General Nutrition Centers' net income up 56.3% for fourth-quarter 2009

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.

SOURCE General Nutrition Centers, Inc.