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General Nutrition Centers, Inc. Reports Fourth Quarter 2009 Results
PITTSBURGH, March 3 /PRNewswire/ -- General Nutrition Centers, Inc. ("GNC" or the "Company"), a leading global specialty retailer of nutritional products, today reported its financial results for the year and quarter ended December 31, 2009.
For the fourth quarter of 2009, the Company reported net income of $12.7 million, a $4.6 million, or 56.3%, increase over net income of $8.1 million for the fourth quarter of 2008. Net income as a percentage of revenue was 3.1% in the fourth quarter of 2009 as compared to 2.1% in the fourth quarter of 2008.
For the fourth quarter of 2009, the Company reported consolidated revenue of $403.9 million, an increase of 3.1% over the consolidated revenue of $391.7 million for the fourth quarter of 2008. Revenue increased in each of the Company's segments: retail by 3.2%, franchise by 4.3%, and manufacturing/wholesale by 1.1%. Same store sales improved 1.2% in domestic Company-owned stores (including e-commerce sales) representing the 18th consecutive quarter of positive same store sales.
Earnings before interest, income taxes, depreciation, amortization and non-cash stock-based compensation ("Adjusted EBITDA") for the fourth quarter of 2009 was $50.6 million, a $4.4 million, or 9.5%, increase over the Adjusted EBITDA of $46.2 million for the fourth quarter of 2008. Adjusted EBITDA was 12.5% as a percentage of revenue in the fourth quarter of 2009, compared to 11.8% in the fourth quarter of 2008.
For the fourth quarter of 2009, the Company generated net cash from operations of $36.1 million, incurred capital expenditures of approximately $8.2 million, and paid approximately $5.4 million in principal on outstanding debt. At December 31, 2009, the Company's cash balance was $75.1 million.
In the fourth quarter of 2009, the Company opened 25 net new domestic Company-owned stores, 1 net new Company-owned store in Canada, 50 net new international franchise locations, and 55 net new franchise store-within-a- store Rite Aid locations, and closed 10 net domestic franchise locations.
The Company announced last month that it, together with its parent company, had entered into a memorandum of understanding to form a strategic partnership with Shanghai-based Bright Food (Group) Co, LTD. This partnership, to be named GNC China, will participate in China's nutritional products market and promote the GNC brands in China's large to medium-sized cities.
Joe Fortunato, Chief Executive Officer, said, "The fourth quarter capped a successful 2009, as we continued to grow revenue, profit, Adjusted EBITDA margin, and cash generation. Equally important, we made key investments in the business and launched several initiatives, including our China venture, to provide a foundation for future growth. We remain focused on science and product innovation that will continue to strengthen GNC's leading position in the health and wellness industry."
For the year ended December 31, 2009, the Company reported net income of $69.6 million; a $14.8 million, or 27.1%, increase over net income of $54.8 million for 2008. Net income as a percentage of revenue was 4.1% for the year ended December 31, 2009 compared to 3.3% for 2008.
For the year ended December 31, 2009, the Company reported consolidated revenue of $1,707.0 million, an increase of $50.3 million, or 3.0%, over the consolidated revenue of $1,656.7 million for the year ended December 31, 2008. Revenue increased in each of the Company's business segments: retail by 3.0%, franchise by 2.4%, and manufacturing / wholesale by 4.0%. For the year, same store sales improved 2.8% in domestic Company-owned stores (including e- commerce sales).
Adjusted EBITDA was $230.7 million for the year ended December 31, 2009, a $15.9 million, or 7.4%, increase over the Adjusted EBITDA of $214.8 million for the year ended December 31, 2008. Adjusted EBITDA improved to 13.5% as a percentage of revenue for the year ended December 31, 2009 compared to 13.0% for 2008.
For the year ended December 31, 2009, the Company generated net cash from operations of $114.0 million, incurred capital expenditures of $28.7 million, and paid approximately $25.3 million in principal on outstanding debt.
For the year ended December 31, 2009, the Company opened 51 net new domestic Company-owned stores, 7 net new Company-owned stores in Canada, 117 net new international franchise locations, and 157 net new franchise store- within-a-store Rite Aid locations and closed 45 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 December 31, 2009, GNC has more than 6,900 locations, of which more than 5,400 retail locations are in the United States (including 909 franchise and 1,869 Rite Aid franchise store-within-a-store locations) and franchise operations in 47 countries. The Company -- which is dedicated to helping consumers Live Well -- also offers products and product information online at www.gnc.com
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. 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. GNC 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 our quarterly and annual filings with the Securities and Exchange Commission.
Adjusted EBITDA is a non-GAAP financial measure within the meaning of the Securities and Exchange Commission's Regulation G. Management has included this information because it believes it represents a more effective means by which to measure the Company's operating performance. This press release contains a reconciliation of the non-GAAP measure to the financial measure calculated and presented in accordance with GAAP which is most directly comparable to the applicable non-GAAP financial measure.
SOURCE: GNC Press Release
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