Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 24, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | GNC HOLDINGS, INC. | |
Entity Central Index Key | 1502034 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 86,599,899 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q1 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $166,926 | $133,834 |
Receivables, net | 135,173 | 136,361 |
Inventories | 554,935 | 569,132 |
Prepaids and other current assets | 48,320 | 37,016 |
Total current assets | 905,354 | 876,343 |
Long-term assets: | ||
Goodwill | 670,766 | 672,293 |
Brands | 720,000 | 720,000 |
Other intangible assets, net | 130,090 | 132,992 |
Property, plant and equipment, net | 227,598 | 232,397 |
Other long-term assets | 43,284 | 43,775 |
Total long-term assets | 1,791,738 | 1,801,457 |
Total assets | 2,697,092 | 2,677,800 |
Current liabilities: | ||
Accounts payable | 153,066 | 129,064 |
Current portion of long-term debt | 4,693 | 4,740 |
Deferred revenue and other current liabilities | 120,362 | 106,539 |
Total current liabilities | 278,121 | 240,343 |
Long-term liabilities: | ||
Long-term debt | 1,336,663 | 1,337,638 |
Deferred tax liabilities, net | 283,162 | 282,842 |
Other long-term liabilities | 60,977 | 60,934 |
Total long-term liabilities | 1,680,802 | 1,681,414 |
Total liabilities | 1,958,923 | 1,921,757 |
Contingencies | ||
Stockholders’ equity: | ||
Common stock | 114 | 113 |
Paid-in capital | 882,175 | 879,655 |
Retained earnings | 946,047 | 898,574 |
Treasury stock, at cost | -1,081,027 | -1,018,470 |
Accumulated other comprehensive loss | -9,140 | -3,829 |
Total stockholders’ equity | 738,169 | 756,043 |
Total liabilities and stockholders’ equity | $2,697,092 | $2,677,800 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Revenue | $670,247 | $674,456 |
Cost of sales, including warehousing, distribution and occupancy | 420,814 | 420,737 |
Gross profit | 249,433 | 253,719 |
Selling, general and administrative | 139,768 | 134,612 |
Other expense (income), net | 60 | -2,148 |
Operating income | 109,605 | 121,255 |
Interest expense, net | 11,515 | 11,531 |
Income before income taxes | 98,090 | 109,724 |
Income tax expense | 34,820 | 39,821 |
Net income | $63,270 | $69,903 |
Earnings per share: | ||
Basic (in dollars per share) | $0.72 | $0.75 |
Diluted (in dollars per share) | $0.72 | $0.75 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 87,865 | 92,975 |
Diluted (in shares) | 88,105 | 93,684 |
Dividends declared per share: (in dollars per share) | $0.18 | $0.16 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Net income | $63,270 | $69,903 |
Other comprehensive loss: | ||
Foreign currency translation adjustments | -5,311 | -781 |
Comprehensive income | $57,959 | $69,122 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Treasury Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) |
In Thousands, unless otherwise specified | ||||||
Beginning balance at Dec. 31, 2013 | $815,579 | $112 | ($734,482) | $847,886 | $700,108 | $1,955 |
Beginning balance (in shares) at Dec. 31, 2013 | 93,989 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income (loss) | 69,122 | 69,903 | -781 | |||
Repurchase of treasury stock (in shares) | -3,159 | |||||
Repurchase of treasury stock | -150,000 | -150,000 | ||||
Common stock dividends | -14,643 | -14,643 | ||||
Conversions to common stock (in shares) | 81 | |||||
Conversions to common stock | 2,410 | 1 | 2,409 | |||
Non-cash stock-based compensation | 2,077 | 2,077 | ||||
Ending balance at Mar. 31, 2014 | 724,545 | 113 | -884,482 | 852,372 | 755,368 | 1,174 |
Ending balance (in shares) at Mar. 31, 2014 | 90,911 | |||||
Beginning balance at Dec. 31, 2014 | 756,043 | 113 | -1,018,470 | 879,655 | 898,574 | -3,829 |
Beginning balance (in shares) at Dec. 31, 2014 | 88,335 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income (loss) | 57,959 | 63,270 | -5,311 | |||
Repurchase of treasury stock (in shares) | -1,394 | |||||
Repurchase of treasury stock | -62,557 | -62,557 | ||||
Common stock dividends | -15,797 | -15,797 | ||||
Conversions to common stock (in shares) | 49 | |||||
Conversions to common stock | 1,216 | 1 | 1,215 | |||
Non-cash stock-based compensation | 1,305 | 1,305 | ||||
Ending balance at Mar. 31, 2015 | $738,169 | $114 | ($1,081,027) | $882,175 | $946,047 | ($9,140) |
Ending balance (in shares) at Mar. 31, 2015 | 86,990 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net income | $63,270 | $69,903 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 14,430 | 13,428 |
Amortization of debt costs | 463 | 448 |
Increase in provision for inventory losses | 5,281 | 4,303 |
Gain on sale of company-owned stores to franchisees | -338 | -2,283 |
Decrease (increase) in receivables | 1,597 | -6,514 |
Decrease (increase) in inventory | 5,661 | -17,833 |
(Increase) decrease in prepaid and other assets | -10,978 | 5,989 |
Increase in accounts payable | 22,482 | 21,925 |
Increase in deferred revenue and other liabilities | 12,976 | 28,926 |
Other operating activities | 2,093 | 4,340 |
Net cash provided by operating activities | 116,937 | 122,632 |
Cash flows from investing activities: | ||
Capital expenditures | -7,519 | -12,849 |
Other investing activities | 273 | 12 |
Net cash used in investing activities | -7,246 | -12,837 |
Cash flows from financing activities: | ||
Dividends paid to shareholders | -15,756 | -14,555 |
Payments on long-term debt | -1,199 | -1,676 |
Proceeds from exercised stock options | 896 | 1,499 |
Excess tax benefits from stock-based compensation | 320 | 911 |
Repurchase of treasury stock | -60,773 | -150,000 |
Net cash used in financing activities | -76,512 | -163,821 |
Effect of exchange rate on cash and cash equivalents | -87 | 463 |
Net decrease in cash and cash equivalents | 33,092 | -53,563 |
Beginning balance, cash and cash equivalents | 133,834 | 226,217 |
Ending balance, cash and cash equivalents | $166,926 | $172,654 |
NATURE_OF_BUSINESS
NATURE OF BUSINESS | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS | NATURE OF BUSINESS |
GNC Holdings, Inc., a Delaware corporation (“Holdings,” and collectively with its subsidiaries and, unless the context requires otherwise, its and their respective predecessors, the “Company”), is a global specialty retailer of health and wellness products, including vitamins, minerals and herbal supplements, sports nutrition products, diet products and other wellness products. | |
