Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 22, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | GNC HOLDINGS, INC. | |
Entity Central Index Key | 1,502,034 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 68,367,171 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q1 |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 60,999 | $ 56,462 |
Receivables, net | 126,898 | 142,486 |
Inventory | 562,868 | 555,885 |
Deferred income taxes | 10,926 | 10,916 |
Prepaid and other current assets | 49,701 | 27,114 |
Total current assets | 811,392 | 792,863 |
Long-term assets: | ||
Goodwill | 646,343 | 649,892 |
Brands | 720,000 | 720,000 |
Other intangible assets, net | 117,158 | 119,204 |
Property, plant and equipment, net | 224,818 | 230,535 |
Deferred income taxes | 3,358 | 3,358 |
Other long-term assets | 34,476 | 38,555 |
Total long-term assets | 1,746,153 | 1,761,544 |
Total assets | 2,557,545 | 2,554,407 |
Current liabilities: | ||
Accounts payable | 208,666 | 152,099 |
Current portion of long-term debt | 4,550 | 4,550 |
Deferred revenue and other current liabilities | 154,586 | 121,062 |
Total current liabilities | 367,802 | 277,711 |
Long-term liabilities: | ||
Long-term debt | 1,536,390 | 1,444,628 |
Deferred income taxes | 305,453 | 304,491 |
Other long-term liabilities | 58,076 | 59,016 |
Total long-term liabilities | 1,899,919 | 1,808,135 |
Total liabilities | $ 2,267,721 | $ 2,085,846 |
Contingencies | ||
Stockholders’ equity: | ||
Common stock | $ 114 | $ 114 |
Additional paid-in capital | 917,005 | 916,128 |
Retained earnings | 1,094,550 | 1,058,148 |
Treasury stock, at cost | (1,715,121) | (1,496,180) |
Accumulated other comprehensive loss | (6,724) | (9,649) |
Total stockholders’ equity | 289,824 | 468,561 |
Total liabilities and stockholders’ equity | $ 2,557,545 | $ 2,554,407 |
Consolidated Statements of Inco
Consolidated Statements of Income (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Revenue | $ 668,905 | $ 681,266 |
Cost of sales, including warehousing, distribution and occupancy | 433,060 | 431,833 |
Gross profit | 235,845 | 249,433 |
Selling, general, and administrative | 143,072 | 139,768 |
Gains on refranchising (Note 4) | (1,015) | (338) |
Other (income) loss, net | (277) | 398 |
Operating income | 94,065 | 109,605 |
Interest expense, net | 14,443 | 11,515 |
Income before income taxes | 79,622 | 98,090 |
Income tax expense | 28,807 | 34,820 |
Net income | $ 50,815 | $ 63,270 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.70 | $ 0.72 |
Diluted (in dollars per share) | $ 0.69 | $ 0.72 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 73,078 | 87,865 |
Diluted (in shares) | 73,373 | 88,105 |
Dividends declared per share: (in dollars per share) | $ 0.2 | $ 0.18 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 50,815 | $ 63,270 |
Other comprehensive income (loss): | ||
Foreign currency translation gain (loss) | 2,925 | (5,311) |
Comprehensive income | $ 53,740 | $ 57,959 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2014 | 88,335 | |||||
Beginning balance at Dec. 31, 2014 | $ 756,043 | $ 113 | $ (1,016,381) | $ 877,566 | $ 898,574 | $ (3,829) |
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income (loss) | 57,959 | 63,270 | (5,311) | |||
Purchase of treasury stock (in shares) | (1,394) | |||||
Purchase of treasury stock | (62,342) | (62,342) | ||||
Dividends declared | (15,797) | (15,797) | ||||
Exercise of stock options (in shares) | 41 | |||||
Exercise of stock options | 897 | $ 1 | 896 | |||
Restricted stock awards (in shares) | 210 | |||||
Minimum tax withholding requirements (in shares) | (5) | |||||
Minimum tax withholding requirements | (216) | (216) | ||||
Net excess tax benefits from stock-based compensation | 320 | 320 | ||||
Excess tax benefits from stock-based compensation (in shares) | 0 | |||||
Stock-based compensation | 1,305 | 1,305 | ||||
Ending balance (in shares) at Mar. 31, 2015 | 87,187 | |||||
Ending balance at Mar. 31, 2015 | 738,169 | $ 114 | (1,078,723) | 879,871 | 946,047 | (9,140) |
Beginning balance (in shares) at Dec. 31, 2015 | 76,276 | |||||
Beginning balance at Dec. 31, 2015 | 468,561 | $ 114 | (1,496,180) | 916,128 | 1,058,148 | (9,649) |
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income (loss) | 53,740 | 50,815 | 2,925 | |||
Purchase of treasury stock (in shares) | (7,599) | |||||
Purchase of treasury stock | (218,941) | (218,941) | ||||
Dividends declared | (14,413) | (14,413) | ||||
Exercise of stock options (in shares) | 20 | |||||
Exercise of stock options | 292 | 292 | ||||
Restricted stock awards (in shares) | 16 | |||||
Minimum tax withholding requirements (in shares) | (19) | |||||
Minimum tax withholding requirements | (519) | (519) | ||||
Net excess tax benefits from stock-based compensation | (315) | (315) | ||||
Stock-based compensation | 1,419 | 1,419 | ||||
Ending balance (in shares) at Mar. 31, 2016 | 68,694 | |||||
Ending balance at Mar. 31, 2016 | $ 289,824 | $ 114 | $ (1,715,121) | $ 917,005 | $ 1,094,550 | $ (6,724) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 50,815 | $ 63,270 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 14,045 | 14,430 |
Amortization of debt costs | 3,099 | 463 |
Stock-based compensation | 1,419 | 1,305 |
Gains on refranchising (Note 4) | (1,015) | (338) |
Changes in assets and liabilities: | ||
Decrease in receivables | 17,402 | 1,597 |
(Increase) decrease in inventory | (13,021) | 10,942 |
(Increase) in prepaid and other current assets | (9,056) | (10,978) |
Increase in accounts payable | 41,364 | 22,482 |
Increase in deferred revenue and accrued liabilities | 33,250 | 12,976 |
Other operating activities | 4,023 | 788 |
Net cash provided by operating activities | 142,325 | 116,937 |
Cash flows from investing activities: | ||
Capital expenditures | (10,542) | (7,519) |
Refranchising proceeds | 830 | 551 |
Store acquisition costs | (519) | (278) |
Net cash used in investing activities | (10,231) | (7,246) |
Cash flows from financing activities: | ||
Borrowings under revolving credit facility | 90,000 | 0 |
Payments on long-term debt | (1,138) | (1,199) |
Debt issuance costs | (1,712) | 0 |
Proceeds from exercise of stock options | 292 | 896 |
Excess tax benefits from stock-based compensation | 0 | 320 |
Minimum tax withholding requirements | (519) | (216) |
Cash paid for treasury stock | (201,002) | (60,557) |
Dividends paid to shareholders | (14,274) | (15,756) |
Net cash used in financing activities | (128,353) | (76,512) |
Effect of exchange rate changes on cash and cash equivalents | 796 | (87) |
Net increase in cash and cash equivalents | 4,537 | 33,092 |
Beginning balance, cash and cash equivalents | 56,462 | 133,834 |
Ending balance, cash and cash equivalents | 60,999 | 166,926 |
Non-cash investing and financing activities: | ||
Accrued capital expenditures | 2,871 | 2,130 |
Accrued treasury stock | $ 17,939 | $ 1,783 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 3 Months Ended |
Mar. 31, 2016 | |
