PITTSBURGH, Jan. 18, 2018 /PRNewswire/ -- GNC Holdings, Inc.
(NYSE: GNC) (the "Company") reported an increase in fourth quarter
same store sales for domestic company-owned stores (including
GNC.com sales) of 5.7%. Adjusted diluted earnings per share
("EPS") is expected to be in the range of $0.24 - $0.25
compared to adjusted diluted EPS of $0.07 in the prior year quarter.
"In the fourth quarter of 2017, our efforts to reposition the
business continued to gain momentum," said Ken Martindale, chief executive officer. "As we
head into 2018, we will continue to focus on our key initiatives
including capital structure improvement, international business
growth, exclusive and innovative products and services, a more
engaging e-commerce and digital platform and further customer
experience improvements."
As of December 31, 2017, the
Company's cash and cash equivalents were $64.0 million and long-term debt was $1.3 billion. The Company paid down the Revolving
Credit Facility in the fourth quarter and there were no borrowings
outstanding as of December 31,
2017. The Company is reiterating its free cash flow estimate
of $190 - $210
million for the full year 2017.
The current quarter adjusted diluted EPS excludes the impact of
potential non cash long-lived asset impairments, the convertible
debt exchange and related debt financing costs, CEO executive
placement costs related to make-whole stock-based compensation
awards, a legal-related charge, tax reform and the Company's
evaluation of the realizability of its deferred tax assets, which
the Company is in the process of finalizing.
The Company recently announced the hiring of Goldman Sachs and
Co. as its strategic advisor in order to optimize the Company's
capital structure and enhance shareholder value. As part of
this process the Company provided preliminary fourth quarter
financial results. The Company does not plan to provide
preliminary financial information in the future other than in
unique circumstances, or in the event of a material event that
requires disclosure.
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 heath, 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, 2017, GNC had
approximately 9,000 locations, of which approximately 6,700 retail
locations are in the United States
(including approximately 2,400 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 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 the Company's
products; costs of compliance and any failure on management's part
to comply with new and existing governmental regulations governing
our products; limitations of or disruptions in the manufacturing
system or losses of manufacturing certifications; disruptions in
the distribution network; or failure to successfully execute the
Company's growth strategy, including any inability to expand
franchise operations or attract new franchisees, any inability to
expand company-owned retail operations, any inability to grow the
international footprint, any inability to expand the e-commerce
businesses, or any inability to successfully integrate businesses
that are acquired. 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, 2016.
Same store sales for company-owned stores include point-of-sale
retail sales from all domestic stores which have been operating for
twelve full months following the opening period. The Company is an
omnichannel retailer with capabilities that allow a customer to use
more than one channel when making a purchase, including in-store
and through e-commerce channels which include its wholly-owned
website GNC.com and third party websites (the sales from which are
included in the GNC.com business unit) where product assortment and
price are controlled by the Company, in which purchases are
fulfilled by direct shipment to the customer from one of the
Company's distribution facilities as well as third party e-commerce
vendors. In-store sales are reduced by sales originally consummated
online or through mobile devices and subsequently returned
in-store. Sales of membership programs, including the new PRO
Access loyalty program and former Gold Card program, which is no
longer offered in the U.S., as well as the net change in the
deferred points liability associated with the myGNC Rewards
program, are excluded from same store sales.
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. 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 or 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. Corporate stores
are included in same store sales after the thirteenth month
following a relocation or conversion to a company-owned store.
The Company also provides retail comparable same stores sales of
its franchisees as well as its Canada business if meaningful to current
results. While retail sales of franchisees are not included in the
Company's Consolidated Financial statements, the metric serves as a
key performance indicator for its franchisees, which ultimately
impacts wholesale sales and royalties and fees received from
franchisees. The Company computes same store sales for its
franchisees and Canada business
consistent with the description of corporate same store sales
above. Same store sales for international franchisees and
Canada exclude the impact of
foreign exchange rate changes relative to the U.S. dollar.
