Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 18, 2019 | |
Document and Entity Information | ||
Document Quarterly Report | true | |
Title of 12(b) Security | Class A common stock, par value $0.001 per share | |
Entity Incorporation, State or Country Code | DE | |
Entity Registrant Name | GNC Holdings, Inc. | |
Entity Central Index Key | 0001502034 | |
Document Type | 10-Q | |
Entity File Number | 001-35113 | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding (in shares) | 84,565,337 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Tax Identification Number | 20-8536244 | |
Entity Address, Address Line One | 300 Sixth Avenue | |
Entity Address, Postal Zip Code | 15222 | |
Trading Symbol | GNC | |
Security Exchange Name | NYSE | |
City Area Code | 412 | |
Local Phone Number | 288-4600 | |
Document Transition Report | false | |
Entity Address, City or Town | Pittsburgh, | |
Entity Address, State or Province | PA |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 121,857 | $ 67,224 |
Receivables, net | 111,053 | 127,317 |
Inventory | 394,763 | 465,572 |
Forward contracts for the issuance of convertible preferred stock | 0 | 88,942 |
Prepaid and other current assets | 17,378 | 55,109 |
Total current assets | 645,051 | 804,164 |
Long-term assets: | ||
Goodwill | 79,041 | 140,764 |
Brand name | 300,720 | 300,720 |
Other intangible assets, net | 72,710 | 92,727 |
Property, plant and equipment, net | 89,104 | 155,095 |
Right-of-use assets | 362,774 | |
Total Equity method investments | 99,729 | 0 |
Other long-term assets | 34,752 | 34,380 |
Total long-term assets | 1,038,830 | 723,686 |
Total assets | 1,683,881 | 1,527,850 |
Current liabilities: | ||
Accounts payable | 166,527 | 148,782 |
Current debt | 152,919 | 158,756 |
Current lease liabilities | 115,473 | |
Deferred revenue and other current liabilities | 97,169 | 120,169 |
Total current liabilities | 532,088 | 427,707 |
Long-term liabilities: | ||
Long-term debt | 705,667 | 993,566 |
Deferred income taxes | 15,223 | 39,834 |
Lease liabilities | 347,658 | |
Other long-term liabilities | 47,518 | 82,249 |
Total long-term liabilities | 1,116,066 | 1,115,649 |
Total liabilities | 1,648,154 | 1,543,356 |
Contingencies | ||
Convertible preferred stock | 211,395 | 98,804 |
Stockholders’ deficit: | ||
Common stock | 130 | 130 |
Additional paid-in capital | 1,011,857 | 1,007,827 |
Retained earnings | 552,095 | 613,637 |
Treasury stock, at cost | (1,725,349) | (1,725,349) |
Accumulated other comprehensive loss | (14,401) | (10,555) |
Total stockholders’ deficit | (175,668) | (114,310) |
Total liabilities, mezzanine equity and stockholders’ deficit | $ 1,683,881 | $ 1,527,850 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue | $ 499,076 | $ 580,185 | $ 1,597,837 | $ 1,805,662 |
Cost of sales, including warehousing, distribution and occupancy | 336,448 | 395,483 | 1,038,374 | 1,206,351 |
Gross profit | 162,628 | 184,702 | 559,463 | 599,311 |
Selling, general, and administrative | 135,795 | 149,903 | 427,938 | 469,164 |
Long-lived asset impairments | 0 | 14,556 | 0 | 14,556 |
Loss on net asset exchange for the formation of the joint ventures | 0 | 0 | 21,293 | 0 |
Other loss (income), net | 179 | 282 | (622) | 357 |
Operating income | 26,654 | 19,961 | 110,854 | 115,234 |
Interest expense, net | 24,456 | 35,732 | 82,376 | 90,448 |
Gain on convertible debt repurchase | 0 | 0 | (3,214) | 0 |
Loss on forward contracts for the issuance of convertible preferred stock | 0 | 0 | 16,787 | 0 |
Loss on debt refinancing | 0 | 0 | 0 | 16,740 |
Income (loss) before income taxes | 2,198 | (15,771) | 14,905 | 8,046 |
Income tax expense (benefit) | 5,733 | (7,181) | 20,719 | (2,895) |
(Loss) income before income from equity method investments | (3,535) | (8,590) | (5,814) | 10,941 |
Income from equity method investments | 1,117 | 0 | 4,192 | 0 |
Net (loss) income | $ (2,418) | $ (8,590) | $ (1,622) | $ 10,941 |
(Loss) earning per share: | ||||
Basic (in dollars per share) | $ (0.09) | $ (0.10) | $ (0.18) | $ 0.13 |
Diluted (in dollars per share) | $ (0.09) | $ (0.10) | $ (0.18) | $ 0.13 |
Weighted average common shares outstanding: | ||||
Basic weighted-average shares (in shares) | 83,823 | 83,412 | 83,667 | 83,326 |
Diluted weighted-average shares (in shares) | 83,823 | 83,412 | 83,667 | 83,431 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net (loss) income | $ (2,418) | $ (8,590) | $ (1,622) | $ 10,941 | |
Other comprehensive (loss) gain: | |||||
Periodic revaluation of interest rate swap, net of tax | [1] | (310) | 963 | (4,605) | (212) |
Reclassification adjustment for interest recognized in Consolidated Statement of Operations, net of tax | [2] | 421 | 610 | 925 | 623 |
Net change in unrecognized gain (loss) on interest rate swaps, net of tax | 111 | 1,573 | (3,680) | 411 | |
Foreign currency translation (loss) gain | (791) | 834 | (166) | (962) | |
Other comprehensive (loss) gain | (680) | 2,407 | (3,846) | (551) | |
Comprehensive (loss) income | $ (3,098) | $ (6,183) | $ (5,468) | $ 10,390 | |
