Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
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 | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding (in shares) | 83,884,711 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 33,348 | $ 64,001 |
Receivables, net | 131,951 | 126,650 |
Inventory | 489,639 | 485,732 |
Prepaid and other current assets | 76,536 | 66,648 |
Total current assets | 731,474 | 743,031 |
Long-term assets: | ||
Goodwill | 140,844 | 141,029 |
Brand name | 324,400 | 324,400 |
Other intangible assets, net | 94,461 | 99,715 |
Property, plant and equipment, net | 159,136 | 186,562 |
Other long-term assets | 29,272 | 25,026 |
Total long-term assets | 748,113 | 776,732 |
Total assets | 1,479,587 | 1,519,763 |
Current liabilities: | ||
Accounts payable | 159,100 | 153,018 |
Current debt | 204,480 | 0 |
Deferred revenue and other current liabilities | 121,475 | 114,081 |
Total current liabilities | 485,055 | 267,099 |
Long-term liabilities: | ||
Long-term debt | 1,040,646 | 1,297,023 |
Deferred income taxes | 43,090 | 56,060 |
Other long-term liabilities | 81,479 | 85,502 |
Total long-term liabilities | 1,165,215 | 1,438,585 |
Total liabilities | 1,650,270 | 1,705,684 |
Contingencies | ||
Stockholders’ deficit: | ||
Common stock | 130 | 130 |
Additional paid-in capital | 1,006,121 | 1,001,315 |
Retained earnings | 554,797 | 543,814 |
Treasury stock, at cost | (1,725,349) | (1,725,349) |
Accumulated other comprehensive loss | (6,382) | (5,831) |
Total stockholders’ deficit | (170,683) | (185,921) |
Total liabilities and stockholders’ deficit | $ 1,479,587 | $ 1,519,763 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | $ 580,185 | $ 612,953 | $ 1,805,662 | $ 1,918,139 |
Cost of sales, including warehousing, distribution and occupancy | 395,483 | 411,661 | 1,206,351 | 1,277,202 |
Gross profit | 184,702 | 201,292 | 599,311 | 640,937 |
Selling, general, and administrative | 149,903 | 156,051 | 469,164 | 481,618 |
Long-lived asset impairments | 14,556 | 3,861 | 14,556 | 23,217 |
Other loss (income), net | 282 | 1,579 | 357 | (40) |
Operating income | 19,961 | 39,801 | 115,234 | 136,142 |
Interest expense, net | 35,732 | 16,339 | 90,448 | 48,300 |
Loss on debt refinancing | 0 | 0 | 16,740 | 0 |
(Loss) income before income taxes | (15,771) | 23,462 | 8,046 | 87,842 |
Income tax expense (benefit) | (7,181) | 2,406 | (2,895) | 25,398 |
Net (loss) income | $ (8,590) | $ 21,056 | $ 10,941 | $ 62,444 |
Earnings per share | ||||
Basic (in dollars per share) | $ (0.10) | $ 0.31 | $ 0.13 | $ 0.91 |
Diluted (in dollars per share) | $ (0.10) | $ 0.31 | $ 0.13 | $ 0.91 |
Weighted average common shares outstanding | ||||
Basic (in shares) | 83,412 | 68,354 | 83,326 | 68,296 |
Diluted (in shares) | 83,412 | 68,569 | 83,431 | 68,411 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (8,590) | $ 21,056 | $ 10,941 | $ 62,444 |
Periodic revaluation of interest rate swap, net of tax (expense) benefit of ($0.4 million) and $0.1 million | 963 | 0 | (212) | 0 |
Reclassification adjustment for interest recognized in Consolidated Statement of Operations, net of tax expense of $0.3 million | 610 | 0 | 623 | 0 |
Net change in unrecognized gain on interest rate swaps, net of tax | 1,573 | 0 | 411 | 0 |
Foreign currency translation gain (loss) | 834 | 1,705 | (962) | 3,305 |
Other comprehensive income (loss) | 2,407 | 1,705 | (551) | 3,305 |
Comprehensive (loss) income | $ (6,183) | $ 22,761 | $ 10,390 | $ 65,749 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net of tax (expense) benefit of ($0.4 million) and $0.1 million | $ (0.4) | $ 0.1 |
Net of tax expense of $0.3 million | $ 0.3 | $ 0.3 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2016 | 68,399 | |||||
Beginning balance at Dec. 31, 2016 | $ (117,563) | $ 114 | $ (1,725,349) | $ 922,687 | $ 693,682 | $ (8,697) |
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income | 65,749 | 62,444 | 3,305 | |||
Dividend forfeitures on restricted stock | 285 | 285 | ||||
Restricted stock awards (in shares) | 636 | |||||
Restricted stock awards | 1 | $ 1 | ||||
Minimum tax withholding requirements (in shares) | (32) | |||||
Minimum tax withholding requirements | (252) | (252) | ||||
Stock-based compensation | 6,025 | 6,025 | ||||
Ending balance (in shares) at Sep. 30, 2017 | 69,003 | |||||
Ending balance at Sep. 30, 2017 | (45,755) | $ 115 | (1,725,349) | 928,460 | 756,411 | (5,392) |
Beginning balance (in shares) at Dec. 31, 2017 | 83,567 | |||||
Beginning balance at Dec. 31, 2017 | (185,921) | $ 130 | (1,725,349) | 1,001,315 | 543,814 | (5,831) |
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income | 10,390 | 10,941 | (551) | |||
Dividend forfeitures on restricted stock | 42 | 42 | ||||
Restricted stock awards (in shares) | 397 | |||||
Restricted stock awards | 0 | |||||
Minimum tax withholding requirements (in shares) | (79) | |||||
Minimum tax withholding requirements | (296) | (296) | ||||
Stock-based compensation | 5,102 | 5,102 | ||||
Ending balance (in shares) at Sep. 30, 2018 | 83,885 | |||||
Ending balance at Sep. 30, 2018 | $ (170,683) | $ 130 | $ (1,725,349) | $ 1,006,121 | $ 554,797 | $ (6,382) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net (loss) income | $ 10,941 | $ 62,444 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 36,002 | 43,688 |
Amortization of debt costs | 14,583 | 9,893 |
Stock-based compensation | 5,102 | 6,025 |
Long-lived asset impairments | 14,556 | 23,217 |
Gains on refranchising | (276) | (314) |
Loss on debt refinancing | 16,740 | 0 |
Third-party fees associated with refinancing | (16,322) | 0 |
Changes in assets and liabilities: | ||
(Increase) decrease in receivables | (6,080) | 1,204 |
(Increase) decrease in inventory | (5,794) | 45,753 |
Increase in prepaid and other current assets | (6,552) | (5,205) |
Increase (decrease) in accounts payable | 6,860 | (19,732) |
Decrease in deferred revenue and accrued liabilities | (10,565) | (19,891) |
Other operating activities | (3,506) | 2,486 |
Net cash provided by operating activities | 55,689 | 149,568 |
Cash flows from investing activities: | ||
Capital expenditures | (13,355) | (26,210) |
Refranchising proceeds | 2,136 | 3,410 |
Store acquisition costs | (220) | (1,930) |
Net cash used in investing activities | (11,439) | (24,730) |
Cash flows from financing activities: | ||
Borrowings under revolving credit facility | 261,500 | 177,500 |
Payments on revolving credit facility | (261,500) | (256,500) |
Original Issuance Discount and revolving credit facility fees | (35,235) | 0 |
Deferred fees associated with pending equity transaction | (3,443) | 0 |
Minimum tax withholding requirements | (296) | (252) |
Net cash used in financing activities | (74,487) | (120,105) |
Effect of exchange rate changes on cash and cash equivalents | (416) | 921 |
Net (decrease) increase in cash and cash equivalents | (30,653) | 5,654 |
Beginning balance, cash and cash equivalents | 64,001 | 34,464 |
Ending balance, cash and cash equivalents | 33,348 | 40,118 |
Non-cash investing activities: | ||
Capital expenditures in current liabilities | 1,177 | 2,141 |
Receivable related to the sale of Lucky Vitamin | 0 | 7,117 |
Non-cash financing activities: | ||
Original issuance discount | 13,231 | 0 |
Tranche B-1 | ||
Cash flows from financing activities: | ||
Payments on term loan facility | (3,413) | (40,853) |
Tranche B-2 | ||
Cash flows from financing activities: | ||
Payments on term loan facility | $ (32,100) | $ 0 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 9 Months Ended |
Sep. 30, 2018 | |
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 health and wellness brand with a diversified, multi-channel business. The Company's assortment of performance and nutritional supplements, vitamins, herbs and greens, health and beauty, food and drink and other general merchandise features innovative private-label products as well as nationally recognized third-party brands, many of which are exclusive to GNC. 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, U.S. and Canada, International, and Manufacturing / Wholesale. Corporate retail store operations are located in the United States, Canada, Puerto Rico, China and Ireland. In addition, the Company offers products on the internet through GNC.com, third-party websites, and prior to the sale of its assets on September 30, 2017, LuckyVitamin.com. Franchise locations exist in the United States and approximately 50 other countries. The Company operates its primary manufacturing facility in South Carolina and distribution centers in Arizona, Indiana, Pennsylvania and South Carolina. The Company manufactures approximately half of its branded products and 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 | 9 Months Ended |
Sep. 30, 2018 | |
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, 2017 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 Footnotes included in the Company’s audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2017 ("2017 10-K"). Interim results are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2018 . Recently Adopted Accounting Pronouncements In December 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-12, which simplifies the application of certain hedge accounting guidance to better align hedge accounting with an organization’s risk management activities in the financial statements. This standard eliminated the separate measurement and reporting of hedge ineffectiveness. Mismatches between changes in value of the hedged item and hedging instrument may still occur but they will no longer be separately reported. For cash flow and net investment hedges, all changes in value of the hedging instrument included in the assessment of effectiveness will be deferred in other comprehensive income and recognized in earnings at the same time that the hedged item affects earnings. The standard is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted. The Company adopted this standard during the second quarter of fiscal 2018, which was applied to the interest rate swaps entered into described below in Note 6 "Long-Term Debt / Interest Expense." The adoption of this standard did not have a material effect on the Company's Consolidated Financial Statements. In May 2017, the FASB issued ASU 2017-09, which amends the scope of modification accounting for share-based payment arrangements. This standard states that an entity should account for the effects of a modification unless all of the following are met: 1) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified (if the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification); 2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and 3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The standard is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company adopted this standard during the first quarter of fiscal 2018 which did not have an impact to the Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15, which addresses changes to the classification of certain cash receipts and cash payments within the statement of cash flows in order to address diversity in practice. In connection with the adoption of this ASU, the Company presented the third-party fees relating to the term loan refinancing as an operating cash flow on the Consolidated Statement of Cash Flows. In November 2016, the FASB issued ASU 2016-18, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of ASU 2016-18 did not have an impact to the Consolidated Statement of Cash Flows. Both standards were effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. Adoption of New Revenue Recognition Standard In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which updates revenue recognition guidance relating to contracts with customers. This standard states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. The Company adopted ASU 2014-09 and its related amendments (collectively known as "ASC 606") during the first quarter of fiscal 2018 using the full retrospective method. The adoption of ASC 606 does not impact recognition of point-of-sale revenue in company-owned stores, most wholesale sales, royalties and sublease revenue, together which account for approximately 90% of the Company’s revenue. The new standard has no impact on the timing or classification of the Company’s cash flows as reported in the Consolidated Statement of Cash Flows and is not expected to have a significant impact on the Company’s Consolidated Statement of Operations in future periods. The Company recorded a reduction to retained earnings, net of tax, at January 1, 2016 (opening balance) and December 31, 2016 of approximately $23 million primarily relating to an increase in deferred franchise fees. Below is a description of the changes that resulted from the new standard. Franchise fees. The Company's previous accounting policy for franchise and license fees received for new store openings and renewals was to recognize these fees when earned per the contract terms, which is when a new store opened or at the start of a new term. In accordance with the new guidance, these fees are now deferred and recognized over the applicable license term as the Company satisfies the performance obligation of granting the customer access to the rights of the Company’s intellectual property. This change impacted all of the Company’s reportable segments. In addition, franchise fees received as part of a sale of a company-owned store to a franchisee are now recorded as described above as part of revenue and will no longer be presented as part of gains on refranchising. Cooperative advertising and other franchise support fees. The Company previously classified advertising and other franchise support fees received from domestic franchisees as a reduction to selling, general and administrative expense and cost of sales on the Consolidated Statement of Operations. In accordance with the new guidance, these fees are now required to be classified as revenue within the U.S. and Canada segment. The new standard does not impact the timing of recognition of this income or the Consolidated Balance Sheet. Specialty manufacturing. The Company previously recognized revenue for products manufactured and sold to customers at a point in time when risk of loss, title and insurable risks have transferred to the customer, net of estimated returns and allowances. Under the new standard, revenue is required to be recognized over time as manufacturing occurs if the customized goods have no alternative use to the manufacturer, and the manufacturer has an enforceable right to payment for performance completed to date. This change impacts contract manufacturing sales to third-parties recorded in the Manufacturing / Wholesale segment. The Company is now recording a reduction to inventory as applicable custom manufacturing services are completed with a corresponding contract asset including the applicable markup, recorded within prepaid and other current assets on the Consolidated Balance Sheet. E-commerce revenues. The Company previously recorded revenue to its e-commerce customers upon delivery. Under the new guidance, the Company is now recognizing revenue upon shipment based on meeting the transfer of control criteria. The Company has made a policy election to treat shipping and handling as costs to fulfill the contract, and as a result, any fees received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of sales for amounts paid to applicable carriers. The Company has not revised prior period balances for e-commerce revenues because the changes are not material. Loyalty. Effective with the launch of the One New GNC on December 29, 2016, the Company introduced a free points-based myGNC Rewards loyalty program system-wide in the U.S. The Company utilized the new revenue recognition standard to account for this program in 2017, the difference of which was immaterial relative to the standard in effect at that time. Refer to Note 3 "Revenue" for additional information relating to the impact of adopting ASC 606. Revisions to Prior Periods As a result of adopting ASC 606 on January 1, 2018, the Company has revised its comparative financial statements for the years ended December 31, 2016 and 2017, and applicable interim periods within those years, as if ASC 606 had been effective for those periods. Additionally, the cumulative effect of applying the new guidance to all contracts with customers that were not completed was recorded as an adjustment to retained earnings as of January 1, 2016. The impact of the adoption of ASC 606 on the Company's Consolidated Balance Sheet as of December 31, 2017 was as follows: As Previously Reported Franchise Fees Specialty Manufacturing Total Adjustments As Revised (in thousands) Inventory $ 506,858 $ — $ (21,126 ) $ (21,126 ) $ 485,732 Prepaid and other current assets 42,320 — 24,328 24,328 66,648 Total current assets 739,829 — 3,202 3,202 743,031 Total assets $ 1,516,561 $ — $ 3,202 $ 3,202 $ 1,519,763 Deferred revenue and other current liabilities $ 108,672 $ 5,409 $ — $ 5,409 $ 114,081 Total current liabilities 261,690 5,409 — 5,409 267,099 Deferred income taxes 64,121 (8,868 ) 807 (8,061 ) 56,060 Other long-term liabilities 55,721 29,781 — 29,781 85,502 Total long-term liabilities 1,416,865 20,913 807 21,720 1,438,585 Total liabilities 1,678,555 26,322 807 27,129 1,705,684 Retained earnings 567,741 (26,322 ) 2,395 (23,927 ) 543,814 Total stockholders' deficit (161,994 ) (26,322 ) 2,395 (23,927 ) (185,921 ) Total liabilities and stockholders' deficit $ 1,516,561 $ — $ 3,202 $ 3,202 $ 1,519,763 The impact of the adoption of ASC 606 on the Consolidated Statements of Operations for the three and nine months ended September 30, 2017 was as follows: Three months ended September 30, 2017 As Previously Reported Franchise Fees Specialty Manufacturing Cooperative Advertising and Other Franchise Support Fees Total Adjustments As Revised (in thousands, except per share amounts) Revenue $ 609,469 $ (360 ) $ (1,925 ) $ 5,769 $ 3,484 $ 612,953 Cost of sales (1) 412,663 — (1,681 ) 