Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 04, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | GNC HOLDINGS, INC. | ||
Entity Central Index Key | 1,502,034 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 3,770 | ||
Entity Common Stock, Shares Outstanding | 74,241,609 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 56,462 | $ 133,834 |
Receivables, net | 142,486 | 136,361 |
Inventory | 555,885 | 569,132 |
Deferred income taxes | 10,916 | 7,622 |
Prepaids and other current assets | 27,114 | 29,394 |
Total current assets | 792,863 | 876,343 |
Long-term assets: | ||
Goodwill | 649,892 | 672,293 |
Brands | 720,000 | 720,000 |
Other intangible assets, net | 119,204 | 132,992 |
Property, plant and equipment, net | 230,535 | 232,397 |
Deferred income taxes | 3,358 | 3,079 |
Other long-term assets | 36,167 | 40,696 |
Total long-term assets | 1,759,156 | 1,801,457 |
Total assets | 2,552,019 | 2,677,800 |
Current liabilities: | ||
Accounts payable | 152,099 | 129,064 |
Current portion of long-term debt | 4,550 | 4,740 |
Deferred revenue and other current liabilities | 121,062 | 106,539 |
Total current liabilities | 277,711 | 240,343 |
Long-term liabilities: | ||
Long-term debt | 1,447,904 | 1,337,638 |
Deferred income taxes | 304,491 | 282,842 |
Other long-term liabilities | 53,352 | 60,934 |
Total long-term liabilities | 1,805,747 | 1,681,414 |
Total liabilities | $ 2,083,458 | $ 1,921,757 |
Commitments and contingencies | ||
Common stock, $0.001 par value, 300,000 shares authorized: | ||
Class A, 114,341 shares issued, 76,276 shares outstanding and 38,065 shares held in treasury at December 31, 2015 and 114,025 shares issued, 88,335 shares outstanding and 25,690 shares held in treasury at December 31, 2014 | $ 114 | $ 113 |
Additional paid-in capital | 916,128 | 877,566 |
Retained earnings | 1,058,148 | 898,574 |
Treasury stock, at cost | (1,496,180) | (1,016,381) |
Accumulated other comprehensive loss | (9,649) | (3,829) |
Total stockholders' equity | 468,561 | 756,043 |
Total liabilities and stockholders' equity | $ 2,552,019 | $ 2,677,800 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Class A Common Stock | ||
Common stock, shares issued | 114,341,000 | 114,025,000 |
Common stock, shares outstanding | 76,276,000 | 88,335,000 |
Common stock, shares held in treasury | 38,065,000 | 25,690,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
Revenue | $ 2,639,212 | $ 2,613,154 | $ 2,626,761 |
Cost of sales, including warehousing, distribution and occupancy | 1,654,569 | 1,632,914 | 1,636,298 |
Gross profit | 984,643 | 980,240 | 990,463 |
Selling, general, and administrative | 567,296 | 554,882 | 533,666 |
Long-lived asset impairments | 28,333 | 0 | 0 |
Other income, net | (4,093) | (14,154) | (3,701) |
Operating income | 393,107 | 439,512 | 460,498 |
Interest expense, net | 50,936 | 46,708 | 53,029 |
Income before income taxes | 342,171 | 392,804 | 407,469 |
Income tax expense | 122,872 | 136,932 | 142,448 |
Net income | $ 219,299 | $ 255,872 | $ 265,021 |
Earnings per share: | |||
Basic (in usd per share) | $ 2.61 | $ 2.83 | $ 2.75 |
Diluted (in usd per share) | $ 2.60 | $ 2.81 | $ 2.72 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 83,927 | 90,493 | 96,481 |
Diluted (in shares) | 84,186 | 90,918 | 97,383 |
Dividends declared per share (in USD per share) | $ 0.72 | $ 0.64 | $ 0.60 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 219,299 | $ 255,872 | $ 265,021 |
Other comprehensive loss: | |||
Foreign currency translation loss | (7,439) | (5,784) | (1,092) |
Release of cumulative translation loss to earnings related to substantial liquidation of Discount Supplements | 1,619 | 0 | 0 |
Other comprehensive loss | (5,820) | (5,784) | (1,092) |
Comprehensive income | $ 213,479 | $ 250,088 | $ 263,929 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Class A Common Stock | Class A Common StockCommon Stock |
Beginning Balance (in shares) at Dec. 31, 2012 | 99,336 | ||||||
Beginning Balance at Dec. 31, 2012 | $ 882,039 | $ (423,900) | $ 810,094 | $ 492,687 | $ 3,047 | $ 111 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Comprehensive income | 263,929 | 265,021 | (1,092) | ||||
Purchase of treasury stock (in shares) | (6,547) | ||||||
Purchase of treasury stock | (309,255) | (309,255) | |||||
Dividends declared | (57,600) | (57,600) | |||||
Exercise of stock options (in shares) | 1,222 | ||||||
Exercise of stock options | 14,589 | 14,588 | $ 1 | ||||
Restricted stock awards | 83 | ||||||
Minimum tax withholding requirements (in shares) | (22) | ||||||
Minimum tax withholding requirements | (1,327) | (1,327) | |||||
Excess tax benefit from stock-based compensation | 15,369 | 15,369 | |||||
Stock-based compensation | 7,835 | 7,835 | |||||
Ending Balance (in shares) at Dec. 31, 2013 | 94,072 | ||||||
Ending Balance at Dec. 31, 2013 | 815,579 | (733,155) | 846,559 | 700,108 | 1,955 | $ 112 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Comprehensive income | 250,088 | 255,872 | (5,784) | ||||
Purchase of treasury stock (in shares) | (6,671) | ||||||
Purchase of treasury stock | (283,226) | (283,226) | |||||
Dividends declared | (57,406) | (57,406) | |||||
Exercise of stock options (in shares) | 970 | ||||||
Exercise of stock options | 22,171 | 22,170 | $ 1 | ||||
Restricted stock awards | (18) | ||||||
Minimum tax withholding requirements (in shares) | (18) | ||||||
Minimum tax withholding requirements | (762) | (762) | |||||
Excess tax benefit from stock-based compensation | 3,743 | 3,743 | |||||
Stock-based compensation | 5,856 | 5,856 | |||||
Ending Balance (in shares) at Dec. 31, 2014 | 88,335 | 88,335 | |||||
Ending Balance at Dec. 31, 2014 | 756,043 | (1,016,381) | 877,566 | 898,574 | (3,829) | $ 113 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Comprehensive income | 213,479 | 219,299 | (5,820) | ||||
Purchase of treasury stock (in shares) | (12,414) | ||||||
Purchase of treasury stock | (479,799) | (479,799) | |||||
Dividends declared | (59,725) | (59,725) | |||||
Exercise of stock options (in shares) | 80 | ||||||
Exercise of stock options | 1,744 | 1,743 | $ 1 | ||||
Restricted stock awards | 290 | ||||||
Minimum tax withholding requirements (in shares) | (15) | ||||||
Minimum tax withholding requirements | (574) | (574) | |||||
Excess tax benefit from stock-based compensation | 604 | 604 | |||||
Stock-based compensation | 6,280 | 6,280 | |||||
Issuance of convertible senior notes, net | 30,509 | 30,509 | |||||
Ending Balance (in shares) at Dec. 31, 2015 | 76,276 | 76,276 | |||||
Ending Balance at Dec. 31, 2015 | $ 468,561 | $ (1,496,180) | $ 916,128 | $ 1,058,148 | $ (9,649) | $ 114 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 219,299 | $ 255,872 | $ 265,021 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization expense | 57,237 | 56,337 | 51,814 |
Amortization of debt costs | 6,421 | 1,729 | 2,507 |
Stock-based compensation | 6,280 | 5,857 | 7,835 |
Loss on debt refinancing | 0 | 0 | 5,712 |
Long-lived asset impairments | 28,333 | 0 | 0 |
Gain on sale of company-owned stores to franchisees | (7,580) | (9,940) | (2,677) |
Deferred income tax expense | 450 | (6,418) | (1,778) |
Reversal of contingent purchase price liability | 0 | (4,438) | (859) |
Decrease (increase) in receivables | 422 | 9,766 | (13,802) |
Decrease (increase) in inventory | 5,381 | (24,089) | (54,435) |
Decrease in prepaid and other current assets | 776 | 2,260 | 2,548 |
Increase (decrease) in accounts payable | 22,375 | (8,978) | 6,628 |
Increase (decrease) in deferred revenue and accrued liabilities | 9,841 | 12,497 | (27,907) |
Other operating activities | 5,298 | 13,330 | (1,161) |
Net cash provided by operating activities | 354,533 | 303,785 | 239,446 |
Cash flows from investing activities: | |||
Capital expenditures | (45,827) | (70,455) | (50,247) |
Cash paid for acquisitions (net of cash acquired) | 0 | (6,402) | (27,562) |
Other investing activities | 178 | 1,370 | (465) |
Net cash used in investing activities | (45,649) | (75,487) | (78,274) |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 0 | 0 | 249,552 |
Proceeds from issuance of convertible senior notes | 287,500 | 0 | 0 |
Revolving credit facility borrowings | 43,000 | 0 | 0 |
Payments on long-term debt | (169,060) | (5,443) | (3,379) |
Debt issuance costs | (8,225) | 0 | (2,397) |
Proceeds from exercise of stock options | 1,744 | 22,170 | 14,588 |
Excess tax benefits from stock-based compensation | 604 | 3,743 | 15,369 |
Minimum tax withholding requirements | (574) | (762) | (1,327) |
Cash paid for treasury stock | (479,799) | (283,226) | (309,255) |
Dividends paid to shareholders | (59,648) | (57,491) | (57,437) |
Net cash used in financing activities | (384,458) | (321,009) | (94,286) |
Effect of exchange rate changes on cash and cash equivalents | (1,798) | 328 | 790 |
Net (decrease) increase in cash and cash equivalents | (77,372) | (92,383) | 67,676 |
Beginning balance, cash and cash equivalents | 133,834 | 226,217 | 158,541 |
Ending balance, cash and cash equivalents | 56,462 | 133,834 | 226,217 |
Cash paid during the period for: | |||
Income taxes | 121,006 | 125,088 | 143,573 |
Interest | 42,911 | 48,940 | 40,696 |
Non-cash investing activities: | |||
Capital expenditures in current liabilities | $ 6,018 | $ 4,182 | $ 2,489 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 12 Months Ended |
Dec. 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, which include vitamins, minerals and herbal supplements ("VMHS"), 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 reportable segments, which include 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 on the Internet through GNC.com, LuckyVitamin.com, and Drugstore.com. The Company also offered product on the Internet through its 2013 acquisition of A1 Sports Limited d/b/a Discount Supplements (“Discount Supplements”) up to and including December 31, 2015 when the assets of Discount Supplements were sold and operations were ceased. Franchise locations exist in the United States and approximately 50 other countries. 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 one or more federal agencies, including the Food and Drug Administration (the "FDA"), the Federal Trade Commission (the "FTC"), 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 SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements and footnotes have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("GAAP") and with the instructions to Form 10-K and Regulation S-X. The Company's annual reporting period is based on a calendar year. Summary of Significant Accounting Policies Principles of Consolidation. The consolidated financial statements include the accounts of Holdings and all of its subsidiaries. All intercompany transactions have been eliminated in consolidation. Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases these estimates on assumptions that it believes to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Cash and Cash Equivalents. The Company considers cash and cash equivalents to include all cash and liquid deposits and investments with an original maturity of three months or less. The majority of payments due from banks for third-party credit and debit cards process within 24 to 72 hours, and are classified as cash equivalents. Receivables, net. The Company extends credit terms for sales of product to its franchisees and, to a lesser extent, various third-party customers. Receivables consist principally of unpaid invoices for product sales, franchisee royalties and sublease payments. The Company also has notes receivables with certain of its franchisees that were approximately $ 18 million at December 31, 2015 and 2014 and are primarily recorded within other long-term assets on the consolidated balance sheets. The Company monitors the financial condition of the Company's franchisees and other third-party customers and establishes an allowance for doubtful accounts for balances estimated to be uncollectible. In addition to considering the aging of receivable balances and assessing the financial condition of the Company's franchisees, the Company considers collateral including inventory and fixed assets for domestic franchisees and letters of credit for international franchisees. The allowance for doubtful accounts was $4.1 million and $6.2 million at December 31, 2015 and 2014 , respectively. Inventories. Inventory components consist of raw materials, work-in-process, finished product and packaging supplies. Inventories are stated at the lower of cost or market on a first in/first out basis ("FIFO"). Inventories include costs associated with distribution and transportation costs, as well as manufacturing overhead, which are capitalized and expensed as merchandise is sold. Inventories are recorded at net realizable value, net of shrinkage, obsolescence and vendor allowances. The Company regularly reviews its inventory levels in order to identify slow moving and short dated products, using factors such as amount of inventory on hand, remaining shelf life, current and expected market conditions, historical trends and the likelihood of recovering the inventory costs based on anticipated demand. Property, Plant and Equipment. Property, plant and equipment expenditures are recorded at cost. Depreciation and amortization are recognized using the straight-line method over the estimated useful life of the property. The estimated useful lives are as follows: Building 30 yrs Machinery and equipment 3-10 yrs Building and leasehold improvements 3-15 yrs Furniture and fixtures 5-8 yrs Software 3-5 yrs Building improvements are depreciated over their estimated useful life or the remaining useful life of the related building, whichever period is shorter. Improvements to retail leased premises are depreciated over the estimated useful life of the improvements or the related leases including renewals that are reasonably assured, whichever period is shorter. Expenditures that materially increase the value or clearly extend the useful life of property, plant and equipment are capitalized while repair and maintenance costs incurred in the normal operations of business are expensed as incurred. Goodwill and Intangible Assets. The Company was acquired by Ares Corporate Opportunities Fund II L.P. and Ontario Teachers’ Pension Plan Board in March 2007 and subsequently completed an initial public offering in 2011 of its common stock resulting in these entities owning an immaterial number of shares of the Company’s common stock. In connection with this acquisition, the Company recorded approximately $ 600 million of goodwill and $ 720 million of indefinite-lived intangible assets related to its brands. The Company formally evaluates the carrying amount of goodwill for each of its reporting units in the fourth quarter. In addition, the Company performs an evaluation on an interim basis if it determines that recent events or prevailing conditions indicate a potential impairment of goodwill. A significant amount of judgment is involved in determining whether an indicator of impairment has occurred between annual impairment tests. These indicators include, but are not limited to, overall financial performance such as adverse changes in recent forecasts of operating results, industry and market considerations, a sustained decrease in the price of a share of the Company's common stock, updated business plans and regulatory and legal developments. Goodwill is impaired when the carrying amount of a reporting unit’s goodwill exceeds its implied fair value based upon a two-step process. In step one of the analysis, the fair value of the reporting unit is compared with its carrying value. If the carrying value of the reporting unit exceeds its fair value, step two of the test must be performed, which requires the Company to determine the implied fair value of goodwill in the same manner as if it had acquired the reporting unit in an arm’s length transaction as of the testing date. This second step is performed by deducting the estimated fair value of all tangible and identifiable intangible net assets of the reporting unit from the estimated fair value of the reporting unit. If the recorded amount of goodwill exceeds this implied fair value, an impairment charge is recorded for the difference as an operating expense in the period incurred. Indefinite-lived intangible assets, consisting of the Company's brands, are also evaluated annually in the fourth quarter for impairment and on an interim basis if events or changes in circumstances between annual tests indicate that the assets might be impaired. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to the difference. See Note 5, "Goodwill and Intangible Assets, Net" for more information. Impairment of Long-lived Assets. The Company evaluates whether the carrying values of property and equipment and definite-lived intangible assets have been impaired whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable based on estimated undiscounted future cash flows. Factors that may trigger an impairment review include significant changes in the intended use of assets, significant negative industry or economic trends, under-performing stores and store closings. If it is determined that the carrying value of the asset group is not recoverable, an impairment loss is recognized for the amount the carrying amount of the asset exceeds its estimated fair value as determined based on quoted market prices or through the use of other valuation techniques. Revenue Recognition. Within the Retail segment, retail sales are recognized at the point of sale, net of sales tax. Revenue related to e-commerce sales is recognized upon delivery to customers and includes shipping charges. A provision for anticipated returns is recorded through a reduction of sales and cost of sales (for product that can be resold or returned to vendors) in the period that the related sales are recorded. Revenue is deferred on sales of the Company's Gold Cards and subsequently recognized over the membership period, which is either a one - or two -year period. Revenue from gift cards is recognized when the gift card is redeemed. These gift cards do not have expiration dates and are not required to be escheated to government authorities. Utilizing historical redemption rates, the Company recognizes revenue for amounts not expected to be redeemed proportionately as other gift card balances are redeemed. Revenue recognized related to breakage was not material in each of the fiscal years ended December 31, 2015, 2014 and 2013. The Franchise segment generates revenues through product sales to franchisees, royalties and franchise fees. The Company's franchisees purchase a significant amount of the products they sell in their retail stores from the Company at wholesale prices. Revenue on product sales to franchisees is recognized when risk of loss, title and insurable risks have transferred to the franchisee, net of estimated returns and allowances. Franchise fees are paid in advance, deferred and recognized by the Company at the time of a franchise store opening. Franchise royalties are recognized as a percentage of the franchisees' retail sales in the period the franchisees' sales occur. The Manufacturing/Wholesale segment sells product to the Company's other segments, which is eliminated in consolidation, and third-party customers. Revenue is recognized when risk of loss, title and insurable risks have transferred to the customer, net of estimated returns and allowances. Cost of Sales. The Company purchases products directly from third-party vendors and manufactures its own products. Cost of sales includes product costs, vendor allowances, inventory shrinkage and obsolescence, manufacturing overhead, freight, distribution, shipping and store occupancy costs. Store occupancy costs include rent, common area maintenance charges, real estate and other asset-based taxes, general maintenance, utilities, depreciation, fixture lease expenses and certain insurance expenses. Vendor Allowances. The Company receives allowances from various vendors based on either sales or purchase volumes as well as cooperative advertising. As the right of offset exists under these arrangements, credit earned under both arrangements are recorded as a reduction in the vendors' accounts payable balances on the balance sheet and represent the estimated amounts due to the Company under the rebate provisions of such contracts. Amounts expected to be received from vendors relating to the purchase of merchandise inventories are recognized as a reduction to cost of sales as the merchandise is sold. Amounts that represent a reimbursement of costs incurred, such as advertising, are recorded as a reduction to the related expense in the period that the related expense is incurred. The Company recorded a reduction to cost of sales of $98.7 million , $89.5 million and $92.6 million for the years ended December 31, 2015 , 2014 and 2013 , respectively, for vendor allowances associated with the purchase of merchandise. Research and Development. Research and development costs arising from internally generated projects are expensed as incurred. The Company recognized $0.7 million , $1.2 million and $1.4 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. These costs are included in selling, general and administrative expense in the accompanying consolidated statements of income. Advertising Expenditures. The Company recognizes the costs to communicate the advertising, promotion and marketing programs the first time the communication takes place. The costs of advertising production are expensed as incurred. The Company administers national advertising funds on behalf of its franchisees. In accordance with the franchisee contracts, the Company collects advertising fees from the franchisees and utilizes the proceeds to coordinate various advertising and marketing campaigns. The Company recognized advertising expense of $64.3 million , $70.5 million and $67.2 million for the years ended December 31, 2015 , 2014 and 2013 , respectively, net of $16.0 million , $15.9 million and $15.4 million received from the national advertising fund derived from the Company's franchisees. Leases. The Company has various operating leases for company-owned and franchise store locations, distribution centers, and equipment generally with an initial term of between five and ten years, which may include renewal options for varying terms thereafter. Leases for franchise store locations are subleased to franchisees. The Company is the primary lessee for the majority of the franchise store locations and makes rental payments to the landlord directly, and then bills the franchisee for reimbursement. If a franchisee defaults on its sublease, the Company has in the past converted, and expects in the future to, convert any such franchise store into a company-owned store and fulfill the remaining lease obligation. Leases generally include amounts relating to base rent, percent rent and other charges such as common area maintenance and real estate taxes. Periodically, the Company receives varying amounts of reimbursements from landlords to compensate the Company for costs incurred in the construction of stores. These reimbursements are recorded as deferred rent within other long-term liabilities on the consolidated balance sheet and are amortized as a reduction to rent expense over the life of the related lease. The expenditures made by the Company are recorded as an increase to leasehold improvements within property, plant and equipment, net. Many of the Company’s lease agreements contain escalation clauses under which, if fixed and determinable, rent expense is recognized on a straight-line basis over the lives of the leases, including renewal periods that are reasonably assured. Certain of the Company's leases also contain clauses for rent to be paid as a percentage of sales, which are based on a percentage of retail sales or a percentage of retail sales in excess of stipulated amounts (contingent rent). Contingent rent is recorded as rent expense when attainment of the target is considered probable and is recognized in proportion to the retail sales contributing to the achievement of the target. Contingencies. The Company accrues a loss contingency if it is probable and can be reasonably estimated. If both of the conditions above are not met, disclosure is made when there is at least a reasonable possibility that a loss contingency has been incurred. As facts concerning contingencies evolve and become known, management reassesses the likelihood of probable loss and makes appropriate adjustments to its financial statements. Pre-Opening Expenditures. The Company recognizes the cost associated with the opening of new stores, which consist primarily of rent, marketing, payroll and recruiting costs as incurred. Income Taxes . The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities result from (i) the future tax impact of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and (ii) differences between the recorded value of assets acquired in business combinations accounted for as purchases for financial reporting purposes and their corresponding tax bases. Deferred income tax assets are reduced by a valuation allowance if it is more likely than not that some portion of the deferred income tax asset will not be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is at least more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. The amount of the tax benefit that is recognized is measured as the largest amount of benefit that is more likely than not to be realized upon effective settlement. The Company classifies interest and penalties accrued in connection with unrecognized tax benefits as income tax expense in its consolidated statements of income. Refer to Note 4, "Income Taxes," for more information. Self-Insurance. T he Company is self-insured for certain losses related to health, workers' compensation and general liability insurance and maintains stop-loss coverage with third-party insurers to limit its liability exposure. Liabilities associated with these losses are estimated by considering historical claims experience, estimated lag time to report and pay claims, average cost per claim and other actuarial factors. Stock-based Compensation. The Company utilizes the Black-Scholes model to calculate the fair value of time-based stock option awards. The grant-date fair value of the Company's time-based restricted stock, performance-based restricted stock, time-based restricted stock units, and performance-based restricted stock units (collectively herein referred to as "restricted stock awards") are based on the closing price for a share of the Company's common stock on the New York Stock Exchange (the "NYSE") on the grant date. Compensation expense for time-based awards is recognized over the applicable vesting period, net of expected forfeitures. Performance-based awards also include a service condition and compensation expense is recognized over the applicable vesting period if the performance condition is probable of being achieved, net of expected forfeitures. The Company regularly reviews the probability of achieving the performance condition on these awards. Earnings Per Share. Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period. The Company uses the treasury stock method to compute diluted EPS, which assumes that outstanding stock awards were converted into common stock and that outstanding stock options that are in-the-money were exercised, and the resulting proceeds (which includes unrecognized compensation expense and excess tax benefits) were used to acquire shares of common stock at its average market price during the reporting period. Foreign Currency. For all foreign operations, the functional currency is the local currency. Assets and liabilities of foreign operations are translated into the Company's reporting currency, the U.S. dollar, using period-end exchange rates, while income and expenses are translated using the average exchange rates for the reporting period. Translation gains and losses are recorded as part of other comprehensive income on the consolidated balance sheet. The Company has intercompany balances with foreign entities that are routinely settled primarily relating to product sales and management fees. Gains or losses resulting from these foreign currency transactions are included in the consolidated statements of income and were not material for the fiscal years ended December 31, 2015, 2014 and 2013. 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 or the year ended December 31, 2015. Consequently, the Company corrected the error in the first quarter of 2015 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 year ended December 31, 2015. This correction had no impact on cash flows from operations in the current year. Revision Certain amounts in the consolidated financial statements for prior year periods have been revised to conform to the current year’s presentation with no impact on previously reported operating income, net income or stockholders' equity. None of these revisions are material to prior periods. Other Income, Net Other income, net typically includes gains on the sale of company-owned stores to franchisees and foreign currency gains and losses. The year ended December 31, 2015 includes a loss of $ 2.7 million attributable to the closure and related asset sale of Discount Supplements as further described in Note 5 "Goodwill and Intangible Assets." The years ended December 31, 2014 and 2013 include the reversal of $4.4 million and $ 0.9 million in contingent purchase price liabilities, respectively, associated with the Discount Supplements and Lucky Vitamin acquisitions. Recently Issued Accounting Pronouncements In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-17, which requires an entity to classify deferred tax liabilities and assets as noncurrent within a classified statement of financial position. This standard is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2016. The Company does not believe the adoption of this guidance will have a material effect on the Company’s consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, which requires an entity that determines the cost of inventory by methods other than last-in, first-out (LIFO) and the retail inventory method (RIM) to measure inventory at the lower of cost and net realizable value. This standard is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2016. The Company does not believe the adoption of this guidance will have a material effect on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, which requires an entity to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt liability, consistent with the treatment of debt discounts. This standard does not affect the recognition and measurement guidance for debt issuance costs. This standard is effective for fiscal years beginning after December 15, 2015. The Company does not believe the adoption of this guidance will have a material effect on the Company’s consolidated financial statements. In June 2014, the FASB issued 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. The Company does not believe the adoption of this guidance will have a material effect on the Company’s consolidated financial statements. 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. In August 2015, the FASB subsequently issued ASU 2015-14, which approved a one year deferral of ASU 2014-09 for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY The net realizable value of inventory consisted of the following: December 31, 2015 2014 (in thousands) Finished product ready for sale $ 487,075 $ 501,027 Work-in-process, bulk product and raw materials 62,242 60,911 Packaging supplies 6,568 7,194 Total inventories, net $ 555,885 $ 569,132 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income before income taxes consisted of the following components: Year ended December 31, 2015 2014 2013 (in thousands) Domestic $ 365,362 $ 373,122 $ 389,459 Foreign (23,191 ) 19,682 18,010 Total income before income taxes $ 342,171 $ 392,804 $ 407,469 Income tax expense consisted of the following components: Year ended December 31 2015 2014 2013 (in thousands) Current: Federal $ 104,711 $ 120,086 $ 120,137 State 13,414 16,968 15,433 Foreign 4,297 6,296 8,656 Total current income tax expense 122,422 143,350 144,226 Deferred: Federal 3,193 (3,785 ) (363 ) State (1,412 ) 1,042 (955 ) Foreign (1,331 ) (3,675 ) (460 ) Total deferred income tax expense (benefit) 450 (6,418 ) (1,778 ) Total income tax expense $ 122,872 $ 136,932 $ 142,448 The following table summarizes the differences between the Company's effective tax rate for financial reporting purposes and the federal statutory tax rate: Year ended December 31, 2015 2014 2013 Percent of pretax earnings: Statutory federal tax rate 35.0 % 35.0 % 35.0 % Increase (reduction) resulting from: State income tax, net of federal tax benefit 3.5 % 3.2 % 3.1 % Other permanent differences 0.4 % 0.1 % 0.1 % International operations, net of foreign tax credits 3.8 % (0.5 )% — % Worthless stock tax benefit (3.4 )% — % — % Federal tax credits and income deductions (2.5 )% (2.3 )% (2.1 )% Tax impact of uncertain tax positions and other (0.9 )% (0.6 )% (1.1 )% Effective income tax rate 35.9 % 34.9 % 35.0 % As described in Note 5, "Goodwill and Intangible Assets, Net," the Company recorded a $ 28.3 million long-lived asset impairment in the third quarter of 2015 related to the Discount Supplements business. The Company fully reduced the deferred income tax assets relating to net operating loss carryforwards of Discount Supplements by a valuation allowance in the third quarter of 2015 and recorded a discrete tax benefit of $ 11.8 million due to the effect of an anticipated worthless stock deduction resulting from excess tax basis in the common shares of Discount Supplements. Significant components of the Company's deferred tax assets and liabilities consisted of the following at December 31: 2015 2014 Assets Liabilities Net Assets Liabilities Net (in thousands) Current assets (liabilities): Operating reserves $ 7,159 $ — $ 7,159 $ 5,971 $ — $ 5,971 Deferred revenue 2,976 — 2,976 2,697 — 2,697 Prepaid expenses — (3,936 ) (3,936 ) — (5,282 ) (5,282 ) Accrued workers' compensation 2,891 — 2,891 2,811 — 2,811 Other 1,826 — 1,826 1,425 — 1,425 Total current $ 14,852 $ (3,936 ) $ 10,916 $ 12,904 $ (5,282 ) $ 7,622 Non-current assets (liabilities): Intangibles $ — $ (331,157 ) $ (331,157 ) $ — $ (327,675 ) $ (327,675 ) Fixed assets 16,900 — 16,900 17,631 — 17,631 Stock compensation 3,344 — 3,344 1,977 — 1,977 Net operating loss and credit carryforwards 11,825 — 11,825 9,421 — 9,421 Long-term rent liabilities 8,438 — 8,438 7,836 — 7,836 Deferred Revenue 3,775 — 3,775 5,070 — 5,070 Convertible senior notes — (16,599 ) (16,599 ) — — — Other 5,256 — 5,256 7,121 — 7,121 Valuation allowance (2,915 ) — (2,915 ) (1,144 ) — (1,144 ) Total non-current $ 46,623 $ (347,756 ) $ (301,133 ) $ 47,912 $ (327,675 ) $ (279,763 ) Total net deferred taxes $ 61,475 $ (351,692 ) $ (290,217 ) $ 60,816 $ (332,957 ) $ (272,141 ) In connection with the convertible debt issuance in August 2015 as explained in Note 7, "Long-Term Debt / Interest Expense," the Company recorded a deferred tax liability, which represents the difference between the carrying value of the debt for book purposes and tax purposes, the latter of which excludes the conversion feature bifurcation. The recognition of this deferred tax liability was recorded as a reduction to additional paid-in capital on the accompanying consolidated balance sheet and will be amortized as a reduction to income tax expense over the life of the convertible debt. At December 31, 2015 and 2014 , the Company had deferred tax assets relating to foreign and state NOLs with lives ranging from 5 to 20 years. As of December 31, 2015 and 2014, a valuation allowance was provided for certain NOLs, as the Company currently believes that these NOLs may not be realizable prior to their expiration. During 2015 , the Company increased its valuation allowance by $1.8 million . During 2014 and 2013, the Company reduced its valuation allowance by $1.6 million and $ 1.4 million , respectively. The valuation allowance was adjusted based on a change in circumstances, including anticipated future earnings and a tax law change, which caused a change in judgment about the realizability of certain deferred tax assets related to NOLs. The Company does not have any material undistributed earnings of international subsidiaries at December 31, 2015 and 2014 as these subsidiaries are either considered to be branches for United States tax purposes, to have incurred cumulative NOLs, or to have only minimal undistributed earnings. Holdings files a consolidated 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 and its subsidiaries operate. The statutes of limitation for the Company’s U.S. federal income tax returns are closed for years through 2011. 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 and local jurisdiction tax years open to possible examination (the earliest open period is generally 2011), and the Company also has certain state and local tax filings currently under audit. As of December 31, 2015 , the Company believes that it is appropriately reserved for any potential federal and state income tax exposures. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: December 31, 2015 2014 2013 (in thousands) Balance of unrecognized tax benefits at beginning of period $ 11,652 $ 10,848 $ 12,882 Additions for tax positions taken during current period 1,345 1,524 873 Additions for tax positions taken during prior periods 543 116 1,965 Reductions for tax positions taken during prior periods (6,258 ) (527 ) (4,068 ) Settlements — (309 ) (804 ) Balance of unrecognized tax benefits at end of period $ 7,282 $ 11,652 $ 10,848 The Company's liability for uncertain tax positions decreased by $ 3.3 million during the current year due in part to the expiration of certain statutes of limitation with respect to the 2011 fiscal year, which was recorded as a reduction to income tax expense. The Company’s liability for uncertain tax positions also decreased by $ 3.0 million with a corresponding reduction to receivables. As of December 31, 2015 , the Company is not aware of any positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next 12 months. Accrued interest and penalties were $ 1.8 million and $4.2 million at December 31, 2015 and 2014 , respectively. At December 31, 2015 , the amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $9.1 million , including the impact of accrued interest and penalties. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its unrecognized tax benefits reflect the most likely outcome. The Company adjusts these unrecognized tax benefits, as well as the related interest, in light of changing facts and circumstances. Settlement of any particular position could require the use of cash. Favorable resolution would be recognized as a reduction to the effective income tax rate in the period of resolution. |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Annual Impairment Test For the 2015 annual goodwill impairment assessment, management concluded that the Company's reporting units had fair values estimated using a discounted cash flow method (income approach) substantially in excess of their respective carrying values, except for approximately $12 million of goodwill associated with the Lucky Vitamin reporting unit, which had an estimated fair value that exceeded its carrying value by less than 15% . If actual market conditions are less favorable than those projected, or if events occur or circumstances change that would reduce the fair value of the Lucky Vitamin reporting unit below its carrying value, management may be required to conduct an interim test or possibly recognize impairment charges in future periods. With the exception of the Discount Supplements reporting unit, no other goodwill impairments have been recorded to date. Management also performed a quantitative impairment test for its indefinite-lived brand intangible assets and concluded that the fair values under the income approach were substantially in excess of their respective carrying values. Discount Supplements Acquisition On October 2, 2013, the Company acquired the assets and assumed the liabilities of Discount Supplements, which was accounted for as a business combination. The total purchase price for this acquisition was approximately $33.3 million , of which $24.6 million , $9.6 million , $0.9 million was allocated to goodwill, definite-lived intangible assets and other net liabilities, respectively. Impairment Charge During the third quarter of 2015, the Company evaluated the financial results of key strategic initiatives, which were undertaken as a result of declining results in the first half of 2015 and continued deterioration of market share. Based on the financial results for the quarter ended September 30, 2015, the Company concluded that these strategic measures were unsuccessful. As a result, the Company determined the Discount Supplements business did not fit into its strategic plan for maximizing long-term shareholder returns based on the Company’s expectations of the required investments necessary to improve the financial performance of the business, both in the short and long-term. The current and anticipated financial performance of the business, coupled with the Company’s consideration of future strategic options was considered a triggering event requiring an interim goodwill impairment review of the Discount Supplements reporting unit as of September 30, 2015. The Company determined the fair value of the Discount Supplements reporting unit at September 30, 2015 using a discounted cash flow method (income approach). The key assumptions used were as follows: • Future cash flow assumptions - The Company's projections for Discount Supplements were based on organic growth and were derived from historical experience and assumptions regarding future growth and profitability trends. These projections also took into account the current economic climate in the United Kingdom where Discount Supplements operated, and the extent to which the regulatory environment was expected to impact future growth opportunities. The Company's analysis incorporated an assumed period of cash flows of five years with a terminal value. • Discount rate - The discount rate was based on Discount Supplements' estimated weighted average cost of capital ("WACC"). The components of WACC are the cost of equity and the cost of debt, each of which requires judgment by management to estimate. The Company developed its cost of equity estimate based on perceived risks and predictability of future cash flows. At September 30, 2015, the WACC used to estimate the fair value of the Discount Supplements reporting unit was 16.5% . As a result of the review, the Company concluded that the carrying value of the Discount Supplements reporting unit exceeded its fair value and proceeded to step two of the impairment analysis. Based on the results of step two, the Company concluded that this reporting unit was fully impaired; as a result, a goodwill impairment charge of $ 23.3 million was recorded in the third quarter of 2015. As a result of the impairment indicators, the Company also performed an impairment analysis with respect to the definite-long-lived assets of Discount Supplements, consisting of trade name and website intangibles and property and equipment. The fair value of these assets were determined using various income approaches. Based on the results of the analyses, the Company recorded impairment charges of $ 4.4 million on the trade name and website intangible assets and $ 0.6 million on property and equipment. All of the aforementioned charges totaling $ 28.3 million are recorded in long-lived asset impairments in the consolidated statement of operations for the year ended December 31, 2015. Asset Sale The Company completed an asset sale of Discount Supplements on December 31, 2015, resulting in a loss of $ 2.7 million recorded within other income, net on the consolidated statement of income primarily consisting of the release of cumulative translation losses to earnings, lease-related exit costs and inventory losses primarily related to packaging materials. The Company considers the Discount Supplements legal entity to be substantially liquidated as there are no future ongoing operations. The proceeds from the sale of $1.3 million were received in the first quarter of 2016. Current and Prior Years Activity The following table summarizes the Company's goodwill activity by reportable segment: Retail Franchising Manufacturing/Wholesale Total (in thousands) Balance at December 31, 2013 $ 346,202 $ 117,303 $ 202,841 $ 666,346 Acquired franchise stores 1,372 — — 1,372 Acquisition of The Health Store 6,853 — — 6,853 Translation effect of exchange rates (2,278 ) — — (2,278 ) Balance at December 31, 2014 $ 352,149 $ 117,303 $ 202,841 $ 672,293 Acquired franchise stores 1,935 — — 1,935 Translation effect of exchange rates (1,077 ) — — (1,077 ) Goodwill impairment - Discount Supplements (23,259 ) — — (23,259 ) Balance at December 31, 2015 $ 329,748 $ 117,303 $ 202,841 $ 649,892 Intangible assets, net consisted of the following: Retail Brand Franchise Brand Operating Agreements Other Intangibles Total (in thousands) Balance at December 31, 2013 $ 500,000 $ 220,000 $ 125,665 $ 17,109 $ 862,774 Acquired franchise stores — — — 781 781 Acquisition of The Health Store — — — 788 788 Amortization expense — — (6,653 ) (4,222 ) (10,875 ) Translation effect of exchange rates — — — (476 ) (476 ) Balance at December 31, 2014 $ 500,000 $ 220,000 $ 119,012 $ 13,980 $ 852,992 Acquired franchise stores — — — 963 963 Amortization expense — — (6,653 ) (3,599 ) (10,252 ) Translation effect of exchange rates — — — (138 ) (138 ) Impairment charge - Discount Supplements — — — (4,361 ) (4,361 ) Balance at December 31, 2015 $ 500,000 $ 220,000 $ 112,359 $ 6,845 $ 839,204 The following table reflects the gross carrying amount and accumulated amortization/impairment for each major intangible asset: December 31, 2015 December 31, 2014 Weighted- Average Life Gross Accumulated Amortization/Impairment Carrying Amount Gross Accumulated Amortization Carrying Amount (in thousands) Goodwill Indefinite $ 673,151 $ (23,259 ) $ 649,892 $ 672,293 $ — $ 672,293 Brands—retail Indefinite 500,000 — 500,000 500,000 — 500,000 Brands—franchise Indefinite 220,000 — 220,000 220,000 — 220,000 Retail agreements 30.3 31,000 (9,407 ) 21,593 31,000 (8,354 ) 22,646 Franchise agreements 25.0 70,000 (24,617 ) 45,383 70,000 (21,817 ) 48,183 Manufacturing agreements 25.0 70,000 (24,617 ) 45,383 70,000 (21,817 ) 48,183 Other intangibles 11.8 10,222 (4,560 ) 5,662 20,457 (7,427 ) 13,030 Franchise rights 3.0 7,206 (6,023 ) 1,183 6,243 (5,293 ) 950 Total $ 1,581,579 $ (92,483 ) $ 1,489,096 $ 1,589,993 $ (64,708 ) $ 1,525,285 The following table represents future amortization expense of definite-lived intangible assets at December 31, 2015: Years ending December 31, Amortization expense (in thousands) 2016 $ 8,108 2017 7,544 2018 7,369 2019 7,257 2020 7,204 Thereafter 81,722 Total future amortization expense $ 119,204 For the years ended December 31, 2015 , 2014 and 2013 , the Company acquired 44 , 25 and 16 franchise stores, respectively. These acquisitions are accounted for utilizing the acquisition method of accounting, and the Company allocated the purchase price by recognizing acquired inventory, fixed assets, franchise rights and other net assets at fair value with any excess being recognized as goodwill. For the years ended December 31, 2015 , 2014 and 2013 , the total purchase prices associated with these acquisitions was $ 6.2 million , $ 3.7 million and $ 2.9 million , respectively. On April 17, 2014, the Company acquired the assets and assumed the liabilities of The Health Store, which was accounted for as a business combination. The total purchase price for this acquisition was approximately $ 8.9 million , of which $ 6.9 million , $ 0.8 million , and $ 1.2 million was allocated to goodwill, definite-lived intangible assets and other net assets, respectively. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment consisted of the following: December 31, 2015 2014 (in thousands) Land, buildings and improvements $ 70,487 $ 69,165 Machinery and equipment 150,809 140,939 Leasehold improvements 139,448 132,378 Furniture and fixtures 106,722 101,823 Software 54,506 42,909 Construction in progress 6,340 4,628 Total property, plant and equipment 528,312 491,842 Less: accumulated depreciation (297,777 ) (259,445 ) Net property, plant and equipment $ 230,535 $ 232,397 The Company recognized depreciation expense on property, plant and equipment of $47.0 million , $45.5 million and $42.8 million for the years ended December 31, 2015 , 2014 and 2013 , respectively, which is included in occupancy expense as part of cost of sales and selling, general and administrative expense on the consolidated statements of income. |