[1] | Net of tax benefit of $0.1 million and tax expense of $0.4 million, respectively, for the three months ended September 30, 2019 and 2018, and net of tax benefit of $2.1 million and $0.1 million, respectively, for the nine months ended September 30, 2019 and 2018. | ||||
[2] | Net of tax expense of $0.1 million and $0.3 million , respectively, for the three months ended September 30, 2019 and 2018, and net of tax expense of $0.4 million and $0.3 million , respectively, for the nine months ended September 30, 2019 and 2018. |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax expense (benefit) before reclassification | $ (0.1) | $ 0.4 | $ (2.1) | $ (0.1) |
Tax expense before reclassification | $ 0.1 | $ 0.3 | $ 0.4 | $ 0.3 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 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 | 5,344 | 6,190 | (846) | |||
Restricted stock awards (in shares) | 149 | |||||
Restricted stock awards | 0 | |||||
Minimum tax withholding requirements (in shares) | (54) | |||||
Minimum tax withholding requirements | (223) | (223) | ||||
Stock-based compensation | 1,512 | 1,512 | ||||
Dividend forfeitures on restricted stock | 42 | 42 | ||||
Ending balance (in shares) at Mar. 31, 2018 | 83,662 | |||||
Ending balance at Mar. 31, 2018 | (179,246) | $ 130 | (1,725,349) | 1,002,604 | 550,046 | (6,677) |
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 | |||||
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) |
Beginning balance (in shares) at Mar. 31, 2018 | 83,662 | |||||
Beginning balance at Mar. 31, 2018 | (179,246) | $ 130 | (1,725,349) | 1,002,604 | 550,046 | (6,677) |
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income | 11,229 | 13,341 | (2,112) | |||
Restricted stock awards (in shares) | 229 | |||||
Restricted stock awards | 0 | |||||
Minimum tax withholding requirements (in shares) | (3) | |||||
Minimum tax withholding requirements | (3) | (3) | ||||
Stock-based compensation | 1,962 | 1,962 | ||||
Ending balance (in shares) at Jun. 30, 2018 | 83,888 | |||||
Ending balance at Jun. 30, 2018 | (166,058) | $ 130 | (1,725,349) | 1,004,563 | 563,387 | (8,789) |
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income | (6,183) | (8,590) | 2,407 | |||
Restricted stock awards (in shares) | 19 | |||||
Restricted stock awards | 0 | |||||
Minimum tax withholding requirements (in shares) | (22) | |||||
Minimum tax withholding requirements | (70) | (70) | ||||
Stock-based compensation | 1,628 | 1,628 | ||||
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) |
Beginning balance (in shares) at Dec. 31, 2018 | 83,886 | |||||
Beginning balance at Dec. 31, 2018 | (114,310) | $ 130 | (1,725,349) | 1,007,827 | 613,637 | (10,555) |
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income | (16,052) | (15,262) | (790) | |||
Restricted stock awards (in shares) | 121 | |||||
Restricted stock awards | 0 | |||||
Minimum tax withholding requirements (in shares) | (41) | |||||
Minimum tax withholding requirements | (120) | (120) | ||||
Stock-based compensation | 1,334 | 1,334 | ||||
Ending balance (in shares) at Mar. 31, 2019 | 83,966 | |||||
Ending balance at Mar. 31, 2019 | (189,084) | $ 130 | (1,725,349) | 1,009,041 | 538,439 | (11,345) |
Beginning balance (in shares) at Dec. 31, 2018 | 83,886 | |||||
Beginning balance at Dec. 31, 2018 | (114,310) | $ 130 | (1,725,349) | 1,007,827 | 613,637 | (10,555) |
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income | (5,468) | |||||
Ending balance (in shares) at Sep. 30, 2019 | 84,564 | |||||
Ending balance at Sep. 30, 2019 | (175,668) | $ 130 | (1,725,349) | 1,011,857 | 552,095 | (14,401) |
Beginning balance (in shares) at Mar. 31, 2019 | 83,966 | |||||
Beginning balance at Mar. 31, 2019 | (189,084) | $ 130 | (1,725,349) | 1,009,041 | 538,439 | (11,345) |
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income | 13,682 | 16,058 | (2,376) | |||
Restricted stock awards (in shares) | 628 | |||||
Restricted stock awards | 0 | |||||
Minimum tax withholding requirements (in shares) | (15) | |||||
Minimum tax withholding requirements | (28) | (28) | ||||
Stock-based compensation | 1,658 | 1,658 | ||||
Repurchase of convertible notes | (80) | (80) | ||||
Ending balance (in shares) at Jun. 30, 2019 | 84,579 | |||||
Ending balance at Jun. 30, 2019 | (173,852) | $ 130 | (1,725,349) | 1,010,591 | 554,497 | (13,721) |
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income | (3,098) | (2,418) | (680) | |||
Restricted stock awards (in shares) | 19 | |||||
Restricted stock awards | 0 | |||||
Minimum tax withholding requirements (in shares) | (34) | |||||
Minimum tax withholding requirements | (85) | (85) | ||||
Stock-based compensation | 1,351 | 1,351 | ||||
Dividend forfeitures on restricted stock | 16 | 16 | ||||
Ending balance (in shares) at Sep. 30, 2019 | 84,564 | |||||
Ending balance at Sep. 30, 2019 | $ (175,668) | $ 130 | $ (1,725,349) | $ 1,011,857 | $ 552,095 | $ (14,401) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (1,622) | $ 10,941 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 27,170 | 36,002 |
Income from equity method investments | (4,192) | 0 |
Amortization of debt costs | 16,491 | 14,583 |