679 (1,002 ) 411,661 Gross profit 196,806 (360 ) (244 ) 5,090 4,486 201,292 SG&A (2) 150,961 — — 5,090 5,090 156,051 Long-lived asset impairments 3,861 — — — — 3,861 Other income, net 1,539 40 — — 40 1,579 Operating income 40,445 (400 ) (244 ) — (644 ) 39,801 Interest expense, net 16,339 — — — — 16,339 Income before income taxes 24,106 (400 ) (244 ) — (644 ) 23,462 Income tax expense 2,643 (146 ) (91 ) — (237 ) 2,406 Net income $ 21,463 $ (254 ) $ (153 ) $ — $ (407 ) $ 21,056 Earnings per share: Basic $ 0.31 $ — $ — $ — $ — $ 0.31 Diluted $ 0.31 $ — $ — $ — $ — $ 0.31 Nine months ended September 30, 2017 As Previously Reported Franchise Fees Specialty Manufacturing Cooperative Advertising and Other Franchise Support Fees Total Adjustments As Revised (in thousands, except per share amounts) Revenue $ 1,895,301 $ 1,976 $ 2,703 $ 18,159 $ 22,838 $ 1,918,139 Cost of sales (1) 1,272,801 — 2,285 2,116 4,401 1,277,202 Gross profit 622,500 1,976 418 16,043 18,437 640,937 SG&A (2) 465,575 — — 16,043 16,043 481,618 Long-lived asset impairments 23,217 — — — — 23,217 Other income, net (110 ) 70 — — 70 (40 ) Operating income 133,818 1,906 418 — 2,324 136,142 Interest expense, net 48,300 — — — — 48,300 Income before income taxes 85,518 1,906 418 — 2,324 87,842 Income tax expense 24,544 701 153 — 854 25,398 Net income $ 60,974 $ 1,205 $ 265 $ — $ 1,470 $ 62,444 Earnings per share: Basic $ 0.89 $ 0.02 $ — $ — $ 0.02 $ 0.91 Diluted $ 0.89 $ 0.02 $ — $ — $ 0.02 $ 0.91 (1) Includes warehousing, distribution and occupancy. (2) Defined as selling, general and administrative expense. The impact of adoption of ASC 606 on the Company's reportable segments for the three and nine months ended September 30, 2017 was as follows: Three months ended September 30, 2017 As Previously Reported Franchise Fees Specialty Manufacturing Cooperative Advertising and Other Franchise Support Fees Total Adjustments As Revised (in thousands) Revenue: U.S. and Canada $ 486,282 $ 332 $ — $ 5,769 $ 6,101 $ 492,383 International 49,057 (599 ) — — (599 ) 48,458 Manufacturing / Wholesale: Intersegment revenues 58,037 — — — — 58,037 Third party 53,304 (93 ) (1,925 ) — (2,018 ) 51,286 Subtotal Manufacturing / Wholesale 111,341 (93 ) (1,925 ) — (2,018 ) 109,323 Total reportable segment revenues 646,680 (360 ) (1,925 ) 5,769 3,484 650,164 Other 20,826 — — — — 20,826 Elimination of intersegment revenues (58,037 ) — — — — (58,037 ) Total revenue $ 609,469 $ (360 ) $ (1,925 ) $ 5,769 $ 3,484 $ 612,953 Operating income: U.S. and Canada $ 31,572 $ 292 $ — $ — $ 292 $ 31,864 International 16,768 (599 ) — — (599 ) 16,169 Manufacturing / Wholesale 19,505 (93 ) (244 ) — (337 ) 19,168 Total reportable segment operating income 67,845 (400 ) (244 ) — (644 ) 67,201 Corporate costs (25,558 ) — — — — (25,558 ) Other (1,842 ) — — — — (1,842 ) Unallocated corporate and other (27,400 ) — — — — (27,400 ) Total operating income $ 40,445 $ (400 ) $ (244 ) $ — $ (644 ) $ 39,801 Nine months ended September 30, 2017 As Previously Reported Franchise Fees Specialty Manufacturing Cooperative Advertising and Other Franchise Support Fees Total Adjustments As Revised (in thousands) Revenue: U.S. and Canada $ 1,537,265 $ 1,394 $ — $ 18,159 $ 19,553 $ 1,556,818 International 132,105 (83 ) — — (83 ) 132,022 Manufacturing / Wholesale: Intersegment revenues 175,335 — — — — 175,335 Third party 159,749 665 2,703 — 3,368 163,117 Subtotal Manufacturing / Wholesale 335,084 665 2,703 — 3,368 338,452 Total reportable segment revenues 2,004,454 1,976 2,703 18,159 22,838 2,027,292 Other 66,182 — — — — 66,182 Elimination of intersegment revenues (175,335 ) — — — — (175,335 ) Total revenue $ 1,895,301 $ 1,976 $ 2,703 $ 18,159 $ 22,838 $ 1,918,139 Operating income: U.S. and Canada $ 133,520 $ 1,324 $ — $ — $ 1,324 $ 134,844 International 46,908 (83 ) — — (83 ) 46,825 Manufacturing / Wholesale 53,989 665 418 — 1,083 55,072 Total reportable segment operating income 234,417 1,906 418 — 2,324 236,741 Corporate costs (79,839 ) — — — — (79,839 ) Other (20,760 ) — — — — (20,760 ) Unallocated corporate and other (100,599 ) — — — (100,599 ) Total operating income $ 133,818 $ 1,906 $ 418 $ — $ 2,324 $ 136,142 Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-used software. This standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of the new standard to have a material impact to the Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, which requires lessees to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments for all leases with a term greater than 12 months. This standard is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2018 and is required to be applied using a modified retrospective approach. In July 2018, the FASB issued ASU 2018-11, which provides companies with the option to apply the new lease standard either at the beginning of the earliest comparative period presented or in the period of adoption. The Company will elect this optional transition relief amendment that allows for a cumulative-effect adjustment in the period of adoption and will not restate prior periods. The Company has completed scoping of its lease portfolio, identified its significant leases and made progress in developing accounting policies and policy elections upon adoption of the new standard. In addition, the Company is currently implementing a new lease management and accounting software to comply with the new standard and is evaluating its processes and internal controls to identify any resulting changes upon adoption. The Company has a significant number of leases, and as a result, expects this guidance to have a material impact on its Consolidated Balance Sheet, the impact of which is currently being evaluated. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Revenue is recognized when obligations under the terms of a contract with the customer are satisfied; generally, this occurs with the transfer of control of products or services. The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. Applicable sales tax collected concurrent with revenue-producing activities are excluded from revenue. U.S. and Canada Revenue The following is a summary of revenue disaggregated by major source in the U.S. and Canada segment: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 U.S. company-owned product sales: (1) (in thousands) Protein $ 76,738 $ 83,652 $ 251,480 $ 266,621 Performance supplements 68,809 69,770 217,525 217,787 Weight management 29,575 32,622 108,048 112,897 Vitamins 48,322 51,015 148,188 154,363 Herbs / Greens 15,872 16,817 48,975 49,552 Wellness 46,245 47,888 143,626 147,484 Health / Beauty 43,332 48,027 138,911 145,624 Food / Drink 28,325 23,248 82,394 72,818 General merchandise 5,637 6,732 18,577 21,941 Total U.S. company-owned product sales $ 362,855 $ 379,771 $ 1,157,724 $ 1,189,087 Wholesale sales to franchisees 58,199 59,413 176,034 189,776 Royalties and franchise fees 7,939 8,649 25,219 27,472 Sublease income 11,087 12,170 34,485 37,128 Cooperative advertising and other franchise support fees 4,739 5,769 16,245 18,159 Gold Card revenue recognized in U.S. (2) — — — 24,399 Other (3) 31,700 26,611 96,543 70,797 Total U.S. and Canada revenue $ 476,519 $ 492,383 $ 1,506,250 $ 1,556,818 (1) Includes GNC.com sales. (2) The Gold Card Member Pricing program in the U.S. was discontinued in December 2016 in connection with the launch of the One New GNC which resulted in $24.4 million of deferred Gold Card revenue being recognized in the first quarter of 2017, net of $1.4 million in applicable coupon redemptions. (3) Includes revenue primarily related to Canada operations and loyalty programs, myGNC Rewards and PRO Access. The increase compared to the prior year period primarily relates to the Company's loyalty programs. International Revenue The following is a summary of the revenue disaggregated by major source in the International reportable segment: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 (in thousands) Wholesale sales to franchisees $ 32,321 $ 28,941 $ 81,266 $ 80,747 Royalties and franchise fees 7,150 6,509 20,347 19,360 Other (*) 11,936 13,008 38,494 31,915 Total International revenue $ 51,407 $ 48,458 $ 140,107 $ 132,022 (*) Includes revenue primarily related to China operations and company-owned stores located in Ireland. Manufacturing / Wholesale Revenue The following is a summary of the revenue disaggregated by major source in the Manufacturing / Wholesale reportable segment: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 (in thousands) Third-party contract manufacturing $ 31,212 $ 29,260 $ 94,514 $ 97,222 Intersegment sales 63,695 58,037 193,596 175,335 Wholesale partner sales 21,047 22,026 64,791 65,895 Total Manufacturing / Wholesale revenue $ 115,954 $ 109,323 $ 352,901 $ 338,452 Revenue by Geography The following is a summary of the revenue by geography. Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Total revenues by geographic areas: (in thousands) United States $ 545,332 $ 574,053 $ 1,696,887 $ 1,808,745 Foreign 34,853 38,900 108,775 109,394 Total revenues (*) $ 580,185 $ 612,953 $ 1,805,662 $ 1,918,139 (*) Prior year revenue includes revenue from Lucky Vitamin, which was sold on September 30, 2017. Revenue Recognition Policies Within the U.S. and Canada segment, retail sales in company-owned stores are recognized at the point of sale. Revenue related to e-commerce sales is recognized upon shipment based on meeting the transfer of control criteria. The Company has made a policy election to treat shipping and handling as costs to fulfill the contract, and as a result, any fees received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of sales for amounts paid to applicable carriers. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue. 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. Effective with the launch of the One New GNC on December 29, 2016, the Company introduced myGNC Rewards, a free points-based loyalty program while discontinuing its Gold Card Member Pricing program system-wide in the U.S. The loyalty program enables customers to earn points based on their purchases. Points earned by members are valid for one year and may be redeemed for cash discounts on any product the Company sells at both company-owned or franchise locations. The Company defers the estimated standalone selling price of points related to this program as a reduction to revenue as points are earned by allocating a portion of the transaction price the customer pays to a loyalty program liability within deferred revenue and other current liabilities on the Consolidated Balance Sheet. The estimated selling price of each point is based on the estimated value of product for which the point is expected to be redeemed, net of points not expected to be redeemed, based on historical redemption rates. When a customer redeems earned points, revenue is recognized with a corresponding reduction to the program liability. Also effective with the launch of the One New GNC, the Company began offering a paid membership program, PRO Access, for $39.99 per year, which provides members with the delivery of sample boxes throughout the membership year, as well as the offering of certain other benefits including the opportunity to earn triple points on a periodic basis. The boxes include sample merchandise and other materials. The Company allocates the transaction price of the membership to the sample boxes and other benefits based on estimated relative stand-alone prices. The membership price paid is recorded within deferred revenue and other current liabilities on the Consolidated Balance Sheet and recognized as revenue as the underlying performance obligations are satisfied. Revenue from gift cards is recognized when the gift card is redeemed. 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. Revenues from domestic and international franchisees include wholesale product sales, franchise fees and royalties, as well as cooperative advertising and other franchise support fees specific to domestic franchisees. Revenues are recorded within the U.S. and Canada segment for domestic franchisees and the International segment for international franchisees. 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 and other franchise support fees (including construction, equipment and other administrative fees) are recognized upon transfer of control to the franchisee, net of estimated returns and allowances. Franchise license fees, royalties and continuing services, such as cooperative advertising, are not separate and distinct performance obligations as they are highly dependent on each other in supporting the overall brand. Franchise fees for the license are paid in advance, and are deferred and recognized over the applicable license term as the Company satisfies the performance obligation of granting the customer access to the rights of its intellectual property. Franchise royalties and cooperative advertising contributions are variable consideration based on a percentage of the franchisees' retail sales, which are recognized in the period the franchisees' underlying sales occur, and are not included in the upfront transaction price for the overall performance obligation relating to providing access to the Company's intellectual property. The Manufacturing / Wholesale segment sells product to the Company's other segments, which is eliminated in consolidation, and third-party customers. Revenue is recognized over time, net of estimated returns and allowances, as manufacturing occurs if the customized goods have no alternative use (specially made for the end customer) and the Company has an enforceable right to payment for performance completed to date (even if such right is not enforced in practice). The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. The Company uses the cost-to-cost measure of progress for its contracts because it best depicts the transfer of control to the customer which occurs as the Company incurs costs on its contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Costs to fulfill include labor, materials, other direct costs and an allocation of indirect costs, which are recognized as cost of sales as revenue is recognized. Services for specialty manufacturing contracts typically have an expected duration of less than one year. Balances from Contracts with Customers Contract assets relating to specialty manufacturing include amounts related to the Company's contractual right to consideration for completed performance obligations not yet invoiced, and were $27.9 million and $24.3 million at September 30, 2018 and December 31, 2017, respectively, recorded within prepaid and other current assets on the accompanying Consolidated Balance Sheets (with a corresponding reduction to inventory at cost). Contract liabilities include payments received in advance of performance under the contract. The following table presents changes in the Company’s contract liabilities: Nine months ended September 30, 2018 Balance at beginning of period Recognition of revenue included in beginning balance Contract liability, net of revenue recognized during the period Balance at end of period (in thousands) Deferred franchise and license fees $ 38,011 $ (7,739 ) $ 4,128 $ 34,400 PRO Access and loyalty program points 24,464 (22,942 ) 24,512 26,034 Gift card liability (*) 4,172 (2,430 ) 159 1,901 (*) Net of estimated breakage The Company's PRO Access and loyalty program points are recorded within deferred revenue and other current liabilities on the Consolidated Balance Sheets. Deferred franchise and license fees are recorded within deferred revenue and other current liabilities and other long-term liabilities on the Consolidated Balance Sheets. As of September 30, 2018 , the Company had deferred franchise and license fees with unsatisfied performance obligations extending throughout 2028 of $34.4 million , of which $7.2 million is expected to be recognized over the next 12 months. The Company has elected to use the practical expedient allowed under the rules of adoption to not disclose the duration of the remaining unsatisfied performance obligations for contracts with an original expected length of one year or less. |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY The net realizable value of inventory consisted of the following: September 30, 2018 December 31, 2017 (*) (in thousands) Finished product ready for sale $ 423,963 $ 432,092 Work-in-process, bulk product and raw materials 59,542 51,225 Packaging supplies 6,134 2,415 Inventory $ 489,639 $ 485,732 (*) The balances as of December 31, 2017 have been revised in connection with the adoption of ASC 606 to include a reduction to inventory as applicable custom manufacturing services are completed. Refer to Note 2, "Basis of Presentation" for more information. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | PROPERTY, PLANT AND EQUIPMENT, NET During the quarter ended September 30, 2018, the Company performed a detailed review of its store portfolio and identified stores in the U.S. and Canada that will be closed within the next three years at the end of their lease terms. This review also identified other stores in which the Company is considering alternatives such as seeking lower rent or a shorter term. In connection with the review of the store portfolio, the Company recorded $14.6 million of impairment charges in the quarter ended September 30, 2018 within the U.S. and Canada segment, of which $9.5 million related to its property, plant and equipment for certain underperforming stores and $5.1 million related to other store closing costs, presented as long-lived asset impairments in the accompanying Consolidated Statement of Operations. During the quarter ended September 30, 2017, the Company recorded $3.9 million in long-lived asset impairment charges related to certain underperforming stores and the impact of Hurricane Maria on the Company’s stores located in Puerto Rico. Underperforming stores were generally defined as those with historical and expected future losses or stores that management intends on closing in the near term. The impairment test was performed at the individual store level as this is the lowest level which identifiable cash flows are largely independent of other groups of assets and liabilities. If the undiscounted estimated cash flows were less than the carrying value of the asset group, an impairment charge was calculated by subtracting the estimated fair value of property and equipment from its carrying value. Fair value was estimated using a discounted cash flow method (income approach) utilizing the undiscounted cash flows computed in the first step of the test. |