LONG-TERM DEBT _ INTEREST EXPEN
LONG-TERM DEBT / INTEREST EXPENSE | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT / INTEREST EXPENSE | LONG-TERM DEBT / INTEREST EXPENSE Long-term debt consisted of the following: December 31, 2015 2014 (in thousands) Term Loan Facility (net of $2.2 million and $3.3 million discount) $ 1,174,369 $ 1,342,165 Revolving Credit Facility 43,000 — Convertible senior notes 235,085 — Other — 213 Total debt $ 1,452,454 $ 1,342,378 Less: current maturities (4,550 ) (4,740 ) Total long-term debt $ 1,447,904 $ 1,337,638 At December 31, 2015 , the Company's future annual contractual principal payments on long-term debt were as follows: Years Ending December 31, Term Loan Facility (1) Revolving Credit Facility Convertible Notes (2) Total (in thousands) 2016 $ 4,550 $ — $ — $ 4,550 2017 4,550 43,000 — 47,550 2018 4,550 — — 4,550 2019 1,162,958 — — 1,162,958 2020 — — 287,500 287,500 Total future principal payments $ 1,176,608 $ 43,000 $ 287,500 $ 1,507,108 (1) Includes the unamortized original issuance discount of $2.2 million . (2) Includes unamortized conversion feature of $46.3 million and original issuance discount of $6.1 million . Senior Credit Facility In March 2011, General Nutrition Centers, Inc. ("Centers"), a wholly owned subsidiary of Holdings, entered into the Senior Credit Facility, consisting of the Term Loan Facility and the Revolving Credit Facility. The Senior Credit Facility permits the Company to prepay a portion or all of the outstanding balance without incurring penalties (except London Interbank Offering Rate ("LIBOR") breakage costs). GNC Corporation, the Company's indirect wholly owned subsidiary ("GNC Corporation"), and Centers' existing and future domestic subsidiaries have guaranteed Centers' obligations under the Senior Credit Facility. In addition, the Senior Credit Facility is collateralized by first priority pledges (subject to permitted liens) of substantially all of Centers' assets, including its equity interests and the equity interests of its domestic subsidiaries. During the fourth quarter of 2013, Centers amended and restated the Senior Credit Facility to, among other amendments, increase the size of the Term Loan Facility by $252.5 million , increase the amount available for borrowings under the Revolving Credit Facility from $80 million to $130 million , extend the Revolving Credit Facility maturity date to March 2017, and extend the maturity of the Term Loan Facility to March 2019. This amendment resulted in a $ 5.7 million loss on debt refinancing recorded within interest expense, net on the accompanying consolidated statement of income consisting of the write-off of deferred financing fees and an original issuance discount. The amendment also included changes to ABR, LIBOR, and Applicable Margin rates. As of December 31, 2015 and 2014, the Company's interest rate on its Term Loan Facility was 3.25% . As of December 31, 2015, the Company had $ 43.0 million outstanding on its Revolving Credit Facility with a weighted average interest rate of 2.6% . The Company is also required to pay an annual fee of 2.50% on outstanding letters of credit and an annual commitment fee of 0.5% on the undrawn portion of the Revolving Credit Facility. The Company had $ 85.9 million available under its revolving credit facility at December 31, 2015 after taking into effect amounts drawn, including $ 1.1 million of letters of credit. The Senior Credit Facility contains customary covenants, including incurrence covenants and certain other limitations on the ability of GNC Corporation, Centers, and Centers' subsidiaries to, among other things, make optional payments in respect of other debt instruments, pay dividends or other payments on capital stock, and enter into arrangements that restrict their ability to pay dividends or grant liens. As of December 31, 2015 , the Company believes that it is in compliance with all covenants under the Senior Credit Facility. Convertible Debt Summary of Terms . On August 10, 2015, the Company issued $ 287.5 million principal amount of 1.5% convertible senior notes due 2020 (the “Notes”) in a private offering. The Notes are governed by the terms of an indenture between the Company and BNY Mellon Trust Company, N.A., as the Trustee (the "Indenture"). The Notes will mature on August 15, 2020, unless earlier purchased by the Company or converted. The Notes will bear interest at a rate of 1.5% per annum, and additionally will be subject to special interest in connection with any failure of the Company to perform certain of its obligations under the Indenture. The Notes are unsecured obligations and do not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company or any of its subsidiaries. Certain events are considered “events of default” under the Notes, which may result in the acceleration of the maturity of the Notes, as described in the indenture governing the Notes. The Notes are fully and unconditionally guaranteed by certain operating subsidiaries of the Company (“Subsidiary Guarantors”) and are subordinated to the Subsidiary Guarantors obligations from time to time with respect to the Senior Credit Facility and ranks equal in right of payment with respect to the Subsidiary Guarantor’s other obligations. The initial conversion rate applicable to the Notes is 15.1156 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $66.16 per share. The conversion rate will be subject to adjustment upon the occurrence of certain specified events, but will not be adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a “make-whole fundamental change" as defined in the Indenture, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Notes in connection with such make-whole fundamental change. Prior to May 15, 2020, the Notes will be convertible only under the following circumstances: (1) during any calendar quarter commencing after September 30, 2015, if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter, the last reported sale price of the Company’s common stock on such trading day is greater than or equal to 130% of the applicable conversion price on such trading day; (2) during the 5 consecutive business day period after any 10 consecutive trading day period in which, for each day of that period, the trading price per $ 1,000 principal amount of Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on such trading day; or (3) upon the occurrence of specified corporate transactions. On and after May 15, 2020, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Notes will be settled, at the Company’s election, in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock. If the Company has not delivered a notice of its election of settlement method prior to the final conversion period it will be deemed to have elected combination settlement with a dollar amount per note to be received upon conversion of $ 1,000 . Accounting Treatment. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability and equity components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. Accordingly, in accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, which is recognized as a debt discount recorded as additional paid-in capital on the consolidated balance sheet represents the difference between the proceeds from the issuance of the Notes and the fair value of the liability component of the Notes and will be amortized to interest expense together with debt issuance costs described below using an effective interest rate of 6.1% over the term of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The Company recorded a deferred tax liability in connection with the convertible debt instrument, which represents the difference between the carrying value of the debt for book purposes and tax purposes, the latter of which excludes the conversion feature bifurcation. The recognition of this deferred tax liability was recorded as a reduction to additional paid-in capital on the accompanying consolidated balance sheet. Refer to Note 4, "Income Taxes" for more information. In accounting for the debt issuance costs related to the issuance of the Notes, the Company allocated the total amount incurred to the liability and equity components based on their relative values. Debt issuance costs attributable to the liability component are amortized to interest expense using the effective interest method over the term of the Notes, and debt issuance costs attributable to the equity component are netted with the equity component in stockholders’ equity. Debt issuance costs related to the Notes were comprised of discounts and commissions payable to the initial purchasers of $ 7.9 million and third party offering costs of $ 0.3 million . Discounts and commissions payable to the initial purchasers attributable to the liability component were recorded as a contra-liability and are presented net against the convertible senior notes balance on the consolidated balance sheet. Third party offering costs attributable to the liability component were recorded as an asset and are presented in other long-term assets on the consolidated balance sheet. The Notes consist of the following components as of December 31, 2015 (in thousands): Liability component Principal $ 287,500 Conversion feature (46,271 ) Discount related to debt issuance costs (6,144 ) Net carrying amount $ 235,085 Equity component Conversion feature $ 49,680 Discount related to debt issuance costs (1,421 ) Deferred taxes (17,750 ) Net amount recorded in additional paid-in capital $ 30,509 Interest Expense The Company's net interest expense was as follows: For the year ended December 31, 2015 2014 2013 (in thousands) Senior Credit Facility: Term Loan coupon $ 42,147 $ 44,427 $ 42,020 Revolver 805 682 680 Loss on debt refinancing — — 5,712 Amortization of discount and deferred financing fees (*) 2,583 1,729 4,712 Subtotal: Senior Credit Facility 45,535 46,838 53,124 Convertible Senior Notes: Coupon 1,702 — — Amortization of conversion feature 3,410 — — Amortization of discount and deferred financing fees 412 — — Subtotal: Convertible Senior Notes 5,524 — — Mortgage and other interest expense 81 123 159 Interest income (204 ) (253 ) (254 ) Interest expense, net $ 50,936 $ 46,708 $ 53,029 (*) In connection with the partial pay-down of $164.3 million of the Term Loan Facility, the Company recorded $0.8 million in accelerated amortization, which represents the pro-rata portion of the original issuance discount and deferred financing fees associated with the paid-down balance . |
DEFERRED REVENUE AND OTHER CURR
DEFERRED REVENUE AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
DEFERRED REVENUE AND OTHER CURRENT LIABILITIES | |
DEFERRED REVENUE AND OTHER CURRENT LIABILITIES | DEFERRED REVENUE AND OTHER CURRENT LIABILITIES Deferred revenue and other current liabilities consisted of the following: December 31, 2015 2014 (in thousands) Deferred revenue $ 45,018 $ 47,823 Accrued compensation and related benefits 31,091 24,958 Accrued real estate taxes, utilities and other occupancy 3,352 3,028 Accrued sales tax 3,659 4,628 Accrued interest 2,210 374 Accrued income taxes 1,181 564 Dividends payable 222 152 Other current liabilities 34,329 25,012 Total deferred revenue and other current liabilities $ 121,062 $ 106,539 Deferred revenue consists primarily of Gold Card membership fees and gift card sales. During 2014, the Company incurred $ 7.8 million of expenses associated with changes among the executive leadership team. These expenses relating to management realignment consisted principally of executive severance. In October 2013, the Company transitioned to a third-party product transportation network and moved away from the Company's existing private fleet. The cost related to this transition was $ 12.2 million , consisting of early lease termination on transportation equipment of $ 9.8 million and employee severance and other costs of $ 2.4 million . At December 31, 2015, the Company had no liability relating to the above restructuring costs. |
FAIR VALUE MEASUREMENTS AND FIN
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS | FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS Accounting Standards Codification 820, Fair Value Measurements and Disclosures defines fair value as a market-based measurement that should be determined based on the assumptions that marketplace participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1 — observable inputs such as quoted prices in active markets for identical assets and liabilities; Level 2 — 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; and Level 3 — unobservable inputs for which there are little or no market data, which require the reporting entity to develop its own assumptions. The carrying amounts of cash and cash equivalents, receivables, accounts payable, accrued liabilities and the revolving credit facility approximate their respective fair values. Based on the interest rates currently available and their underlying risk, the carrying value of franchise notes receivable approximates its fair value. The carrying value and estimated fair value of the Notes (excluding the equity component classified in stockholders' equity) and Term Loan Facility were as follows: December 31, 2015 December 31, 2014 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Term Loan Facility $ 1,174,369 $ 1,145,010 $ 1,342,378 $ 1,288,683 Convertible senior notes 235,085 188,940 — — The fair value of the Term Loan Facility was determined using the instrument’s trading value in markets that are not active, which are considered Level 2 inputs. The fair value of the Notes was determined based on quoted market prices and bond terms and conditions, which are considered Level 2 inputs. As described in Note 5, "Goodwill and Intangible Assets, Net," the Company recorded asset impairments during the third quarter of 2015 which resulted in goodwill and definite-long-lived assets for Discount Supplements being measured at fair value on a non-recurring basis using Level 3 inputs at September 30, 2015. |
LONG-TERM LEASE OBLIGATIONS
LONG-TERM LEASE OBLIGATIONS | 12 Months Ended |
Dec. 31, 2015 | |
Leases, Operating [Abstract] | |
LONG-TERM LEASE OBLIGATIONS | LONG-TERM LEASE OBLIGATIONS The Company's rent expense, which is recorded within cost of sales on the consolidated statements of income, was as follows: Year ended December 31, 2015 2014 2013 (in thousands) Company-owned and franchised retail stores: Rent on operating leases $ 197,114 $ 189,369 $ 174,756 Sublease income (43,569 ) (41,696 ) (37,680 ) Landlord related taxes 21,854 21,247 19,552 Common operating expenses 38,663 37,284 34,978 Percent rent 20,775 22,185 23,943 Total company-owned and franchised retail stores 234,837 228,389 215,549 Truck fleet — — 4,491 Other 16,495 15,606 13,484 Total rent expense $ 251,332 $ 243,995 $ 233,524 Minimum future obligations for non-cancelable operating leases, excluding optional renewal periods, with initial or remaining terms of at least one year in effect at December 31, 2015 were as follows for the years ending December 31. Company-Owned Retail Stores Franchise Retail Stores Sublease Income Other Total (in thousands) 2016 $ 143,706 $ 31,209 $ (31,209 ) $ 5,226 $ 148,932 2017 118,617 25,608 (25,608 ) 4,480 123,097 2018 89,722 18,689 (18,689 ) 2,431 92,153 2019 63,664 12,325 (12,325 ) 1,853 65,517 2020 43,968 7,019 (7,019 ) 1,669 45,637 Thereafter 96,341 8,876 (8,876 ) 10,647 106,988 Total future obligations $ 556,018 $ 103,726 $ (103,726 ) $ 26,306 $ 582,324 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND 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. Currently, none of the Company's accruals for outstanding legal matters are material individually or in the aggregate to the Company's financial position. However, if the Company ultimately is required to make a payment 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. 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 the Company's stores in November 2013, and/or Aegeline, a compound extracted from bael trees. As of December 31, 2014, the Company was named in 28 personal injury lawsuits involving products containing DMAA and/or Aegeline. As a general matter, the proceedings associated with these personal injury cases, which generally seek indeterminate money damages, are in the early stages, and any losses that may arise from these matters are not probable or reasonably estimable at this time. The case captioned Leanne Sparling and Michael Sparling on behalf of Michael Sparling, deceased v. USPLabs, GNC Corporation et al., which previously was scheduled for trial in February 2016, was dismissed with prejudice. The Company is contractually entitled to indemnification by its third-party vendors 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 vendors and/or their insurance coverage and the absence of any significant defenses available to its insurer. California Wage and Break Claim. 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. In October 2011, plaintiff filed an eight -count amended complaint alleging, among other matters, meal, rest break and overtime violations on behalf of sales associates and store managers. In January 2013, the Court conditionally certified a Fair Labor Standards Act ("FLSA") class with respect to one of Plaintiff's claims, and in November 2014, the Court granted in part and denied in part the plaintiff's motion to certify a California class and granted the Company's motion for decertification of the FLSA class. In May 2015, plaintiffs filed a motion for partial summary judgment as to the Company' alleged liability for non-compliant wage statements, which was granted in part and denied in part in September 2015. On February 5, 2016, the Company and attorneys representing the putative class agreed to class-wide settlements of the Brewer case and an additional, immaterial case raising similar claims, pursuant to which the Company agreed to pay up to $9.5 million in the aggregate, including attorneys’ fees and costs. The settlement agreement remains subject to Court approval, and the Court has scheduled a preliminary hearing in April 2016. As a result of this settlement, the Company recorded a charge of $6.3 million in the fourth quarter of 2015, in addition to $3.2 million previously accrued in the first quarter of 2015. On February 29, 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. The complaint contains eight causes of action, alleging, among other matters, meal, rest break, and overtime violations. As of December 31, 2015, an immaterial liability has been accrued in the accompanying financial statements. Jason Olive v. General Nutrition Corp. In April 2012, Jason Olive filed a complaint in the Superior Court of California, County of Los Angeles, 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 December 31, 2014, an immaterial liability has been accrued in the accompanying financial statements. Oregon Attorney General. On October 22, 2015, the Attorney General for the State of Oregon sued General Nutrition Corporation in Multnomah County Circuit Court for alleged violations of Oregon’s Unlawful Trade Practices Act, in connection with its sale in Oregon of certain third-party products. The Company intends to vigorously defend against these allegations. As any losses that may arise from this matter are not probably or reasonably estimable at this time, no liability has been accrued in the accompanying interim consolidated financial statements. Moreover, the Company does not anticipate that any such losses are likely to have a material impact on the Company, its business or results of operations. The Company is contractually entitled to indemnification and defense by its third-party vendors, which have accepted the Company’s tender request for defense and indemnification. Ultimately, however, the Company's ability to obtain full recovery in respect of any such claims against it is dependent upon the creditworthiness of its vendors and/or their insurance coverage and the absence of any significant defenses available to their insurers. Commitments In addition to operating leases obtained in the normal course of business, the Company maintains certain purchase commitments with various vendors to ensure its operational needs are fulfilled. As of December 31, 2015 , such future purchase commitments consisted of $40.7 million . Other commitments related to the Company's business operations cover varying periods of time and are not significant. All of these commitments are expected to be fulfilled with no adverse consequences to the Company's operations or financial condition. 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 has completed additional investigations with the DHEC's approval and the DHEC is currently reviewing the results. The Company will consult with the DHEC on the next steps in the work after their review of the results of the investigation is complete. 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 has been recorded in the accompanying consolidated balance sheet. 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. |
STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