Stock-based compensation | 4,343 | 5,102 |
Long-lived asset impairments | 0 | 14,556 |
Loss on forward contracts for the issuance of convertible preferred stock | 16,787 | 0 |
Loss on net asset exchange for the formation of the joint ventures | 21,293 | 0 |
Gain on convertible debt repurchase | (3,214) | 0 |
Gains on refranchising | (440) | (276) |
Loss on debt refinancing | 0 | 16,740 |
Third-party fees associated with refinancing | 0 | (16,322) |
Distributions received from equity method investments | 791 | 0 |
Changes in assets and liabilities: | ||
Increase in receivables | (4,933) | (6,080) |
Decrease (increase) in inventory | 9,718 | (5,794) |
Increase in prepaid and other current assets | (843) | (6,552) |
Increase in accounts payable | 48,795 | 6,860 |
Decrease in deferred revenue and accrued liabilities | (9,456) | (10,565) |
Decrease in net lease liabilities | (25,382) | 0 |
Other operating activities | 2,332 | (3,506) |
Net cash provided by operating activities | 97,638 | 55,689 |
Cash flows from investing activities: | ||
Capital expenditures | (10,933) | (13,355) |
Refranchising proceeds, net of store acquisition costs | 2,062 | 1,916 |
Proceeds from net asset exchange | 99,221 | 0 |
Capital contribution to the newly formed joint ventures | (13,079) | 0 |
Net cash provided by (used in) investing activities | 77,271 | (11,439) |
Cash flows from financing activities: | ||
Borrowings under revolving credit facility | 22,000 | 261,500 |
Payments on revolving credit facility | (22,000) | (261,500) |
Proceeds from the issuance of convertible preferred stock | 199,950 | 0 |
Payments on convertible notes repurchase | (24,708) | 0 |
Original issuance discount and revolving credit facility fees | (10,365) | (35,235) |
Fees associated with the issuance of convertible preferred stock | (12,814) | (3,443) |
Minimum tax withholding requirements | (233) | (296) |
Net cash used in financing activities | (119,256) | (74,487) |
Effect of exchange rate changes on cash and cash equivalents | (1,020) | (416) |
Net increase (decrease) in cash and cash equivalents | 54,633 | (30,653) |
Beginning balance, cash and cash equivalents | 67,224 | 64,001 |
Ending balance, cash and cash equivalents | 121,857 | 33,348 |
Non-cash investing activities: | ||
Capital expenditures in current liabilities | 1,050 | 1,177 |
Non-cash financing activities: | ||
Original issuance discount | 0 | 13,231 |
Tranche B-1 | ||
Cash flows from financing activities: | ||
Payments on term loan facility | (147,312) | (3,413) |
Tranche B-2 | ||
Cash flows from financing activities: | ||
Payments on term loan facility | $ (123,774) | $ (32,100) |
NATURE OF BUSINESS
NATURE OF BUSINESS | 9 Months Ended |
Sep. 30, 2019 | |
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, omni-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's 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 (refer to Note 12, "Segments" for more information). Corporate retail store operations are located in the United States, Canada, Puerto Rico and Ireland. In addition, the Company offers products on the internet through GNC.com and third-party websites. Franchise locations exist in the United States and approximately 50 other countries. Additionally, the Company licenses the use of its trademarks and trade names. In February 2019, the Company entered into two joint ventures with Harbin Pharmaceutical Group Co., Ltd ("Harbin") to operate its e-commerce business in China (the "HK JV") and retail business in China (the "China JV"), which will accelerate its presence and maximize the Company's opportunities for growth in the Chinese supplement market. Under the terms of the agreement, the Company contributed its China business and retained 35% equity interest in the HK JV and China JV. In March 2019, the Company entered into a strategic joint venture with International Vitamin Corporation ("IVC") regarding the Company's manufacturing business (the "Manufacturing JV"), which enables the Company to increase its focus on product innovation while IVC manages manufacturing and integrates with the Company's supply chain thereby driving more efficient usage of capital. Under the terms of the agreement, the Company received $101 million and contributed its Nutra manufacturing and Anderson facility net assets in exchange for an initial 43% equity interest in the Manufacturing JV. During the second quarter of 2019, the Company recognized a $1.8 million working capital purchase price adjustment, which was settled in the third quarter of 2019. Over the next four years, GNC expects to receive an additional $75 million from IVC, adjusted up or down based on the Manufacturing JV's future performance, as IVC’s ownership of the joint venture increases to 100% . |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2019 | |
