WEIDER NUTRITION INTERNATIONAL INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------

FORM 10-K

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED MAY 31, 1998

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ______ TO _______.

COMMISSION FILE NUMBER:
1-14608

WEIDER NUTRITION INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 87-0563574
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

2002 SOUTH 5070 WEST
SALT LAKE CITY, UTAH 84104-4726
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

Registrant's telephone number, including area code:
(801) 975-5000

Securities registered pursuant to Section 12(b) of the Act:
Class A Common Stock, par value $.01 per share
(Title of Class)

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.[ ]

The number of shares outstanding of the Registrant's common stock is
24,735,781 (as of August 3, 1998).

The aggregate market value of the voting stock held by non-affiliates of
the Registrant is approximately $110,500,000 (as of August 3, 1998).

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement for its Annual Meeting of
Shareholders to be held on October 29, 1998, which will be filed with the SEC,
are incorporated by reference into Part III.

1

PART I

ITEM 1. BUSINESS

GENERAL

Weider Nutrition International, Inc. (the "Company") is a manufacturer of
branded and private label nutritional supplements. The Company manufactures a
broad range of capsules and tablets, powdered drink mixes, bottled beverages and
nutrition bars. The Company markets its branded products in four principal
categories: sports nutrition; vitamins, minerals and herbs; diet; and healthy
snacks. The Company manufactures and markets approximately 1,400 products
consisting of approximately 1,800 stock keeping units ("SKUs"). The Company's
principal executive offices are located at 2002 South 5070 West, Salt Lake City,
Utah 84104 and its telephone number is (801) 975-5000. As used herein, the
"Company" means Weider Nutrition International, Inc. and its subsidiaries,
except where indicated otherwise.

SUBSEQUENT DEVELOPMENT

In July 1998, the Company acquired Haleko Hanseatisches Lebensmittel
Kontor GmbH ("Haleko"), the largest sports nutrition company in Europe. Based in
Hamburg, Germany, Haleko had revenues of approximately $65 million for the
twelve months ending May 31, 1998. Its branded products, including Multipower,
Multaben, and Champ are currently sold in over 20,000 retail outlets in Europe.
Haleko's business also includes a range of active sportswear that is sold under
the brand name Venice Beach.

The purchase price is comprised of $25 million in cash, 200,000 shares of
WNI stock, and an $8 million contingent earnout agreement tied to future
financial performance. In addition, the Company assumed $16 million in long-term
debt and expects to incur $5 million in acquisition-related capital costs. The
cash portion of the purchase price was initially financed with funds available
under the Company's credit facility with General Electric Capital Corporation
("GECC").

INDUSTRY OVERVIEW

According to Packaged Facts, the principal markets in which the Company's
products compete totaled approximately $6.5 billion in 1996 and grew at a
compound annual growth rate of approximately 15% from 1992 through 1996. The
Company believes several factors account for the steady growth of the
nutritional supplement market, including increased public awareness of the
health benefits of nutritional supplements and favorable demographic trends
toward older Americans who are more likely to consume nutritional supplements.

Over the past several years, public awareness of the positive effects of
nutritional supplements on health has been heightened by widely publicized
reports and medical research findings indicating a correlation between the
consumption of nutrients and the reduced incidence of certain diseases. Reports
have indicated that the United States government and universities generally have
increased sponsorship of research relating to nutritional supplements. In
addition, Congress has established the Office of Alternative Medicine within the
National Institutes of Health to foster research into alternative medical
treatment modalities, which may include natural remedies. Congress has also
recently established the Office of Dietary Supplements in the National
Institutes of Health to conduct and coordinate research into the role of dietary
supplements in maintaining health and preventing disease.

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The Company believes that the aging of the United States population,
together with a corresponding increased focus on preventative health care
measures, will continue to result in increased demand for certain nutritional
supplement products. According to Congressional findings that accompanied the
Dietary Supplement Health and Education Act ("DSHEA"), national surveys reveal
that almost 43% of Americans regularly consume vitamins, minerals and herbal
supplements and 80% consume these products at some time during their lives. The
35-and-older age group of consumers, which is expected to continue to grow over
the next two decades, represents 78% of the regular users of vitamin and mineral
supplements. Based on data provided by the United States Bureau of the Census,
from 1990 to 2010, the 35-and-older age group of the United States population is
projected to increase by 32%, a significantly greater increase than the 20%
projected increase for the United States population in general.

The Company believes these events and trends together with product
introductions have supplied the growth of the nutritional supplement market. New
products introduced over the past several years include, among others, function
specific products for weight loss, sports nutrition, menopause, energy and
mental alertness. In addition, the use of a number of innovative ingredients,
such as CitriMax(R), DHEA, chromium picolinate, melatonin,chondroitin sulfate,
glucosamine,and DL-Phenylalanine have created opportunities to offer new
products.

SALES AND DISTRIBUTION

The Company's products are currently sold in over 42,000 retail outlets in
all 50 states. The Company's customers in the mass volume retail channel
include: mass merchandisers -- Wal-Mart, Target and Kmart; drug stores --
Walgreens, CVS, American Drug and Rite Aid; warehouse clubs -- Costco and Sam's
Club; and supermarkets -- Albertson's, Giant and Fred Meyer. The Company
services the health food market by distributing its products to General
Nutrition Center (GNC) and the leading health food distributors (such as
Tree-of-Life, Stow Mills and Nature's Best). The Company also sells through
other distribution channels, including its network of distributors to health
clubs and gyms (such as Bally's Health and Fitness and Gold's Gym),
International markets, and private label manufacturing for other nutritional
supplement companies and certain retail customers. The Company pursues a
multi-channel distribution strategy in order to participate in the growth being
experienced in each of these channels, thereby increasing its overall share of
the nutritional supplement market. The Company also distributes its products to
all major markets worldwide.

BRANDS AND PRODUCTS. As part of its multi-brand, multi-channel strategy,
the Company has created a portfolio of recognized brands designed for specific
distribution channels. The positioning of the Company's brand names is supported
by significant advertising and marketing expenditures as well as the Company's
historical association with the Weider name. As a result, the Company believes
that it has many of the leading brands in the nutritional supplement industry.

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The following table identifies the Company's 12 leading brands and
illustrates the Company's multi-brand, multi-channel strategy:

BRAND PRIMARY CHANNEL PRIMARY CATEGORY

GREAT AMERICAN NUTRITION(TM) Mass volume retailers Vitamins and diet
JOE WEIDER SIGNATURE(TM) Mass volume retailers Sports nutrition and diet
TIGER'S MILK(TM) Mass volume retailers Healthy snacks
SCHIFF(R) Mass volume retailers Vitamins and diet
& health food stores
FI-BAR(R) Health food stores Healthy snacks
METAFORM(TM) Health food stores Sports nutrition and diet
VICTORY(TM) Health food stores Sports nutrition
MEGA MASS(R) Health food stores Sports nutrition
EXCEL(TM) Health food stores Sports nutrition and diet
AMERICAN BODY BUILDING(TM) Health clubs and gyms Sports nutrition and diet
SCIENCE FOODS(R) Health clubs and gyms Sports nutrition and diet
STEEL BAR(R) Health clubs and gyms Sports nutrition

The Company markets its branded products in four principal categories of
nutritional supplements: sports nutrition; vitamins, minerals and herbs; diet;
and healthy snacks. The Company also manufactures private label products for
other nutritional supplement marketers and certain retail customers. The Company
believes that offering its customers a wide variety of products also provides
the Company a competitive advantage in capturing an increasing share of the
growing nutritional supplement market.

SPORTS NUTRITION. The Company's sports nutrition category includes a wide
variety of products designed to enhance athletic performance and support the
results derived from exercise programs. The Company's sports nutrition products
deliver nutritional supplements through a variety of forms, including powdered
drink mixes, tablets, capsules, nutrition bars and beverages. The target
consumers for the Company's sports nutrition products are athletes, bodybuilders
and fitness enthusiasts. While each of the Company's products offers distinct
benefits to the consumer, the Company's sports nutrition products are intended
to generally enhance the consumer's ability to control weight, support muscle
growth, lose fat and increase energy levels and stamina. The following table
summarizes the major brands and representative products of the Company's sports
nutrition category:

MAJOR BRANDS REPRESENTATIVE PRODUCTS

American Body Building................. Blue Thunder protein beverages and
Ripped Force energy beverages and
powdered drink mixes
Science Foods.......................... White Lightning protein beverages,
nutrition bars, and Turbo-Tea
energizing beverages
Victory................................ Mass 1000 and Professional powdered
drink mixes
Mega Mass.............................. Giant Mega Mass and Super Mega Mass
powdered drink mixes
Metaform............................... Metaform and Metaform Heat powdered
drink mixes and nutrition bars
Joe Weider Signature................... Dynamic Weight Gain and Dynamic
Muscle Builder powdered drink mixes
Tiger's Milk........................... Tiger Sport nutrition bars
Steel Bar.............................. Steel Bar nutrition bars

4

The American Body Building brands, which are intended to help the consumer
increase energy levels and stamina, control weight and lose fat, are primarily
distributed to health clubs and gyms through the Company's exclusive
distributors. Science Foods products are distributed through health clubs and
gyms through direct, non-exclusive distributors. The Victory, Mega Mass,
Metaform and Joe Weider Signature brands, which are intended to support
consumers' efforts to control weight, support muscle growth and lose fat, are
primarily distributed through mass volume retailers and health food stores such
as GNC. The Tiger's Milk product line, which has been marketed for over 30
years, includes seven nutrition bars that supply significant amounts of protein,
vitamins and other essential nutrients with less fat than a traditional candy
bar. Both Tiger Sport and Steel Bars are nationally distributed through
supermarkets, convenience stores, warehouse clubs and health food stores.

VITAMINS, MINERAL AND HERBS. The Company markets a complete line of
vitamins and minerals, including multivitamins, multiminerals, antioxidants and
digestive enzymes. These products are offered in various forms (including
liquids, tablets, capsules, softgels and powdered drink mixes). In addition,
herbs and phytonutrients constitute a small but growing percentage of the net
sales of the Company. Herbs and phytonutrients, which are a growing category in
the nutritional supplement industry, are alternatives or complements to
over-the-counter pharmaceutical products for consumers who seek a more natural
and preventative approach to their health care. The following table summarizes
the major brands and representative products of the Company's vitamins, minerals
and herbs category:

MAJOR BRANDS REPRESENTATIVE PRODUCTS

Schiff vitamins........................ Multivitamins, multiminerals,
antioxidants and digestive enzymes
Schiff herbs........................... Ginseng, St. John's wort, garlic,
ginkgo biloba and echinacea
Great American Nutrition............... D-glucarate products and Cold-Free
zinc lozenges
Excel.................................. Ultra High Performance and High
Performance capsules

The Company's Schiff brand vitamin products are designed to provide
consumers with essential vitamins and minerals as supplements to their diet.
Schiff vitamins and minerals include multivitamins such as Single Day(TM),
multiminerals such as Guided(TM) Multiminerals Complex, individual vitamins and
minerals such as Vitamins C, E, and Calcium, specialty formulae such as PMS,
Menopause, Melatonin, and DHEA, beta carotene and other antioxidants and
B-complex. Schiff vitamins are marketed through health food stores as well as
supermarkets and drug stores within the mass volume retail channel.

The Company markets various herbs (including ginseng, garlic, ginkgo
biloba and echinacea) under the Schiff brand to mass volume retailers and health
food stores. Through its phytocharged supplement line distributed primarily
through health food stores, Schiff is a leader in the development and
introduction of phytonutrients, which are naturally-occurring compounds in
plants that are believed to promote health and prevent disease. These
phytonutrients include lycopene (the beta carotene relative that has been
recently linked in the popular media to lowering prostate cancer risk) and beta
glucan (an extract from oats that is the soluble fiber believed to be
responsible for lowering blood cholesterol levels).

The Company markets certain joint products including Pain Free and certain
chondroitin sulfate and/or glucosamine compounds under several brands, including
Schiff, Great American Nutrition and MetaForm.

5

The Company markets certain of its vitamins, minerals and herbal
supplements as energy enhancers under the Excel brand. Excel's energy products
include Ultra High Performance and High Performance with Ginseng. All Excel
products were originally formulated with Ma Huang, an herb that naturally
contains the stimulant ephedrine. In fiscal 1997, the Company discontinued the
manufacturing and marketing of products containing ephedrine in capsule and
tablet form to further evaluate the potential for misuse. In fiscal 1998, the
Company launched several new capsule and tablet products containing reduced
levels of ephedrine. While Excel targets health food stores for herbal energy
products, Great American Nutrition distributes such products through mass volume
retailers.

DIET. The Company is one of the leading suppliers to mass volume retailers
of natural products that utilize vitamins, herbs and other nutritional
supplements designed to promote weight control. The Company's diet products are
intended to support consumers' efforts in a number of weight control functions,
including metabolizing fat, suppressing the appetite, replacing meals and
providing low calorie, low fat snacks. The products are specifically formulated,
packaged and priced to appeal to a wide variety of consumers with different
demographic characteristics and physiological needs. The following table
summarizes the major brands and representative products of the Company's diet
category:

MAJOR BRANDS REPRESENTATIVE PRODUCTS

Great American Nutrition.............. PhenCal capsules and tablets, Fat
Burner drinks and supplements
Schiff................................ Ultra Lean capsules and tablets
American Body Building................ Ripped Force and Cutting Force
energy beverages
Science Foods......................... Razor Ripped and Cut-Up energy
beverages
Joe Weider Signature.................. Fat Burner supplements
Metaform.............................. Metaform Heat powdered drink mixes
Excel................................. Super Diet and Fat Burner capsules
and tablets

The Great American Nutrition brands, which are intended to support
consumers' efforts to reduce fat, are primarily distributed through mass volume
retailers. The Schiff brands, which are intended to aid in suppressing the
appetite, are primarily distributed through health food stores. The American
Body Building brands, which are intended to support consumers' efforts to reduce
fat and provide a low calorie source of energy, are primarily distributed
through the Company's exclusive distributors to health clubs and gyms. The Joe
Weider Signature and Metaform brands, which are intended to enhance the
consumers' efforts to control weight, support muscle growth and lose fat, are
primarily distributed through mass volume retailers and health food stores, such
as GNC. The Excel line, which is intended to aid in suppressing the appetite and
support consumers' efforts to reduce fat, is distributed primarily though health
food stores.

HEALTHY SNACKS. The Company's healthy snacks category includes its Fi-Bar
and Tiger's Milk product lines. The Fi-Bar product line is comprised of Fat Free
Granola bars and fruit and nut bars coated with yogurt, chocolate or carob made
without hydrogenated fats. The Tiger's Milk product line, which has been
marketed for over 30 years, includes several nutrition bars that supply
significant amounts of protein, vitamins and other essential nutrients with less
fat than a traditional candy bar. The following table summarizes the major
brands and representative products of the Company's healthy snacks category:

6

MAJOR BRANDS REPRESENTATIVE PRODUCTS

Tiger's Milk.......................... Tiger's Milk nutrition bars
Fi-Bar................................ Fat Free Fi-Bar nutrition bars

The Tiger's Milk and Fi-Bar brands, which are intended to provide
consumers with a healthy alternative to traditional snack foods and candy bars,
are primarily distributed through mass volume retailers and health food stores.

