Exhibit 99.1
GNC Holdings, Inc. Reports Fourth Quarter and Full Year 2011 Results
Exceeds Outlook for 2011
Declares Cash Dividend
Fourth Quarter Revenue Increases 16.9% to $509.6 million
Fourth Quarter Domestic Company-Owned Same Store Sales Increases 12.1%
(26th Consecutive Quarterly Same Store Sales Increase)
Fourth Quarter Adjusted EBITDA Increases 43.3%
Fourth Quarter Adjusted Earnings per share of $0.35
PITTSBURGH, February 16, 2012 /PRNewswire/ — GNC Holdings, Inc. (NYSE: “GNC”) (the “Company”), a leading global specialty retailer of nutritional products, today reported its financial results for the quarter and year ended December 31, 2011. In the first quarter of 2011, the Company entered into a new Senior Credit Facility and utilized a portion of the proceeds to refinance former indebtedness (the “Refinancing”). On April 6, 2011, the Company completed an Initial Public Offering (the “IPO”) of 25.875 million shares of Class A common stock at a public offering price of $16.00 per share. During the fourth quarter, certain of the Company’s stockholders completed a Secondary Offering of 23 million shares of Class A common stock (the “Secondary Offering”).
In addition to presenting the Company’s financial results in conformity with U.S. generally accepted accounting principles (GAAP), the Company is also presenting results on an “adjusted” basis to exclude the impact of certain expenses related to the Refinancing, the IPO, the Secondary Offering, and executive severance.
Fourth Quarter Performance
For the fourth quarter of 2011, the Company reported consolidated revenue of $509.6 million, an increase of 16.9% over consolidated revenue of $435.8 million for the fourth quarter of 2010. Revenue increased in each of the Company’s segments: retail by 16.9%, franchise by 17.6%, and manufacturing/wholesale by 16.4%. Same store sales increased 12.1% in domestic company-owned stores (including GNC.com sales), representing the Company’s 26th consecutive quarter of positive same store sales growth. In domestic franchise locations, same store sales increased 11.4%.
Adjusted EBITDA, which the Company defines as net income before interest, income taxes, depreciation, amortization, sponsor obligation payments, executive severance, and transaction related costs, for the fourth quarter of 2011 was $82.5 million, a $24.9 million, or 43.3%, increase over adjusted EBITDA of $57.6 million for the fourth quarter of 2010. Adjusted EBITDA was 16.2% of revenue for the fourth quarter of 2011, compared to 13.2% for the fourth quarter of 2010.
For the fourth quarter of 2011, the Company reported net income of $37.7 million, compared to $18.8 million for the fourth quarter of 2010. Net income for the fourth quarter of 2011 included $0.5 million of pre-tax expenses associated with the Secondary Offering. Excluding these expenses, adjusted net income for the fourth quarter of 2011 was $38.3 million, a $20.3 million or 113.3% increase from adjusted net income of $17.9 million for the fourth quarter of 2010. Diluted earnings per share, also adjusted for the Secondary Offering expenses, were $0.35 for the fourth quarter of 2011.
Joe Fortunato, President & CEO, said, “We’re very pleased with our performance in 2011. This is a testament to the strength of our global brand, which represents quality, integrity and innovation. These traits resonate with consumers in many ways. Our domestic retail business delivered our 26th consecutive quarter of positive same store sales fueled by accelerating trends and market share gains in our core categories, the continued success of new product innovation, and the ongoing substantial growth in GNC.com. In addition, we are succeeding with other brand extension channels including PetSmart, Sam’s Club and contract manufacturing. We see significant additional domestic and international expansion opportunities and are positioned for long term growth, supported by our global brand presence.”
Quarterly Dividend, Share Repurchase Program
The Company’s Board of Directors has authorized and declared a cash dividend of $0.11 per share of its common stock for the first quarter of 2012, payable on or about March 30, 2012 to stockholders of record at the close of business on March 15, 2012. The Company currently intends to pay regular quarterly dividends; however, the declaration of such future dividends is subject to the final determination of the Company’s Board of Directors.
