GNC Holdings said its board has commenced a review of a wide range of strategic and financial alternatives to increase shareholder value.
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The review will include a thorough evaluation of the company's current operating plan, as well as potential value maximizing alternatives such as accelerated refranchising strategies, capital structure optimization, partnerships and other value-creating collaborations, or a potential sale of the company.
The board is working with Goldman, Sachs & Co. as financial advisor and Wachtell, Lipton, Rosen & Katz as legal advisor to assist in the process.
"The Board is committed to increasing shareholder value. After careful consideration, including discussions with a range of shareholders, we believe it is an appropriate time to undertake a comprehensive review of the Company's strategic and financial alternatives," said Michael F. Hines, GNC's Chairman
"We are in the early stages of a broad review and will take the time we need to thoroughly evaluate our opportunities to achieve the best result for our shareholders, business partners, and associates.
"While the review is ongoing, GNC will continue to act with the necessary urgency to deliver improved financial performance by addressing our near-term challenges and continuing to execute our strategic initiatives."
In its latest earning report on April 28, for the first quarter of 2016, the company reported consolidated revenue of $668.9 million, a decrease of 1.8% as compared with consolidated revenue of $681.3 million for the first quarter of 2015.
Revenue, excluding intersegment sales, increased in the company's Manufacturing / Wholesale segment by 3.5%. Revenue decreased in the Company's Retail and Franchise segments by 1.5% and 5.6%, respectively.
Same store sales decreased 2.6% in domestic company-owned stores (including GNC.com sales) in the first quarter of 2016. In domestic franchise locations, same store sales decreased 5.6% in the first quarter of 2016.
For the first quarter of 2016, the Company reported net income of $50.8 million.
Adjusted net income for the first quarter of 2016 was $50.8 million, a decrease of 23.0% as compared with adjusted net income of $66.0 million for the first quarter of 2015.
Adjusted diluted earnings per share was $0.69 for the first quarter of 2016, as compared with adjusted diluted earnings per share of $0.75 for the first quarter of 2015. ■