PITTSBURGH, Feb. 16, 2017 /PRNewswire/ -- GNC Holdings,
Inc. (NYSE: GNC) (the "Company") reported consolidated revenue of
$569.9 million in the fourth quarter
of 2016, compared with consolidated revenue of $629.1 million for the fourth quarter of
2015.
Same store sales decreased 12.0% in domestic company-owned
stores (including GNC.com sales which contributed 4.5% of the
decrease) in the fourth quarter of 2016. In domestic
franchise locations, same store sales decreased 6.0% in the fourth
quarter of 2016.
For the fourth quarter of 2016, the Company reported a net loss
of $433.4 million. The Company
recorded $473.5 million in non-cash
long-lived asset impairments in the current quarter of which
$471.1 million related to goodwill
and $2.4 million related to property
and equipment. The non-cash goodwill impairment charges were
recorded on the Domestic Stores, Manufacturing and Canada reporting units for $366.4 million, $90.5
million and $14.2 million,
respectively. Diluted loss per share was $6.35 for the fourth quarter of 2016. Adjusted
diluted EPS was $0.07 for the fourth
quarter of 2016.
Bob Moran, Interim Chief
Executive Officer, commented, "GNC's performance in the
fourth quarter, while well below expectations, does not reflect the
fundamental changes we have made to the business model. Customers
are responding well to the new model, which launched in late
December and includes simplified, more competitive pricing and new
loyalty programs. We are aware that the changes we have made have
short-term financial impacts and while it is still in the early
days, and it will take time for our investments to bear fruit, we
are encouraged by the trends we're seeing and believe the One New
GNC can help the company return to profitable growth."
Key elements of the One New GNC launch:
- Pricing model. Following more than a year of
consumer tests and pilot programs, we rolled out a single-tiered
pricing strategy in our domestic company-owned and franchise
locations.
- myGNC Rewards and PRO Access loyalty programs. Following
extensive research, a free loyalty program, myGNC Rewards, and a
paid program, PRO Access, were launched. The initial focus was to
have the myGNC Rewards program well entrenched with customers and
direct additional resources to a more comprehensive sales focus on
PRO Access later in the first quarter of 2017. Further developing
and encouraging active customer participation through robust
loyalty programs is an important step towards the goal of
attracting new customers and building long-term connections with
existing customers.
- GNC.com. In the third quarter, prices at GNC.com were
aligned with stores to eliminate any competition between selling
channels, including franchisees. As an element of our omnichannel
strategy, early in the first quarter we launched a GNC storefront
on Amazon.
Segment Operating Performance
U.S. & Canada
Revenue in the U.S. and Canada
segment decreased $41.1 million, or
8.0%, to $472.6 million for the three
months ended December 31, 2016
compared with $513.7 million in the
prior year quarter. E-commerce sales which include GNC.com and
Lucky Vitamin, were 8.8% of U.S. and Canada revenue for the three months ended
December 31, 2016, compared with
11.4% in the prior year quarter.
Negative domestic retail same store sales of 12.0%, which
includes GNC.com, were primarily due to lower sales in the
Vitamins, Protein, Food/Drink and Weight Management categories,
partially offset by improvement in the Health and Beauty category
and include the impact of a significant decrease in GNC.com sales
due in part to a meaningful reduction in web promotion as well as
lower point-of-sale gold card sales. In addition, negative same
store sales include a 1.0% impact of closing our corporate stores
on December 28, 2016 in connection
with the roll-out of the One New GNC. Our corporate stores
decreased from 3,584 at December 31,
2015 to 3,513 at December 31,
2016.
Domestic franchise revenue increased $3.2
million to $72.6 million in
the current quarter compared with $69.4
million in the prior year quarter primarily due to a net
increase in the number of franchise stores from 1,084 at
December 31, 2015 to 1,178 at
December 31, 2016, partially offset
by the impact of negative retail same stores sales of 6.0%.