In December 2011, the Company announced a share repurchase program, with the intent of mitigating dilution associated primarily with the exercise of employee stock options. Under the program, which was largely completed in December 2011 and concluded in January 2012, the Company repurchased 2.4 million shares for an aggregate purchase price of $67.5 million. At the conclusion of the program diluted shares outstanding were approximately 107.3 million. In an effort to continue to offset the dilutive effect of stock option exercises, in February 2012 the Company’s Board of Directors extended the repurchase program for up to an additional 1 million shares over the forthcoming year.
Fourth Quarter Segment Operating Performance
For the fourth quarter of 2011, retail segment revenue grew 16.9% to $365.3 million, compared to $312.5 million for the fourth quarter of 2010, driven primarily by a 12.1% domestic same store sales increase, including 35.1% growth in GNC.com revenue, the addition of LuckyVitamin.com (acquired August 31, 2011) and 129 net new stores from the end of the fourth quarter of 2010. Operating income increased by 56.9%, from $34.6 million to $54.3 million, and was 14.9% of segment revenue for the fourth quarter 2011 compared to 11.1% for the fourth quarter of 2010. The increase in operating income percentage was driven by gross margin improvement and expense leverage on the same store sales increase in occupancy and payroll.
For the fourth quarter of 2011, franchise segment revenue grew 17.6% to $83.7 million, compared to $71.2 million for the fourth quarter of 2010, driven primarily by increased wholesale sales and royalty income in both domestic and international franchise operations. Operating income increased 20.1%, from $23.3 million to $28.0 million, and was 33.4% of segment revenue for the fourth quarter of 2011 compared to 32.7% for the fourth quarter of 2010. The increase in operating income percentage in the quarter was driven by a higher gross product margin percentage on wholesale sales.
For the fourth quarter of 2011, manufacturing/wholesale segment revenue, excluding intersegment revenue, grew 16.4% to $60.7 million, compared to $52.1 million for the fourth quarter of 2010, driven primarily by an 11.1% increase in 3rd party manufacturing contract sales, and wholesale sales to PetSmart and Sam’s Club. Operating income increased 16.0% from $18.3 million to $21.2 million and was 35.0% of segment revenue for the fourth quarter of 2011 compared to 35.1% for the fourth quarter of 2010.
Total operating income for the fourth quarter of 2011 was $69.5 million, a $29.5 million, or 73.5%, increase over operating income of $40.1 million for the fourth quarter of 2010. Operating income for the fourth quarter of 2011 included $0.5 million of expenses associated with the Secondary Offering.
In the fourth quarter of 2011, the Company opened 52 net new domestic company-owned stores, 42 net new international franchise locations, 22 net new franchise store-within-a-store Rite Aid locations, 5 net new domestic franchise locations, and closed net 2 company owned and 1 franchise store in Canada.
Full Year Performance
For the full year 2011, the Company reported consolidated revenue of $2,072.2 million, an increase of 13.7% over consolidated revenue of $1,822.2 million for the full year of 2010. Revenue increased in each of the Company’s segments: retail by 13.0%, franchise by 14.0%, and manufacturing/wholesale by 18.8%. Same store sales increased 10.1% in domestic company-owned stores (including GNC.com sales). In domestic franchise locations, same store sales increased 7%.
Adjusted EBITDA for the full year of 2011 was $346.7 million, an $81.8 million, or 30.9%, increase over Adjusted EBITDA of $264.9 million for the full year of 2010. Adjusted EBITDA was 16.7% as a percentage of revenue for the full year of 2011, compared to 14.5% for the full year of 2010.