LONG-TERM DEBT _ INTEREST EXPEN
LONG-TERM DEBT / INTEREST EXPENSE | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT / INTEREST EXPENSE | LONG-TERM DEBT / INTEREST EXPENSE Long-term debt consisted of the following: September 30, December 31, (in thousands) Tranche B-1 Term Loan (net of $0.1 million and $0.9 million discount) $ 148,402 $ 1,130,320 Tranche B-2 Term Loan (net of $24.9 million discount) 647,366 — FILO Term Loan (net of $11.6 million discount) 263,403 — Unpaid original issuance discount 13,231 — Notes 173,591 167,988 Debt issuance costs (867 ) (1,285 ) Total debt 1,245,126 1,297,023 Less: current debt (204,480 ) — Long-term debt $ 1,040,646 $ 1,297,023 Refinancing of Senior Credit Facility On February 28, 2018, the Company amended and restated its Senior Credit Facility (the “Amendment”, and the Senior Credit Facility as so amended, the "Term Loan Agreement") formerly consisting of a $1,131.2 million term loan facility due in March 2019 and a $225.0 million revolving credit facility that was scheduled to mature in September 2018. The Amendment included an extension of the maturity date for $704.3 million of the $1,131.2 million term loan facility from March 2019 to March 2021 (the “Tranche B-2 Term Loan"). However, if more than $50.0 million of the Company's Notes have not been repaid, converted or effectively discharged prior to such date (“Existing Indenture Discharge”), the maturity date becomes May 2020, subject to certain adjustments. The Amendment also terminated the existing $225.0 million revolving credit facility. After the effectiveness of the Amendment, the remaining term loan of $151.9 million as of February 28, 2018 continues to have a maturity date of March 2019 (the "Tranche B-1 Term Loan"). The Tranche B-2 Term Loan requires annual aggregate principal payments of at least $43 million and bears interest at a rate of LIBOR plus a margin of 9.25% per annum subject to change under certain circumstances (with a minimum and maximum possible interest rate of LIBOR plus a margin of 8.25% and 9.25% , respectively, per annum). Payments and interest associated with the Tranche B-1 Term Loan are consistent with past terms. The Term Loan Agreement is secured by a (i) first lien on certain assets of the Company primarily consisting of capital stock issued by General Nutrition Centers, Inc. ("Centers") and its subsidiaries, intellectual property and equipment (“Term Priority Collateral”) and (ii) second lien on certain assets of the Company primarily consisting of inventory and accounts receivable (“ABL Priority Collateral”). The Term Loan Agreement is guaranteed by all material, wholly-owned domestic subsidiaries of the Company (the “U.S. Guarantors”) and by General Nutrition Centres Company, an unlimited liability company organized under the laws of Nova Scotia (together with the U.S. Guarantors, the “Guarantors”). On February 28 2018, the Company also entered into a new asset-based credit agreement (the "ABL Credit Agreement"), consisting of: • a new $100 million asset-based Revolving Credit Facility (the "Revolving Credit Facility") with a maturity date of August 2022 (which maturity date will become May 2020, subject to certain adjustments, if the Existing Indenture Discharge has not occurred); and • a $275.0 million asset-based Term Loan Facility advanced on a “first-in, last-out” basis (the "FILO Term Loan") with a maturity date of December 2022 (which maturity date will become May 2020, subject to certain adjustments, if the Existing Indenture Discharge has not occurred). There are no scheduled amortization payments associated with the FILO Term Loan, which bears interest at a rate of LIBOR plus a margin of 7.00% per annum subject to decrease under certain circumstances (with a minimum possible interest rate of LIBOR plus a margin of 6.50% per annum). Outstanding borrowings under the Revolving Credit Facility bear interest at a rate of LIBOR plus 1.50% or prime plus 0.50% (both subject to an increase of 0.25% to 0.50% based on the amount available to be drawn under the Revolving Credit Facility). The Company is also required to pay an annual fee to revolving lenders equal to a maximum of 2.0% (subject to adjustment based on the amount available to be drawn under the Revolving Credit Facility) on outstanding letters of credit and an annual commitment fee of 0.375% on the undrawn portion of the Revolving Credit Facility subject to an increase to 0.5% based on the amount available to draw under the Revolving Credit Facility. The FILO Term Loan and Revolving Credit Facility are secured by a (i) first lien on ABL Priority Collateral and (ii) second lien on Term Priority Collateral. The FILO Term Loan and Revolving Credit Facility are guaranteed by the Guarantors. In connection with the debt refinancing, the Company recognized a loss of $16.7 million in the first quarter of 2018, which primarily includes third-party fees relating to the Tranche B-2 Term Loan and the FILO Term Loan, and is presented as an operating outflow on the accompanying Consolidated Statement of Cash Flows. In addition, the Company incurred $43.4 million consisting of an original issuance discount (“OID”) to the Tranche B-2 Term Loan and the FILO Term Loan lenders, of which $30.2 million has been paid. The remaining $13.2 million is due to the Tranche B-2 Term Loan lenders at 2% of the outstanding balance the earlier of March 2019 or after a qualifying event in which the Company receives net cash proceeds as defined in the credit agreement, the amount of which is subject to change based on the timing and amount of such cash proceeds. The OID together with $5.1 million in fees incurred relating to the Revolving Credit Facility (included within other long-term assets on the Consolidated Balance Sheet) will be amortized through the applicable maturity dates as an increase to interest expense. The $30.2 million portion of OID paid together with the Revolving Credit Facility fees resulted in $35.2 million presented as a financing outflow on the accompanying Consolidated Statement of Cash Flows. Included within the current debt above is the Tranche B-1 Term Loan balance, scheduled amortization payments on the Tranche B-2 Term Loan over the next 12 months and the 2% OID that is due to the Tranche B-2 Term Loan lenders by March 2019. Under the Company’s Term Loan Agreement and ABL Credit Agreement (collectively, the "Credit Facilities"), the Company is required to make certain mandatory prepayments, including a requirement to prepay first the Tranche B-2 Term Loan (until repaid in full), second the FILO Term Loan (until repaid in full, but only if such prepayment is permitted under the ABL Credit Agreement), and third the Tranche B-1 Term Loan, in each case annually with amounts based on excess cash flow, as defined in the Company’s Credit Facilities, based on the results of the Company for the prior fiscal year. The first such payment will be due with respect to the year ending December 31, 2018. The payment will be either 75% or 50% of excess cash flow for each such fiscal year, as determined by the Consolidated Net First Lien Leverage Ratio, and will be reduced by scheduled debt amortization payments and debt maturity payments that occur during the fiscal year and in the subsequent year up to the date the excess cash flow payment is required to be paid. The Company estimates the amount of excess cash flow payment to be between $0 and $25 million . The proceeds from the Harbin transaction, if received and used to pay down the debt prior to December 31, 2018, is expected to result in the Company's excess cash flow payment being at 50% . At September 30, 2018, the contractual interest rates under the Tranche B-1 Term Loan, Tranche B-2 Term Loan, and the FILO Term Loan were 4.8% , 11.5% and 9.3% , respectively, which consist of LIBOR plus the applicable margin rate. At December 31, 2017, the contractual interest rate under the Tranche B-1 Term Loan was 4.1% . At September 30, 2018, the Company had $94.2 million available under the Revolving Credit Facility, after giving effect to $5.8 million utilized to secure letters of credit. See below under "Interest Rate Swaps" for discussion of the interest rate swaps. The Company’s Credit Facilities contain customary covenants, including limitations on the ability of GNC Corporation, Centers, and Centers' subsidiaries to, among other things, incur debt, grant liens on their assets, enter into mergers or liquidations, sell assets, make investments or acquisitions, make optional payments in respect of, or modify, certain other debt instruments, pay dividends or other payments on capital stock, or enter into arrangements that restrict their ability to pay dividends or grant liens. In addition, the Term Loan Agreement requires compliance, as of the end of each fiscal quarter of the Company, with a maximum Consolidated Net First Lien Leverage Ratio initially set at 5.50 to 1.00 through December 31, 2018 and decreasing to 5.00 to 1.00 from March 31, 2019 to December 31, 2019 and 4.25 to 1.00 thereafter. Depending on the amount available to be drawn under the Revolving Credit Facility, the ABL Credit Agreement requires compliance as of the end of each fiscal quarter of the Company with a minimum Fixed Charge Coverage Ratio of 1.00 to 1.00. The Company is currently in compliance, and expects to remain in compliance over the next twelve months, with the terms of its Credit Facilities. On November 7, 2018, The Company entered into an Amendment to the Securities Purchase Agreement with Harbin Pharmaceutical Group Holdings Co., Ltd. ("Harbin") for the purchase of 299,950 shares of Convertible Preferred Stock described in Note 12, "Subsequent Events". Harbin's $300 million investment will be funded in three separate tranches. On November 8, 2018, the Company received the initial $100 million investment for the purchase of 100,000 shares of Convertible Preferred Stock. The Company utilized the $100 million to pay a portion of the Tranche B-2 Term Loan due in March 2021 pursuant to the Amendment to its Senior Credit Facility and elected to use the payment to satisfy the scheduled amortization payments on the Term Loan Facility through December 2020. The remaining net proceeds, after deducting legal and advisory fees, will be available to satisfy the amount due under the Tranche B-1 Term Loan in March 2019. There is no assurance that the remaining applicable closing conditions will be satisfied or waived prior to March 2019 when the obligation is due. Management believes that the Company will have sufficient liquidity to meet its obligations, as they become due, for the next twelve months. In the event that the remaining payments anticipated from the Securities Purchase Agreement, are either delayed or not made at all, management believes that the Company will have adequate cash on hand, cash generated from operations and amounts available under the Revolving Credit Facility to satisfy the Tranche B-1 Term Loan repayment of $147.3 million due in March 2019, net of a $1.1 million principal payment expected in December 2018. To the extent that actual available cash differs materially from the current cash flow forecast, management has the ability to consider certain discretionary payments or asset sales to increase the amount of available cash. Convertible Debt The Company maintains a $ 188.6 million principal amount of 1.5% convertible senior notes due in 2020 (the "Notes"). The Notes consist of the following components: September 30, 2018 December 31, 2017 (in thousands) Liability component Principal $ 188,565 $ 188,565 Conversion feature (13,167 ) (18,065 ) Discount related to debt issuance costs (1,807 ) (2,512 ) Net carrying amount $ 173,591 $ 167,988 Interest Rate Swaps On June 13, 2018, the Company entered into two interest rate swaps with notional amounts of $275 million and $225 million to limit the exposure to its variable interest rate debt by effectively converting it to a fixed interest rate. The Company receives payments based on the one-month LIBOR and makes payments based on a fixed rate. The Company receives payments with a floor of 0.00% and 0.75% , respectively, on the $275 million and $225 million interest rate swaps, which aligns with the related debt instruments. The interest rate swap agreements had an effective date of June 29, 2018. The $225 million interest rate swap expires on February 28, 2021, and the $275 million interest rate swap expires on June 30, 2021. The notional amount of the $225 million interest rate swap is scheduled to decrease to $175 million on June 30, 2019, $125 million on June 30, 2020 and $75 million on December 31, 2020. The Company designated these instruments as cash flow hedges and deemed effective upon initiation. The interest rate swaps are recognized on the balance sheet at fair value. Changes in fair value are recorded within other comprehensive gain (loss) on the Consolidated Balance Sheet and reclassified into the Consolidated Statement of Operations as interest expense in the period in which the underlying transaction affects earnings. At September 30, 2018, the fair value of the interest rate swaps was an asset of $0.6 million included within other long-term assets in the Company's accompanying Consolidated Balance Sheet with a corresponding cumulative unrealized gain of $0.4 million , net of tax, included in accumulated other comprehensive gain (loss). This gain would be immediately recognized in the Consolidated Statement of Operations if these instruments fail to meet certain cash flow hedge requirements. As of September 30, 2018, the amount included in accumulated other comprehensive gain related to the interest rate swaps to be reclassified into earnings during the next 12 months is not material. Refer to Note 7, "Fair Value Measurements of Financial Instruments" for more information on how the interest rate swaps are valued. Interest Expense Interest expense consisted of the following: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 (in thousands) Tranche B-1 Term Loan coupon $ 1,755 $ 10,803 $ 11,496 $ 30,509 Tranche B-2 Term Loan coupon 20,447 — 45,976 — FILO Term Loan coupon 6,901 — 15,241 — Revolving Credit Facility 285 — 655 — Terminated revolving credit facility — 1,188 316 3,982 Amortization of discount and debt issuance costs 3,659 550 8,954 1,800 Subtotal 33,047 12,541 82,638 36,291 Notes: Coupon 707 1,078 2,121 3,210 Amortization of conversion feature 1,655 2,422 4,898 7,156 Amortization of discount and debt issuance costs 244 321 731 938 Total Notes 2,606 3,821 7,750 11,304 Other 79 (23 ) 60 705 Interest expense, net $ 35,732 $ 16,339 $ 90,448 $ 48,300 |
FAIR VALUE MEASUREMENTS AND FIN
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2018 | |