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 ("SEC"), include all adjustments (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, 2018 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, 2018 , as filed with the SEC on March 13, 2019 (the "2018 10-K"). Interim results are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2019 . Recently Adopted Accounting Pronouncements Adoption of the New Lease Standard In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 adopted ASU 2016-02 and its related amendments (collectively known as "ASC 842") during the first quarter of fiscal 2019 electing the optional transition relief amendment that allows for a cumulative-effect adjustment in the period of adoption and did not restate prior periods. In transitioning to ASC 842, the Company elected to use the practical expedient package available under the guidance for leases that commenced before the effective date and did not elect to use hindsight. The Company has implemented a new lease management and accounting system and updated its processes and internal controls to comply with the new standard. The Company leases substantially all of its retail stores in the U.S. and Canada segment, including most of the domestic franchise stores that are leased and subleased to franchisees, its distribution centers in the United States and retail stores in Ireland. In addition, the Company has leased office locations and vehicle and equipment leases to support our store and supply chain operations. All of the Company's leases are classified as operating leases. The Company determines if a contract contains a lease at inception. The lease liabilities are recognized based on the present value of the future minimum lease payments over the term at the commencement date for leases exceeding 12 months. The lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. The minimum lease payments include only fixed lease components, as well as any variable rate payments that depend on an index, initially measured using the index at the lease commencement date. Lease terms may include options to renew when it is reasonably certain that the Company will exercise an option. The Company estimates its incremental borrowing rate, which was estimated to approximate the interest rate on a collateralized basis with similar terms and payments for each lease, using a portfolio approach. The right-of-use assets recognized are initially equal to the lease liability, adjusted for any lease payments made on or before the commencement dates and lease incentives. The Company recognized lease liabilities of $550.2 million on January 1, 2019. A right-of-use asset of $504.2 million was recognized based on the lease liability, adjusted for the reclassification of deferred rent of $53.3 million and prepaid rent of $7.3 million . Additionally, the Company recognized $79.8 million of right-of-use asset impairment charges related to certain of the Company's stores for which it was previously determined that the carrying value of the stores' assets were not recoverable. The right-of-use asset impairment charges were recorded as a reduction to January 1, 2019 (opening day) retained earnings, net of tax of $19.8 million . The new lease standard has no impact on the timing or classification of the Company's cash flows as reported in the Consolidated Statement of Cash Flows. The lease liabilities for the operating leases are amortized using the effective interest method. The right-of-use asset is amortized by taking the difference between total rent expense recorded on straight-line basis and the lease liability amortization. When the right-of-use asset for an operating lease is impaired, lease expense is no longer recognized on a straight-line basis. For impaired leases, the Company continues to amortize the lease liability using the same effective interest method as before the impairment charge and the right-of-use asset is amortized on a straight-line basis. Refer to Note 8 "Leases" for additional information. Recently Issued Accounting Pronouncements |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2019 | |
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 is 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, 2019 2018 2019 2018 U.S. company-owned product sales: (1) (in thousands) Protein $ 73,103 $ 76,738 $ 230,520 $ 251,480 Performance supplements 70,704 68,809 218,565 217,525 Weight management 22,279 29,575 82,665 108,048 Vitamins 43,107 48,322 135,099 148,188 Herbs / Greens 13,939 15,872 45,348 48,975 Wellness 41,995 46,245 135,565 143,626 Health / Beauty 44,356 43,332 137,279 138,911 Food / Drink 23,806 28,325 78,308 82,394 General merchandise 5,051 5,637 17,370 18,577 Total U.S. company-owned product sales $ 338,340 $ 362,855 $ 1,080,719 $ 1,157,724 Wholesale sales to franchisees 55,729 58,199 173,855 176,034 Royalties and franchise fees 7,592 7,939 24,239 25,219 Sublease income 10,508 11,087 31,982 34,485 Cooperative advertising and other franchise support fees 4,558 4,739 14,379 16,245 Other (2) 28,007 31,700 84,777 96,543 Total U.S. and Canada revenue $ 444,734 $ 476,519 $ 1,409,951 $ 1,506,250 (1) Includes e-commerce sales. (2) Includes revenue primarily related to operations in Canada and the loyalty programs, myGNC Rewards and PRO Access, as further discussed below. International Revenues The following is a summary of