Aug 10 2010
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 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.
SOURCE General Nutrition Centers, Inc.
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