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 recorded in other long-term assets approximates its fair value. The carrying values and estimated fair values of the interest rate swap assets and the term loans, net of discount, and Notes (net of the equity component classified in stockholders' equity and discount) were as follows: September 30, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Assets: Interest rate swaps $ 596 $ 596 $ — $ — Liabilities: Tranche B-1 Term Loan $ 148,402 $ 146,176 $ 1,130,320 $ 930,592 Tranche B-2 Term Loan 647,366 642,511 — — FILO Term Loan 263,403 269,330 — — Notes 173,591 135,184 167,988 85,044 The fair values of the term loans were 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. The Company's interest rate swaps are carried at fair value, which is based primarily on Level 2 inputs utilizing readily observable market data, such as LIBOR forward rates, for all substantial terms of the interest rate swap contracts and the assessment of nonperformance risk. |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES 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 liability matters, 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. 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. If the Company ultimately is required to make any payments 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. 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 per policy year. 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. 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. Litigation 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 September 30, 2018, the Company was named in 27 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. 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 class action complaint contains eight causes of action, alleging, among other matters, meal, rest break and overtime violations for which indeterminate money damages for wages, penalties, interest, and legal fees are sought. In June 2018, the Court granted in part and denied in part the Company's Motion for Decertification. In August 2018, the plaintiff voluntarily dismissed the class action claims alleging overtime violations. As of September 30, 2018, an immaterial liability has been accrued in the accompanying financial statements. The Company intends to vigorously defend against the remaining class action claims asserted in this action, and to seek decertification as to some or all of the claims following additional discovery. It is expected that the trial will occur in 2019. Pennsylvania Fluctuating Workweek . On September 18, 2013, Tawny Chevalier and Andrew Hiller commenced a class action in the Court of Common Pleas of Allegheny County, Pennsylvania. Plaintiff asserted a claim against the Company for a purported violation of the Pennsylvania Minimum Wage Act ("PMWA"), challenging the Company's utilization of the "fluctuating workweek" method to calculate overtime compensation, on behalf of all employees who worked for the Company in Pennsylvania and who were paid according to the fluctuating workweek method. In October 2014, the Court entered an order holding that the use of the fluctuating workweek method violated the PMWA. In September 2016, the Court entered judgment in favor of Plaintiffs and the class in an immaterial amount, which has been recorded as a charge in the accompanying Consolidated Financial Statements. Plaintiffs subsequently filed a petition for an award of attorney's fees, costs and incentive payment. The court awarded an immaterial amount in legal fees. The Company appealed from the adverse judgment and the award of attorney's fees. On December 22, 2017, the Pennsylvania Superior Court held that the Company correctly determined the "regular rate" by dividing weekly compensation by all hours worked (rather than 40), but held that the regular rate must be multiplied by 1.5 (rather than 0.5) to determine the amount of overtime owed. Taking accumulated interest into account, the net result of the Superior Court's decision was to reduce the Company's liability by an immaterial amount, which has been reflected in the accompanying Consolidated Financial Statements. The Company filed a petition for appeal to the Pennsylvania Supreme Court on January 22, 2018. The Pennsylvania Supreme Court accepted the Company's petition for appeal and the Company filed its appellant’s brief on August 27, 2018. The appellees filed their brief on September 26, 2018. It is anticipated that oral argument will occur in early to mid-2019. 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 began on July 20, 2016 and concluded on August 8, 2016. The jury awarded plaintiff immaterial amounts for actual damages and emotional distress damages, which are accrued in the accompanying Consolidated Financial Statements. The jury refused to award plaintiff any of the profits he sought to disgorge, or punitive damages. The court entered judgment in the case on October 14, 2016. In addition to the verdict, the Company and Mr. Olive sought attorneys' fees and other costs from the Court. The Court refused to award attorney's fees to either side but awarded plaintiff an immaterial amount for costs. Plaintiff has appealed the judgment, and separately, the order denying attorney's fees. The Company has cross-appealed the judgment and the Court's denial of attorney fees. Argument occurred in October 2018. On November 2, 2018, the Court affirmed the trail court's decision in part and reversed in part, reversing the denial of Mr. Olive's motion for attorneys' fees and remanding the matter to the trial court for further proceedings regarding his attorneys' fees and costs. Oregon Attorney General. On October 22, 2015, the Attorney General for the State of Oregon sued GNC 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 is vigorously defending itself against these allegations. Along with its Amended Answer and Affirmative Defenses, the Company filed a counterclaim for declaratory relief, asking the court to make certain rulings in favor of the Company, and adding USPlabs, LLC and SK Laboratories as counterclaim defendants. In March 2018, the Oregon Attorney General filed a motion for summary judgment relating to its first claim for relief, which the Company contested. The Company filed a cross motion for summary judgment on the first claim for relief, which the Oregon Attorney General contested. Following oral argument in August 2018, the Court denied the State’s motion for summary judgment and granted in part and denied in part the Company’s motion for summary judgment. The parties are in the process of exchanging discovery. Trial is currently scheduled to begin in September 2019. 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 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. 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. Holland and Barrett License Litigation. On September 18, 2014, the Company's wholly-owned affiliate General Nutrition Investment Company ("GNIC") commenced proceedings in the U.K. High Court to determine if the license agreement from March 2003 between GNIC and Holland & Barrett International Ltd and Health and Diet Centers Ltd. (“Defendants”) was validly terminated. GNIC alleged that termination of the entire agreement was warranted due to several material breaches by Defendants, and that the agreement should be terminated related to five licensed GNC trademarks for lack of use for more than five years. On April 7, 2017, the Court issued its judgment that found that GNIC's notice of termination was invalid and while there were several breaches of the agreement, none were sufficiently material to justify termination. Under U.K. procedural rules, GNIC is required to pay some portion of Defendant’s legal costs. As a result, the Company recorded a charge of $2.1 million in the first quarter of 2017 and subsequently reached an agreement with the Defendants in relation to costs. The Defendants appealed part of the Court's judgment concerning findings in relation to the licensed GNIC trademarks, and that appeal was heard at the U.K.'s Court of Appeal in June 2018. In July 2018, the Court found in favor of the Defendants and GNIC was ordered to pay an immaterial amount for Defendants' costs related to the appeal. E-Commerce Pricing Matters . In April 2016, Jenna Kaskorkis, et al. filed a complaint against General Nutrition Centers, Inc. followed by similar cases brought forth by Ashley Gennock in May 2016 and Kenneth Harrison in December 2016. Plaintiffs allege that the Company's promotional pricing on its website was misleading and did not fairly represent promotions based on average retail prices over a trended period of time being consistent with prices advertised as promotional. The Company attended a mediation with counsel for all plaintiffs and reached a tentative agreement in the third quarter of 2017 on many of the key terms of a settlement. The matters have been effectively stayed while the parties remain in discussions. The Company currently expects any settlement to be in a form that does not require the recording of a contingent liability, except an immaterial amount the Company has accrued in the accompanying Consolidated Financial Statements. Government Regulation In November 2013, the Company received a subpoena from the U.S. Department of Justice ("DOJ") for information related to its investigation of a third party product vendor, USPlabs, LLC. The Company fully cooperated with the investigation of the vendor and the related products, all of which were discontinued in 2013. In December 2016, the Company reached agreement with the DOJ in connection with the Company's cooperation, which agreement acknowledges the Company relied on the representations and written guarantees of USPlabs and the Company's representation that it did not knowingly sell products not in compliance with the FDCA. Under the agreement, which includes an immaterial payment to the federal government, the Company will take a number of actions to broaden industry-wide knowledge of prohibited ingredients and improve compliance by vendors of third party products. These actions are in keeping with the leadership role the Company has taken in setting industry quality and compliance standards, and the Company's commitment over the course of the agreement ( 60 months) to support a combination of its and the industry's initiatives. Some of these actions include maintaining and continuously updating a list of restricted ingredients that will be prohibited from inclusion in any products that are sold by the Company. Vendors selling products to the Company for the sale of such products by the Company will be required to warrant that the products sold do not contain any of these restricted ingredients. In addition, the Company will develop and maintain a list of ingredients that the Company believes comply with the applicable provisions of the FDCA. 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. The Company installed and began operating a pilot vapor extraction system under a portion of the facility in the second half of 2016, which was an immaterial cost to the Company, with DHEC's approval to assess the effectiveness of such a remedial system. After an initial period of monitoring, in October of 2017, the DHEC approved a work plan for extended monitoring of such system and the contamination into 2021. The Company will continue to consult with the DHEC on the next steps in the work after their review of the results of the extended monitoring is complete. At this stage of the investigation, however, it is not possible to estimate the timing and extent of any additional 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 Company's Consolidated Financial Statements. 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 | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, Nine months ended September 30, 2018 2017 2018 2017 (in thousands) Basic weighted average shares 83,412 68,354 83,326 68,296 Effect of dilutive stock-based compensation awards — 215 105 115 Diluted weighted average shares 83,412 68,569 83,431 68,411 For the three months and nine months ended September 30, 2018 and 2017, the following awards were not included in the computation of diluted EPS because the effect of doing so would be anti-dilutive or because certain conditions have not been met with respect to the Company's performance awards. Three months ended September 30, Nine months ended September 30, 2018 (*) 2017 2018 2017 (in thousands) Anti-dilutive: Time-based options and restricted stock awards 3,076 2,381 3,022 2,179 Performance-based restricted stock awards 1,241 — 1,013 — Performance-based restricted stock awards with a market condition 294 — — — Contingently issuable: Performance-based restricted stock awards — 62 — 67 Performance-based restricted stock awards with a market condition — 387 308 416 Total stock-based awards excluded from diluted EPS 4,611 2,830 4,343 2,662 (*) For the quarter ended September 30, 2018, all 4.6 million outstanding stock-based awards were excluded from the computation of diluted EPS because the Company was in a net loss position and as a result, inclusion of the awards would have been anti-dilutive. The Company has applied the if-converted method to calculate dilution on the Notes in the nine months ended September 30, 2018 , which has resulted in all 2.9 million underlying convertible shares being anti-dilutive. The treasury stock method was used in the prior year periods, which also resulted in the underlying shares being anti-dilutive. |
SEGMENTS
SEGMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTS The Company aggregates its operating segments into three reportable segments, U.S. and Canada, International and Manufacturing / Wholesale. The Company fully allocates warehousing and distribution costs to its reportable segments. The Company's chief operating decision maker evaluates segment operating results based primarily on performance indicators, including revenue and operating income. Operating income of each reportable segment excludes certain items that are managed at the consolidated level, such as corporate costs. The Manufacturing / Wholesale segment manufactures and sells product to the U.S. and Canada and International segments at cost with a markup, which is eliminated at consolidation. In connection with the asset sale of Lucky Vitamin on September 30, 2017, their results are included within Other for applicable prior periods to ensure comparability. The following table represents key financial information for each of the Company's reportable segments: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 (in thousands) Revenue: U.S. and Canada $ 476,519 $ 492,383 $ 1,506,250 $ 1,556,818 International 51,407 48,458 140,107 132,022 Manufacturing / Wholesale: Intersegment revenues 63,695 58,037 193,596 175,335 Third party 52,259 51,286 159,305 163,117 Subtotal Manufacturing / Wholesale 115,954 109,323 352,901 338,452 Total reportable segment revenues 643,880 650,164 1,999,258 2,027,292 Other — 20,826 — 66,182 Elimination of intersegment revenues (63,695 ) (58,037 ) (193,596 ) (175,335 ) Total revenue $ 580,185 $ 612,953 $ 1,805,662 $ 1,918,139 Operating income: U.S. and Canada $ 11,466 $ 31,864 $ 100,559 $ 134,844 International 16,468 16,169 46,624 46,825 Manufacturing / Wholesale 16,869 19,168 47,722 55,072 Total reportable segment operating income 44,803 67,201 194,905 236,741 Corporate costs (24,732 ) (25,558 ) (79,511 ) (79,839 ) Other (110 ) (1,842 ) (160 ) (20,760 ) Unallocated corporate costs and other (24,842 ) (27,400 ) (79,671 ) (100,599 ) Total operating income 19,961 39,801 115,234 136,142 Interest expense, net 35,732 16,339 90,448 48,300 Loss on debt refinancing — — 16,740 — (Loss) income before income taxes $ (15,771 ) $ 23,462 $ 8,046 $ 87,842 Refer to Note 3, "Revenue," for more information on the Company's reportable segments. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recognized $7.2 million of income tax benefit during the three months ended September 30, 2018 compared with $2.4 million of income tax expense in the prior year quarter. The Company recognized $2.9 million of income tax benefit during the nine months ended September 30, 2018 compared with $25.4 million of income tax expense in the same period in 2017. The effective tax rate for the quarter ended September 30, 2018 was significantly impacted by $3.6 million in discrete tax benefits associated with finalization of the Company's 2017 federal income tax return. At September 30, 2018 and December 31, 2017 , the Company had $6.4 million and $5.8 million of unrecognized tax benefits, respectively, excluding interest and penalties, which if recognized, would affect the effective tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company accrued $1.9 million at September 30, 2018 and December 31, 2017 , 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. On December 22, 2017, Staff Accounting Bulletin No. 118 was issued to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act. The Consolidated Financial Statements for the year ended December 31, 2017 included an immaterial provisional tax impact related to deemed repatriated earnings. The ultimate impact may differ from these provisional amounts, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made and additional regulatory guidance that may be issued. Any subsequent adjustment will be recorded to current tax expense in the quarter of 2018 when the analysis is complete. GNC Holdings, Inc. 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 2013. The Company has various state and local jurisdiction tax years open to examination (the earliest open period is generally 2011). |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS As previously disclosed in the Company’s 2017 10-K, on February 13, 2018, the Company entered into a Securities Purchase Agreement (as amended from time to time, the “Securities Purchase Agreement”) by and between the Company and Harbin Pharmaceutical Group Holdings Co., Ltd. (the “Investor”), pursuant to which the Company agreed to issue and sell to the Investor, 299,950 shares of a newly created series of convertible perpetual preferred stock of the Company, designated as “Series A Convertible Preferred Stock” (the “Convertible Preferred Stock”), for a purchase price of $1,000 per share, or an aggregate of approximately $300 million . The Convertible Preferred Stock is convertible into shares of the common stock of the Company (the “Common Stock”) at an initial conversion price of $5.35 per share, subject to customary antidilution adjustments. Pursuant to the terms of the Securities Purchase Agreement, the Investor assigned its interest in the Securities Purchase Agreement to Harbin Pharmaceutical Group Co., Ltd., a company incorporated in the People’s Republic of China. In addition, the Securities Purchase Agreement provides for the parties to use their respective reasonable best efforts to negotiate in good faith definitive documentation with respect to a commercial joint venture in China which would be controlled 65% by the Investor and 35% by the Company. On November 7, 2018, the Company and Harbin entered into an Amendment to the Securities Purchase Agreement (the “SPA Amendment”) for the funding of the Convertible Preferred Stock purchase and entered into definitive documentation (the "JV Framework Agreement") with respect to joint ventures in Hong Kong and China (collectively, the "China JV"). Pursuant to the SPA Amendment, the Company and Harbin agreed to complete the securities purchase as follows: (i) 100,000 shares of Preferred Stock issued by November 9, 2018 for a total purchase price of $100 million (the “Initial Issuance”), (ii) 50,000 shares of Preferred Stock issued by December 28, 2018 for a total purchase price of $50 million (the “First Subsequent Issuance”) and (iii) 149,950 shares of Preferred Stock issued by February 13, 2019 for a total purchase price of approximately $150 million (the “Second Subsequent Issuance” and together with the Initial Issuance and the First Subsequent Issuance, the “Issuances”). The SPA Amendment also provides that Harbin will be entitled to designate two directors to the Company's board following the closing of the Initial Issuance, and an additional three directors (including at least two independent directors) upon completion of the Second Subsequent Issuance. The execution of the JV Framework Agreement satisfies the closing condition related to the definitive documentation of the China JV. In addition, Harbin has advised the Company that the required foreign exchange registration with the State Administration of Foreign Exchange (SAFE) for the People’s Republic of China has been completed. The companies completed the Initial Issuance on November 8, 2018. Each of the First Subsequent Issuance and the Second Subsequent Issuance are subject to customary closing conditions. The formation and completion of the China JV is conditioned upon completion of the Second Subsequent Issuance. There can be no assurance that the remaining applicable closing conditions will be satisfied or waived within the timeframes described above. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In December 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-12, which simplifies the application of certain hedge accounting guidance to better align hedge accounting with an organization’s risk management activities in the financial statements. This standard eliminated the separate measurement and reporting of hedge ineffectiveness. Mismatches between changes in value of the hedged item and hedging instrument may still occur but they will no longer be separately reported. For cash flow and net investment hedges, all changes in value of the hedging instrument included in the assessment of effectiveness will be deferred in other comprehensive income and recognized in earnings at the same time that the hedged item affects earnings. The standard is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted. The Company adopted this standard during the second quarter of fiscal 2018, which was applied to the interest rate swaps entered into described below in Note 6 "Long-Term Debt / Interest Expense." The adoption of this standard did not have a material effect on the Company's Consolidated Financial Statements. In May 2017, the FASB issued ASU 2017-09, which amends the scope of modification accounting for share-based payment arrangements. This standard states that an entity should account for the effects of a modification unless all of the following are met: 1) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified (if the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification); 2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and 3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The standard is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company adopted this standard during the first quarter of fiscal 2018 which did not have an impact to the Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15, which addresses changes to the classification of certain cash receipts and cash payments within the statement of cash flows in order to address diversity in practice. In connection with the adoption of this ASU, the Company presented the third-party fees relating to the term loan refinancing as an operating cash flow on the Consolidated Statement of Cash Flows. In November 2016, the FASB issued ASU 2016-18, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of ASU 2016-18 did not have an impact to the Consolidated Statement of Cash Flows. Both standards were effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. Adoption of New Revenue Recognition Standard In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which updates revenue recognition guidance relating to contracts with customers. This standard states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. The Company adopted ASU 2014-09 and its related amendments (collectively known as "ASC 606") during the first quarter of fiscal 2018 using the full retrospective method. The adoption of ASC 606 does not impact recognition of point-of-sale revenue in company-owned stores, most wholesale sales, royalties and sublease revenue, together which account for approximately 90% of the Company’s revenue. The new standard has no impact on the timing or classification of the Company’s cash flows as reported in the Consolidated Statement of Cash Flows and is not expected to have a significant impact on the Company’s Consolidated Statement of Operations in future periods. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-used software. This standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of the new standard to have a material impact to the Consolidated Financial Statements. |
Revenue Recognition | Franchise fees. The Company's previous accounting policy for franchise and license fees received for new store openings and renewals was to recognize these fees when earned per the contract terms, which is when a new store opened or at the start of a new term. In accordance with the new guidance, these fees are now deferred and recognized over the applicable license term as the Company satisfies the performance obligation of granting the customer access to the rights of the Company’s intellectual property. This change impacted all of the Company’s reportable segments. In addition, franchise fees received as part of a sale of a company-owned store to a franchisee are now recorded as described above as part of revenue and will no longer be presented as part of gains on refranchising. Cooperative advertising and other franchise support fees. The Company previously classified advertising and other franchise support fees received from domestic franchisees as a reduction to selling, general and administrative expense and cost of sales on the Consolidated Statement of Operations. In accordance with the new guidance, these fees are now required to be classified as revenue within the U.S. and Canada segment. The new standard does not impact the timing of recognition of this income or the Consolidated Balance Sheet. Specialty manufacturing. The Company previously recognized revenue for products manufactured and sold to customers at a point in time when risk of loss, title and insurable risks have transferred to the customer, net of estimated returns and allowances. Under the new standard, revenue is required to be recognized over time as manufacturing occurs if the customized goods have no alternative use to the manufacturer, and the manufacturer has an enforceable right to payment for performance completed to date. This change impacts contract manufacturing sales to third-parties recorded in the Manufacturing / Wholesale segment. The Company is now recording a reduction to inventory as applicable custom manufacturing services are completed with a corresponding contract asset including the applicable markup, recorded within prepaid and other current assets on the Consolidated Balance Sheet. E-commerce revenues. The Company previously recorded revenue to its e-commerce customers upon delivery. Under the new guidance, the Company is now recognizing revenue upon shipment based on meeting the transfer of control criteria. The Company has made a policy election to treat shipping and handling as costs to fulfill the contract, and as a result, any fees received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of sales for amounts paid to applicable carriers. The Company has not revised prior period balances for e-commerce revenues because the changes are not material. Loyalty. Effective with the launch of the One New GNC on December 29, 2016, the Company introduced a free points-based myGNC Rewards loyalty program system-wide in the U.S. The Company utilized the new revenue recognition standard to account for this program in 2017, the difference of which was immaterial relative to the standard in effect at that time. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The impact of the adoption of ASC 606 on the Company's Consolidated Balance Sheet as of December 31, 2017 was as follows: As Previously Reported Franchise Fees Specialty Manufacturing Total Adjustments As Revised (in thousands) Inventory $ 506,858 $ — $ (21,126 ) $ (21,126 ) $ 485,732 Prepaid and other current assets 42,320 — 24,328 24,328 66,648 Total current assets 739,829 — 3,202 3,202 743,031 Total assets $ 1,516,561 $ — $ 3,202 $ 3,202 $ 1,519,763 Deferred revenue and other current liabilities $ 108,672 $ 5,409 $ — $ 5,409 $ 114,081 Total current liabilities 261,690 5,409 — 5,409 267,099 Deferred income taxes 64,121 (8,868 ) 807 (8,061 ) 56,060 Other long-term liabilities 55,721 29,781 — 29,781 85,502 Total long-term liabilities 1,416,865 20,913 807 21,720 1,438,585 Total liabilities 1,678,555 26,322 807 27,129 1,705,684 Retained earnings 567,741 (26,322 ) 2,395 (23,927 ) 543,814 Total stockholders' deficit (161,994 ) (26,322 ) 2,395 (23,927 ) (185,921 ) Total liabilities and stockholders' deficit $ 1,516,561 $ — $ 3,202 $ 3,202 $ 1,519,763 The impact of the adoption of ASC 606 on the Consolidated Statements of Operations for the three and nine months ended September 30, 2017 was as follows: Three months ended September 30, 2017 As Previously Reported Franchise Fees Specialty Manufacturing Cooperative Advertising and Other Franchise Support Fees Total Adjustments As Revised (in thousands, except per share amounts) Revenue $ 609,469 $ (360 ) $ (1,925 ) $ 5,769 $ 3,484 $ 612,953 Cost of sales (1) 412,663 — (1,681 ) 679 (1,002 ) 411,661 Gross profit 196,806 (360 ) (244 ) 5,090 4,486 201,292 SG&A (2) 150,961 — — 5,090 5,090 156,051 Long-lived asset impairments 3,861 — — — — 3,861 Other income, net 1,539 40 — — 40 1,579 Operating income 40,445 (400 ) (244 ) — (644 ) 39,801 Interest expense, net 16,339 — — — — 16,339 Income before income taxes 24,106 (400 ) (244 ) — (644 ) 23,462 Income tax expense 2,643 (146 ) (91 ) — (237 ) 2,406 Net income $ 21,463 $ (254 ) $ (153 ) $ — $ (407 ) $ 21,056 Earnings per share: Basic $ 0.31 $ — $ — $ — $ — $ 0.31 Diluted $ 0.31 $ — $ — $ — $ — $ 0.31 Nine months ended September 30, 2017 As Previously Reported Franchise Fees Specialty Manufacturing Cooperative Advertising and Other Franchise Support Fees Total Adjustments As Revised (in thousands, except per share amounts) Revenue $ 1,895,301 $ 1,976 $ 2,703 $ 18,159 $ 22,838 $ 1,918,139 Cost of sales (1) 1,272,801 — 2,285 2,116 4,401 1,277,202 Gross profit 622,500 1,976 418 16,043 18,437 640,937 SG&A (2) 465,575 — — 16,043 16,043 481,618 Long-lived asset impairments 23,217 — — — — 23,217 Other income, net (110 ) 70 — — 70 (40 ) Operating income 133,818 1,906 418 — 2,324 136,142 Interest expense, net 48,300 — — — — 48,300 Income before income taxes 85,518 1,906 418 — 2,324 87,842 Income tax expense 24,544 701 153 — 854 25,398 Net income $ 60,974 $ 1,205 $ 265 $ — $ 1,470 $ 62,444 Earnings per share: Basic $ 0.89 $ 0.02 $ — $ — $ 0.02 $ 0.91 Diluted $ 0.89 $ 0.02 $ — $ — $ 0.02 $ 0.91 (1) Includes warehousing, distribution and occupancy. (2) Defined as selling, general and administrative expense. The impact of adoption of ASC 606 on the Company's reportable segments for the three and nine months ended September 30, 2017 was as follows: Three months ended September 30, 2017 As Previously Reported Franchise Fees Specialty Manufacturing Cooperative Advertising and Other Franchise Support Fees Total Adjustments As Revised (in thousands) Revenue: U.S. and Canada $ 486,282 $ 332 $ — $ 5,769 $ 6,101 $ 492,383 International 49,057 (599 ) — — (599 ) 48,458 Manufacturing / Wholesale: Intersegment revenues 58,037 — — — — 58,037 Third party 53,304 (93 ) (1,925 ) — (2,018 ) 51,286 Subtotal Manufacturing / Wholesale 111,341 (93 ) (1,925 ) — (2,018 ) 109,323 Total reportable segment revenues 646,680 (360 ) (1,925 ) 5,769 3,484 650,164 Other 20,826 — — — — 20,826 Elimination of intersegment revenues (58,037 ) — — — — (58,037 ) Total revenue $ 609,469 $ (360 ) $ (1,925 ) $ 5,769 $ 3,484 $ 612,953 Operating income: U.S. and Canada $ 31,572 $ 292 $ — $ — $ 292 $ 31,864 International 16,768 (599 ) — — (599 ) 16,169 Manufacturing / Wholesale 19,505 (93 ) (244 ) — (337 ) 19,168 Total reportable segment operating income 67,845 (400 ) (244 ) — (644 ) 67,201 Corporate costs (25,558 ) — — — — (25,558 ) Other (1,842 ) — — — — (1,842 ) Unallocated corporate and other (27,400 ) — — — — (27,400 ) Total operating income $ 40,445 $ (400 ) $ (244 ) $ — $ (644 ) $ 39,801 Nine months ended September 30, 2017 As Previously Reported Franchise Fees Specialty Manufacturing Cooperative Advertising and Other Franchise Support Fees Total Adjustments As Revised (in thousands) Revenue: U.S. and Canada $ 1,537,265 $ 1,394 $ — $ 18,159 $ 19,553 $ 1,556,818 International 132,105 (83 ) — — (83 ) 132,022 Manufacturing / Wholesale: Intersegment revenues 175,335 — — — — 175,335 Third party 159,749 665 2,703 — 3,368 163,117 Subtotal Manufacturing / Wholesale 335,084 665 2,703 — 3,368 338,452 Total reportable segment revenues 2,004,454 1,976 2,703 18,159 22,838 2,027,292 Other 66,182 — — — — 66,182 Elimination of intersegment revenues (175,335 ) — — — — (175,335 ) Total revenue $ 1,895,301 $ 1,976 $ 2,703 $ 18,159 $ 22,838 $ 1,918,139 Operating income: U.S. and Canada $ 133,520 $ 1,324 $ — $ — $ 1,324 $ 134,844 International 46,908 (83 ) — — (83 ) 46,825 Manufacturing / Wholesale 53,989 665 418 — 1,083 55,072 Total reportable segment operating income 234,417 1,906 418 — 2,324 236,741 Corporate costs (79,839 ) — — — — (79,839 ) Other (20,760 ) — — — — (20,760 ) Unallocated corporate and other (100,599 ) — — — (100,599 ) Total operating income $ 133,818 $ 1,906 $ 418 $ — $ 2,324 $ 136,142 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | U.S. and Canada Revenue The following is a summary of revenue disaggregated by major source in the U.S. and Canada segment: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 U.S. company-owned product sales: (1) (in thousands) Protein $ 76,738 $ 83,652 $ 251,480 $ 266,621 Performance supplements 68,809 69,770 217,525 217,787 Weight management 29,575 32,622 108,048 112,897 Vitamins 48,322 51,015 148,188 154,363 Herbs / Greens 15,872 16,817 48,975 49,552 Wellness 46,245 47,888 143,626 147,484 Health / Beauty 43,332 48,027 138,911 145,624 Food / Drink 28,325 23,248 82,394 72,818 General merchandise 5,637 6,732 18,577 21,941 Total U.S. company-owned product sales $ 362,855 $ 379,771 $ 1,157,724 $ 1,189,087 Wholesale sales to franchisees 58,199 59,413 176,034 189,776 Royalties and franchise fees 7,939 8,649 25,219 27,472 Sublease income 11,087 12,170 34,485 37,128 Cooperative advertising and other franchise support fees 4,739 5,769 16,245 18,159 Gold Card revenue recognized in U.S. (2) — — — 24,399 Other (3) 31,700 26,611 96,543 70,797 Total U.S. and Canada revenue $ 476,519 $ 492,383 $ 1,506,250 $ 1,556,818 (1) Includes GNC.com sales. (2) The Gold Card Member Pricing program in the U.S. was discontinued in December 2016 in connection with the launch of the One New GNC which resulted in $24.4 million of deferred Gold Card revenue being recognized in the first quarter of 2017, net of $1.4 million in applicable coupon redemptions. (3) Includes revenue primarily related to Canada operations and loyalty programs, myGNC Rewards and PRO Access. The increase compared to the prior year period primarily relates to the Company's loyalty programs. International Revenue The following is a summary of the revenue disaggregated by major source in the International reportable segment: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 (in thousands) Wholesale sales to franchisees $ 32,321 $ 28,941 $ 81,266 $ 80,747 Royalties and franchise fees 7,150 6,509 20,347 19,360 Other (*) 11,936 13,008 38,494 31,915 Total International revenue $ 51,407 $ 48,458 $ 140,107 $ 132,022 (*) Includes revenue primarily related to China operations and company-owned stores located in Ireland. Manufacturing / Wholesale Revenue The following is a summary of the revenue disaggregated by major source in the Manufacturing / Wholesale reportable segment: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 (in thousands) Third-party contract manufacturing $ 31,212 $ 29,260 $ 94,514 $ 97,222 Intersegment sales 63,695 58,037 193,596 175,335 Wholesale partner sales 21,047 22,026 64,791 65,895 Total Manufacturing / Wholesale revenue $ 115,954 $ 109,323 $ 352,901 $ 338,452 Revenue by Geography The following is a summary of the revenue by geography. Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Total revenues by geographic areas: (in thousands) United States $ 545,332 $ 574,053 $ 1,696,887 $ 1,808,745 Foreign 34,853 38,900 108,775 109,394 Total revenues (*) $ 580,185 $ 612,953 $ 1,805,662 $ 1,918,139 (*) Prior year revenue includes revenue from Lucky Vitamin, which was sold on September 30, 2017. |
Contract with Customer | The following table presents changes in the Company’s contract liabilities: Nine months ended September 30, 2018 Balance at beginning of period Recognition of revenue included in beginning balance Contract liability, net of revenue recognized during the period Balance at end of period (in thousands) Deferred franchise and license fees $ 38,011 $ (7,739 ) $ 4,128 $ 34,400 PRO Access and loyalty program points 24,464 (22,942 ) 24,512 26,034 Gift card liability (*) 4,172 (2,430 ) 159 1,901 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Net Realizable Value of Inventory | The net realizable value of inventory consisted of the following: September 30, 2018 December 31, 2017 (*) (in thousands) Finished product ready for sale $ 423,963 $ 432,092 Work-in-process, bulk product and raw materials 59,542 51,225 Packaging supplies 6,134 2,415 Inventory $ 489,639 $ 485,732 (*) The balances as of December 31, 2017 have been revised in connection with the adoption of ASC 606 to include a reduction to inventory as applicable custom manufacturing services are completed. Refer to Note 2, "Basis of Presentation" for more information. |
LONG-TERM DEBT _ INTEREST EXP_2
LONG-TERM DEBT / INTEREST EXPENSE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following: September 30, December 31, (in thousands) Tranche B-1 Term Loan (net of $0.1 million and $0.9 million discount) $ 148,402 $ 1,130,320 Tranche B-2 Term Loan (net of $24.9 million discount) 647,366 — FILO Term Loan (net of $11.6 million discount) 263,403 — Unpaid original issuance discount 13,231 — Notes 173,591 167,988 Debt issuance costs (867 ) (1,285 ) Total debt 1,245,126 1,297,023 Less: current debt (204,480 ) — Long-term debt $ 1,040,646 $ 1,297,023 |