revenue disaggregated by major source in the International reportable segment: Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (in thousands) Wholesale sales to franchisees $ 22,965 $ 32,321 $ 75,421 $ 81,266 Royalties and franchise fees 6,792 7,150 19,111 20,347 Other (1) 7,183 11,936 22,779 38,494 Total International revenue $ 36,940 $ 51,407 $ 117,311 $ 140,107 (1) Includes revenue related to China operations prior to the transfer of the China business to the HK JV and China JV, which was effective February 13, 2019, wholesale sales to the HK JV and China JV, and revenue from company-owned locations in Ireland. Manufacturing / Wholesale Revenue The following is a summary of revenue disaggregated by major source in the Manufacturing / Wholesale reportable segment: Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (in thousands) Third-party contract manufacturing (1) $ — $ 31,212 $ 15,783 $ 94,514 Intersegment sales (1) — 63,695 35,505 193,596 Wholesale partner sales 17,402 21,047 54,792 64,791 Total Manufacturing / Wholesale revenue $ 17,402 $ 115,954 $ 106,080 $ 352,901 (1) The decrease in third-party contract manufacturing and intersegment sales for the three and nine months ended September 30, 2019 compared to the prior year period is due to the transfer of the Nutra manufacturing business to the newly formed Manufacturing JV effective March 1, 2019. Revenue by Geography The following is a summary of revenue by geography: Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Total revenues by geographic areas (1) : (in thousands) United States $ 477,306 $ 545,332 $ 1,526,111 $ 1,696,887 Foreign 21,770 34,853 71,726 108,775 Total revenues $ 499,076 $ 580,185 $ 1,597,837 $ 1,805,662 (1) Geographic areas are defined based on legal entity jurisdiction. Balances from Contracts with Customers Contract assets represent amounts related to the Company's contractual right to consideration for completed performance obligations not yet invoiced. As of December 31, 2018, the Company had contract assets of $25.5 million for specialty manufacturing recorded within prepaid and other current assets on the Consolidated Balance Sheet (with a corresponding reduction to inventory at cost). Due to the transfer of the Nutra manufacturing net assets to the Manufacturing JV on March 1, 2019, the Company had no contract assets on the Consolidated Balance Sheet as of September 30, 2019. Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract. 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. The following table presents changes in the Company’s contract liabilities: Nine months ended September 30, 2019 Balance at Beginning of Period Recognition of revenue included in beginning balance Contract liability, net of revenue, recognized during the period Balance at the End of Period (in thousands) Deferred franchise and license fees $ 33,464 (7,931 ) 3,476 $ 29,009 PRO Access and loyalty program points 24,836 (21,266 ) 22,562 26,132 Gift card liability 3,416 (1,945 ) 324 1,795 As of September 30, 2019, the Company had deferred franchise fees with unsatisfied performance obligations extending throughout 2029 of $29.0 million , of which approximately $6.3 million |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY The net realizable value of inventory consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Finished product ready for sale $ 394,763 $ 416,113 Work-in-process, bulk product and raw materials (1) — 46,520 Packaging supplies (1) — 2,939 Inventory $ 394,763 $ 465,572 (1) The decrease in work-in-process, bulk product and raw materials and packaging supplies as of September 30, 2019 compared with December 31, 2018 is due to the transfer of the Nutra manufacturing net assets to the Manufacturing JV effective March 1, 2019. |
LONG-TERM DEBT _ INTEREST EXPEN
LONG-TERM DEBT / INTEREST EXPENSE | 9 Months Ended |
Sep. 30, 2019 | |
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 $ — $ 147,289 Tranche B-2 Term Loan (net of $8.5 million and $17.5 million discount) 440,009 554,760 FILO Term Loan (net of $8.9 million and $10.9 million discount) 266,132 264,086 Unpaid original issuance discount — 11,445 Notes 152,944 175,504 Debt issuance costs (499 ) (762 ) Total debt 858,586 1,152,322 Less: current debt (152,919 ) (158,756 ) Long-term debt $ 705,667 $ 993,566 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"), which included an extension of the maturity date of a portion of the term loan from March 2019 to March 2021 (the "Tranche B-2 Term Loan"). The remaining term loan continued to have a maturity date of March 2019 ("the Tranche B-1 Term Loan"). In the event that all outstanding amounts under the convertible senior notes exceeding $50.0 million are not repaid, refinanced, converted or effectively discharged prior to May 2020 ("Springing Maturity Date"), the maturity date of the Tranche B-2 Term Loan will become the Springing Maturity Date, subject to certain adjustments. In connection with the debt refinancing, the Company recognized a loss of $16.7 million during the first quarter of 2018, which primarily included third-party