nutritional supplements market in the U.S. Leiner is also the largest supplier of vitamins and minerals to the US military. The Leiner bankruptcy represents an opportunity for NBTY to expand into new markets, particularly in sales to the military.
NBTY has faced six lawsuits over the last six years. Most have accused the company of engaging in false advertising in the promotion of one of the company's products. Three of the lawsuits were settled without having a significant impact on NBTY's financial condition. The other three are still pending.