For the full year of 2011, the Company reported net income of $132.3 million, compared to $96.6 million for the full year of 2010. Net income included expenses related to the Refinancing, the IPO, the Secondary Offering, and executive severance. Adjusting for these expenses, sponsor obligations, and the tax impact of certain of these transactions, adjusted net income was $163.5 million, 7.9% of revenue and a 69.6% increase over full year 2010. Diluted earnings per share, also adjusted for these items (“Adjusted EPS”), were $1.52 for the full year of 2011.
For the full year of 2011, the Company opened 131 net new domestic company-owned stores, 154 net new international franchise locations, 122 net new franchise store-within-a-store Rite Aid locations, 21 net new domestic franchise locations, and closed net 2 company owned and 1 franchise store in Canada.
For the full year of 2011, the Company generated net cash from operations of $174.7 million, incurred capital expenditures of $43.8 million, repurchased $61.6 million in common stock under the share repurchase program, used $19.8 million for the acquisition of LuckyVitamin.com, borrowed $1.2 billion under the Term Loan Facility, and used approximately $1.1 billion of these funds to redeem in full the outstanding Senior Toggle Notes, Senior Subordinated Notes, repay the 2007 Senior Credit Facility, and pay related expenses. Additionally, the Company received net proceeds of $237.3 million from the IPO, and used the proceeds and cash on hand to, among other things, redeem all of its outstanding Class A Preferred Stock, and repay $300 million of outstanding borrowings under the Term Loan Facility. At December 31, 2011, the Company’s cash balance was $128.4 million.
Current 2012 Outlook
The Company’s outlook for 2012 is based on current expectations and includes “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.
Below is the Company’s initial outlook for 2012 based on current expectations:
· Consolidated revenue of approximately $2.28 billion for the full year 2012, a 10% increase over 2011 consolidated revenue of $2.07 billion. This is based on achieving a mid-single digit domestic retail same store sales increase for the full year 2012, excluding the impact of GNC.com which in 2011 contributed approximately 140 basis points to the total reported same store sales increase of 10.1%.
· Consolidated earnings per diluted share (“EPS”) of approximately $1.82 for the full year 2012, a 20% increase over 2011 Adjusted EPS of $1.52. Quarterly EPS comparisons are affected by the following factors:
· In Q1 2011, approximately 3¢ higher interest expense as a result of the pre-Refinancing debt structure.
· In Q3 2011, approximately 2¢ non-recurring income tax benefit.
· After these adjustments, the Company still expects Q1 2012 to be the highest EPS growth rate quarter, as a result of comparisons against the lowest 2011 same store sales growth quarter in both retail and domestic franchise segments. The Company’s current estimate for Q1 2012 EPS is approximately $0.49.
· Depreciation and amortization of approximately $50 million, interest expense of approximately $42 million, a tax rate of approximately 37%, and a diluted share count of approximately 107.5 million.
· Capital expenditures of approximately $50 million. New store expectations: approximately 125 net new domestic retail locations, 15 net new domestic franchise locations, 150 net new international franchise locations, and 50 net new GNC-Rite Aid store-within-a-store locations.
About Us
GNC Holdings, Inc., headquartered in Pittsburgh, Pa., is a leading global specialty retailer of health and wellness products, including vitamins, minerals, and herbal supplement products, sports nutrition products and diet products, and trades on the New York Stock Exchange under the symbol “GNC.”
As of December 31, 2011, GNC has more than 7,600 locations, of which more than 5,900 retail locations are in the United States (including 924 franchise and 2,125 Rite Aid franchise store-within-a-store locations) and franchise operations in 53 countries (including distribution centers where retail sales are made). The Company — which is dedicated to helping consumers Live Well — has a diversified, multi-channel business model and derives revenue from product sales through company-owned retail stores, domestic and international franchise activities, third party contract manufacturing, e-commerce and corporate partnerships. Our broad and deep product mix, which is focused on high-margin, premium, value-added nutritional products, is sold under GNC proprietary brands, including Mega Men®, Ultra Mega®, GNC Total Lean, Pro Performance® and Pro Performance® AMP, and under nationally recognized third party brands.
