Health Wellness & Beauty Products Tear Sheet

$52 Billion $18 Billion 196,159 2016 Revenue 2016 Profit 2016 Businesses

Historical and Expected Performance Industry Revenue

$80,000 10% Growth Rate Growth $60,000 8% 6% $40,000 4%

$20,000 2% TotalRevenue $- 0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 est. est. est. est. est.

Total Revenue (mm's) Growth Rate

U.S. Market Size: ~$51.6 Billion The U.S. Health, Wellness and Beauty Products industry is made up of three main segments:

Health Stores primarily sell health and Percent of Segment Revenue personal care products in the form of nutritional supplement stores, convalescent Orthopedic Equipment Sports and Nutrition and prosthetic supply stores and specialized and First-Aid Supplies, 9.1% Products, medical supply stores. Retail outlets are 31.6% generally beauty supplement stores, Other, specialty cosmetic stores and fragrance 10.1% stores. The Health Stores segment experienced strong growth from 2012 to 2017, with an annual growth rate of 4.5%. Convalescent This segment’s growth, however, is expected Vitamin and Care Products, Mineral to slow to 0.3% annually from 2017 to 2022. 22.7% Supplements, The lower estimated growth rate is primarily 26.5% due to intensifying competition from new market entrants, mass merchandisers and online retailers, which will have a negative impact on prices.

Sources: IBISWorld, FactSet financial data and analytics SDR VENTURES, INC. 5613 DTC PARKWAY, SUITE 830 │ GREENWOOD VILLAGE, CO 80111 Investment Banking and Securities Offered Through SDR Capital Markets, Inc., 720.221.9220 Member FINRA and SIPC. SDRVENTURES.COM

Beauty, Cosmetic and Fragrance Stores have Percent of Segment Revenue experienced strong growth and are expected to see only slightly lower annual growth rates Fragrances, Skin-Care from 2017 to 2022. This segment grew at a 10.6% Treatments, rate of 5.0% from 2012 to 2017 and is 28.9% expected to grow at an annual rate of 4.7% Cosmetics, from 2017 to 2022. Per capital disposable 17.3% income and growing preference toward specialty beauty stores are driving growth, and higher-priced product offerings are Nail Products, expected to have a positive impact on future Hair-Care Deoderants, revenue growth. Products, and Other, 22.3% 20.9%

Online Vitamin and Supplement Sales Percent of Segment Revenue include online retail sales of dietary Herbal Other, supplements, including vitamins and Supplements, 8.7% minerals, herbs and sports nutrition products. 10.2% This segment has grown at a CAGR of 12% Sports over the past five years, the highest growth Nutrition rate of the three segments. This segment is Products, Specialty 38.5% also expected to have the highest annual Dietary growth from 2016 to 2021, of 8.9%. This Supplements, segment is expected to grow from 14% of 14.2% the industry in 2016 to 17% in 2021.

Vitamins and Minerals, 28.4% Key Trends  Overall internet sales have increased drastically and online sales of dietary supplements have grown faster than the overall retail market for these products. Nutrition Business Journal reports that online sales of supplements represented 2.7% of the entire retail market in 2011 and are expected to make up 3.9% of the entire retail market by 2020.  An aging population is expected to purchase more products with age-defying capabilities to combat memory loss and promote physical performance, muscle retention and skin health, leading to industry growth in the Health Stores segment.  An increase in youth-targeted cosmetics, the expansion of male-specific products and the reformulation of anti-aging staples have expanded the product offerings in specialty beauty stores.  Regulatory constraints may weigh on profit margins, as operators may be forced to take on more legal fees and compliance-related costs.

Percent of Industry Revenue, by Segment 100% 11% 12% 13% 13% 14% 14% 15% 16% 17% 17% 80% 42% 42% 43% 42% 40% 60% 41% 42% 42% 43% 43%

40%

20% 47% 46% 45% 45% 46% 45% 43% 42% 41% 39%

Health Stores Beauty, Cosmetic and Fragrance Stores Online Vitamin and Supplement Sales

Recent Precedent Transactions EV / EV / Date Target Buyer Segment EV (MM) Rev EBITDA

09/28/17 Pro Pac Labs, Inc. Linden Capital Partners; MeriCal LLC Vitamins, Minerals, & Supplements - - -

09/27/17 Bird & Cronin, Inc. Dynatronics Corp. Personal Care $ 15.5 - -

08/08/17 Neocell Corp. Wellnext LLC; WM Partners LP Vitamins, Minerals, & Supplements - - -