Components of Convertible Debt | The Notes consist of the following components: September 30, 2018 December 31, 2017 (in thousands) Liability component Principal $ 188,565 $ 188,565 Conversion feature (13,167 ) (18,065 ) Discount related to debt issuance costs (1,807 ) (2,512 ) Net carrying amount $ 173,591 $ 167,988 |
Schedule of Interest Expense | Interest expense consisted of the following: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 (in thousands) Tranche B-1 Term Loan coupon $ 1,755 $ 10,803 $ 11,496 $ 30,509 Tranche B-2 Term Loan coupon 20,447 — 45,976 — FILO Term Loan coupon 6,901 — 15,241 — Revolving Credit Facility 285 — 655 — Terminated revolving credit facility — 1,188 316 3,982 Amortization of discount and debt issuance costs 3,659 550 8,954 1,800 Subtotal 33,047 12,541 82,638 36,291 Notes: Coupon 707 1,078 2,121 3,210 Amortization of conversion feature 1,655 2,422 4,898 7,156 Amortization of discount and debt issuance costs 244 321 731 938 Total Notes 2,606 3,821 7,750 11,304 Other 79 (23 ) 60 705 Interest expense, net $ 35,732 $ 16,339 $ 90,448 $ 48,300 |
FAIR VALUE MEASUREMENTS AND F_2
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Actual and Estimated Fair Values of the Financial Instruments | The carrying values and estimated fair values of the interest rate swap assets and the term loans, net of discount, and Notes (net of the equity component classified in stockholders' equity and discount) were as follows: September 30, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Assets: Interest rate swaps $ 596 $ 596 $ — $ — Liabilities: Tranche B-1 Term Loan $ 148,402 $ 146,176 $ 1,130,320 $ 930,592 Tranche B-2 Term Loan 647,366 642,511 — — FILO Term Loan 263,403 269,330 — — Notes 173,591 135,184 167,988 85,044 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, Nine months ended September 30, 2018 2017 2018 2017 (in thousands) Basic weighted average shares 83,412 68,354 83,326 68,296 Effect of dilutive stock-based compensation awards — 215 105 115 Diluted weighted average shares 83,412 68,569 83,431 68,411 |
Schedule of Antidilutive and Contingently Issuable Securities Excluded from Computation of Earnings Per Share | For the three months and nine months ended September 30, 2018 and 2017, the following awards were not included in the computation of diluted EPS because the effect of doing so would be anti-dilutive or because certain conditions have not been met with respect to the Company's performance awards. Three months ended September 30, Nine months ended September 30, 2018 (*) 2017 2018 2017 (in thousands) Anti-dilutive: Time-based options and restricted stock awards 3,076 2,381 3,022 2,179 Performance-based restricted stock awards 1,241 — 1,013 — Performance-based restricted stock awards with a market condition 294 — — — Contingently issuable: Performance-based restricted stock awards — 62 — 67 Performance-based restricted stock awards with a market condition — 387 308 416 Total stock-based awards excluded from diluted EPS 4,611 2,830 4,343 2,662 (*) For the quarter ended September 30, 2018, all 4.6 million outstanding stock-based awards were excluded from the computation of diluted EPS because the Company was in a net loss position and as a result, inclusion of the awards would have been anti-dilutive. |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Key Financial Information of the Segments | The following table represents key financial information for each of the Company's reportable segments: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 (in thousands) Revenue: U.S. and Canada $ 476,519 $ 492,383 $ 1,506,250 $ 1,556,818 International 51,407 48,458 140,107 132,022 Manufacturing / Wholesale: Intersegment revenues 63,695 58,037 193,596 175,335 Third party 52,259 51,286 159,305 163,117 Subtotal Manufacturing / Wholesale 115,954 109,323 352,901 338,452 Total reportable segment revenues 643,880 650,164 1,999,258 2,027,292 Other — 20,826 — 66,182 Elimination of intersegment revenues (63,695 ) (58,037 ) (193,596 ) (175,335 ) Total revenue $ 580,185 $ 612,953 $ 1,805,662 $ 1,918,139 Operating income: U.S. and Canada $ 11,466 $ 31,864 $ 100,559 $ 134,844 International 16,468 16,169 46,624 46,825 Manufacturing / Wholesale 16,869 19,168 47,722 55,072 Total reportable segment operating income 44,803 67,201 194,905 236,741 Corporate costs (24,732 ) (25,558 ) (79,511 ) (79,839 ) Other (110 ) (1,842 ) (160 ) (20,760 ) Unallocated corporate costs and other (24,842 ) (27,400 ) (79,671 ) (100,599 ) Total operating income 19,961 39,801 115,234 136,142 Interest expense, net 35,732 16,339 90,448 48,300 Loss on debt refinancing — — 16,740 — (Loss) income before income taxes $ (15,771 ) $ 23,462 $ 8,046 $ 87,842 Refer to Note 3, "Revenue," for more information on the Company's reportable segments. |
NATURE OF BUSINESS (Details)
NATURE OF BUSINESS (Details) | 9 Months Ended |
Sep. 30, 2018segmentcountry | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | segment | 3 |
Number of international countries in which franchise stores are located | country | 50 |
BASIS OF PRESENTATION - Recent
BASIS OF PRESENTATION - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Retained earnings | $ 554,797 | $ 554,797 | $ 543,814 | ||||
Balance Sheet [Abstract] | |||||||
Inventory | 489,639 | 489,639 | 485,732 | ||||
Prepaid and other current assets | 76,536 | 76,536 | 66,648 | ||||
Total current assets | 731,474 | 731,474 | 743,031 | ||||
Assets | 1,479,587 | 1,479,587 | 1,519,763 | ||||
Deferred revenue and other current liabilities | 121,475 | 121,475 | 114,081 | ||||
Total current liabilities | 485,055 | 485,055 | 267,099 | ||||
Deferred income taxes | 43,090 | 43,090 | 56,060 | ||||
Other long-term liabilities | 81,479 | 81,479 | 85,502 | ||||
Total long-term liabilities | 1,165,215 | 1,165,215 | 1,438,585 | ||||
Total liabilities | 1,650,270 | 1,650,270 | 1,705,684 | ||||
Retained earnings | 554,797 | 554,797 | 543,814 | ||||
Total stockholders’ deficit | (170,683) | $ (45,755) | (170,683) | $ (45,755) | (185,921) | $ (117,563) | |
Total liabilities and stockholders’ deficit | 1,479,587 | 1,479,587 | 1,519,763 | ||||
Income Statement [Abstract] | |||||||
Revenue | 580,185 | 612,953 | 1,805,662 | 1,918,139 | |||
Cost of sales | 395,483 | 411,661 | 1,206,351 | 1,277,202 | |||
Gross profit | 184,702 | 201,292 | 599,311 | 640,937 | |||
SG&A | 149,903 | 156,051 | 469,164 | 481,618 | |||
Long-lived asset impairments | 14,600 | 3,900 | |||||
Other loss (income), net | 282 | 1,579 | 357 | (40) | |||
Operating income | 19,961 | 39,801 | 115,234 | 136,142 | |||
Interest expense, net | 35,732 | 16,339 | 90,448 | 48,300 | |||
(Loss) income before income taxes | (15,771) | 23,462 | 8,046 | 87,842 | |||
Income tax expense (benefit) | (7,181) | 2,406 | (2,895) | 25,398 | |||
Net (loss) income | $ (8,590) | $ 21,056 | $ 10,941 | $ 62,444 | |||
Earnings (loss) per share: | |||||||
Basic (in dollars per share) | $ (0.10) | $ 0.31 | $ 0.13 | $ 0.91 | |||
Diluted (in dollars per share) | $ (0.10) | $ 0.31 | $ 0.13 | $ 0.91 | |||
Accounting Standards Update 2014-09 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Revenue unaffected by ASU | 90.00% | ||||||
Income Statement [Abstract] | |||||||
Revenue | $ 612,953 | $ 1,918,139 | |||||
Cost of sales | 411,661 | 1,277,202 | |||||
Gross profit | 201,292 | 640,937 | |||||
SG&A | 156,051 | 481,618 | |||||
Long-lived asset impairments | 3,861 | 23,217 | |||||
Other loss (income), net | 1,579 | (40) | |||||
Operating income | 39,801 | 136,142 | |||||
Interest expense, net | 16,339 | 48,300 | |||||
(Loss) income before income taxes | 23,462 | 87,842 | |||||
Income tax expense (benefit) | 2,406 | 25,398 | |||||
Net (loss) income | $ 21,056 | $ 62,444 | |||||
Earnings (loss) per share: | |||||||
Basic (in dollars per share) | $ 0.31 | $ 0.91 | |||||
Diluted (in dollars per share) | $ 0.31 | $ 0.91 | |||||
As Previously Reported | Accounting Standards Update 2014-09 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Retained earnings | 567,741 | ||||||
Balance Sheet [Abstract] | |||||||
Inventory | 506,858 | ||||||
Prepaid and other current assets | 42,320 | ||||||
Total current assets | 739,829 | ||||||
Assets | 1,516,561 | ||||||
Deferred revenue and other current liabilities | 108,672 | ||||||
Total current liabilities | 261,690 | ||||||
Deferred income taxes | 64,121 | ||||||
Other long-term liabilities | 55,721 | ||||||
Total long-term liabilities | 1,416,865 | ||||||
Total liabilities | 1,678,555 | ||||||
Retained earnings | 567,741 | ||||||
Total stockholders’ deficit | (161,994) | ||||||
Total liabilities and stockholders’ deficit | 1,516,561 | ||||||
Income Statement [Abstract] | |||||||
Revenue | $ 609,469 | $ 1,895,301 | |||||
Cost of sales | 412,663 | 1,272,801 | |||||
Gross profit | 196,806 | 622,500 | |||||
SG&A | 150,961 | 465,575 | |||||
Long-lived asset impairments | 3,861 | 23,217 | |||||
Other loss (income), net | 1,539 | (110) | |||||
Operating income | 40,445 | 133,818 | |||||
Interest expense, net | 16,339 | 48,300 | |||||
(Loss) income before income taxes | 24,106 | 85,518 | |||||
Income tax expense (benefit) | 2,643 | 24,544 | |||||
Net (loss) income | $ 21,463 | $ 60,974 | |||||
Earnings (loss) per share: | |||||||
Basic (in dollars per share) | $ 0.31 | $ 0.89 | |||||
Diluted (in dollars per share) | $ 0.31 | $ 0.89 | |||||
Adjustments | Accounting Standards Update 2014-09 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Retained earnings | (23,927) | $ (23,000) | |||||
Balance Sheet [Abstract] | |||||||
Inventory | (21,126) | ||||||
Prepaid and other current assets | 24,328 | ||||||
Total current assets | 3,202 | ||||||
Assets | 3,202 | ||||||
Deferred revenue and other current liabilities | 5,409 | ||||||
Total current liabilities | 5,409 | ||||||
Deferred income taxes | (8,061) | ||||||
Other long-term liabilities | 29,781 | ||||||
Total long-term liabilities | 21,720 | ||||||
Total liabilities | 27,129 | ||||||
Retained earnings | (23,927) | $ (23,000) | |||||
Total stockholders’ deficit | (23,927) | ||||||
Total liabilities and stockholders’ deficit | 3,202 | ||||||
Income Statement [Abstract] | |||||||
Revenue | $ 3,484 | $ 22,838 | |||||
Cost of sales | (1,002) | 4,401 | |||||
Gross profit | 4,486 | 18,437 | |||||
SG&A | 5,090 | 16,043 | |||||
Long-lived asset impairments | 0 | 0 | |||||
Other loss (income), net | 40 | 70 | |||||
Operating income | (644) | 2,324 | |||||
Interest expense, net | 0 | 0 | |||||
(Loss) income before income taxes | (644) | 2,324 | |||||
Income tax expense (benefit) | (237) | 854 | |||||
Net (loss) income | $ (407) | $ 1,470 | |||||
Earnings (loss) per share: | |||||||
Basic (in dollars per share) | $ 0 | $ 0.02 | |||||
Diluted (in dollars per share) | $ 0 | $ 0.02 | |||||
Adjustments | Franchise Fees | Accounting Standards Update 2014-09 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Retained earnings | (26,322) | ||||||
Balance Sheet [Abstract] | |||||||
Inventory | 0 | ||||||
Prepaid and other current assets | 0 | ||||||
Total current assets | 0 | ||||||
Assets | 0 | ||||||
Deferred revenue and other current liabilities | 5,409 | ||||||
Total current liabilities | 5,409 | ||||||
Deferred income taxes | (8,868) | ||||||
Other long-term liabilities | 29,781 | ||||||
Total long-term liabilities | 20,913 | ||||||
Total liabilities | 26,322 | ||||||
Retained earnings | (26,322) | ||||||
Total stockholders’ deficit | (26,322) | ||||||
Total liabilities and stockholders’ deficit | 0 | ||||||
Income Statement [Abstract] | |||||||
Revenue | $ (360) | $ 1,976 | |||||
Cost of sales | 0 | 0 | |||||
Gross profit | (360) | 1,976 | |||||
SG&A | 0 | 0 | |||||
Long-lived asset impairments | 0 | 0 | |||||
Other loss (income), net | 40 | 70 | |||||
Operating income | (400) | 1,906 | |||||
Interest expense, net | 0 | 0 | |||||
(Loss) income before income taxes | (400) | 1,906 | |||||
Income tax expense (benefit) | (146) | 701 | |||||
Net (loss) income | $ (254) | $ 1,205 | |||||
Earnings (loss) per share: | |||||||
Basic (in dollars per share) | $ 0 | $ 0.02 | |||||
Diluted (in dollars per share) | $ 0 | $ 0.02 | |||||
Adjustments | Specialty Manufacturing | Accounting Standards Update 2014-09 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Retained earnings | 2,395 | ||||||
Balance Sheet [Abstract] | |||||||
Inventory | (21,126) | ||||||
Prepaid and other current assets | 24,328 | ||||||
Total current assets | 3,202 | ||||||
Assets | 3,202 | ||||||
Deferred revenue and other current liabilities | 0 | ||||||
Total current liabilities | 0 | ||||||
Deferred income taxes | 807 | ||||||
Other long-term liabilities | 0 | ||||||
Total long-term liabilities | 807 | ||||||
Total liabilities | 807 | ||||||
Retained earnings | 2,395 | ||||||
Total stockholders’ deficit | 2,395 | ||||||
Total liabilities and stockholders’ deficit | $ 3,202 | ||||||
Income Statement [Abstract] | |||||||
Revenue | $ (1,925) | $ 2,703 | |||||
Cost of sales | (1,681) | 2,285 | |||||
Gross profit | (244) | 418 | |||||
SG&A | 0 | 0 | |||||
Long-lived asset impairments | 0 | 0 | |||||
Other loss (income), net | 0 | 0 | |||||
Operating income | (244) | 418 | |||||
Interest expense, net | 0 | 0 | |||||
(Loss) income before income taxes | (244) | 418 | |||||
Income tax expense (benefit) | (91) | 153 | |||||
Net (loss) income | $ (153) | $ 265 | |||||
Earnings (loss) per share: | |||||||
Basic (in dollars per share) | $ 0 | $ 0 | |||||
Diluted (in dollars per share) | $ 0 | $ 0 | |||||
Adjustments | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | |||||||
Income Statement [Abstract] | |||||||
Revenue | $ 5,769 | $ 18,159 | |||||
Cost of sales | 679 | 2,116 | |||||
Gross profit | 5,090 | 16,043 | |||||
SG&A | 5,090 | 16,043 | |||||
Long-lived asset impairments | 0 | 0 | |||||
Other loss (income), net | 0 | 0 | |||||
Operating income | 0 | 0 | |||||
Interest expense, net | 0 | 0 | |||||
(Loss) income before income taxes | 0 | 0 | |||||
Income tax expense (benefit) | 0 | 0 | |||||
Net (loss) income | $ 0 | $ 0 | |||||
Earnings (loss) per share: | |||||||
Basic (in dollars per share) | $ 0 | $ 0 | |||||
Diluted (in dollars per share) | $ 0 | $ 0 |
BASIS OF PRESENTATION - Impact
BASIS OF PRESENTATION - Impact on Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | $ 580,185 | $ 612,953 | $ 1,805,662 | $ 1,918,139 |
Operating income | 19,961 | 39,801 | 115,234 | 136,142 |
Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 612,953 | 1,918,139 | ||
Operating income | 39,801 | 136,142 | ||
U.S. and Canada | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 31,864 | 134,844 | ||
International | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 16,169 | 46,825 | ||
Manufacturing / Wholesale: | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 52,259 | 51,286 | 159,305 | 163,117 |
Manufacturing / Wholesale: | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 51,286 | 163,117 | ||
Operating income | 19,168 | 55,072 | ||
Operating Segment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 643,880 | 650,164 | 1,999,258 | 2,027,292 |
Operating income | 44,803 | 67,201 | 194,905 | 236,741 |
Operating Segment | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 650,164 | 2,027,292 | ||
Operating income | 67,201 | 236,741 | ||
Operating Segment | U.S. and Canada | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 476,519 | 492,383 | 1,506,250 | 1,556,818 |
Operating income | 11,466 | 31,864 | 100,559 | 134,844 |
Operating Segment | U.S. and Canada | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 492,383 | 1,556,818 | ||
Operating Segment | U.S. and Canada | Cooperative advertising and other franchise support fees | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 4,739 | 5,769 | 16,245 | 18,159 |
Operating Segment | International | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 51,407 | 48,458 | 140,107 | 132,022 |
Operating income | 16,468 | 16,169 | 46,624 | 46,825 |
Operating Segment | International | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 48,458 | 132,022 | ||
Operating Segment | Manufacturing / Wholesale: | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 115,954 | 109,323 | 352,901 | 338,452 |
Operating income | 16,869 | 19,168 | 47,722 | 55,072 |
Operating Segment | Manufacturing / Wholesale: | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 109,323 | 338,452 | ||
Intersegment Eliminations | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (63,695) | (58,037) | (193,596) | (175,335) |
Intersegment Eliminations | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (58,037) | (175,335) | ||
Intersegment Eliminations | Manufacturing / Wholesale: | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | $ 63,695 | 58,037 | $ 193,596 | 175,335 |
Intersegment Eliminations | Manufacturing / Wholesale: | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 58,037 | 175,335 | ||
Unallocated corporate and other | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | (27,400) | (100,599) | ||
Corporate costs | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | (25,558) | (79,839) | ||
Other | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 20,826 | 66,182 | ||
Operating income | (1,842) | (20,760) | ||
Adjustments | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 3,484 | 22,838 | ||
Operating income | (644) | 2,324 | ||
Adjustments | Franchise Fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (360) | 1,976 | ||
Operating income | (400) | 1,906 | ||
Adjustments | Specialty Manufacturing | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (1,925) | 2,703 | ||
Operating income | (244) | 418 | ||
Adjustments | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 5,769 | 18,159 | ||
Operating income | 0 | 0 | ||
Adjustments | U.S. and Canada | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 292 | 1,324 | ||
Adjustments | U.S. and Canada | Franchise Fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 292 | 1,324 | ||
Adjustments | U.S. and Canada | Specialty Manufacturing | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 0 | 0 | ||
Adjustments | U.S. and Canada | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 0 | 0 | ||
