PITTSBURGH, July 28, 2016 /PRNewswire/ -- GNC Holdings,
Inc. (NYSE: GNC) (the "Company") reported consolidated
revenue of $673.2 million, a decrease
of 2.4% as compared with consolidated revenue of $689.6 million for the second quarter of
2015. As previously announced, beginning in the second
quarter of 2016 the Company changed its reportable segments.
Revenue in the U.S. & Canada
segment decreased by 2.0%, revenue in the International segment
decreased 2.5%, and revenue in the Manufacturing/Wholesale segment,
excluding intersegment sales increased 5.3%.
Same store sales decreased 3.7% in domestic company-owned stores
(including GNC.com sales) in the second quarter of 2016. In
domestic franchise locations, same store sales decreased 6.6% in
the second quarter of 2016.
For the second quarter of 2016, the Company reported net income
of $64.0 million compared with net
income of $67.4 million in the second
quarter of 2015. Diluted earnings per share were $0.94 for the second quarter of 2016, compared
with diluted earnings per share of $0.79 in the second quarter of 2015. Adjusted
EPS, excluding the benefit of a $16.9
million pre-tax gain related to the sale of 86 company-owned
stores to franchisees, were $0.79 for
the second quarter of 2016 compared with adjusted EPS of
$0.77 in the comparable prior year
quarter.
Earlier today, the Company also announced the appointment of
Robert F. Moran as Interim Chief
Executive Officer. Mr. Moran replaces Mike Archbold who is leaving the Company.
Mr. Moran commented, "Our results for the quarter were
disappointing and we are focused on addressing those areas where we
can drive a meaningful impact on the business in the shortest
period of time. We clearly have work to do to reverse the
current trends, but I am confident in our business and the GNC
brand and I am committed to working closely with our talented team
to deliver improved performance. As we do so, we will
continue the previously announced comprehensive review of strategic
and financial alternatives."
Segment Operating Performance
U.S. & Canada
(Includes: Company-owned stores in the U.S., Puerto Rico and Canada, franchise stores in the U.S. and
e-commerce)
For the second quarter of 2016, the U.S. & Canada segment revenue decreased $11.7 million, or 2.0%, to $570.9 million compared with $582.6 million in the prior year quarter.
The segment's revenue decline is due to decreases in same store
sales in both company-owned and franchise stores. Domestic same
store sales declines of 3.7%, which includes GNC.com, were
primarily due to continued negative trends in the vitamin and
food/drink categories, which more than offset the timing of the
Easter holiday (March in the current year compared with April in
the prior year) around which sales historically are low. Our
all store promotional events were not enough to offset the
unexpected decline in retail traffic late in the quarter.
Domestic franchise revenue decreased $1.9
million to $86.5 million in
the current quarter compared with $88.4
million in the prior year quarter due to lower wholesale
sales and royalties as an overall decline more than offset the
earlier timing of our annual franchise convention, which resulted
in higher sales in the current quarter as compared with the prior
year quarter. Our franchisees did not participate in all corporate
promotions and our expanded assortment initiative has been adopted
by approximately half of our franchise stores compared with the
significant majority of our corporate stores as of June 30, 2016; as a result, our franchisees
reported lower retail same store sales as compared with our
corporate stores, or negative 6.6% in the second quarter of
2016.
Operating income decreased slightly to $104.5 million for the three months ended
June 30, 2016 compared with $105.5
million for the same period in 2015. Operating income
as a percentage of segment revenue was 18.3% in the current quarter
compared with 18.1% in the prior year quarter. Excluding
refranchising gains of $16.9 million
and $1.1 million in the current
quarter and prior year quarter, respectively, operating income
decreased to $87.7 million compared
with $104.4 million and was 15.4% and
17.9% of segment revenue. The decrease in operating income
percentage was due primarily to lower product margin rate in our
GNC.com business and expense deleverage associated with negative
same store sales.
International (Includes: Franchise locations in
approximately 50 countries, The Health Store and China operations)
Revenues in our International segment decreased $1.1 million, or 2.5%, to $43.1 million in the current quarter compared
with $44.2 million in the prior year
quarter. Wholesale sales and royalties from franchisees
decreased by $2.6 million primarily
relating to Mexico, Turkey and Chile, partially offset by the earlier timing
of our annual franchise convention, which resulted in higher sales
in the current quarter compared with the prior year quarter.
