Common use of CERTAIN FINANCIAL PROJECTIONS Clause in Contracts

CERTAIN FINANCIAL PROJECTIONS. The Company does not, as a matter of course, make public forecasts or projections as to its future financial performance. However, in connection with the negotiations between Numico and the Company, the Company made available to Numico and its representatives certain nonpublic information (the "Projections") regarding the Company's projected operating performance. The Projections indicated that for the fiscal year ending August 31, 2000 and for the calendar years ending December 31, 2000, 2001 and 2002, the Company's net revenue, earnings before interest and income taxes ("EBIT"), earnings before interest, income taxes, depreciation and amortization ("EBITDA") and net earnings were projected to be: REXALL SUNDOWN, INC. CERTAIN PROJECTIONS OF FUTURE OPERATING RESULTS (IN THOUSANDS) YEAR ENDING DECEMBER 31, FISCAL YEAR ENDING -------------------------------- AUGUST 31, 2000 2000 2001 2002 ------------------ -------- -------- ---------- Net revenue.................................. $747,500 $807,300 $940,200 $1,079,300 EBIT......................................... 129,396 148,376 183,179 210,859 EBITDA....................................... 150,103 171,930 210,025 240,772 Net earnings................................. 74,387 83,040 104,056 122,225 The Projections reflect the Company's forecast of its consolidated net revenue, EBIT, EBITDA and net earnings on a stand-alone basis and without reflecting any potential synergies from the consummation of the Offer and the Merger. THE PROJECTIONS WERE PREPARED SOLELY FOR INTERNAL USE AND NOT WITH A VIEW TO PUBLIC DISCLOSURE OR COMPLIANCE WITH THE PUBLISHED GUIDELINES OF THE SEC OR THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING PROJECTIONS AND WERE NOT PREPARED WITH THE ASSISTANCE OF, OR REVIEWED BY, INDEPENDENT ACCOUNTANTS. THE PROJECTIONS ARE INCLUDED IN THIS OFFER TO PURCHASE SOLELY BECAUSE SUCH INFORMATION WAS FURNISHED TO NUMICO AND THE PURCHASER BY THE COMPANY. THE PROJECTIONS WERE NOT PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND WERE NOT AUDITED OR REVIEWED BY ANY INDEPENDENT ACCOUNTING FIRM, NOR DID ANY SUCH FIRM PERFORM ANY OTHER SERVICES WITH RESPECT THERETO. THE PROJECTIONS ARE BASED ON A VARIETY OF ASSUMPTIONS RELATING TO THE BUSINESSES OF THE COMPANY, INDUSTRY PERFORMANCE, GENERAL BUSINESS AND ECONOMIC CONDITIONS AND OTHER MATTERS, WHICH ARE INHERENTLY SUBJECT TO SIGNIFICANT UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL. THESE ASSUMPTIONS INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC AND COMPETITIVE CONDITIONS, INFLATION RATES AND FUTURE BUSINESS CONDITIONS. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE ASSUMPTIONS MADE IN PREPARING THE PROJECTIONS WILL PROVE ACCURATE, AND ACTUAL RESULTS MAY BE MATERIALLY GREATER OR LESS THAN THOSE CONTAINED IN THE PROJECTIONS. THE INCLUSION OF THE PROJECTIONS HEREIN SHOULD NOT BE REGARDED AS AN INDICATION THAT THE COMPANY, NUMICO, THE PURCHASER OR THEIR RESPECTIVE AFFILIATES OR REPRESENTATIVES CONSIDERED OR CONSIDER THE PROJECTIONS TO BE A RELIABLE PREDICTION OF FUTURE EVENTS, AND THE PROJECTIONS SHOULD NOT BE RELIED UPON AS SUCH. NONE OF NUMICO, THE PURCHASER OR ANY OF THEIR RESPECTIVE AFFILIATES ASSUMES ANY RESPONSIBILITY FOR THE VALIDITY, REASONABLENESS, ACCURACY OR COMPLETENESS OF THE PROJECTIONS. NONE OF NUMICO, THE PURCHASER OR THE COMPANY IS UNDER ANY OBLIGATION TO OR HAS ANY INTENTION TO UPDATE THE PROJECTIONS AT ANY FUTURE TIME.

