Optimum Nutrition Buys Weider Line 34875

Optimum Nutrition Buys Weider Line

SALT LAKE CITY--Weider Nutrition International, based here,sold all assets and associated liabilities relating to its American BodyBuilding (ABB) brand, which includes the Science Foods brand, to American BodyBuilding Products, a newly formed, wholly owned subsidiary of Aurora, Ill.-basedOptimum Nutrition. According to Weider, the net proceeds from the sale--whichwill include $5.65 million in cash--will be used to reduce its long-term debt.

"As previously announced, we have been concentrating on improvingprofitability within our business units: Schiff Specialty Nutrition, ActiveNutrition and Haleko," said Bruce Wood, Weider president and chiefexecutive officer (CEO). "To meet our goals, we are redirecting marketingresources to our flagship Schiff and Weider brands domestically." He addedthat the company sees this transaction as a positive step forward in fulfillingits long-term strategy.

The ABB brand was bought by Weider in 1995, according to BodyBuilding.com,and is made up of bottled and powdered drinks marketed for energy, recovery andweight control. The products have primarily been distributed to health clubs andgyms. According to Optimum Nutrition, its own products sell in health foodstores and gyms, but ABB has a stronger foothold in the gym sector and has astrong distribution network throughout all 50 states. "ABB's dominancewithin the sports beverage segment combined with Optimum Nutrition's corecompetency in sports nutrition has made this new addition a good fit with ourexisting line," stated Tony Costello, CEO of Optimum Nutrition (www.optimumnutrition.com)."We are now the only sports nutrition company in the industry tomanufacture items for all of its product categories."

The final sale price of the brands will be based on the closing statement ofacquired assets and assumed liabilities, which includes the assumption of a$250,000 mortgage on the accompanying ABB beverage facility in Walterboro, S.C.Weider reported the transaction will negatively impact fiscal 2002 pre-taxfinancial results by approximately $9 million, primarily due to impairment ofintangible assets.

Weider (www.weider.com) sales in fiscal2001, which endedMay 31, 2001, were down 3.4 percent with net profit coming inat $211,000, down 80 percent from $1.1 million logged in fiscal 2000. InDecember 2001, the company attempted to cut its losses by laying off 25 staffmembers, eliminating various departments and organizing Weider into three units.