Our international franchisees reported negative same store sales of
1.6% in the current quarter excluding the impact of foreign
exchange rates relative to the U.S. dollar. Partially
offsetting the decrease in revenue was an increase in revenue of
$1.5 million associated with our
China business.
Operating income decreased $2.1
million, or 13.0%, to $13.6
million for the three months ended June 30, 2016
compared with $15.7 million in the
prior year quarter. Operating income was 31.7% of segment
revenue in the current quarter compared with 35.5% in the prior
year quarter. The decrease in operating income percentage was
primarily due to a bad debt allowance with a franchisee recorded in
the current quarter along with the comparative effect of the
reversal of a previously established bad debt allowance with a
franchisee in the prior year quarter. In addition, a foreign
currency loss of $0.4 million was
recorded in the current quarter.
Manufacturing / Wholesale (Includes: Manufactured
product sold to other segments, third-party contract manufacturing
and sales to wholesale partners)
Revenues in our Manufacturing / Wholesale segment, excluding
intersegment sales, increased $3.0
million, or 5.3%, to $59.2
million compared with $56.2
million in the prior year quarter. Third-party
contract manufacturing sales increased $5.2
million, or 18.3%, to $33.7
million for the quarter compared with $28.5 million in the prior year quarter.
This increase was partially offset by a decrease in wholesale sales
of $2.2 million, or 8.1%.
Intersegment sales decreased $16.4
million from $73.0 million in
the prior year quarter to $56.6
million in the current quarter primarily due to lower
proprietary sales.
Operating income decreased $3.2
million, or 15.0%, to $17.9
million for the three months ended June 30, 2016
compared with $21.1 million in the
prior year quarter. Operating income as a percentage of
segment revenue decreased from 16.3% in the prior year quarter to
15.5% in the current quarter primarily due to lower intersegment
sales, which resulted in unfavorable manufacturing variances, and a
higher mix of third-party contract manufacturing sales, which
generally contribute lower margins.
Refranchising Store Strategy
Consistent with its previously announced refranchising strategy,
the Company completed the conversion of 86 corporate stores during
the second quarter of 2016, of which 84 stores were sold to one
franchisee, and recorded a pre-tax gain of $16.9 million. The Company remains on track
to meet its 2016 goal to refranchise 200 company-owned
stores.
Year-to-Date Performance
For the first six months of 2016, the Company reported
consolidated revenue of $1,342.1
million, a decrease of 2.1% compared with consolidated
revenue of $1,370.8 million for the
first six months of 2015. Revenue in the U.S. & Canada segment decreased by 1.4%, revenue in
the International segment decreased 4.6%, and revenue in the
Manufacturing/Wholesale segment increased 4.4%, excluding
intersegment sales.
For the first six months of 2016, the Company reported net
income of $114.8 million, compared
with net income of $130.6 million for
the first six months of 2015. Diluted earnings per share were
$1.62 for the first six months of
2016, compared with diluted earnings per share of $1.50 in the first six months of 2015.
Operating Metrics
As of June 30, 2016, the Company
had 3,506 corporate stores in the U.S. and Canada, 1,163 domestic franchise locations,
2,343 Rite Aid franchise store-within-a-store locations and 2,075
international stores. The Company now has 9,087 store locations
worldwide.
For the first six months of 2016, the Company generated net cash
from operating activities of $130.9
million and invested $20.8
million in capital expenditures. The Company generated free
cash flow of $110.5 million (which it
defines as cash provided by operating activities less cash used in
investing activities excluding acquisitions). As of
June 30, 2016, the Company's cash and
cash equivalents were $48.2 million
and long-term debt was $1.59
billion.
Dividends
The Company's Board of Directors declared a cash dividend of
$0.20 per share of its common stock
for the third quarter of 2016. The dividend will be payable on or
about September 30, 2016 to
stockholders of record at the close of business on September 16, 2016. 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.
2016 Outlook
As the Company conducts its evaluation of the business under new
leadership and develops an appropriate course of action to deliver
improved results, it has suspended its previous earnings guidance
for fiscal 2016.
Mr. Moran stated, "The decision to suspend our fiscal 2016
guidance in no way detracts from our commitment to move quickly to
deliver improved performance. We remain confident in GNC's
long-term prospects but believe it is prudent to suspend guidance
as we identify actions to address the challenges we are currently
facing in our business."