Conference Call
GNC has scheduled a conference call and webcast to report its fourth quarter 2011 financial results on Thursday, February 16, 2012 at 9:00 am EST. To listen to this call, dial 1-800-591-6945 inside the U.S. and
1-617-614-4911 outside the U.S. The conference identification number for all participants is 33169715. A webcast of the call will also be available on www.gnc.com - via the Investor Relations section under “About GNC” - through March 17, 2012.
Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties
This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations and business that is not historical information. Forward-looking statements can be identified by the use of terminology such as “subject to,” “believes,” “anticipates,” “plans,” “expects,” “intends,” “estimates,” “projects,” “may,” “will,” “should,” “can,” the negatives thereof, variations thereon and similar expressions, or by discussions of strategy and outlook. While GNC believes there is a reasonable basis for its expectations and beliefs, they are inherently uncertain, and the Company may not realize its expectations and its beliefs may not prove correct. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Actual results could differ materially from those described or implied by such forward-looking statements. For a listing of factors that may materially affect such forward-looking statements, please refer to the prospectus that is contained in our registration statement on Form S-1 (File No. 333-176721) filed with the Securities and Exchange Commission.
Management has included non-GAAP financial measures in this press release because it believes they represent a more effective means by which to measure the Company’s operating performance. We use adjusted EBITDA to evaluate our performance relative to our competitors and also as a measurement for the calculation of management incentive compensation. Although we primarily view adjusted EBITDA as an operating performance measure, we also consider it to be a useful analytical tool for measuring our liquidity, our leverage capacity, and our ability to service our debt and generate cash for other purposes. Management also believes that adjusted EBITDA, adjusted net income and adjusted diluted earnings per share are useful to investors as they enable the Company and its investors to evaluate and compare the Company’s results from operations and cash resources generated from the Company’s business in a more meaningful and consistent manner by excluding specific items which are not reflective of ongoing operating results. Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income, operating income, or any other performance measures derived in accordance with GAAP, or as an alternative to GAAP cash flow from operating activities, as a measure of our profitability or liquidity.
GNC HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(in thousands)
|
|
|
Three months ended |
|
Year ended |
| ||||||||
|
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
|
|
|
(unaudited) |
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Revenue |
|
$ |
509,608 |
|
$ |
435,759 |
|
$ |
2,072,179 |
|
$ |
1,822,168 |
|
|
Cost of sales, including cost of warehousing, distribution and occupancy |
|
325,438 |
|
286,047 |
|
1,318,346 |
|
1,179,886 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Gross profit |
|
184,170 |
|
149,712 |
|
753,833 |
|
642,282 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Compensation and related benefits (a) |
|
72,257 |
|
69,129 |
|
291,268 |
|
273,797 |
| ||||
|
Advertising and promotion |
|
12,893 |
|
11,277 |
|
52,924 |
|
51,707 |
| ||||
|
Other selling, general and administrative |
|
28,947 |
|
25,411 |
|
113,477 |
|
100,687 |
| ||||
|
Foreign currency loss (gain) |
|
15 |
|
(147 |
) |
121 |
|
(296 |
) | ||||
|
Transaction and strategic alternative related costs (b) |
|
537 |
|
3,981 |
|
13,536 |
|
3,981 |
| ||||
|
Operating income |
|
69,521 |
|
40,061 |
|
282,507 |
|
212,406 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest expense, net |
|
10,386 |
|
16,194 |
|
74,903 |
|
65,376 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income before income taxes |
|
59,135 |
|
23,867 |
|
207,604 |
|
147,030 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income tax expense |
|
21,392 |
|
5,041 |
|
75,271 |
|
50,463 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income |
|
$ |
37,743 |
|
$ |
18,826 |
|
$ |
132,333 |
|
$ |
96,567 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income per share - Basic and Diluted: |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income |
|
$ |
37,743 |
|
$ |
18,826 |
|
$ |
132,333 |
|
$ |
96,567 |
|
|
Preferred stock dividends |
|
— |
|
(5,344 |
) |
(4,726 |
) |
(20,606 |
) | ||||
|
Net income available to common stockholders |
|
$ |
37,743 |
|
$ |
13,482 |
|
$ |
127,607 |
|
$ |
75,961 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Earnings per share: |
|
|
|
|
|
|
|
|
| ||||
|
Basic. |
|
$ |
0.36 |
|
$ |
0.15 |
|
$ |
1.27 |
|
$ |
0.87 |
|
|
Diluted |
|
$ |
0.35 |
|
$ |
0.15 |
|
$ |
1.24 |
|
$ |
0.85 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
106,309 |
|
87,367 |
|
100,261 |
|
87,339 |
| ||||
|
Diluted |
|
109,116 |
|
88,719 |
|
103,010 |
|
88,917 |
| ||||
(a) Includes $3.5 million of executive severance for the year ended December 31, 2011.