PRIVATE LABEL. The Company manufactures capsules, tablets, beverages,
nutrition bars and powdered drink mixes for more than 20 other marketers of
nutritional supplements and certain retail customers. These independent
marketers, or private label customers, market the Company's products under their
own brand name. The Company believes private label manufacturing provides
opportunities to enhance profitable growth through increased efficiencies from
greater use of operating capacities. In addition, the Company believes private
label manufacturing allows it to participate, indirectly, in the growth of
direct marketing.

INTERNATIONAL MARKETS. The Company believes significant opportunities
exist for nutritional supplement products in international markets. The Company
has positioned itself to take advantage of such opportunities through
acquisitions (in fiscal years 1996 and 1997) of businesses in Western Europe and
Canada. These acquisitions provide the Company with the rights to manufacture
and market, under the "Weider" name, nutritional supplements worldwide,
excluding Australia, New Zealand, Japan and South Africa. In addition, the
acquisition of Haleko, effective July, 1998, provides the Company with the
capability to manufacture nutritional supplements in Germany, Spain and the
United Kingdom and market nutritional supplements throughout Europe. The Company
believes that the acquisition of Haleko, with its manufacturing capabilities,
will complement the Company's existing resources in Spain and the United
Kingdom. The Company also markets nutritional supplements to South America,
Russia and the Pacific Rim through distributors.

GROWTH STRATEGY. The Company intends to broaden its leadership position in
the nutritional supplement industry by combining internal growth with strategic
acquisitions. Specifically, the Company's strategy is to:(i) leverage its
portfolio of established brands to increase its share of the nutritional
supplement market; (ii) develop new brands and product line extensions through
its commitment to research and development; (iii) continue the growth of its
balanced distribution network; (iv) further penetrate international markets; and
(v) supplement internal growth through strategic acquisitions of related
businesses and product lines. The Company believes that its multiple
distribution channels, broad portfolio of leading brands and state-of-the-art
manufacturing and distribution capabilities position it to be a long-term
competitive leader in the nutritional supplement industry.

MARKETING AND CUSTOMER SALES SUPPORT

The Company believes its promotional and advertising programs, in
combination with its sales force and customer service standards, have been
integral to the Company's growth. A key part of the Company's strategy is to
help educate consumers about innovative, safe and beneficial nutritional
supplement products. The Company's marketing and advertising expenditures were
approximately $15.6 million in fiscal 1998, $12.5 million in fiscal 1997, and
$11.3 million in fiscal 1996.

7

During fiscal 1998 the Company realigned its sales and marketing
departments to pursue a vertical marketing strategy. The vertical marketing
strategy targets three market categories, as follows:

o Mass market: Including mass volume retailers, chain drug stores,
convenience stores, and supermarkets. Current customers in this
division include, among others, Wal-Mart, Kmart, Target, Walgreens
and Costco.
o Specialty markets: Including health food stores, health clubs and
gyms, and private label products. Current customers in specialty
markets include, among others, GNC, Nutra Source, Tree of Life,
Nature's Best, Sovex, Gold's Gym and World Gym.
o International: Including targeted markets in Europe, South and
Central America, Canada and the Pacific Rim. Current international
customers include, among others, Boots, Holland & Barrett, Corta
Ingles and Decathalon. This division also includes several
international manufacturing facilities.

Management believes that the vertical marketing strategy and
organizational realignment will assist the Company in maximizing its
multi-brand, multi-channel strategy by providing greater focus within the three
categories. Each category is led by a General Manager, who is directly supported
by senior sales personnel, brand managers and a direct sales force. The
realignment should increase the Company's ability to quickly service the
requirements of its customers in all distribution channels.

The Company has promoted its products in more than 37 consumer magazines,
such as NEWSWEEK, PEOPLE, COSMOPOLITAN, SELF, PARADE, MARTHA STEWART LIVING,
WOMAN'S DAY, FAMILY CIRCLE and MADEMOISELLE and trade magazines, such as WHOLE
FOODS, VITAMIN RETAILER, MASS MARKET RETAILER AND CHAIN DRUG REVIEW. In addition
to these publications, the Company advertises in several magazines published by
Weider Publications Inc. ("Weider Publications"), an affiliate of the Company,
including: MUSCLE AND FITNESS, FLEX, SHAPE, MEN'S FITNESS, and SENIOR GOLFER.
The Company also maintains several Internet sites.

The Company participates in consumer education by sponsoring and attending
various sporting events, including leading professional body building
competitions such as The Mr. Olympia, The Arnold Schwarzenegger Classic and 45
local National Physique Committee bodybuilding competitions. In addition, the
Company plays an active role in supporting industry and consumer advocate
organizations for nutritional products. The Company also promotes its products
at numerous trade and consumer shows representing all current distribution
channels.

PRODUCT RESEARCH AND DEVELOPMENT

The Company strives to be a leader in nutritional supplement product
development and intends to continue its commitment to research and development
to create new brands and product line extensions. The nutritional supplement
industry is influenced by products that become popular due to changing consumer
tastes and media attention. The Company believes it is important to develop new
products in the nutritional supplement industry in order to capitalize on new
market opportunities, to strengthen relationships with customers by meeting
demand and to increase market share. In addition, the Company believes that
continually introducing new products is important to preserving and enhancing
gross margins due to the relatively short life cycle of some products.

8

As a result of the Company's product development history, the Company
believes that it has built a reputation in the nutritional supplement industry
for innovation in both branded and private label products. The Company has
pioneered a number of innovations in the nutritional supplement industry,
including: (i) the development of the first domestic source of melatonin with
consistent quality, supply and cost; (ii) the introduction of garcinia cambogia,
a popular weight loss ingredient; (iii) the production of the first
high-protein, low carbohydrate beverage; and (iv) the retail introduction of the
first carotenoid complex product. The Company is in various stages of
development with respect to new product concepts that will augment its existing
product lines.

In order to support its commitment to research and development, the
Company hires requisite technical personnel and invests in formulation, testing
and other research and development related capital additions. The Company's
product research and development expenditures were $4.0 million in fiscal 1998,
$2.3 million in fiscal 1997, and $1.5 million in fiscal 1996.

MANUFACTURING AND PRODUCT QUALITY

The Company has invested in manufacturing to meet the growing demand for
nutritional supplement products, to ensure continued operating efficiencies and
to maintain high product quality standards. The Company manufactures
approximately 90% of its branded products. Consistent with its commitment to
capturing an increasing share of the growing nutritional supplement market, the
Company, in June 1997, completed construction of a state-of-the-art facility
that more than triples previous capacity. The new facility, located in Salt Lake
City, Utah, includes the Company's main distribution center and primary
administrative offices. The Company also currently manufactures its products in
four other U.S. facilities in Salt Lake City, Utah; Irwindale, California;
Walterboro, South Carolina; and Las Vegas, Nevada.

QUALITY STANDARDS. The Company's manufacturing facilities are in the
initial evaluation and implementation phases of ISO 9000 certification. As part
of this process, all testing and inspection procedures performed by more than 35
quality control professionals are standardized and periodically evaluated for
compliance. Each of the Company's manufacturing sites is equipped with
microbiology and quality control laboratories. Samples are evaluated using
visual and flavor profiles as well as analytical testing using high pressure
liquid chromatography, atomic absorption, a UV fluorometer, thin layer
chromatography and infrared spectrophotometric equipment. The Company's products
are also subject to extensive shelf life stability testing through which the
Company determines the effects of aging on its products. The Company's product
retention program allows the Company the ability to maintain samples from each
product batch shipped and, when appropriate, to analyze such samples to insure
product quality. Certified outside laboratories are used routinely to evaluate
the Company's laboratory performance and to supplement its testing capabilities.
In addition, certain vendors certify raw materials quality, and certain vendors
certify that the raw materials quality has been confirmed by an outside,
third-party laboratory.

PURCHASING. The Company focuses on the acquisition of raw materials and
packaging through a two-tiered approach. Initial material sourcing and
negotiation of terms are administered on a corporate wide basis, assuring the
Company of reliable and consistent supply while allowing the Company to benefit
from volume purchasing discounts. The Company's respective manufacturing
facilities then directly procure the necessary raw materials and packaging in
accordance with previously negotiated terms and conditions. The Company has more
than 300 qualified suppliers.

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COMPETITION

The market for the sale of nutritional supplements is highly competitive.
Competition is based principally upon price, quality of products, customer
service and marketing support. The nutritional supplement industry consists of
six principal types of suppliers: independent health food suppliers, who focus
primarily on vitamins and nutritional supplements; mass volume retail suppliers,
who sell nutritional products that have mass appeal; gym and health club product
companies; direct sale and mail order marketers; private label manufacturers;
and major pharmaceutical companies. The majority of competitors in the
nutritional supplement industry are privately held and the Company is unable to
precisely assess the size of such competitors. However, the Company believes
that no competitor controls more than 10% of this market.

The Company believes that by reacting quickly to market changes,
scientific discoveries and competitive challenges, the Company will continue to
compete, effectively in the nutritional supplement industry. As the nutritional
supplement industry grows and evolves, the Company believes retailers will rely
heavily on suppliers, such as the Company, that can respond quickly to new
opportunities, support them with production capacity and flexibility, and
provide innovative and high margin products. In addition, retailers have begun
to align themselves with suppliers, such as the Company, who are financially
stable, aggressively market a broad portfolio of products and offer superior
customer service. The Company believes that it competes favorably with other
nutritional supplement companies and major pharmaceutical companies because of
its competitive pricing, marketing strategies, sales support and the quality and
breadth of its product line.

GOVERNMENT REGULATION

The manufacturing, packaging, labeling, advertising, distribution and sale
of the Company's products are subject to regulation by one or more governmental
agencies, the most active of which is the Food and Drug Administration ("FDA"),
which regulates the Company's products under the Federal Food, Drug, and
Cosmetic Act ("FDCA") and regulations promulgated thereunder. The Company's
products are also subject to regulation by the Federal Trade Commission ("FTC"),
the Consumer Product Safety Commission ("CPSC"), the United States Department of
Agriculture ("USDA") and the Environmental Protection Agency ("EPA"). The
Company's activities are also regulated by various agencies of the states,
localities and foreign countries to which the Company distributes its products
and in which the Company's products are sold. The FDCA has been amended several
times with respect to dietary supplements, most recently by the Nutrition
Labeling and Education Act of 1990 ("NLEA") and DSHEA.

The FTC, which exercises jurisdiction over the advertising of nutritional
and dietary supplements under the Federal Trade Commission Act, has in the past
several years instituted enforcement actions against several nutritional
supplement companies alleging false and misleading advertising of certain
products. These enforcement actions have resulted in the payment of fines and/or
consent decrees by certain of the companies involved.

The Company is a party to a Consent Order (the "Order") with the FTC,
which was signed by Weider Health and Fitness ("WHF") in 1985. Pursuant to the
Order, the Company is prohibited from making certain advertising claims relating
to the muscle building capabilities of Anabolic Mega Paks and Dynamic Life
Essence and any other product of substantially similar composition. In
connection with the Company's other food products, the Company is similarly
prohibited from making these claims unless the Company is able to substantiate
such claims. In September 1991, the FTC informed the Company that the FTC has

10

reviewed the several compliance reports which had been filed from March 1986
through and including June 20, 1991 and no action was planned at such time.
Although the Company has received occasional inquiries from the FTC regarding
compliance matters since September 1991, the FTC has not taken any formal action
regarding the Company's compliance.

The FTC continues to monitor the advertising with respect to nutritional
and dietary supplements and, accordingly, the Company from time to time receives
inquiries from the FTC with respect to the Company's advertising. In September
1997, the Company received an access letter from the FTC regarding the Company's
advertising with respect to the Company's PhenCal products. The Company disputes
the FTC's contentions and is engaged in on-going discussions with the FTC. In
similar matters with the FTC, the FTC routinely pursues the imposition of
consent orders and/or penalties and fines. The Company's management believes
that the outcome of this matter will not have a material adverse effect on the
Company.

The FTC in recent years has brought a number of actions challenging claims
by companies (other than the Company) for weight loss dietary supplement
products and plans. Most recently, on March 25, 1997, the FTC announced proposed
consent orders in seven cases involving weight loss claims, as well as a
general, coordinated long-term consumer education and law enforcement program
titled "Operation Waistline." On November 7, 1996, the FTC entered into proposed
consent orders (which have since been finally entered) that would prohibit three
companies from claiming that chromium picolinate causes weight loss, increases
muscle mass or regulates blood sugar levels unless the companies had adequate
substantiation for the claims. Although the Company is not a party to the
consent order, chromium picolinate is used in many of the Company's weight loss
and body building products.

The Company manufactures certain products pursuant to contracts with
customers who distribute the products under their own or other trademarks. Such
customers are subject to governmental regulations in connection with their
purchase, marketing, distribution and sale of such products, and the Company is
subject to such regulations in connection with the manufacture of such products
and its delivery of services to such customers. However, the Company's contract
manufacturing customers are independent companies, and their labeling, marketing
and distribution of such products is beyond the Company's control. The failure
of these customers to comply with applicable laws or regulations could have a
material adverse effect on the Company.

Governmental regulations in foreign countries where the Company plans to
commence or expand sales may prevent or delay entry into the market or prevent
or delay the introduction, or require the reformulation of certain of the
Company's products. Compliance with such foreign governmental regulations is
generally controlled by the Company's distributors for those countries. These
distributors are independent contractors over whom the Company has limited
control.

The Company has a number of individuals dedicated to regulatory
compliance, including a Vice President of Quality Control, a Director of
Regulatory Affairs and a Vice President of Research, in addition to a number of
outside legal consultants. The Vice President of Quality Control is responsible
for monitoring the Company's manufacturing facilities to conform with applicable
GMPs and federal and state regulations. The Director of Regulatory Affairs'
responsibilities include monitoring product packaging and advertising compliance
and serving as the primary liaison between the Company and the Company's outside
patent consultants. The Vice President of Research is responsible for submitting
structure/function claims to the FDA and validating technical claims made in the
Company's advertising or packaging.

11

The Company may be subject to additional laws or regulations administered
by the FDA or other federal, state or foreign regulatory authorities, the repeal
or amendment of laws or regulations which the Company considers favorable, such
as DSHEA, or more stringent interpretations of current laws or regulations, from
time to time in the future. The Company is unable to predict the nature of such
future laws, regulations, interpretations or applications, nor can it predict
what effect additional governmental regulations or administrative orders, when
and if promulgated, would have on its business in the future. They could,
however, require reformulation of certain products to meet new standards, recall
or discontinuance of certain products not able to be reformulated, imposition of
additional recordkeeping requirements, expanded documentation of the properties
of certain products, expanded or different labeling and scientific
substantiation. Any or all such requirements could have a material adverse
effect on the Company's results of operations and financial condition.