Adjustments | International | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | (599) | (83) | ||
Adjustments | International | Franchise Fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | (599) | (83) | ||
Adjustments | International | Specialty Manufacturing | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 0 | 0 | ||
Adjustments | International | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 0 | 0 | ||
Adjustments | Manufacturing / Wholesale: | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (2,018) | 3,368 | ||
Operating income | (337) | 1,083 | ||
Adjustments | Manufacturing / Wholesale: | Franchise Fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (93) | 665 | ||
Operating income | (93) | 665 | ||
Adjustments | Manufacturing / Wholesale: | Specialty Manufacturing | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (1,925) | 2,703 | ||
Operating income | (244) | 418 | ||
Adjustments | Manufacturing / Wholesale: | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Operating income | 0 | 0 | ||
Adjustments | Operating Segment | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 3,484 | 22,838 | ||
Operating income | (644) | 2,324 | ||
Adjustments | Operating Segment | Franchise Fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (360) | 1,976 | ||
Operating income | (400) | 1,906 | ||
Adjustments | Operating Segment | Specialty Manufacturing | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (1,925) | 2,703 | ||
Operating income | (244) | 418 | ||
Adjustments | Operating Segment | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 5,769 | 18,159 | ||
Operating income | 0 | 0 | ||
Adjustments | Operating Segment | U.S. and Canada | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 6,101 | 19,553 | ||
Adjustments | Operating Segment | U.S. and Canada | Franchise Fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 332 | 1,394 | ||
Adjustments | Operating Segment | U.S. and Canada | Specialty Manufacturing | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Adjustments | Operating Segment | U.S. and Canada | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 5,769 | 18,159 | ||
Adjustments | Operating Segment | International | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (599) | (83) | ||
Adjustments | Operating Segment | International | Franchise Fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (599) | (83) | ||
Adjustments | Operating Segment | International | Specialty Manufacturing | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Adjustments | Operating Segment | International | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Adjustments | Operating Segment | Manufacturing / Wholesale: | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (2,018) | 3,368 | ||
Adjustments | Operating Segment | Manufacturing / Wholesale: | Franchise Fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (93) | 665 | ||
Adjustments | Operating Segment | Manufacturing / Wholesale: | Specialty Manufacturing | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (1,925) | 2,703 | ||
Adjustments | Operating Segment | Manufacturing / Wholesale: | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Adjustments | Intersegment Eliminations | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Adjustments | Intersegment Eliminations | Franchise Fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Adjustments | Intersegment Eliminations | Specialty Manufacturing | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Adjustments | Intersegment Eliminations | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Adjustments | Intersegment Eliminations | Manufacturing / Wholesale: | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Adjustments | Intersegment Eliminations | Manufacturing / Wholesale: | Franchise Fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Adjustments | Intersegment Eliminations | Manufacturing / Wholesale: | Specialty Manufacturing | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Adjustments | Intersegment Eliminations | Manufacturing / Wholesale: | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Adjustments | Unallocated corporate and other | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 0 | 0 | ||
Adjustments | Unallocated corporate and other | Franchise Fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 0 | 0 | ||
Adjustments | Unallocated corporate and other | Specialty Manufacturing | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 0 | 0 | ||
Adjustments | Unallocated corporate and other | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 0 | |||
Adjustments | Corporate costs | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 0 | 0 | ||
Adjustments | Corporate costs | Franchise Fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 0 | 0 | ||
Adjustments | Corporate costs | Specialty Manufacturing | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 0 | 0 | ||
Adjustments | Corporate costs | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 0 | 0 | ||
Adjustments | Other | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Operating income | 0 | 0 | ||
Adjustments | Other | Franchise Fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Operating income | 0 | 0 | ||
Adjustments | Other | Specialty Manufacturing | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Operating income | 0 | 0 | ||
Adjustments | Other | Cooperative advertising and other franchise support fees | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 0 | 0 | ||
Operating income | 0 | 0 | ||
As Previously Reported | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 609,469 | 1,895,301 | ||
Operating income | 40,445 | 133,818 | ||
As Previously Reported | U.S. and Canada | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 31,572 | 133,520 | ||
As Previously Reported | International | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | 16,768 | 46,908 | ||
As Previously Reported | Manufacturing / Wholesale: | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 53,304 | 159,749 | ||
Operating income | 19,505 | 53,989 | ||
As Previously Reported | Operating Segment | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 646,680 | 2,004,454 | ||
Operating income | 67,845 | 234,417 | ||
As Previously Reported | Operating Segment | U.S. and Canada | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 486,282 | 1,537,265 | ||
As Previously Reported | Operating Segment | International | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 49,057 | 132,105 | ||
As Previously Reported | Operating Segment | Manufacturing / Wholesale: | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 111,341 | 335,084 | ||
As Previously Reported | Intersegment Eliminations | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (58,037) | (175,335) | ||
As Previously Reported | Intersegment Eliminations | Manufacturing / Wholesale: | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 58,037 | 175,335 | ||
As Previously Reported | Unallocated corporate and other | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | (27,400) | (100,599) | ||
As Previously Reported | Corporate costs | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | (25,558) | (79,839) | ||
As Previously Reported | Other | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 20,826 | 66,182 | ||
Operating income | $ (1,842) | $ (20,760) |
REVENUE - U.S. and Canada Reve
REVENUE - U.S. and Canada Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | ||||||
Revenue | $ 580,185,000 | $ 612,953,000 | $ 1,805,662,000 | $ 1,918,139,000 | ||
Operating Segment | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 643,880,000 | 650,164,000 | 1,999,258,000 | 2,027,292,000 | ||
Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 476,519,000 | 492,383,000 | 1,506,250,000 | 1,556,818,000 | ||
Product Sales | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 362,855,000 | 379,771,000 | 1,157,724,000 | 1,189,087,000 | ||
Protein | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 76,738,000 | 83,652,000 | 251,480,000 | 266,621,000 | ||
Performance supplements | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 68,809,000 | 69,770,000 | 217,525,000 | 217,787,000 | ||
Weight management | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 29,575,000 | 32,622,000 | 108,048,000 | 112,897,000 | ||
Vitamins | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 48,322,000 | 51,015,000 | 148,188,000 | 154,363,000 | ||
Herbs / Greens | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 15,872,000 | 16,817,000 | 48,975,000 | 49,552,000 | ||
Wellness | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 46,245,000 | 47,888,000 | 143,626,000 | 147,484,000 | ||
Health / Beauty | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 43,332,000 | 48,027,000 | 138,911,000 | 145,624,000 | ||
Food / Drink | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 28,325,000 | 23,248,000 | 82,394,000 | 72,818,000 | ||
General merchandise | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 5,637,000 | 6,732,000 | 18,577,000 | 21,941,000 | ||
Wholesale sales to franchisees | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 58,199,000 | 59,413,000 | 176,034,000 | 189,776,000 | ||
Royalties and franchise fees | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 7,939,000 | 8,649,000 | 25,219,000 | 27,472,000 | ||
Sublease income | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 11,087,000 | 12,170,000 | 34,485,000 | 37,128,000 | ||
Cooperative advertising and other franchise support fees | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 4,739,000 | 5,769,000 | $ 16,245,000 | 18,159,000 | ||
Gold Card revenue recognized in U.S. | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Deferred revenue | $ 24,400,000 | |||||
Recognition of deferred revenue | $ 1,400,000 | |||||
Period for loyalty rewards | 1 year | |||||
Annual membership fee per customer | 39.99 | $ 39.99 | ||||
Gold Card revenue recognized in U.S. | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 0 | 0 | 0 | 24,399,000 | ||
Other | Operating Segment | U.S. and Canada | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | $ 31,700,000 | $ 26,611,000 | $ 96,543,000 | $ 70,797,000 |
REVENUE - International Revenue
REVENUE - International Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 580,185 | $ 612,953 | $ 1,805,662 | $ 1,918,139 |
Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 643,880 | 650,164 | 1,999,258 | 2,027,292 |
Operating Segment | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 51,407 | 48,458 | 140,107 | 132,022 |
Operating Segment | International | Wholesale sales to franchisees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 32,321 | 28,941 | 81,266 | 80,747 |
Operating Segment | International | Royalties and franchise fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 7,150 | 6,509 | 20,347 | 19,360 |
Operating Segment | International | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 11,936 | $ 13,008 | $ 38,494 | $ 31,915 |
REVENUE - Manufacturing_Wholesa
REVENUE - Manufacturing/Wholesale Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 580,185 | $ 612,953 | $ 1,805,662 | $ 1,918,139 |
Manufacturing / Wholesale: | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 52,259 | 51,286 | 159,305 | 163,117 |
Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 643,880 | 650,164 | 1,999,258 | 2,027,292 |
Operating Segment | Manufacturing / Wholesale: | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 115,954 | 109,323 | 352,901 | 338,452 |
Operating Segment | Manufacturing / Wholesale: | Third-party contract manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 31,212 | 29,260 | 94,514 | 97,222 |
Operating Segment | Manufacturing / Wholesale: | Wholesale partner sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 21,047 | 22,026 | 64,791 | 65,895 |
Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (63,695) | (58,037) | (193,596) | (175,335) |
Intersegment Eliminations | Manufacturing / Wholesale: | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 63,695 | 58,037 | 193,596 | 175,335 |
Intersegment Eliminations | Manufacturing / Wholesale: | Intersegment sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 63,695 | $ 58,037 | $ 193,596 | $ 175,335 |
REVENUE - Revenue by Geography
REVENUE - Revenue by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 580,185 | $ 612,953 | $ 1,805,662 | $ 1,918,139 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 545,332 | 574,053 | 1,696,887 | 1,808,745 |
Foreign | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 34,853 | $ 38,900 | $ 108,775 | $ 109,394 |
REVENUE - Balances from Contrac
REVENUE - Balances from Contract with Customer (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Contract With Customer [Line Items] | ||
Contract assets | $ 27,900 | $ 24,300 |
Deferred franchise and license fees | ||
Contract liabilities: | ||
Balance at Beginning of Period | 38,011 | |
Deductions | (7,739) | |
Balance at the End of Period | 34,400 | |
Contract With Customer, Liability, Additions, Net Of Revenue Recognized | 4,128 | |
PRO Access and loyalty program points | ||
Contract liabilities: | ||
Balance at Beginning of Period | 24,464 | |
Deductions | (22,942) | |
Balance at the End of Period | 26,034 | |
Contract With Customer, Liability, Additions, Net Of Revenue Recognized | 24,512 | |
Gift card liability | ||
Contract liabilities: | ||
Balance at Beginning of Period | 4,172 | |
Deductions | (2,430) | |
Balance at the End of Period | 1,901 | |
Contract With Customer, Liability, Additions, Net Of Revenue Recognized | 159 | |
Franchise Fees | ||
Contract liabilities: | ||
Balance at the End of Period | 34,400 | |
Deferred revenue | $ 7,200 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished product ready for sale | $ 423,963 | $ 432,092 |
Work-in-process, bulk product and raw materials | 59,542 | 51,225 |
Packaging supplies | 6,134 | 2,415 |
Inventory | $ 489,639 | $ 485,732 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Long-lived asset impairments | $ 14.6 | $ 3.9 |
Property, plant and equipment | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Long-lived asset impairments | 9.5 | |
Other store closing costs | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Long-lived asset impairments | $ 5.1 |
LONG-TERM DEBT _ INTEREST EXP_3
LONG-TERM DEBT / INTEREST EXPENSE - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Feb. 28, 2018 | Feb. 27, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Debt Instrument | |||||
Net carrying amount | $ 1,245,126 | $ 1,297,023 | |||
Unpaid original issuance discount | 13,231 | 0 | $ 0 | ||
Debt issuance costs | (867) | (1,285) | |||
Less: current debt | (204,480) | 0 | |||
Long-term debt | 1,040,646 | 1,297,023 | |||
Term Loan Facility Due March 2019 | |||||
Debt Instrument | |||||
Net carrying amount | $ 1,131,200 | ||||
Term Loan Facility | Amended Term Loan Facility Due March 2021 | |||||
Debt Instrument | |||||
Net carrying amount | $ 704,300 | ||||
Asset-backed Securities | Term Loan | FILO Asset-based Term Loan Facility | |||||
Debt Instrument | |||||
Net carrying amount | 263,403 | 0 | |||
Convertible Senior Notes | 1.5% Convertible Senior Notes, Due 2020 | |||||
Debt Instrument | |||||
Net carrying amount | 173,591 | 167,988 | |||
Tranche B-1 | Term Loan Facility | Term Loan Facility Due March 2019 | |||||
Debt Instrument | |||||
Net carrying amount | 148,402 | $ 151,900 | 1,130,320 | ||
Tranche B-2 | FILO Asset-based Term Loan Facility | |||||
Debt Instrument | |||||
Unpaid original issuance discount | 13,200 | ||||
Tranche B-2 | Term Loan Facility | Amended Term Loan Facility Due March 2021 | |||||
Debt Instrument | |||||
Net carrying amount | $ 647,366 | $ 0 |
LONG-TERM DEBT _ INTEREST EXP_4
LONG-TERM DEBT / INTEREST EXPENSE - Narrative (Details) | Nov. 09, 2018USD ($)shares | Nov. 07, 2018USD ($)shares | Feb. 28, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 13, 2018USD ($)interest_rate_swap | Feb. 27, 2018USD ($) |
Debt Instrument | ||||||||||||||||
Borrowings outstanding | $ 1,297,023,000 | $ 1,245,126,000 | $ 1,245,126,000 | |||||||||||||
Loss on debt refinancing | 0 | $ 0 | 16,740,000 | $ 0 | ||||||||||||
Unpaid original issuance discount | $ 0 | 13,231,000 | 0 | 13,231,000 | 0 | |||||||||||
Payment of discount and fees | $ 30,200,000 | |||||||||||||||
Original Issuance Discount and revolving credit facility fees | 35,235,000 | 0 | ||||||||||||||
Revaluation of interest rate swap, net of tax of $0.5 million | (963,000) | $ 0 | 212,000 | 0 | ||||||||||||
FILO Asset-based Term Loan Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Loss on debt refinancing | $ 16,700,000 | |||||||||||||||
Term Loan Facility Due March 2019 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Borrowings outstanding | $ 1,131,200,000 | |||||||||||||||
Revolving Credit Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Borrowings outstanding | $ 225,000,000 | |||||||||||||||
Line of credit facility, remaining borrowing capacity | 94,200,000 | 94,200,000 | ||||||||||||||
Revolving Credit Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Commitment fee on undrawn portion of revolving credit facility | 0.50% | |||||||||||||||
Term Loan Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Origination issuance discount (OID) | $ 43,400,000 | |||||||||||||||
Current OID due, percent | 2.00% | |||||||||||||||
Term Loan Facility | Amended Term Loan Facility Due March 2021 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Borrowings outstanding | $ 704,300,000 | |||||||||||||||
Term Loan Facility | Term Loan Facility Due March 2019 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Minimum for notes repayment, refinanced, converted, discharged, or prepaid, For maturity date extension trigger | 50,000,000 | |||||||||||||||
Asset-backed Securities | Revolving Credit Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Principal | 100,000,000 | |||||||||||||||
Unamortized debt issuance costs | 5,100,000 | |||||||||||||||
