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 September 30, 2009.
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.
For the third quarter of 2009, the Company reported consolidated revenues of $430.8 million, an increase of 4.0% over the consolidated revenues of $414.2 million for the same quarter of 2008. Revenue increased in the Company's Retail and Manufacturing/Wholesale segments by 4.4% and 7.6% respectively, and was flat in the Franchise segment. Same store sales improved 4.3% in the domestic retail business (including e-commerce sales) and represents the 17(th) consecutive quarter of positive same store sales.
For the third quarter of 2009, the Company reported earnings before income taxes, depreciation and amortization ("EBITDA") of $59.0 million compared to $54.3 million for the same quarter of 2008, an increase of 8.7% or $4.7 million. Included as part of compensation expense in each of the third quarters of 2009 and 2008 was $0.7 million of non-cash stock-based compensation expense. Excluding this non-cash expense, Adjusted EBITDA for the third quarter of 2009 was $59.7 million, a $4.7 million, or 8.6%, increase over the Adjusted EBITDA of $55.0 million in the same quarter of 2008. Adjusted EBITDA was 13.9% as a percentage of revenue in the third quarter of 2009, compared to 13.3% in the third quarter of 2008.
For the third quarter of 2009, the Company reported net income of $19.5 million, a $3.2 million, or 19.7%, increase over net income of $16.3 million for the same quarter of 2008. Net income, as a percentage of revenue, was 4.5% in the third quarter of 2009 as compared to 3.9% in the third quarter of 2008.
For the third quarter of 2009, the Company generated net cash from operations of $21.5 million, incurred capital expenditures of approximately $9.1 million, paid a cash dividend to its parent of approximately $13.6 million, and paid approximately $0.4 million in principal on outstanding debt. At September 30, 2009, the ending cash balance for the Company was $64.6 million. In the quarter, the Company opened 4 new domestic Company-owned stores, 2 new Company-owned stores in Canada, 33 net new international franchise locations and 59 new franchise store-within-a-store Rite Aid locations.
Joe Fortunato, Chief Executive Officer, said, "We are pleased with our third quarter performance, particularly in the Retail segment where we generated solid revenue and profit growth. Clearly, the GNC brand continues to strengthen, driven by our new, innovative and highly valued proprietary products, effective marketing, and a significantly improved customer shopping experience."
For the first nine months of 2009, the Company reported consolidated revenues of $1,303.1 million, an increase of $38.1 million, or 3.0%, over the consolidated revenues of $1,265.0 million for the first nine months of 2008. Revenue increased in each of the Company's business segments; retail by 3.0%, franchise by 1.8%, and manufacturing / wholesale by 5.0%. Same store sales improved by 3.3% in the domestic retail business (including e-commerce sales).
For the first nine months of 2009, the Company reported EBITDA of $178.0 million compared to $166.4 million for the same period in 2008, an increase of $11.6 million. Included as part of compensation expense in the first nine months of 2009 and 2008 was $2.1 million and $2.2 million, respectively, of non-cash stock-based compensation expense. Excluding this non-cash expense, Adjusted EBITDA was $180.1 million for the first nine months of 2009, an $11.5 million, or 6.8%, increase over the Adjusted EBITDA of $168.6 million for the first nine months of 2008. Adjusted EBITDA improved to 13.8% as a percentage of revenue in the first nine months of 2009 compared to 13.3% in the first nine months of 2008.
For the first nine months of 2009, the Company reported net income of $56.9 million; a $10.2 million, or 22.0%, increase over the net income of $46.7 million for the same period in 2008. Net income, as a percentage of revenue, was 4.4% in the first nine months of 2009 compared to 3.7% in the same period in 2008.
For the first nine months of 2009, the Company generated net cash from operations of $77.8 million, incurred capital expenditures of $20.4 million, and paid approximately $20.0 million in principal on outstanding debt.
For the first nine months of 2009, the Company opened 18 new domestic Company-owned stores, 9 new Company-owned stores in Canada, 67 net new international franchise locations and 122 new franchise store-within-a-store Rite Aid locations.
EBITDA and adjusted EBITDA are non-GAAP financial measures 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.
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