Conference Call
GNC has scheduled a live webcast to report its second quarter
2016 financial results on July 28,
2016 at 8:30 a.m. Eastern
time. To participate on the live call listeners in
North America may dial (888)
259-8387 and international listeners may dial (913) 981-5544. In
addition, a live webcast of the call will be available on
www.gnc.com via the Investor Relations section under "About
GNC." A replay of this webcast will be available through
August 25, 2016.
About Us
GNC Holdings, Inc. (NYSE: GNC) - Headquartered in
Pittsburgh, PA - is a leading
global specialty health, wellness and performance retailer.
The Company's foundation is built on 80 years of superior
product quality and innovation. GNC connects customers to their
best selves by offering a premium assortment of health, wellness
and performance products, including protein, performance
supplements, weight management supplements, vitamins, herbs and
greens, wellness supplements, health and beauty, food and drink and
other general merchandise. This assortment features proprietary GNC
- including Mega Men®, Ultra Mega®, Total LeanTM, Pro Performance®,
Pro Performance® AMP, Beyond Raw®, GNC Puredge®, GNC GenetixHD®,
Herbal Plus® - and nationally recognized third-party brands.
GNC's diversified, multi-channel business model generates
revenue from product sales through company-owned retail stores,
domestic and international franchise activities, third-party
contract manufacturing, e-commerce and corporate partnerships. As
of June 30, 2016, GNC had more than
9,000 locations, of which more than 6,700 retail locations are in
the United States (including 2,343
Rite Aid franchise store-within-a-store locations) and franchise
operations in approximately 50 countries.
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 the Company's 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 regarding our dividend,
share repurchase plan, strategy and outlook. While GNC believes
there is a reasonable basis for its expectations and beliefs, they
are inherently uncertain. The Company may not realize its
expectations and its beliefs may not prove correct. Many factors
could affect future performance and cause actual results to differ
materially from those matters expressed in or implied by
forward-looking statements, including but not limited to
unfavorable publicity or consumer perception of our products; costs
of compliance and any failure on our part to comply with new and
existing governmental regulations governing our products;
limitations of or disruptions in our manufacturing system or losses
of manufacturing certifications; disruptions in our distribution
network; or failure to successfully execute our growth strategy,
including any inability to expand our franchise operations or
attract new franchisees, any inability to expand our company-owned
retail operations, any inability to grow our international
footprint, any inability to expand our e-commerce businesses, or
any inability to successfully integrate businesses that we
acquire. 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 Company's Annual Report on Form
10-K for the year ended
December 31, 2015.
The Company is authorized to repurchase from time to time shares
of its outstanding common stock on the open market or in privately
negotiated transactions. The Company may finance any repurchases
with cash, potential financing transactions, or a combination of
the foregoing. The timing and amount of stock repurchases
will depend on a variety of factors, including the market
conditions as well as corporate and regulatory considerations. The
share repurchase program may be suspended, modified or discontinued
at any time and the Company has no obligation to repurchase any
amount of its common stock under the program. The Company intends
to make all repurchases in compliance with applicable regulatory
guidelines and to administer the plan in accordance with applicable
laws, including Rule 10b-18 and, as applicable, Rule 10b-5 of the
Securities Exchange Act of 1934, as amended.
Management has included as an operational metric same store
sales, which is a commonly used statistical measure in the retail
industry and is important to the understanding of the Company's
performance. Same store sales growth represents the
percentage change in same store point-of-sale retail sales in the
period presented compared with the prior year period. Same
store sales are calculated on a daily basis for each store and
exclude the net sales of a store for any period if the store was
not open during the same period of the prior year. The
Company includes its internet sales of GNC.com in the domestic
retail company-owned same store sales calculation. When a
store's square footage has been changed as a result of
reconfiguration or relocation in the same mall or shopping center,
the store continues to be treated as a same store. If, during
the period presented, a store was closed, relocated to a different
mall or shopping center, or converted to a franchise store of a
company-owned store, sales from that store up to and including the
closing day or the day immediately preceding the relocation or
conversion are included as same store sales as long as the store
was open during the same period of the prior year. The
Company excludes sales during the period presented that occurred on
or after the date of relocation to a different mall or shopping
center or the date of a conversion.
