BUSINESS NEWS: General Nutrition Centers, Inc. Reports First Quarter 2010 Results

General Nutrition Centers, Inc. Reports First Quarter 2010 Results

PITTSBURGH /PRNewswire/ -- General Nutrition Centers, Inc. ("GNC" or the "Company"), a leading global specialty retailer of nutritional products, today reported its financial results for the quarter ended March 31, 2010.

For the first quarter of 2010, the Company reported net income of $26.0 million, a $6.5 million, or 33.5%, increase over net income of $19.4 million for the first quarter of 2009. Net income as a percentage of revenue was 5.6% in the first quarter of 2010, compared to 4.4% in the first quarter of 2009.

For the first quarter of 2010, the Company reported consolidated revenue of $465.0 million, an increase of 5.7% over consolidated revenue of $439.9 million for the first quarter of 2009. Revenue increased in the Company's retail and franchise segments by 5.1% and 12.6%, respectively, and declined in the manufacturing/wholesale segment by 0.3%. Same store sales improved 3.1% in domestic Company-owned stores representing the 19th consecutive quarter of positive same store sales.

Earnings before interest, income taxes, depreciation, amortization and non-cash stock-based compensation ("Adjusted EBITDA") for the first quarter of 2010 was $70.3 million, an $8.0 million, or 12.8%, increase over the Adjusted EBITDA of $62.3 million for the first quarter of 2009. Adjusted EBITDA was 15.1% as a percentage of revenue in the first quarter of 2010, compared to 14.2% in the first quarter of 2009.

For the first quarter of 2010, the Company generated net cash from operations of $72.1 million, incurred capital expenditures of approximately $7.3 million, and paid approximately $0.6 million in principal on outstanding debt. Additionally during the quarter, the Company declared and paid a dividend of $28.4 million to GNC Corporation, its direct parent. At March 31, 2010, the Company's cash balance was $110.6 million.

In the first quarter of 2010, the Company opened 9 net new domestic Company-owned stores, 3 net new Company-owned stores in Canada, 31 net new international franchise locations, and 54 net new franchise store-within-a-store Rite Aid locations, and closed 8 net domestic franchise locations.

In the first quarter of 2010, the Company announced an alliance with The Gatorade Company, a division of PepsiCo, to launch G Series Pro – a new sports drink variant of Gatorade's recently launched G Series that until now has only been available in professional sports locker rooms and specialized training facilities. Through this alliance, G Series Pro will be distributed initially through an exclusive co-marketing and co-distribution collaboration with the Company and its network of more than 3,500 company-owned and franchised GNC stores across the country.

Joe Fortunato, Chief Executive Officer, said, "Our first quarter results represent a good start to 2010, as we continue to grow revenue, profit, Adjusted EBITDA margin, and cash flow. We also continue to make progress on our major strategic initiatives. The recently announced collaboration with Gatorade is a good example of our exciting new brand extension efforts. We are confident that our relentless focus on science and product innovation will continue to generate opportunities to build brand awareness and strengthen GNC's leading position in the health and wellness industry."

SOURCE: CNW Newswire Press Release