STOCKHOLDER'S EQUITY | STOCKHOLDERS' EQUITY Treasury Stock In August 2015, the Board approved a $ 500.0 million multi-year repurchase program in addition to the $ 500.0 million multi-year program approved in August 2014, bringing the aggregate share repurchase program to $ 1.0 billion of Holdings' common stock. Holdings repurchased $479.8 million of common stock during 2015. As of December 31, 2015, $ 427.0 million remains available for purchase under the program. Preferred Stock Holdings is authorized to issue up to 60.0 million shares of preferred stock, par value $0.001 per share. No shares of preferred stock were issued or outstanding in 2015, 2014 and 2013. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table represents the Company's basic and dilutive weighted average shares: Year ended December 31, 2015 2014 2013 (in thousands) Basic weighted average shares 83,927 90,493 96,481 Effect of dilutive employee stock-based compensation awards 259 425 902 Diluted weighted averages shares 84,186 90,918 97,383 For the year ended December 31, 2015 and each of the years ended December 31, 2014 and 2013 , the Company had 0.2 million and 0.3 million shares, respectively, that were not included in the computation of diluted earnings per share because the impact of applying the treasury stock method to these options was anti-dilutive. The Company has the intent and ability to settle the principal portion of its Notes in cash, and as such, has applied the treasury stock method, which has resulted in all underlying convertible shares being anti-dilutive in the current year as the Company's average stock price from the issuance of the Notes through December 31, 2015 is less than the conversion price. Refer to Note 7, "Long-Term Debt / Interest Expense" for more information on the Notes. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION PLANS | STOCK-BASED COMPENSATION PLANS Overview The Company has outstanding stock-based compensation awards that were granted by the compensation committee of Holdings' Board of Directors (the "Compensation Committee") under the following two stock-based employee compensation plans: • the GNC Holdings, Inc. 2015 Stock and Incentive Plan (the "2015 Stock Plan") amended and adopted in May 2015, formerly the GNC Holdings, Inc. 2011 Stock and Incentive Plan (the "2011 Stock Plan") adopted in March 2011; and • the GNC Acquisition Holdings Inc. 2007 Stock Incentive Plan adopted in March 2007 (as amended, the "2007 Stock Plan"). Both plans have provisions that allow for the granting of stock options, restricted stock and other stock based awards and are available to certain eligible employees, directors, consultants or advisors as determined by the Compensation Committee. The Company will not grant any additional awards under the 2007 Stock Plan. Up to 11.5 million shares of common stock may be issued under the 2015 Stock Plan (subject to adjustment to reflect certain transactions and events specified in the 2015 Stock Plan for any award grant), of which 8.4 million shares remain available for issuance as of December 31, 2015. The following table sets forth a summary of all share awards outstanding under all plans at December 31: 2015 2014 Time-based stock options 688,083 746,533 Time-based restricted stock awards 194,271 122,681 Performance-based restricted stock awards 140,916 41,656 Total share awards outstanding 1,023,270 910,870 The Company recognized $ 6.3 million , $ 5.9 million and $ 7.8 million of non-cash compensation expense for the years ended December 31, 2015 , 2014 and 2013 , respectively. At December 31, 2015 , there was approximately $11.6 million of total unrecognized expense related to non-vested stock-based compensation that is expected to be recognized over a weighted average period of approximately 1.3 years. Cash received from the exercise of options was $ 1.7 million , $ 22.2 million , and $ 14.6 million in 2015, 2014 and 2013, respectively, which was recorded as additional paid-in capital on the accompanying consolidated balance sheets and presented as a cash inflow from financing activities on the accompanying consolidated statements of cash flows. The total tax benefit associated with stock-based compensation resulted in an excess tax benefit of $ 0.6 million , $ 3.7 million , and $ 15.4 million in 2015, 2014 and 2013, respectively, which was recorded as additional paid-in capital and presented as a financing cash inflow. Stock Options Stock options 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 following table sets forth a summary of stock options under all plans: Total Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2014 746,533 $ 26.19 $ 15,505 Granted 50,815 $ 41.10 Exercised (80,183 ) $ 21.75 $ 1,970 Forfeited and expired (29,082 ) $ 27.92 Outstanding at December 31, 2015 688,083 $ 27.75 5.4 $ 4,187 Exercisable at December 31, 2015 394,997 $ 23.44 4.2 $ 3,656 During the years ended December 31, 2014, and 2013, the total intrinsic value of options exercised was $ 13.9 million , and $ 44.6 million . The assumptions used in the Company's Black Scholes valuation were as follows: Year ended December 31, 2015 2014 2013 Dividend yield 1.5% - 2.4% 1.5% - 1.9% 1.0% - 1.4% Expected term 6.3 years 6.3 years 4.8 years Volatility 31.1% - 38.3% 37.6% - 37.9% 35.9% - 40.5% Risk free rate 1.3% - 1.9% 1.7% - 1.9% 0.7% - 1.4% The option term has been estimated by considering both the vesting period and the contractual term. Volatility is estimated utilizing a peer group average. The Black Scholes valuation resulted in a weighted average grant date fair value in 2015, 2014 and 2013 of $ 15.64 , $ 11.08 and $ 16.16 , respectively. Restricted Stock Awards Under the 2015 Stock Plan, the Company granted time-based and performance-based restricted stock and restricted stock units. Time-based awards vest over a period of three years . Performance-based awards vest after a period of three years and the achievement of performance targets; based on the extent to which the targets are achieved, vested shares may range from 0% to 200% of the original share amount. Compensation expense related to the performance-based awards is adjusted as necessary to reflect changes in the probability that the vesting criteria will be achieved. The following table sets forth a summary of restricted stock awards granted under the 2015 Stock Plan: Time-Based Performance-Based Shares Wtd Avg Grant Date Fair Value Shares Wtd Avg Grant Date Fair Value Outstanding at December 31, 2014 122,681 $ 38.04 41,656 $ 44.64 Granted 141,701 $ 47.85 106,314 $ 49.00 Vested (55,448 ) $ 35.22 — $ — Forfeited (14,663 ) $ 38.64 (7,054 ) $ 46.02 Outstanding at December 31, 2015 194,271 $ 45.95 140,916 $ 47.86 The total intrinsic value of time-based restricted stock awards vested was $ 2.4 million , $ 4.3 million and $ 3.8 million for the years ended December 31, 2015, 2014 and 2013, respectively. The total intrinsic value of restricted stock awards outstanding at December 31, 2015 was $ 6.0 million and $ 4.4 million for time-based and performance-based awards, respectively. The weighted average grant date fair value of time-based and performance-based restricted stock awards granted was $ 43.38 and $ 44.62 in 2014 and $ 50.39 and $ 45.76 in 2013, respectively. |
RETIREMENT PLANS
RETIREMENT PLANS | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT PLANS | RETIREMENT PLANS The Company sponsors a 401(k) defined contribution savings plan covering substantially all employees. Full time employees who have completed 30 days of service and part time employees who have completed 1000 hours of service are eligible to participate in the plan. The plan provides for employee contributions of 1% to 80% of individual compensation into deferred savings, subject to IRS limitations. The plan provides for Company contributions upon the employee meeting the eligibility requirements. The Company match consists of both a fixed and a discretionary match. The fixed match is 50% on the first 3% of the salary that an employee defers and the discretionary match could be up to an additional 50% match on the 3% deferral. A discretionary match can be approved at any time by the Company. An employee becomes vested in the Company match portion as follows: Years of Service Percent Vested 0-1 0 % 1-2 33 % 2-3 66 % 3+ 100 % The Company made cash contributions to the 401(k) plan of $1.5 million , $1.5 million and $2.4 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. The Company has a Non-qualified Deferred Compensation Plan that provides benefits payable to certain eligible associates upon their retirement or their designated beneficiaries upon death. This plan allows participants the opportunity to defer pretax amounts ranging from 2% to 100% of their base compensation plus bonuses. During 2015 and 2014, the Company elected to match a percentage of the contributions from employees. For each of the years ended December 31, 2015 and 2014, this contribution was $0.3 million . |
SEGMENTS
SEGMENTS | 12 Months Ended |
Dec. 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 Company's chief operating decision maker, its Chief Executive Officer, 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 Company’s long-lived asset impairment charge of $ 28.3 million along with the $2.7 million loss on sale related to Discount Supplements recorded in 2015 is included in the Company’s Retail reporting segment as described in Note 5 "Goodwill and Intangible Assets, Net." In addition, the Company recorded a charge for $9.5 million included in Corporate related to a legal settlement as described in Note 11 "Commitments and Contingencies." The following table represents key financial information for each of the Company's reportable segments: Year ended December 31, 2015 2014 2013 (in thousands) Revenue: Retail $ 1,945,197 $ 1,939,150 $ 1,926,770 Franchise 458,335 432,828 436,917 Manufacturing/Wholesale: Intersegment revenues 267,377 291,220 318,766 Third party 235,680 241,176 263,074 Subtotal Manufacturing/Wholesale 503,057 532,396 581,840 Subtotal segment revenues 2,906,589 2,904,374 2,945,527 Elimination of intersegment revenues (267,377 ) (291,220 ) (318,766 ) Total revenue $ 2,639,212 $ 2,613,154 $ 2,626,761 Operating income: Retail $ 308,303 $ 348,952 $ 362,658 Franchise 164,525 157,342 153,545 Manufacturing/Wholesale 90,292 89,921 104,709 Corporate and other costs: Warehousing and distribution costs (71,673 ) (68,283 ) (77,101 ) Corporate costs (98,340 ) (88,420 ) (83,313 ) Subtotal corporate and other costs (170,013 ) (156,703 ) (160,414 ) Total operating income 393,107 439,512 460,498 Interest expense, net 50,936 46,708 53,029 Income before income taxes $ 342,171 $ 392,804 $ 407,469 Year ended December 31 2015 2014 2013 (in thousands) Depreciation and amortization: Retail $ 33,405 $ 34,653 $ 30,769 Franchise 3,047 3,020 3,004 Manufacturing / Wholesale 10,582 10,725 11,003 Corporate / Other 10,203 7,939 7,038 Total depreciation and amortization $ 57,237 $ 56,337 $ 51,814 Capital expenditures: Retail $ 30,600 $ 36,627 $ 34,835 Franchise 221 222 229 Manufacturing / Wholesale 5,662 5,903 8,464 Corporate / Other 9,344 27,703 6,719 Total capital expenditures $ 45,827 $ 70,455 $ 50,247 Total revenues by geographic areas: United States $ 2,478,687 $ 2,440,836 $ 2,486,542 Foreign 160,525 172,318 140,219 Total revenues $ 2,639,212 $ 2,613,154 $ 2,626,761 As of December 31 2015 2014 (in thousands) Total assets: Retail $ 1,505,286 $ 1,574,332 Franchise 512,102 511,701 Manufacturing / Wholesale 400,048 406,797 Corporate / Other 134,583 184,970 Total assets $ 2,552,019 $ 2,677,800 Property, plant, and equipment, net: United States $ 221,049 $ 223,068 Foreign 9,486 9,329 Total property, plant and equipment, net $ 230,535 $ 232,397 Retail Revenue The following table represents sales by product category in the Retail reportable segment: Year ended December 31, 2015 2014 2013 (in thousands) Retail Product Categories: VMHS $ 626,626 $ 649,110 $ 663,625 Sports nutrition 778,813 759,819 764,908 Diet 201,400 193,830 198,834 Other wellness 108,500 110,594 92,123 Other (*) 229,858 225,797 207,280 Total retail revenue $ 1,945,197 $ 1,939,150 $ 1,926,770 (*) Includes revenue primarily related to Canada operations, Lucky Vitamin, Discount Supplements and The Health Store, whose sales categories are not consistent with domestic point of sales system, and deferred Gold Card revenue. Franchise Revenue The following is a summary of the Company's revenue by type in the Franchise reportable segment: Year ended December 31, 2015 2014 2013 (in thousands) Product sales $ 387,716 $ 358,247 $ 363,810 Royalties 58,306 59,561 58,247 Franchise fees 6,129 7,076 7,936 Other 6,184 7,944 6,924 Total franchise revenue $ 458,335 $ 432,828 $ 436,917 Manufacturing/Wholesale sales are generated from sales of manufactured products to third parties, primarily in the VMHS product category, and intersegment sales. |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL INFORMATION | QUARTERLY FINANCIAL INFORMATION The following table summarizes the Company's 2015 and 2014 quarterly results: Three months ended (unaudited) Year ended March 31, June 30, September 30, December 31, December 31, 2015 (1) 2015 2015 2015 2015 (In thousands, except per share amounts) Total revenue $ 670,247 $ 678,520 $ 672,244 $ 618,201 $ 2,639,212 Gross profit 249,433 256,332 250,644 228,234 984,643 Operating income 109,605 117,638 82,150 83,714 393,107 Net income 63,270 67,357 45,750 42,922 219,299 Weighted average shares outstanding: Basic 87,865 85,501 83,669 78,775 83,927 Diluted 88,105 85,777 83,958 79,008 84,186 Earnings per share: Basic (2) $ 0.72 $ 0.79 $ 0.55 $ 0.54 $ 2.61 Diluted (2) $ 0.72 $ 0.79 $ 0.54 $ 0.54 $ 2.60 Three months ended (unaudited) Year ended March 31, June 30, September 30, December 31, December 31, 2014 2014 2014 2014 2014 (In thousands, except per share amounts) Total revenue $ 674,456 $ 675,216 $ 656,326 $ 607,156 $ 2,613,154 Gross profit 253,719 258,580 247,748 220,193 980,240 Operating income 121,255 121,051 108,725 88,481 439,512 Net income 69,903 69,887 64,314 51,768 255,872 Weighted average shares outstanding: Basic 92,975 90,414 89,814 88,824 90,493 Diluted 93,684 90,931 90,233 89,044 90,918 Earnings per share: Basic (2) $ 0.75 $ 0.77 $ 0.72 $ 0.58 $ 2.83 Diluted (2) $ 0.75 $ 0.77 $ 0.71 $ 0.58 $ 2.81 (1) Refer to Note 2, "Basis of Presentation and Summary of Significant Accounting Policies" for details with respect to the correction of a $ 2.8 million immaterial error relating to prior periods in the calculation of the portion of the accrued payroll liability relating to certain amounts paid to store employees. (2) Quarterly results for earnings per share may not add to full year results due to rounding. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On January 28, 2016, the Company's Board of Directors authorized and declared a cash dividend for the first quarter of 2016 of $ 0.20 per share of common stock, payable on or about March 25, 2016 to stockholders of record as of the close of business on March 11, 2016. |
SCHEDULE I - CONDENSED FINANCIA
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF GNC HOLDINGS, INC. | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF GNC HOLDINGS, INC. | SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF GNC HOLDINGS, INC. GNC HOLDINGS, INC. (Parent Company Only) Balance Sheets (in thousands) December 31, 2015 2014 Current assets: Cash and cash equivalents $ 1 $ 1 Prepaids and other current assets 385 343 Total current assets 386 344 Long-term assets: Deferred financing fees 248 — Intercompany receivable 164,300 — Investment in subsidiaries 709,409 905,524 Total long-term assets 873,957 905,524 Total assets $ 874,343 $ 905,868 Current liabilities: Accounts payable $ 22 $ — Intercompany payable 3,502 1,466 Deferred revenue and other current liabilities 1,995 189 Total current liabilities 5,519 1,655 Long-term liabilities: Deferred tax liabilities 16,599 — Convertible senior notes 235,085 — Intercompany loan 148,579 148,170 Total long term liabilities 400,263 148,170 Total liabilities 405,782 149,825 Stockholders' equity: Class A common stock 114 113 Additional paid-in capital 916,128 877,566 Retained earnings 1,058,148 898,574 Treasury stock, at cost (1,496,180 ) (1,016,381 ) Accumulated other comprehensive loss (9,649 ) (3,829 ) Total stockholders' equity 468,561 756,043 Total liabilities and stockholders' equity $ 874,343 $ 905,868 See the accompanying note to the condensed parent-only financial statements. SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF GNC HOLDINGS, INC. GNC HOLDINGS, INC. (Parent Company Only) Statements of Income and Comprehensive Income (in thousands, except per share data) Year ended December 31, 2015 2014 2013 Selling, general and administrative $ 1,645 $ 1,552 $ 749 Subsidiary income (223,090 ) (257,045 ) (265,522 ) Operating income 221,445 255,493 264,773 Interest expense, net 4,241 153 44 Income before income taxes 217,204 255,340 264,729 Income tax benefit (2,095 ) (532 ) (292 ) Net income $ 219,299 $ 255,872 $ 265,021 Other comprehensive loss: Foreign currency translation loss (7,439 ) (5,784 ) (1,092 ) Release of cumulative translation loss to earnings related to substantial liquidation of Discount Supplements 1,619 — — Other comprehensive loss (5,820 ) (5,784 ) (1,092 ) Comprehensive income $ 213,479 $ 250,088 $ 263,929 Earning per share: Basic $ 2.61 $ 2.83 $ 2.75 Diluted $ 2.60 $ 2.81 $ 2.72 Weighted average common shares outstanding (Note 13): Basic 83,927 90,493 96,481 Diluted 84,186 90,918 97,383 Dividends declared per share $ 0.72 $ 0.64 $ 0.60 See the accompanying note to the condensed parent-only financial statements. SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF GNC HOLDINGS, INC. GNC HOLDINGS, INC. (Parent Company Only) Statements of Cash Flows (in thousands) Year ended December 31, 2015 2014 2013 Cash flows from operating activities: Net income $ 219,299 $ 255,872 $ 265,021 Equity in income of subsidiaries (223,090 ) (257,045 ) (265,522 ) Dividends received 422,355 317,808 289,300 Other operating activities 4,738 2,393 1,334 Net cash provided by operating activities 423,302 319,028 290,133 Cash flows from financing activities: Loan from a subsidiary — — 62,700 Loan to a subsidiary (164,300 ) — — Proceeds from issuance of convertible notes 287,500 — — Debt issuance costs on convertible senior notes (8,225 ) — — Proceeds from exercise of stock options 1,744 22,170 14,588 Minimum tax withholding requirements (574 ) (762 ) (1,327 ) Repurchase of treasury stock (479,799 ) (283,226 ) (309,255 ) Dividend payment (59,648 ) (57,491 ) (57,437 ) Net cash used in financing activities (423,302 ) (319,309 ) (290,731 ) Net decrease in cash and cash equivalents — (281 ) (598 ) Beginning balance, cash and cash equivalents 1 282 880 Ending balance, cash and cash equivalents $ 1 $ 1 $ 282 See the accompanying note to the condensed parent-only financial statements. BACKGROUND These condensed parent company financial statements should be read in conjunction with the consolidated financial statements of GNC Holdings, Inc. and subsidiaries. The Senior Credit Facility of General Nutrition Centers, Inc. ("Centers"), a wholly owned subsidiary of GNC Holdings, Inc., contains customary covenants, including incurrence covenants and certain other limitations on the ability of GNC Corporation, Centers, and Centers' subsidiaries to, among other things, make optional payments in respect of other debt instruments, pay dividends or other payments on capital stock, and enter into arrangements that restrict their ability to pay dividends or grant liens. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS GNC Holdings, Inc. and Subsidiaries Valuation and Qualifying Accounts (in thousands) Balance at Beginning of Period Charged to Costs and Expenses Deductions Balance at End of Period 2013 Allowance for doubtful accounts $ 2,178 $ 4,241 $ (4,529 ) $ 1,890 Reserve for sales returns 4,276 70,308 (69,618 ) 4,966 Tax valuation allowances 4,176 — (1,449 ) 2,727 2014 Allowance for doubtful accounts $ 1,890 $ 4,535 $ (233 ) $ 6,192 Reserve for sales returns 4,966 70,075 (70,092 ) 4,949 Tax valuation allowances 2,727 579 (2,162 ) 1,144 2015 Allowance for doubtful accounts $ 6,192 $ 2,679 $ (4,744 ) $ 4,127 Reserve for sales returns 4,949 67,283 (67,385 ) 4,847 Tax valuation allowances 1,144 1,771 — 2,915 |
BASIS OF PRESENTATION AND SUM28
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation. The consolidated financial statements include the accounts of Holdings and all of its subsidiaries. All intercompany transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases these estimates on assumptions that it believes to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. |
Cash and Cash Equivalents | Cash and Cash Equivalents. The Company considers cash and cash equivalents to include all cash and liquid deposits and investments with an original maturity of three months or less. The majority of payments due from banks for third-party credit and debit cards process within 24 to 72 hours, and are classified as cash equivalents. |
Receivables, net | Receivables, net. The Company extends credit terms for sales of product to its franchisees and, to a lesser extent, various third-party customers. Receivables consist principally of unpaid invoices for product sales, franchisee royalties and sublease payments. The Company also has notes receivables with certain of its franchisees that were approximately $ 18 million at December 31, 2015 and 2014 and are primarily recorded within other long-term assets on the consolidated balance sheets. The Company monitors the financial condition of the Company's franchisees and other third-party customers and establishes an allowance for doubtful accounts for balances estimated to be uncollectible. In addition to considering the aging of receivable balances and assessing the financial condition of the Company's franchisees, the Company considers collateral including inventory and fixed assets for domestic franchisees and letters of credit for international franchisees. The allowance for doubtful accounts was $4.1 million and $6.2 million at December 31, 2015 and 2014 , respectively. |
Inventories | Inventories. Inventory components consist of raw materials, work-in-process, finished product and packaging supplies. Inventories are stated at the lower of cost or market on a first in/first out basis ("FIFO"). Inventories include costs associated with distribution and transportation costs, as well as manufacturing overhead, which are capitalized and expensed as merchandise is sold. Inventories are recorded at net realizable value, net of shrinkage, obsolescence and vendor allowances. The Company regularly reviews its inventory levels in order to identify slow moving and short dated products, using factors such as amount of inventory on hand, remaining shelf life, current and expected market conditions, historical trends and the likelihood of recovering the inventory costs based on anticipated demand. |
Property, Plant and Equipment | Property, Plant and Equipment. Property, plant and equipment expenditures are recorded at cost. Depreciation and amortization are recognized using the straight-line method over the estimated useful life of the property. The estimated useful lives are as follows: Building 30 yrs Machinery and equipment 3-10 yrs Building and leasehold improvements 3-15 yrs Furniture and fixtures 5-8 yrs Software 3-5 yrs Building improvements are depreciated over their estimated useful life or the remaining useful life of the related building, whichever period is shorter. Improvements to retail leased premises are depreciated over the estimated useful life of the improvements or the related leases including renewals that are reasonably assured, whichever period is shorter. Expenditures that materially increase the value or clearly extend the useful life of property, plant and equipment are capitalized while repair and maintenance costs incurred in the normal operations of business are expensed as incurred. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets. The Company was acquired by Ares Corporate Opportunities Fund II L.P. and Ontario Teachers’ Pension Plan Board in March 2007 and subsequently completed an initial public offering in 2011 of its common stock resulting in these entities owning an immaterial number of shares of the Company’s common stock. In connection with this acquisition, the Company recorded approximately $ 600 million of goodwill and $ 720 million of indefinite-lived intangible assets related to its brands. The Company formally evaluates the carrying amount of goodwill for each of its reporting units in the fourth quarter. In addition, the Company performs an evaluation on an interim basis if it determines that recent events or prevailing conditions indicate a potential impairment of goodwill. A significant amount of judgment is involved in determining whether an indicator of impairment has occurred between annual impairment tests. These indicators include, but are not limited to, overall financial performance such as adverse changes in recent forecasts of operating results, industry and market considerations, a sustained decrease in the price of a share of the Company's common stock, updated business plans and regulatory and legal developments. Goodwill is impaired when the carrying amount of a reporting unit’s goodwill exceeds its implied fair value based upon a two-step process. In step one of the analysis, the fair value of the reporting unit is compared with its carrying value. If the carrying value of the reporting unit exceeds its fair value, step two of the test must be performed, which requires the Company to determine the implied fair value of goodwill in the same manner as if it had acquired the reporting unit in an arm’s length transaction as of the testing date. This second step is performed by deducting the estimated fair value of all tangible and identifiable intangible net assets of the reporting unit from the estimated fair value of the reporting unit. If the recorded amount of goodwill exceeds this implied fair value, an impairment charge is recorded for the difference as an operating expense in the period incurred. Indefinite-lived intangible assets, consisting of the Company's brands, are also evaluated annually in the fourth quarter for impairment and on an interim basis if events or changes in circumstances between annual tests indicate that the assets might be impaired. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to the difference. See Note 5, "Goodwill and Intangible Assets, Net" for more information. The Company determined the fair value of the Discount Supplements reporting unit at September 30, 2015 using a discounted cash flow method (income approach). The key assumptions used were as follows: • Future cash flow assumptions - The Company's projections for Discount Supplements were based on organic growth and were derived from historical experience and assumptions regarding future growth and profitability trends. These projections also took into account the current economic climate in the United Kingdom where Discount Supplements operated, and the extent to which the regulatory environment was expected to impact future growth opportunities. The Company's analysis incorporated an assumed period of cash flows of five years with a terminal value. • Discount rate - The discount rate was based on Discount Supplements' estimated weighted average cost of capital ("WACC"). The components of WACC are the cost of equity and the cost of debt, each of which requires judgment by management to estimate. The Company developed its cost of equity estimate based on perceived risks and predictability of future cash flows. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets. The Company evaluates whether the carrying values of property and equipment and definite-lived intangible assets have been impaired whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable based on estimated undiscounted future cash flows. Factors that may trigger an impairment review include significant changes in the intended use of assets, significant negative industry or economic trends, under-performing stores and store closings. If it is determined that the carrying value of the asset group is not recoverable, an impairment loss is recognized for the amount the carrying amount of the asset exceeds its estimated fair value as determined based on quoted market prices or through the use of other valuation techniques. |