Operating loss was $361.4 million
for the three months ended December 31, 2016 compared with
income of $78.4 million for the same
period in 2015. Long-lived asset impairments were recorded in the
current quarter totaling $383.0
million as explained above. Excluding these non-cash
impairment charges and gains on refranchising of $0.8 million and $5.1
million the current quarter and prior year quarter,
operating income was 4.4% and 14.3% of segment revenue,
respectively. The decrease in operating income as a percentage of
segment revenue excluding asset impairment charges and gains on
refranchising compared with the prior year quarter was primarily
due to: deleverage in occupancy and salaries expense associated
with negative company-owned same store sales; lower domestic retail
product margin rate as a result of higher reserves on certain
third-party product that could not be returned to vendors as well
as higher estimated reserves on certain proprietary products as a
result of recent sales trends and to a lesser extent the impact of
promotional pricing; and the launch of the One New GNC (which
lowered operating income by approximately $10 million).
International
Revenues in the International segment decreased $9.0 million, or 18.5%, to $39.7 million in the current quarter compared
with $48.7 million in the prior year
quarter. Despite our international franchisees reporting an
increase in retail same store sales of 5.1% in the current quarter
(excluding the impact of foreign exchange rate changes relative to
the U.S. dollar), revenue from franchisees decreased $9.4 million compared with the prior year quarter
primarily related to challenges in several markets, as well as a
net decrease in the number of franchise stores from 2,095 at
December 31, 2015 to 1,973 at
December 31, 2016.
Operating income decreased $2.5
million, or 15.1%, to $14.0
million for the three months ended December 31, 2016 compared with $16.5 million in the prior year quarter.
Operating income was 35.2% of segment revenue in the current
quarter, which increased compared with the prior year quarter of
33.8% as a result of higher product margin rate due in part to a
higher mix of proprietary sales.
Manufacturing / Wholesale
Revenues in the Manufacturing / Wholesale segment, excluding
intersegment sales, decreased $4.6
million, or 7.4% to $57.7
million for the three months ended December 31, 2016
compared with $62.3 million in the
prior year quarter. Third-party contract manufacturing sales
increased $2.6 million, or 8.4%, to
$33.8 million in the current quarter
compared with $31.2 million in the
prior year quarter. This increase was partially offset by a
decrease in sales to our wholesale customers of $7.3 million, or 23.3% from $31.1 million in the prior year quarter to
$23.8 million in the current quarter.
Intersegment sales decreased $14.4
million from $60.6 million in
the prior year quarter to $46.2
million in the current quarter primarily due to lower
proprietary sales in the U.S. and Canada and International segments.
Operating loss was $73.7 million
for the three months ended December 31,
2016 compared with income of $22.6
million in the prior year quarter. Excluding the
$90.5 million non-cash goodwill
impairment charge described above, operating income was
$16.8 million or 16.2% of segment
revenue in the current quarter compared with 18.4% in the prior
year quarter. The decrease in operating income as a percentage of
segment revenue excluding the current quarter impairment charge
compared with the prior year quarter was 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.
Full Year Performance
For the full year 2016, the Company reported consolidated
revenue of $2,540.0 million, a
decrease of 5.3% compared with consolidated revenue of $2,683.3 million for the full year 2015. Revenue
in the U.S. & Canada and
International segments decreased by 4.3% and 12.2%, respectively,
compared with the prior year. Revenue in the Manufacturing /
Wholesale segment was flat compared with the prior year, excluding
intersegment sales.
Same store sales decreased 6.5% in domestic company-owned stores
(including GNC.com sales which contributed 1.8% to the decrease)
for fiscal 2016. In domestic franchise locations, same store
sales decreased 6.8% in fiscal 2016.
For the full year 2016, the Company reported a net loss of
$286.3 million, compared with net
income of $219.3 million for the full
year 2015. The net loss in 2016 includes $476.6 million of non-cash long-lived asset
impairment charges. Diluted loss per share was $4.12 for full year 2016 compared with
$2.60 in 2015. Adjusted diluted EPS
was $2.15 for the full year 2016
compared with $2.87 in 2015.
Operating Metrics
At year-end, the Company had 3,513 corporate stores in the U.S.
and Canada, 1,178 domestic
franchise locations, 2,358 Rite Aid franchise store-within-a-store
locations and 1,973 international stores. The Company now has 9,022
store locations worldwide. As part of ongoing reviews of the
Company's store portfolio giving consideration to the most recent
trends and developments, the Company intends on exiting
approximately 100 stores whose leases terminate in 2017 and
lowering the rate of new store openings to maximize the return on
investment of the capital invested in new stores.