(b) Expenses related to the IPO, the Secondary Offering, and other strategic alternative related costs.
The following table provides a reconciliation of net income to adjusted EBITDA determined in accordance with GAAP for each respective period:
|
|
|
Three months ended |
|
Year ended |
| ||||||||
|
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
|
|
|
(in thousands) |
| ||||||||||
|
|
|
(unaudited) |
|
|
|
|
| ||||||
|
Net income |
|
$ |
37,743 |
|
$ |
18,826 |
|
$ |
132,333 |
|
$ |
96,567 |
|
|
Interest expense, net |
|
10,386 |
|
16,194 |
|
74,903 |
|
65,376 |
| ||||
|
Income tax expense |
|
21,392 |
|
5,041 |
|
75,271 |
|
50,463 |
| ||||
|
Depreciation and amortization |
|
12,446 |
|
13,139 |
|
46,790 |
|
46,993 |
| ||||
|
Transaction and strategic alternative related costs (b) |
|
537 |
|
3,981 |
|
13,536 |
|
3,981 |
| ||||
|
Executive severance |
|
— |
|
— |
|
3,470 |
|
— |
| ||||
|
Sponsor obligations |
|
— |
|
375 |
|
375 |
|
1,500 |
| ||||
|
Adjusted EBITDA |
|
$ |
82,504 |
|
$ |
57,556 |
|
$ |
346,678 |
|
$ |
264,880 |
|
(b) Expenses related to the IPO, the Secondary Offering, and other strategic alternative related costs.
The following table provides a reconciliation of net income and EPS to adjusted net income and adjusted EPS for each respective period:
|
|
|
Three months ended |
|
Year ended |
| ||||||||
|
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
|
|
|
(in thousands) |
| ||||||||||
|
|
|
(unaudited) |
|
|
|
|
| ||||||
|
Net Income |
|
$ |
37,743 |
|
$ |
18,826 |
|
$ |
132,333 |
|
$ |
96,567 |
|
|
Transaction and strategic alternative related costs (b) |
|
537 |
|
3,981 |
|
13,536 |
|
3,981 |
| ||||
|
Executive severance |
|
— |
|
— |
|
3,470 |
|
— |
| ||||
|
Interest expense |
|
— |
|
— |
|
28,099 |
|
— |
| ||||
|
Sponsor obligations |
|
— |
|
375 |
|
375 |
|
1,500 |
| ||||
|
Tax effect |
|
— |
|
(5,232 |
) |
(14,275 |
) |
(5,648 |
) | ||||
|
Adjusted net income |
|
$ |
38,280 |
|
$ |
17,950 |
|
$ |
163,538 |
|
$ |
96,400 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Adjusted Income per share - Basic and Diluted: |
|
|
|
|
|
|
|
|
| ||||
|
Adjusted Net income |
|
$ |
38,280 |
|
$ |
17,950 |
|
$ |
163,538 |
|
$ |
96,400 |
|
|
Preferred stock dividends (c) |
|
— |
|
(5,344 |
) |
— |
|
(20,606 |
) | ||||
|
Net income available to common stockholders |
|
$ |
38,280 |
|
$ |
12,606 |
|
$ |
163,538 |
|
$ |
75,794 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
$ |
0.36 |
|
$ |
0.14 |
|
$ |
1.56 |
|
$ |
0.87 |
|
|
Diluted |
|
$ |
0.35 |
|
$ |
0.14 |
|
$ |
1.52 |
|
$ |
0.85 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Adjusted weighted average common shares outstanding (d): |
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
106,309 |
|
87,367 |
|
104,562 |
|
87,339 |
| ||||
|
Diluted |
|
109,116 |
|
88,719 |
|
107,256 |
|
88,917 |
| ||||
(b) Expenses related to the IPO, the Secondary Offering, and other strategic alternative related costs.