Revenue Recognition | Revenue Recognition. Within the Retail segment, retail sales are recognized at the point of sale, net of sales tax. Revenue related to e-commerce sales is recognized upon delivery to customers and includes shipping charges. A provision for anticipated returns is recorded through a reduction of sales and cost of sales (for product that can be resold or returned to vendors) in the period that the related sales are recorded. Revenue is deferred on sales of the Company's Gold Cards and subsequently recognized over the membership period, which is either a one - or two -year period. Revenue from gift cards is recognized when the gift card is redeemed. These gift cards do not have expiration dates and are not required to be escheated to government authorities. Utilizing historical redemption rates, the Company recognizes revenue for amounts not expected to be redeemed proportionately as other gift card balances are redeemed. Revenue recognized related to breakage was not material in each of the fiscal years ended December 31, 2015, 2014 and 2013. The Franchise segment generates revenues through product sales to franchisees, royalties and franchise fees. The Company's franchisees purchase a significant amount of the products they sell in their retail stores from the Company at wholesale prices. Revenue on product sales to franchisees is recognized when risk of loss, title and insurable risks have transferred to the franchisee, net of estimated returns and allowances. Franchise fees are paid in advance, deferred and recognized by the Company at the time of a franchise store opening. Franchise royalties are recognized as a percentage of the franchisees' retail sales in the period the franchisees' sales occur. The Manufacturing/Wholesale segment sells product to the Company's other segments, which is eliminated in consolidation, and third-party customers. Revenue is recognized when risk of loss, title and insurable risks have transferred to the customer, net of estimated returns and allowances. |
Cost of Sales | Cost of Sales. The Company purchases products directly from third-party vendors and manufactures its own products. Cost of sales includes product costs, vendor allowances, inventory shrinkage and obsolescence, manufacturing overhead, freight, distribution, shipping and store occupancy costs. Store occupancy costs include rent, common area maintenance charges, real estate and other asset-based taxes, general maintenance, utilities, depreciation, fixture lease expenses and certain insurance expenses. |
Vendor Allowances | Vendor Allowances. The Company receives allowances from various vendors based on either sales or purchase volumes as well as cooperative advertising. As the right of offset exists under these arrangements, credit earned under both arrangements are recorded as a reduction in the vendors' accounts payable balances on the balance sheet and represent the estimated amounts due to the Company under the rebate provisions of such contracts. Amounts expected to be received from vendors relating to the purchase of merchandise inventories are recognized as a reduction to cost of sales as the merchandise is sold. Amounts that represent a reimbursement of costs incurred, such as advertising, are recorded as a reduction to the related expense in the period that the related expense is incurred. The Company recorded a reduction to cost of sales of $98.7 million , $89.5 million and $92.6 million for the years ended December 31, 2015 , 2014 and 2013 , respectively, for vendor allowances associated with the purchase of merchandise. |
Research and Development | Research and Development. Research and development costs arising from internally generated projects are expensed as incurred. The Company recognized $0.7 million , $1.2 million and $1.4 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. These costs are included in selling, general and administrative expense in the accompanying consolidated statements of income. |
Advertising Expenditures | Advertising Expenditures. The Company recognizes the costs to communicate the advertising, promotion and marketing programs the first time the communication takes place. The costs of advertising production are expensed as incurred. The Company administers national advertising funds on behalf of its franchisees. In accordance with the franchisee contracts, the Company collects advertising fees from the franchisees and utilizes the proceeds to coordinate various advertising and marketing campaigns. |
Leases | Leases. The Company has various operating leases for company-owned and franchise store locations, distribution centers, and equipment generally with an initial term of between five and ten years, which may include renewal options for varying terms thereafter. Leases for franchise store locations are subleased to franchisees. The Company is the primary lessee for the majority of the franchise store locations and makes rental payments to the landlord directly, and then bills the franchisee for reimbursement. If a franchisee defaults on its sublease, the Company has in the past converted, and expects in the future to, convert any such franchise store into a company-owned store and fulfill the remaining lease obligation. Leases generally include amounts relating to base rent, percent rent and other charges such as common area maintenance and real estate taxes. Periodically, the Company receives varying amounts of reimbursements from landlords to compensate the Company for costs incurred in the construction of stores. These reimbursements are recorded as deferred rent within other long-term liabilities on the consolidated balance sheet and are amortized as a reduction to rent expense over the life of the related lease. The expenditures made by the Company are recorded as an increase to leasehold improvements within property, plant and equipment, net. Many of the Company’s lease agreements contain escalation clauses under which, if fixed and determinable, rent expense is recognized on a straight-line basis over the lives of the leases, including renewal periods that are reasonably assured. Certain of the Company's leases also contain clauses for rent to be paid as a percentage of sales, which are based on a percentage of retail sales or a percentage of retail sales in excess of stipulated amounts (contingent rent). Contingent rent is recorded as rent expense when attainment of the target is considered probable and is recognized in proportion to the retail sales contributing to the achievement of the target. |
Contingencies | Contingencies. The Company accrues a loss contingency if it is probable and can be reasonably estimated. If both of the conditions above are not met, disclosure is made when there is at least a reasonable possibility that a loss contingency has been incurred. As facts concerning contingencies evolve and become known, management reassesses the likelihood of probable loss and makes appropriate adjustments to its financial statements. |
Pre-Opening Expenditures | Pre-Opening Expenditures. The Company recognizes the cost associated with the opening of new stores, which consist primarily of rent, marketing, payroll and recruiting costs as incurred. |
Income Taxes | Income Taxes . The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities result from (i) the future tax impact of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and (ii) differences between the recorded value of assets acquired in business combinations accounted for as purchases for financial reporting purposes and their corresponding tax bases. Deferred income tax assets are reduced by a valuation allowance if it is more likely than not that some portion of the deferred income tax asset will not be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is at least more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. The amount of the tax benefit that is recognized is measured as the largest amount of benefit that is more likely than not to be realized upon effective settlement. The Company classifies interest and penalties accrued in connection with unrecognized tax benefits as income tax expense in its consolidated statements of income. Refer to Note 4, "Income Taxes," for more information. |
Self-Insurance | Self-Insurance. T he Company is self-insured for certain losses related to health, workers' compensation and general liability insurance and maintains stop-loss coverage with third-party insurers to limit its liability exposure. Liabilities associated with these losses are estimated by considering historical claims experience, estimated lag time to report and pay claims, average cost per claim and other actuarial factors. |
Stock-based Compensation | Stock-based Compensation. The Company utilizes the Black-Scholes model to calculate the fair value of time-based stock option awards. The grant-date fair value of the Company's time-based restricted stock, performance-based restricted stock, time-based restricted stock units, and performance-based restricted stock units (collectively herein referred to as "restricted stock awards") are based on the closing price for a share of the Company's common stock on the New York Stock Exchange (the "NYSE") on the grant date. Compensation expense for time-based awards is recognized over the applicable vesting period, net of expected forfeitures. Performance-based awards also include a service condition and compensation expense is recognized over the applicable vesting period if the performance condition is probable of being achieved, net of expected forfeitures. The Company regularly reviews the probability of achieving the performance condition on these awards. |
Earnings Per Share | Earnings Per Share. Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period. The Company uses the treasury stock method to compute diluted EPS, which assumes that outstanding stock awards were converted into common stock and that outstanding stock options that are in-the-money were exercised, and the resulting proceeds (which includes unrecognized compensation expense and excess tax benefits) were used to acquire shares of common stock at its average market price during the reporting period. |
Foreign Currency | Foreign Currency. For all foreign operations, the functional currency is the local currency. Assets and liabilities of foreign operations are translated into the Company's reporting currency, the U.S. dollar, using period-end exchange rates, while income and expenses are translated using the average exchange rates for the reporting period. Translation gains and losses are recorded as part of other comprehensive income on the consolidated balance sheet. The Company has intercompany balances with foreign entities that are routinely settled primarily relating to product sales and management fees. Gains or losses resulting from these foreign currency transactions are included in the consolidated statements of income and were not material for the fiscal years ended December 31, 2015, 2014 and 2013. |
Revision | Revision Certain amounts in the consolidated financial statements for prior year periods have been revised to conform to the current year’s presentation with no impact on previously reported operating income, net income or stockholders' equity. None of these revisions are material to prior periods. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-17, which requires an entity to classify deferred tax liabilities and assets as noncurrent within a classified statement of financial position. This standard is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2016. The Company does not believe the adoption of this guidance will have a material effect on the Company’s consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, which requires an entity that determines the cost of inventory by methods other than last-in, first-out (LIFO) and the retail inventory method (RIM) to measure inventory at the lower of cost and net realizable value. This standard is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2016. The Company does not believe the adoption of this guidance will have a material effect on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, which requires an entity to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt liability, consistent with the treatment of debt discounts. This standard does not affect the recognition and measurement guidance for debt issuance costs. This standard is effective for fiscal years beginning after December 15, 2015. The Company does not believe the adoption of this guidance will have a material effect on the Company’s consolidated financial statements. In June 2014, the FASB issued 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. The Company does not believe the adoption of this guidance will have a material effect on the Company’s consolidated financial statements. 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. In August 2015, the FASB subsequently issued ASU 2015-14, which approved a one year deferral of ASU 2014-09 for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements. |
BASIS OF PRESENTATION AND SUM29
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Property, Plant and Equipment | The estimated useful lives are as follows: Building 30 yrs Machinery and equipment 3-10 yrs Building and leasehold improvements 3-15 yrs Furniture and fixtures 5-8 yrs Software 3-5 yrs Property, plant and equipment consisted of the following: December 31, 2015 2014 (in thousands) Land, buildings and improvements $ 70,487 $ 69,165 Machinery and equipment 150,809 140,939 Leasehold improvements 139,448 132,378 Furniture and fixtures 106,722 101,823 Software 54,506 42,909 Construction in progress 6,340 4,628 Total property, plant and equipment 528,312 491,842 Less: accumulated depreciation (297,777 ) (259,445 ) Net property, plant and equipment $ 230,535 $ 232,397 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Net Carrying Value of Inventories | The net realizable value of inventory consisted of the following: December 31, 2015 2014 (in thousands) Finished product ready for sale $ 487,075 $ 501,027 Work-in-process, bulk product and raw materials 62,242 60,911 Packaging supplies 6,568 7,194 Total inventories, net $ 555,885 $ 569,132 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Before Income Taxes | Income before income taxes consisted of the following components: Year ended December 31, 2015 2014 2013 (in thousands) Domestic $ 365,362 $ 373,122 $ 389,459 Foreign (23,191 ) 19,682 18,010 Total income before income taxes $ 342,171 $ 392,804 $ 407,469 |
Summary of Income Tax Expense (Benefit) | Income tax expense consisted of the following components: Year ended December 31 2015 2014 2013 (in thousands) Current: Federal $ 104,711 $ 120,086 $ 120,137 State 13,414 16,968 15,433 Foreign 4,297 6,296 8,656 Total current income tax expense 122,422 143,350 144,226 Deferred: Federal 3,193 (3,785 ) (363 ) State (1,412 ) 1,042 (955 ) Foreign (1,331 ) (3,675 ) (460 ) Total deferred income tax expense (benefit) 450 (6,418 ) (1,778 ) Total income tax expense $ 122,872 $ 136,932 $ 142,448 |
Summary of Differences Between the Company's Effective Tax Rate and the Federal Statutory Tax Rate | The following table summarizes the differences between the Company's effective tax rate for financial reporting purposes and the federal statutory tax rate: Year ended December 31, 2015 2014 2013 Percent of pretax earnings: Statutory federal tax rate 35.0 % 35.0 % 35.0 % Increase (reduction) resulting from: State income tax, net of federal tax benefit 3.5 % 3.2 % 3.1 % Other permanent differences 0.4 % 0.1 % 0.1 % International operations, net of foreign tax credits 3.8 % (0.5 )% — % Worthless stock tax benefit (3.4 )% — % — % Federal tax credits and income deductions (2.5 )% (2.3 )% (2.1 )% Tax impact of uncertain tax positions and other (0.9 )% (0.6 )% (1.1 )% Effective income tax rate 35.9 % 34.9 % 35.0 % |
Summary of Significant Components of the Company's Deferred Tax Assets and Liabilities | Significant components of the Company's deferred tax assets and liabilities consisted of the following at December 31: 2015 2014 Assets Liabilities Net Assets Liabilities Net (in thousands) Current assets (liabilities): Operating reserves $ 7,159 $ — $ 7,159 $ 5,971 $ — $ 5,971 Deferred revenue 2,976 — 2,976 2,697 — 2,697 Prepaid expenses — (3,936 ) (3,936 ) — (5,282 ) (5,282 ) Accrued workers' compensation 2,891 — 2,891 2,811 — 2,811 Other 1,826 — 1,826 1,425 — 1,425 Total current $ 14,852 $ (3,936 ) $ 10,916 $ 12,904 $ (5,282 ) $ 7,622 Non-current assets (liabilities): Intangibles $ — $ (331,157 ) $ (331,157 ) $ — $ (327,675 ) $ (327,675 ) Fixed assets 16,900 — 16,900 17,631 — 17,631 Stock compensation 3,344 — 3,344 1,977 — 1,977 Net operating loss and credit carryforwards 11,825 — 11,825 9,421 — 9,421 Long-term rent liabilities 8,438 — 8,438 7,836 — 7,836 Deferred Revenue 3,775 — 3,775 5,070 — 5,070 Convertible senior notes — (16,599 ) (16,599 ) — — — Other 5,256 — 5,256 7,121 — 7,121 Valuation allowance (2,915 ) — (2,915 ) (1,144 ) — (1,144 ) Total non-current $ 46,623 $ (347,756 ) $ (301,133 ) $ 47,912 $ (327,675 ) $ (279,763 ) Total net deferred taxes $ 61,475 $ (351,692 ) $ (290,217 ) $ 60,816 $ (332,957 ) $ (272,141 ) |
Summary of Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: December 31, 2015 2014 2013 (in thousands) Balance of unrecognized tax benefits at beginning of period $ 11,652 $ 10,848 $ 12,882 Additions for tax positions taken during current period 1,345 1,524 873 Additions for tax positions taken during prior periods 543 116 1,965 Reductions for tax positions taken during prior periods (6,258 ) (527 ) (4,068 ) Settlements — (309 ) (804 ) Balance of unrecognized tax benefits at end of period $ 7,282 $ 11,652 $ 10,848 |
GOODWILL AND INTANGIBLE ASSET32
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill Activity | The following table summarizes the Company's goodwill activity by reportable segment: Retail Franchising Manufacturing/Wholesale Total (in thousands) Balance at December 31, 2013 $ 346,202 $ 117,303 $ 202,841 $ 666,346 Acquired franchise stores 1,372 — — 1,372 Acquisition of The Health Store 6,853 — — 6,853 Translation effect of exchange rates (2,278 ) — — (2,278 ) Balance at December 31, 2014 $ 352,149 $ 117,303 $ 202,841 $ 672,293 Acquired franchise stores 1,935 — — 1,935 Translation effect of exchange rates (1,077 ) — — (1,077 ) Goodwill impairment - Discount Supplements (23,259 ) — — (23,259 ) Balance at December 31, 2015 $ 329,748 $ 117,303 $ 202,841 $ 649,892 |
Summary of Intangible Asset Activity | Intangible assets, net consisted of the following: Retail Brand Franchise Brand Operating Agreements Other Intangibles Total (in thousands) Balance at December 31, 2013 $ 500,000 $ 220,000 $ 125,665 $ 17,109 $ 862,774 Acquired franchise stores — — — 781 781 Acquisition of The Health Store — — — 788 788 Amortization expense — — (6,653 ) (4,222 ) (10,875 ) Translation effect of exchange rates — — — (476 ) (476 ) Balance at December 31, 2014 $ 500,000 $ 220,000 $ 119,012 $ 13,980 $ 852,992 Acquired franchise stores — — — 963 963 Amortization expense — — (6,653 ) (3,599 ) (10,252 ) Translation effect of exchange rates — — — (138 ) (138 ) Impairment charge - Discount Supplements — — — (4,361 ) (4,361 ) Balance at December 31, 2015 $ 500,000 $ 220,000 $ 112,359 $ 6,845 $ 839,204 |
Schedule of Gross Carrying Amount and Accumulated Amortization | The following table reflects the gross carrying amount and accumulated amortization/impairment for each major intangible asset: December 31, 2015 December 31, 2014 Weighted- Average Life Gross Accumulated Amortization/Impairment Carrying Amount Gross Accumulated Amortization Carrying Amount (in thousands) Goodwill Indefinite $ 673,151 $ (23,259 ) $ 649,892 $ 672,293 $ — $ 672,293 Brands—retail Indefinite 500,000 — 500,000 500,000 — 500,000 Brands—franchise Indefinite 220,000 — 220,000 220,000 — 220,000 Retail agreements 30.3 31,000 (9,407 ) 21,593 31,000 (8,354 ) 22,646 Franchise agreements 25.0 70,000 (24,617 ) 45,383 70,000 (21,817 ) 48,183 Manufacturing agreements 25.0 70,000 (24,617 ) 45,383 70,000 (21,817 ) 48,183 Other intangibles 11.8 10,222 (4,560 ) 5,662 20,457 (7,427 ) 13,030 Franchise rights 3.0 7,206 (6,023 ) 1,183 6,243 (5,293 ) 950 Total $ 1,581,579 $ (92,483 ) $ 1,489,096 $ 1,589,993 $ (64,708 ) $ 1,525,285 |
Schedule of Future Estimated Amortization Expense | The following table represents future amortization expense of definite-lived intangible assets at December 31, 2015: Years ending December 31, Amortization expense (in thousands) 2016 $ 8,108 2017 7,544 2018 7,369 2019 7,257 2020 7,204 Thereafter 81,722 Total future amortization expense $ 119,204 |
PROPERTY, PLANT AND EQUIPMENT33
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | The estimated useful lives are as follows: Building 30 yrs Machinery and equipment 3-10 yrs Building and leasehold improvements 3-15 yrs Furniture and fixtures 5-8 yrs Software 3-5 yrs Property, plant and equipment consisted of the following: December 31, 2015 2014 (in thousands) Land, buildings and improvements $ 70,487 $ 69,165 Machinery and equipment 150,809 140,939 Leasehold improvements 139,448 132,378 Furniture and fixtures 106,722 101,823 Software 54,506 42,909 Construction in progress 6,340 4,628 Total property, plant and equipment 528,312 491,842 Less: accumulated depreciation (297,777 ) (259,445 ) Net property, plant and equipment $ 230,535 $ 232,397 |
LONG-TERM DEBT _ INTEREST EXP34
LONG-TERM DEBT / INTEREST EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following: December 31, 2015 2014 (in thousands) Term Loan Facility (net of $2.2 million and $3.3 million discount) $ 1,174,369 $ 1,342,165 Revolving Credit Facility 43,000 — Convertible senior notes 235,085 — Other — 213 Total debt $ 1,452,454 $ 1,342,378 Less: current maturities (4,550 ) (4,740 ) Total long-term debt $ 1,447,904 $ 1,337,638 |