fees. As of September 30, 2019, the Company had paid off the Tranche B-1 Term Loan and had $440.0 million outstanding under the Tranche B-2 Term Loan. The Company also entered into a new asset-based credit agreement (the "ABL Credit Agreement"), consisting of: • 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, should the Springing Maturity Date be triggered); and • a $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, should the Springing Maturity Date be triggered). In connection with the transfer of the Nutra manufacturing and Anderson facility net assets to the manufacturing joint venture with IVC, the Revolving Credit Facility commitment was reduced from $100 million to $81 million effective March 2019. As of September 30, 2019 there were no borrowings outstanding on the Revolving Credit Facility. The Tranche B-2 Term Loan requires annual aggregate principal payments of at least $43 million and bears interest at a rate of, at the Company's option, LIBOR plus a margin of 8.75% per annum subject to change under certain circumstances (with a minimum and maximum margin of 8.25% and 9.25% , respectively, per annum), or prime plus a margin of 7.75% per annum subject to change under certain circumstances (with a minimum and maximum margin of 7.25% and 8.25% , respectively, per annum). Any mandatory repayments as defined in the credit agreement shall be applied to the remaining annual aggregate principal payments in direct order of maturity. As discussed in further detail below, in November 2018 the Company paid $100 million on the Tranche B-2 Term Loan and elected to use the payment to satisfy the scheduled amortization payments on the Term Loan Facility through December 2020. 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”). 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 1.75% (subject to an increase or decrease of 0.25% 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, which is subject to an increase to 0.5% based on the amount available to drawn 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. 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) and second the FILO Term Loan (until repaid in full, but only if such prepayment is permitted under the ABL Credit Agreement) 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 payment will be 75% of excess cash flow for each such fiscal year, subject to a reduction to 50% based on the attainment of a certain Consolidated Net First Lien Leverage Ratio, and will be reduced by certain scheduled debt payment amounts. The Company made the first excess cash flow payment in the amount of $9.8 million in April 2019 with respect to the year ending December 31, 2018. The Company currently expects the excess cash flow payment for the year ending December 31, 2019, which is required to be paid in the second quarter of 2020, to be between $25 million and $35 million at 50% . At September 30, 2019, the Company's contractual interest rates under the Tranche B-2 Term Loan and the FILO Term Loan were 10.8% and 9.1% , respectively, which consist of LIBOR plus the applicable margin rate. At December 31, 2018, the interest rates under the Tranche B-1 Term Loan, Tranche B-2 Term Loan, and the FILO Term Loan were 5.7% , 11.8% , and 9.5% , respectively. At September 30, 2019, the Company had $68.2 million available under the Revolving Credit Facility, after giving effect to $5.7 million utilized to secure letters of credit and a $7.1 million reduction to borrowing ability as a result of decrease in net collateral. 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. Despite these limitations, the Company has the ability to discharge the liabilities of GNC Holdings, Inc. in the ordinary course of business through a variety of alternatives, including a restricted payment basket, a junior lien debt incurrence basket, and repayment of intercompany debt. 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. If the Company’s availability under the Revolving Credit Facility is less than the greater of (i) 12.5% of the borrowing base or (ii) $12.5M , then the ABL Credit Agreement requires compliance as of the end of each fiscal quarter 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. The Company utilized proceeds from the investment from Harbin Pharmaceutical Group Co., Ltd ("Harbin") and the Manufacturing JV with IVC to pay down outstanding long-term debt. The $100 million investment from Harbin received in November 2018 was utilized to pay a portion of the Tranche B-2 Term Loan. The Company elected to use the payment to satisfy the scheduled amortization payments through December 2020. The Company received the remaining $200 million investment from Harbin and $101 million from IVC in the first quarter of 2019, the proceeds of which were used to pay down the remaining balance of the Tranche B-1 Term Loan that matured in March 2019. The remaining proceeds, together with cash generated from operating activities, were utilized to pay $114.0 million of the Tranche B-2 Term Loan and the original issuance discount due to the Tranche B-2 Term Loan lenders at 2% of outstanding