The Company is vertically integrated, as its operations consist of purchasing raw materials, formulating and manufacturing products and selling the finished products through its three segments: Retail, Franchising and Manufacturing/Wholesale. Corporate retail store operations are located in the United States, Canada, Puerto Rico and beginning with the acquisition of THSD d/b/a The Health Store ("The Health Store") in 2014, Ireland. In addition, the Company offers products domestically through GNC.com, LuckyVitamin.com, www.drugstore.com, and beginning with the acquisition of A1 Sports Limited d/b/a DiscountSupplements in 2013, internationally through www.discountsupplements.co.uk. Franchise stores are located in the United States and more than 50 other countries (including distribution centers where retail sales are made). The Company operates its primary manufacturing facilities in South Carolina and distribution centers in Arizona, Indiana, Pennsylvania and South Carolina. The Company manufactures the majority of its branded products, but also merchandises various third-party products. Additionally, the Company licenses the use of its trademarks and trade names. | |
The processing, formulation, packaging, labeling and advertising of the Company’s products are subject to regulation by various federal agencies, including the Food and Drug Administration (the “FDA”), the Federal Trade Commission, the Consumer Product Safety Commission, the United States Department of Agriculture and the Environmental Protection Agency. These activities are also regulated by various agencies of the states and localities in which the Company’s products are sold. |
BASIS_OF_PRESENTATION_AND_SUMM
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION |
The accompanying unaudited consolidated financial statements, which have been prepared in accordance with the applicable rules of the Securities and Exchange Commission, include all adjustments (consisting of a normal and recurring nature) that management considers necessary to fairly state the Company's results of operations, financial position and cash flows. The December 31, 2014 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2014. Interim results are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2015. | |
Correction of Immaterial Error. During the quarter ended March 31, 2015, the Company identified a $2.8 million error relating to prior periods in the calculation of the portion of the accrued payroll liability relating to certain amounts paid to store employees. The impact of this error was not material to any prior period. In addition, the cumulative impact of the correction was not material to the Company's consolidated financial statements for the quarter ended March 31, 2015. Consequently, the Company has corrected the error in the current period by increasing selling, general and administrative expense on the consolidated statement of income and deferred revenue and other current liabilities on the consolidated balance sheet by $2.8 million. The impact to net income was a decrease of $1.8 million for the three months ended March 31, 2015. This correction had no impact on cash flow from operations for the current period. | |
Revision. Certain amounts in the consolidated financial statements for prior year periods have been revised to conform to the current period's presentation with no impact on previously reported operating income, net income or stockholders' equity. Specifically, the gains resulting from the sales of company-owned stores are presented in "Other expense (income), net" on the consolidated statements of income and the related cash proceeds are presented in "Other investing activities" as an investing cash inflow on the consolidated statements of cash flows. These gains were previously presented in “Gross profit” on the consolidated statements of income with the related cash proceeds being presented as an operating activity in the consolidated statements of cash flows. Certain other amounts in the consolidated financial statements of prior year periods have been revised to conform to the current period’s presentation. None of these revisions are material to prior periods. | |
Recent Accounting Pronouncements. In June 2014, the FASB issued accounting standard update ("ASU") 2014-12, which updates guidance on performance stock awards. The update states that for any award that has a performance target that affects vesting and that could be achieved after the requisite period, that performance target should still be treated as a performance condition. This standard is effective for fiscal years beginning after December 15, 2015. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements but does not expect the effect to be material. | |
In May 2014, the FASB issued ASU 2014-09, which updates revenue recognition guidance relating to contracts with customers. This standard states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard is effective for fiscal years beginning after December 15, 2016. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements. |
INVENTORIES
INVENTORIES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
INVENTORIES | INVENTORIES | |||||||
The net carrying value of inventories consisted of the following: | ||||||||
31-Mar-15 | 31-Dec-14 | |||||||
(in thousands) | ||||||||
Finished product ready for sale | $ | 479,937 | $ | 501,027 | ||||
Work-in-process, bulk product and raw materials | 67,782 | 60,911 | ||||||
Packaging supplies | 7,216 | 7,194 | ||||||
Total inventory | $ | 554,935 | $ | 569,132 | ||||
LONGTERM_DEBT_INTEREST_EXPENSE
LONG-TERM DEBT / INTEREST EXPENSE | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Debt Disclosure [Abstract] | ||||||||||
LONG-TERM DEBT / INTEREST EXPENSE | LONG-TERM DEBT / INTEREST EXPENSE | |||||||||
Long-term debt consisted of the following: | ||||||||||
March 31, | December 31, | |||||||||
2015 | 2014 | |||||||||
(in thousands) | ||||||||||
Term Loan Facility | $ | 1,341,213 | $ | 1,342,165 | ||||||
Other | 143 | 213 | ||||||||
Total debt | 1,341,356 | 1,342,378 | ||||||||
Less: current maturities | (4,693 | ) | (4,740 | ) | ||||||
Long-term debt | $ | 1,336,663 | $ | 1,337,638 | ||||||
In 2013, the Company amended and restated its existing $1.4 billion term loan facility (the “Term Loan Facility”) to, among other amendments, increase borrowings by $252.5 million and extend the maturity date of the Term Loan Facility to March 2019. The Company also increased the amount available for borrowing under the $80.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Credit Facility”) to $130.0 million, extended the maturity date of the Revolving Credit Facility to March 2017, and effected changes in the interest rates applicable to amounts outstanding under the Revolving Credit Facility. | ||||||||||
For each of the three month periods ended March 31, 2015 and 2014, net interest expense was approximately $11.5 million, the substantial majority of which consisted of interest on outstanding borrowings under the Term Loan Facility. Interest under the Term Loan Facility and the Revolving Credit Facility is based on variable rates. At March 31, 2015 and December 31, 2014, the interest rate under the Term Loan Facility was 3.25%. The Revolving Credit Facility was undrawn and had outstanding letters of credit of $1.1 million at March 31, 2015 and December 31, 2014. At March 31, 2015 and December 31, 2014, the commitment fee on the undrawn portion of the Revolving Credit Facility was 0.5%, and the fee on outstanding letters of credit was 2.50%. As of March 31, 2015, the Company is in compliance with all covenants under the Senior Credit Facility. |