Schedule of Total Debt Principal Maturities | At December 31, 2015 , the Company's future annual contractual principal payments on long-term debt were as follows: Years Ending December 31, Term Loan Facility (1) Revolving Credit Facility Convertible Notes (2) Total (in thousands) 2016 $ 4,550 $ — $ — $ 4,550 2017 4,550 43,000 — 47,550 2018 4,550 — — 4,550 2019 1,162,958 — — 1,162,958 2020 — — 287,500 287,500 Total future principal payments $ 1,176,608 $ 43,000 $ 287,500 $ 1,507,108 (1) Includes the unamortized original issuance discount of $2.2 million . (2) Includes unamortized conversion feature of $46.3 million and original issuance discount of $6.1 million . |
Convertible Debt | The Notes consist of the following components as of December 31, 2015 (in thousands): Liability component Principal $ 287,500 Conversion feature (46,271 ) Discount related to debt issuance costs (6,144 ) Net carrying amount $ 235,085 Equity component Conversion feature $ 49,680 Discount related to debt issuance costs (1,421 ) Deferred taxes (17,750 ) Net amount recorded in additional paid-in capital $ 30,509 |
Interest Income and Interest Expense Disclosure | The Company's net interest expense was as follows: For the year ended December 31, 2015 2014 2013 (in thousands) Senior Credit Facility: Term Loan coupon $ 42,147 $ 44,427 $ 42,020 Revolver 805 682 680 Loss on debt refinancing — — 5,712 Amortization of discount and deferred financing fees (*) 2,583 1,729 4,712 Subtotal: Senior Credit Facility 45,535 46,838 53,124 Convertible Senior Notes: Coupon 1,702 — — Amortization of conversion feature 3,410 — — Amortization of discount and deferred financing fees 412 — — Subtotal: Convertible Senior Notes 5,524 — — Mortgage and other interest expense 81 123 159 Interest income (204 ) (253 ) (254 ) Interest expense, net $ 50,936 $ 46,708 $ 53,029 (*) In connection with the partial pay-down of $164.3 million of the Term Loan Facility, the Company recorded $0.8 million in accelerated amortization, which represents the pro-rata portion of the original issuance discount and deferred financing fees associated with the paid-down balance . |
DEFERRED REVENUE AND OTHER CU35
DEFERRED REVENUE AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
DEFERRED REVENUE AND OTHER CURRENT LIABILITIES | |
Summary of Deferred Revenue and Other Current Liabilities | Deferred revenue and other current liabilities consisted of the following: December 31, 2015 2014 (in thousands) Deferred revenue $ 45,018 $ 47,823 Accrued compensation and related benefits 31,091 24,958 Accrued real estate taxes, utilities and other occupancy 3,352 3,028 Accrued sales tax 3,659 4,628 Accrued interest 2,210 374 Accrued income taxes 1,181 564 Dividends payable 222 152 Other current liabilities 34,329 25,012 Total deferred revenue and other current liabilities $ 121,062 $ 106,539 |
FAIR VALUE MEASUREMENTS AND F36
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Schedule of Carrying Amount and Estimated Fair Values of the Financial Instruments | The carrying value and estimated fair value of the Notes (excluding the equity component classified in stockholders' equity) and Term Loan Facility were as follows: December 31, 2015 December 31, 2014 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Term Loan Facility $ 1,174,369 $ 1,145,010 $ 1,342,378 $ 1,288,683 Convertible senior notes 235,085 188,940 — — |
LONG-TERM LEASE OBLIGATIONS (Ta
LONG-TERM LEASE OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Leases, Operating [Abstract] | |
Schedule of Components of the Company's Rental Expense | The Company's rent expense, which is recorded within cost of sales on the consolidated statements of income, was as follows: Year ended December 31, 2015 2014 2013 (in thousands) Company-owned and franchised retail stores: Rent on operating leases $ 197,114 $ 189,369 $ 174,756 Sublease income (43,569 ) (41,696 ) (37,680 ) Landlord related taxes 21,854 21,247 19,552 Common operating expenses 38,663 37,284 34,978 Percent rent 20,775 22,185 23,943 Total company-owned and franchised retail stores 234,837 228,389 215,549 Truck fleet — — 4,491 Other 16,495 15,606 13,484 Total rent expense $ 251,332 $ 243,995 $ 233,524 |
Schedule of Minimum Future Obligations for Non-Cancelable Operating Leases | Minimum future obligations for non-cancelable operating leases, excluding optional renewal periods, with initial or remaining terms of at least one year in effect at December 31, 2015 were as follows for the years ending December 31. Company-Owned Retail Stores Franchise Retail Stores Sublease Income Other Total (in thousands) 2016 $ 143,706 $ 31,209 $ (31,209 ) $ 5,226 $ 148,932 2017 118,617 25,608 (25,608 ) 4,480 123,097 2018 89,722 18,689 (18,689 ) 2,431 92,153 2019 63,664 12,325 (12,325 ) 1,853 65,517 2020 43,968 7,019 (7,019 ) 1,669 45,637 Thereafter 96,341 8,876 (8,876 ) 10,647 106,988 Total future obligations $ 556,018 $ 103,726 $ (103,726 ) $ 26,306 $ 582,324 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Company's Basic and Dilutive Weighted Average Shares | The following table represents the Company's basic and dilutive weighted average shares: Year ended December 31, 2015 2014 2013 (in thousands) Basic weighted average shares 83,927 90,493 96,481 Effect of dilutive employee stock-based compensation awards 259 425 902 Diluted weighted averages shares 84,186 90,918 97,383 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table sets forth a summary of all share awards outstanding under all plans at December 31: 2015 2014 Time-based stock options 688,083 746,533 Time-based restricted stock awards 194,271 122,681 Performance-based restricted stock awards 140,916 41,656 Total share awards outstanding 1,023,270 910,870 |
Summary of Stock Options Under all Plans | he following table sets forth a summary of stock options under all plans: Total Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2014 746,533 $ 26.19 $ 15,505 Granted 50,815 $ 41.10 Exercised (80,183 ) $ 21.75 $ 1,970 Forfeited and expired (29,082 ) $ 27.92 Outstanding at December 31, 2015 688,083 $ 27.75 5.4 $ 4,187 Exercisable at December 31, 2015 394,997 $ 23.44 4.2 $ 3,656 |
Schedule of Assumptions Used in Valuation Related to Stock Option Grants | The assumptions used in the Company's Black Scholes valuation were as follows: Year ended December 31, 2015 2014 2013 Dividend yield 1.5% - 2.4% 1.5% - 1.9% 1.0% - 1.4% Expected term 6.3 years 6.3 years 4.8 years Volatility 31.1% - 38.3% 37.6% - 37.9% 35.9% - 40.5% Risk free rate 1.3% - 1.9% 1.7% - 1.9% 0.7% - 1.4% |
Summary of Stock Awards Granted Under the 2015 Stock Plan | The following table sets forth a summary of restricted stock awards granted under the 2015 Stock Plan: Time-Based Performance-Based Shares Wtd Avg Grant Date Fair Value Shares Wtd Avg Grant Date Fair Value Outstanding at December 31, 2014 122,681 $ 38.04 41,656 $ 44.64 Granted 141,701 $ 47.85 106,314 $ 49.00 Vested (55,448 ) $ 35.22 — $ — Forfeited (14,663 ) $ 38.64 (7,054 ) $ 46.02 Outstanding at December 31, 2015 194,271 $ 45.95 140,916 $ 47.86 |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Vesting Percentage of Company Based on Employees Match | An employee becomes vested in the Company match portion as follows: Years of Service Percent Vested 0-1 0 % 1-2 33 % 2-3 66 % 3+ 100 % |
SEGMENTS (Tables)
SEGMENTS (Tables) | 12 Months Ended |
Dec. 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: Year ended December 31, 2015 2014 2013 (in thousands) Revenue: Retail $ 1,945,197 $ 1,939,150 $ 1,926,770 Franchise 458,335 432,828 436,917 Manufacturing/Wholesale: Intersegment revenues 267,377 291,220 318,766 Third party 235,680 241,176 263,074 Subtotal Manufacturing/Wholesale 503,057 532,396 581,840 Subtotal segment revenues 2,906,589 2,904,374 2,945,527 Elimination of intersegment revenues (267,377 ) (291,220 ) (318,766 ) Total revenue $ 2,639,212 $ 2,613,154 $ 2,626,761 Operating income: Retail $ 308,303 $ 348,952 $ 362,658 Franchise 164,525 157,342 153,545 Manufacturing/Wholesale 90,292 89,921 104,709 Corporate and other costs: Warehousing and distribution costs (71,673 ) (68,283 ) (77,101 ) Corporate costs (98,340 ) (88,420 ) (83,313 ) Subtotal corporate and other costs (170,013 ) (156,703 ) (160,414 ) Total operating income 393,107 439,512 460,498 Interest expense, net 50,936 46,708 53,029 Income before income taxes $ 342,171 $ 392,804 $ 407,469 Year ended December 31 2015 2014 2013 (in thousands) Depreciation and amortization: Retail $ 33,405 $ 34,653 $ 30,769 Franchise 3,047 3,020 3,004 Manufacturing / Wholesale 10,582 10,725 11,003 Corporate / Other 10,203 7,939 7,038 Total depreciation and amortization $ 57,237 $ 56,337 $ 51,814 Capital expenditures: Retail $ 30,600 $ 36,627 $ 34,835 Franchise 221 222 229 Manufacturing / Wholesale 5,662 5,903 8,464 Corporate / Other 9,344 27,703 6,719 Total capital expenditures $ 45,827 $ 70,455 $ 50,247 Total revenues by geographic areas: United States $ 2,478,687 $ 2,440,836 $ 2,486,542 Foreign 160,525 172,318 140,219 Total revenues $ 2,639,212 $ 2,613,154 $ 2,626,761 As of December 31 2015 2014 (in thousands) Total assets: Retail $ 1,505,286 $ 1,574,332 Franchise 512,102 511,701 Manufacturing / Wholesale 400,048 406,797 Corporate / Other 134,583 184,970 Total assets $ 2,552,019 $ 2,677,800 Property, plant, and equipment, net: United States $ 221,049 $ 223,068 Foreign 9,486 9,329 Total property, plant and equipment, net $ 230,535 $ 232,397 |
Schedule of Sales by General Product Category | The following table represents sales by product category in the Retail reportable segment: Year ended December 31, 2015 2014 2013 (in thousands) Retail Product Categories: VMHS $ 626,626 $ 649,110 $ 663,625 Sports nutrition 778,813 759,819 764,908 Diet 201,400 193,830 198,834 Other wellness 108,500 110,594 92,123 Other (*) 229,858 225,797 207,280 Total retail revenue $ 1,945,197 $ 1,939,150 $ 1,926,770 (*) Includes revenue primarily related to Canada operations, Lucky Vitamin, Discount Supplements and The Health Store, whose sales categories are not consistent with domestic point of sales system, and deferred Gold Card revenue. |
Schedule of Franchise Revenue by Type | The following is a summary of the Company's revenue by type in the Franchise reportable segment: Year ended December 31, 2015 2014 2013 (in thousands) Product sales $ 387,716 $ 358,247 $ 363,810 Royalties 58,306 59,561 58,247 Franchise fees 6,129 7,076 7,936 Other 6,184 7,944 6,924 Total franchise revenue $ 458,335 $ 432,828 $ 436,917 |
QUARTERLY FINANCIAL INFORMATI42
QUARTERLY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Results | The following table summarizes the Company's 2015 and 2014 quarterly results: Three months ended (unaudited) Year ended March 31, June 30, September 30, December 31, December 31, 2015 (1) 2015 2015 2015 2015 (In thousands, except per share amounts) Total revenue $ 670,247 $ 678,520 $ 672,244 $ 618,201 $ 2,639,212 Gross profit 249,433 256,332 250,644 228,234 984,643 Operating income 109,605 117,638 82,150 83,714 393,107 Net income 63,270 67,357 45,750 42,922 219,299 Weighted average shares outstanding: Basic 87,865 85,501 83,669 78,775 83,927 Diluted 88,105 85,777 83,958 79,008 84,186 Earnings per share: Basic (2) $ 0.72 $ 0.79 $ 0.55 $ 0.54 $ 2.61 Diluted (2) $ 0.72 $ 0.79 $ 0.54 $ 0.54 $ 2.60 Three months ended (unaudited) Year ended March 31, June 30, September 30, December 31, December 31, 2014 2014 2014 2014 2014 (In thousands, except per share amounts) Total revenue $ 674,456 $ 675,216 $ 656,326 $ 607,156 $ 2,613,154 Gross profit 253,719 258,580 247,748 220,193 980,240 Operating income 121,255 121,051 108,725 88,481 439,512 Net income 69,903 69,887 64,314 51,768 255,872 Weighted average shares outstanding: Basic 92,975 90,414 89,814 88,824 90,493 Diluted 93,684 90,931 90,233 89,044 90,918 Earnings per share: Basic (2) $ 0.75 $ 0.77 $ 0.72 $ 0.58 $ 2.83 Diluted (2) $ 0.75 $ 0.77 $ 0.71 $ 0.58 $ 2.81 (1) Refer to Note 2, "Basis of Presentation and Summary of Significant Accounting Policies" for details with respect to the correction of a $ 2.8 million immaterial error relating to prior periods in the calculation of the portion of the accrued payroll liability relating to certain amounts paid to store employees. (2) Quarterly results for earnings per share may not add to full year results due to rounding. |
NATURE OF BUSINESS (Details)
NATURE OF BUSINESS (Details) | 12 Months Ended |
Dec. 31, 2015segmentcountry | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of primary segments | segment | 3 |
Franchising | |
General nature of business and recent significant transactions | |
Number of international countries in which franchise stores are located (more than) | country | 50 |
BASIS OF PRESENTATION AND SUM44
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Minimum | |
Cash and Cash Equivalents [Line Items] | |
Cash and cash equivalents, maturity term (in hours) | 24 hours |
Maximum | |
Cash and Cash Equivalents [Line Items] | |
Cash and cash equivalents, maturity term (in hours) | 72 hours |
BASIS OF PRESENTATION AND SUM45
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RECEIVABLES (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts | $ 4.1 | $ 6.2 |
Notes Receivable | Franchise | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Long-term notes receivable | $ 18 | $ 18 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Building | |
Property, plant and equipment | |
Useful lives | 30 years |
Machinery and equipment | Minimum | |
Property, plant and equipment | |
Useful lives | 3 years |
Machinery and equipment | Maximum | |
Property, plant and equipment | |
Useful lives | 10 years |
Building and leasehold improvements | Minimum | |
Property, plant and equipment | |
Useful lives | 3 years |
Building and leasehold improvements | Maximum | |
Property, plant and equipment | |
Useful lives | 15 years |
Furniture and fixtures | Minimum | |
Property, plant and equipment | |
Useful lives | 5 years |
Furniture and fixtures | Maximum | |
Property, plant and equipment | |
Useful lives | 8 years |
Software | Minimum | |
Property, plant and equipment | |
Useful lives | 3 years |
Software | Maximum | |
Property, plant and equipment | |
Useful lives | 5 years |
BASIS OF PRESENTATION AND SUM47
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2007 |
Accounting Policies [Abstract] | ||||
Goodwill | $ 649,892 | $ 672,293 | $ 666,346 | $ 600,000 |
Brands | $ 720,000 | $ 720,000 | $ 720,000 |
BASIS OF PRESENTATION AND SUM48
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REVENUE RECOGNITION (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Minimum | |
Revenue Recognition [Line Items] | |
Deferred revenue, gold card, revenue recognition Period | 1 year |
Maximum | |
Revenue Recognition [Line Items] | |
Deferred revenue, gold card, revenue recognition Period | 2 years |
OTHER EXPENSES (Details)
OTHER EXPENSES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Vendor Allowances | |||
Rebate income reducing cost of goods sold | $ 98.7 | $ 89.5 | $ 92.6 |
Research and Development | |||
Research and development costs | 0.7 | 1.2 | 1.4 |
Advertising Expenditures | |||
Advertising, promotion and marketing program costs | 64.3 | 70.5 | 67.2 |
Amount received from national advertising fund | $ 16 | $ 15.9 | $ 15.4 |
LEASES (Details)
LEASES (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Operating Leased Assets | |
Lease term | 1 year |
Minimum | |
Operating Leased Assets | |
Lease term | 5 years |
Maximum | |
Operating Leased Assets | |
Lease term | 10 years |
BASIS OF PRESENTATION AND SUM51
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CORRECTION OF IMMATERIAL ERROR (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Accrued payroll liability error in prior period | $ 31,091 | $ 24,958 | $ 31,091 | $ 24,958 | |||||||
Decrease in net income | $ (42,922) | $ (45,750) | $ (67,357) | $ (63,270) | $ (51,768) | $ (64,314) | $ (69,887) | $ (69,903) | (219,299) | $ (255,872) | $ (265,021) |
Immaterial Error Correction | |||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Accrued payroll liability error in prior period | 2,800 | ||||||||||
Adjustment | Immaterial Error Correction | |||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Decrease in net income | $ 1,800 | ||||||||||
Deferred Revenue and Other Current Liabilities | Immaterial Error Correction | |||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Accrued payroll liability error in prior period | $ 2,800 |
BASIS OF PRESENTATION AND SUM52
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES OTHER INCOME (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Reversal of contingent purchase price liability | $ 0 | $ 4,438 | $ 859 | |
Discount Supplements and Lucky Vitamin | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Reversal of contingent purchase price liability | $ 4,400 | $ 900 | ||
Discount Supplements | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss on disposition of business | $ 2,700 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Finished product ready for sale | $ 487,075 | $ 501,027 |
Work-in-process, bulk product and raw materials | 62,242 | 60,911 |
Packaging supplies | 6,568 | 7,194 |
Total inventories, net | $ 555,885 | $ 569,132 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | |||
Long-lived asset impairments | $ 28,333 | $ 0 | $ 0 |
Income tax benefit, anticipated worthless stock deduction | 11,800 | ||
State net operating losses | 8,400 | ||
Valuation allowance adjustment | 1,800 | (1,600) | $ (1,400) |
Unrecognized tax benefits, reduction resulting from lapse of applicable statute of limitations | 3,300 | ||
Unrecognized tax benefits, period decrease with a corresponding reduction to receivables | 3,000 | ||
Accrued interest and penalties | 1,800 | $ 4,200 | |
Unrecognized tax benefits that would impact effective tax rate | $ 9,100 | ||
Minimum | |||
Operating Loss Carryforwards [Line Items] | |||
Period of realization prior to expiration | 5 years | ||
Maximum | |||
Operating Loss Carryforwards [Line Items] | |||
Period of realization prior to expiration | 20 years |
SUMMARY OF INCOME BEFORE INCOME
SUMMARY OF INCOME BEFORE INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income before income taxes | |||
Domestic | $ 365,362 | $ 373,122 | $ 389,459 |
Foreign | (23,191) | 19,682 | 18,010 |
Income before income taxes | $ 342,171 | $ 392,804 | $ 407,469 |
SUMMARY OF INCOME TAX EXPENSE (
SUMMARY OF INCOME TAX EXPENSE (BENEFIT) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
Federal | $ 104,711 | $ 120,086 | $ 120,137 |
State | 13,414 | 16,968 | 15,433 |
Foreign | 4,297 | 6,296 | 8,656 |
Current income tax expense (benefit) | 122,422 | 143,350 | 144,226 |
Deferred: | |||
Federal | 3,193 | (3,785) | (363) |
State | (1,412) | 1,042 | (955) |
Foreign | (1,331) | (3,675) | (460) |
Total deferred income tax expense (benefit) | 450 | (6,418) | (1,778) |
Total income tax expense | $ 122,872 | $ 136,932 | $ 142,448 |
SUMMARY OF DIFFERENCES BETWEEN
SUMMARY OF DIFFERENCES BETWEEN THE COMPANY'S EFFECTIVE TAX RATE AND THE FEDERAL STATUTORY TAX RATE (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Percent of pretax earnings: | |||
Statutory federal tax rate | 35.00% | 35.00% | 35.00% |
Increase (reduction) resulting from: | |||
State income tax, net of federal tax benefit | 3.50% | 3.20% | 3.10% |
Other permanent differences | 0.40% | 0.10% | 0.10% |
International operations, net of foreign tax credits | 3.80% | (0.50%) | 0.00% |
Worthless stock tax benefit | (3.40%) | (0.00%) | (0.00%) |
Federal tax credits and income deductions | (2.50%) | (2.30%) | (2.10%) |
Tax impact of uncertain tax positions and other | (0.90%) | (0.60%) | (1.10%) |
Effective income tax rate | 35.90% | 34.90% | 35.00% |
SUMMARY OF SIGNIFICANT COMPONEN
SUMMARY OF SIGNIFICANT COMPONENTS OF THE COMPANY'S DEFERRED TAX ASSETS AMD LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current tax assets: | ||
Operating reserves | $ 7,159 | $ 5,971 |
Deferred revenue | 2,976 | 2,697 |
Accrued workers' compensation | 2,891 | 2,811 |
Other | 1,826 | 1,425 |
Total current | 14,852 | 12,904 |
Current tax liabilities: | ||
Prepaid expenses | (3,936) | (5,282) |
Other | 0 | 0 |
Total current | (3,936) | (5,282) |
Current tax assets (liabilities): | ||
Operating reserves | 7,159 | 5,971 |
Deferred revenue | 2,976 | 2,697 |
Prepaid expenses | (3,936) | (5,282) |
Accrued workers' compensation | 2,891 | 2,811 |
Other | 1,826 | 1,425 |
Total current | 10,916 | 7,622 |
Non-current tax assets: | ||
Fixed assets | 16,900 | 17,631 |
Stock compensation | 3,344 | 1,977 |
Net operating loss and credit carryforwards | 11,825 | 9,421 |
Long-term rent liabilities | 8,438 | 7,836 |
Deferred Revenue | 3,775 | 5,070 |
Other | 5,256 | 7,121 |
Valuation allowance | (2,915) | (1,144) |
Total non-current | 46,623 | 47,912 |
Non-current tax liabilities: | ||
Intangibles | (331,157) | (327,675) |
Convertible senior notes | (16,599) | 0 |
Total non-current | (347,756) | (327,675) |
Non-current tax assets (liabilities): | ||
Intangibles | (331,157) | (327,675) |
Fixed assets | 16,900 | 17,631 |
Stock compensation | 3,344 | 1,977 |
Net operating loss and credit carryforwards | 11,825 | 9,421 |
Long-term rent liabilities | 8,438 | 7,836 |
Deferred Revenue | 3,775 | 5,070 |
Convertible senior notes | (16,599) | 0 |
Other | 5,256 | 7,121 |
Total non-current | (301,133) | (279,763) |
Total deferred tax assets | 61,475 | 60,816 |
Total deferred tax liabilities | (351,692) | (332,957) |
Total net deferred taxes | $ (290,217) | $ (272,141) |
SUMMARY OF RECONCILLIATION OF T
SUMMARY OF RECONCILLIATION OF THE BEGINNING AND ENDING AMOUNTS OF UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits | |||
Balance of unrecognized tax benefits at beginning of period | $ 11,652 | $ 10,848 | $ 12,882 |
Additions for tax positions taken during current period | 1,345 | 1,524 | 873 |
Additions for tax positions taken during prior periods | 543 | 116 | 1,965 |
Reductions for tax positions taken during prior periods | (6,258) | (527) | (4,068) |
Settlements | 0 | (309) | (804) |
Balance of unrecognized tax benefits at end of period | $ 7,282 | $ 11,652 | $ 10,848 |
GOODWILL AND INTANGIBLE ASSET60
GOODWILL AND INTANGIBLE ASSETS, NET (Details) $ in Thousands | Dec. 31, 2015USD ($) | Sep. 30, 2015 | Apr. 17, 2014USD ($) | Oct. 02, 2013USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)store | Dec. 31, 2014USD ($)store | Dec. 31, 2013USD ($)store | Feb. 11, 2016USD ($) | Mar. 31, 2007USD ($) |
Acquisitions | ||||||||||
Goodwill | $ 649,892 | $ 649,892 | $ 672,293 | $ 666,346 | $ 600,000 | |||||
Percentage of fair value in excess of carrying value (less than) | 15.00% | 15.00% | ||||||||
Goodwill impairment - Discount Supplements | $ 23,259 | |||||||||
Impairment charge - Discount Supplements | 4,361 | |||||||||
Long-lived asset impairments | 28,333 | 0 | 0 | |||||||
Lucky Vitamin | ||||||||||
Acquisitions | ||||||||||
Goodwill | $ 12,000 | 12,000 | ||||||||
Discount Supplements | ||||||||||
Acquisitions | ||||||||||
Goodwill | $ 24,600 | |||||||||
Aggregate purchase price | 33,300 | |||||||||
Purchase price allocated to amortizable intangible assets | 9,600 | |||||||||
Purchase price allocated to other net liabilities | $ 900 | |||||||||
Long-lived asset impairments | 28,333 | |||||||||
Franchise Stores | ||||||||||
Acquisitions | ||||||||||
Aggregate purchase price | $ 6,200 | $ 3,700 | $ 2,900 | |||||||
Number of franchise stores acquired | store | 44 | 25 | 16 | |||||||
The Health Store | ||||||||||
Acquisitions | ||||||||||
Goodwill | $ 6,900 | |||||||||
Aggregate purchase price | 8,900 | |||||||||
Purchase price allocated to amortizable intangible assets | 800 | |||||||||
Purchase price allocated to goodwill, definite-lived intangible assets and other assets | $ 1,200 | |||||||||
Discount Supplements | ||||||||||
Acquisitions | ||||||||||
Loss on disposition of business | 2,700 | |||||||||
Retail | ||||||||||
Acquisitions | ||||||||||
Goodwill | $ 329,748 | $ 329,748 | $ 352,149 | $ 346,202 | ||||||
Goodwill impairment - Discount Supplements | 23,259 | |||||||||
Operating Segments | Discount Supplements | Retail | ||||||||||
Acquisitions | ||||||||||
Goodwill impairment - Discount Supplements | $ 23,300 | |||||||||
Tradename And Website | Discount Supplements | ||||||||||
Acquisitions | ||||||||||
Impairment charge - Discount Supplements | 4,400 | |||||||||
Property And Equipment | Discount Supplements | ||||||||||