For the full year 2016, the Company generated net cash from
operating activities of $208.2
million and invested $59.6
million in capital expenditures. The Company generated free
cash flow of $185.8 million (which it
defines as cash provided by operating activities less cash used in
investing activities excluding acquisitions), which includes
$39.2 million of proceeds associated
with refranchising transactions. As of December 31, 2016, the Company's cash and cash
equivalents were $34.5 million,
long-term debt was $1.5 billion and
the Company had $167.2 million
available under the Revolving Credit Facility.
Dividends and Share Repurchases
The Board of Directors has approved management's recommendation
to suspend the Company's quarterly dividend. The dividend
suspension is part of a broader plan to utilize a greater portion
of the Company's free cash to reduce debt. By suspending what
has been a $0.20 per share quarterly
dividend, the Company intends to reallocate approximately
$55 million of cash annually,
primarily to reduce debt through the pay-down of its
revolver. The Company remains focused on creating long-term
shareholder value by returning GNC to sustainable growth,
strengthening its balance sheet and restoring financial flexibility
and strong liquidity.
During 2016, the Company repurchased 7.9 million shares of the
Company's stock for $229.2
million. No shares were repurchased by the Company
under its share repurchase program in the fourth quarter of fiscal
2016. The remaining $197.8
million authorized under the current program is not expected
to be utilized during fiscal 2017.
Conference Call
GNC has scheduled a live webcast to report its fourth quarter
2016 financial results on February 16,
2017 at 8:30 a.m. Eastern
time. To participate on the live call listeners in
North America may dial (888)
312-9837 and international listeners may dial (719) 785-1760; the
conference identification number for all callers is 9718857. 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 March 16, 2017.
About Us
GNC Holdings, Inc. (NYSE: GNC) - Headquartered in
Pittsburgh, PA - is a leading
global specialty health, wellness and performance retailer.
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 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 December 31, 2016, GNC had more
than 9,000 locations, of which more than 6,700 retail locations are
in the United States (including
2,358 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 risk factors in the Company's Annual Report on Form 10-K for
the year ended December 31, 2016.
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 long-lived asset impairments, gains on
refranchising and certain other 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 Operations
|
(in thousands,
except per share amounts)
|
|
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(unaudited)
|
Revenue
|
$
|
569,929
|
|
|
$
|
629,110
|
|
|
$
|
2,540,016
|
|
|
$
|
2,683,298
|
|
Cost of sales,
including warehousing, distribution and
occupancy
|
399,761
|
|
|
400,876
|
|
|
1,679,897
|
|
|
1,698,655
|
|
Gross
profit
|
170,168
|
|
|
228,234
|
|
|
860,119
|
|
|
984,643
|
|
Selling, general, and
administrative
|
144,770
|
|
|
146,283
|
|
|
575,218
|
|
|
567,296
|
|
Gains on
refranchising
|
(829)
|
|
|
(5,144)
|
|
|
(19,112)
|
|
|
(7,580)
|
|
Long-lived asset
impairments
|
473,508
|
|
|
—
|
|
|
476,553
|
|
|
28,333
|
|
Other loss,
net