CERTAIN FINANCIAL PROJECTIONS. The Company does not, as a matter of course, make public forecasts or projections as to its future financial performance. However, in connection with the negotiations between Numico and the Company, the Company made available to representatives of Numico and its representatives certain nonpublic non-public information (the "Projections") regarding the Company's projected operating performance. The Projections indicated that for the fiscal year ending August 31, 2000 and for the calendar years ending December 31ended February 5, 2000, February 3, 2001 and February 2, 2002, the Company's net revenue, earnings before interest and income taxes ("EBIT"), earnings before interest, income taxes, depreciation and amortization ("EBITDA") and net earnings were projected to beare as follows: REXALL SUNDOWNGENERAL NUTRITION COMPANIES, INC. CERTAIN PROJECTIONS OF FUTURE OPERATING RESULTS (IN THOUSANDSMILLIONS) YEAR ENDING DECEMBER 31, FISCAL YEAR ENDING -------------------------------- AUGUST 31ENDED ------------------------------------------------- FEBRUARY 5, 2000 FEBRUARY 3, FEBRUARY 2, 2000 2001 2002 ------------------ -------- -------- ---------- --------------- --------------- --------------- Net revenue.................................. $747,500 $807,300 $940,200 $1,079,300 .................................................. $ 1,529.1 $ 1,724.8 $ 1,976.9 EBIT......................................... 129,396 148,376 183,179 210,859 ......................................................... 192.1 222.0 266.5 EBITDA....................................... 150,103 171,930 210,025 240,772 ....................................................... 256.7 295.5 343.6 Net earnings................................. 74,387 83,040 104,056 122,225 ................................................. 90.6 112.3 143.9 The Projections reflect the Company's forecast of its consolidated net revenue, EBIT, EBITDA and net earnings on a stand-alone basis and without reflecting any potential synergies from the consummation of the Offer and the Merger. THE PROJECTIONS WERE PREPARED SOLELY FOR INTERNAL USE AND NOT WITH A VIEW TO PUBLIC DISCLOSURE OR COMPLIANCE WITH THE PUBLISHED GUIDELINES OF THE SEC OR THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING PROJECTIONS AND WERE NOT PREPARED WITH THE ASSISTANCE OF, OR REVIEWED BY, INDEPENDENT ACCOUNTANTS. THE PROJECTIONS ARE INCLUDED IN THIS OFFER TO PURCHASE SOLELY BECAUSE SUCH INFORMATION WAS FURNISHED TO NUMICO AND THE PURCHASER BY THE COMPANY. NONE OF NUMICO, THE PURCHASER, THE COMPANY, THE DEALER MANAGER OR ANY OTHER PERSON PROVIDES ANY ASSURANCE AS TO THE VALIDITY OR ACCURACY OF THE PROJECTED OUTCOMES OR COMPLETENESS OF THE PROJECTIONS, AND THE INCLUSION OF SUCH PROJECTED INFORMATION IN THIS OFFER TO PURCHASE SHOULD NOT BE REGARDED AS AN INDICATION THAT ANY SUCH PERSONS CONSIDER SUCH PROJECTED OUTCOMES TO BE ACCURATE OR RELIABLE. THE PROJECTIONS WERE NOT PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND WERE NOT AUDITED OR REVIEWED BY ANY INDEPENDENT ACCOUNTING FIRM, NOR DID ANY SUCH FIRM PERFORM ANY OTHER SERVICES WITH RESPECT THERETO. THE PROJECTIONS ARE BASED ON A VARIETY OF ASSUMPTIONS RELATING TO THE BUSINESSES OF THE COMPANY, INDUSTRY PERFORMANCE, GENERAL BUSINESS AND ECONOMIC CONDITIONS AND OTHER MATTERS, WHICH ARE INHERENTLY SUBJECT TO SIGNIFICANT UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL. THESE ASSUMPTIONS INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC AND COMPETITIVE CONDITIONS, INFLATION RATES AND FUTURE BUSINESS CONDITIONS. ACCORDINGLYTHEREFORE, THE PROJECTIONS ARE INHERENTLY IMPRECISE AND THERE CAN BE NO ASSURANCE THAT THE ASSUMPTIONS MADE IN PREPARING THE PROJECTIONS THEY WILL PROVE ACCURATETO BE RELIABLE. ALSO, AND ACTUAL FUTURE RESULTS MAY BE VARY MATERIALLY GREATER OR LESS THAN FROM THOSE CONTAINED SHOWN IN THE PROJECTIONS. THE INCLUSION OF THE PROJECTIONS HEREIN SHOULD NOT BE REGARDED AS AN INDICATION THAT THE COMPANY, NUMICO, THE PURCHASER OR THEIR RESPECTIVE AFFILIATES OR REPRESENTATIVES CONSIDERED OR CONSIDER THE PROJECTIONS TO BE A RELIABLE PREDICTION OF FUTURE EVENTS, AND THE PROJECTIONS SHOULD NOT BE RELIED UPON AS SUCH. NONE OF NUMICO, THE PURCHASER OR ANY OF THEIR RESPECTIVE AFFILIATES ASSUMES ANY RESPONSIBILITY FOR THE VALIDITY, REASONABLENESS, ACCURACY OR COMPLETENESS OF THE PROJECTIONS. NONE OF NUMICO, THE PURCHASER PURCHASER, THE COMPANY OR THE COMPANY DEALER MANAGER IS UNDER ANY OBLIGATION TO OR HAS ANY INTENTION TO UPDATE THE PROJECTIONS AT ANY FUTURE TIME.