PRODUCT LIABILITY INSURANCE

Because the Company manufactures products designed to be ingested, it
faces the risk that materials used for the final products may be contaminated
with substances that may cause sickness or other injury to persons who have used
the products. Although the Company maintains production and operating standards
designed to prevent such events, certain portions of the process of product
development, including the production, harvesting, storage and transportation of
raw materials, along with the handling, transportation and storage of finished
products delivered to consumers, are not within the control of the Company.
Furthermore, sickness or injury to persons may occur if products manufactured by
the Company are ingested in dosages which exceed the dosage recommended on the
product label. The Company cannot control misuse of its products by consumers or
the marketing, distribution and resale of its products by its customers. With
respect to product liability claims in the United States, the Company has $1.0
million per occurrence and $1.0 million in aggregate liability insurance subject
to self-insurance retention of $25,000. In addition, if claims should exceed
$1.0 million, the Company has excess umbrella liability insurance of up to $90.0
million. However, there can be no assurance that such insurance will continue to
be available, or if available, will be adequate to cover potential liabilities.
The Company generally does not obtain contractual indemnification from parties
supplying raw materials or marketing its products and, in any event, any such
indemnification is limited by its terms and, as a practical matter, to the
creditworthiness of the indemnification party. In addition, the Company's
product liability insurance does not cover non-safety claims relating to the
Company's products, such as noncompliance with label claims or similar matters.

TRADEMARKS AND PATENTS

At August 1, 1998 the Company had approximately 200 trademarks registered
and/or applications pending with the United States Patent and Trademark Office.
The Company's policy is to pursue registrations for all of the trademarks
associated with its key products. The Company protects its legal rights
concerning its trademarks and is currently enforcing several trademarks against
infringement by litigation, both in the United States and in foreign countries.

The Company relies on common law trademark rights to protect its
unregistered trademarks. Common law trademark rights do not provide the Company
with the same level of protection as afforded by a United States federal
registration of a trademark. In addition, common law trademark rights are
limited to the geographic area in which the trademark is actually used, while a
United States federal registration of a trademark enables the

12

registrant to stop the unauthorized use of the trademark by any third party
anywhere in the United States even if the registrants never used the trademark
in the geographic area wherein the unauthorized use is being made (provided
however, that an unauthorized third party user has not, prior to the
registration date, perfected its common law rights in the trademark in that
geographical area). The Company intends to register its trademarks in certain
foreign jurisdictions where the Company's products are sold. However, the
protection available in such jurisdictions may not be as extensive as the
protection available to the Company in the United States.

EMPLOYEES

At August 1, 1998, the Company employed approximately 625 persons, of whom
approximately 340 were in management, sales, purchasing, logistics and
administration and approximately 285 were in manufacturing. Additionally, the
Company utilizes temporary employees in some of its manufacturing processes. The
Company is not party to any collective bargaining arrangements. The Company
believes that its relationship with its employees is good.

ITEM 2. PROPERTIES

At May 31, 1998, the Company owned or leased the following facilities:

APPROXIMATE EXPIRATION
LOCATION FUNCTION SQUARE FEET LEASE/OWN DATE OF LEASE

Salt Lake City, UT Company Headquarters,
Manufacturing & Pro-
duction, Warehouse &
Distribution 418,000 Lease March 2013
Salt Lake City, UT Manufacturing & Pro-
duction, Warehouse 152,000 Own N/A
Irwindale, CA Manufacturing & Pro-
duction 129,000 Lease (1)
Walterboro, S.C. Manufacturing & Pro-
duction 55,000 Own N/A
Las Vegas, NV Manufacturing & Pro-
duction 27,500 Lease November 1999
Montreal, Quebec Administrative Offices
& Warehouse 24,600 Lease September 1998
Madrid, Spain Administrative Offices,
Manufacturing & Pro-
duction 20,000 Lease September 2006

(1) This location consists of three separate facilities. The lease for
30,000 square feet expires in April 1999; the lease for 61,600 square feet
expires in April 2000; and the lease for 37,400 square feet expires in May 2000.

ITEM 3. LEGAL PROCEEDINGS

The following discussion contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These statements relate to the Company's legal
proceedings described below. The Company is involved in various legal
proceedings which arise in the ordinary course of its business. Litigation is
inherently uncertain and may result in adverse rulings or decisions and the
Company is unable to predict the outcome of these proceedings. Additionally, the
Company may enter into settlements or be subject to judgments which may,
individually or in the aggregate, have a material adverse effect on the
Company's results of operations. Accordingly, actual results could differ
materially from those projected in the forward-looking statements.

The Company and its subsidiary, Schiff Products, Inc. ("Schiff
Products"), together with other distributors, manufacturers and retailers of

13

L-Tryptophan, are defendants in actions in federal and state courts seeking
compensatory and, in some cases, punitive damages for alleged personal injuries
resulting from the ingestion of products containing allegedly contaminated
L-Tryptophan. The Company acquired Schiff Products pursuant to an asset
acquisition transaction in 1989. Schiff Products was a distributor of
L-Tryptophan, but neither the Company nor Schiff Products ever distributed
products that are the subject of the lawsuits. In each lawsuit, the L-Tryptophan
products were shipped by the entity from whom the Company purchased the
trademark Schiff and other assets in 1989. The Company and Schiff Products have
entered into an indemnification agreement (the "Indemnification Agreement") with
Showa Denko America ("SDA"), a U.S. subsidiary of a Japanese Corporation, Showa
Denko, K.K. ("SDK"). Under the Indemnification Agreement, SDA agreed to assume
the defense of all claims arising out of the ingestion of L-Tryptophan products,
pay all legal fees and indemnify the Company and its affiliates against
liability in any action if it is determined that a proximate cause of the injury
sustained by the plaintiff in the action was a constituent of the raw material
sold by SDA to Schiff Products, or was a factor for which SDA or any of its
affiliates was responsible, except to the extent that action by the Company or
Schiff Products proximately contributed to the injury, and except for certain
claims relating to punitive damages. SDK has posted a revolving irrevocable
letter of credit for the benefit of the indemnified group if SDA is unable or
unwilling to satisfy any claims or judgments. SDK has unconditionally guaranteed
the payment obligations of SDA under the Indemnification Agreement. In
management's judgment, the outcome of this matter will not have a material
adverse effect on the Company's financial position or results of operation.

The Company was named as one of several defendants in a suit filed in
December 1996 alleging unfair competition and false advertising under California
law. The plaintiff alleged that the defendants promoted and sold a certain
product, the label and advertising materials for which contained incorrect
information concerning the product's nutritional content. The Company is in the
process of implementing the terms of a settlement that was agreed to in July
1998. On August 27, 1998, the plaintiff filed an application pursuant to the
court order established by the settlement contending that the product was not
manufactured and labeled in compliance with applicable law by virtue of the
alleged inclusion of a minimal amount of cholesterol. The Company intends to
address the application in due course.

On April 24, 1997, the Company filed a lawsuit in the United States
District Court for the District of Utah (Central Division) for a declaratory
judgment that Pain Free(TM), a joint care product, did not infringe two U.S.
patents held by Nutramax Laboratories, Inc. ("Nutramax") or, in the alternative,
declaring such patents invalid. On June 30, 1997, Nutramax filed a counterclaim
against the Company alleging that, through the manufacture and sale of a Company
product, the Company was willfully infringing on one or more U.S. patents of
Nutramax and also had contributorily and actively induced infringement on such
patents. The counterclaim seeks treble damages as a result of the claimed
willful and intentional nature of the alleged infringement. The litigation has
been transferred to the United States District Court for the District of
Maryland, where Nutramax had previously commenced litigation alleging that
twenty-two other entities had also infringed those patents, and is in
discovery. To the extent the Company does not prevail in the lawsuit, the
Company could be enjoined from the future manufacture and marketing of Pain
Free(TM), which has recently become one of its best selling products, and could
be required by the court to pay damages to Nutramax, which under certain
circumstances could be trebled. Although the Company intends to vigorously
oppose the counterclaim and believes that there will be no material liability,
the imposition by the court of any of the foregoing could have a material
adverse effect on the Company.

Nutramax has also informed representatives of the Company that it intends
to file a lawsuit in Maryland State Court against the Company alleging breaches
by a Company employee of claimed confidentiality obligations he supposedly owed
to Nutramax because, Nutramax claims, he was a consultant to it before he was
employed by the Company. The Nutramax complaint will purportedly allege that the
Company was a participant.

In addition, the Company is involved in other claims, potential unasserted
claims and legal and administrative actions arising in the ordinary course of
business. In management's judgment, the outcome of these other matters will not
have a material adverse effect on the Company's financial position, results of
operations and cash flows.

14

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

No matter was submitted to the vote of security holders during the fourth
quarter of fiscal 1998.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

In May 1997, the Company completed its initial public equity offering of
6,440,000 shares (includes over-allotment of 840,000 shares) of Class A common
stock, $.01 par value per share, which were issued at $11.00 per share, (the
"IPO"). The Company's Class A common stock is traded on the New York Stock
Exchange under the symbol "WNI".

The high and low closing prices of the Company's common stock subsequent
to the IPO through May 31, 1997, were $12.75 and $11.13, respectively. The high
and low closing prices of the Company's common stock for each quarter of fiscal
1998 are set forth below:

FISCAL YEAR ENDED MAY 31, 1998: HIGH LOW
---- ---
First Quarter............................ $19.75 $12.25
Second Quarter........................... 15.25 10.38
Third Quarter............................ 15.13 10.75
Fourth Quarter........................... 16.13 11.00

The Company paid a quarterly dividend of $0.0375 per share (annual
dividend of $0.15 per share) for fiscal 1998. In addition, the Company paid a
quarterly dividend of $0.0375 per share subsequent to year end. The dividend was
declared to be payable on June 15, 1998 to holders of all classes of common
stock of record at the close of business on June 1, 1998. The Company's Board of
Directors will determine dividend policy in the future based upon, among other
things, the Company's results of operations, financial condition, contractual
restrictions and other factors deemed relevant at the time. In addition, the
Company entered into an amended credit agreement with General Electric Capital
Corporation which contains certain customary financial covenants that may limit
the Company's ability to pay dividends on its common stock (See Note 5 to the
Consolidated Financial Statements). Accordingly, there can be no assurance that
the Company will be able to sustain the payment of dividends in the future.

The closing price of the Company's Class A common stock on August 3, 1998
was $13.44. The approximate number of stockholders of record on August 3, 1998
was 350.

15

ITEM 6. SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

The following selected consolidated financial data as of, and for the
fiscal years ended May 31, 1994 through May 31, 1998 have been derived from the
Company's consolidated financial statements, which have been audited by Deloitte
& Touche LLP, independent auditors. The financial data should be read in
conjunction with the consolidated financial statements and notes thereto,
included elsewhere in this Annual Report on Form 10-K. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

(Dollars in thousands) FISCAL YEAR ENDED MAY 31,
-----------------------------------------------------------
1994 1995 1996 1997 1998
-------- -------- --------- --------- ---------

INCOME STATEMENT DATA:
Net Sales ....................... $ 67,870 $ 90,927 $ 186,405 $ 218,566 $ 250,542
Cost of goods sold .............. 39,287 55,411 116,177 136,875 161,334
-------- -------- --------- --------- ---------
Gross profit .................... 28,583 35,516 70,228 81,691 89,208
Operating expenses .............. 20,344 24,226 41,068 51,745 60,903
Impairment of intangible assets . -- -- -- 2,095 --
Management and employee compensa-
tion charge .................... -- -- -- 14,495 401
-------- -------- --------- --------- ---------
Total operating expenses ........ 20,344 24,226 41,068 68,335 61,304
Income from operations .......... 8,239 11,290 29,160 13,356 27,904
Other income (expense):
Interest, net .................. (245) (1,079) (3,736) (5,791) (4,219)
Other .......................... (1,015) 147 (253) (557) (671)
-------- -------- --------- --------- ---------
Total ........................ (1,260) (932) (3,989) (6,348) (4,890)
-------- -------- --------- --------- ---------
Income before income taxes ...... 6,979 10,358 25,171 7,008 23,014
Provision for income taxes ...... 2,845 4,266 10,207 2,708 9,010
-------- -------- --------- --------- ---------
Net income ...................... $ 4,134 $ 6,092 $ 14,964 $ 4,300 $ 14,004
======== ======== ========= ========= =========

Weighted average shares outstanding, in thousands (1):
Basic............................... 17,245 17,866 24,702
========= ========= =========
Diluted............................. 17,245 17,866 25,001
========= ========= =========
Net income per share (1):
Basic............................... $ 0.87 $ 0.24 $ 0.57
========= ========= =========
Diluted............................. $ 0.87 $ 0.24 $ 0.56
========= ========= =========

MAY 31,
--------------------------------------------------
1994 1995 1996 1997 1998
------- ------- -------- -------- --------
BALANCE SHEET DATA:
Cash and cash equivalents $ 2 $ 2,272 $ 1,592 $ 1,259 $ 684
Working capital .......... 14,082 25,044 42,605 62,016 85,688
Total assets ............. 39,548 70,048 133,147 168,756 209,740
Total debt ............... 7,410 28,616 68,054 45,094 70,346
Total stockholders' equity 22,946 28,100 39,332 92,424 103,136

(1) During fiscal 1998, the Company adopted SFAS No. 128, "Earnings Per Share."
SFAS No. 128 establishes new standards for computing and presenting earnings per
share ("EPS"). SFAS No. 128 replaces the presentation of primary and fully
diluted EPS and requires a dual presentation of basic and diluted EPS. Basic EPS
is computed using the weighted average number of common shares outstanding.
Diluted EPS is computed using the weighted average number of common shares and
potentially diluted common shares outstanding during the period. Potentially
dilutive common shares consist of common stock options and performance units
(See Note 7 to Consolidated Financial Statements). Earnings per share amounts
for fiscal 1996 and 1997 have been restated to conform to the requirements of
SFAS No. 128.