|
848
|
|
|
3,381
|
|
|
407
|
|
|
3,487
|
|
Operating (loss)
income
|
(448,129)
|
|
|
83,714
|
|
|
(172,947)
|
|
|
393,107
|
|
Interest expense,
net
|
15,365
|
|
|
14,024
|
|
|
60,443
|
|
|
50,936
|
|
(Loss) income
before income taxes
|
(463,494)
|
|
|
69,690
|
|
|
(233,390)
|
|
|
342,171
|
|
Income tax (benefit)
expense
|
(30,047)
|
|
|
26,768
|
|
|
52,860
|
|
|
122,872
|
|
Net (loss)
income
|
$
|
(433,447)
|
|
|
$
|
42,922
|
|
|
$
|
(286,250)
|
|
|
$
|
219,299
|
|
(Loss) earnings
per share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(6.35)
|
|
|
$
|
0.54
|
|
|
$
|
(4.12)
|
|
|
$
|
2.61
|
|
Diluted
|
$
|
(6.35)
|
|
|
$
|
0.54
|
|
|
$
|
(4.12)
|
|
|
$
|
2.60
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
68,219
|
|
|
78,775
|
|
|
69,409
|
|
|
83,927
|
|
Diluted
|
68,219
|
|
|
79,008
|
|
|
69,409
|
|
|
84,186
|
|
GNC
HOLDINGS, INC. AND SUBSIDIARIES
|
Reconciliation of
Net (Loss) Income and Diluted (Loss) EPS to Adjusted Net Income and
Adjusted
Diluted EPS
|
(in thousands,
except per share data)
|
(Unaudited)
|
|
|
Three months
ended
December 31,
|
|
2016
|
|
2015
|
|
Net (Loss)
Income
|
|
Diluted
(Loss) EPS
|
|
Net
Income
|
|
Diluted
EPS
|
Reported
|
$
|
(433,447)
|
|
|
$
|
(6.35)
|
|
|
$
|
42,922
|
|
|
$
|
0.54
|
|
Gains on
refranchising
|
(829)
|
|
|
(0.01)
|
|
|
(5,139)
|
|
|
(0.07)
|
|
Long-lived asset
impairments
|
473,508
|
|
|
6.93
|
|
|
—
|
|
|
—
|
|
Loss on sale of
Discount Supplements
|
—
|
|
|
—
|
|
|
2,729
|
|
|
0.04
|
|
Other SG&A
(1)
|
440
|
|
|
0.01
|
|
|
6,335
|
|
|
0.08
|
|
Tax effect
|
(34,748)
|
|
|
(0.51)
|
|
|
(158)
|
|
|
—
|
|
Adjusted
|
$
|
4,924
|
|
|
$
|
0.07
|
|
|
$
|
46,689
|
|
|
$
|
0.59
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted common shares outstanding (2)
|
68,327
|
|
|
|
|
79,008
|
|
|
|
|
Year ended
December 31,
|
|
2016
|
|
2015
|
|
Net (Loss)
Income
|
|
Diluted
(Loss) EPS
|
|
Net
Income
|
|
Diluted
EPS
|
Reported
|
$
|
(286,250)
|
|
|
$
|
(4.12)
|
|
|
$
|
219,299
|
|
|
$
|
2.60
|
|
Gains on
refranchising
|
(19,112)
|
|
|
(0.27)
|
|
|
(7,571)
|
|
|
(0.09)
|
|
Long-lived asset
impairments
|
476,553
|
|
|
6.85
|
|
|
28,333
|
|
|
0.34
|
|
Other SG&A
(1)
|
5,513
|
|
|
0.07
|
|
|
7,522
|
|
|
0.09
|
|
Executive
severance
|
4,453
|
|
|
0.07
|
|
|
—
|
|
|
—
|
|
Loss on sale of
Discount Supplements
|
—
|
|
|
—
|
|
|
2,729
|
|
|
0.04
|
|
Correction of
immaterial payroll accrual error
|
—
|
|
|
—
|
|
|
2,762
|
|
|
0.03
|
|
Tax effect
|
(31,488)
|
|
|
(0.45)
|
|
|
(11,456)
|
|
|
(0.14)
|
|
Adjusted
|
$
|
149,669
|
|
|
$
|
2.15
|
|
|
$
|
241,618
|
|
|
$
|
2.87
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted common shares outstanding (2)
|
69,534
|
|
|
|
|
84,186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Current quarter
includes store-closing-related costs and prior year quarter
includes a legal accrual. Current year includes legal
accruals and store-closing-
related costs and prior year includes a legal accrual partially
offset by the reversal of an international franchise receivable
reserve.
|
(2)
|
For reported diluted
loss per share in the current quarter and current year, all
outstanding stock-based awards are excluded for diluted shares
outstanding
because the Company reported a net loss making all awards
antidilutive; however, for purposes of adjusted diluted EPS, the
Company has included the impact
of dilutive stock-based awards as the Company reported net income
on an adjusted basis.