Management has included non-GAAP financial measures in this
press release because it believes they represent an effective
supplemental means by which to measure the Company's operating
performance. Management believes that net income and earnings
per share, adjusted to exclude gains on refranchising and certain
prior period expenses as reflected in this release, and free cash
flow are useful to investors as they enable the Company and its
investors to evaluate and compare the Company's results from
operations in a more meaningful and consistent manner by excluding
specific items which are not reflective of ongoing operating
results. However, these measures are not measurements of the
Company's performance under GAAP and should not be considered as
alternatives to earnings per share, net income or any other
performance measures derived in accordance with GAAP, or as an
alternative to GAAP cash flow from operating activities, or as a
measure of the Company's profitability or liquidity. For more
information, see the attached reconciliations of non-GAAP financial
measures.
GNC
HOLDINGS, INC. AND SUBSIDIARIES
|
Consolidated
Statements of Income
|
(in thousands,
except per share amounts)
|
|
|
Three months
ended
June 30,
|
|
Six months
ended
June 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(unaudited)
|
Revenue
|
$
|
673,218
|
|
|
$
|
689,564
|
|
|
$
|
1,342,123
|
|
|
$
|
1,370,829
|
|
Cost of sales,
including warehousing, distribution and
occupancy
|
434,520
|
|
|
433,232
|
|
|
867,580
|
|
|
865,064
|
|
Gross
profit
|
238,698
|
|
|
256,332
|
|
|
474,543
|
|
|
505,765
|
|
Selling, general, and
administrative
|
138,984
|
|
|
140,090
|
|
|
282,056
|
|
|
279,858
|
|
Gains on
refranchising
|
(16,885)
|
|
|
(1,149)
|
|
|
(17,900)
|
|
|
(1,491)
|
|
Other loss (income),
net
|
375
|
|
|
(247)
|
|
|
98
|
|
|
155
|
|
Operating
income
|
116,224
|
|
|
117,638
|
|
|
210,289
|
|
|
227,243
|
|
Interest expense,
net
|
15,275
|
|
|
11,644
|
|
|
29,718
|
|
|
23,159
|
|
Income before
income taxes
|
100,949
|
|
|
105,994
|
|
|
180,571
|
|
|
204,084
|
|
Income tax
expense
|
36,921
|
|
|
38,637
|
|
|
65,728
|
|
|
73,457
|
|
Net
income
|
$
|
64,028
|
|
|
$
|
67,357
|
|
|
$
|
114,843
|
|
|
$
|
130,627
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.94
|
|
|
$
|
0.79
|
|
|
$
|
1.63
|
|
|
$
|
1.51
|
|
Diluted
|
$
|
0.94
|
|
|
$
|
0.79
|
|
|
$
|
1.62
|
|
|
$
|
1.50
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
68,176
|
|
|
85,501
|
|
|
70,627
|
|
|
86,677
|
|
Diluted
|
68,303
|
|
|
85,777
|
|
|
70,760
|
|
|
86,934
|
|
Note: The presentation of certain amounts in the consolidated
financial statements of prior periods have been revised to conform
to the current periods presented with no impact on previously
reported net income or stockholders' equity.
GNC
HOLDINGS, INC. AND SUBSIDIARIES
|
Reconciliation of
Net Income and Diluted EPS to Adjusted Net Income and Adjusted
Diluted EPS
|
(in thousands,
except per share data)
|
(Unaudited)
|
|
|
Three months
ended
June 30,
|
|
2016
|
|
2015
|
|
Net
Income
|
|
Diluted
EPS
|
|
Net
Income
|
|
Diluted
EPS
|
Reported
|
$
|
64,028
|
|
|
$
|
0.94
|
|
|
$
|
67,357
|
|
|
$
|
0.79
|
|
Gains on
refranchising
|
(16,885)
|
|
|
(0.25)
|
|
|
(1,149)
|
|
|
(0.02)
|
|