16

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH
THE CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING
ELSEWHERE IN THIS ANNUAL REPORT ON FORM 10-K. EXCEPT FOR THE HISTORICAL
INFORMATION CONTAINED HEREIN, THE MATTERS DISCUSSED IN THIS ANNUAL REPORT
CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT OF 1993, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE
ACT OF 1934, THAT ARE BASED ON MANAGEMENT'S BELIEFS AND ASSUMPTIONS, CURRENT
EXPECTATIONS, ESTIMATES, AND PROJECTIONS. STATEMENTS THAT ARE NOT HISTORICAL
FACTS, INCLUDING WITHOUT LIMITATION STATEMENTS WHICH ARE PRECEDED BY, FOLLOWED
BY OR INCLUDE THE WORDS "BELIEVES," "ANTICIPATES," "PLANS," "EXPECTS," "MAY,"
"SHOULD" OR SIMILAR EXPRESSIONS ARE FORWARD-LOOKING STATEMENTS. MANY OF THE
FACTORS THAT WILL DETERMINE THE COMPANY'S FUTURE RESULTS ARE BEYOND THE ABILITY
OF THE COMPANY TO CONTROL OR PREDICT. THESE STATEMENTS ARE SUBJECT TO RISKS AND
UNCERTAINTIES AND, THEREFORE, ACTUAL RESULTS MAY DIFFER MATERIALLY. THE COMPANY
DISCLAIMS ANY OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS WHETHER AS A
RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

IMPORTANT FACTORS THAT MAY AFFECT FUTURE RESULTS INCLUDE, BUT ARE NOT
LIMITED TO: THE IMPACT OF COMPETITIVE PRODUCTS AND PRICING, PRODUCT DEVELOPMENT,
CHANGES IN LAW AND REGULATIONS, CUSTOMER DEMAND, LITIGATION, AVAILABILITY OF
FUTURE FINANCING, UNCERTAINTY OF MARKET ACCEPTANCE OF NEW PRODUCTS, AND OTHER
RISKS DETAILED FROM TIME TO TIME IN THE COMPANY'S SEC REPORTS, COPIES OF WHICH
ARE AVAILABLE UPON REQUEST FROM THE COMPANY'S INVESTOR RELATIONS DEPARTMENT.

OVERVIEW

Net income for the years ended May 31, 1996, 1997 and 1998 amounted to
$15.0 million, $4.3 million and $14.0 million, respectively. On a pro forma
basis, net income for 1997 amounted to $16.7 million. Pro forma earnings for
1997 exclude a charge of $2.1 million ($1.3 million after tax) resulting from
the June 1996 adoption by the Company of Statement of Financial Accounting
Standards ("SFAS") No. 121 and a one-time charge of $14.5 million ($8.9 million
after tax) attributable to compensation expense recognized in connection with
the IPO. Pro forma interest expense is adjusted downward to $2.1 million ($5.8
million as reported) as if $45.6 million of the net proceeds from the IPO were
applied against outstanding debt as of the beginning of the year.

The Company experienced growth in sales over the past three fiscal years.
Net sales were $186.4 million, $218.6 million and $250.5 million for fiscal
1996, 1997 and 1998, respectively. The Company's growth has been a result of
increased demand for the Company's products, including the introduction of new
products, the Company's increased penetration of the growing mass volume retail
distribution channel and the Company's acquisition strategy. The Company
acquired several businesses in the three-year period ending May 31, 1998 which
contributed to the Company's growth. Excluding acquisitions, the Company's
internal net sales grew at a compound annual growth rate of 30.0% for the
three-year period ended May 31, 1998.

Net sales increased 14.6% in fiscal 1998 compared to an increase of 17.3%
in fiscal 1997. The Company's higher growth rate in fiscal 1997, in comparison
to fiscal 1998, resulted primarily from the incrementally greater impact of
acquisitions. The Company consummated two international acquisitions in
September 1996 and acquired Science Foods effective January 1, 1997. Net sales
for fiscal 1998 were also impacted by manufacturing capacity

17

constraints. Sales volume increased in mass market (31.3%), health food markets
(4.4%), private label (9.8%), and beverage distribution (sports drinks) (12.4%)
in 1998 compared to 1997. Sales volume in international markets decreased by
approximately 3.6% in 1998 compared to 1997 primarily due to lower sales volume
in Canada and the United Kingdom.

The following table shows selected items expressed on an actual basis and
as a percentage of net sales for the years indicated:

1996 1997 1998
---------------- ---------------- ----------------
(dollars in thousands)

Net sales .......... $186,405 100.0% $218,566 100.0% $250,542 100.0%
Cost of goods
sold ............. 116,177 62.3 136,875 62.6 161,334 64.4
-------- ----- -------- ----- -------- -----
Gross profit ....... 70,228 37.7 81,691 37.4 89,208 35.6
-------- ----- -------- ----- -------- -----
Operating
expenses ......... 41,068 22.0 51,745 23.7 60,903 24.3
Management
compensation
program .......... -- -- 14,495 6.6 401 .2
Impairment of
intangible
assets ........... -- -- 2,095 1.0 -- --
-------- ----- -------- ----- -------- -----
Total operating
expenses ......... 41,068 22.0 68,335 31.3 61,304 24.5
-------- ----- -------- ----- -------- -----
Income from
operations ....... 29,160 15.6 13,356 6.1 27,904 11.1
Other expense, net . 3,989 2.1 6,348 2.9 4,890 2.0
Provision for
income taxes ..... 10,207 5.5 2,708 1.2 9,010 3.5
-------- ----- -------- ----- -------- -----
Net income ......... $ 14,964 8.0% $ 4,300 2.0% $ 14,004 5.6%
======== ===== ======== ===== ======== =====

RESULTS OF OPERATIONS
(FISCAL 1998 COMPARED TO FISCAL 1997)

NET SALES. Net sales increased approximately 14.6% to $250.5 million in
fiscal 1998 from $218.6 million in fiscal 1997. The increase in net sales in
fiscal 1998 resulted primarily from increased sales to mass volume retailers
resulting from introduction of new products, together with smaller sales volume
increases in other distribution channels.

The following table shows comparative net sales results categorized by
distribution channel on an actual basis and as a percentage of net sales for the
fiscal years indicated:

1997 1998
------------------ ------------------
(dollars in thousands)

Mass volume retailers .......... $ 77,993 35.6% $102,375 40.9%
Health food .................... 45,484 20.8 47,468 18.9
Private label .................. 48,009 22.0 52,728 21.0
Beverage distributors .......... 23,108 10.6 25,970 10.4
International markets .......... 17,630 8.1 16,991 6.8
Other .......................... 6,342 2.9 5,010 2.0
-------- ----- -------- -----
Total .................... $218,566 100.0% $250,542 100.0%
======== ===== ======== =====

Sales to mass volume retailers increased approximately 31.3% to $102.4
million in fiscal 1998 from $78.0 million in fiscal 1997. The increase in sales
to mass volume retailers in fiscal 1998 resulted primarily from expanding
distribution to existing accounts through the introduction of new branded
products such as Pain Free(TM) and PhenCal(TM). Sales to health food stores
increased approximately 4.4% to $47.5 million in fiscal 1998 from $45.5 million
in fiscal 1997. The increase in sales to health food stores was

18

primarily the result of the introduction of new products under the MetaForm
line. Sales to private label customers increased approximately 9.8% to $52.7
million in fiscal 1998 from $48.0 million in fiscal 1997. The increase in sales
to private label customers was primarily due to increased volumes with General
Nutrition Center ("GNC"). Sales to international markets decreased approximately
3.6% to $17.0 million in fiscal 1998 from $17.6 million in fiscal 1997. The
decrease in sales to international markets resulted primarily from lower sales
volume in Canada and the United Kingdom. Sales to other customers decreased
approximately 21.0% to $5.0 million in fiscal 1998 from $6.3 million in fiscal
1997. The decrease in sales to other customers was primarily attributable to
reduced volume with the military.

The Company's largest customers, General Nutrition Center ("GNC"),
Wal-Mart, and Costco accounted for approximately 16%, 13%, and 12%,
respectively, of net sales for the year ended May 31, 1998 and 10%, 11%, and 7%,
respectively, for the year ended May 31, 1997.

GROSS PROFIT. Gross profit increased approximately 9.2% to $89.2 million
in fiscal 1998 from $81.7 million in fiscal 1997. The increase in gross profit
in fiscal 1998 resulted primarily from the increase in sales in fiscal 1998 from
fiscal 1997. Gross margin decreased to 35.6% for fiscal 1998 from 37.4% for
fiscal 1997, primarily as a result of changes in the sales mix and unexpected
delays and start-up costs associated with the opening of the Company's new
manufacturing and distribution facility, which also resulted in higher than
expected levels of outsourced manufacturing.

OPERATING EXPENSES. Operating expenses, including selling and marketing,
general and administrative and amortization expenses, increased approximately
17.7% to $60.9 million in the year ended May 31, 1998 from $51.7 million in the
year ended May 31, 1997, excluding certain unusual charges in fiscal 1997. In
connection with the Company's initial public offering in May 1997, the Company
recognized a compensation charge totaling approximately $14.5 million ($.4
million in 1998). In addition, the Company recognized an asset impairment charge
of $2.1 million in fiscal 1997 in connection with the adoption of SFAS No. 121.
Including these charges, operating expenses amounted to $68.3 million in fiscal
1997.

Selling and marketing expenses, including sales, marketing, advertising
and freight costs, increased approximately 19.7% to $39.2 million in fiscal 1998
from $32.8 million in fiscal 1997. The increase in selling and marketing
expenses in fiscal 1998 resulted primarily from increased advertising costs and
personnel required to handle higher volumes of products associated with
increased sales. Selling and marketing expenses as a percentage of net sales
were 15.7% in fiscal 1998 compared to 15.0% in fiscal 1997.

General and administrative expenses increased approximately 6.3% to $15.5
million in fiscal 1998 from $14.6 million in fiscal 1997. The increase in
general and administrative expenses in fiscal 1998 resulted primarily from
additional personnel and overhead costs associated with increased sales volume,
and increased legal costs, offset in part by reduced provisions for employee
bonuses. General and administrative expenses as a percentage of net sales were
6.2% in fiscal 1998 compared to 6.7% in fiscal 1997.

The expense for amortization of intangible assets increased approximately
4.4% to $2.2 million for fiscal 1998 from $2.1 million for fiscal 1997. The
increase in amortization of intangible assets resulted primarily from the
acquisition of Science Foods during fiscal 1997. Amortization of intangible
assets expense as a percentage of net sales remained relatively constant.

19

OTHER EXPENSE. Other expense decreased approximately 23.0% to $4.9 million
in fiscal 1998 from $6.3 million in fiscal 1997. The decrease in other expense
resulted primarily from a decrease in interest expense of 19.4% to $4.8 million
in fiscal 1998 from $6.0 million in fiscal 1997. Interest expense decreased in
fiscal 1998 primarily as a result of a reduction in the Company's overall
effective interest rate. In addition, other expense, net, decreased as a result
of an increase in interest income in fiscal 1998 resulting from the increase in
interest bearing notes due from officers.

PROVISION FOR INCOME TAXES. Provision for income taxes increased
approximately 232.7% to $9.0 million in fiscal 1998 from $2.7 million in fiscal
1997. The dollar increase in provision for income taxes resulted primarily from
increased taxable income in fiscal 1998 compared to fiscal 1997. As noted above,
pre-tax earnings in fiscal 1997 were impacted by the one-time compensation
charge of $14.5 million and the adoption of SFAS No. 121 ($2.1 million).
Provision for income taxes as a percentage of pre-tax earnings was 39.2% in
fiscal 1998 compared to 38.6% in fiscal 1997.

SUBSEQUENT EVENT. On July 24, 1998, the Company acquired 100% of the
outstanding shares of Haleko Hanseatisches Lebensmittel Kontor GmbH, a
corporation organized under the laws of Germany ("Haleko"). Haleko, the largest
sports nutrition company in Europe, had sales of approximately $65 million for
the twelve months ending May 31, 1998. The purchase price is comprised of $25.2
million in cash, 200,000 shares of Class A common stock, and an $8 million
contingent earnout agreement tied to future financial performance. In addition,
the Company assumed $16 million in long-term debt and expects to incur $5
million in acquisition-related capital costs. The cash portion of the purchase
price was initially financed with funds available under the Company's credit
facility with GECC.

The acquisition will be accounted for as a purchase. As such, the excess
of the purchase price over the estimated fair value of the acquired net assets
will be recorded as goodwill.

RESULTS OF OPERATIONS
(FISCAL 1997 COMPARED TO FISCAL 1996)

NET SALES. Net sales for the year ended May 31, 1997 increased $32.2
million, or 17.3%, to $218.6 million from $186.4 million for the year ended May
31, 1996. Sales to mass volume retailers, beverage distributors and
international markets together with private label sales volume increased during
1997 compared to 1996. Sales to mass volume retailers increased approximately
22.7% to $78.0 million in 1997 from $63.6 million in 1996. The increase in sales
to mass volume retailers resulted primarily from increased penetration of the
market and the introduction of new products. Sales to beverage distributors
increased approximately 26.9% to $23.1 million in 1997 from $18.2 million in
1996. The increase in sales to beverage distributors was primarily a result of
additional sports drink sales to health clubs and gyms enhanced in part by the
acquisition of Science Foods, Inc., effective January 1, 1997. Sales to private
label customers increased approximately 13.5% to $48.0 million in 1997 from
$42.3 million in 1996 primarily as a result of increased volumes with existing
customers. Sales to health food distributors and retailers decreased
approximately 10.2% to $45.5 million in 1997 from $50.7 million in 1996. The
decrease in sales to health food distributors and retailers resulted primarily
from limitations on the Company's capsule and tablet manufacturing capacity.

The Company's penetration into international markets, while still
amounting to less than 10% of total sales volume, increased significantly during
1997. Sales to international markets increased 226.1% to $17.6 million

20

in 1997 from $5.4 million in 1996. The increase in sales to international
markets resulted primarily from the Company's acquisition of businesses in
Western Europe and Canada, consummated in the second half of 1996 and the first
half of 1997.

The following table shows comparative net sales results categorized by
distribution channel on an actual basis and as a percentage of net sales for the
years indicated (dollars in thousands):

1996 1997
---------------- ----------------
Mass volume retailers........ $ 63,561 34.1% $ 77,993 35.6%
Health food.................. 50,656 27.2 45,484 20.8
Private label................ 42,302 22.7 48,009 22.0
Beverage distributors........ 18,209 9.8 23,108 10.6
International markets........ 5,407 2.8 17,630 8.1
Other........................ 6,270 3.4 6,342 2.9
-------- ----- -------- -----
Total.................. $186,405 100.0% $218,566 100.0%
======== ===== ======== =====

GROSS PROFIT. Gross profit increased approximately 16.3% to $81.7 million
in the year ended May 31, 1997 from $70.2 million in the year ended May 31,
1996. Gross profit as a percentage of net sales was 37.4% for the year ended May
31, 1997 compared to 37.7% for the year ended May 31, 1996. The slight decrease
in the gross profit percent resulted primarily from the Company's decision,
implemented in 1997, to invest in manufacturing and distribution infrastructure
to support future growth.

OPERATING EXPENSES. Operating expenses increased approximately 66.4% to
$68.3 million in the year ended May 31, 1997 from $41.1 million in the year
ended May 31, 1996. In connection with the Company's initial public offering,
the Company recognized a one-time compensation charge relating to the vested
portion of certain management incentive agreements and certain other charges as
a result of issuing stock to other employees based on years of service totaling
approximately $14.5 million ($8.9 million after tax). In addition, the Company
adopted SFAS No. 121 effective June 1, 1996 and recognized an asset impairment
loss of approximately $2.1 million ($1.3 million after tax). Excluding these
charges, operating expenses increased approximately $10.7 million, or 26.0%, to
$51.7 million in 1997 compared to $41.1 million in 1996. As a percentage of net
sales, operating expenses (excluding the aforementioned charges) were 23.7% for
1997 compared to 22.0% for 1996. Operating expenses increased primarily as a
result of additional personnel, new information systems and increased legal
costs.