08/01/17 Novel Ingredient Services LLC Innophos Holdings, Inc. Vitamins, Minerals, & Supplements $ 125.0 - -

07/03/17 Mineral Fusion Natural Brands LLC BWX Ltd. Vitamins, Minerals, & Supplements $ 43.0 - -

06/19/17 Top Secret Nutrition LLC Hi-Tech Pharmaceuticals, Inc. Vitamins, Minerals, & Supplements

06/16/17 Infused Mfg LLC QuikFlo Health, Inc. Personal Care - - -

06/02/17 Innovative Food Processors, Inc. Balchem Corp. Vitamins, Minerals, & Supplements - - -

06/01/17 Parfums de Coeur Ltd. CVC Capital Partners Ltd. Personal Care $ 1,425.0 - -

05/31/17 ME Bath Experience, Inc. Parfums de Coeur Ltd.; Yellow Wood Partners LLC Personal Care - - -

05/24/17 Seguin Natural Hair Products, Inc. Seguin Natural Hair Products, Inc. Personal Care $ 0.3 - NM

05/16/17 Limelight By Alcone L'Occitane International SA Personal Care $ 320.0 - -

04/03/17 Gimbal Brothers LLC Highlander Partners LP; Bettera Brands LLC Vitamins, Minerals, & Supplements - - -

04/03/17 Scivation, Inc. MidOcean US Advisor LP; Woodbolt Distribution LLC Vitamins, Minerals, & Supplements - - -

03/09/17 Vee Pak, Inc. Wind Point Advisors LLC Personal Care - - -

03/02/17 Natural Products, Inc. LTS Nutraceuticals, Inc. Vitamins, Minerals, & Supplements - - -

02/24/17 Focus Medical LLC Lumenis Ltd. Personal Care - - -

02/14/17 APS BioGroup LLC Pegasus Capital Advisors; PanTheryx, Inc. Vitamins, Minerals, & Supplements - - -

02/14/17 La Belle, Inc. Pegasus Capital Advisors; PanTheryx, Inc. Vitamins, Minerals, & Supplements - - -

02/14/17 Cynosure, Inc. Hologic, Inc. Personal Care $ 1,426.6 3.3x 29.7x

01/18/17 Jusuru International, Inc. Modere, Inc.; Z Capital Partners LLC (Private Equity) Vitamins, Minerals, & Supplements - - - 01/10/17 Mortara Instrument, Inc. Hill-Rom Holdings, Inc. Personal Care $ 330.0 2.9x -

Summary of all Transactions - Last Three Years Enterprise Value (MM) EV / Revenue EV / EBITDA Mean $ 199 5.2x 8.0x Median $ 8 3.3x 1.1x

Transactions by Product Type, since 2015

50 25 40

30 16 DealCount 20 33 10 8 24 6 0 2015 2016 2017

Vitamins, Minerals, & Supplements Personal Care

Public Comparables

Personal Care Market Stats Operating Stats LTM Multiples Market Cap Quarter YTD EBITDA TEV/ TEV/ Price/ Company Name Symbol Est. Revenue Growth ($ in Mil) Change Change Margin Rev EBITDA EPS Unilever Plc ULVR-GB $ 69,681 (2.4%) 28.0% 2.7% 19.1% 1.0x 14.9x 25.3x Estee Lauder Cos., Inc. EL 27,744 14.9% 62.0% 10.1% 22.6% 3.9x 18.4x 33.5x Ulta Beauty, Inc. ULTA 13,705 (1.3%) (12.5%) NM NM 2.5x 13.8x NM Coty, Inc. COTY 12,809 3.4% (6.7%) 4.0% 12.6% 2.3x 18.3x NM Nu Skin Enterprises, Inc. NUS 3,578 10.5% 42.2% 8.8% 14.5% 1.7x 11.9x 24.8x Sally Beauty Holdings, Inc. SBH 2,205 (12.3%) (35.0%) 0.1% 15.4% 1.0x 6.5x 11.0x USANA Health Sciences, Inc. USNA 1,730 25.0% 17.8% 5.8% 13.6% 1.5x 10.7x 19.9x Revlon, Inc. REV 1,171 (9.4%) (23.7%) (2.5%) 2.0% 1.5x 16.2x (8.2x) Inter Parfums, Inc. IPAR 1,400 8.8% 37.1% 6.7% 21.2% 2.4x 15.2x 34.0x Avon Products, Inc. AVP 898 (12.4%) (59.5%) 2.0% 8.4% 0.5x 5.9x NM Natural Health Trends Corp. NHTC 209 (22.9%) (25.8%) NM 21.6% 0.4x 1.5x 4.4x United-Guardian, Inc. UG 72 (19.7%) 1.0% NM 47.8% 4.7x 12.0x 20.1x Revlon, Inc. UG 72 (19.7%) 1.0% NM 47.8% 4.7x 12.0x 20.1x United-Guardian, Inc. UG 72 (19.7%) 1.0% NM 47.8% 4.7x 12.0x 20.1x Segment Average 9,664 (0.1%) 0.4% 4.2% 16.8% 1.9x 12.6x 15.8x Segment Median 1,565 (1.8%) (2.8%) 4.0% 15.4% 1.6x 12.9x 19.9x