|
GNC
HOLDINGS, INC. AND SUBSIDIARIES
|
Consolidated
Balance Sheets
|
(in
thousands)
|
|
|
December
31,
|
|
2016
|
|
2015
|
|
(unaudited)
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
34,464
|
|
|
$
|
56,462
|
|
Receivables,
net
|
129,178
|
|
|
142,486
|
|
Inventory
|
583,212
|
|
|
555,885
|
|
Deferred income
taxes
|
12,875
|
|
|
10,916
|
|
Prepaid and other
current assets
|
39,400
|
|
|
27,114
|
|
Total
current assets
|
799,129
|
|
|
792,863
|
|
Long-term
assets:
|
|
|
|
Goodwill
|
176,062
|
|
|
649,892
|
|
Brand name
|
720,000
|
|
|
720,000
|
|
Other intangible
assets, net
|
111,229
|
|
|
119,204
|
|
Property, plant and
equipment, net
|
232,292
|
|
|
230,535
|
|
Deferred income
taxes
|
—
|
|
|
3,358
|
|
Other long-term
assets
|
29,927
|
|
|
38,555
|
|
Total
long-term assets
|
1,269,510
|
|
|
1,761,544
|
|
Total
assets
|
$
|
2,068,639
|
|
|
$
|
2,554,407
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
179,933
|
|
|
$
|
152,099
|
|
Current portion of
long-term debt
|
12,562
|
|
|
4,550
|
|
Deferred revenue and
other current liabilities
|
115,171
|
|
|
121,062
|
|
Total current
liabilities
|
307,666
|
|
|
277,711
|
|
Long-term
liabilities:
|
|
|
|
Long-term
debt
|
1,527,891
|
|
|
1,444,628
|
|
Deferred income
taxes
|
272,000
|
|
|
304,491
|
|
Other long-term
liabilities
|
56,129
|
|
|
59,016
|
|
Total
long-term liabilities
|
1,856,020
|
|
|
1,808,135
|
|
Total
liabilities
|
2,163,686
|
|
|
2,085,846
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common
stock
|
114
|
|
|
114
|
|
Additional paid-in
capital
|
922,687
|
|
|
916,128
|
|
Retained
earnings
|
716,198
|
|
|
1,058,148
|
|
Treasury stock, at
cost
|
(1,725,349)
|
|
|
(1,496,180)
|
|
Accumulated other
comprehensive loss
|
(8,697)
|
|
|
(9,649)
|
|
Total
stockholders' (deficit) equity
|
(95,047)
|
|
|
468,561
|
|
Total liabilities
and stockholders' equity
|
$
|
2,068,639
|
|
|
$
|
2,554,407
|
|
GNC
HOLDINGS, INC. AND SUBSIDIARIES
|
Consolidated
Statements of Cash Flows
|
(in
thousands)
|
|
|
Year ended
December 31,
|
|
2016
|
|
2015
|
|
(unaudited)
|
Cash flows from
operating activities:
|
|
|
|
Net (loss)
income
|
$
|
(286,250)
|
|
|
$
|
219,299
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization expense
|
60,038
|
|
|
57,237
|
|
Amortization of debt
costs
|
12,698
|
|
|
6,421
|
|
Stock-based
compensation
|
8,833
|
|
|
6,280
|
|
Long-lived asset
impairments
|
476,553
|
|
|
28,333
|
|
Gains on
refranchising
|
(19,112)
|
|
|
(7,580)
|
|
Deferred income tax
(benefit) expense
|
(31,026)
|
|
|
450
|
|
Changes in assets
and liabilities:
|
|
|
|
Decrease in
receivables
|
11,053
|
|
|
422
|
|
(Increase) decrease
in inventory
|
(33,496)
|
|
|
5,381
|
|
(Increase) decrease
in prepaid and other current assets
|
(11,955)
|
|
|
776
|
|
Increase in accounts
payable
|
26,980
|
|
|
22,375
|
|
(Decrease) increase
in deferred revenue and accrued liabilities
|
(8,282)
|
|
|
9,841
|
|
Other operating
activities
|
2,164
|
|
|
5,298
|
|