Acquisitions | ||||||||||
Tangible asset impairment charges | $ 600 | |||||||||
Subsequent Event | Discount Supplements | ||||||||||
Acquisitions | ||||||||||
Consideration received on disposal of business | $ 1,300 | |||||||||
Income Approach Valuation Technique | Operating Segments | Discount Supplements | Retail | ||||||||||
Acquisitions | ||||||||||
Weighted average cost of capital | 16.50% |
SUMMARY OF GOODWILL ACTIVITY (D
SUMMARY OF GOODWILL ACTIVITY (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in goodwill during the period | ||
Balance at the beginning of the period | $ 672,293 | $ 666,346 |
Translation effect of exchange rates | (1,077) | (2,278) |
Goodwill impairment - Discount Supplements | (23,259) | |
Balance at the end of the period | 649,892 | 672,293 |
Franchise Stores | ||
Changes in goodwill during the period | ||
Acquired during period | 1,935 | 1,372 |
The Health Store | ||
Changes in goodwill during the period | ||
Acquired during period | 6,853 | |
Retail | ||
Changes in goodwill during the period | ||
Balance at the beginning of the period | 352,149 | 346,202 |
Translation effect of exchange rates | (1,077) | (2,278) |
Goodwill impairment - Discount Supplements | (23,259) | |
Balance at the end of the period | 329,748 | 352,149 |
Retail | Franchise Stores | ||
Changes in goodwill during the period | ||
Acquired during period | 1,935 | 1,372 |
Retail | The Health Store | ||
Changes in goodwill during the period | ||
Acquired during period | 6,853 | |
Franchising | ||
Changes in goodwill during the period | ||
Balance at the beginning of the period | 117,303 | 117,303 |
Translation effect of exchange rates | 0 | 0 |
Goodwill impairment - Discount Supplements | 0 | |
Balance at the end of the period | 117,303 | 117,303 |
Franchising | Franchise Stores | ||
Changes in goodwill during the period | ||
Acquired during period | 0 | 0 |
Franchising | The Health Store | ||
Changes in goodwill during the period | ||
Acquired during period | 0 | |
Manufacturing/Wholesale | ||
Changes in goodwill during the period | ||
Balance at the beginning of the period | 202,841 | 202,841 |
Translation effect of exchange rates | 0 | 0 |
Goodwill impairment - Discount Supplements | 0 | |
Balance at the end of the period | 202,841 | 202,841 |
Manufacturing/Wholesale | Franchise Stores | ||
Changes in goodwill during the period | ||
Acquired during period | $ 0 | 0 |
Manufacturing/Wholesale | The Health Store | ||
Changes in goodwill during the period | ||
Acquired during period | $ 0 |
SUMMARY OF INTANGIBLE ASSET ACT
SUMMARY OF INTANGIBLE ASSET ACTIVITY (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Indefinite-lived Intangible Assets | |||
Balance at the beginning of period | $ 720,000 | ||
Balance at the end of period | 720,000 | $ 720,000 | |
Finite-lived Intangible Assets | |||
Amortization expense | (10,252) | (10,875) | |
Translation effect of exchange rates | (138) | (476) | |
Impairment charge - Discount Supplements | (4,361) | ||
Balance at the end of period | 119,204 | ||
Intangible assets, net (excluding goodwill) | 839,204 | 852,992 | $ 862,774 |
Franchise Stores | |||
Finite-lived Intangible Assets | |||
Acquired during period | 963 | 781 | |
The Health Store | |||
Finite-lived Intangible Assets | |||
Acquired during period | 788 | ||
Operating Agreements | |||
Finite-lived Intangible Assets | |||
Balance at the beginning of period | 119,012 | 125,665 | |
Amortization expense | (6,653) | (6,653) | |
Translation effect of exchange rates | 0 | 0 | |
Impairment charge - Discount Supplements | 0 | ||
Balance at the end of period | 112,359 | 119,012 | |
Operating Agreements | Franchise Stores | |||
Finite-lived Intangible Assets | |||
Acquired during period | 0 | 0 | |
Operating Agreements | The Health Store | |||
Finite-lived Intangible Assets | |||
Acquired during period | 0 | ||
Other Intangibles | |||
Finite-lived Intangible Assets | |||
Balance at the beginning of period | 13,980 | 17,109 | |
Amortization expense | (3,599) | (4,222) | |
Translation effect of exchange rates | (138) | (476) | |
Impairment charge - Discount Supplements | (4,361) | ||
Balance at the end of period | 6,845 | 13,980 | |
Other Intangibles | Franchise Stores | |||
Finite-lived Intangible Assets | |||
Acquired during period | 963 | 781 | |
Other Intangibles | The Health Store | |||
Finite-lived Intangible Assets | |||
Acquired during period | 788 | ||
Retail Brand | |||
Indefinite-lived Intangible Assets | |||
Balance at the beginning of period | 500,000 | 500,000 | |
Acquired during period | 0 | ||
Translation effect of exchange rates | 0 | 0 | |
Balance at the end of period | 500,000 | 500,000 | |
Retail Brand | Franchise Stores | |||
Indefinite-lived Intangible Assets | |||
Acquired during period | 0 | 0 | |
Franchise Brand | |||
Indefinite-lived Intangible Assets | |||
Balance at the beginning of period | 220,000 | 220,000 | |
Acquired during period | 0 | ||
Translation effect of exchange rates | 0 | 0 | |
Balance at the end of period | 220,000 | 220,000 | |
Franchise Brand | Franchise Stores | |||
Indefinite-lived Intangible Assets | |||
Acquired during period | $ 0 | $ 0 |
SCHEDULE OF GROSS CARRYING AMOU
SCHEDULE OF GROSS CARRYING AMOUNT AND ACCUMULATED AMORTIZATION (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2007 | |
Indefinite-Lived Intangible Assets, Net [Abstract] | ||||
Goodwill, gross | $ 673,151 | $ 672,293 | ||
Goodwill, accumulated impairment | (23,259) | 0 | ||
Goodwill | 649,892 | 672,293 | $ 666,346 | $ 600,000 |
Indefinite-lived intangible assets | 720,000 | 720,000 | $ 720,000 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Carrying Amount | 119,204 | |||
Total, gross | 1,581,579 | 1,589,993 | ||
Total, accumulated amortization/impairment | (92,483) | (64,708) | ||
Total, net | $ 1,489,096 | 1,525,285 | ||
Retail agreements | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Weighted- Average Life | 30 years 3 months 18 days | |||
Gross | $ 31,000 | 31,000 | ||
Accumulated Amortization/Impairment | (9,407) | (8,354) | ||
Carrying Amount | $ 21,593 | 22,646 | ||
Franchise agreements | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Weighted- Average Life | 25 years | |||
Gross | $ 70,000 | 70,000 | ||
Accumulated Amortization/Impairment | (24,617) | (21,817) | ||
Carrying Amount | $ 45,383 | 48,183 | ||
Manufacturing agreements | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Weighted- Average Life | 25 years | |||
Gross | $ 70,000 | 70,000 | ||
Accumulated Amortization/Impairment | (24,617) | (21,817) | ||
Carrying Amount | $ 45,383 | 48,183 | ||
Other intangibles | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Weighted- Average Life | 11 years 9 months 18 days | |||
Gross | $ 10,222 | 20,457 | ||
Accumulated Amortization/Impairment | (4,560) | (7,427) | ||
Carrying Amount | $ 5,662 | 13,030 | ||
Franchise rights | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Weighted- Average Life | 3 years | |||
Gross | $ 7,206 | 6,243 | ||
Accumulated Amortization/Impairment | (6,023) | (5,293) | ||
Carrying Amount | 1,183 | 950 | ||
Brands—retail | ||||
Indefinite-Lived Intangible Assets, Net [Abstract] | ||||
Indefinite-lived intangible assets | 500,000 | 500,000 | 500,000 | |
Brands—franchise | ||||
Indefinite-Lived Intangible Assets, Net [Abstract] | ||||
Indefinite-lived intangible assets | $ 220,000 | $ 220,000 | $ 220,000 |
SCHEDULE OF FUTURE ESTIMATED AM
SCHEDULE OF FUTURE ESTIMATED AMORTIZATION EXPENSE (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,016 | $ 8,108 |
2,017 | 7,544 |
2,018 | 7,369 |
2,019 | 7,257 |
2,020 | 7,204 |
Thereafter | 81,722 |
Carrying Amount | $ 119,204 |
SUMMARY OF PROPERTY, PLANT AND
SUMMARY OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, plant and equipment | |||
Total property, plant and equipment | $ 528,312 | $ 491,842 | |
Less: accumulated depreciation | (297,777) | (259,445) | |
Net property, plant and equipment | 230,535 | 232,397 | |
Depreciation expense | 47,000 | 45,500 | $ 42,800 |
Land, Buildings and Improvements | |||
Property, plant and equipment | |||
Total property, plant and equipment | 70,487 | 69,165 | |
Machinery and equipment | |||
Property, plant and equipment | |||
Total property, plant and equipment | 150,809 | 140,939 | |
Leasehold Improvements | |||
Property, plant and equipment | |||
Total property, plant and equipment | 139,448 | 132,378 | |
Furniture and fixtures | |||
Property, plant and equipment | |||
Total property, plant and equipment | 106,722 | 101,823 | |
Software | |||
Property, plant and equipment | |||
Total property, plant and equipment | 54,506 | 42,909 | |
Construction in Progress | |||
Property, plant and equipment | |||
Total property, plant and equipment | $ 6,340 | $ 4,628 |
SCHEDULE OF LONG TERM DEBT (Det
SCHEDULE OF LONG TERM DEBT (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument | ||
Net carrying amount | $ 1,452,454 | $ 1,342,378 |
Less: current maturities | (4,550) | (4,740) |
Total long-term debt | 1,447,904 | 1,337,638 |
Term Loan Facility | ||
Debt Instrument | ||
Net carrying amount | 1,174,369 | 1,342,165 |
Other | ||
Debt Instrument | ||
Net carrying amount | 0 | 213 |
1.5% Convertible Senior Notes Due 2020 | Convertible senior notes | ||
Debt Instrument | ||
Net carrying amount | 235,085 | 0 |
Revolving Credit Facility | Line of Credit | ||
Debt Instrument | ||
Net carrying amount | $ 43,000 | $ 0 |
SCHEDULE OF TOTAL DEBT PRINCIPA
SCHEDULE OF TOTAL DEBT PRINCIPAL MATURITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument | ||
2,016 | $ 4,550 | |
2,017 | 47,550 | |
2,018 | 4,550 | |
2,019 | 1,162,958 | |
2,020 | 287,500 | |
Total future principal payments | 1,507,108 | |
Term Loan Facility | ||
Debt Instrument | ||
2,016 | 4,550 | |
2,017 | 4,550 | |
2,018 | 4,550 | |
2,019 | 1,162,958 | |
2,020 | 0 | |
Total future principal payments | 1,176,608 | |
Unamortized discount | 2,200 | $ 3,300 |
Revolving Credit Facility | ||
Debt Instrument | ||
2,016 | 0 | |
2,017 | 43,000 | |
2,018 | 0 | |
2,019 | 0 | |
2,020 | 0 | |
Total future principal payments | 43,000 | |
Senior Credit Facility | ||
Debt Instrument | ||
Unamortized discount | 2,200 | |
1.5% Convertible Senior Notes Due 2020 | Convertible senior notes | ||
Debt Instrument | ||
2,016 | 0 | |
2,017 | 0 | |
2,018 | 0 | |
2,019 | 0 | |
2,020 | 287,500 | |
Total future principal payments | 287,500 | |
Unamortized discount | 46,271 | |
Discount related to debt issuance costs | $ 6,144 |
LONG-TERM DEBT _ INTEREST EXP68
LONG-TERM DEBT / INTEREST EXPENSE (Details) | Aug. 10, 2015USD ($)day$ / shares | Dec. 31, 2013USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2013USD ($) |
Debt Instrument | ||||||
Draw on line of credit | $ 1,452,454,000 | $ 1,342,378,000 | ||||
Term Loan Facility | ||||||
Debt Instrument | ||||||
Draw on line of credit | 1,174,369,000 | 1,342,165,000 | ||||
Line of Credit | Revolving Credit Facility | ||||||
Debt Instrument | ||||||
Draw on line of credit | 43,000,000 | 0 | ||||
Senior Credit Facility | ||||||
Debt Instrument | ||||||
Loss on debt refinancing | 0 | $ 0 | $ 5,712,000 | |||
Senior Credit Facility | Revolving Credit Facility | ||||||
Debt Instrument | ||||||
Line of credit facility, maximum borrowing capacity | $ 130,000,000 | |||||
Amended And Restated Senior Credit Facility | ||||||
Debt Instrument | ||||||
Effective interest rate | 3.25% | 3.25% | ||||
Amended And Restated Senior Credit Facility | Revolving Credit Facility | ||||||
Debt Instrument | ||||||
Line of credit facility, maximum borrowing capacity | $ 80,000,000 | |||||
Weighted average interest rate | 2.60% | |||||
Unused capacity for letters of credit, commitment fee percentage | 0.50% | |||||
Line of credit facility, remaining borrowing capacity | $ 85,900,000 | |||||
Amended And Restated Senior Credit Facility | Letter of Credit | ||||||
Debt Instrument | ||||||
Annual fee on outstanding letters of credit | 2.50% | |||||
Long-term line of credit | $ 1,100,000 | |||||
Amended And Restated Senior Credit Facility | Term Loan Facility | ||||||
Debt Instrument | ||||||
Proceeds from issuance of debt | $ 252,500,000 | |||||
Loss on debt refinancing | $ 5,700,000 | |||||
1.5% Convertible Senior Notes Due 2020 | Convertible senior notes | ||||||
Debt Instrument | ||||||
Effective interest rate | 6.10% | |||||
Draw on line of credit | $ 235,085,000 | $ 0 | ||||
Debt instrument, principal | $ 287,500,000 | $ 287,500,000 | ||||
Debt instrument, interest rate, stated percentage | 1.50% | |||||
Convertible debt instrument, conversion ratio | 0.0151156 | |||||
Convertible debt instrument conversion price (in dollars per share) | $ / shares | $ 66.16 | |||||
Debt issuance costs, discounts and commissions | $ 7,900,000 | |||||
Debt issuance costs, third party offering cost | $ 300,000 | |||||
1.5% Convertible Senior Notes Due 2020 | Convertible senior notes | Debt Instrument, Redemption, Period One | Debt Instrument, Conversion, Option One | ||||||
Debt Instrument | ||||||
Convertible debt instrument, trading days threshold | day | 20 | |||||
Convertible debt instrument percentage of stock price trigger threshold | 130.00% | |||||
Convertible debt instrument, consecutive trading days threshold | 30 days | |||||
1.5% Convertible Senior Notes Due 2020 | Convertible senior notes | Debt Instrument, Redemption, Period One | Debt Instrument, Conversion, Option Two | ||||||
Debt Instrument | ||||||
Convertible debt instrument, consecutive business days threshold | 5 days | |||||
Convertible debt instrument, consecutive trading days threshold | 10 days | |||||
Convertible debt instrument ratio of trading price per $1,000 in principal Amount | 98.00% |
LONG-TERM DEBT _ INTEREST EXP69
LONG-TERM DEBT / INTEREST EXPENSE COMPONENTS OF CONVERTIABLE DEBT (Details) - USD ($) | Dec. 31, 2015 | Aug. 10, 2015 | Dec. 31, 2014 |
Liability component | |||
Net carrying amount | $ 1,452,454,000 | $ 1,342,378,000 | |
Convertible senior notes | 1.5% Convertible Senior Notes Due 2020 | |||
Liability component | |||
Principal | 287,500,000 | $ 287,500,000 | |
Conversion feature | (46,271,000) | ||
Discount related to debt issuance costs | (6,144,000) | ||
Net carrying amount | 235,085,000 | $ 0 | |
Equity component | |||
Conversion feature | 49,680,000 | ||
Discount related to debt issuance costs | (1,421,000) | ||
Deferred taxes | (17,750,000) | ||
Net amount recorded in additional paid-in capital | $ 30,509,000 |
LONG-TERM DEBT _ INTEREST EXP70
LONG-TERM DEBT / INTEREST EXPENSE SCHEDULE OF INTEREST EXPENSE (Details) - USD ($) $ in Thousands | Aug. 10, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Debt Instrument | ||||
Amortization of discount and deferred financing fees | $ 6,421 | $ 1,729 | $ 2,507 | |
Interest income | (204) | (253) | (254) | |
Interest expense, net | 50,936 | 46,708 | 53,029 | |
Payments on long-term debt | 169,060 | 5,443 | 3,379 | |
Accelerated amortization | 0 | 0 | 5,712 | |
Senior Credit Facility | ||||
Debt Instrument | ||||
Loss on debt refinancing | 0 | 0 | 5,712 | |
Amortization of discount and deferred financing fees | 2,583 | 1,729 | 4,712 | |
Interest and Debt Expense | 45,535 | 46,838 | 53,124 | |
Term Loan coupon | ||||
Debt Instrument | ||||
Payments on long-term debt | $ 164,300 | |||
Accelerated amortization | $ (800) | |||
Term Loan coupon | Senior Credit Facility | ||||
Debt Instrument | ||||
Interest expense, excluding amortization | 42,147 | 44,427 | 42,020 | |
Convertible senior notes | 1.5% Convertible Senior Notes Due 2020 | ||||
Debt Instrument | ||||
Interest expense, excluding amortization | 1,702 | 0 | 0 | |
Amortization of conversion feature | 3,410 | 0 | 0 | |
Amortization of discount and deferred financing fees | 412 | 0 | 0 | |
Interest and Debt Expense | 5,524 | 0 | 0 | |
Mortgage and other interest expense | ||||
Debt Instrument | ||||
Interest expense, excluding amortization | 81 | 123 | 159 | |
Revolver | Senior Credit Facility | ||||
Debt Instrument | ||||
Interest expense, excluding amortization | $ 805 | $ 682 | $ 680 |
SUMMARY OF DEFERRED REVENUE AND
SUMMARY OF DEFERRED REVENUE AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred revenue and other current liabilities | ||
Deferred revenue | $ 45,018 | $ 47,823 |
Accrued compensation and related benefits | 31,091 | 24,958 |
Accrued real estate taxes, utilities and other occupancy | 3,352 | 3,028 |
Accrued sales tax | 3,659 | 4,628 |
Accrued interest | 2,210 | 374 |
Accrued income taxes | 1,181 | 564 |
Dividends payable | 222 | 152 |
Other current liabilities | 34,329 | 25,012 |
Total deferred revenue and other current liabilities | $ 121,062 | $ 106,539 |
DEFERRED REVENUE AND OTHER CU72
DEFERRED REVENUE AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Oct. 31, 2013 | Dec. 31, 2014 | |
Restructuring Cost and Reserve [Line Items] | ||
Management realignment | $ 7.8 | |
Transaction and restructuring related cost | $ 12.2 | |
Early Lease Termination | ||
Restructuring Cost and Reserve [Line Items] | ||
Transaction and restructuring related cost | 9.8 | |
Employee Severance and Other Costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Transaction and restructuring related cost | $ 2.4 |
SCHEDULE OF CARRYING AMOUNT AND
SCHEDULE OF CARRYING AMOUNT AND ESTIMATED FAIR VALUES OF THE FINANCIAL INSTRUMENTS (Details 2) - Level 2 - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Senior Credit Facility | Term Loan Facility | Carrying Amount | ||
Actual and estimated fair values of the financial instruments | ||
Long term debt | $ 1,174,369 | $ 1,342,378 |
Senior Credit Facility | Term Loan Facility | Fair Value | ||
Actual and estimated fair values of the financial instruments | ||
Long term debt | 1,145,010 | 1,288,683 |
1.5% Convertible Senior Notes Due 2020 | Convertible senior notes | Carrying Amount | ||
Actual and estimated fair values of the financial instruments | ||
Long term debt | 235,085 | 0 |
1.5% Convertible Senior Notes Due 2020 | Convertible senior notes | Fair Value | ||
Actual and estimated fair values of the financial instruments | ||
Long term debt | $ 188,940 | $ 0 |
LONG-TERM LEASE OBLIGATIONS (De
LONG-TERM LEASE OBLIGATIONS (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Leases, Operating [Abstract] | |
Initial or remaining term of leases in effect at year end (in years) | 1 year |
SCHEDULE OF COMPONENTS OF THE C
SCHEDULE OF COMPONENTS OF THE COMPANY'S RENTAL EXPENSE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Company-owned and franchised retail stores: | |||
Rent on operating leases | $ 197,114 | $ 189,369 | $ 174,756 |
Sublease income | (43,569) | (41,696) | (37,680) |
Landlord related taxes | 21,854 | 21,247 | 19,552 |
Common operating expenses | 38,663 | 37,284 | 34,978 |
Percent rent | 20,775 | 22,185 | 23,943 |
Total company-owned and franchised retail stores | 234,837 | 228,389 | 215,549 |
Truck fleet | 0 | 0 | 4,491 |
Other | 16,495 | 15,606 | 13,484 |
Total rent expense | $ 251,332 | $ 243,995 | $ 233,524 |
SCHEDULE OF MINIMUM FUTURE OBLI
SCHEDULE OF MINIMUM FUTURE OBLIGATIONS FOR NON-CANCELABLE OPERATING LEASES (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Sublease Income | |
2,016 | $ (31,209) |
2,017 | (25,608) |
2,018 | (18,689) |
2,019 | (12,325) |
2,020 | (7,019) |
Thereafter | (8,876) |
Total future obligations | (103,726) |
Total | |
2,016 | 148,932 |
2,017 | 123,097 |
2,018 | 92,153 |
2,019 | 65,517 |
2,020 | 45,637 |
Thereafter | 106,988 |
Total future obligations | 582,324 |
Company-Owned Retail Stores | |
Minimum Future Obligations | |
2,016 | 143,706 |
2,017 | 118,617 |
2,018 | 89,722 |
2,019 | 63,664 |
2,020 | 43,968 |
Thereafter | 96,341 |
Total future obligations | 556,018 |
Franchise Retail Stores | |
Minimum Future Obligations | |
2,016 | 31,209 |
2,017 | 25,608 |
2,018 | 18,689 |
2,019 | 12,325 |
2,020 | 7,019 |
Thereafter | 8,876 |
Total future obligations | 103,726 |
Other | |
Minimum Future Obligations | |
2,016 | 5,226 |
2,017 | 4,480 |
2,018 | 2,431 |
2,019 | 1,853 |
2,020 | 1,669 |
Thereafter | 10,647 |
Total future obligations | $ 26,306 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Feb. 05, 2016USD ($) | Feb. 29, 2012action | Oct. 31, 2011claim | Dec. 31, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014lawsuit |
Commitments and contingencies | |||||||
Amount of future purchase commitments | $ 40,700,000 | ||||||
Liability related to environmental loss contingency recorded | $ 0 | 0 | |||||
Charles Brewer, California Wage and Break Claims | |||||||
Commitments and contingencies | |||||||
Number of lawsuits filed against the company | claim | 8 | ||||||
Litigation settlement, amount | $ 9,500,000 | 6,300,000 | $ 3,200,000 | ||||
Elizabeth Naranjo, California Wage and Break Claims | |||||||
Commitments and contingencies | |||||||
Number of lawsuits filed against the company | action | 8 | ||||||
Attorney General for the State of Oregon | Violations of Oregon Unlawful Trade Practices Act | |||||||
Commitments and contingencies | |||||||
Accrued contingent liability | $ 0 | 0 | |||||
Damages from product defects | |||||||
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 | ||||||
Damages from product defects | DMAA Claims | |||||||
Commitments and contingencies | |||||||
Number of pending lawsuits in which company is named | lawsuit | 28 |
STOCKHOLDER'S EQUITY TREASURY S
STOCKHOLDER'S EQUITY TREASURY STOCK (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 31, 2015 | Aug. 31, 2014 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Treasury stock, authorized amount | $ 1,000,000,000 | ||||
Payments for Repurchase of Common Stock | 479,799,000 | $ 283,226,000 | $ 309,255,000 | ||
August 2014 Stock Repurchase Program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Treasury stock, authorized amount | $ 500,000,000 | ||||
August 2015 Stock Repurchase Program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Treasury stock, authorized amount | $ 500,000,000 | ||||
Treasury stock, remaining authorized amount | $ 427,000,000 |
STOCKHOLDER'S EQUITY PREFERRED
STOCKHOLDER'S EQUITY PREFERRED STOCK (Details) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Equity [Abstract] | |||
Preferred stock, shares authorized | 60,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||
Preferred stock, shares outstanding | 0 | 0 | 0 |
Preferred stock, shares issued | 0 | 0 | 0 |
SCHEDULE OF COMPANY'S BASIC AND
SCHEDULE OF COMPANY'S BASIC AND DILUTIVE WEIGHTED AVERAGE SHARES (Details) - shares shares in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | |||||||||||
Basic weighted average shares | 78,775 | 83,669 | 85,501 | 87,865 | 88,824 | 89,814 | 90,414 | 92,975 | 83,927 | 90,493 | 96,481 |
Effect of dilutive employee stock-based compensation awards | 259 | 425 | 902 | ||||||||
Diluted weighted averages shares | 79,008 | 83,958 | 85,777 | 88,105 | 89,044 | 90,233 | 90,931 | 93,684 | 84,186 | 90,918 | 97,383 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | |||
Unexercised stock options excluded from computation of earnings per share (in shares) | 0.2 | 0.3 | 0.3 |
STOCK-BASED COMPENSATION PLAN82
STOCK-BASED COMPENSATION PLANS (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)plan$ / sharesshares | Dec. 31, 2014USD ($)$ / shares | Dec. 31, 2013USD ($)$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Number of stock-based employee compensation plans | plan | 2 | ||
Non-cash stock-based compensation expense | $ 6,300 | $ 5,900 | $ 7,800 |
Total unrecognized compensation cost related to non-vested stock awards | $ 11,600 | ||
Weighted average period over which compensation cost is expected to be recognized | 1 year 4 months 6 days | ||
Intrinsic value of stock based awards other than options | $ 6,000 | ||
2015 Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Number of shares authorized for issuance | shares | 11,500,000 | ||
Number of shares available for grant | shares | 8,400,000 | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expiration period | 7 years | ||
Vesting period | 4 years | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expiration period | 10 years | ||
Vesting period | 5 years | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Total amount of cash received from the exercise of options | $ 1,700 | 22,200 | 14,600 |