Selling and marketing expenses as a percentage of net sales were 15.0% for
the year ended May 31, 1997 compared to 14.3% for the year ended May 31, 1996.
The increase in selling and marketing expense resulted primarily from the
incremental costs of additional sales personnel and increased royalty expense.

General and administrative expense as a percentage of net sales were 6.7%
for the year ended May 31, 1997 compared to 5.9% for the year ended May 31,
1996. The increase resulted primarily from increased legal costs and costs
associated with additional personnel.

Excluding the effects of adopting SFAS No. 121, amortization of intangible
assets expense remained relatively constant for the years ended May 31, 1997 and
1996, respectively, at approximately 1.0% and 1.1% of net sales. The Company
adopted SFAS No. 121 effective June 1, 1996 and, primarily as a result of the
Company's decision to suspend manufacturing and marketing products containing
ephedrine (Ma Huang) in capsule and tablet form, recognized an impairment of
intangible assets loss of approximately $2.1 million ($1.3 million after tax).

21

OTHER EXPENSE. Other expense amounted to $6.3 million for the year ended
May 31, 1997 compared to $4.0 million for the year ended May 31, 1996. The net
increase of approximately $2.4 million consists primarily of increased interest
costs associated with additional indebtedness incurred in connection with
certain acquisitions, increased working capital requirements and additions to
property and equipment.

PROVISION FOR INCOME TAXES. Provision for income taxes amounted to $2.7
million for the year ended May 31, 1997 compared to $10.2 million for the year
ended May 31, 1996. The decrease in the Company's provision for income taxes
resulted primarily from the reduction in pre-tax earnings in 1997 compared to
1996. As noted above, pre-tax earnings in fiscal 1997 were impacted by the
one-time compensation charge of $14.5 million and the adoption of SFAS No. 121
($2.1 million). Income taxes as a percentage of pre-tax income amounted to
approximately 38.6% for the year ended May 31, 1997 compared to 40.6% for the
year ended May 31, 1996. The reduction in the effective tax rate in 1997
resulted primarily from a reduction in the Federal statutory rate applicable to
the Company and a reduction in the overall effective state income tax rate.

ACQUISITIONS. In September 1996, the Company acquired certain assets and
international distribution rights from a related party in Canada for $4.0
million. The purchase of these assets was accounted for at historical cost
($25,000) and the results of operations have been included since September 1,
1996. Included in distributions to WHF is an amount of $3,975,000 representing
the difference between the purchase price and historical cost.

In September 1996, the Company acquired trademarks and nutritional
supplement operations providing distribution capabilities in primarily Spain and
Portugal for a total purchase price of $3.4 million. Of the total amounts paid,
$2,650,000 was paid to an affiliate of which $1,350,000 represents an amount in
excess of historical cost that is accounted for as a distribution to WHF.
Results of operations have been included since September 1, 1996.

In January 1997, the Company acquired the net assets of Science Foods,
Inc., a competing sports nutrition beverage manufacturer, for $3.9 million in
cash plus the assumption of $.7 million in debt. The Company accounted for this
acquisition as a purchase and recognized goodwill of $3.2 million which is being
amortized over 35 years. Results of operations have been included since January
1, 1997.

LIQUIDITY AND CAPITAL RESOURCES

Prior to the IPO, the Company's operations and capital requirements were
financed through internally generated funds, borrowings under a credit agreement
and loans from WHF.

Concurrent with the Company's IPO, effective May 1, 1997, the Company
entered into an amended credit agreement (the "Credit Agreement") with GECC. The
Credit Agreement is a $130.0 million senior secured, long-term credit facility
that contains standard terms and conditions, including subject to permitted
amounts, a limitation on the ability of the Company to pay dividends on its
common stock and minimum net worth requirements. The obligations of the Company
under the Credit Agreement are secured by a first priority lien on all owned or
acquired tangible and intangible assets of the Company and a pledge to GECC of
the capital stock of the U.S. subsidiaries of the Company (including the
subsidiary that owns the Company's foreign subsidiaries). Borrowings available
under the Credit Agreement are used for general working capital, to support
capital expenditures and, if necessary, to effect acquisitions. Borrowings under
the Credit Agreement bear interest at floating

22

rates and mature in February 2000. At May 31, 1998, the Company had $64.8
million of available credit under the Credit Agreement.

The Company had working capital of approximately $86.0 million at May 31,
1998 compared to $62.0 million at May 31, 1997. This increase resulted primarily
from increased inventories financed by borrowings, classified as long-term,
under the Company's Credit Agreement. Current inventories increased $19.7
million to $60.5 million as of May 31, 1998. All categories of inventory
increased, primarily as a result of the proportionately higher percentage of
products manufactured "in-house," the net sales growth, the recent and/or
planned introduction of new products and the advanced purchases of a certain raw
material based on sales forecasts that have not been realized at the forecasted
rate. The Company believes that such raw material will be utilized in the
ordinary course of business. Net long-term borrowings increased approximately
$25.9 million to $68.8 million at May 31, 1998 primarily as a result of the
growth in inventories together with capital expenditures of approximately $12.0
million in fiscal 1998.

During the fourth quarter of fiscal 1998, the Company entered into a
barter transaction whereby inventories in the amount of $4.5 million, at cost,
were exchanged for cash and advertising credits. The Company expects to utilize
the capitalized credits ($4.1 million, of which $2.7 million are included in
other assets) over a three-year period.

The Company expects to fund its long-term capital requirements for the
next twelve months through the use of operating cash flow supplemented as
necessary by borrowings under the Credit Agreement and, if necessary, through
debt financing or the issuance of additional equity. The Company may also make
strategic acquisitions as the nutritional supplements industry continues to
consolidate. The funding of future acquisitions may also require borrowings
under the Credit Agreement and/or other debt financing or the issuance of
additional equity.

The Company paid a quarterly dividend of $0.0375 per share (annual
dividend of $0.15 per share) for fiscal 1998. In addition, the Company paid a
quarterly dividend of $0.0375 per share subsequent to year end. The dividend was
declared to be payable on June 15, 1998 to holders of all classes of common
stock of record at the close of business on June 1, 1998. The Company's Board of
Directors will determine dividend policy in the future based upon, among other
things, the Company's results of operations, financial condition, contractual
restrictions and other factors deemed relevant at the time. In addition, the
Company entered into the Credit Agreement which contains certain customary
financial covenants that may limit the Company's ability to pay dividends on its
common stock. Accordingly, there can be no assurance that the Company will be
able to sustain the payment of dividends in the future.

IMPACT OF INFLATION

The Company has historically been able to pass inflationary increases for
raw materials and other costs onto its customers through price increases and
anticipates that it will be able to continue to do so in the future.

SEASONALITY

The Company's business is seasonal, with lower sales typically realized
during the first and second fiscal quarters and higher sales typically realized
during the third and fourth fiscal quarters. The Company believes such
fluctuations in sales are the result of greater marketing and promotional
activities toward the end of each fiscal year, customer buying patterns, and
consumer spending patterns related primarily to the consumers' interest in

23

achieving personal health and fitness goals after the beginning of each new
calendar year and before the summer fashion season.

Furthermore, as a result of changes in product sales mix and other
factors, as discussed above, the Company experiences fluctuations in gross
profit and operating margins on a quarter-to-quarter basis.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains, and losses)
in a full set of general purpose financial statements. SFAS No. 130 requires
that an enterprise (a) classify items of other comprehensive income by their
nature in a financial statement and (b) display the accumulated balance of other
comprehensive income separately from retained earnings and additional paid-in
capital in the equity section of a statement of financial position. SFAS No. 130
is effective for the Company's financial statements for the year ending May 31,
1999. The Company does not expect the impact of SFAS No. 130 to be material in
relation to its financial statements.

In June 1997, the FASB issued SFAS No. 131, "Disclosure About Segments of
an Enterprise and Related Information." SFAS No. 131 established standards for
the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosure about products and services, geographic areas, and major customers.
SFAS No. 131 is effective for the Company's financial statements for the year
ending May 31, 1999. The Company does not expect the impact of SFAS No. 131 to
be material in relation to its financial statements.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which supersedes SFAS No. 80, "Accounting
for Futures Contracts," SFAS No. 105, "Disclosure of Information About Financial
Instruments with Off-Balance-Sheet Risk and Financial Instruments with
Concentration of Credit Risk," and SFAS No. 119, "Disclosures about Derivative
Financial Instruments and Fair Value of Financial Instruments," and also amends
certain aspects of other SFAS's previously issued. SFAS No. 133 establishes
accounting and reporting standards for derivative instruments and hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the balance sheet and measure those instruments at fair
value. SFAS No. 133 is effective for the Company's financial statements for the
year ending May 31, 2000. The Company does not expect the impact of SFAS No. 133
to be material in relation to its financial statements.

YEAR 2000

In 1998 the Company initiated a year 2000 date compliance project (the
"Year 2000 Project"). The Company has identified the Year 2000 Project as a
priority and has allocated resources to it in an effort to minimize the impact
of year 2000 date-related problems. Although the Company's assessment of its
Year 2000 issues is not complete, the Company has assigned a senior-level
manager to oversee the Year 2000 Project and has retained the services of an
outside year 2000 consulting firm. The scope of the Year 2000 Project
encompasses the Company's traditional mainframe-based application software, its
mid-range and personal computing platforms, and its embedded microprocessor
systems.

Approximately $100,000 has been spent on the Year 2000 Project as of May
31, 1998. Additional expenditures of approximately $400,000 are estimated to
complete

24

the Year 2000 Project, although no assurance can be given that additional
expenditures will not exceed such amounts. The Company is also in the process of
evaluating the year 2000 compliance by its major suppliers and, in the process
of formulating its contingency plans. Although the Company is undertaking the
Year 2000 Project, no assurance can be given that such a program will be able to
solve the year 2000 issues applicable to the Company.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial statements and supplementary data for the Company are on the
following pages F-1 through F-19.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None

25

WEIDER NUTRITION INTERNATIONAL, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Independent Auditors' Report................................... F-2

Consolidated Balance Sheets at May 31, 1997 and 1998........... F-3

Consolidated Statements of Income, Years Ended
May 31, 1996, 1997 and 1998.................................... F-4

Consolidated Statements of Stockholders' Equity,
Years Ended May 31, 1996, 1997 and 1998........................ F-5

Consolidated Statements of Cash Flows, Years
Ended May 31, 1996, 1997 and 1998.............................. F-6

Notes to Consolidated Financial Statements..................... F-8

F-1

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Weider Nutrition International, Inc. and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Weider Nutrition
International, Inc. and subsidiaries (collectively, the "Company") as of May 31,
1997 and 1998, and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the three years in the period ended May 31,
1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Weider Nutrition International,
Inc. and subsidiaries at May 31, 1997 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
May 31, 1998 in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Salt Lake City, Utah
July 9, 1998

F-1

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
MAY 31, 1997 AND 1998
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS 1997 1998
--------- ---------

Current assets:
Cash and cash equivalents ............................... $ 1,259 $ 684
Accounts receivable, net of allowance for doubtful
accounts of $212 (1997) and $291 (1998) ............... 43,634 53,873
Other receivables ....................................... 3,038 1,331
Inventories ............................................. 40,782 60,523
Prepaid expenses and other .............................. 2,629 3,193
Deferred taxes .......................................... 4,093 3,896
--------- ---------
Total current assets ................................ 95,435 123,500
--------- ---------
Property and equipment, net ............................... 35,930 41,962
--------- ---------
Other assets:
Intangible assets, net .................................. 26,550 24,392
Deposits and other assets ............................... 9,864 14,668
Notes receivable from officers related
to stock performance units (Note 7) ................... -- 3,987
Deferred taxes .......................................... 977 1,231
--------- ---------
Total other assets .................................. 37,391 44,278
--------- ---------
Total assets .................................. $ 168,756 $ 209,740
========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable ........................................ $ 22,727 $ 26,359
Accrued expenses ........................................ 8,511 6,432
Current portion of long-term debt ....................... 2,181 1,554
Income taxes payable .................................... -- 3,467
--------- ---------
Total current liabilities ........................... 33,419 37,812
--------- ---------
Long-term debt ............................................ 42,913 68,792
--------- ---------

Commitments and contingencies (Notes 7, 8 and 9)

Stockholders' equity:
Preferred stock, par value $.01 per share; shares
authorized-10,000,000; no shares issued and outstanding -- --
Class A common stock, par value $.01 per share; shares
authorized-50,000,000; shares issued and
outstanding-9,011,806 (1997) and 9,048,349 (1998) ..... 90 91
Class B common stock, par value $.01 per share; shares
authorized-25,000,000; shares issued and
outstanding-15,687,432 (1997 and 1998) ................ 157 157
Additional paid-in capital .............................. 79,271 79,671
Foreign currency translation ............................ (177) (165)
Retained earnings ....................................... 13,083 23,382
--------- ---------
Total stockholders' equity .......................... 92,424 103,136
--------- ---------
Total liabilities and stockholders' equity .... $ 168,756 $ 209,740
========= =========

See notes to consolidated financial statements.

F-3

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED MAY 31, 1996, 1997 AND 1998
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

1996 1997 1998
------------ ------------ ------------

Net sales .......................... $ 186,405 $ 218,566 $ 250,542

Cost of goods sold ................. 116,177 136,875 161,334
------------ ------------ ------------

Gross profit ....................... 70,228 81,691 89,208
------------ ------------ ------------
Operating expenses:
Selling and marketing ............ 26,596 32,776 39,230
General and administrative ....... 10,924 14,594 15,515
Research and development ......... 1,469 2,291 3,983
Amortization of intangible assets 2,079 2,084 2,175
Impairment of intangible assets .. -- 2,095 --
Management and employee
compensation charge ............ -- 14,495 401
------------ ------------ ------------
Total operating expenses ..... 41,068 68,335 61,304
------------ ------------ ------------
Income from operations ............. 29,160 13,356 27,904
------------ ------------ ------------
Other income (expense):
Interest income .................. 80 187 599
Interest expense ................. (3,816) (5,978) (4,818)
Other ............................ (253) (557) (671)
------------ ------------ ------------
Total ........................ (3,989) (6,348) (4,890)
------------ ------------ ------------
Income before income taxes ......... 25,171 7,008 23,014

Provision for income taxes ......... 10,207 2,708 9,010
------------ ------------ ------------
Net income ......................... $ 14,964 $ 4,300 $ 14,004
============ ============ ============
Weighted average shares outstanding:
Basic ............................ 17,245,036 17,866,157 24,702,283
============ ============ ============
Diluted .......................... 17,245,036 17,866,157 25,000,616
============ ============ ============
Net income per share:
Basic ............................ $ 0.87 $ 0.24 $ 0.57
============ ============ ============
Diluted .......................... $ 0.87 $ 0.24 $ 0.56
============ ============ ============

See notes to consolidated financial statements.