FINANCIAL_INSTRUMENTS
FINANCIAL INSTRUMENTS | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Financial Instruments, Owned, at Fair Value [Abstract] | ||||||||||||||||
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS | |||||||||||||||
At March 31, 2015 and December 31, 2014, the Company’s financial instruments consisted of cash and cash equivalents, receivables, franchise notes receivable, accounts payable, accrued liabilities and long-term debt. The carrying amount of cash and cash equivalents, receivables, accounts payable and accrued liabilities approximates their respective fair values because of the short maturities of these instruments. Based on the interest rates currently available and their underlying risk, the carrying value of the franchise notes receivable approximates their respective fair values. These fair values are reflected net of reserves for uncollectible amounts. As considerable judgment is required to determine these estimates and assumptions, changes in the assumptions or methodologies may have an effect on these estimates. | ||||||||||||||||
The Company determined the estimated fair values of its debt by using currently available market information. The fair value measurement for debt utilizes Level 2 inputs on the fair value hierarchy, which are defined as observable inputs such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, other inputs that are observable, or can be corroborated by observable market data. The actual and estimated fair values of the Company’s financial instruments are as follows: | ||||||||||||||||
31-Mar-15 | 31-Dec-14 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | |||||||||||||
(in thousands) | ||||||||||||||||
Cash and cash equivalents | $ | 166,926 | $ | 166,926 | $ | 133,834 | $ | 133,834 | ||||||||
Receivables, net | 135,173 | 135,173 | 136,361 | 136,361 | ||||||||||||
Franchise notes receivable, net | 17,247 | 17,247 | 17,722 | 17,722 | ||||||||||||
Accounts payable | 153,066 | 153,066 | 129,064 | 129,064 | ||||||||||||
Long-term debt (including current portion) | 1,341,356 | 1,336,326 | 1,342,378 | 1,288,683 | ||||||||||||
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES |
Litigation | |
The Company is engaged in various legal actions, claims and proceedings arising in the normal course of business, including claims related to breach of contracts, products liabilities, intellectual property matters and employment-related matters resulting from the Company's business activities. | |
The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred and the amount of such loss can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. If the Company ultimately is required to make a payment exceeding amounts accrued in connection with an adverse outcome in any of the matters discussed below, it is possible that it could have a material adverse effect on the Company's business, financial condition, results of operations or cash flows. | |
The Company's contingencies are subject to substantial uncertainties, including for each such contingency the following, among other factors: (i) the procedural status of the case; (ii) whether the case has or may be certified as a class action suit; (iii) the outcome of preliminary motions; (iv) the impact of discovery; (v) whether there are significant factual issues to be determined or resolved; (vi) whether the proceedings involve a large number of parties and/or parties and claims in multiple jurisdictions or jurisdictions in which the relevant laws are complex or unclear; (vii) the extent of potential damages, which are often unspecified or indeterminate; and (viii) the status of settlement discussions, if any, and the settlement posture of the parties. Consequently, except as otherwise noted below with regard to a particular matter, the Company cannot predict with any reasonable certainty the timing or outcome of the legal matters described below, and the Company is unable to estimate a possible loss or range of loss. | |
As a manufacturer and retailer of nutritional supplements and other consumer products that are ingested by consumers or applied to their bodies, the Company has been and is currently subjected to various product liability claims. Although the effects of these claims to date have not been material to the Company, it is possible that current and future product liability claims could have a material adverse effect on its business or financial condition, results of operations or cash flows. The Company currently maintains product liability insurance with a deductible/retention of $4.0 million per claim with an aggregate cap on retained loss of $10.0 million. The Company typically seeks and has obtained contractual indemnification from most parties that supply raw materials for its products or that manufacture or market products it sells. The Company also typically seeks to be added, and has been added, as an additional insured under most of such parties’ insurance policies. The Company is also entitled to indemnification by Numico for certain losses arising from claims related to products containing ephedra or Kava Kava sold prior to December 5, 2003. However, any such indemnification or insurance is limited by its terms and any such indemnification, as a practical matter, is limited to the creditworthiness of the indemnifying party and its insurer, and the absence of significant defenses by the insurers. Consequently, the Company may incur material products liability claims, which could increase its costs and adversely affect its reputation, revenue and operating income. | |
Hydroxycut Claims. In 2009, the FDA issued a warning on several Hydroxycut-branded products manufactured by Iovate Health Sciences U.S.A., Inc. (“Iovate”) based on 23 reports of liver injuries from consumers who claimed to have used the products between 2002 and 2009. As a result, Iovate voluntarily recalled 14 Hydroxycut-branded products. | |
Following the recall, the Company was named, among other defendants, in multiple lawsuits related to Hydroxycut-branded products in several states. The United States Judicial Panel on Multidistrict Litigation consolidated pretrial proceedings of many of the pending actions in the Southern District of California (In re: Hydroxycut Marketing and Sales Practices Litigation, MDL No. 2087), and Iovate previously accepted the Company’s tender request for defense and indemnification under its purchasing agreement with the Company in these matters. | |