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, wellness and performance products, including protein, performance supplements, weight management supplements, vitamins, herbs and greens, wellness supplements, health and beauty, food and drink and other general merchandise. 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, Franchise, 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 its websites, GNC.com and LuckyVitamin.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 various federal agencies, including the Food and Drug Administration, the Federal Trade Commission, the Consumer Product Safety Commission, the United States Department of Agriculture and the Environmental Protection Agency. These activities are also regulated by various agencies of the states and localities in which the Company’s products are sold. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements, which have been prepared in accordance with the applicable rules of the Securities and Exchange Commission, include all adjustments (consisting of a normal and recurring nature) that management considers necessary to fairly state the Company's results of operations, financial position and cash flows. The December 31, 2015 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2015 ("2015 10-K"). Interim results are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2016 . Revision for Sublease Rent Income The Company revised its presentation of sublease income received from its franchisees for prior year periods to conform to the current period’s presentation with no impact on previously reported gross profit, operating income, net income, shareholders’ equity or cash flow from operations. The Company is the primary obligor of the leases for the majority of its franchise store locations and makes rental payments directly to the landlord and separately bills the franchisee for reimbursement. Accordingly, sublease rental income received from franchisees is now appropriately presented as “Revenue” compared with the previous presentation as a reduction to occupancy expense in “Cost of sales, including warehousing, distribution, and occupancy" on the consolidated statements of income. In addition, the deferred rent asset associated with recognizing sublease rental income for lease agreements that contain escalation clauses, which are fixed and determinable, on a straight-line basis is now appropriately presented in “Other long-term assets” compared with the previous presentation as a reduction to the deferred rent liability in “Other long-term liabilities" on the consolidated balance sheets. This revision is not material to prior periods. The following table includes the revisions to the consolidated statements of income for the interim periods during 2015 and 2014: For the Three Months Ended Year Ended March 31 June 30 September 30 December 31 December 31 2015: (in thousands) Revenue: Prior to revision $ 670,247 $ 678,520 $ 672,244 $ 618,201 $ 2,639,212 Revision 11,019 11,044 11,114 10,909 44,086 As Revised $ 681,266 $ 689,564 $ 683,358 $ 629,110 $ 2,683,298 Cost of sales, including warehousing, distribution and occupancy: Prior to revision $ 420,814 $ 422,188 $ 421,600 $ 389,967 $ 1,654,569 Revision 11,019 11,044 11,114 10,909 44,086 As Revised $ 431,833 $ 433,232 $ 432,714 $ 400,876 $ 1,698,655 2014: Revenue: Prior to revision $ 674,456 $ 675,216 $ 656,326 $ 607,156 $ 2,613,154 Revision 10,122 10,321 10,585 10,824 41,852 As Revised $ 684,578 $ 685,537 $ 666,911 $ 617,980 $ 2,655,006 Cost of sales, including warehousing, distribution and occupancy: Prior to revision $ 420,737 $ 416,636 $ 408,578 $ 386,963 $ 1,632,914 Revision 10,122 10,321 10,585 10,824 41,852 As Revised $ 430,859 $ 426,957 $ 419,163 $ 397,787 $ 1,674,766 The following table includes the revision to the consolidated balance sheet: December 31, 2015 Other long-term assets: (in thousands) Prior to revision (*) $ 32,891 Revision 5,664 As Revised $ 38,555 Other long-term liabilities: Prior to revision $ 53,352 Revision 5,664 As Revised $ 59,016 (*) Includes the adoption of ASU 2015-03 and 2015-15 relating to the presentation of deferred financing fees as described below, which reclassified $ 3.3 million of debt issuance costs from "Other long-term assets" to "Long-term debt" at December 31, 2015 on the consolidated balance sheet. Correction of Prior Year 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. 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 three months ended March 31, 2015. This correction had no impact on cash flows from operations for the prior year quarter. Recently Adopted Accounting Pronouncements In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2015-03, which requires an entity to present debt issuance costs related to a recognized debt liability as a direct reduction 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. In August 2015, the FASB subsequently issued ASU 2015-15, which clarifies that ASU 2015-03 does not address the presentation of debt issuance costs related to line-of-credit arrangements. This standard is effective for fiscal years beginning after December 15, 2015. Accordingly, the Company adopted these standards during the first quarter of fiscal 2016, with retrospective application. Net debt issuance costs in the amount of $3.3 million , which were previously classified as "Other long-term assets" at December 31, 2015, were reclassified as a reduction to "Long-term debt" on the Company's consolidated balance sheet to conform to the current year presentation. Recently Issued Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, which includes multiple provisions intended to simplify various aspects of accounting and reporting for share-based payments. This standard is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2016. The Company is currently evaluating the impact this guidance will have on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, which requires an entity to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about the entity's leasing arrangements. This standard is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2018. The Company is currently evaluating the impact this guidance will have on the Company's consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, which requires an entity to classify deferred tax assets and liabilities as noncurrent on the balance sheet. 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 and the retail inventory method 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 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. Other Revisions In addition to the sublease rent revision and the adoption of ASU 2015-03 as explained above, certain amounts in the consolidated financial statements for prior year periods have been revised to conform to the current period's presentation. The impact to prior periods of these revisions was not significant with no impact on previously reported operating income, net income, cash flows from operations or stockholders' equity. |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY The net realizable value of inventory consisted of the following: March 31, 2016 December 31, 2015 (in thousands) Finished product ready for sale $ 497,682 $ 487,075 Work-in-process, bulk product and raw materials 59,200 62,242 Packaging supplies 5,986 6,568 Total inventory $ 562,868 $ 555,885 |
REFRANCHISING
REFRANCHISING | 3 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
REFRANCHISING | REFRANCHISING Held for Sale The Company classifies assets as held for sale when it commits to a plan to dispose of the assets by refranchising specific stores in their current condition at a price that is reasonable, and the Company believes completing the sale within one year is probable without significant changes. Assets held for sale are recorded at the lower of their carrying value or fair value, less costs to sell and depreciation is ceased on assets at the time they are classified as held for sale. The Company has begun to execute its previously announced refranchising strategy, which includes increasing the proportion of its domestic stores that are franchise locations. In March 2016, the Company completed an asset purchase agreement to sell 84 of its company-owned stores to a franchisee with the sale expected to occur in the second quarter of 2016. The Company also expects to complete a sale of 10 of its stores to another franchisee in 2016, half of which are expected to close in the second quarter. As of March 31, 2016, the Company classified as held for sale, within “Prepaid and other current assets” in the accompanying consolidated balance sheet, the applicable assets of 94 company-owned stores the Company expects to sell during the next 12 months as described above with a corresponding reduction to inventory, goodwill and property, plant and equipment, net. The fair values of these assets exceeded their respective carrying values. The following summarizes the financial statement carrying amounts of assets as held for sale at March 31, 2016: (in thousands) Inventory $ 7,803 Goodwill 3,849 Property, plant and equipment, net 1,736 Total held for sale assets $ 13,388 Gains on Refranchising Refranchising pre-tax gains of approximately $20 million are expected to be recorded associated with the sale of 94 company-owned stores as explained above, the majority of which will be recognized in the second quarter of 2016. These gains are calculated by subtracting the carrying value of applicable assets disposed of from the sales proceeds. In addition, the initial franchise fee received is included in the gain along with any other costs incurred by the Company to get the underlying assets ready for sale. The Company recognizes gains on refranchising after the asset purchase agreement is signed, the franchisee has taken possession of the store and management is satisfied that the franchisee can meet its financial obligations. Gains of $ 1.0 million and $ 0.3 million were recorded in the current quarter and prior year quarter, respectively. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consisted of the following: March 31, December 31, (in thousands) Term Loan Facility (net of $2.4 million and $3.3 million discount) $ 1,173,398 $ 1,174,369 Revolving Credit Facility 133,000 43,000 Notes 237,581 235,085 Debt issuance costs (3,039 ) (3,276 ) Total debt 1,540,940 1,449,178 Less: current maturities (4,550 ) (4,550 ) Long-term debt $ 1,536,390 $ 1,444,628 The Company maintains a $1.2 billion term loan facility (the “Term Loan Facility”) that matures in March 2019. The Company also maintains a $300.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Credit Facility”) that matures in September 2018 as described in more detail below. 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. At March 31, 2016 and December 31, 2015 , the interest rate under the Term Loan Facility was 3.25% . The Revolving Credit Facility had a weighted average interest rate of 2.7% and 2.6% at March 31, 2016 and December 31, 2015 , respectively. At March 31, 2016 and December 31, 2015 , the commitment fee on the undrawn portion of the Revolving Credit Facility was 0.5% , and the fee on outstanding letters of credit was 2.50% . Refinancing of Revolving Credit Facility The Company amended the Revolving Credit Facility on March 4, 2016, to extend its maturity from March 2017 to September 2018 and increase total availability from $ 130.0 million to $ 300.0 million . In connection with this transaction, the Company incurred $ 1.7 million of costs, which were capitalized as deferred financing fees within "Other long-term assets" and will be amortized to interest expense over the new term of the Revolving Credit Facility. At March 31, 2016 , the Company had $ 161.4 million available under the Revolving Credit Facility, after giving effect to $ 133.0 million of borrowings outstanding (including $ 90.0 million drawn in the current quarter) and $ 5.6 million utilized to secure letters of credit. Convertible Debt The Notes consist of the following components: March 31, 2016 December 31, 2015 (in thousands) Liability component Principal $ 287,500 $ 287,500 Conversion feature (44,039 ) (46,271 ) Discount related to debt issuance costs (5,880 ) (6,144 ) Net carrying amount $ 237,581 $ 235,085 Equity component Conversion feature $ 49,680 $ 49,680 Debt issuance costs (1,421 ) (1,421 ) Deferred taxes (17,750 ) (17,750 ) Net amount recorded in additional paid-in capital $ 30,509 $ 30,509 Interest Expense Interest expense consisted of the following: Three months ended March 31, 2016 2015 (in thousands) Senior Credit Facility: Term Loan Facility coupon $ 9,666 $ 10,932 Revolver 616 168 Amortization of discount and debt issuance costs 592 463 Total Senior Credit Facility 10,874 11,563 Notes: Coupon 1,078 — Amortization of conversion feature 2,232 — Amortization of discount and debt issuance costs 275 — Total Notes 3,585 — Interest income and other (16 ) (48 ) Interest expense, net $ 14,443 $ 11,515 |
FAIR VALUE MEASUREMENTS AND FIN
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [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 Term Loan Facility and Notes (excluding the equity component classified in stockholders' equity) were as follows: March 31, 2016 December 31, 2015 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Term Loan Facility $ 1,173,398 $ 1,163,131 $ 1,174,369 $ 1,145,010 Notes 237,581 194,222 235,085 188,940 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. |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES Litigation The Company is engaged in various legal actions, claims and proceedings arising in the normal course of business, including claims related to breach of contracts, product 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 product 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 March 31, 2016, 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 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 Claims. 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's 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. Following a hearing on April 19, 2016, the Court preliminarily approved the settlement agreement, which remains subject to final Court approval. 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 March 31, 2016, 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 is scheduled for July 11, 2016. As of March 31, 2016, 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 probable 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. Environmental Compliance In March 2008, the South Carolina Department of Health and Environmental Control (the "DHEC") requested that the Company investigate contamination associated with historical activities at its South Carolina facility. These investigations have identified chlorinated solvent impacts in soils and groundwater that extend offsite from the facility. The Company entered into a Voluntary Cleanup Contract with the DHEC regarding the matter on September 24, 2012. Pursuant to such contract, the Company is completing additional investigations with the DHEC's approval. At this stage of the investigation, however, it is not possible to estimate the timing and extent of any remedial action that may be required, the ultimate cost of remediation, or the amount of the Company's potential liability, therefore no liability is recorded. In addition to the foregoing, the Company is subject to numerous federal, state, local and foreign environmental and health and safety laws and regulations governing its operations, including the handling, transportation and disposal of the Company's non-hazardous and hazardous substances and wastes, as well as emissions and discharges from its operations into the environment, including discharges to air, surface water and groundwater. Failure to comply with such laws and regulations could result in costs for remedial actions, penalties or the imposition of other liabilities. New laws, changes in existing laws or the interpretation thereof, or the development of new facts or changes in their processes could also cause the Company to incur additional capital and operating expenditures to maintain compliance with environmental laws and regulations and environmental permits. The Company is also subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment without regard to fault or knowledge about the condition or action causing the liability. Under certain of these laws and regulations, such liabilities can be imposed for cleanup of previously owned or operated properties, or for properties to which substances or wastes that were sent in connection with current or former operations at its facilities. The presence of contamination from such substances or wastes could also adversely affect the Company's ability to sell or lease its properties, or to use them as collateral for financing. From time to time, the Company has incurred costs and obligations for correcting environmental and health and safety noncompliance matters and for remediation at or relating to certain of the Company's properties or properties at which the Company's waste has been disposed. However, compliance with the provisions of national, state and local environmental laws and regulations has not had a material effect upon the Company's capital expenditures, earnings, financial position, liquidity or competitive position. The Company believes it has complied with, and is currently complying with, its environmental obligations pursuant to environmental and health and safety laws and regulations and that any liabilities for noncompliance will not have a material adverse effect on its business, financial performance or cash flows. However, it is difficult to predict future liabilities and obligations, which could be material. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table represents the Company's basic and dilutive weighted average shares: Three months ended March 31, 2016 2015 (in thousands) Basic weighted-average shares 73,078 87,865 Effect of dilutive stock-based awards 295 240 Diluted weighted-average shares 73,373 88,105 In each of the three months ended March 31, 2016 and 2015, the Company had 0.1 million of time-based and market-based stock awards that were not included in the computation of diluted earnings per share because the impact of applying the treasury stock method was anti-dilutive. Because certain conditions have not been met as of March 31, 2016 with respect to the Company's performance-based awards, the Company has determined these awards to be contingently issuable; as a result, all 0.1 million outstanding performance-based awards were not included in the diluted EPS calculation in each of the three months ended March 31, 2016 and 2015. 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 as the Company's average stock price in the current quarter is less than the conversion price. Refer to Note 5, "Long-Term Debt" for more information on the Notes. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM | STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM Stock and Incentive Plans The Company has outstanding stock-based compensation awards that were granted by the Compensation and Organizational Development Committee (the “Compensation Committee”) of Holdings’ board of directors (the "Board") under the following two stock-based employee compensation plans: • the GNC Holdings, Inc. 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 allowing for the granting of stock options, restricted stock and other stock-based awards and are available to eligible employees, directors, consultants or advisers 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 7.1 million shares remain available for issuance as of March 31, 2016. The following table sets forth a summary of all stock-based compensation awards outstanding under all plans: March 31, 2016 December 31, 2015 (in thousands) Time-based stock options 1,288 688 Time-based restricted stock awards 322 194 Performance-based restricted stock awards 141 141 Market-based restricted stock awards 167 — Total 1,918 1,023 Stock-Based Compensation Activity During the three months ended March 31, 2016 , the Company granted the following stock-based compensation awards: March 31, 2016 (in thousands) Time-based stock options 629 Time-based restricted stock awards 194 Market-based restricted stock awards 167 Total 990 Time-based stock options vest 25% per year over a period of four years and the fair value was determined using the Black-Scholes model. Key assumptions used for the options granted during the quarter include a dividend yield between 2.31% and 3.06% , an expected term of 6.3 years, volatility of 30.7% , and a risk-free rate between 1.32% and 1.90% . Time-based restricted stock awards vest one-third per year over a period of three years. Market-based awards vest at the end of a three -year period based upon total shareholder return compared with that of a selected group of peer companies. Total shareholder return is defined as share price appreciation plus the value of dividends paid during the three -year vesting period. Fair value of these awards was determined using a Monte Carlo simulation, which requires various inputs and assumptions, including the Company's common stock price. Compensation cost for these awards is recognized regardless of whether the market condition is achieved. Vested shares may range from 0% to 200% of the original target. Key assumptions used in the Monte Carlo simulation for the awards granted during the quarter include peer group volatility of 34.2% and a risk-free rate of 0.89% . The awards granted during the quarter will result in compensation expense of $14.1 million , net of expected forfeitures, over the requisite service period assuming the market-based awards vest at 100% of the original target award. The Company recognized $1.4 million and $1.3 million of total non-cash stock-based compensation expense for the three months ended March 31, 2016 and 2015, respectively. At March 31, 2016 , there was approximately $22.5 million of total unrecognized compensation cost related to non-vested stock-based compensation for all awards previously made that are expected to be recognized over a weighted average period of approximately 1.8 years . Share Repurchase Program 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 $218.9 million of common stock (including $ 17.9 million purchased that cash settled in April) during the three months ended March 31, 2016 and has utilized $792.0 million of the current repurchase program. As of March 31, 2016 , $208.0 million remains available for purchase under the program. |
SEGMENTS
SEGMENTS | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTS The Company aggregates its operating segments into three reportable segments, which include Retail, Franchise, 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 corporate costs. The following table represents key financial information for each of the Company's reportable segments. Refer to Note 2, "Basis of Presentation" for a description of the prior period revision associated with sublease rent income. Refer to Note 12, "Subsequent Events" for a description of the change in the Company's reportable segments effective in the second quarter of 2016. Three months ended March 31, 2016 2015 (in thousands) Revenue: Retail $ 495,962 $ 503,466 Franchise 115,480 122,276 Manufacturing / Wholesale: Intersegment revenues 63,031 66,254 Third-party 57,463 55,524 Subtotal Manufacturing / Wholesale 120,494 121,778 Total reportable segment revenues 731,936 747,520 Elimination of intersegment revenues (63,031 ) (66,254 ) Total revenue $ 668,905 $ 681,266 Operating income: Retail $ 80,562 $ 92,362 Franchise 35,971 39,683 Manufacturing / Wholesale 19,300 21,122 Total reportable segment operating income 135,833 153,167 Unallocated corporate and other costs: Warehousing and distribution costs (18,008 ) (17,785 ) Corporate costs (23,760 ) (25,777 ) Subtotal unallocated corporate and other costs (41,768 ) (43,562 ) Total operating income 94,065 109,605 Interest expense, net 14,443 11,515 Income before income taxes $ 79,622 $ 98,090 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recognized $28.8 million of income tax expense (or 36.2% of pre-tax income) during the three months ended March 31, 2016 compared with $34.8 million (or 35.5% of pre-tax income) in the prior year quarter. At March 31, 2016 and December 31, 2015 , the Company had $6.8 million (which if recognized, would affect the effective tax rate) and $7.3 million of unrecognized tax benefits, respectively, excluding interest and penalties. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company had accrued $1.7 million and $1.8 million at March 31, 2016 and December 31, 2015 , respectively, for potential interest and penalties associated with uncertain tax positions. To the extent interest and penalties are not assessed with respect to the ultimate settlement of uncertain tax positions, amounts previously accrued will be reversed as a reduction to income tax expense. 