balance. Management believes that cash generated from operations, together with amounts available under the Revolving Credit Facility, will be sufficient to service its debt (including the expected excess cash flow payment), over the next twelve months. While our plan is to refinance our indebtedness by the end of 2019, we make no assurances regarding the likelihood, certainty or exact timing of this refinancing. In the event that a refinancing does not occur before the Springing Maturity Date or the August 2020 maturity date, management believes that the Company will have the ability to repay $159.1 million of the Notes with projected cash on hand and the Revolving Credit Facility. Convertible Debt As of September 30, 2019, the Company maintains $ 159.1 million in principal amount of 1.5% convertible senior notes due in August 2020 (the "Notes"). The Notes consist of the following components: September 30, 2019 December 31, 2018 (in thousands) Liability component Principal $ 159,097 $ 188,565 Conversion feature (5,419 ) (11,489 ) Discount related to debt issuance costs (734 ) (1,572 ) Net carrying amount $ 152,944 $ 175,504 During the second quarter of 2019, the Company repurchased $29.5 million in aggregate principal amount of the Notes for $24.7 million in cash. The convertible debt repurchase resulted in a gain of $3.2 million , which included the unamortized conversion feature of $1.3 million and unamortized discount of $0.2 million . 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 of 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 has scheduled decreases 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 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 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. The fair values of the derivative financial instruments included in the Consolidated Balance Sheets consisted of the following: (in thousands, except percentages) Fair Value at Notional Amount Fixed Rate Balance Sheet Classification September 30, 2019 December 31, 2018 Accounting cash flow hedges: Interest rate swap $ 275,000 2.82 % Other long-term liabilities $ 6,258 $ 2,371 Interest rate swap (1) 175,000 2.74 % Other long-term liabilities 2,283 839 Net carrying amount $ 450,000 Total liabilities $ 8,541 $ 3,210 (1) The notional amount of the $225 million interest rate swap had decreased to $175 million on June 30, 2019 as scheduled. At September 30, 2019, there was a cumulative unrealized loss of $5.9 million , net of tax, related to these interest rate swaps included in accumulated other comprehensive loss. This loss 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, 2019, the amount included in accumulated other comprehensive loss related to the interest rate swaps to be reclassified into earnings during the next 12 months is $3.6 million . 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, 2019 2018 2019 2018 (in thousands) Tranche B-1 Term Loan coupon $ — $ 1,755 $ 928 $ 11,496 Tranche B-2 Term Loan coupon 12,849 20,447 42,271 45,976 FILO Term Loan coupon 6,901 6,901 20,479 15,241 Revolving Credit Facility 97 285 316 655 Terminated revolving credit facility — — — 316 Amortization of discount and debt issuance costs 2,522 3,659 11,087 8,954 Subtotal 22,369 33,047 75,081 82,638 Notes: Coupon 597 707 2,033 2,121 Amortization of conversion feature 1,413 1,655 4,725 4,898 Amortization of discount and debt issuance costs 193 244 679 731 Total Notes 2,203 2,606 7,437 7,750 Other (116 ) 79 (142 ) 60 Interest expense, net $ 24,456 $ 35,732 $ 82,376 $ 90,448 |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | EQUITY METHOD INVESTMENTS In February 2019, the Company contributed its China business in exchange for 35% ownership of each of the newly formed joint ventures with Harbin, the HK JV and China JV. The HK JV includes the operation of the cross-border China e-commerce business, and has an exclusive right to use the Company’s trademarks to manufacture and distribute the Company’s products in China (excluding Hong Kong, Taiwan and Macau) via e-commerce channels. The China JV is a retail-focused joint venture to operate GNC's brick-and-mortar retail business in China and it will have an exclusive right to use the Company's trademarks to manufacture and distribute the Company's products in China (excluding Hong Kong, Taiwan and Macau) via retail stores and pharmacies. The HK JV closed in February 2019 and the China JV agreement is expected to be completed in the fourth quarter of 2019 or the first quarter of 2020, following the satisfaction of certain routine regulatory and legal requirements. In March 2019, the Company received $101 million , net of a $1.8 million working capital purchase price adjustment in the second quarter of 2019, from IVC and contributed the net assets of the Nutra manufacturing and Anderson facilities in exchange for an initial 43% equity interest in a newly formed manufacturing joint venture. In addition, the Company made a capital contribution of $10.7 million to the Manufacturing JV to fund its share of short-term working capital needs. Over the next four