F-4

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED MAY 31, 1996, 1997 AND 1998
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

CLASS A CLASS B ADDITIONAL FOREIGN
COMMON COMMON PAID-IN CURRENCY RETAINED
STOCK STOCK CAPITAL TRANSLATION EARNINGS TOTAL
------- ------- ---------- ---------- -------- ---------

Balance at June 1, 1995 .................................... $ 16 $ 157 $ 4,308 $ -- $ 23,619 $ 28,100

Net income ............................................... -- -- -- -- 14,964 14,964
Distributions to WHF ..................................... -- -- -- -- (3,732) (3,732)
------- ------- ---------- ---------- -------- ---------

Balance at May 31, 1996 .................................... 16 157 4,308 -- 34,851 39,332

Net income ............................................... -- -- -- -- 4,300 4,300
Distributions to WHF ..................................... -- -- -- -- (26,068) (26,068)
Initial public offering of common
stock .................................................. 64 -- 63,817 -- -- 63,881
Issuance of stock in connection with
management incentive agreements
and in connection with
equity plan (Note 7) ................................... 10 -- 11,146 -- -- 11,156
Foreign currency translation
adjustments ............................................ -- -- -- (177) -- (177)
------- ------- ---------- ---------- -------- ---------
Balance at May 31, 1997 .................................... 90 157 79,271 (177) 13,083 92,424

Net income ............................................... -- -- -- -- 14,004 14,004
Issuance of stock in connection
with management incentive
agreements (note 7) .................................... 1 -- 400 -- -- 401
Dividends paid on common stock ........................... -- -- -- -- (3,705) (3,705)
Foreign currency translation
adjustments ............................................ -- -- -- 12 -- 12
------- ------- ---------- ---------- -------- ---------
Balance at May 31, 1998 .................................... $ 91 $ 157 $ 79,671 $ (165) $ 23,382 $ 103,136
======= ======= ========== ========== ======== =========

See notes to consolidated financial statements.

F-5

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MAY 31, 1996, 1997 AND 1998
(DOLLARS IN THOUSANDS)

1996 1997 1998
-------- -------- --------

Cash flows from operating activities:
Net income .................................. $ 14,964 $ 4,300 $ 14,004
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Provision for bad debts ................. 98 151 273
Deferred taxes .......................... (1,550) (1,862) (57)
Depreciation, amortization, and
asset impairment ...................... 5,001 8,050 7,996
Management and employee stock
compensation .......................... -- 11,156 401
Changes in operating assets and liabilities-
net of assets acquired:
Accounts receivable ..................... (8,219) (9,539) (10,512)
Other receivables ....................... (496) (1,802) 1,707
Inventories ............................. (18,452) (2,509) (19,741)
Prepaid expenses and other .............. (3,742) 2,180 (564)
Deposits and other assets ............... (428) (3,187) (4,804)
Accounts payable ........................ 881 2,812 3,632
Other current liabilities ............... (259) (71) 1,388
-------- -------- --------

Net cash provided by (used in)
operating activities .................. (12,202) 9,679 (6,277)
-------- -------- --------

Cash flows from financing activities:
Issuance of common stock .................... -- 63,881 --
Dividends paid .............................. -- -- (3,705)
Distributions to WHF ........................ (3,731) (26,068) --
Net change in payable to WHF ................ 182 (3,747) --
Proceeds from long-term debt ................ 35,250 40,647 27,438
Payments on long-term debt .................. (4,949) (60,367) (2,186)
-------- -------- --------

Net cash provided by financing activities 26,752 14,346 21,547
-------- -------- --------

Cash flows from investing activities:
Purchase of property and equipment .......... (6,084) (17,400) (11,870)
Increase in officers' notes receivable ...... -- -- (3,987)
Purchase of intangible assets ............... (135) (1,699) --
Purchase of companies, net of cash acquired . (9,011) (5,082) --
-------- -------- --------

Net cash used in investing activities ... (15,230) (24,181) (15,857)
-------- -------- --------
Effect of exchange rate changes on cash ....... -- (177) 12
-------- -------- --------
Decrease in cash and cash equivalents ......... (680) (333) (575)

Cash and cash equivalents, beginning of year .. 2,272 1,592 1,259
-------- -------- --------

Cash and cash equivalents, end of year ........ $ 1,592 $ 1,259 $ 684
======== ======== ========

F-6

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MAY 31, 1996, 1997 AND 1998
(DOLLARS IN THOUSANDS)

SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:

1996 1997 1998
------- ------ ------
Cash paid during the year for:
Interest ................................ $ 3,816 $5,721 $4,930
Income taxes (net of refunds) ........... 11,920 5,185 4,792

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

In connection with the acquisitions of net assets from other companies (see
Note 9), the Company assumed liabilities as follows:

1996 1997
-------- -------
Fair value of assets acquired ................. $ 18,497 $ 4,471
Cost in excess of fair value of
net assets acquired ......................... 11,275 4,017
Cash paid, net of cash acquired ............... (9,011) (5,082)
Debt and liabilities issued ................... (7,063) (1,837)
-------- -------
Liabilities assumed ........................... $ 13,698 $ 1,569
======== =======

Note: There were no acquisitions consummated during fiscal 1998.

(Concluded)

See notes to consolidated financial statements.

F-7

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MAY 31, 1996, 1997 AND 1998
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

1. SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION--The consolidated financial statements include
the accounts of Weider Nutrition International, Inc. and its wholly-owned
subsidiaries (collectively, the "Company") which is a majority-owned subsidiary
of Weider Health and Fitness ("WHF"). All significant intercompany accounts and
transactions have been eliminated.

INITIAL PUBLIC OFFERING--Effective May 1, 1997, the Company consummated an
initial public offering of its Class A common stock (the "IPO"). A total of
6,440,000 shares were sold to the public at $11 per share. The net proceeds to
the Company from the IPO amounted to approximately $63.9 million (after
underwriters' discounts of $5.0 million and offering costs of $2.0 million). The
net proceeds were used to pay a one-time distribution of $18.3 million to WHF
and to pay down long-term debt (see Note 5). Concurrent with consummation of the
IPO, the Company entered into an amended credit agreement which provides for a
revolving credit facility of $130.0 million with General Electric Capital
Corporation ("GECC") (see Note 5).

Prior to the IPO, the Board of Directors (the "Board") authorized a stock
split of all issued and outstanding common shares at the rate of 14,428.9 for 1,
which increased the number of issued and outstanding Class A common shares from
1,195.17 to 17,245,036. The Board authorized the Company to issue shares of
Class B common stock to WHF in exchange for its Class A holdings. A total of
15,687,432 shares of Class B common stock were issued to WHF. Each holder of
Class B common stock is entitled to ten votes per share on all matters presented
to a vote of stockholders, including the election of directors.

DESCRIPTION OF BUSINESS--The Company is a manufacturer of branded and
private label nutritional supplements. The Company manufactures a broad range of
capsules and tablets, powdered drink mixes, bottled beverages and nutrition
bars. The Company markets its branded products through several distribution
channels, including mass volume retailers, health foods stores, health clubs and
gyms, and international markets.

USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS--The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
sales and expenses during the reporting period. Such estimates include, among
others, the allowance for doubtful accounts and the allowance for sales returns.
Actual results could differ from the estimates.

CASH EQUIVALENTS--Cash equivalents include highly liquid investments with
an original maturity of three months or less.

INVENTORIES--Inventories are stated at the lower of cost (on a first-in,
first-out basis) or market.

The Company enters into barter transactions and accounts for such
transactions at the lower of the net realizable value of the inventory or the
barter credits. During the fourth quarter of fiscal 1998, the Company entered
into a barter transaction whereby inventories in the amount of $4.5 million, at
cost, were exchanged for cash of $0.4 million and advertising credits of $4.1
million. The Company expects to utilize the capitalized credits over a
three-year period. The advertising credits do not have an expiration date.

F-8

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

PROPERTY AND EQUIPMENT--Property and equipment are stated at cost less
accumulated depreciation. Depreciation and amortization expense was $2,922
(1996), $3,871 (1997)and $5,667 (1998), computed primarily using the
straight-line method over the estimated useful lives of 31 years for buildings
and 2 to 10 years for other property and equipment.

INTANGIBLE ASSETS--Intangible assets are stated at cost and amortized
using the straight-line method over the estimated useful lives of the assets as
follows:

Cost in excess of fair value of net assets acquired 10-35 years
Patents and trademarks 10-20 years
Noncompete agreements 5 years

The Company evaluates the economic factors for determining requisite
recovery periods for certain intangible assets on a case-by-case basis.

LONG-LIVED ASSETS--Impairment of long-lived assets is determined in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and of Long-Lived Assets to
be Disposed Of." The Company recognized asset impairments in the amount of
$2,095 in fiscal 1997.

INCOME TAXES--Prior to the Company's IPO, the Company filed consolidated
returns with WHF for Federal and, where appropriate, state income tax purposes.
For financial statement purposes, the Company provided for income taxes as if it
was filing separate tax returns. Effective May 1,1997, the Company files
separate Federal income tax returns as a result of the reduction in WHF's
ownership percentage due to consummation of the Company's IPO. The Company
records in its balance sheet deferred income tax liabilities and assets for
temporary differences in the bases of assets and liabilities as reported for
financial statement purposes and income tax purposes.

NET SALES--The Company recognizes sales upon shipment of a product to a
customer. Allowances are made for uncollectible accounts and future credits. The
Company's largest customers, General Nutrition Center ("GNC"), Wal-Mart and
Costco, accounted for approximately 16%, 15% and 3%, respectively, of net sales
in fiscal 1996; approximately 10%, 11% and 7%, respectively, in fiscal 1997; and
16%, 13% and 12%, respectively, in fiscal 1998.

STOCK-BASED COMPENSATION--In October 1995, the Financial Accounting
Standards Board issued SFAS No. 123, "Accounting for Stock-Based
Compensation", which became effective for the Company beginning June 1, 1997.
SFAS No. 123 requires expanded disclosures of stock-based compensation
arrangements with employees. Since the Company has decided to disclose the
effect of SFAS No. 123 on a pro forma basis and to continue to follow
Accounting Principles Board Opinion No. 25 (as permitted by SFAS No. 123) as
it relates to stock-based compensation, the appropriate required disclosure of
the effects of SFAS No. 123 are included in Note 7.

EARNINGS PER SHARE--During fiscal 1998, the Company adopted SFAS No. 128,
"Earnings Per Share." SFAS No. 128 establishes new standards for computing and
presenting earnings per share ("EPS"). SFAS No. 128 replaces the presentation of
primary and fully diluted EPS and requires a dual presentation of basic and
diluted EPS. Basic EPS is computed using the weighted average number of common
shares outstanding. Diluted EPS is computed using the weighted average number of
common shares and potentially diluted common shares outstanding during the
period. Potentially dilutive common

F-9

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

shares consist of common stock options and performance units (Note 7).
Earnings per share amounts for fiscal 1996 and 1997 have been restated to
conform to the requirements of SFAS No. 128.

FINANCIAL INSTRUMENTS--The Company's financial instruments, when valued
using market interest rates, would not be materially different from the amounts
presented in the consolidated financial statements.

RECLASSIFICATIONS--Certain amounts in prior year financial statements have
been reclassified to conform with the current year presentation.

RECENTLY ISSUED ACCOUNTING STANDARDS--In June 1997, the FASB issued SFAS
No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards
for reporting and display of comprehensive income and its components (revenues,
expenses, gains, and losses) in a full set of general purpose financial
statements. SFAS No. 130 requires that an enterprise (a) classify items of other
comprehensive income by their nature in a financial statement and (b) display
the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position. SFAS No. 130 is effective for the Company's financial
statements for the year ending May 31, 1999. The Company does not expect the
impact of SFAS No. 130 to be material in relation to its financial statements.

In June 1997, the FASB issued SFAS No. 131, "Disclosure About Segments of
an Enterprise and Related Information." SFAS No. 131 established standards for
the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosure about products and services, geographic areas, and major customers.
SFAS No. 131 is effective for the Company's financial statements for the year
ending May 31, 1999. The Company does not expect the impact of SFAS No. 131 to
be material in relation to its financial statements.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which supersedes SFAS No. 80, "Accounting
for Futures Contracts," SFAS No. 105, "Disclosure of Information About Financial
Instruments with Off-Balance-Sheet Risk and Financial Instruments with
Concentration of Credit Risk," and SFAS No. 119, "Disclosures about Derivative
Financial Instruments and Fair Value of Financial Instruments," and also amends
certain aspects of other SFAS's previously issued. SFAS No. 133 establishes
accounting and reporting standards for derivative instruments and hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the balance sheet and measure those instruments at fair
value. SFAS No. 133 is effective for the Company's financial statements for the
year ending May 31, 2000. The Company does not expect the impact of SFAS No. 133
to be material in relation to its financial statements.

F-10

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

2. INVENTORIES

Inventories consist of the following at May 31:

1997 1998
------- -------
Raw materials .......................... $17,569 $23,226
Work in process ........................ 2,629 3,613
Finished goods ......................... 20,584 33,684
------- -------
Total ............................ $40,782 $60,523
======= =======

Inventory totaling $5,900 ($4,453 in 1997), primarily consisting of two
raw materials, is included as a long-term asset in deposits and other assets in
the accompanying balance sheets.

3. PROPERTY AND EQUIPMENT

Property and equipment consists of the following at May 31:

1997 1998
-------- --------
Land ....................................... $ 1,679 $ 1,679
Buildings .................................. 6,970 7,245
Furniture and equipment .................... 19,881 32,501
Leasehold improvements ..................... 3,246 12,607
Construction in progress ................... 13,815 3,126
-------- --------
45,591 57,158
Less accumulated depreciation
and amortization ......................... (9,661) (15,196)
-------- --------
Total ................................ $ 35,930 $ 41,962
======== ========

4. INTANGIBLE ASSETS

Intangible assets consist of the following at May 31:

1997 1998
-------- --------
Cost in excess of fair value
of net assets acquired ................... $ 28,626 $ 28,685
Patents and trademarks ..................... 4,933 4,933
Noncompete agreements ...................... 219 214
-------- --------
33,778 33,832

Less accumulated amortization .............. (7,228) (9,440)
-------- --------
Total ................................ $ 26,550 $ 24,392
======== ========

F-11

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

5. LONG-TERM DEBT

Long-term debt consists of the following at May 31:

1997 1998
-------- --------
Advances under a $130,000 revolving line of
credit to GECC bearing interest at floating
rates (6.90% to 8.50% at May 31, 1998)
through February 2000 ............................ $ 37,946 $ 65,250

Mortgage loan, due in monthly installments of
$30 including interest at 7-5/8% due
February 2009 .................................... 2,978 2,871

Note payable to the previous owner of Nion
(See Note 9), due in quarterly installments
of $151 plus interest at 8% through September
1998.............................................. 756 302

Noninterest bearing notes arising as a
result of certain acquisitions
consummated in September 1996 (see Note 9) ....... 1,800 820

Other .............................................. 1,614 1,103
-------- --------
Total ........................................ 45,094 70,346

Less current portion ......................... (2,181) (1,554)
-------- --------
Long-term portion ............................ $ 42,913 $ 68,792
======== ========

As of May 31, 1998, future payments of long-term debt are due as follows:
$1,554 (1999), $65,603 (2000), $245 (2001), $224 (2002), $283 (2003), and $2,437
thereafter.