As of March 31, 2015, there were 76 pending lawsuits related to Hydroxycut in which the Company had been named: 70 individual, largely personal injury claims and six putative class action cases, generally inclusive of claims of consumer fraud, misrepresentation, strict liability and breach of warranty. In May 2013, the parties to the individual personal injury cases signed a Master Settlement Agreement, under which the Company is not required to make any payments. Settlement payments are being made exclusively by Iovate and dismissals are expected to be entered in these actions in the near term. The parties in the consolidated class actions reached a settlement, which was approved by the Court on October 20, 2014 and which does not require the Company to make any payments. Following final resolution of the individual personal injury cases and the settlement of the consolidated class action suits, all of the Hydroxycut claims currently pending against the Company will be resolved without any payment by the Company. | |
DMAA / Aegeline Claims. Prior to December 2013, the Company sold products manufactured by third parties that contained derivatives from geranium known as 1.3-dimethylpentylamine/dimethylamylamine/13-dimethylamylamine, or “DMAA,” which were recalled from its stores in November 2013, and/or Aegeline, a compound extracted from bael trees. | |
As of March 31, 2015, the Company was named in 31 personal injury lawsuits involving products containing DMAA and/or Aegeline. As a general matter, the proceedings associated with these cases, which generally seek indeterminate money damages, are in the early stages, and any liabilities that may arise from these matters are not probable or reasonably estimable at this time. The Company is contractually entitled to indemnification by its third-party vendor with regard to these matters, although the Company’s ability to obtain full recovery in respect of any such claims against it is dependent upon the creditworthiness of the vendor and/or its insurance coverage and the absence of any significant defenses available to its insurer. | |
One of the personal injury suits in which the Company is named, Leanne Sparling and Michael Sparling on behalf of Michael Sparling, deceased v. USPLabs, GNC Corporation, et al., Superior Court of California, County of San Diego (Case No. 2013-00034663-CU-PL-CTL), filed February 13, 2013, is the subject of pending motion for summary judgment filed by the Company and is scheduled for trial in June 2015. Additionally, the Company previously was named in three putative class action cases in the United States District Court for the District of New Jersey, one of which was dismissed with prejudice in December 2014. The two remaining class action claims were consolidated and, in February 2015, the United States District Court for the Northern District of Florida approved a settlement agreement among the parties, which does not require any payment by the Company. | |
California Wage and Break Claims. In November 2008, 98 plaintiffs filed individual claims against the Company in the Superior Court of the State of California for the County of Orange, which was removed to the U.S. District Court, Central District of California in February 2009. Each of the plaintiffs had previously been a member of a purported class in a lawsuit filed against the Company in 2007 and resolved in September 2009. The plaintiffs alleged that they were not provided all of the rest and meal periods to which they were entitled under California law, and further alleged that the Company failed to pay them split shift and overtime compensation to which they were entitled under California law. The plaintiffs also alleged derivative claims for inaccurate wage statements, failure to pay wages due at termination, and penalty claims under the California Labor Code. In June 2013, a trial was conducted with respect to the claims of seven of the plaintiffs. The jury returned a verdict in favor of the Company on all claims submitted to the jury, and the Court entered an order in favor of the Company on the one claim submitted to the Court. A number of other plaintiffs were dismissed from the action pursuant to stipulation and/or Court order. The remaining plaintiffs entered into a settlement agreement with the Company in December 2014 and the Court subsequently entered a final order dismissing the action with prejudice. | |
In July 2011, Charles Brewer, on behalf of himself and all others similarly situated, sued General Nutrition Corporation in federal court, alleging state and federal wage and hour claims (U.S. District Court, Northern District of California, Case No. 11CV3587). In October 2011, plaintiff filed an eight-count amended complaint alleging, inter alia, meal, rest break and overtime violations on behalf of sales associates and assistant store managers, and the Company filed a motion to dismiss the complaint. In January 2013, the Court conditionally certified a Fair Labor Standards Act class with respect to one of Plaintiff's claims, and in November 2014, the Court granted in part and denied in part Plaintiff’s Motion to Certify a California class, and granted Defendant’s Motion for Decertification of FLSA Collective Action. A mediation conducted in April 2015 was unsuccessful in resolving the Plaintiff's claims. As of March 31, 2015, an immaterial liability has been accrued in the accompanying financial statements. | |
In February 2012, former Senior Store Manager, Elizabeth Naranjo, individually and on behalf of all others similarly situated sued General Nutrition Corporation in the Superior Court of the State of California for the County of Alameda (Case No. RG 12619626). The complaint contains eight causes of action, alleging, inter alia, meal, rest break, and overtime violations. In October 2014, the Court granted Plaintiff’s Motion to Certify a Class of approximately 900 current and former managers. A mediation conducted in April 2015 was unsuccessful in resolving the Plaintiff's claims. As of March 31, 2015, an immaterial liability has been accrued in the accompanying financial statements. | |
FLSA Matters. In June 2010, Dominic Vargas and Anne Hickok, on behalf of themselves and all others similarly situated, sued General Nutrition Corporation and the Company in federal court (U.S. District Court, Western District of Pennsylvania, Case No. 2:05-mc-02025). The two-count complaint alleged, generally, that plaintiffs were required to perform work on an uncompensated basis and that the Company failed to pay overtime for such work. The parties have settled the plaintiffs' claims for an immaterial amount. | |