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On April 26, 2016, the Board authorized and declared a cash dividend for the second quarter of 2016 of $0.20 per share of common stock, payable on or about June 24, 2016 to stockholders of record as of the close of business on June 10, 2016. As described in Note 4, "Refranchising", the Company expects to sell 94 corporate stores to two franchisees and record pre-tax gains of approximately $ 20 million , the majority of which will be recognized in the second quarter of 2016. The Company’s previously disclosed refranchising strategy, which will increase the proportion of domestic stores that are franchise locations in 2016 and beyond, will result in a change in the Company’s organizational structure and the financial reporting utilized by the Company’s chief operating decision maker (its chief executive officer) to assess performance and allocate resources; as a result, the Company's reportable segments will change effective in the second quarter of 2016. The Company believes that the new segments will better present management’s new view of the business. The new reportable segments will be disclosed beginning in the Company's second quarter of 2016. The following table shows the new reportable segments compared with the previous reporting structure. Old New Segment: Retail Includes: Company-owned stores in the U.S., Puerto Rico and Canada, The Health Store and e-commerce, including Discount Supplements, which was sold in the fourth quarter of 2015 Segment: U.S. and Canada Includes: Company-owned stores in the U.S., Puerto Rico and Canada, franchise stores in the U.S. and e-commerce Segment: Franchise Includes: Domestic and international franchise locations and China operations Segment: International Includes : Franchise locations in approximately 50 countries, The Health Store and China operations Segment: Manufacturing / Wholesale Includes: Manufactured product sold to the Company's other segments, third-party contract manufacturing and sales to wholesale partners Segment: Manufacturing / Wholesale Includes: Manufactured product sold to the Company's other segments, third-party contract manufacturing and sales to wholesale partners (no change from old) Other Includes: Discount Supplements, an e-commerce business which was sold in the fourth quarter of 2015 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2015-03, which requires an entity to present debt issuance costs related to a recognized debt liability as a direct reduction 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. In August 2015, the FASB subsequently issued ASU 2015-15, which clarifies that ASU 2015-03 does not address the presentation of debt issuance costs related to line-of-credit arrangements. This standard is effective for fiscal years beginning after December 15, 2015. Accordingly, the Company adopted these standards during the first quarter of fiscal 2016, with retrospective application. Net debt issuance costs in the amount of $3.3 million , which were previously classified as "Other long-term assets" at December 31, 2015, were reclassified as a reduction to "Long-term debt" on the Company's consolidated balance sheet to conform to the current year presentation. Recently Issued Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, which includes multiple provisions intended to simplify various aspects of accounting and reporting for share-based payments. This standard is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2016. The Company is currently evaluating the impact this guidance will have on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, which requires an entity to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about the entity's leasing arrangements. This standard is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2018. The Company is currently evaluating the impact this guidance will have on the Company's consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, which requires an entity to classify deferred tax assets and liabilities as noncurrent on the balance sheet. 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 and the retail inventory method 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 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. Other Revisions In addition to the sublease rent revision and the adoption of ASU 2015-03 as explained above, certain amounts in the consolidated financial statements for prior year periods have been revised to conform to the current period's presentation. The impact to prior periods of these revisions was not significant with no impact on previously reported operating income, net income, cash flows from operations or stockholders' equity. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Prior Period Revisions in Presentation | The following table includes the revisions to the consolidated statements of income for the interim periods during 2015 and 2014: For the Three Months Ended Year Ended March 31 June 30 September 30 December 31 December 31 2015: (in thousands) Revenue: Prior to revision $ 670,247 $ 678,520 $ 672,244 $ 618,201 $ 2,639,212 Revision 11,019 11,044 11,114 10,909 44,086 As Revised $ 681,266 $ 689,564 $ 683,358 $ 629,110 $ 2,683,298 Cost of sales, including warehousing, distribution and occupancy: Prior to revision $ 420,814 $ 422,188 $ 421,600 $ 389,967 $ 1,654,569 Revision 11,019 11,044 11,114 10,909 44,086 As Revised $ 431,833 $ 433,232 $ 432,714 $ 400,876 $ 1,698,655 2014: Revenue: Prior to revision $ 674,456 $ 675,216 $ 656,326 $ 607,156 $ 2,613,154 Revision 10,122 10,321 10,585 10,824 41,852 As Revised $ 684,578 $ 685,537 $ 666,911 $ 617,980 $ 2,655,006 Cost of sales, including warehousing, distribution and occupancy: Prior to revision $ 420,737 $ 416,636 $ 408,578 $ 386,963 $ 1,632,914 Revision 10,122 10,321 10,585 10,824 41,852 As Revised $ 430,859 $ 426,957 $ 419,163 $ 397,787 $ 1,674,766 The following table includes the revision to the consolidated balance sheet: December 31, 2015 Other long-term assets: (in thousands) Prior to revision (*) $ 32,891 Revision 5,664 As Revised $ 38,555 Other long-term liabilities: Prior to revision $ 53,352 Revision 5,664 As Revised $ 59,016 (*) Includes the adoption of ASU 2015-03 and 2015-15 relating to the presentation of deferred financing fees as described below, which reclassified $ 3.3 million of debt issuance costs from "Other long-term assets" to "Long-term debt" at December 31, 2015 on the consolidated balance sheet. |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Net Carrying Value of Inventories | The net realizable value of inventory consisted of the following: March 31, 2016 December 31, 2015 (in thousands) Finished product ready for sale $ 497,682 $ 487,075 Work-in-process, bulk product and raw materials 59,200 62,242 Packaging supplies 5,986 6,568 Total inventory $ 562,868 $ 555,885 |
REFRANCHSING (Tables)
REFRANCHSING (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disclosure of Long Lived Assets Held-for-sale | The fair values of these assets exceeded their respective carrying values. The following summarizes the financial statement carrying amounts of assets as held for sale at March 31, 2016: (in thousands) Inventory $ 7,803 Goodwill 3,849 Property, plant and equipment, net 1,736 Total held for sale assets $ 13,388 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following: March 31, December 31, (in thousands) Term Loan Facility (net of $2.4 million and $3.3 million discount) $ 1,173,398 $ 1,174,369 Revolving Credit Facility 133,000 43,000 Notes 237,581 235,085 Debt issuance costs (3,039 ) (3,276 ) Total debt 1,540,940 1,449,178 Less: current maturities (4,550 ) (4,550 ) Long-term debt $ 1,536,390 $ 1,444,628 |
Components of Convertible Debt | The Notes consist of the following components: March 31, 2016 December 31, 2015 (in thousands) Liability component Principal $ 287,500 $ 287,500 Conversion feature (44,039 ) (46,271 ) Discount related to debt issuance costs (5,880 ) (6,144 ) Net carrying amount $ 237,581 $ 235,085 Equity component Conversion feature $ 49,680 $ 49,680 Debt issuance costs (1,421 ) (1,421 ) Deferred taxes (17,750 ) (17,750 ) Net amount recorded in additional paid-in capital $ 30,509 $ 30,509 |
Schedule of Interest Expense | Interest expense consisted of the following: Three months ended March 31, 2016 2015 (in thousands) Senior Credit Facility: Term Loan Facility coupon $ 9,666 $ 10,932 Revolver 616 168 Amortization of discount and debt issuance costs 592 463 Total Senior Credit Facility 10,874 11,563 Notes: Coupon 1,078 — Amortization of conversion feature 2,232 — Amortization of discount and debt issuance costs 275 — Total Notes 3,585 — Interest income and other (16 ) (48 ) Interest expense, net $ 14,443 $ 11,515 |