Net cash provided
by operating activities
|
208,198
|
|
|
354,533
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(59,579)
|
|
|
(45,827)
|
|
Refranchising
proceeds
|
39,177
|
|
|
3,374
|
|
Acquisition
costs
|
(2,018)
|
|
|
(3,196)
|
|
Net cash used in
investing activities
|
(22,420)
|
|
|
(45,649)
|
|
Cash flows from
financing activities:
|
|
|
|
Borrowings under
revolving credit facility
|
234,500
|
|
|
43,000
|
|
Payments on revolving
credit facility
|
(150,500)
|
|
|
—
|
|
Payments on term loan
facility
|
(4,550)
|
|
|
(169,060)
|
|
Proceeds from
issuance of convertible senior notes
|
—
|
|
|
287,500
|
|
Debt issuance
costs
|
(1,827)
|
|
|
(8,225)
|
|
Proceeds from
exercise of stock options
|
353
|
|
|
1,743
|
|
Gross excess tax
benefits from stock-based compensation
|
162
|
|
|
604
|
|
Minimum tax
withholding requirements
|
(1,169)
|
|
|
(574)
|
|
Cash paid for
treasury stock
|
(229,169)
|
|
|
(479,799)
|
|
Dividends paid to
shareholders
|
(55,336)
|
|
|
(59,647)
|
|
Net cash used in
financing activities
|
(207,536)
|
|
|
(384,458)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(240)
|
|
|
(1,798)
|
|
Net decrease in cash
and cash equivalents
|
(21,998)
|
|
|
(77,372)
|
|
Beginning balance,
cash and cash equivalents
|
56,462
|
|
|
133,834
|
|
Ending balance, cash
and cash equivalents
|
$
|
34,464
|
|
|
$
|
56,462
|
|
|
|
|
|
GNC
HOLDINGS, INC. AND SUBSIDIARIES
|
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow
|
(in
thousands)
|
|
|
Year
ended
December 31,
|
|
2016
|
|
2015
|
|
(unaudited)
|
Net cash provided
by operating activities
|
$
|
208,198
|
|
|
$
|
354,533
|
|
Capital
expenditures
|
(59,579)
|
|
|
(45,827)
|
|
Refranchising
proceeds
|
39,177
|
|
|
3,374
|
|
Acquisition
costs
|
(2,018)
|
|
|
(3,196)
|
|
Free cash
flow
|
$
|
185,778
|
|
|
$
|
308,884
|
|
|
|
|
|
GNC
HOLDINGS, INC. AND SUBSIDIARIES
|
Segment Financial
Data
|
(in
thousands)
|
|
|
Three months
ended
December 31,
|
|
Year
ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(unaudited)
|
Revenue:
|
|
|
|
|
|
|
|
U.S. and
Canada
|
$
|
472,599
|
|
|
$
|
513,741
|
|
|
$
|
2,143,647
|
|
|
$
|
2,240,515
|
|
International
|
39,654
|
|
|
48,656
|
|
|
160,691
|
|
|
183,007
|
|
Manufacturing /
Wholesale:
|
|
|
|
|
|
|
|
Intersegment
revenues
|
46,158
|
|
|
60,628
|
|
|
218,761
|
|
|
267,377
|
|
Third-party
|
57,676
|
|
|
62,303
|
|
|
235,678
|
|
|
235,680
|
|
Subtotal
Manufacturing / Wholesale
|
103,834
|
|
|
122,931
|
|
|
454,439
|
|
|
503,057
|
|
Total
reportable segment revenues
|
616,087
|
|
|
685,328
|
|
|
2,758,777
|
|
|
2,926,579
|
|
Other
|
—
|
|
|
4,410
|
|
|
—
|
|
|
24,096
|
|
Elimination of
intersegment revenues
|
(46,158)
|
|
|
(60,628)
|
|
|
(218,761)
|
|
|
(267,377)
|
|
Total
revenue
|
$
|
569,929
|
|
|
$
|
629,110
|
|
|
$
|
2,540,016
|
|
|
$
|
2,683,298
|
|
Operating (loss)
income:
|
|
|
|
|
|
|
|
U.S. and
Canada
|
$
|
(361,394)
|
|
|
$
|
78,414
|
|
|
$
|
(105,252)
|
|
|
$
|
378,233
|
|
International
|