Jason Olive v. General Nutrition Corp. In April 2012, Jason Olive filed a complaint in the Superior Court of California, County of Los Angeles (Case No. BC482686), for misappropriation of likeness in which he alleges that the Company continued to use his image in stores after the expiration of the license to do so in violation of common law and California statutes. Mr. Olive is seeking compensatory, punitive and statutory damages and attorneys’ fees and costs. The trial in this matter previously scheduled for December 2014 was postponed and no new trial date has been set. As of March 31, 2015, an immaterial liability has been accrued in the accompanying financial statements. | |
Environmental Compliance | |
In March 2008, the South Carolina Department of Health and Environmental Control (the "DHEC") requested that the Company investigate contamination associated with historical activities at its South Carolina facility. These investigations have identified chlorinated solvent impacts in soils and groundwater that extend offsite from the facility. The Company entered into a Voluntary Cleanup Contract with the DHEC regarding the matter on September 24, 2012. Pursuant to such contract, the Company is completing additional investigations with the DHEC's approval. At this stage of the investigation, however, it is not possible to estimate the timing and extent of any remedial action that may be required, the ultimate cost of remediation, or the amount of the Company's potential liability, therefore no liability is recorded. | |
In addition to the foregoing, the Company is subject to numerous federal, state, local and foreign environmental and health and safety laws and regulations governing its operations, including the handling, transportation and disposal of the Company's non-hazardous and hazardous substances and wastes, as well as emissions and discharges from its operations into the environment, including discharges to air, surface water and groundwater. Failure to comply with such laws and regulations could result in costs for remedial actions, penalties or the imposition of other liabilities. New laws, changes in existing laws or the interpretation thereof, or the development of new facts or changes in their processes could also cause the Company to incur additional capital and operating expenditures to maintain compliance with environmental laws and regulations and environmental permits. The Company is also subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment without regard to fault or knowledge about the condition or action causing the liability. Under certain of these laws and regulations, such liabilities can be imposed for cleanup of previously owned or operated properties, or for properties to which substances or wastes that were sent in connection with current or former operations at its facilities. The presence of contamination from such substances or wastes could also adversely affect the Company's ability to sell or lease its properties, or to use them as collateral for financing. From time to time, the Company has incurred costs and obligations for correcting environmental and health and safety noncompliance matters and for remediation at or relating to certain of the Company's properties or properties at which the Company's waste has been disposed. However, compliance with the provisions of national, state and local environmental laws and regulations has not had a material effect upon the Company's capital expenditures, earnings, financial position, liquidity or competitive position. The Company believes it has complied with, and is currently complying with, its environmental obligations pursuant to environmental and health and safety laws and regulations and that any liabilities for noncompliance will not have a material adverse effect on its business, financial performance or cash flows. However, it is difficult to predict future liabilities and obligations, which could be material. |
STOCKBASED_COMPENSATION_PLANS_
STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM | 3 Months Ended | ||
Mar. 31, 2015 | |||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM | STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM | ||
Stock and Incentive Plans | |||
The Company has outstanding stock-based compensation awards that were granted by the Compensation and Organizational Development Committee (the “Compensation Committee”) of Holdings’ board of directors (the "Board") under the following two stock-based employee compensation plans: | |||
• | the GNC Holdings, Inc. 2011 Stock and Incentive Plan (the “2011 Stock Plan”); and | ||
• | the GNC Acquisition Holdings Inc. 2007 Stock Incentive Plan (as amended, the “2007 Stock Plan”). | ||
Additionally, as of April 2, 2015, the Board, upon recommendation of the Compensation Committee, adopted the GNC Holdings, Inc. 2015 Stock and Incentive Plan (the "2015 Stock Plan"), subject to stockholder approval. | |||
Each plan allows for the grant of stock options, restricted stock and other stock-based awards to eligible employees, directors, consultants or advisers as determined by the Compensation Committee. Stock options under the 2007 Stock Plan and 2011 Stock Plan were granted with exercise prices at or above fair market value on the date of grant, typically vest over a four- or five-year period, and expire seven or ten years from the date of grant. | |||
The Company will grant future awards under the 2015 Stock Plan, under which approximately 9 million shares are authorized for grant, subject to stockholder approval thereof. Up to 8.5 million shares of common stock were authorized for issuance under the 2011 Stock Plan, of which 5.4 million shares remained available for issuance as of March 31, 2015. | |||
Stock-Based Compensation Activity | |||
During the quarter ended March 31, 2015, the Company granted the following share-based compensation awards (in thousands): | |||
Time-based stock options | 29 | ||
Time-based restricted stock awards | 118 | ||
Performance-based restricted stock | 98 | ||
Total | 245 | ||
Time-based stock options vest 25% per year over a period of four years and the fair value was determined using a Black-Scholes-Merton model. Time-based restricted stock awards vest 33.3% per year over a period of three years. Performance-based restricted stock vests at the end of a three-year performance period, based on the Company's achievement of pre-determined earnings per share and revenue growth targets; based on the extent to which the targets are achieved, vested shares may range from 0% to 200% of the original target grant. The unrecognized compensation cost related to performance-based stock will be adjusted as necessary to reflect changes in probability that the vesting criteria will be achieved. The above awards will result in compensation expense of $10.4 million, net of expected forfeitures, over the four-year service period assuming the performance-based units vest at 100% of the original target award. | |||
