GNC Reports $25.6 Million Profit

General Nutrition Centers, Inc. ("GNC" or the "Company"), a leading global specialty retailer of nutritional products, has reported its financial results for the quarter ended June 30, 2010.

For the second quarter of 2010, the Company reported net income of $25.6 million, a $7.6 million, or 42.5%, increase over net income of $18.0 million for the second quarter of 2009. Net income as a percentage of revenue was 5.6% in the second quarter of 2010, compared to 4.2% in the second quarter of 2009. The Company's second quarter of 2009 financial performance was negatively impacted by the May 2009 Hydroxycut product recall.

For the second quarter of 2010, the Company reported consolidated revenue of $455.9 million, an increase of 5.4% over consolidated revenue of $432.4 million for the second quarter of 2009. Revenue increased in the Company's retail and franchise segments by 8.2% and 5.5%, respectively, and declined in the manufacturing/wholesale segment by 13.5%. Same store sales improved 6.5% in domestic Company-owned stores, representing the 20th consecutive quarter of positive same store sales.

Earnings before interest, income taxes, depreciation, amortization and non-cash stock-based compensation ("Adjusted EBITDA") for the second quarter of 2010 was $68.6 million, a $10.5 million, or 18.1%, increase over the Adjusted EBITDA of $58.1 million for the second quarter of 2009. Adjusted EBITDA was 15.0% as a percentage of revenue in the second quarter of 2010, compared to 13.4% in the second quarter of 2009.

For the second quarter of 2010, the Company generated net cash from operations of $14.5 million, incurred capital expenditures of approximately $6.4 million, and paid approximately $0.4 million in principal on outstanding debt. At June 30, 2010, the Company's cash balance was $118.5 million.

In the second quarter of 2010, the Company opened 13 net new domestic Company-owned stores, 1 net new Company-owned store in Canada, 43 net new international franchise locations, and 49 net new franchise store-within-a-store Rite Aid locations, and closed 9 net domestic franchise locations.

In the second quarter of 2010, the Company and PetSmart announced the launch of a line of dietary supplements designed for dogs and cats. This new line, which recognizes the unique dietary needs of pets, will be made exclusively for PetSmart and available at PetSmart and www.petsmart.com beginning in the Fall of 2010.

Joe Fortunato, Chief Executive Officer, said, "Our second quarter results demonstrate the continued momentum of the business and our ability to consistently grow revenue and adjusted EBITDA. Beyond the core business, I am also pleased with our on- going corporate partnership initiatives, such as our previously announced venture with Pepsi and our most recent project with PetSmart. As a leader in the health and wellness industry focused on science and innovation, GNC is well positioned to continue to build on the valued brand that gives us an edge in the marketplace and allows us to continue to enhance financial leverage."

For the first six months of 2010, the Company reported net income of $51.6 million, a $14.1 million, or 37.8%, increase over net income of $37.4 million for the first six months of 2009. Net income as a percentage of revenue was 5.6% in the first six months of 2010, compared to 4.3% in the first six months of 2009.

For the first six months of 2010, the Company reported consolidated revenue of $920.9 million, an increase of 5.6% over consolidated revenue of $872.3 million for the first six months of 2009. Revenue increased in the Company's retail and franchise segments by 6.6% and 8.9%, respectively, and declined in the manufacturing/wholesale segment by 7.2%. Same store sales improved 4.7% in domestic Company-owned stores in the first six months of 2010 compared to the same period in 2009.

Adjusted EBITDA for the first six months of 2010 was $138.8 million, an $18.5 million, or 15.4%, increase over the Adjusted EBITDA of $120.3 million for the first six months of 2009. Adjusted EBITDA was 15.1% as a percentage of revenue in the first six months of 2010, compared to 13.8% in the first six months of 2009.

For the first six months of 2010, the Company generated net cash from operations of $86.6 million, incurred capital expenditures of approximately $13.7 million, and paid approximately $1.0 million in principal on outstanding debt. Additionally during the six months, the Company declared and paid a dividend of $28.4 million to GNC Corporation, its direct parent.

In the first six months of 2010, the Company opened 22 net new domestic Company-owned stores, 4 net new Company-owned stores in Canada, 74 net new international franchise locations, and 103 net new franchise store-within-a-store Rite Aid locations, and closed 17 net domestic franchise locations.

General Nutrition Centers, Inc., headquartered in Pittsburgh, Pa., is a leading global specialty retailer of nutritional products including vitamin, mineral, herbal and other specialty supplements and sports nutrition, diet and energy products. General Nutrition Centers, Inc. is an indirect wholly owned subsidiary of GNC Parent LLC, which was acquired by affiliates of Ares Management LLC and Ontario Teachers' Pension Plan Board through a merger on March 16, 2007.

As of June 30, 2010, GNC has more than 7,100 locations, of which more than 5,500 retail locations are in the United States (including 892 franchise and 1,972 Rite Aid franchise store-within-a-store locations), and franchise operations in 50 countries. The Company—which is dedicated to helping consumers Live Well— also offers products and product information online at www.gnc.com. GNC has scheduled a conference call and webcast to report its second quarter 2010 financial results on Tuesday, August 10, 2010 at 11:00 am EDT. To listen to this call dial 1-866-468-1032 inside the U.S. and 1-832-445-1665 outside the U.S. The conference identification number for all participants is 91356815. A webcast of the call will also be available through the "About GNC" link on www.gnc.com through September 10, 2010.

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