By NADRA KAREEM Staff Reporter Established in 1980, Natrol Inc. has managed to evolve for nearly three decades. In the last two years, however, the Chatsworth-based nutritional product manufacturer has arguably undergone its most significant changes. After going through a rocky period between 2002 and 2005 in which sales were down, Natrol executives spent 2006 and 2007 turning the company’s financial predicament around, culminating Nov. 26 in the sale of the company to Indian-based pharmaceutical company Plethico Pharmaceuticals Limited for $80.8 million. “We have gained a solid reputation in our market niches and believe the merger with Plethico will also be a win-win for our customers and employees,” Natrol President and Chief Executive Officer Wayne M. Bos said at the time. In terms of market niches, Natrol Inc. has made a name for itself through its nutritional supplements, functional herbal teas and sports nutrition products. In addition to Natrol, the company’s brands include MRI, Prolab, Laci Le Beau, Promensil, Trinovin, Nu Hair and Shen Min. The company manufactures supplements for third parties as well as for its own brands. The products the company distributes nationally reach more than 54,000 retailers; internationally, through distribution partners and subsidiaries in the UK and Hong Kong, Natrol reaches more than 40 countries. A member of the Dietary Supplement Education Alliance and similar organizations, Natrol also serves as an educator about the types of products it distributes. To this end, the company recently partnered with the Fifth Annual Yoga Journal San Francisco Conference and Health Etc. 2008 The Business Journal spoke with Bos about the challenges Natrol has faced, how the merger with Plethico will affect the company and related issues. Question: You called the company’s merger with Plethico a win-win for all involved. Why do you think so? Answer: We have much more resources. There’s the opportunity for synergies between the two businesses. Every time you do an acquisition, you do a merger, more often than not. From a customer perspective it opens up greater opportunity for new products. For our employees, there’s greater opportunities, greater flexibility with careers and career development overall. Usually, it’s quite synergistic, both internally with the company and externally with the customer base. With Plethico being Indian-based means we’ve got sharing opportunities in those markets, so, overall it makes the whole prospect a lot more exciting and quite different. Q: The merger was finalized just recently. What effects has the merger had thus far on Natrol, or is it too soon to say? A: We’re private now, but we were a public company. With an acquisition, it’s usually anticlimactic. There’s an enormous amount of time spent on the transaction. [Afterward], you start to initiate some of the projects. There’s very little execution on anything major. You want the synergies to evolve. Q: Looking back on 2007, what were Natrol’s major achievements? A: Let’s take the last two years, 2006 and 2007. We turned the business around. The business was not performing that well between 2002 and 2005, so we had to turn some things around. We made some acquisitions in 2006 and 2007. We had the business wash out and clean balance sheet items. In some cases, we sold real estate. We balanced out the portfolio and got our operating margins to improve. Q: What are the company’s goals for 2008? A: We’re looking at opportunities that are international. We’re looking at growth in Europe, growth in the U.S., growth and acquisition in Asia and also looking at the Middle East. Combined with Plethico, we’ll have much more enhanced business development and growth. We expect we can add a lot. Q: Plethico, based in India, is a key global player, but Natrol is based in Chatsworth. What are the advantages to being located in the Valley? A: We really like the Valley for several reasons, beyond just the weather. I’m from Australia, so I notice that. There’s an excellent work force, access to really talented people. It’s a terrific access point for travel and transportation, good logistics. We do our logistics out of Chatsworth. It’s really those logistical items. They’re really key. Q: Natrol has been around for 27 years. How has it evolved during that time? A: The company has grown from when it started in 1980, created right here in Chatsworth, right here in the Valley. The business really evolved in 1998. It had a very successful initial public offering, listed on NASDAQ and continued to grow and evolve. That happens with a lot of businesses. It made successful acquisitions in all parts of the world. The evolution of the business has been very typical for a very successful company. Q: You’ve been at Natrol for two years, arguably the most exciting period of the company’s history. Where were you before? A: I had lots of business technology companies, technical business financial services, etc. I’ve always owned my own companies. Q: Natrol includes nutritional supplements, functional herbal teas and sports nutrition products in its portfolio. What are the company’s most popular products? A: We’re the No. 1 melatonin brand. We’re market leaders in sports nutrition. We’re focusing on what’s next in technology. Natrol is really, really well recognized. Q: Not long ago, there was quite an uproar about the safety of nutritional supplements, but Natrol swears by its quality testing practices. Why should consumers trust them? A: Natrol is second to none when it comes to quality. We have the highest standards. We spend more money on our initiatives beyond just ordinary, acceptable standards. That’s one of our strongest selling points in the industry. Natrol has still been very consistent , and when you look at the brand, you know Natrol’s products can be totally trusted. The founder had great pioneering skills. He gave Natrol very high standards, didn’t make compromises. (We have) high quality people, great passion, great vision, amazing work ethic. Q: Recently you provided free supplements during the Fifth Annual Yoga Journal San Francisco Conference and Health Etc. 2008. How does it benefit the company to participate in such events? A: There are a couple of purposes, and they’re not all selfish. We believe we’ve got a responsibility to serve the community. We’re not just trying to sell products, clearly that’s a part of it, but we also recognize a need to educate the consumer, to deliver supplements. There is a real benefit to providing a little more balance in their diet, in their lifestyle. From our perspective, it’s awareness of the food market, healthy living for the consumer. We are influencing with our products more awareness of their diet.