The Company recognized $1.3 million and $2.1 million of total non-cash stock-based compensation expense for the three months ended March 31, 2015 and 2014, respectively. At March 31, 2015, there was approximately $15.8 million of total unrecognized compensation cost related to non-vested stock-based compensation for all awards previously made that are expected to be recognized over a weighted average period of approximately 2.0 years. | |||
Share Repurchase Program | |||
In August 2014, the Board approved a multi-year program to repurchase up to an aggregate of $500.0 million of Holdings' common stock. Holdings repurchased $62.6 million of common stock (including $1.8 million purchased at the end of March which cash settled in April) during the three months ended March 31, 2015 and has utilized $155.6 million of the current repurchase program. As of March 31, 2015, $344.4 million remains available for purchase under the program. | |||
SEGMENTS
SEGMENTS | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Segment Reporting [Abstract] | ||||||||
SEGMENTS | SEGMENTS | |||||||
The Company aggregates its operating segments into three reportable segments, which include Retail, Franchising, and Manufacturing/Wholesale. The Retail reportable segment includes the Company's corporate store operations in the United States, Canada, Puerto Rico, Ireland and its websites GNC.com, LuckyVitamin.com, and DiscountSupplements.co.uk. The Franchise reportable segment represents the Company's franchise operations, both domestically and internationally. The Manufacturing/Wholesale reportable segment represents the Company's manufacturing operations in South Carolina and the Wholesale business. This segment supplies the Retail and Franchise segments, along with various third parties, with finished products for sale. The Company's chief operating decision maker evaluates segment operating results based primarily on performance indicators, including revenue and operating income. Operating income of each reportable segment excludes certain items that are managed at the consolidated level, such as warehousing, distribution and other corporate costs. The following table represents key financial information for each of the Company's reportable segments. | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Revenue: | ||||||||
Retail | $ | 503,466 | $ | 508,998 | ||||
Franchise | 111,257 | 103,514 | ||||||
Manufacturing/Wholesale: | ||||||||
Intersegment revenues | 66,254 | 68,758 | ||||||
Third-party | 55,524 | 61,944 | ||||||
Subtotal Manufacturing/Wholesale | 121,778 | 130,702 | ||||||
Subtotal segment revenues | 736,501 | 743,214 | ||||||
Elimination of intersegment revenues | (66,254 | ) | (68,758 | ) | ||||
Total revenue | $ | 670,247 | $ | 674,456 | ||||
Operating income: | ||||||||
Retail | $ | 92,362 | $ | 94,746 | ||||
Franchise | 39,683 | 39,581 | ||||||
Manufacturing/Wholesale | 21,122 | 23,511 | ||||||
Unallocated corporate and other costs: | ||||||||
Warehousing and distribution costs | (17,785 | ) | (15,934 | ) | ||||
Corporate costs | (25,777 | ) | (20,649 | ) | ||||
Subtotal unallocated corporate and other costs | (43,562 | ) | (36,583 | ) | ||||
Total operating income | 109,605 | 121,255 | ||||||
Interest expense, net | 11,515 | 11,531 | ||||||
Income before income taxes | $ | 98,090 | $ | 109,724 | ||||
INCOME_TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES |
The Company recognized $34.8 million of income tax expense (or 35.5% of pre-tax income) during the three months ended March 31, 2015 compared to $39.8 million (or 36.3% of pre-tax income) for the same period in 2014. The decrease in the tax rate is principally due to changes in reserves for state uncertain tax positions of $0.8 million. | |
At March 31, 2015 and December 31, 2014, the Company had $11.0 million and $11.7 million of unrecognized tax benefits, respectively, excluding interest and penalties. As of March 31, 2015, the Company is not aware of any tax positions for which it is reasonably possible that the amounts of unrecognized tax benefits will significantly increase or decrease within the next 12 months. The amount of unrecognized tax benefits excluding interest and penalties that, if recognized, would affect the effective tax rate is approximately $11.0 million. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company had accrued approximately $4.0 million and $4.2 million at March 31, 2015 and December 31, 2014, respectively, for potential interest and penalties associated with uncertain tax positions. To the extent interest and penalties are not assessed with respect to the ultimate settlement of uncertain tax positions, amounts previously accrued will be reversed as a reduction to income tax expense. | |
The Company files a consolidated U.S. federal tax return and various consolidated and separate tax returns as prescribed by the tax laws of the state, local and international jurisdictions in which it operates. The Company’s 2010 and 2011 federal income tax returns have been examined by the Internal Revenue Service. The Internal Revenue Service closed the examination without making any material adjustments to the returns. The Company has various state, local and international jurisdiction tax years open to possible examination (the earliest open period is 2010), and the Company also has certain state and local jurisdictions currently under audit. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS |
On April 29, 2015, the board of directors authorized and declared a cash dividend for the second quarter of 2015 of $0.18 per share of common stock, payable on or about June 26, 2015 to stockholders of record as of the close of business on June 12, 2015. |
BASIS_OF_PRESENTATION_AND_SUMM1
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements. In June 2014, the FASB issued accounting standard update ("ASU") 2014-12, which updates guidance on performance stock awards. The update states that for any award that has a performance target that affects vesting and that could be achieved after the requisite period, that performance target should still be treated as a performance condition. This standard is effective for fiscal years beginning after December 15, 2015. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements but does not expect the effect to be material. |
In May 2014, the FASB issued ASU 2014-09, which updates revenue recognition guidance relating to contracts with customers. This standard states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard is effective for fiscal years beginning after December 15, 2016. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements. |
INVENTORIES_Tables
INVENTORIES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Schedule of Net Carrying Value of Inventories | The net carrying value of inventories consisted of the following: | |||||||