Vitamins, Minerals, & Supplements Market Stats Operating Stats LTM Multiples Market Cap Quarter YTD EBITDA TEV/ TEV/ Price/ Company Name Symbol Est. Revenue Growth ($ in Mil) Change Change Margin Rev EBITDA EPS Weight Watchers International, Inc. WTW $ 2,771.56 (1.4%) 275.1% 7.8% 32.8% 3.6x 13.7x 25.6x Herbalife Ltd. HLF 6,087.22 2.9% 45.0% 6.8% 13.4% 1.5x 10.1x 15.8x Nutrisystem, Inc. NTRI 1,478 (12.0%) 42.0% 16.1% 15.9% 2.1x 14.7x 26.9x Medifast, Inc. MED 822 16.1% 65.6% 13.4% 14.7% 2.5x 17.7x 34.0x GNC Holdings, Inc. GNC 419 (31.3%) (45.0%) (1.8%) 9.6% 0.7x 7.5x NM Nature's Sunshine Products, Inc. NATR 246 28.1% (13.3%) NM 5.2% 0.6x 21.7x NM Vitamin Shoppe, Inc. VSI 97 (24.3%) (82.9%) (5.0%) 1.9% 0.2x 3.6x NM LifeVantage Corp. LFVN 77 28.2% (33.6%) NM 3.6% 0.4x 24.3x 60.1x Mannatech, Inc. MTEX 38 (3.4%) (31.0%) NM 3.6% 0.0x 0.7x 49.0x Segment Average 1,337 0.3% 24.6% 6.2% 11.2% 1.3x 12.7x 35.2x Segment Median 419 (1.4%) (13.3%) 7.3% 9.6% 0.7x 13.7x 30.4x

Historical EV / NTM EBITDA

Personal Care 20.0x

15.0x

11.0x 10.0x 9.7x

5.0x

0.0x

Unilever PLC Estee Lauder Companies Inc. Class A Ulta Beauty Inc Coty Inc. Class A Nu Skin Enterprises, Inc. Class A Sally Beauty Holdings, Inc. USANA Health Sciences, Inc. Revlon, Inc. Class A Inter Parfums, Inc. Avon Products, Inc. Natural Health Trends Corp. United-Guardian, Inc. LifeVantage Corporation CCA Industries, Inc. Average

Vitamins, Minerals and Supplements 20.0x 18.0x 16.0x 14.0x 12.0x 10.0x 9.7x 8.0x 8.7x 6.0x 4.0x 2.0x 0.0x

Herbalife Ltd. Weight Watchers International, Inc. Nutrisystem, Inc. Medifast, Inc. GNC Holdings, Inc. Class A Nature's Sunshine Products, Inc. Vitamin Shoppe, Inc. LifeVantage Corporation Mannatech, Incorporated Average

Conclusion Health, Wellness and Beauty Products is a strong industry that will continue to grow due to significant consumer demand driven by online sales. Both the Personal Care and the Vitamins, Minerals and Supplements public comparable baskets have higher median EV / EBITDA multiples than the Health, Wellness and Beauty Services Industry. This is likely due to greater capital efficiency. Online vitamin, supplement and beauty products is a high-margin business that requires less capital and labor requirements than many service businesses. Given these characteristics, we believe a health, wellness and beauty products business can achieve an EV / EBITDA multiple in the range of 8x to 15x.

For any further questions or discussion, please contact Chris Bouck, Principal at SDR Ventures.