FAIR VALUE MEASUREMENTS AND F24
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Actual and Estimated Fair Values of the Financial Instruments | The carrying value and estimated fair value of the Term Loan Facility and Notes (excluding the equity component classified in stockholders' equity) were as follows: March 31, 2016 December 31, 2015 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Term Loan Facility $ 1,173,398 $ 1,163,131 $ 1,174,369 $ 1,145,010 Notes 237,581 194,222 235,085 188,940 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | The following table represents the Company's basic and dilutive weighted average shares: Three months ended March 31, 2016 2015 (in thousands) Basic weighted-average shares 73,078 87,865 Effect of dilutive stock-based awards 295 240 Diluted weighted-average shares 73,373 88,105 |
STOCK-BASED COMPENSATION PLAN26
STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-Based Compensation Awards | During the three months ended March 31, 2016 , the Company granted the following stock-based compensation awards: March 31, 2016 (in thousands) Time-based stock options 629 Time-based restricted stock awards 194 Market-based restricted stock awards 167 Total 990 The following table sets forth a summary of all stock-based compensation awards outstanding under all plans: March 31, 2016 December 31, 2015 (in thousands) Time-based stock options 1,288 688 Time-based restricted stock awards 322 194 Performance-based restricted stock awards 141 141 Market-based restricted stock awards 167 — Total 1,918 1,023 |
SEGMENTS (Tables)
SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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. Refer to Note 2, "Basis of Presentation" for a description of the prior period revision associated with sublease rent income. Refer to Note 12, "Subsequent Events" for a description of the change in the Company's reportable segments effective in the second quarter of 2016. Three months ended March 31, 2016 2015 (in thousands) Revenue: Retail $ 495,962 $ 503,466 Franchise 115,480 122,276 Manufacturing / Wholesale: Intersegment revenues 63,031 66,254 Third-party 57,463 55,524 Subtotal Manufacturing / Wholesale 120,494 121,778 Total reportable segment revenues 731,936 747,520 Elimination of intersegment revenues (63,031 ) (66,254 ) Total revenue $ 668,905 $ 681,266 Operating income: Retail $ 80,562 $ 92,362 Franchise 35,971 39,683 Manufacturing / Wholesale 19,300 21,122 Total reportable segment operating income 135,833 153,167 Unallocated corporate and other costs: Warehousing and distribution costs (18,008 ) (17,785 ) Corporate costs (23,760 ) (25,777 ) Subtotal unallocated corporate and other costs (41,768 ) (43,562 ) Total operating income 94,065 109,605 Interest expense, net 14,443 11,515 Income before income taxes $ 79,622 $ 98,090 |
SUBSEQUENT EVENTS (Tables)
SUBSEQUENT EVENTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Schedule of Segment Organization | The following table shows the new reportable segments compared with the previous reporting structure. Old New Segment: Retail Includes: Company-owned stores in the U.S., Puerto Rico and Canada, The Health Store and e-commerce, including Discount Supplements, which was sold in the fourth quarter of 2015 Segment: U.S. and Canada Includes: Company-owned stores in the U.S., Puerto Rico and Canada, franchise stores in the U.S. and e-commerce Segment: Franchise Includes: Domestic and international franchise locations and China operations Segment: International Includes : Franchise locations in approximately 50 countries, The Health Store and China operations Segment: Manufacturing / Wholesale Includes: Manufactured product sold to the Company's other segments, third-party contract manufacturing and sales to wholesale partners Segment: Manufacturing / Wholesale Includes: Manufactured product sold to the Company's other segments, third-party contract manufacturing and sales to wholesale partners (no change from old) Other Includes: Discount Supplements, an e-commerce business which was sold in the fourth quarter of 2015 |
NATURE OF BUSINESS (Details)
NATURE OF BUSINESS (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016segmentcountry | Dec. 31, 2015segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of primary segments | segment | 3 | 3 |
Number of international countries in which franchise stores are located (more than 50 countries) | country | 50 |
BASIS OF PRESENTATION- Summary
BASIS OF PRESENTATION- Summary of Revision for Sublease Rent Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2016 | 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 | |
Error Corrections and Prior Period Adjustments Restatement | |||||||||||
Revenue | $ 668,905 | $ 629,110 | $ 683,358 | $ 689,564 | $ 681,266 | $ 617,980 | $ 666,911 | $ 685,537 | $ 684,578 | $ 2,683,298 | $ 2,655,006 |
Cost of sales, including warehousing, distribution and occupancy | 433,060 | 400,876 | 432,714 | 433,232 | 431,833 | 397,787 | 419,163 | 426,957 | 430,859 | 1,698,655 | 1,674,766 |
Other long-term assets | 34,476 | 38,555 | 38,555 | ||||||||
Other long-term liabilities | 58,076 | 59,016 | 59,016 | ||||||||
Debt issuance costs | $ (3,039) | (3,276) | (3,276) | ||||||||
Prior to revision | |||||||||||
Error Corrections and Prior Period Adjustments Restatement | |||||||||||
Revenue | 618,201 | 672,244 | 678,520 | 670,247 | 607,156 | 656,326 | 675,216 | 674,456 | 2,639,212 | 2,613,154 | |
Cost of sales, including warehousing, distribution and occupancy | 389,967 | 421,600 | 422,188 | 420,814 | 386,963 | 408,578 | 416,636 | 420,737 | 1,654,569 | 1,632,914 | |
Other long-term assets | 32,891 | 32,891 | |||||||||
Other long-term liabilities | 53,352 | 53,352 | |||||||||
Revision | |||||||||||
Error Corrections and Prior Period Adjustments Restatement | |||||||||||
Revenue | 10,909 | 11,114 | 11,044 | 11,019 | 10,824 | 10,585 | 10,321 | 10,122 | 44,086 | 41,852 | |
Cost of sales, including warehousing, distribution and occupancy | 10,909 | $ 11,114 | $ 11,044 | $ 11,019 | $ 10,824 | $ 10,585 | $ 10,321 | $ 10,122 | 44,086 | $ 41,852 | |
Other long-term assets | 5,664 | 5,664 | |||||||||
Other long-term liabilities | 5,664 | 5,664 | |||||||||
Accounting Standards Update 2015-03 | Other long-term assets | |||||||||||
Error Corrections and Prior Period Adjustments Restatement | |||||||||||
Debt issuance costs | 3,300 | 3,300 | |||||||||
Accounting Standards Update 2015-03 | Long-term debt | |||||||||||
Error Corrections and Prior Period Adjustments Restatement | |||||||||||
Debt issuance costs | $ (3,300) | $ (3,300) |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Error Corrections and Prior Period Adjustments Restatement | |||
Debt issuance costs | $ (3,039) | $ (3,276) | |
Net income | $ 50,815 | $ 63,270 | |
Immaterial Error Correction | |||
Error Corrections and Prior Period Adjustments Restatement | |||
Accrued payroll liability error in prior periods | 2,800 | ||
Immaterial Error Correction | Adjustment | |||
Error Corrections and Prior Period Adjustments Restatement | |||
Net income | 1,800 | ||
Immaterial Error Correction | Deferred Revenue and Other Current Liabilities | |||
Error Corrections and Prior Period Adjustments Restatement | |||
Accrued payroll liability error in prior periods | $ 2,800 | ||
Accounting Standards Update 2015-03 | Other long-term assets | |||
Error Corrections and Prior Period Adjustments Restatement | |||
Debt issuance costs | 3,300 | ||
Accounting Standards Update 2015-03 | Long-term debt | |||
Error Corrections and Prior Period Adjustments Restatement | |||
Debt issuance costs | $ (3,300) |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Finished product ready for sale | $ 497,682 | $ 487,075 |
Work-in-process, bulk product and raw materials | 59,200 | 62,242 |
Packaging supplies | 5,986 | 6,568 |
Total inventory | $ 562,868 | $ 555,885 |
REFRANCHISING (Details)