31-Mar-15 | 31-Dec-14 | |||||||
(in thousands) | ||||||||
Finished product ready for sale | $ | 479,937 | $ | 501,027 | ||||
Work-in-process, bulk product and raw materials | 67,782 | 60,911 | ||||||
Packaging supplies | 7,216 | 7,194 | ||||||
Total inventory | $ | 554,935 | $ | 569,132 | ||||
LONGTERM_DEBT_INTEREST_EXPENSE1
LONG-TERM DEBT / INTEREST EXPENSE (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Debt Disclosure [Abstract] | ||||||||||
Schedule of Long-term Debt | Long-term debt consisted of the following: | |||||||||
March 31, | December 31, | |||||||||
2015 | 2014 | |||||||||
(in thousands) | ||||||||||
Term Loan Facility | $ | 1,341,213 | $ | 1,342,165 | ||||||
Other | 143 | 213 | ||||||||
Total debt | 1,341,356 | 1,342,378 | ||||||||
Less: current maturities | (4,693 | ) | (4,740 | ) | ||||||
Long-term debt | $ | 1,336,663 | $ | 1,337,638 | ||||||
FINANCIAL_INSTRUMENTS_Tables
FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Financial Instruments, Owned, at Fair Value [Abstract] | ||||||||||||||||
Schedule of Actual and Estimated Fair Values of the Financial Instruments | The actual and estimated fair values of the Company’s financial instruments are as follows: | |||||||||||||||
31-Mar-15 | 31-Dec-14 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | |||||||||||||
(in thousands) | ||||||||||||||||
Cash and cash equivalents | $ | 166,926 | $ | 166,926 | $ | 133,834 | $ | 133,834 | ||||||||
Receivables, net | 135,173 | 135,173 | 136,361 | 136,361 | ||||||||||||
Franchise notes receivable, net | 17,247 | 17,247 | 17,722 | 17,722 | ||||||||||||
Accounts payable | 153,066 | 153,066 | 129,064 | 129,064 | ||||||||||||
Long-term debt (including current portion) | 1,341,356 | 1,336,326 | 1,342,378 | 1,288,683 | ||||||||||||
STOCKBASED_COMPENSATION_PLANS_1
STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Schedule of Share-Based Compensation Awards | During the quarter ended March 31, 2015, the Company granted the following share-based compensation awards (in thousands): | ||
Time-based stock options | 29 | ||
Time-based restricted stock awards | 118 | ||
Performance-based restricted stock | 98 | ||
Total | 245 | ||
SEGMENTS_Tables
SEGMENTS (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Segment Reporting [Abstract] | ||||||||
Schedule of Key Financial Information of the Segments | The following table represents key financial information for each of the Company's reportable segments. | |||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Revenue: | ||||||||
Retail | $ | 503,466 | $ | 508,998 | ||||
Franchise | 111,257 | 103,514 | ||||||
Manufacturing/Wholesale: | ||||||||
Intersegment revenues | 66,254 | 68,758 | ||||||
Third-party | 55,524 | 61,944 | ||||||
Subtotal Manufacturing/Wholesale | 121,778 | 130,702 | ||||||
Subtotal segment revenues | 736,501 | 743,214 | ||||||
Elimination of intersegment revenues | (66,254 | ) | (68,758 | ) | ||||
Total revenue | $ | 670,247 | $ | 674,456 | ||||
Operating income: | ||||||||
Retail | $ | 92,362 | $ | 94,746 | ||||
Franchise | 39,683 | 39,581 | ||||||
Manufacturing/Wholesale | 21,122 | 23,511 | ||||||
Unallocated corporate and other costs: | ||||||||
Warehousing and distribution costs | (17,785 | ) | (15,934 | ) | ||||
Corporate costs | (25,777 | ) | (20,649 | ) | ||||
Subtotal unallocated corporate and other costs | (43,562 | ) | (36,583 | ) | ||||
Total operating income | 109,605 | 121,255 | ||||||
Interest expense, net | 11,515 | 11,531 | ||||||
Income before income taxes | $ | 98,090 | $ | 109,724 | ||||
NATURE_OF_BUSINESS_Details
NATURE OF BUSINESS (Details) | 3 Months Ended |
Mar. 31, 2015 | |
segment | |
country | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of primary segments | 3 |
Number of international countries in which franchise stores are located (more than 50 countries) | 50 |
BASIS_OF_PRESENTATION_AND_SUMM2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Net income | $63,270,000 | $69,903,000 |
Immaterial Error Correction | ||
Accrued payroll liability error in prior periods | 2,800,000 | |
Immaterial Error Correction | Deferred Revenue and Other Current Liabilities | ||
Accrued payroll liability error in prior periods | 2,800,000 | |
Adjustment | Immaterial Error Correction | ||
Net income | ($1,800,000) |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Finished product ready for sale | $479,937 | $501,027 |
Work-in-process, bulk product and raw materials | 67,782 | 60,911 |
Packaging supplies | 7,216 | 7,194 |
Total inventory | $554,935 | $569,132 |
LONGTERM_DEBT_INTEREST_EXPENSE2
LONG-TERM DEBT / INTEREST EXPENSE (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Long-term Debt | ||||
Interest expense, net | $11,515,000 | $11,531,000 | ||
Revolving Credit Facility | ||||
Long-term Debt | ||||
Maximum borrowing capacity | 80,000,000 | |||
Borrowing capacity increase limit | 130,000,000 | |||
Commitment fee on undrawn portion of revolving credit facility (as a percent) | 0.50% | 0.50% | ||
Letter Of Credit | ||||
Long-term Debt | ||||
Outstanding letters of credit | 1,100,000 | 1,100,000 | ||
Outstanding letters of credit fee (as a percent) | 2.50% | 2.50% | ||
Term Loan Facility | ||||
Long-term Debt | ||||
Maximum borrowing capacity | 1,400,000,000 | |||
Borrowing capacity increase | $252,500,000 | |||
Interest rate (as a percent) | 3.25% | 3.25% |
LONGTERM_DEBT_INTEREST_EXPENSE3
LONG-TERM DEBT / INTEREST EXPENSE (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Debt Instrument | ||
Total debt | $1,341,356 | $1,342,378 |
Less: current maturities | -4,693 | -4,740 |
Long-term debt | 1,336,663 | 1,337,638 |
Term Loan Facility | ||
Debt Instrument | ||
Total debt | 1,341,213 | 1,342,165 |
Other | ||
Debt Instrument | ||
Total debt | $143 | $213 |
FINANCIAL_INSTRUMENTS_Details
FINANCIAL INSTRUMENTS (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Carrying Amount | ||
Actual and estimated fair values of the financial instruments | ||
Cash and cash equivalents | $166,926 | $133,834 |
Receivables, net | 135,173 | 136,361 |
Franchise notes receivable, net | 17,247 | 17,722 |
Accounts payable | 153,066 | 129,064 |
Long-term debt (including current portion) | 1,341,356 | 1,342,378 |
Fair Value | ||
Actual and estimated fair values of the financial instruments | ||
Cash and cash equivalents | 166,926 | 133,834 |
Receivables, net | 135,173 | 136,361 |
Franchise notes receivable, net | 17,247 | 17,722 |
Accounts payable | 153,066 | 129,064 |
Long-term debt (including current portion) | $1,336,326 | $1,288,683 |
CONTINGENCIES_Details
CONTINGENCIES (Details) (USD $) | 1 Months Ended | 3 Months Ended |
Nov. 30, 2008 | Mar. 31, 2015 | |
plaintiff | ||
Commitments and contingencies | ||
Number of putative class action cases pending against the company | 3 | |
Number of putative class action lawsuits dismissed | 1 | |