Tax benefit associated with the exercise of awards | 600 | 3,700 | 15,400 |
Exercised | $ 1,970 | $ 13,900 | $ 44,600 |
Options, grants in period, weighted average grant date fair value (in dollars per share) | $ / shares | $ 15.64 | $ 11.08 | $ 16.16 |
Time Vesting Restricted Stock Awards | 2015 Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting period | 3 years | ||
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 47.85 | 43.38 | 50.39 |
Performance Vesting Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting period | 3 years | ||
Performance Vesting Restricted Stock Awards | 2015 Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 49 | $ 44.62 | $ 45.76 |
Performance Vesting Restricted Stock Awards | Minimum | 2015 Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting rights percentage | 0.00% | ||
Performance Vesting Restricted Stock Awards | Maximum | 2015 Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting rights percentage | 200.00% | ||
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Intrinsic value of stock based awards other than options | $ 4,400 | ||
Restricted Stock Awards | 2015 Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Intrinsic value of stock based awards other than options | $ 2,400 | $ 4,300 | $ 3,800 |
STOCK-BASED COMPENSATION PLAN83
STOCK-BASED COMPENSATION PLANS SUMMARY OF SHARES OUTSTANDING UNDER ALL PLANS (Details) - shares | Dec. 31, 2015 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Total share awards outstanding | 1,023,270 | 910,870 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Time-based stock options | 688,083 | 746,533 |
2015 Stock Plan | Time Vesting Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Total non-option stock awards outstanding | 194,271 | 122,681 |
2015 Stock Plan | Performance Vesting Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Total non-option stock awards outstanding | 140,916 | 41,656 |
SUMMARY OF STOCK OPTIONS UNDER
SUMMARY OF STOCK OPTIONS UNDER ALL PLANS (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Total Options | |||
Outstanding at the beginning of the period (in shares) | 746,533 | ||
Granted (in shares) | 50,815 | ||
Exercised (in shares) | (80,183) | ||
Forfeited (in shares) | (29,082) | ||
Outstanding at the end of the period (in shares) | 688,083 | 746,533 | |
Exercisable at the end of the period (in shares) | 394,997 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 26.19 | ||
Granted (in dollars per share) | 41.10 | ||
Exercised (in dollars per share) | 21.75 | ||
Forfeited (in dollars per share) | 27.92 | ||
Outstanding at the end of the period (in dollars per share) | 27.75 | $ 26.19 | |
Exercisable at the end of the period (in dollars per share) | $ 23.44 | ||
Weighted Average Remaining Contractual Term (In Years) | |||
Outstanding at the end of the period | 5 years 4 months 24 days | ||
Exercisable at the end of the period | 4 years 2 months 12 days | ||
Aggregate Intrinsic Value | |||
Outstanding at beginning of period | $ 15,505 | ||
Exercised | 1,970 | $ 13,900 | $ 44,600 |
Outstanding at the end of the period | 4,187 | $ 15,505 | |
Exercisable at the end of the period | $ 3,656 |
SCHEDULE OF ASSUMPTIONS USED IN
SCHEDULE OF ASSUMPTIONS USED IN VALUATION RELATED TO STOCK OPTION GRANTS (Details) - Stock Options | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expected option life (in years) | 6 years 3 months 18 days | 6 years 3 months 18 days | 4 years 9 months 18 days |
Volatility factor percentage of market price, minimum | 31.10% | 37.60% | 35.90% |
Volatility factor percentage of market price, maximum | 38.30% | 37.90% | 40.50% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Dividend yield (as a percent) | 1.50% | 1.50% | 1.00% |
Discount rate (as a percent) | 1.30% | 1.70% | 0.70% |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Dividend yield (as a percent) | 2.40% | 1.90% | 1.40% |
Discount rate (as a percent) | 1.90% | 1.90% | 1.40% |
SUMMARY OF STOCK AWARDS UNDER T
SUMMARY OF STOCK AWARDS UNDER THE 2015 STOCK PLAN (Details) - 2015 Stock Plan - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Time Vesting Restricted Stock Awards | |||
Restricted Stock | |||
Balance at beginning of the period (in shares) | 122,681 | ||
Granted (in shares) | 141,701 | ||
Vested (in shares) | (55,448) | ||
Forfeited (in shares) | (14,663) | ||
Balance at end of the period (in shares) | 194,271 | 122,681 | |
Weighted Average Grant-Date Fair Value | |||
Balance at beginning of the period (in usd per share) | $ 38.04 | ||
Granted (in dollars per share) | 47.85 | $ 43.38 | $ 50.39 |
Vested (in dollars per share) | 35.22 | ||
Forfeited (in dollars per share) | 38.64 | ||
Balance at end of the period (in usd per share) | $ 45.95 | $ 38.04 | |
Performance Vesting Restricted Stock Awards | |||
Restricted Stock | |||
Balance at beginning of the period (in shares) | 41,656 | ||
Granted (in shares) | 106,314 | ||
Vested (in shares) | 0 | ||
Forfeited (in shares) | (7,054) | ||
Balance at end of the period (in shares) | 140,916 | 41,656 | |
Weighted Average Grant-Date Fair Value | |||
Balance at beginning of the period (in usd per share) | $ 44.64 | ||
Granted (in dollars per share) | 49 | $ 44.62 | $ 45.76 |
Vested (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | 46.02 | ||
Balance at end of the period (in usd per share) | $ 47.86 | $ 44.64 |
RETIREMENT PLANS (Details)
RETIREMENT PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Benefit Plan Disclosure | |||
Eligibility for matching contribution for full time employees, period of service (at least, in days) | 30 days | ||
Eligibility for matching contribution for part time employees, period of service (at least, in hours) | 1000 hours | ||
Employer match of employee contributions of first 3% of eligible compensation (as a percent) | 50.00% | ||
Percentage of eligible compensation, matched 50% by employer | 3.00% | ||
Percentage of discretionary contribution made by employer | 50.00% | ||
Percentage of deferral salary contributed by employee | 3.00% | ||
Cash contribution made | $ 1.5 | $ 1.5 | $ 2.4 |
Employer's contribution to deferred compensation plan | $ 0.3 | $ 0.3 | |
Minimum | |||
Defined Benefit Plan Disclosure | |||
Employee contributions (as a percent) | 1.00% | ||
Employee's contribution (as a percent) | 2.00% | ||
Maximum | |||
Defined Benefit Plan Disclosure | |||
Employee contributions (as a percent) | 80.00% | ||
Employee's contribution (as a percent) | 100.00% |
SCHEDULE OF VESTING PERCENTAGE
SCHEDULE OF VESTING PERCENTAGE BASED ON EMPLOYEES MATCH (Details) | 12 Months Ended |
Dec. 31, 2015 | |
0-1 Years | |
Defined Benefit Plan Disclosure | |
Percent vested | 0.00% |
1-2 Years | |
Defined Benefit Plan Disclosure | |
Percent vested | 33.00% |
2-3 Years | |
Defined Benefit Plan Disclosure | |
Percent vested | 66.00% |
3 Years | |
Defined Benefit Plan Disclosure | |
Percent vested | 100.00% |
Minimum | 0-1 Years | |
Defined Benefit Plan Disclosure | |
Years of service | 0 years |
Minimum | 1-2 Years | |
Defined Benefit Plan Disclosure | |
Years of service | 1 year |
Minimum | 2-3 Years | |
Defined Benefit Plan Disclosure | |
Years of service | 2 years |
Minimum | 3 Years | |
Defined Benefit Plan Disclosure | |
Years of service | 3 years |
Maximum | 0-1 Years | |
Defined Benefit Plan Disclosure | |
Years of service | 1 year |
Maximum | 1-2 Years | |
Defined Benefit Plan Disclosure | |
Years of service | 2 years |
Maximum | 2-3 Years | |
Defined Benefit Plan Disclosure | |
Years of service | 3 years |
SEGMENTS (Details)
SEGMENTS (Details) $ in Thousands | Feb. 05, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Segment Reporting [Abstract] | |||||||
Number of reportable segments | segment | 3 | ||||||
Long-lived asset impairments | $ 28,333 | $ 0 | $ 0 | ||||
Discount Supplements | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss on disposition of business | $ 2,700 | ||||||
Charles Brewer, California Wage and Break Claims | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Litigation settlement, amount | $ (9,500) | $ (6,300) | $ (3,200) |
SCHEDULE OF KEY FINANCIAL INFOR
SCHEDULE OF KEY FINANCIAL INFORMATION OF THE SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information | |||||||||||
Revenue | $ 618,201 | $ 672,244 | $ 678,520 | $ 670,247 | $ 607,156 | $ 656,326 | $ 675,216 | $ 674,456 | $ 2,639,212 | $ 2,613,154 | $ 2,626,761 |
Operating income | $ 83,714 | $ 82,150 | $ 117,638 | $ 109,605 | $ 88,481 | $ 108,725 | $ 121,051 | $ 121,255 | 393,107 | 439,512 | 460,498 |
Interest expense, net | 50,936 | 46,708 | 53,029 | ||||||||
Income before income taxes | 342,171 | 392,804 | 407,469 | ||||||||
Depreciation and amortization | 57,237 | 56,337 | 51,814 | ||||||||
Capital expenditures | 45,827 | 70,455 | 50,247 | ||||||||
United States | |||||||||||
Segment Reporting Information | |||||||||||
Revenue | 2,478,687 | 2,440,836 | 2,486,542 | ||||||||
Foreign | |||||||||||
Segment Reporting Information | |||||||||||
Revenue | 160,525 | 172,318 | 140,219 | ||||||||
Operating Segments | |||||||||||
Segment Reporting Information | |||||||||||
Revenue | 2,906,589 | 2,904,374 | 2,945,527 | ||||||||
Operating Segments | Retail | |||||||||||
Segment Reporting Information | |||||||||||
Revenue | 1,945,197 | 1,939,150 | 1,926,770 | ||||||||
Operating income | 308,303 | 348,952 | 362,658 | ||||||||
Depreciation and amortization | 33,405 | 34,653 | 30,769 | ||||||||
Capital expenditures | 30,600 | 36,627 | 34,835 | ||||||||
Operating Segments | Franchise | |||||||||||
Segment Reporting Information | |||||||||||
Revenue | 458,335 | 432,828 | 436,917 | ||||||||
Operating income | 164,525 | 157,342 | 153,545 | ||||||||
Depreciation and amortization | 3,047 | 3,020 | 3,004 | ||||||||
Capital expenditures | 221 | 222 | 229 | ||||||||
Operating Segments | Manufacturing/Wholesale | |||||||||||
Segment Reporting Information | |||||||||||
Revenue | 503,057 | 532,396 | 581,840 | ||||||||
Operating income | 90,292 | 89,921 | 104,709 | ||||||||
Depreciation and amortization | 10,582 | 10,725 | 11,003 | ||||||||
Capital expenditures | 5,662 | 5,903 | 8,464 | ||||||||
Operating Segments | Manufacturing/Wholesale | Intersegment revenues | |||||||||||
Segment Reporting Information | |||||||||||
Revenue | 267,377 | 291,220 | 318,766 | ||||||||
Operating Segments | Manufacturing/Wholesale | Third party | |||||||||||
Segment Reporting Information | |||||||||||
Revenue | 235,680 | 241,176 | 263,074 | ||||||||
Intersegment Eliminations | |||||||||||
Segment Reporting Information | |||||||||||
Revenue | (267,377) | (291,220) | (318,766) | ||||||||
Corporate, Non-Segment | |||||||||||
Segment Reporting Information | |||||||||||
Operating income | (170,013) | (156,703) | (160,414) | ||||||||
Warehousing and distribution costs | (71,673) | (68,283) | (77,101) | ||||||||
Corporate costs | (98,340) | (88,420) | (83,313) | ||||||||
Depreciation and amortization | 10,203 | 7,939 | 7,038 | ||||||||
Capital expenditures | $ 9,344 | $ 27,703 | $ 6,719 |
SCHEDULE OF KEY FINANCIAL INF91
SCHEDULE OF KEY FINANCIAL INFORMATION OF THE SEGMENTS (Details 2) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Segment Reporting Information | ||
Total assets | $ 2,552,019 | $ 2,677,800 |
Property, plant, and equipment, net | 230,535 | 232,397 |
Operating Segments | Retail | ||
Segment Reporting Information | ||
Total assets | 1,505,286 | 1,574,332 |
Operating Segments | Franchise | ||
Segment Reporting Information | ||
Total assets | 512,102 | 511,701 |
Operating Segments | Manufacturing/Wholesale | ||
Segment Reporting Information | ||
Total assets | 400,048 | 406,797 |
Operating Segments | Other | ||
Segment Reporting Information | ||
Total assets | 134,583 | 184,970 |
United States | ||
Segment Reporting Information | ||
Property, plant, and equipment, net | 221,049 | 223,068 |
Foreign | ||
Segment Reporting Information | ||
Property, plant, and equipment, net | $ 9,486 | $ 9,329 |
SCHEDULE OF SALES BY GENERAL PR
SCHEDULE OF SALES BY GENERAL PRODUCT CATEGORY (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue from External Customer | |||||||||||
Revenue | $ 618,201 | $ 672,244 | $ 678,520 | $ 670,247 | $ 607,156 | $ 656,326 | $ 675,216 | $ 674,456 | $ 2,639,212 | $ 2,613,154 | $ 2,626,761 |
Operating Segments | |||||||||||
Revenue from External Customer | |||||||||||
Revenue | 2,906,589 | 2,904,374 | 2,945,527 | ||||||||
Operating Segments | Retail | |||||||||||
Revenue from External Customer | |||||||||||
Revenue | 1,945,197 | 1,939,150 | 1,926,770 | ||||||||
Operating Segments | Retail | VMHS | |||||||||||
Revenue from External Customer | |||||||||||
Revenue | 626,626 | 649,110 | 663,625 | ||||||||
Operating Segments | Retail | Sports nutrition | |||||||||||
Revenue from External Customer | |||||||||||
Revenue | 778,813 | 759,819 | 764,908 | ||||||||
Operating Segments | Retail | Diet | |||||||||||
Revenue from External Customer | |||||||||||
Revenue | 201,400 | 193,830 | 198,834 | ||||||||
Operating Segments | Retail | Other wellness | |||||||||||
Revenue from External Customer | |||||||||||
Revenue | 108,500 | 110,594 | 92,123 | ||||||||
Operating Segments | Retail | Other | |||||||||||
Revenue from External Customer | |||||||||||
Revenue | $ 229,858 | $ 225,797 | $ 207,280 |
SCHEDULE OF FRANCHISE REVENUE B
SCHEDULE OF FRANCHISE REVENUE BY TYPE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information | |||
Franchise revenue | $ 458,335 | $ 432,828 | $ 436,917 |
Product sales | |||
Segment Reporting Information | |||
Franchise revenue | 387,716 | 358,247 | 363,810 |
Royalties | |||
Segment Reporting Information | |||
Franchise revenue | 58,306 | 59,561 | 58,247 |
Franchise fees | |||
Segment Reporting Information | |||
Franchise revenue | 6,129 | 7,076 | 7,936 |
Other | |||
Segment Reporting Information | |||
Franchise revenue | $ 6,184 | $ 7,944 | $ 6,924 |
SUMMARY OF QUARTERLY RESULTS (D
SUMMARY OF QUARTERLY RESULTS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Accrued payroll liability error in prior period | $ 31,091 | $ 24,958 | $ 31,091 | $ 24,958 | |||||||
Total revenue | 618,201 | $ 672,244 | $ 678,520 | $ 670,247 | 607,156 | $ 656,326 | $ 675,216 | $ 674,456 | 2,639,212 | 2,613,154 | $ 2,626,761 |
Gross profit | 228,234 | 250,644 | 256,332 | 249,433 | 220,193 | 247,748 | 258,580 | 253,719 | 984,643 | 980,240 | 990,463 |
Operating income | 83,714 | 82,150 | 117,638 | 109,605 | 88,481 | 108,725 | 121,051 | 121,255 | 393,107 | 439,512 | 460,498 |
Net income | $ 42,922 | $ 45,750 | $ 67,357 | $ 63,270 | $ 51,768 | $ 64,314 | $ 69,887 | $ 69,903 | $ 219,299 | $ 255,872 | $ 265,021 |
Weighted average shares outstanding: | |||||||||||
Basic (in shares) | 78,775 | 83,669 | 85,501 | 87,865 | 88,824 | 89,814 | 90,414 | 92,975 | 83,927 | 90,493 | 96,481 |
Diluted (in shares) | 79,008 | 83,958 | 85,777 | 88,105 | 89,044 | 90,233 | 90,931 | 93,684 | 84,186 | 90,918 | 97,383 |
Earnings per share: | |||||||||||
Basic (in usd per share) | $ 0.54 | $ 0.55 | $ 0.79 | $ 0.72 | $ 0.58 | $ 0.72 | $ 0.77 | $ 0.75 | $ 2.61 | $ 2.83 | $ 2.75 |
Diluted (in usd per share) | $ 0.54 | $ 0.54 | $ 0.79 | $ 0.72 | $ 0.58 | $ 0.71 | $ 0.77 | $ 0.75 | $ 2.60 | $ 2.81 | $ 2.72 |
Immaterial Error Correction | |||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Accrued payroll liability error in prior period | $ 2,800 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | Jan. 28, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Subsequent Events | ||||
Common stock dividends (in USD per share) | $ 0.72 | $ 0.64 | $ 0.60 | |
Subsequent Event | Class A Common Stock | ||||
Subsequent Events | ||||
Common stock dividends (in USD per share) | $ 0.20 |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF GNC HOLDINGS, INC. (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current assets: | ||||
Cash and cash equivalents | $ 56,462 | $ 133,834 | $ 226,217 | $ 158,541 |
Prepaids and other current assets | 27,114 | 29,394 | ||
Total current assets | 792,863 | 876,343 | ||
Long-term assets: | ||||
Total long-term assets | 1,759,156 | 1,801,457 | ||
Total assets | 2,552,019 | 2,677,800 | ||
Current liabilities: | ||||
Accounts payable | 152,099 | 129,064 | ||
Deferred revenue and other current liabilities | 121,062 | 106,539 | ||
Total current liabilities | 277,711 | 240,343 | ||
Deferred tax liabilities | 304,491 | 282,842 | ||
Total long-term liabilities | 1,805,747 | 1,681,414 | ||
Total liabilities | 2,083,458 | 1,921,757 | ||
Stockholders' equity: | ||||
Class A common stock | 114 | 113 | ||
Additional paid-in capital | 916,128 | 877,566 | ||
Retained earnings | 1,058,148 | 898,574 | ||
Treasury stock, at cost | (1,496,180) | (1,016,381) | ||
Accumulated other comprehensive loss | (9,649) | (3,829) | ||
Total stockholders' equity | 468,561 | 756,043 | 815,579 | 882,039 |
Total liabilities and stockholders' equity | 2,552,019 | 2,677,800 | ||
GNC Holdings | ||||
Current assets: | ||||
Cash and cash equivalents | 1 | 1 | $ 282 | $ 880 |
Prepaids and other current assets | 385 | 343 | ||
Total current assets | 386 | 344 | ||
Long-term assets: | ||||
Deferred financing fees | 248 | 0 | ||
Intercompany receivable | 164,300 | 0 | ||
Investment in subsidiaries | 709,409 | 905,524 | ||
Total long-term assets | 873,957 | 905,524 | ||
Total assets | 874,343 | 905,868 | ||
Current liabilities: | ||||
Accounts payable | 22 | 0 | ||
Intercompany payable | 3,502 | 1,466 | ||
Deferred revenue and other current liabilities | 1,995 | 189 | ||
Total current liabilities | 5,519 | 1,655 | ||
Deferred tax liabilities | 16,599 | 0 | ||
Convertible senior notes | 235,085 | 0 | ||
Intercompany loan | 148,579 | 148,170 | ||
Total long-term liabilities | 400,263 | 148,170 | ||
Total liabilities | 405,782 | 149,825 | ||
Stockholders' equity: | ||||
Additional paid-in capital | 916,128 | 877,566 | ||
Retained earnings | 1,058,148 | 898,574 | ||
Treasury stock, at cost | (1,496,180) | (1,016,381) | ||
Accumulated other comprehensive loss | (9,649) | (3,829) | ||
Total stockholders' equity | 468,561 | 756,043 | ||
Total liabilities and stockholders' equity | 874,343 | 905,868 | ||
Class A Common Stock | GNC Holdings | ||||
Stockholders' equity: | ||||
Class A common stock | $ 114 | $ 113 |
CONDENSED FINANCIAL INFORMATI97
CONDENSED FINANCIAL INFORMATION OF GNC HOLDINGS, INC. (Details 2) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Condensed Financial Statements | |||||||||||
Operating income | $ 83,714 | $ 82,150 | $ 117,638 | $ 109,605 | $ 88,481 | $ 108,725 | $ 121,051 | $ 121,255 | $ 393,107 | $ 439,512 | $ 460,498 |
Interest expense, net | 50,936 | 46,708 | 53,029 | ||||||||
Income before income taxes | 342,171 | 392,804 | 407,469 | ||||||||
Income tax benefit | 122,872 | 136,932 | 142,448 | ||||||||
Net income | $ 42,922 | $ 45,750 | $ 67,357 | $ 63,270 | $ 51,768 | $ 64,314 | $ 69,887 | $ 69,903 | 219,299 | 255,872 | 265,021 |
Other comprehensive loss | (5,820) | (5,784) | (1,092) | ||||||||
Comprehensive income | $ 213,479 | $ 250,088 | $ 263,929 | ||||||||
Earning per share: | |||||||||||
Basic (in usd per share) | $ 0.54 | $ 0.55 | $ 0.79 | $ 0.72 | $ 0.58 | $ 0.72 | $ 0.77 | $ 0.75 | $ 2.61 | $ 2.83 | $ 2.75 |
Diluted (in usd per share) | $ 0.54 | $ 0.54 | $ 0.79 | $ 0.72 | $ 0.58 | $ 0.71 | $ 0.77 | $ 0.75 | $ 2.60 | $ 2.81 | $ 2.72 |
Weighted average common shares outstanding (Note 13): | |||||||||||
Basic (in shares) | 78,775 | 83,669 | 85,501 | 87,865 | 88,824 | 89,814 | 90,414 | 92,975 | 83,927 | 90,493 | 96,481 |
Diluted (in shares) | 79,008 | 83,958 | 85,777 | 88,105 | 89,044 | 90,233 | 90,931 | 93,684 | 84,186 | 90,918 | 97,383 |
Common stock dividends (in USD per share) | $ 0.72 | $ 0.64 | $ 0.60 | ||||||||
GNC Holdings | |||||||||||
Condensed Financial Statements | |||||||||||
Selling, general and administrative | $ 1,645 | $ 1,552 | $ 749 | ||||||||
Subsidiary income | 223,090 | 257,045 | 265,522 | ||||||||
Operating income | 221,445 | 255,493 | 264,773 | ||||||||
Interest expense, net | 4,241 | 153 | 44 | ||||||||
Income before income taxes | 217,204 | 255,340 | 264,729 | ||||||||
Income tax benefit | (2,095) | (532) | (292) | ||||||||
Net income | 219,299 | 255,872 | 265,021 | ||||||||
Foreign currency translation loss | (7,439) | (5,784) | (1,092) | ||||||||
Other comprehensive loss | $ (5,820) | $ (5,784) | $ (1,092) | ||||||||
Weighted average common shares outstanding (Note 13): | |||||||||||
Basic (in shares) | 83,927 | 90,493 | 96,481 | ||||||||
Diluted (in shares) | 84,186 | 90,918 | 97,383 | ||||||||
Common stock dividends (in USD per share) | $ 0.72 | $ 0.64 | $ 0.60 | ||||||||
Release of cumulative translation loss to earnings related to substantial liquidation of Discount Supplements | GNC Holdings | |||||||||||
Condensed Financial Statements | |||||||||||
Foreign currency translation loss | $ 1,619 | $ 0 | $ 0 |
CONDENSED FINANCIAL INFORMATI98
CONDENSED FINANCIAL INFORMATION OF GNC HOLDINGS, INC. (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||||||||||
Net income | $ 42,922 | $ 45,750 | $ 67,357 | $ 63,270 | $ 51,768 | $ 64,314 | $ 69,887 | $ 69,903 | $ 219,299 | $ 255,872 | $ 265,021 |
Other operating activities | 5,298 | 13,330 | (1,161) | ||||||||
Net cash provided by operating activities | 354,533 | 303,785 | 239,446 | ||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of convertible notes | 0 | 0 | 249,552 | ||||||||
Debt issuance costs on convertible senior notes | (8,225) | 0 | (2,397) | ||||||||
Proceeds from exercise of stock options | (1,744) | (22,170) | (14,588) | ||||||||
Minimum tax withholding requirements | (574) | (762) | (1,327) | ||||||||
Repurchase of treasury stock | (479,799) | (283,226) | (309,255) | ||||||||
Dividend payment | (59,648) | (57,491) | (57,437) | ||||||||
Net cash used in financing activities | (384,458) | (321,009) | (94,286) | ||||||||
Net (decrease) increase in cash and cash equivalents | (77,372) | (92,383) | 67,676 | ||||||||
Beginning balance, cash and cash equivalents | 133,834 | 226,217 | 133,834 | 226,217 | 158,541 | ||||||
Ending balance, cash and cash equivalents | 56,462 | 133,834 | 56,462 | 133,834 | 226,217 | ||||||
GNC Holdings | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | 219,299 | 255,872 | 265,021 | ||||||||
Equity in income of subsidiaries | (223,090) | (257,045) | (265,522) | ||||||||
Dividends received | 422,355 | 317,808 | 289,300 | ||||||||
Other operating activities | 4,738 | 2,393 | 1,334 | ||||||||
Net cash provided by operating activities | 423,302 | 319,028 | 290,133 | ||||||||
Cash flows from financing activities: | |||||||||||
Loan from a subsidiary | 0 | 0 | 62,700 | ||||||||
Loan to a subsidiary | (164,300) | 0 | 0 | ||||||||
Proceeds from issuance of convertible notes | 287,500 | 0 | 0 | ||||||||
Debt issuance costs on convertible senior notes | (8,225) | 0 | 0 | ||||||||
Proceeds from exercise of stock options | (1,744) | (22,170) | (14,588) | ||||||||
Minimum tax withholding requirements | (574) | (762) | (1,327) | ||||||||
Repurchase of treasury stock | (479,799) | (283,226) | (309,255) | ||||||||
Dividend payment | (59,648) | (57,491) | (57,437) | ||||||||
Net cash used in financing activities | (423,302) | (319,309) | (290,731) | ||||||||
Net (decrease) increase in cash and cash equivalents | 0 | (281) | (598) | ||||||||
Beginning balance, cash and cash equivalents | $ 1 | $ 282 | 1 | 282 | 880 | ||||||
Ending balance, cash and cash equivalents | $ 1 | $ 1 | $ 1 | $ 1 | $ 282 |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for doubtful accounts | |||
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Period | $ 6,192 | $ 1,890 | $ 2,178 |
Charged to Costs and Expenses | 2,679 | 4,535 | 4,241 |
Deductions | (4,744) | (233) | (4,529) |
Balance at End of Period | 4,127 | 6,192 | 1,890 |
Reserve for sales returns | |||
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Period | 4,949 | 4,966 | 4,276 |
Charged to Costs and Expenses | 67,283 | 70,075 | 70,308 |
Deductions | (67,385) | (70,092) | (69,618) |
Balance at End of Period | 4,847 | 4,949 | 4,966 |
Tax valuation allowances | |||
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Period | 1,144 | 2,727 | 4,176 |
Charged to Costs and Expenses | 1,771 | 579 | 0 |
Deductions | 0 | (2,162) | (1,449) |
Balance at End of Period | $ 2,915 | $ 1,144 | $ 2,727 |