Other SG&A
related to legal accrual and reversal of
international franchise receivable reserve
|
—
|
|
|
—
|
|
|
(652)
|
|
|
(0.01)
|
|
Tax effect
|
6,643
|
|
|
0.10
|
|
|
659
|
|
|
0.01
|
|
Adjusted
|
$
|
53,786
|
|
|
$
|
0.79
|
|
|
$
|
66,215
|
|
|
$
|
0.77
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted common shares outstanding
|
68,303
|
|
|
|
|
85,777
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended
June 30,
|
|
2016
|
|
2015
|
|
Net
Income
|
|
Diluted
EPS
|
|
Net
Income
|
|
Diluted
EPS
|
Reported
|
$
|
114,843
|
|
|
$
|
1.62
|
|
|
$
|
130,627
|
|
|
$
|
1.50
|
|
Gains on
refranchising
|
(17,900)
|
|
|
(0.25)
|
|
|
(1,491)
|
|
|
(0.02)
|
|
Other SG&A
related to legal accrual and reversal of
international franchise receivable reserve
|
—
|
|
|
—
|
|
|
1,187
|
|
|
0.02
|
|
Correction of an
immaterial error
|
—
|
|
|
—
|
|
|
2,762
|
|
|
0.03
|
|
Tax effect
|
7,655
|
|
|
0.11
|
|
|
(885)
|
|
|
(0.01)
|
|
Adjusted
|
$
|
104,598
|
|
|
$
|
1.48
|
|
|
$
|
132,200
|
|
|
$
|
1.52
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted common shares outstanding
|
70,760
|
|
|
|
|
86,934
|
|
|
|
GNC
HOLDINGS, INC. AND SUBSIDIARIES
|
Consolidated
Balance Sheets
|
(in
thousands)
|
|
|
June
30,
|
|
December
31,
|
|
2016
|
|
2015
|
|
(unaudited)
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
48,220
|
|
|
$
|
56,462
|
|
Receivables,
net
|
158,349
|
|
|
142,486
|
|
Inventory
|
602,679
|
|
|
555,885
|
|
Deferred income
taxes
|
10,927
|
|
|
10,916
|
|
Prepaid and other
current assets
|
40,730
|
|
|
27,114
|
|
Total current
assets
|
860,905
|
|
|
792,863
|
|
Long-term
assets:
|
|
|
|
Goodwill
|
646,796
|
|
|
649,892
|
|
Brands
|
720,000
|
|
|
720,000
|
|
Other intangible
assets, net
|
115,181
|
|
|
119,204
|
|
Property, plant and
equipment, net
|
222,956
|
|
|
230,535
|
|
Deferred income
taxes
|
3,358
|
|
|
3,358
|
|
Other long-term
assets
|
33,416
|
|
|
38,555
|
|
Total long-term
assets
|
1,741,707
|
|
|
1,761,544
|
|
Total
assets
|
$
|
2,602,612
|
|
|
$
|
2,554,407
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
185,767
|
|
|
$
|
152,099
|
|
Current portion of
long-term debt
|
4,550
|
|
|
4,550
|
|
Deferred revenue and
other current liabilities
|
127,859
|
|
|
121,062
|
|
Total current
liabilities
|
318,176
|
|
|
277,711
|
|
Long-term
liabilities:
|
|
|
|
Long-term
debt
|
1,590,193
|
|
|
1,444,628
|
|
Deferred income
taxes
|
305,650
|
|
|
304,491
|
|
Other long-term
liabilities
|
57,348
|
|
|
59,016
|
|
Total long-term
liabilities
|
1,953,191
|
|
|
1,808,135
|
|
Total
liabilities
|
2,271,367
|
|
|
2,085,846
|
|
Stockholders'
equity:
|
|
|
|
Common
stock
|
114
|
|
|
114
|
|
Additional paid-in
capital
|
918,479
|
|
|
916,128
|
|
Retained
earnings
|
1,144,795
|
|
|
1,058,148
|
|
Treasury stock, at
cost
|
(1,725,349)
|
|
|
(1,496,180)
|
|
Accumulated other
comprehensive loss
|
(6,794)
|
|
|
(9,649)
|
|
Total
stockholders' equity
|
331,245
|
|
|
468,561
|
|
Total liabilities
and stockholders' equity
|
$
|
2,602,612
|
|
|
$
|
2,554,407
|
|
GNC
HOLDINGS, INC. AND SUBSIDIARIES
|
Consolidated
Statements of Cash Flows
|
(in
thousands)
|
|
|
Six months
ended
June 30,
|
|
2016
|
|
2015
|
|
(unaudited)
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
114,843
|
|
|
$
|
130,627