Concurrent with the Company's IPO, the Company entered into an amended
credit agreement (the "Credit Agreement") with GECC. The Credit Agreement is a
$130.0 million senior secured, long-term credit facility that contains standard
terms and conditions, including subject to permitted amounts, a limitation on
the ability of the Company to pay dividends on the common stock and minimum net
worth requirements. The obligations of the Company under the Credit Agreement
are secured by a first priority lien on all owned or acquired tangible and
intangible assets of the Company and a pledge to GECC of the capital stock of
the U.S. subsidiaries of the Company (including the subsidiary that owns the
Company's foreign subsidiaries). Borrowings available under the Credit Agreement
are used for general working capital needs and to support capital expenditures
and, if necessary, to effect acquisitions. Borrowings under the Credit Agreement
bear interest at floating rates (6.90% to 8.50% at May 31, 1998) and mature in
February 2000. As of May 31, 1998, the Company has $64.8 million of available
credit under the Credit Agreement.

F-12

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

6. INCOME TAXES

The components of income tax expense consist of the following for the
years ended May 31:

1996 1997 1998
-------- ------- -------
Current .................... $ 11,757 $ 4,570 $ 9,067
Deferred ................... (1,550) (1,862) (57)
-------- ------- -------
Total ................ $ 10,207 $ 2,708 $ 9,010
======== ======= =======

The provision for income taxes differs from a calculated income tax at the
Federal statutory rate as follows:

1996 1997 1998
------- ------- -------
Computed Federal income tax expense
at the statutory rate of 35% ........... $ 8,810 $ 2,453 $ 8,055
Amortization of cost in excess of
fair value of net assets acquired ....... 133 147 153
Meals and entertainment .................. 31 30 34
State income taxes ....................... 1,221 169 990
Other .................................... 12 (91) (222)
------- ------- -------
Total .............................. $10,207 $ 2,708 $ 9,010
======= ======= =======

Net deferred income tax assets consist of the following at May 31:

1997 1998
-------------- ---------------
LONG- LONG-
CURRENT TERM CURRENT TERM
------ ------ ------ ------
Assets:
Accounts receivable allowances ........... $ 470 $ -- $ 734 $ --
Inventory allowance ...................... 675 -- 719 --
Deferred compensation .................... -- 422 -- 512
Accrued vacation and bonuses ............. 212 -- 236 --
Accrued other ............................ 432 -- 435 --
Amortization of intangibles .............. -- 499 -- 544
Capitalization of inventory costs ........ 909 -- 1,123 --
Depreciation ............................. -- -- -- 185
Options and performance units ............ 1,163 -- 157 --
State taxes .............................. 232 -- 492 --
Noncompete agreement ..................... -- 152 -- 141
Basis difference in acquired
companies .............................. -- 107 -- 98
------ ------ ------ ------
Total ............................ 4,093 1,180 3,896 1,480
------ ------ ------ ------
Liabilities:
Amortization of intangibles .............. -- -- -- 104
Depreciation ............................. -- 203 -- --
Other .................................... -- -- -- 145
------ ------ ------ ------

Total ............................ -- 203 -- 249
------ ------ ------ ------
Deferred income taxes, net ............... $4,093 $ 977 $3,896 $1,231
====== ====== ====== ======

F-13

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

7. MANAGEMENT INCENTIVE AND STOCK PLANS

MANAGEMENT INCENTIVE PLAN--Prior to the Company's IPO, certain employees
("the Recipients") had management incentive agreements (the "Agreements")
pursuant to which the employees were granted performance units ("Performance
Units") as incentive compensation.

Simultaneously with the IPO, which triggered a conversion under the
Agreements, the Company paid in cash and shares of Class A common stock the
vested portion of the Performance Units. In aggregate, the Company paid $2,960
in cash and issued 972,247 shares of Class A common stock (valued at the IPO
price). The Company recognized compensation expense of $13.6 million (included
in management and employee compensation charge in the accompanying consolidated
statements of income) in 1997 as a result of the conversion of Performance Units
into Class A common stock.

The unvested portion of the performance units (represented by 182,716
restricted shares of Class A common stock as of the IPO date) vest (contingent
upon continued employment and/or other factors) over a five-year period at 20%
per year through May 2002. During 1998, 36,543 shares of Class A common stock
became issued and outstanding in accordance with the on-going vesting provisions
of the Performance Units. The Company recognized compensation expense of $401 in
fiscal 1998 in connection with the additional vested Class A common shares.

In order to facilitate the payment of individual income taxes, the Company
makes available to each Recipient a loan in principal amount up to 30% of the
conversion value of the vested Performance Units held by each Recipient. Such
loans to the Recipients bear interest at 8.0% per annum, are repayable five
years from the borrowing date and are secured by the Recipients' stock. At May
31, 1997 and 1998, there were aggregate loans outstanding of $0 and $3,987,
respectively.

EQUITY PLAN--The 1997 Equity Participation Plan (the "Equity Plan")
provides for the granting of stock options, stock appreciation rights,
restricted or deferred stock and other awards ("Awards") to officers, directors,
and key employees responsible for the direction and management of the Company
and to nonemployee consultants. Concurrent with the Company's IPO, effective May
1, 1997, a total of 1,646,000 shares of Class A common stock (or the equivalent
in other equity securities) were reserved for issuance under the Equity Plan. Of
the options outstanding at May 31, 1998, 670,000 become exercisable after five
years from the date of grant, and 613,000 become exercisable over five years
from the date of grant at the rate of 20 percent per each successive anniversary
date. Stock options expire eight years after the date of grant.

F-14

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

Information relating to stock options issued per the equity plan is as
follows:

WEIGHTED
NUMBER AVERAGE PER
OF SHARE OPTION TOTAL
SHARES PRICE PRICE
---------- -------------- --------
Options outstanding, June 1, 1996 ... -- $ -- $ --
Granted ........................... 1,208,000 11.00 13,288
Exercised ......................... -- -- --
Cancelled ......................... -- -- --
---------- -------------- --------

Options outstanding, May 31, 1997 ... 1,208,000 11.00 13,288
Granted ........................... 167,000 12.46 2,082
Exercised ......................... -- -- --
Cancelled ......................... (92,000) 11.00 (1,012)
---------- -------------- --------

Options outstanding, May 31, 1998 ... 1,283,000 $ 11.19 $ 14,358
========== ============== ========

Exercisable options:
May 31, 1998 ..................... 108,800 $ 11.00 $ 1,197
========== ============== ========

The weighted average fair market value of options granted during fiscal
1997 and 1998 amounted to $3.28 and $4.92, respectively.

The Company applied APB Opinion No. 25 in accounting for its stock options
and, accordingly, no compensation expense has been recognized for stock options
in the accompanying financial statements.

Pro forma information regarding net income and earnings per share is
required by SFAS No. 123, and has been determined as if the Company had
accounted for its employee stock options including the unvested performance
units under the fair value method of SFAS No. 123. The fair value for these
options was estimated at the date of grant using a Binomial Option pricing model
with the following weighted average assumptions for 1997 and 1998.

1997 1998
---------- ----------
Risk-free interest rate ............ 6.49% 5.20%
Dividend yield ..................... 1.36% 1.19%
Volatility factor .................. 29.76% 50.43%
Weighted average expected life ..... 3.9 years 3.5 years

For purposes of pro forma disclosure, the estimated fair value of the
options is amortized to expense over the options vesting period. The Company's
pro forma earnings and earnings per share were as follows:

1997 1998
---------- ----------
Net earnings, as reported ............... $ 4,300 $ 14,004
Net earnings, pro forma ................. 4,260 13,513
Diluted earnings per share, as reported . .24 .56
Basic earnings per share, pro forma ..... .24 .55
Diluted earnings per share, pro forma ... .24 .54

It is likely that the pro forma expense will increase in future years as
new option grants become subject to the pricing model.

F-15

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

In addition to granting stock options as summarized above, the Company
also, upon consummation of the IPO, made stock payment awards to certain
employees based upon years of service. An aggregate total of 41,955 shares of
Class A common stock were issued to such employees. Furthermore, the Company
paid, in cash, estimated Federal and State income taxes on behalf of the same
employees. The Company recognized compensation expense in the amount of $.9
million (included in management and employee compensation charge in the
accompanying consolidated statement of income) in 1997.

8. COMMITMENTS AND CONTINGENCIES

LEASES--The Company leases warehouse and office facilities, manufacturing
and production facilities, transportation equipment and other equipment under
several operating lease agreements expiring through 2013. As of May 31, 1998,
future minimum payments of $33,375 under the noncancelable operating leases are
due as follows: $3,237 (1999), $2,522 (2000), $1,855 (2001), $1,890 (2002),
$2,070 (2003) and $21,801 thereafter. Rental expense charged to operations
amounted to $1,610 (1996), $2,197 (1997), and $4,064 (1998).

LITIGATION--On April 24, 1997, the Company filed a lawsuit in the United
States District Court for the district of Utah (Central Division) for a
declaratory judgement that Pain FreeTM, a pain relief product, did not infringe
two U.S. patents held by Nutramax Laboratories, Inc. ("Nutramax") or, in the
alternative, declaring such patents invalid. On June 30, 1997, Nutramax filed a
counterclaim against the Company alleging that, through the manufacture and sale
of a Company product, the Company was willfully infringing on one or more U.S.
patents of Nutramax and also had contributorily and actively induced
infringement on such patents. The counterclaim seeks treble damages as a result
of the claimed willful and intentional nature of the alleged infringement. The
litigation has been transferred to the United States District Court for the
District of Maryland, where Nutramax had previously commenced litigation
alleging that twenty-two other entities had also infringed those patents, and is
in discovery. To the extent the Company does not prevail in the lawsuit, the
Company would be enjoined from the future manufacture and marketing of Pain
FreeTM, which has recently become one of its best-selling products, and could be
required by the court to pay damages to Nutramax, which could under certain
circumstances be trebled. Although the Company intends to vigorously oppose the
counterclaim and believes that there will be no material liability, the
imposition by the court of any of the foregoing could have a material adverse
effect on the Company.

The Company is presently engaged in various other legal actions, and,
although ultimate liability cannot be determined at the present time, the
Company currently believes that the amount of any such lability from these other
actions, after taking into consideration the Company's insurance coverage, will
not have a material adverse effect on its results of operations, financial
condition and cash flows.

ROYALTIES--The Company obtained the exclusive right to use the Weider name
and trademarks outside of specified royalty-free territories (most notably North
America) throughout the world, with the exceptions of Australia, New Zealand,
Japan and South Africa, pursuant to a sublicense agreement dated December 1,
1996 with Mariz Gestao E Investimentos Limitada ("Mariz"). Mariz is a company
incorporated under the laws of Portugal and owned by a trust of which the family
members of a director of the Company are included among the beneficiaries. Mariz
obtained its exclusive international rights to use the Weider name and
trademarks pursuant to a license agreement, effective June 1, 1994, between
Mariz and certain affiliates, including WHF (the "Licensors").

F-16

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

Pursuant to the license agreement with Mariz, the Company is required to
make annual royalty payments to Mariz commencing on December 1, 1998 on sales of
the Company's brands in existence on December 1, 1996 in countries covered by
the agreement. The royalty payments are to be equal to (i) 4% of sales up to
$33.0 million; (ii) 3.5% of sales greater than $33.0 million and less than $66.0
million; (iii) 3.0% of sales from $66.0 million to $100.0 million; and (iv) 2.5%
of sales over $100.0 million. In addition, the sublicense agreement with Mariz
includes an irrevocable buy-out option exercisable by the Company after May 31,
2002 for a purchase price equal to the greater of $7.0 million or 6.5 times the
aggregate royalties paid by the Company in the fiscal year immediately preceding
the date of the exercise of the option.

RETIREMENT PLAN--The Company sponsors a contributory 401(k) savings plan
covering all employees who have met minimum age and service requirements.
Contributions to this plan were approximately $112, $241 and $271 for the years
ended May 31, 1996, 1997, and 1998, respectively, and were included in general
and administrative expenses.

9. ACQUISITIONS

In June 1995, the Company acquired the assets of National Institute of
Nutrition, Inc. (dba Nion Laboratories) ("Nion") for cash of $8,190, notes of
$7,063, and the assumption of certain liabilities. The Company accounted for
this acquisition as a purchase and recognized goodwill of approximately $8,149
which is being amortized over 15 years. Nion manufactures and distributes
nutritional supplements in capsule and tablet form.

In October 1995, the Company acquired certain assets of American Nutrition
Bars ("ANB") for the forgiveness of a note receivable of $850 and the assumption
of certain liabilities. The Company accounted for this acquisition as a purchase
and recognized goodwill of approximately $3,126 which is being amortized over a
15-year period. ANB manufactures and distributes nutritional bars.

In January 1996, the Company purchased net assets with a recorded value of
approximately $49 and rights to use the Weider name in England and Ireland, and
with certain customer accounts in Austria, France, and Switzerland for
approximately $557 from a commonly controlled entity. The Company also incurred
liabilities of $250 to the benefit of the commonly controlled entity. As a
result, $758 is included in distribution to WHF for the purchase of such assets.
The purchase of these assets was accounted for at the historical cost of $49 in
the records of the Company and the results of operations have been included
since January 1, 1996. Included in distributions to WHF is an additional $900
paid for the rights to use the Weider name in the European countries not
included above.

In September 1996, the Company acquired certain assets and international
distribution rights from a related party in Canada for $4,000. Of the $4,000
purchase price, $3,000 was paid in cash and $1,000 was in the form of an earnout
to be paid $40 per month for 25 months. The purchase of these assets was
accounted for at the historical cost of $25 in the records of the Company, and
the results of operations have been included since September 1, 1996. Included
in distributions to WHF is an amount of $3,975 representing the difference
between the purchase price and historical cost.

In September 1996, the Company acquired trademarks and nutritional
supplement operations providing distribution capabilities in primarily Spain and
Portugal for a total purchase price of $3,427. Of the $3,427, $627 was paid for
certain net assets in Spain, $200 was paid as consideration for a

F-17

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

covenant not to compete from the seller, $300 was paid as a condition to
closing, $500 is to be paid on each of the first and second anniversaries of the
closing and $1,300 was paid for certain trademarks. Of the total amounts paid,
$2,650 was paid to an affiliate of which $1,350 represents an amount in excess
of historical cost that is accounted for as a distribution to WHF. Results of
operations have been included since September 1, 1996.