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 impairment charges on long-lived assets,
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
|
Reconciliation of
Net Loss and Diluted Loss per Share to Adjusted Net Income and
Adjusted Diluted EPS
|
(in thousands,
except per share data)
|
(Unaudited)
|
|
|
|
Three months
ended
December 31
|
|
2016
|
|
Net
(Loss)
Income
|
|
Diluted
(Loss)
EPS
|
|
|
Reported
|
$
|
(433,447)
|
|
|
$
|
(6.35)
|
|
Gains on
refranchising
|
(829)
|
|
|
(0.01)
|
|
Long-lived asset
impairments
|
473,508
|
|
|
6.93
|
|
Other SG&A
(1)
|
440
|
|
|
0.01
|
|
Tax effect
|
(34,748)
|
|
|
(0.51)
|
|
Adjusted
|
$
|
4,924
|
|
|
$
|
0.07
|
|
|
|
|
|
Weighted average
diluted common shares outstanding (2)
|
68,327
|
|
|
|
|
|
|
|
|
(1) Includes
store-closing-related costs
|
(2) For reported
diluted loss per share, 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
|
U.S. Company-Owned
Same Store Sales (including GNC.com)
|
|
|
|
|
|
2017
|
|
2016
|
|
Q1
3/31
|
|
Q2
6/30
|
|
Q3
9/30
|
|
Q4
12/31
|
|
YTD
12/31
|
|
Q1
3/31
|
|
Q2
6/30
|
|
Q3
9/30
|
|
Q4
12/31
|
|
YTD
12/31
|
Total same store
sales
|
(3.9)%
|
|
|
(0.9)%
|
|
|
1.3
|
%
|
|
5.7
|
%
|
|
0.2
|
%
|
|
(2.3)%
|
|
|
(3.9)%
|
|
|
(8.6)%
|
|
|
(11.3)%
|
|
|
(6.3)%
|
|
Drivers of same
store sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
transactions
|
9.3%
|
|
|
12.3%
|
|
|
12.4
|
%
|
|
11.7
|
%
|
|
11.6
|
%
|
|
(4.1)%
|
|
|
(5.5)%
|
|
|
(6.6)%
|
|
|
(6.5)%
|
|
|
(5.6)%
|
|
Average transaction
amount
|
(12.1)%
|
|
|
(11.8)%
|
|
|
(9.9)
|
%
|
|
(5.4)
|
%
|
|
(10.2)
|
%
|
|
1.8%
|
|
|
1.7%
|
|
|
(2.2)%
|
|
|
(5.2)%
|
|
|
(0.8)%
|
|
Contribution to
same store sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic retail same
store sales
|
(3.6)%
|
|
|
(0.5)%
|
|
|
(1.2)
|
%
|
|
0.2
|
%
|
|
(1.4)
|
%
|
|
(1.9)%
|
|
|
(3.4)%
|
|
|
(6.5)%
|
|
|
(6.6)%
|
|
|
(4.5)%
|
|
GNC.com contribution
to same store sales
|
(0.3)%
|
|
|
(0.4)%
|
|
|
2.5
|
%
|
|
5.5
|
%
|
|
1.6
|
%
|
|
(0.4)%
|
|
|
(0.5)%
|
|
|
(2.1)%
|
|
|
(4.7)%
|
|
|
(1.8)%
|
|
Total same store
sales
|
(3.9)%
|
|
|
(0.9)%
|
|
|
1.3
|
%
|
|
5.7
|
%
|
|
0.2
|
%
|
|
(2.3)%
|
|
|
(3.9)%
|
|
|
(8.6)%
|
|
|
(11.3)%
|
|
|
(6.3)%
|
|
Web site:
http://www.gnc.com
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content:http://www.prnewswire.com/news-releases/gnc-holdings-inc-provides-fourth-quarter-2017-update-300584167.html
SOURCE GNC Holdings, Inc.