Asset-backed Securities | Term Loan | FILO Asset-based Term Loan Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Borrowings outstanding | $ 0 | 263,403,000 | 263,403,000 | |||||||||||||
Principal | 275,000,000 | |||||||||||||||
Origination issuance discount (OID) | $ 11,600,000 | $ 11,600,000 | ||||||||||||||
Effective interest rate | 9.30% | 9.30% | ||||||||||||||
Convertible Senior Notes | 1.5% Convertible Senior Notes, Due 2020 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Borrowings outstanding | 167,988,000 | $ 173,591,000 | $ 173,591,000 | |||||||||||||
Principal | 188,565,000 | 188,565,000 | 188,565,000 | |||||||||||||
Origination issuance discount (OID) | 18,065,000 | 13,167,000 | 13,167,000 | |||||||||||||
Unamortized debt issuance costs | 2,512,000 | $ 1,807,000 | $ 1,807,000 | |||||||||||||
Interest rate | 1.50% | 1.50% | ||||||||||||||
Tranche B-1 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Repayments of secured debt | $ 3,413,000 | 40,853,000 | ||||||||||||||
Tranche B-1 | Forecast | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Debt instrument, periodic payment | $ 147,300,000 | |||||||||||||||
Debt instrument, periodic principal payment | $ 1,100,000 | |||||||||||||||
Tranche B-1 | Term Loan Facility | Amended Term Loan Facility Due March 2021 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Origination issuance discount (OID) | $ 900,000 | $ 100,000 | $ 100,000 | |||||||||||||
Effective interest rate | 4.10% | 4.80% | 4.80% | |||||||||||||
Tranche B-1 | Term Loan Facility | Term Loan Facility Due March 2019 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Borrowings outstanding | $ 151,900,000 | $ 1,130,320,000 | $ 148,402,000 | $ 148,402,000 | ||||||||||||
Tranche B-1 | Asset-backed Securities | Term Loan Facility Due March 2019 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Commitment fee on undrawn portion of revolving credit facility | 0.375% | |||||||||||||||
Potential increase of unused capacity fee | 0.50% | |||||||||||||||
Tranche B-2 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Repayments of secured debt | 32,100,000 | $ 0 | ||||||||||||||
Tranche B-2 | FILO Asset-based Term Loan Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Unpaid original issuance discount | 13,200,000 | 13,200,000 | ||||||||||||||
Tranche B-2 | Term Loan Facility | Amended Term Loan Facility Due March 2021 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Borrowings outstanding | $ 0 | 647,366,000 | 647,366,000 | |||||||||||||
Annual principal payment | $ 43,000,000 | |||||||||||||||
Origination issuance discount (OID) | $ 24,900,000 | $ 24,900,000 | ||||||||||||||
Current OID due, percent | 2.00% | |||||||||||||||
Mandatory prepayment, percent of excess cash flows | 50.00% | |||||||||||||||
Effective interest rate | 11.50% | 11.50% | ||||||||||||||
Tranche B-2 | Initial Rate | Term Loan Facility | Amended Term Loan Facility Due March 2021 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Mandatory prepayment, percent of excess cash flows | 75.00% | |||||||||||||||
Tranche B-2 | Reduced Rate | Term Loan Facility | Amended Term Loan Facility Due March 2021 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Mandatory prepayment, percent of excess cash flows | 50.00% | |||||||||||||||
LIBOR | Asset-backed Securities | Term Loan | FILO Asset-based Term Loan Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 7.00% | |||||||||||||||
LIBOR | Tranche B-1 | Asset-backed Securities | Term Loan Facility Due March 2019 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 1.50% | |||||||||||||||
LIBOR | Tranche B-2 | Term Loan Facility | Amended Term Loan Facility Due March 2021 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 9.25% | |||||||||||||||
Prime | Tranche B-1 | Asset-backed Securities | Term Loan Facility Due March 2019 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 0.50% | |||||||||||||||
Letter Of Credit | Revolving Credit Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Minimum fixed charge coverage ratio | 1 | 1 | ||||||||||||||
Letter Of Credit | Asset-backed Securities | Revolving Credit Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Letters of credit outstanding | $ 5,800,000 | $ 5,800,000 | ||||||||||||||
Letter Of Credit | Tranche B-1 | Asset-backed Securities | Term Loan Facility Due March 2019 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Fee on outstanding balance | 2.00% | |||||||||||||||
Minimum | Tranche B-2 | Reduced Rate | Term Loan Facility | Amended Term Loan Facility Due March 2021 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Payments for excess cash flows | 0 | |||||||||||||||
Minimum | LIBOR | Asset-backed Securities | Term Loan | FILO Asset-based Term Loan Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 6.50% | |||||||||||||||
Minimum | LIBOR | Tranche B-1 | Asset-backed Securities | Term Loan Facility Due March 2019 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Potential increase (decrease) on basis spread of variable rate | 0.25% | |||||||||||||||
Minimum | LIBOR | Tranche B-2 | Term Loan Facility | Amended Term Loan Facility Due March 2021 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 8.25% | |||||||||||||||
Maximum | Tranche B-2 | Reduced Rate | Term Loan Facility | Amended Term Loan Facility Due March 2021 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Payments for excess cash flows | $ 25,000,000 | |||||||||||||||
Maximum | LIBOR | Tranche B-1 | Asset-backed Securities | Term Loan Facility Due March 2019 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Potential increase (decrease) on basis spread of variable rate | 0.50% | |||||||||||||||
Maximum | LIBOR | Tranche B-2 | Term Loan Facility | Amended Term Loan Facility Due March 2021 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 9.25% | |||||||||||||||
Through December 31, 2018 | Letter Of Credit | Revolving Credit Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Maximum net first lien leverage ratio | 5.50 | 5.50 | ||||||||||||||
March 31, 2019 to December 31, 2019 | Letter Of Credit | Revolving Credit Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Maximum net first lien leverage ratio | 5 | 5 | ||||||||||||||
Thereafter | Letter Of Credit | Revolving Credit Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Maximum net first lien leverage ratio | 4.25 | 4.25 | ||||||||||||||
Interest rate swaps | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Number of interest rate swaps | interest_rate_swap | 2 | |||||||||||||||
Interest rate swap one | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Notional amount | $ 275,000,000 | $ 275,000,000 | $ 275,000,000 | |||||||||||||
Derivative interest floor rate (percentage) | 0.00% | |||||||||||||||
Interest rate swap two | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Notional amount | 225,000,000 | 225,000,000 | $ 225,000,000 | |||||||||||||
Interest rate swaps | $ 600,000 | 600,000 | ||||||||||||||
Derivative interest floor rate (percentage) | 0.75% | |||||||||||||||
Revaluation of interest rate swap, net of tax of $0.5 million | $ 400,000 | |||||||||||||||
Interest rate swap two | Forecast | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Notional amount | $ 75,000,000 | $ 125,000,000 | $ 175,000,000 | |||||||||||||
Subsequent Event | Tranche B-2 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Repayments of secured debt | $ 100,000,000 | |||||||||||||||
Subsequent Event | Convertible Preferred Stock | The Amendment | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Convertible preferred stock issued (in shares) | shares | 299,950 | |||||||||||||||
Sale of stock, consideration received on transaction | $ 300,000,000 | |||||||||||||||
Subsequent Event | Preferred Stock | The Amendment, Initial Issuance | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Convertible preferred stock issued (in shares) | shares | 100,000 | 100,000 | ||||||||||||||
Purchase price | $ 100,000,000 | $ 100,000,000 |
LONG-TERM DEBT _ INTEREST EXP_5
LONG-TERM DEBT / INTEREST EXPENSE - Components of Convertible Debt (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Liability component | ||
Net carrying amount | $ 1,245,126,000 | $ 1,297,023,000 |
Convertible Senior Notes | 1.5% Convertible Senior Notes, Due 2020 | ||
Debt Instrument | ||
Interest rate | 1.50% | |
Liability component | ||
Principal | $ 188,565,000 | 188,565,000 |
Conversion feature | (13,167,000) | (18,065,000) |
Discount related to debt issuance costs | (1,807,000) | (2,512,000) |
Net carrying amount | $ 173,591,000 | $ 167,988,000 |
LONG-TERM DEBT _ INTEREST EXP_6
LONG-TERM DEBT / INTEREST EXPENSE - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Instrument | ||||
Other | $ 79 | $ (23) | $ 60 | $ 705 |
Interest expense, net | 35,732 | 16,339 | 90,448 | 48,300 |
Revolving Credit Facility | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | 0 | 1,188 | 316 | 3,982 |
Senior Credit Facility | ||||
Debt Instrument | ||||
Amortization of discount and debt issuance costs | 3,659 | 550 | 8,954 | 1,800 |
Interest expense | 33,047 | 12,541 | 82,638 | 36,291 |
Senior Credit Facility | Revolving Credit Facility | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | 655 | 0 | ||
Senior Credit Facility | Term Loan Facility | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | 11,496 | 30,509 | ||
Senior Credit Facility | Asset-backed Securities | Revolving Credit Facility | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | 285 | 0 | ||
FILO Asset-based Term Loan Facility | Asset-backed Securities | Term Loan | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | 6,901 | 0 | 15,241 | 0 |
1.5% Convertible Senior Notes, Due 2020 | Convertible Senior Notes | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | 707 | 1,078 | 2,121 | 3,210 |
Amortization of conversion feature | 1,655 | 2,422 | 4,898 | 7,156 |
Amortization of discount and debt issuance costs | 244 | 321 | 731 | 938 |
Interest expense | 2,606 | 3,821 | 7,750 | 11,304 |
Tranche B-1 | Senior Credit Facility | Term Loan Facility | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | 1,755 | 10,803 | ||
Tranche B-2 | Senior Credit Facility | Term Loan Facility | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | $ 20,447 | $ 0 | $ 45,976 | $ 0 |
FAIR VALUE MEASUREMENTS AND F_3
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS - Schedule of Carrying Amount and Estimated Fair Values of the Financial Instruments (Details) - Level 2 - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Interest rate swaps | Carrying Amount | ||
Actual and estimated fair values of the financial instruments | ||
Interest rate swaps | $ 596 | $ 0 |
Interest rate swaps | Fair Value | ||
Actual and estimated fair values of the financial instruments | ||
Interest rate swaps | 596 | 0 |
FILO Asset-based Term Loan Facility | Asset-backed Securities | Carrying Amount | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 263,403 | 0 |
FILO Asset-based Term Loan Facility | Asset-backed Securities | Fair Value | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 269,330 | 0 |
1.5% Convertible Senior Notes, Due 2020 | Notes | Carrying Amount | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 173,591 | 167,988 |
1.5% Convertible Senior Notes, Due 2020 | Notes | Fair Value | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 135,184 | 85,044 |
Tranche B-1 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | Carrying Amount | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 148,402 | 1,130,320 |
Tranche B-1 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | Fair Value | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 146,176 | 930,592 |
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | Carrying Amount | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 647,366 | 0 |
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | Fair Value | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | $ 642,511 | $ 0 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) | Sep. 18, 2014patent | Feb. 29, 2012action | Dec. 31, 2016 | Mar. 31, 2017USD ($) | Sep. 30, 2018USD ($)lawsuit |
Commitments and contingencies | |||||
Accrual for environmental loss | $ 0 | ||||
Product Liability | |||||
Commitments and contingencies | |||||
Deductible/retention per claim | 4,000,000 | ||||
Aggregate cap on retained loss | $ 10,000,000 | ||||
DMAA Claims | Product Liability | |||||
Commitments and contingencies | |||||
Number of pending lawsuits in which company is named | lawsuit | 27 | ||||
Elizabeth Naranjo, California Wage and Break Claims | |||||
Commitments and contingencies | |||||
Number of claims filed | action | 8 | ||||
Holland and Barrett Litigation | |||||
Commitments and contingencies | |||||
Number of unused patents | patent | 5 | ||||
Period of unused patents | 5 years | ||||
Litigation charge | $ 2,100,000 | ||||
Subpoena from Department of Justice Related to USP Labs | |||||
Commitments and contingencies | |||||
Term of settlement agreement | 60 months |
EARNINGS PER SHARE - Schedule
EARNINGS PER SHARE - Schedule of Weighted Average Number of Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Basic weighted-average shares (in shares) | 83,412 | 68,354 | 83,326 | 68,296 |
Effect of dilutive stock-based compensation awards (in shares) | 0 | 215 | 105 | 115 |
Diluted weighted-average shares (in shares) | 83,412 | 68,569 | 83,431 | 68,411 |
EARNINGS PER SHARE - Schedul_2
EARNINGS PER SHARE - Schedule of Antidilutive and Contingently Issuable Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based awards excluded from diluted EPS | 4,611 | 2,830 | 4,343 | 2,662 |
Performance-based restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contingently issuable awards excluded from diluted EPS (in shares) | 0 | 62 | 0 | 67 |
Performance-based restricted stock awards with a market condition | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Antidilutive awards excluded from diluted EPS (in shares) | 294 | 0 | 0 | 0 |
Contingently issuable awards excluded from diluted EPS (in shares) | 0 | 387 | 308 | 416 |
Convertible shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based awards excluded from diluted EPS | 2,900 | |||
Time-based options and restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Antidilutive awards excluded from diluted EPS (in shares) | 3,076 | 2,381 | 3,022 | 2,179 |
Performance-based restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Antidilutive awards excluded from diluted EPS (in shares) | 1,241 | 0 | 1,013 | 0 |
SEGMENTS (Details)
SEGMENTS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 3 | |||
Revenue: | ||||
Revenue | $ 580,185 | $ 612,953 | $ 1,805,662 | $ 1,918,139 |
Operating income: | ||||
Operating income | 19,961 | 39,801 | 115,234 | 136,142 |
Unallocated corporate costs and other | (24,842) | (27,400) | (79,671) | (100,599) |
Interest expense, net | 35,732 | 16,339 | 90,448 | 48,300 |
Loss on debt refinancing | 0 | 0 | 16,740 | 0 |
(Loss) income before income taxes | (15,771) | 23,462 | 8,046 | 87,842 |
Manufacturing / Wholesale: | ||||
Revenue: | ||||
Revenue | 52,259 | 51,286 | 159,305 | 163,117 |
Operating Segment | ||||
Revenue: | ||||
Revenue | 643,880 | 650,164 | 1,999,258 | 2,027,292 |
Operating income: | ||||
Operating income | 44,803 | 67,201 | 194,905 | 236,741 |
Operating Segment | U.S. and Canada | ||||
Revenue: | ||||
Revenue | 476,519 | 492,383 | 1,506,250 | 1,556,818 |
Operating income: | ||||
Operating income | 11,466 | 31,864 | 100,559 | 134,844 |
Operating Segment | International | ||||
Revenue: | ||||
Revenue | 51,407 | 48,458 | 140,107 | 132,022 |
Operating income: | ||||
Operating income | 16,468 | 16,169 | 46,624 | 46,825 |
Operating Segment | Manufacturing / Wholesale: | ||||
Revenue: | ||||
Revenue | 115,954 | 109,323 | 352,901 | 338,452 |
Operating income: | ||||
Operating income | 16,869 | 19,168 | 47,722 | 55,072 |
Operating Segment | Other | ||||
Revenue: | ||||
Revenue | 0 | 20,826 | 0 | 66,182 |
Intersegment Eliminations | ||||
Revenue: | ||||
Revenue | (63,695) | (58,037) | (193,596) | (175,335) |
Intersegment Eliminations | Manufacturing / Wholesale: | ||||
Revenue: | ||||
Revenue | 63,695 | 58,037 | 193,596 | 175,335 |
Corporate costs | ||||
Operating income: | ||||
Unallocated corporate costs and other | (24,732) | (25,558) | (79,511) | (79,839) |
Other | ||||
Operating income: | ||||
Unallocated corporate costs and other | $ (110) | $ (1,842) | $ (160) | $ (20,760) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense (benefit) | $ (7,181) | $ 2,406 | $ (2,895) | $ 25,398 | |
Discrete tax benefit | 3,600 | ||||
Reduction to net deferred tax liabilities | 6,400 | 6,400 | $ 5,800 | ||
Interest and penalties accrued related to unrecognized tax benefits | $ 1,900 | $ 1,900 | $ 1,900 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 09, 2018 | Nov. 07, 2018 | Feb. 13, 2018 |
Securities Purchase Agreement | |||
Subsequent Event [Line Items] | |||
Joint venture ownership percentage | 35.00% | ||
Securities Purchase Agreement | Convertible Preferred Stock | |||
Subsequent Event [Line Items] | |||
Convertible preferred stock issued (in shares) | 299,950 | ||
Sale of stock, price per share (in dollars per share) | $ 1,000 | ||
Sale of stock, consideration received on transaction | $ 300 | ||
Convertible debt, conversion price (in dollars per share) | $ 5.35 | ||
Securities Purchase Agreement | Harbin Pharmaceutical Group | |||
Subsequent Event [Line Items] | |||
Investment, ownership interest | 65.00% | ||
The Amendment, Initial Issuance | Preferred Stock | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Convertible preferred stock issued (in shares) | 100,000 | 100,000 | |
Purchase price | $ 100 | $ 100 | |
First Subsequent Issuance | Preferred Stock | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Convertible preferred stock issued (in shares) | 50,000 | ||
Purchase price | $ 50 | ||
Second Subsequent Issuance | Preferred Stock | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Convertible preferred stock issued (in shares) | 149,950 | ||
Purchase price | $ 150 |