In January 1997, the Company acquired the net assets of Science Foods,
Inc., a competing sports nutrition beverage manufacturer, for $3,900 in cash
plus the assumption of $700 in debt. The Company accounted for this acquisition
as a purchase and recognized goodwill of $3,165 which is being amortized over 35
years. Results of operations have been included since January 1, 1997.

Requisite pro forma financial information is not provided as the results
would not be materially different.

10. RELATED PARTY TRANSACTIONS

Significant related party transactions, not otherwise disclosed, are
summarized below.

Payments to reimburse WHF for Company expenses (including primarily
advertising, insurance, endorsements, retirement benefits, interest and
royalties) consist of the following for the years ended May 31:

1996 1997 1998
------ ------ ------
Operating expenses ................ $1,285 $1,910 $2,193
Interest, net ..................... 897 3,327 --
Other ............................. 448 384 489
------ ------ ------
Total ....................... $2,630 $5,621 $2,682
====== ====== ======

Included in other receivables is an amount due from an affiliated entity
in the amount of $988 at May 31, 1997.

Prior to entering into the Credit Agreement (see Note 5), the Company was
the principal borrower under a credit agreement with GECC that was administered
and guaranteed by WHF. The Company paid a service charge to WHF in excess of the
interest paid to GECC in the amount of $378 (1996) and $485 (1997),
respectively.

11. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Quarterly data (unaudited) for 1997 and 1998 is as follows:

QUARTER ENDED
-----------------------------------------
AUG. 31 NOV. 30 FEB. 28 MAY 31
------- ------- ------- --------
1997:
Net sales ...................... $46,927 $48,992 $55,487 $ 67,160
Gross profit ................... 17,188 17,318 22,892 24,293
Operating income (loss) ........ 3,619 5,786 9,150 (5,199)
Income taxes (benefit) ......... 882 1,552 2,949 (2,675)
Net income (loss) .............. 1,291 2,360 4,424 (3,775)

Basic and diluted earnings
(loss) per share .............. .08 .14 .25 (.19)

F-18

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

QUARTER ENDED
----------------------------------------
AUG. 31 NOV. 30 FEB. 28 MAY 31
------- ------- ------- -------
1998:
Net sales ........................ $53,515 $60,811 $62,368 $73,848
Gross profit ..................... 17,873 20,629 23,003 27,703
Operating income ................. 3,996 5,406 7,752 10,750
Income taxes ..................... 1,127 1,574 2,538 3,771
Net income ....................... 1,692 2,532 3,971 5,809

Basic earnings per share ......... .07 .10 .16 .24
Diluted earnings per share ....... .07 .10 .16 .23

12. SUBSEQUENT EVENT

On July 24, 1998, the Company acquired 100% of the outstanding shares of
Haleko Hanseatisches Lebensmittel Kontor GmbH, a corporation organized under the
laws of Germany ("Haleko"). Haleko, the largest sports nutrition company in
Europe, had sales of approximately $65 million for the twelve months ending May
31, 1998. The purchase price is comprised of $25.2 million in cash, 200,000
shares of Class A common stock, and an $8 million contingent earnout agreement
tied to future financial performance. In addition, $16 million in long-term debt
was assumed and $5 million in acquisition-related capital costs are expected.
The cash portion of the purchase price was initially financed with funds
available under the Company's credit facility with GECC.

The acquisition will be accounted for as a purchase. As such, the excess
of the purchase price over the estimated fair value of the acquired net assets
will be recorded as goodwill.

The following unaudited pro forma results of operations of the Company
give effect to the acquisition of Haleko as though the transaction had occurred
on June 1, 1997.

YEAR ENDED
MAY 31, 1998
--------
Net sales ................................. $315,575
Operating income .......................... 30,742
Net income ................................ 14,200
Basic earnings per share ................. 0.57
Diluted earnings per share ................ 0.56

F-19

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The table below sets forth certain information concerning the directors
and executive officers of the Company at May 31, 1998.

DIRECTORS AND EXECUTIVE OFFICERS AGE POSITION
Eric Weider . . . . . . . . 34 Chairman of the Board
and Director
Richard B. Bizzaro. . . . . 55 Chief Executive Officer,
President and Director
Robert K. Reynolds. . . . . 41 Chief Operating Officer,
Executive Vice President,
Secretary and Director
Richard A. Blair . . . . . 39 Executive Vice President and
General Manager--Sales and
and Marketing (Mass Market
Division)
Stephen D. Young. . . . . . 44 Executive Vice President--
Operations and Chief Financial
Officer
Ronald L. Corey . . . . . . 59 Director
Roger H. Kimmel . . . . . . 52 Director
George F. Lengvari. . . . . 56 Director
Donald G. Drapkin . . . . . 50 Director
Glenn W. Schaeffer. . . . . 44 Director

ERIC WEIDER has been a director of the Company since June 1989, Chairman
of the Board since August 1996 and is currently President and Chief Executive
Officer of WHF. Mr. Weider also serves as a member of the board of directors of
a number of public and private companies in the United States and Canada,
including WHF and Mpact Immedia Corporation. Mr. Weider is also the President of
the Joe Weider Foundation.

RICHARD B. BIZZARO has been Chief Executive Officer, President and a
director of the Company since June 1990. Prior to his appointment as Chief
Executive Officer and President of the Company, he was Vice President of Sales
for WHF, responsible for sales at the Company and Weider Exercise Equipment. Mr.
Bizzaro has worked for the Company, WHF or one of WHF's affiliates since 1983.

ROBERT K. REYNOLDS has been Executive Vice President, Chief Operating
Officer and Secretary of the Company since July 1992 and a director of the
Company since January 1994. Mr. Reynolds joined the Company in September 1990
as Chief Financial Officer. Mr. Reynolds, a certified public accountant, is
primarily responsible for all domestic and international operations.

RICHARD A. BLAIR has been Executive Vice President and General Manager--
Sales and Marketing (Mass Market Division) of the Company since March 1998. From
January 1997 to March 1998, Mr. Blair was Executive Vice President--Sales and
Marketing of the Company. From January 1994 to January 1997, Mr. Blair was
Senior Vice President--Sales of the Company. Mr. Blair joined the Company in
June 1991 and prior thereto was Director of Sales and Marketing at Tunturi
Sports Equipment Company, which he joined in 1984.

STEPHEN D. YOUNG has been Executive Vice President--Operations and Chief
Financial Officer of the Company since January 1997. From January 1994 to

26

January 1997, Mr. Young was Senior Vice President--Finance and Chief Financial
Officer of the Company. Mr. Young joined the Company in September 1993. Mr.
Young is a certified public accountant and, prior to September 1993, was Vice
President Finance at First Health Strategies, which he joined in 1983.

RONALD L. COREY has been a director of the Company since August 1996.
Mr. Corey has been President of the Club de Hockey Canadien Inc. (the Montreal
Canadiens) and the Molson Center Inc. since 1982. In addition, between 1985
and 1989, Mr. Corey held the position of Chairman of the Board and director of
the Montreal Port Corporation. Mr. Corey has served as a director of numerous
companies, including Banque Laurentienne, Reno-Depot Inc. and Transamerica
Life Companies.

ROGER H. KIMMEL has been a director of the Company since August 1996.
Mr. Kimmel has been a partner at the law firm of Latham & Watkins for more
than five years. Mr. Kimmel is a director of Algos Pharmaceutical
Corporation, TSR Paging Inc. and U S Dermatologics, Inc.

GEORGE F. LENGVARI has been a director of the Company since August 1996.
Mr. Lengvari has been Vice Chairman of WHF since June 1995 and Chairman of
Weider Publications U.K. since September 1994. Prior to joining WHF, Mr.
Lengvari was a partner for 22 years in the law firm Lengvari Braman and is
currently of counsel to the law firm LaPointe Rosenstein. Mr. Lengvari
currently serves as a member of the board of directors of WHF.

DONALD G. DRAPKIN has been a director of the Company since October 1997.
Mr. Drapkin has been a Director and Vice Chairman of MacAndrews & Forbes
Holdings, Inc. and various of its affiliates since March 1987. Prior to joining
MacAndrews & Forbes, Mr. Drapkin was a Partner in the law firm of Skadden, Arps,
Slate, Meagher & Flom in New York for more than five years. Mr. Drapkin also is
a director of the following corporations which file reports pursuant to the
Securities Exchange Act of 1934: Algos Pharmaceutical Corp., Anthracite Capital,
Inc., BlackRock Asset Investors, Cardio Technologies, Inc., The Cosmetic Center,
Inc., Genta, Inc., The Molson Companies Limited, Playboy Enterprises, Inc.,
Revlon, Inc., Revlon Consumer Products Corp., and VIMRx Pharmaceuticals, Inc.

GLENN W. SCHAEFFER has been a director of the Company since October
1997. Mr. Schaeffer has been President, Chief Financial Officer and Director
of Circus Circus Enterprises, Inc. since 1995. From 1993 to 1995, he served
as a principal of Gold Strike Resorts. From 1984 to 1991, he held various
senior executive positions at Circus Circus Enterprises, Inc.

ITEM 11. EXECUTIVE COMPENSATION

See the Company's Proxy Statement, incorporated by references in Part III
of this Form 10-K, under the headings "Executive Compensation" and "Certain
Relationships and Related Party Transactions."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

See the Company's Proxy Statement, incorporated by reference in Part III
of this Form 10-K, under the heading "Security Ownership of Certain Beneficial
Owners and Management."

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

See the Company's Proxy Statement, incorporated by reference in Part III
of this Form 10-K, under the heading "Certain Relationships and Related Party
Transactions."

27

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Documents filed as part of this report

(1) Financial Statements

See "Item 8. Financial Statements and Supplementary Data" for
Financial Statements included with this Annual Report on Form 10-K.

(2) Financial Statement Schedules

Schedule II - Valuation and Qualifying Accounts

All other schedules have been omitted because they are not required, not
applicable, or the information is otherwise set forth in the financial
statements or notes thereto.

(3) Exhibits

2.1 Stock Purchase Agreement, dated July 9, 1998, by and among Weider
Nutrition Group, Inc. and Wolfgang Brandt and Eberhardt Schluter.(2)
2.2 Amendment Deed to Stock Purchase Agreement, dated July 24, 1998.(2)
2.3 Share Transfer Deed, dated July 24, 1998.(2)
3.1 Amended and Restated Certificate of Incorporation of Weider Nutrition
International, Inc. (1)
3.2 Amended and Restated Bylaws of Weider Nutrition International, Inc. (1)
10.1 Build-To-Suit Lease Agreement, dated March 20, 1996, between SCI
Development Services Incorporated and Weider Nutrition Group, Inc. (1)
10.2 Agreement by and between Joseph Weider and Weider Health and Fitness (1)
10.3 1997 Equity Participation Plan of Weider Nutrition International, Inc. (1)
10.4 Form of Tax Sharing Agreement by and among Weider Nutrition International,
Inc. and its subsidiaries and Weider Health and Fitness and its
subsidiaries (1)
10.5 Form of Employment Agreement between Weider Nutrition International, Inc.
and Richard B. Bizzaro (1)
10.6 Form of Employment Agreement between Weider Nutrition International, Inc.
and Robert K. Reynolds (1)
10.7 Form of Senior Executive Employment Agreement between Weider Nutrition
International, Inc. and certain senior executives of the Company (1)
10.8 Advertising Agreement between Weider Nutrition International, Inc. and
Weider Publications, Inc.(1)
10.9 Amended and Restated Shareholders Agreement between Weider Health and
Fitness and Hornchurch Investments Limited (1)
10.10 Amended and Restated Shareholders Agreement between Weider Health and
Fitness, Bayonne Settlement and Ronald Corey(1)
10.11 Indemnification Agreement between Weider Nutrition Group, Inc. And Showa
Denko America (1)
10.12 License Agreement between Mariz Gestao E Investmentos Limitada and Weider
Nutrition Group Limited (1)
21 Subsidiaries of Weider Nutrition International, Inc.(1)
23.1 Consent of Deloitte & Touche LLP (3)
27.1 FINANCIAL DATA SCHEDULE SUMMARY (3)

- ---------------------
(1) Filed as an Exhibit to the Company's Registration Statement on Form S-1
(File No. 333-12929)and incorporated herein by reference.
(2) Previously filed in the Company's Current Report on Form 8-K dated as of
July 24, 1998 and incorporated herein by reference.
(3) FILED HEREWITH.

(b) Reports on Form 8-K
No report on Form 8-K was filed during the fourth quarter of fiscal
1998.

(c) Item 601 Exhibits
The exhibits required by Item 601 of Regulation S-K are set forth in
(a) (3) above.

(d) Financial Statement Schedules
The financial statement schedules required by Regulation S-K are set
forth in (a) (2) above.

28

SIGNATURES

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

Weider Nutrition International, Inc.

Dated: August 28, 1998 By: /S/ RICHARD B. BIZZARO
Richard B. Bizzaro
Chief Executive Officer and
President

Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.

NAME TITLE DATE

/s/ ERIC WEIDER Chairman of the Board August 28, 1998
and Director

/s/ RICHARD B. BIZZARO Chief Executive Officer, August 28, 1998
President and Director
(Principal Executive Officer)

/s/ ROBERT K. REYNOLDS Chief Operating Officer, August 28, 1998
Executive Vice President and
Director (Principal Financial
Accounting Officer)

/s/ RONALD L. COREY Director August 28, 1998

/s/ ROGER H. KIMMEL Director August 28, 1998

/s/ GEORGE F. LENGVARI Director August 28, 1998

/s/ DONALD G. DRAPKIN Director August 28, 1998

/s/ GLENN W. SCHAEFFER Director August 28, 1998

29

WEIDER NUTRITION INTERNATIONAL, INC. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED MAY 31, 1996, 1997 AND 1998
(IN THOUSANDS)

ADDITIONS
BALANCE AT CHARGED TO
BEGINNING COSTS BALANCE AT
DESCRIPTION OF YEAR EXPENSES DEDUCTIONS END OF YEAR
------------ ------------ ------------ ------------
ALLOWANCE FOR DOUBTFUL ACCOUNTS:

1996 ..................... $ 150 $ 98 $ (111) $ 137
------------ ------------ ------------ ------------
1997 ..................... $ 137 $ 151 $ (76) $ 212
------------ ------------ ------------ ------------
1998 ..................... $ 212 $ 273 $ (194) $ 291
------------ ------------ ------------ ------------
SALES RETURNS AND
ALLOWANCES:
1996 ..................... $ 754 $ 6,821 $ (6,357) $ 1,218
------------ ------------ ------------ ------------
1997 ..................... $ 1,218 $ 10,126 $ (10,356) $ 988
------------ ------------ ------------ ------------
1998 ..................... $ 988 $ 15,396 $ (14,734) $ 1,650
------------ ------------ ------------ ------------

S-1