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization expense
|
28,209
|
|
|
28,628
|
|
Amortization of debt
costs
|
6,245
|
|
|
925
|
|
Stock-based
compensation
|
2,949
|
|
|
3,080
|
|
Gains on
refranchising
|
(17,900)
|
|
|
(1,491)
|
|
Changes in assets and
liabilities:
|
|
|
|
Decrease (increase)
in receivables
|
15,121
|
|
|
(459)
|
|
(Increase) in
inventory
|
(53,073)
|
|
|
(348)
|
|
(Increase) in prepaid
and other current assets
|
(11,715)
|
|
|
(4,624)
|
|
Increase in accounts
payable
|
36,751
|
|
|
17,549
|
|
Increase in deferred
revenue and accrued liabilities
|
6,558
|
|
|
11,687
|
|
Other operating
activities
|
2,901
|
|
|
(1,379)
|
|
Net cash provided
by operating activities
|
130,889
|
|
|
184,195
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(20,809)
|
|
|
(20,131)
|
|
Refranchising
proceeds
|
1,831
|
|
|
1,051
|
|
Store acquisition
costs
|
(1,395)
|
|
|
(962)
|
|
Net
cash used in investing activities
|
(20,373)
|
|
|
(20,042)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Borrowings under
revolving credit facility
|
182,000
|
|
|
—
|
|
Payments on revolving
credit facility
|
(40,000)
|
|
|
—
|
|
Payments on term loan
facility
|
(2,275)
|
|
|
(2,400)
|
|
Debt issuance
costs
|
(1,712)
|
|
|
—
|
|
Proceeds from
exercise of stock options
|
305
|
|
|
1,075
|
|
Gross excess tax
benefits from stock-based compensation
|
156
|
|
|
475
|
|
Minimum tax
withholding requirements
|
(622)
|
|
|
(423)
|
|
Cash paid for
treasury stock
|
(229,169)
|
|
|
(164,798)
|
|
Dividends paid to
shareholders
|
(27,974)
|
|
|
(31,017)
|
|
Net
cash used in financing activities
|
(119,291)
|
|
|
(197,088)
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
533
|
|
|
(121)
|
|
Net increase in cash
and cash equivalents
|
(8,242)
|
|
|
(33,056)
|
|
Beginning balance,
cash and cash equivalents
|
56,462
|
|
|
133,834
|
|
Ending balance, cash
and cash equivalents
|
$
|
48,220
|
|
|
$
|
100,778
|
|
GNC
HOLDINGS, INC. AND SUBSIDIARIES
|
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow
|
(in
thousands)
|
|
|
Six months
ended
June 30,
|
|
2016
|
|
2015
|
|
(unaudited)
|
Net cash provided
by operating activities
|
$
|
130,889
|
|
|
$
|
184,195
|
|
Capital
expenditures
|
(20,809)
|
|
|
(20,131)
|
|
Refranchising
proceeds
|
1,831
|
|
|
1,051
|
|
Store acquisition
costs
|
(1,395)
|
|
|
(962)
|
|
Free cash
flow
|
$
|
110,516
|
|
|
$
|
164,153
|
|
|
|
|
|
GNC
HOLDINGS, INC. AND SUBSIDIARIES
|
Segment Financial
Data
|
(in
thousands)
|
|
|
Three months
ended
June 30,
|
|
Six months
ended
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(in
thousands)
|
Revenue:
|
|
|
|
|
|
|
|
U.S. and
Canada
|
$
|
570,943
|
|
|
$
|
582,584
|
|
|
$
|
1,145,543
|
|
|
$
|
1,161,522
|
|
International
|
43,077
|
|
|
44,159
|
|
|
79,919
|
|
|
83,783
|
|
Manufacturing /
Wholesale:
|
|
|
|
|
|
|
|
Intersegment
revenues
|
56,556
|
|
|
72,984
|
|
|
119,587
|
|
|
139,238
|
|
Third-party
|
59,198
|
|
|
56,233
|
|
|
116,661
|
|
|
111,757
|
|
Subtotal
Manufacturing / Wholesale
|
115,754
|
|
|
129,217
|
|
|
236,248
|
|
|
250,995
|
|
Total reportable
segment revenues
|
729,774
|
|
|
755,960
|
|
|
1,461,710
|
|
|
1,496,300
|
|
Other
|
—
|
|
|
6,588
|
|
|
—
|
|
|
13,767
|
|
Elimination of
intersegment revenues
|
(56,556)
|
|
|