REFRANCHISING (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Apr. 28, 2016USD ($) | Jun. 30, 2016USD ($)store | Mar. 31, 2016USD ($)franchise | Dec. 31, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016store | |
Franchisor Disclosure [Line Items] | ||||||
Gains on refranchising | $ 1,015 | $ 338 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||
Franchisor Disclosure [Line Items] | ||||||
Gains on refranchising | $ 1,000 | $ 300 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Company Owned Stores | ||||||
Franchisor Disclosure [Line Items] | ||||||
Number of franchises | franchise | 94 | |||||
Forecast | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||
Franchisor Disclosure [Line Items] | ||||||
Gains on refranchising | $ 20,000 | $ 20,000 | ||||
Forecast | Franchisee Group 1 | Disposal Group, Held-for-sale, Not Discontinued Operations | Company Owned Stores | ||||||
Franchisor Disclosure [Line Items] | ||||||
Number of franchises | store | 84 | |||||
Forecast | Franchisee Group 2 | Disposal Group, Held-for-sale, Not Discontinued Operations | Company Owned Stores | ||||||
Franchisor Disclosure [Line Items] | ||||||
Number of franchises | store | 10 |
REFRANCHISING- Schedule of Asse
REFRANCHISING- Schedule of Assets Held for Sale (Details) - Disposal Group, Held-for-sale, Not Discontinued Operations - Refranchising $ in Thousands | Mar. 31, 2016USD ($) |
Long Lived Assets Held-for-sale [Line Items] | |
Inventory | $ 7,803 |
Goodwill | 3,849 |
Property, plant and equipment, net | 1,736 |
Total held for sale assets | $ 13,388 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument | ||
Net carrying amount | $ 1,540,940 | $ 1,449,178 |
Debt issuance costs | (3,039) | (3,276) |
Less: current maturities | (4,550) | (4,550) |
Long-term debt | 1,536,390 | 1,444,628 |
Term Loan Facility | ||
Debt Instrument | ||
Discount | 2,400 | 3,300 |
Net carrying amount | 1,173,398 | 1,174,369 |
1.5% Convertible Senior Notes, Due 2020 | Convertible Senior Notes | ||
Debt Instrument | ||
Discount | 44,039 | 46,271 |
Net carrying amount | 237,581 | 235,085 |
Revolving Credit Facility | Credit Facility | ||
Debt Instrument | ||
Net carrying amount | $ 133,000 | $ 43,000 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2016 | Mar. 04, 2016 | Mar. 03, 2016 | Aug. 10, 2015 |
Debt Instrument | ||||||
Borrowings outstanding | $ 1,540,940,000 | $ 1,449,178,000 | $ 1,540,940,000 | |||
Revolving Credit Facility | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | $ 130,000,000 | ||
Debt, Weighted Average Interest Rate | 2.70% | 2.60% | 2.70% | |||
Commitment fee on undrawn portion of revolving credit facility (as a percent) | 0.50% | 0.50% | ||||
Line of credit facility, remaining borrowing capacity | $ 161,400,000 | $ 161,400,000 | ||||
Amounts drawn on lines of credit during period | 90,000,000 | |||||
Letter Of Credit | ||||||
Debt Instrument | ||||||
Outstanding letters of credit fee (as a percent) | 2.50% | 2.50% | ||||
Letters of credit outstanding | $ 5,600,000 | 5,600,000 | ||||
Term Loan Facility | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | $ 1,200,000,000 | $ 1,200,000,000 | ||||
Effective interest rate (as a percent) | 3.25% | 3.25% | 3.25% | |||
Borrowings outstanding | $ 1,173,398,000 | $ 1,174,369,000 | $ 1,173,398,000 | |||
Convertible Senior Notes | 1.5% Convertible Senior Notes, Due 2020 | ||||||
Debt Instrument | ||||||
Principal | 287,500,000 | 287,500,000 | 287,500,000 | $ 287,500,000 | ||
Interest rate (as a percent) | 1.50% | |||||
Borrowings outstanding | 237,581,000 | 235,085,000 | 237,581,000 | |||
Credit Facility | Revolving Credit Facility | ||||||
Debt Instrument | ||||||
Debt issuance costs, gross | $ 1,700,000 | |||||
Borrowings outstanding | $ 133,000,000 | $ 43,000,000 | $ 133,000,000 |
LONG-TERM DEBT- Components of C
LONG-TERM DEBT- Components of Convertible Debt (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | Aug. 10, 2015 |
Liability component | |||
Net carrying amount | $ 1,540,940,000 | $ 1,449,178,000 | |
Convertible Senior Notes | 1.5% Convertible Senior Notes, Due 2020 | |||
Liability component | |||
Principal | 287,500,000 | 287,500,000 | $ 287,500,000 |
Conversion feature | (44,039,000) | (46,271,000) | |
Discount related to debt issuance costs | (5,880,000) | (6,144,000) | |
Net carrying amount | 237,581,000 | 235,085,000 | |
Equity component | |||
Conversion feature | 49,680,000 | 49,680,000 | |
Debt issuance costs | (1,421,000) | (1,421,000) | |
Deferred taxes | (17,750,000) | (17,750,000) | |
Net amount recorded in additional paid-in capital | $ 30,509,000 | $ 30,509,000 |
LONG-TERM DEBT - Schedule of In
LONG-TERM DEBT - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Debt Instrument | ||
Interest income and other | $ (16) | $ (48) |
Interest expense, net | 14,443 | 11,515 |
Senior Credit Facility | ||
Debt Instrument | ||
Amortization of discount and debt issuance costs | 592 | 463 |
Subtotal: interest expense | 10,874 | 11,563 |
Senior Credit Facility | Revolving Credit Facility | ||
Debt Instrument | ||
Interest expense (excluding amortization) | 616 | 168 |
Senior Credit Facility | Term Loan Facility | ||
Debt Instrument | ||
Interest expense (excluding amortization) | 9,666 | 10,932 |
1.5% Convertible Senior Notes, Due 2020 | Convertible Senior Notes | ||
Debt Instrument | ||
Interest expense (excluding amortization) | 1,078 | 0 |
Amortization of conversion feature | 2,232 | 0 |
Amortization of discount and debt issuance costs | 275 | 0 |
Subtotal: interest expense | $ 3,585 | $ 0 |
FAIR VALUE MEASUREMENTS AND F39
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS - Schedule of Carrying Amount and Estimated Fair Values of the Financial Instruments (Details) - Level 2 - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Senior Credit Facility | Term Loan Facility | Carrying Amount | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | $ 1,173,398 | $ 1,174,369 |
Senior Credit Facility | Term Loan Facility | Fair Value | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 1,163,131 | 1,145,010 |
1.5% Convertible Senior Notes, Due 2020 | Notes | Carrying Amount | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 237,581 | 235,085 |
1.5% Convertible Senior Notes, Due 2020 | Notes | Fair Value | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | $ 194,222 | $ 188,940 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) | Feb. 05, 2016USD ($) | Feb. 29, 2012action | Oct. 31, 2011claim | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014lawsuit |
Commitments and contingencies | |||||||
Accrual for environmental loss | $ 0 | ||||||
Charles Brewer, California Wage and Break Claims | |||||||
Commitments and contingencies | |||||||
Number of claims filed | 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 claims filed | action | 8 | ||||||
Violations of Oregon Unlawful Trade Practices Act | Attorney General for the State of Oregon | |||||||
Commitments and contingencies | |||||||
Loss contingency accrual | $ 0 | ||||||
Product Liability | |||||||
Commitments and contingencies | |||||||
Deductible/retention per claim out of total product liability insurance | 4,000,000 | ||||||
Aggregate cap on retained loss for deductible/retention per claim out of total product liability insurance | $ 10,000,000 | ||||||
Product Liability | DMAA Claims | |||||||
Commitments and contingencies | |||||||
Number of pending lawsuits in which company is named | lawsuit | 28 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Weighted Average Number of Shares (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Basic weighted-average shares | 73,078 | 87,865 |
Effect of dilutive stock-based awards | 295 | 240 |
Diluted weighted-average shares | 73,373 | 88,105 |
EARNINGS PER SHARE- Narrative (
EARNINGS PER SHARE- Narrative (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0.1 | 0.1 |
Contingently issuable shares excluded from computation of diluted earnings per share | 0.1 | 0.1 |
STOCK-BASED COMPENSATION PLAN43
STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 19 Months Ended | |||