(c) Preferred stock dividends were not subtracted for the year ended December 31, 2011, as the share count was adjusted to reflect the IPO as if it had occurred on January 1, 2011.
(d) Weighted average shares outstanding were adjusted to reflect shares issued at IPO as if it had occurred on January 1, 2011.
GNC HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
|
|
|
December 31, |
|
December 31, |
| ||
|
|
|
2011 |
|
2010 |
| ||
|
Current assets: |
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
128,438 |
|
$ |
193,902 |
|
|
Receivables, net |
|
114,190 |
|
102,874 |
| ||
|
Inventories |
|
423,610 |
|
381,949 |
| ||
|
Prepaids and other current assets |
|
38,777 |
|
40,569 |
| ||
|
Total current assets |
|
705,015 |
|
719,294 |
| ||
|
|
|
|
|
|
| ||
|
Long-term assets: |
|
|
|
|
| ||
|
Goodwill, brands and other intangibles, net |
|
1,507,466 |
|
1,492,465 |
| ||
|
Property, plant and equipment, net |
|
198,171 |
|
193,428 |
| ||
|
Other long-term assets |
|
18,935 |
|
19,896 |
| ||
|
Total long-term assets |
|
1,724,572 |
|
1,705,789 |
| ||
|
|
|
|
|
|
| ||
|
Total assets |
|
$ |
2,429,587 |
|
$ |
2,425,083 |
|
|
|
|
|
|
|
| ||
|
Current liabilities: |
|
|
|
|
| ||
|
Accounts payable |
|
$ |
124,416 |
|
$ |
98,662 |
|
|
Current portion, long-term debt |
|
1,592 |
|
28,070 |
| ||
|
Other current liabilities |
|
104,525 |
|
108,093 |
| ||
|
Total current liabilities |
|
230,533 |
|
234,825 |
| ||
|
|
|
|
|
|
| ||
|
Long-term liabilities: |
|
|
|
|
| ||
|
Long-term debt |
|
899,950 |
|
1,030,429 |
| ||
|
Other long-term liabilities |
|
320,642 |
|
321,965 |
| ||
|
Total long-term liabilities |
|
1,220,592 |
|
1,352,394 |
| ||
|
|
|
|
|
|
| ||
|
Total liabilities |
|
1,451,125 |
|
1,587,219 |
| ||
|
|
|
|
|
|
| ||
|
Preferred stock |
|
— |
|
218,381 |
| ||
|
|
|
|
|
|
| ||
|
Total stockholders’ equity |
|
978,462 |
|
619,483 |
| ||
|
|
|
|
|
|
| ||
|
Total liabilities and stockholders’ equity |
|
$ |
2,429,587 |
|
$ |
2,425,083 |
|
GNC HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
|
|
|
Year Ended |
| ||||
|
|
|
December 31, |
| ||||
|
|
|
2011 |
|
2010 |
| ||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
| ||
|
Net income |
|
$ |
132,333 |
|
$ |
96,567 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
| ||
|
Early extinguishment of debt |
|
19,855 |
|
— |
| ||
|
Depreciation and amortization expense |
|
46,790 |
|
46,993 |
| ||
|
Amortization of debt costs |
|
2,756 |
|
4,694 |
| ||
|
Non-cash stock based compensation |
|
3,932 |
|
3,169 |
| ||
|
Other |
|
14,070 |
|
8,118 |
| ||
|
Changes in: |
|
|
|
|
| ||
|
Receivables |
|
(13,155 |
) |
(9,620 |