Number of putative class action cases where court approved a settlement | 2 | |
Number of plaintiffs who filed individual claims against the company | 98 | |
California Wage And Break Claims | ||
Commitments and contingencies | ||
Number of current and former managers Involved In class action case | 900 | |
Product Liability | ||
Commitments and contingencies | ||
Deductible/retention per claim out of total product liability insurance | $4,000,000 | |
Aggregate cap on retained loss for deductible/retention per claim out of total product liability insurance | $10,000,000 | |
Product Liability | Hydroxycut Claims | ||
Commitments and contingencies | ||
Number of reports of liver injuries | 23 | |
Number of Hydroxycut-branded products recalled | 14 | |
Number of pending lawsuits in which company is named | 76 | |
Number of individual, largely personal injury claims pending | 70 | |
Number of putative class action cases pending against the company | 6 | |
Product Liability | DMAA Claims | ||
Commitments and contingencies | ||
Number of pending lawsuits in which company is named | 31 |
STOCKBASED_COMPENSATION_PLANS_2
STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM (Details) (USD $) | 3 Months Ended | 8 Months Ended | 1 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Apr. 30, 2015 | Aug. 31, 2014 | |
plan | plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Number of stock-based employee compensation plans | 2 | 2 | |||
Vesting period | 4 years | ||||
Vesting rights percentage | 100.00% | ||||
Non-cash stock-based compensation expense | $1,300,000 | $2,100,000 | |||
Total unrecognized compensation cost related to non-vested stock awards | 15,800,000 | 15,800,000 | |||
Weighted average period over which compensation cost is expected to be recognized | 2 years | ||||
Authorized amount of stock to be repurchased (in usd) | 500,000,000 | ||||
Stock repurchased during period (in usd) | 62,557,000 | 150,000,000 | 155,600,000 | ||
Payments for repurchase of common stock | 60,773,000 | 150,000,000 | |||
Remaining authorized repurchase amount (in usd) | 344,400,000 | 344,400,000 | |||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting period | 4 years | ||||
Expiration period | 7 years | ||||
Vesting rights percentage | 0.00% | ||||
Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting period | 5 years | ||||
Expiration period | 10 years | ||||
Vesting rights percentage | 200.00% | ||||
Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting period | 4 years | ||||
Performance Vesting Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting period | 3 years | ||||
Time Vesting Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting period | 3 years | ||||
Time Based and Performance Based Compensation Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Total unrecognized compensation cost related to non-vested stock awards | 10,400,000 | 10,400,000 | |||
2011 Stock Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Number of shares authorized for issuance | 8,500,000 | 8,500,000 | |||
Number of remaining shares available for issue | 5,400,000 | 5,400,000 | |||
2015 Stock Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Number of shares authorized for issuance | 9,000,000 | 9,000,000 | |||
Subsequent Event | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Payments for repurchase of common stock | $1,800,000 | ||||
Year 1 | Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting rights (percentage per year) | 25.00% | ||||
Year 1 | Time Vesting Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting rights (percentage per year) | 33.30% | ||||
Year 2 | Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting rights (percentage per year) | 25.00% | ||||
Year 2 | Time Vesting Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting rights (percentage per year) | 33.30% | ||||
Year 3 | Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting rights (percentage per year) | 25.00% | ||||
Year 3 | Time Vesting Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting rights (percentage per year) | 33.30% | ||||
Year 4 | Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting rights (percentage per year) | 25.00% |
STOCKBASED_COMPENSATION_PLANS_3
STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM - SCHEDULE OF SHARE-BASED COMPENSATION AWARDS (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Total | 245 |
Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Time-based stock options | 29 |
Time Vesting Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Time-based restricted stock and performance-based restricted stock awards | 118 |
Performance Vesting Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Time-based restricted stock and performance-based restricted stock awards | 98 |
SEGMENTS_Details
SEGMENTS (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
segment | ||
Segment Reporting [Abstract] | ||
Number of reportable segments | 3 | |
Revenue: | ||
Total revenue | $670,247 | $674,456 |
Operating income: | ||
Operating income | 109,605 | 121,255 |
Interest expense, net | 11,515 | 11,531 |
Income before income taxes | 98,090 | 109,724 |
Operating Segment | ||
Revenue: | ||
Total revenue | 736,501 | 743,214 |
Operating Segment | Intersegment Revenues | ||
Revenue: | ||
Total revenue | -66,254 | -68,758 |
Operating Segment | Retail | ||
Revenue: | ||
Total revenue | 503,466 | 508,998 |
Operating income: | ||
Operating income | 92,362 | 94,746 |
Operating Segment | Franchise | ||
Revenue: | ||
Total revenue | 111,257 | 103,514 |
Operating income: | ||
Operating income | 39,683 | 39,581 |
Operating Segment | Manufacturing/ Wholesale | ||
Revenue: | ||
Total revenue | 121,778 | 130,702 |
Operating income: | ||
Operating income | 21,122 | 23,511 |
Operating Segment | Manufacturing/ Wholesale | Intersegment Revenues | ||
Revenue: | ||
Total revenue | 66,254 | 68,758 |
Operating Segment | Manufacturing/ Wholesale | Third Party | ||
Revenue: | ||
Total revenue | 55,524 | 61,944 |
Corporate, Non-Segment | ||
Operating income: | ||
Warehousing and distribution costs | -17,785 | -15,934 |
Corporate costs | -25,777 | -20,649 |
Subtotal unallocated corporate and other costs | ($43,562) | ($36,583) |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense | $34,820,000 | $39,821,000 | |
Effective income tax rate (as a percent) | 35.50% | 36.30% | |
Change in reserves for uncertain tax positions | -800,000 | ||
Unrecognized tax benefits | 11,000,000 | 11,700,000 | |
Unrecognized tax benefits that would affect the effective tax rate | 11,000,000 | ||
Interest and penalties accrued related to unrecognized tax benefits | $4,000,000 | $4,200,000 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (Subsequent Event, USD $) | 0 Months Ended |
Apr. 29, 2015 | |
Subsequent Event | |
Subsequent Event | |
Dividends declared per share (in dollars per share) | $0.18 |