Apr. 28, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Total unrecognized compensation cost related to non-vested stock awards | $ 22,500,000 | $ 22,500,000 | ||||
Non-cash stock-based compensation expense | $ 1,400,000 | $ 1,300,000 | ||||
Weighted average period over which compensation cost is expected to be recognized (in years) | 1 year 9 months | |||||
Authorized repurchase amount, increase in current period | $ 500,000,000 | |||||
Authorized repurchase amount, authorized in prior period | $ 500,000,000 | |||||
Authorized amount of stock to be repurchased | $ 1,000,000,000 | |||||
Stock repurchased during period | $ 218,900,000 | 792,000,000 | ||||
Cash settled for repurchase of common stock | 201,002,000 | $ 60,557,000 | ||||
Remaining authorized repurchase amount (in usd) | $ 208,000,000 | 208,000,000 | ||||
Time-based stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting period | 4 years | |||||
Expected term | 6 years 3 months 18 days | |||||
Expected volatility rate | 30.70% | |||||
Risk free interest rate, minimum | 1.32% | |||||
Risk free interest rate, maximum | 1.90% | |||||
Time-based stock options | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Expected dividend yield | 2.31% | |||||
Time-based stock options | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Expected dividend yield | 3.06% | |||||
Time-based stock options | Year 1 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting rights (percentage per year) | 25.00% | |||||
Time-based stock options | Year 2 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting rights (percentage per year) | 25.00% | |||||
Time-based stock options | Year 3 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting rights (percentage per year) | 25.00% | |||||
Time-based stock options | Year 4 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting rights (percentage per year) | 25.00% | |||||
Time-based restricted stock awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting period | 3 years | |||||
Time-based restricted stock awards | Year 1 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting rights (percentage per year) | 33.33% | |||||
Time-based restricted stock awards | Year 2 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting rights (percentage per year) | 33.33% | |||||
Time-based restricted stock awards | Year 3 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting rights (percentage per year) | 33.33% | |||||
Market-based restricted stock awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting period | 3 years | |||||
Expected volatility rate | 34.20% | |||||
Vesting rights percentage | 100.00% | |||||
Risk free interest rate | 0.89% | |||||
Market-based restricted stock awards | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting rights percentage | 0.00% | |||||
Market-based restricted stock awards | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting rights percentage | 200.00% | |||||
Time Based and Market Based Compensation Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Total unrecognized compensation cost related to non-vested stock awards | $ 14,100,000 | $ 14,100,000 | ||||
Subsequent Event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Cash settled for repurchase of common stock | $ 17,900,000 | |||||
2015 Stock Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Number of shares authorized | 11,500,000 | 11,500,000 | ||||
Number of remaining shares available for issue | 7,100,000 | 7,100,000 |
STOCK-BASED COMPENSATION PLAN44
STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM- Schedule of Awards Outstanding (Details) - shares shares in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Total share awards outstanding (in shares) | 1,918 | 1,023 |
Time-based stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Options outstanding (in shares) | 1,288 | 688 |
Time-based restricted stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Stock awards other than options outstanding (in shares) | 322 | 194 |
Performance-based restricted stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Stock awards other than options outstanding (in shares) | 141 | 141 |
Market-based restricted stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Stock awards other than options outstanding (in shares) | 167 | 0 |
STOCK-BASED COMPENSATION PLAN45
STOCK-BASED COMPENSATION PLANS AND SHARE REPURCHASE PROGRAM - Schedule of Awards Granted (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Total (in shares) | 990 |
Time-based stock options | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Options granted (in shares) | 629 |
Time-based restricted stock awards | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Non-options stock awards granted (in shares) | 194 |
Market-based restricted stock awards | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Non-options stock awards granted (in shares) | 167 |
SEGMENTS (Details)
SEGMENTS (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of reportable segments | segment | 3 | 3 | |||||||||
Revenue: | |||||||||||
Revenue | $ 668,905 | $ 629,110 | $ 683,358 | $ 689,564 | $ 681,266 | $ 617,980 | $ 666,911 | $ 685,537 | $ 684,578 | $ 2,683,298 | $ 2,655,006 |
Operating income: | |||||||||||
Operating income | 94,065 | 109,605 | |||||||||
Interest expense, net | 14,443 | 11,515 | |||||||||
Income before income taxes | 79,622 | 98,090 | |||||||||
Manufacturing/ Wholesale | |||||||||||
Revenue: | |||||||||||
Revenue | 57,463 | 55,524 | |||||||||
Operating Segment | |||||||||||
Revenue: | |||||||||||
Revenue | 731,936 | 747,520 | |||||||||
Operating income: | |||||||||||
Operating income | 135,833 | 153,167 | |||||||||
Operating Segment | Retail | |||||||||||
Revenue: | |||||||||||
Revenue | 495,962 | 503,466 | |||||||||
Operating income: | |||||||||||
Operating income | 80,562 | 92,362 | |||||||||
Operating Segment | Franchise | |||||||||||
Revenue: | |||||||||||
Revenue | 115,480 | 122,276 | |||||||||
Operating income: | |||||||||||
Operating income | 35,971 | 39,683 | |||||||||
Operating Segment | Manufacturing/ Wholesale | |||||||||||
Revenue: | |||||||||||
Revenue | 120,494 | 121,778 | |||||||||
Operating income: | |||||||||||
Operating income | 19,300 | 21,122 | |||||||||
Intersegment Eliminations | |||||||||||
Revenue: | |||||||||||
Revenue | (63,031) | (66,254) | |||||||||
Intersegment Eliminations | Manufacturing/ Wholesale | |||||||||||
Revenue: | |||||||||||
Revenue | (63,031) | (66,254) | |||||||||
Corporate, Non-Segment | |||||||||||
Operating income: | |||||||||||
Operating income | (41,768) | (43,562) | |||||||||
Warehousing and distribution costs | (18,008) | (17,785) | |||||||||
Corporate costs | $ (23,760) | $ (25,777) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense | $ 28,807 | $ 34,820 | |
Effective income tax rate (as a percent) | 36.20% | 35.50% | |
Unrecognized tax benefits that would affect the effective tax rate | $ 6,800 | $ 7,300 | |
Interest and penalties accrued related to unrecognized tax benefits | $ 1,700 | $ 1,800 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands | Apr. 26, 2016$ / shares | Apr. 28, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($)franchisecountryfranchisee$ / shares | Dec. 31, 2015USD ($) | Mar. 31, 2015USD ($)$ / shares |
Subsequent Event | ||||||
Dividends declared per share (in dollars per share) | $ / shares | $ 0.2 | $ 0.18 | ||||
Gains on refranchising | $ 1,015 | $ 338 | ||||
Number of international countries in which franchise stores are located (more than 50 countries) | country | 50 | |||||
Subsequent Event | ||||||
Subsequent Event | ||||||
Dividends declared per share (in dollars per share) | $ / shares | $ 0.20 | |||||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||
Subsequent Event | ||||||
Gains on refranchising | $ 1,000 | $ 300 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Company Owned Stores | ||||||
Subsequent Event | ||||||
Number of franchises | franchise | 94 | |||||
Number of franchisees purchasing company owned stores | franchisee | 2 | |||||
Forecast | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||
Subsequent Event | ||||||
Gains on refranchising | $ 20,000 | $ 20,000 |