) | ||
|
Inventory |
|
(56,919 |
) |
(26,324 |
) | ||
|
Accounts payable |
|
23,243 |
|
2,705 |
| ||
|
Other working capital |
|
1,769 |
|
15,198 |
| ||
|
Net cash provided by operating activities |
|
174,674 |
|
141,500 |
| ||
|
|
|
|
|
|
| ||
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
| ||
|
Capital expenditures |
|
(43,817 |
) |
(32,522 |
) | ||
|
Acquisition of Lucky Vitamin |
|
(19,840 |
) |
— |
| ||
|
Other |
|
(1,887 |
) |
(3,551 |
) | ||
|
Net cash used in investing activities |
|
(65,544 |
) |
(36,073 |
) | ||
|
|
|
|
|
|
| ||
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
| ||
|
Repayment of long-term debt |
|
(1,355,973 |
) |
(1,721 |
) | ||
|
Purchase of treasury stock |
|
(61,634 |
) |
— |
| ||
|
Repurchase of Class A Preferred Stock |
|
(223,107 |
) |
— |
| ||
|
Proceeds from sale of Class A Common Stock |
|
237,253 |
|
233 |
| ||
|
Proceeds from issuance of long-term debt |
|
1,196,200 |
|
— |
| ||
|
Other |
|
33,613 |
|
— |
| ||
|
Net cash used in financing activities |
|
(173,648 |
) |
(1,488 |
) | ||
|
|
|
|
|
|
| ||
|
Effect of exchange rate on cash |
|
(946 |
) |
15 |
| ||
|
Net (decrease) increase in cash |
|
(65,464 |
) |
103,954 |
| ||
|
Beginning balance, cash |
|
193,902 |
|
89,948 |
| ||
|
Ending balance, cash |
|
$ |
128,438 |
|
$ |
193,902 |
|
Segment Financial Data and Store Counts (unaudited)
Retail Segment — Company-owned stores in the U.S. and Canada as well as e-commerce
|
|
|
Three months ended |
|
Year ended |
| ||||||||
|
|
|
December 31, |
|
December 31, |
| ||||||||
|
$ in thousands |
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
|
|
|
(unaudited) |
|
|
|
|
| ||||||
|
Revenue |
|
$ |
365,256 |
|
$ |
312,460 |
|
$ |
1,518,494 |
|
$ |
1,344,358 |
|
|
Comp store sales - domestic, including e-commerce |
|
12.1 |
% |
5.8 |
% |
10.1 |
% |
5.6 |
% | ||||
|
Operating Income |
|
$ |
54,333 |
|
$ |
34,625 |
|
$ |
243,506 |
|
$ |
181,873 |
|
|
% Revenue |
|
14.9 |
% |
11.1 |
% |
16.0 |
% |
13.5 |
% | ||||
Franchise Segment — Franchise-operated domestic and international locations
|
|
|
Three months ended |
|
Year ended |
| ||||||||
|
|
|
December 31, |
|
December 31, |
| ||||||||
|
$ in thousands |
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
|
|
|
(unaudited) |
|
|
|
|
| ||||||
|
Domestic |
|
$ |
48,401 |
|
$ |
41,765 |
|
$ |
207,341 |
|
$ |
185,881 |
|
|
International |
|
35,295 |
|
29,418 |
|
127,451 |
|
107,668 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total revenue |
|
$ |
83,696 |
|
$ |
71,183 |
|
$ |
334,792 |
|
$ |
293,549 |
|
|
Operating income |
|
$ |
27,970 |
|
$ |
23,291 |
|
$ |
111,261 |
|
$ |