(72,984)
|
|
|
(119,587)
|
|
|
(139,238)
|
|
Total
revenue
|
$
|
673,218
|
|
|
$
|
689,564
|
|
|
$
|
1,342,123
|
|
|
$
|
1,370,829
|
|
Operating
income:
|
|
|
|
|
|
|
|
U.S. and
Canada
|
$
|
104,549
|
|
|
$
|
105,519
|
|
|
$
|
190,850
|
|
|
$
|
206,073
|
|
International
|
13,649
|
|
|
15,694
|
|
|
26,752
|
|
|
31,908
|
|
Manufacturing /
Wholesale
|
17,891
|
|
|
21,060
|
|
|
36,324
|
|
|
41,067
|
|
Total reportable
segment operating income
|
136,089
|
|
|
142,273
|
|
|
253,926
|
|
|
279,048
|
|
Unallocated corporate
and other costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
costs
|
(19,865)
|
|
|
(23,547)
|
|
|
(43,626)
|
|
|
(49,324)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
—
|
|
|
(1,088)
|
|
|
(11)
|
|
|
(2,481)
|
|
Subtotal unallocated
corporate and other costs
|
(19,865)
|
|
|
(24,635)
|
|
|
(43,637)
|
|
|
(51,805)
|
|
Total operating
income
|
$
|
116,224
|
|
|
$
|
117,638
|
|
|
$
|
210,289
|
|
|
$
|
227,243
|
|
|
|
|
|
|
|
|
|
Segment operating
income %:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. and
Canada
|
18.3%
|
|
18.1%
|
|
16.7%
|
|
17.7%
|
International
|
31.7%
|
|
35.5%
|
|
33.5%
|
|
38.1%
|
Manufacturing/Wholesale
|
15.5%
|
|
16.3%
|
|
15.4%
|
|
16.4%
|
Consolidated
|
17.3%
|
|
17.1%
|
|
15.7%
|
|
16.6%
|
|
|
|
|
|
|
|
|
Comp store sales -
domestic, including
GNC.com
|
(3.7)%
|
|
(2.7)%
|
|
(3.2)%
|
|
(3.5)%
|
GNC
HOLDINGS, INC. AND SUBSIDIARIES
|
Consolidated Store
Count Activity
|
|
|
Six months
ended
June 30,
|
|
2016
|
|
2015
|
U.S. &
Canada
|
|
|
|
Company-owned(a):
|
|
|
|
Beginning of period
balance
|
3,584
|
|
|
3,487
|
|
Store
openings
|
30
|
|
|
47
|
|
Acquired
franchise stores(b)
|
10
|
|
|
20
|
|
Franchise conversions(c)
|
(90)
|
|
|
(7)
|
|
Store
closings
|
(28)
|
|
|
(17)
|
|
End of period
balance
|
3,506
|
|
|
3,530
|
|
Domestic
Franchise:
|
|
|
|
Beginning of period
balance
|
1,084
|
|
|
1,070
|
|
Store
openings
|
13
|
|
|
13
|
|
Acquired
franchise stores(b)
|
(10)
|
|
|
(19)
|
|
Franchise conversions(c)
|
90
|
|
|
7
|
|
Store
closings
|
(14)
|
|
|
(4)
|
|
End of period
balance
|
1,163
|
|
|
1,067
|
|
International(d):
|
|
|
|
Beginning of period
balance
|
2,095
|
|
|
2,150
|
|
Store
openings
|
43
|
|
|
36
|
|
Store
closings
|
(63)
|
|
|
(83)
|
|
End of period
balance
|
2,075
|
|
|
2,103
|
|
Store-within-a-store (Rite Aid):
|
|
|
|
Beginning of period
balance
|
2,327
|
|
|
2,269
|
|
Store
openings
|
19
|
|
|
36
|
|
Store
closings
|
(3)
|
|
|
(1)
|
|
End of period
balance
|
2,343
|
|
|
2,304
|
|
Total
Stores
|
9,087
|
|
|
9,004
|
|
|
|
|
|
|
|
|
|
(a) Includes
Canada.
|
(b) Stores that were
acquired from franchisees and subsequently converted
into company-owned stores.
|
(c) Company-owned
store locations sold to franchisees.
|
(d) Includes
franchise locations in approximately 50 countries (including
distribution
centers where sales are made) and 10 locations of The Health
Store.
|
Contacts:
|
|
|
|
Investors:
|
Amy Greene, Vice
President – Investor & Government Relations, (412) 288-4744;
or
|
|
John Mills, Partner -
ICR, (646) 277-1254
|
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visit:http://www.prnewswire.com/news-releases/gnc-holdings-inc-reports-second-quarter-2016-results-300305280.html
SOURCE GNC Holdings, Inc.