13,976
|
|
|
16,461
|
|
|
55,404
|
|
|
64,486
|
|
Manufacturing /
Wholesale
|
(73,680)
|
|
|
22,583
|
|
|
(19,961)
|
|
|
86,172
|
|
Total
reportable segment operating (loss) income
|
(421,098)
|
|
|
117,458
|
|
|
(69,809)
|
|
|
528,891
|
|
Unallocated corporate
and other costs:
|
|
|
|
|
|
|
|
Corporate
costs
|
(26,575)
|
|
|
(28,373)
|
|
|
(103,362)
|
|
|
(98,340)
|
|
Other
|
(456)
|
|
|
(5,371)
|
|
|
224
|
|
|
(37,444)
|
|
Subtotal
unallocated corporate and other costs
|
(27,031)
|
|
|
(33,744)
|
|
|
(103,138)
|
|
|
(135,784)
|
|
Total operating
(loss) income
|
$
|
(448,129)
|
|
|
$
|
83,714
|
|
|
$
|
(172,947)
|
|
|
$
|
393,107
|
|
Same store sales -
domestic, including GNC.com
|
|
(12.0)%
|
|
|
|
1.0%
|
|
|
|
(6.5)%
|
|
|
|
1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GNC
HOLDINGS, INC. AND SUBSIDIARIES
|
|
|
Consolidated Store
Count Activity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31,
|
|
|
|
|
|
|
2016
|
|
2015
|
U.S. &
Canada
|
|
|
|
|
|
|
|
|
Company-owned(a):
|
|
|
|
|
|
|
|
|
Beginning of period
balance
|
|
|
|
|
|
3,584
|
|
|
3,487
|
|
Store
openings
|
|
|
|
|
|
69
|
|
|
115
|
|
Acquired
franchise stores(b)
|
|
|
|
|
|
21
|
|
|
44
|
|
Franchise
conversions(c)
|
|
|
|
|
|
(102)
|
|
|
(33)
|
|
Store
closings
|
|
|
|
|
|
(59)
|
|
|
(29)
|
|
End of period
balance
|
|
|
|
|
|
3,513
|
|
|
3,584
|
|
Domestic
Franchise:
|
|
|
|
|
|
|
|
|
Beginning of period
balance
|
|
|
|
|
|
1,084
|
|
|
1,070
|
|
Store
openings
|
|
|
|
|
|
33
|
|
|
32
|
|
Acquired
franchise stores(b)
|
|
|
|
|
|
(21)
|
|
|
(44)
|
|
Franchise
conversions(c)
|
|
|
|
|
|
102
|
|
|
33
|
|
Store
closings
|
|
|
|
|
|
(20)
|
|
|
(7)
|
|
End of period
balance
|
|
|
|
|
|
1,178
|
|
|
1,084
|
|
International(d):
|
|
|
|
|
|
|
|
|
Beginning of period
balance
|
|
|
|
|
|
2,095
|
|
|
2,150
|
|
Store
openings
|
|
|
|
|
|
108
|
|
|
144
|
|
Store
closings
|
|
|
|
|
|
(230)
|
|
|
(199)
|
|
End of period
balance
|
|
|
|
|
|
1,973
|
|
|
2,095
|
|
Store-within-a-store (Rite Aid):
|
|
|
|
|
|
|
|
|
Beginning of period
balance
|
|
|
|
|
|
2,327
|
|
|
2,269
|
|
Store
openings
|
|
|
|
|
|
41
|
|
|
59
|
|
Store
closings
|
|
|
|
|
|
(10)
|
|
|
(1)
|
|
End of period
balance
|
|
|
|
|
|
2,358
|
|
|
2,327
|
|
Total
Stores
|
|
|
|
|
|
9,022
|
|
|
9,090
|
|
|
(a)
|
Includes
Canada
|
(b)
|
Stores that were
acquired from franchisees and subsequently converted into
company-owned stores
|
(c)
|
Company-owned stores
locations sold to franchisees
|
(d)
|
Includes franchise
locations in approximately 50 countries (including distribution
centers where sales are made) and company-owned stores located in
Ireland (The Health Store) and China
|
Contacts:
|
|
Investors:
|
Amy Greene, Vice
President – Investor & Government Relations (412) 288-4744;
or
|
|
John Mills, Partner –
ICR, (646) 277-1254
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/gnc-holdings-inc-reports-fourth-quarter-and-full-year-2016-results-300408607.html
SOURCE GNC Holdings, Inc.