93,821 |
|
|
% Revenue |
|
33.4 |
% |
32.7 |
% |
33.2 |
% |
32.0 |
% | ||||
Manufacturing/Wholesale Segment - Third-party contract manufacturing; wholesale and consignment sales with Rite Aid, PetSmart, Sam’s Club and www.drugstore.com
|
|
|
Three months ended |
|
Year ended |
| ||||||||
|
|
|
December 31, |
|
December 31, |
| ||||||||
|
$ in thousands |
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
|
|
|
(unaudited) |
|
|
|
|
| ||||||
|
Revenue |
|
$ |
60,656 |
|
$ |
52,116 |
|
$ |
218,893 |
|
$ |
184,261 |
|
|
Operating income |
|
$ |
21,202 |
|
$ |
18,281 |
|
$ |
82,185 |
|
$ |
69,421 |
|
|
% Revenue |
|
35.0 |
% |
35.1 |
% |
37.5 |
% |
37.7 |
% | ||||
Consolidated unallocated costs (e)
|
|
|
Three months ended |
|
Year ended |
| ||||||||
|
|
|
December 31, |
|
December 31, |
| ||||||||
|
$ in thousands |
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
|
|
|
(unaudited) |
|
|
|
|
| ||||||
|
Warehousing and distribution costs |
|
$ |
(14,962 |
) |
$ |
(13,533 |
) |
$ |
(60,539 |
) |
$ |
(54,983 |
) |
|
Corporate costs (f) |
|
$ |
(18,485 |
) |
$ |
(18,622 |
) |
$ |
(80,370 |
) |
$ |
(73,745 |
) |
|
Transaction related costs |
|
$ |
(537 |
) |
$ |
(3,981 |
) |
$ |
(13,536 |
) |
$ |
(3,981 |
) |
(e) Part of consolidated operating income.
(f) Includes $3.5 million of executive severance for the year ended December 31, 2011.
|
|
|
Year ended December 31, 2011 |
| ||||||||
|
|
|
Company- |
|
Franchised stores |
|
|
| ||||
|
|
|
owned (2) |
|
Domestic |
|
International |
|
Rite Aid |
|
Total |
|
|
Beginning of period balance |
|
2,917 |
|
903 |
|
1,437 |
|
2,003 |
|
7,260 |
|
|
Store openings (1) |
|
175 |
|
63 |
|
195 |
|
127 |
|
560 |
|
|
Store closings |
|
(46 |
) |
(42 |
) |
(42 |
) |
(5 |
) |
(135 |
) |
|
End of period balance |
|
3,046 |
|
924 |
|
1,590 |
|
2,125 |
|
7,685 |
|
|
|
|
Year ended December 31, 2010 |
| ||||||||
|
|
|
Company- |
|
Franchised stores |
|
|
| ||||
|
|
|
owned (2) |
|
Domestic |
|
International |
|
Rite Aid |
|
Total |
|
|
Beginning of period balance |
|
2,832 |
|
909 |
|
1,307 |
|
1,869 |
|
6,917 |
|
|
Store openings (1) |
|
125 |
|
42 |
|
232 |
|
150 |
|
549 |
|
|
Store closings |
|
(40 |
) |
(48 |
) |
(102 |
) |
(16 |
) |
(206 |
) |
|
End of period balance |
|
2,917 |
|
903 |
|
1,437 |
|
2,003 |
|
7,260 |
|
(1) openings include new stores and corporate/franchise conversion activity
(2) including Canada
Contacts:
Investors: Michael M. Nuzzo, Executive Vice President and CFO
(412) 288-2029, or
Dennis Magulick, Senior Director Treasury & Investor Relations
(412) 288-4632
|
SOURCE: |
GNC Holdings, Inc. |
|
Web site: |
http://www.gnc.com/ |