years, GNC expects to receive an additional $75 million from IVC, adjusted up or down based on the Manufacturing JV's future performance, as IVC’s ownership of the joint venture increases to 100% . The Manufacturing JV is responsible for the manufacturing of the products previously produced by the Company at the Nutra manufacturing facility. Gain (loss) from the net asset exchange In connection with the formation of the joint ventures effective in the first quarter of 2019, the Company deconsolidated its China business and its Nutra manufacturing business which resulted in a pre-tax gain of $5.8 million and loss of $27.1 million , respectively, recorded within loss on net asset exchange for the formation of the joint ventures on the Consolidated Statements of Operations. The $5.8 million gain from the Harbin transaction was calculated based on the difference between the fair value of the 35% equity interest in the HK JV and China JV, less the carrying value of the contributed China business, including $2.4 million of cash, and third-party closing fees. The $27.1 million loss from the Manufacturing JV transaction was calculated based on the fair value of the 43% equity interest retained in the Manufacturing JV and the $101 million in cash received, net of a $1.8 million working capital purchase price adjustment in the second quarter of 2019, less the carrying value of the contributed Nutra and Anderson facilities and third-party closing fees. The Company's interests in the joint ventures are accounted for as equity method investments due to the Company’s ability to exercise significant influence over management decisions of the joint ventures. Under the equity method, the Company's share of profits and losses from the joint ventures is recorded within income from equity method investments on the Consolidated Statement of Operations. The following table provides a reconciliation of equity method investments on the Company’s Consolidated Balance Sheets: September 30, 2019 (in thousands) Manufacturing JV $ 75,434 Manufacturing JV capital contribution 10,714 HK JV and China JV 10,180 Income from equity method investments 4,192 Distributions received from equity method investments (791 ) Total Equity method investments $ 99,729 In connection with the transaction with IVC, the Company entered into a lease for warehouse space within the Anderson facility. Refer to Note 8, "Leases" for more information. Additionally, the Company purchased approximately $46 million and $118 million , respectively, of finished goods from the Manufacturing JV during the three and nine months ended September 30, 2019 and had approximately $10 million accounts payable outstanding as of September 30, 2019. In connection with the HK JV, the Company recognized revenue, primarily from wholesale sales and royalties, of $3.8 million and $8.1 million , respectively, for the three and nine months ended September 30, 2019 and had $6.4 million |
FAIR VALUE MEASUREMENTS AND FIN
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2019 | |
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 value and estimated fair value of the forward contracts for the issuance of convertible preferred stock, the Term Loan Facility, net of discount, Notes (net of the equity component classified in stockholders' equity and discount) and the interest rate swaps were as follows: September 30, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Assets: Forward contracts for the issuance of convertible preferred stock $ — $ — $ 88,942 $ 88,942 Liabilities: Tranche B-1 Term Loan $ — $ — $ 147,289 $ 145,080 Tranche B-2 Term Loan 440,009 418,559 554,760 511,766 FILO Term Loan 266,132 266,417 264,086 260,125 Notes 152,944 142,620 175,504 131,628 Interest rate swaps 8,541 8,541 3,210 3,210 The forward contracts for the issuance of convertible preferred stock were measured at fair value, as of the valuation date, using a single factor binomial lattice model (the "Lattice Model") which incorporates the terms and conditions of the convertible preferred stock and is based on changes in the prices of the underlying common share price over successive periods of time. Key assumptions of the Lattice Model include the current price of the underlying stock and its historical and expected volatility, risk-neutral interest rates and the instrument's remaining term. These assumptions require significant management judgment and are considered Level 3 inputs. The forward contracts were revalued at each reporting period with changes in fair value recognized in the Consolidated Statements of Operations. The forward contracts settled upon issuance on January 2, 2019 and February 13, 2019. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The Company has operating leases for retail stores, distribution centers, other leased office locations, vehicles and certain equipment with remaining lease terms of one to 15 years , some of which include options to extend the leases for up to 10 years . As of September 30, 2019, the weighted average remaining lease term was 5.2 years and the weighted average discount rate was 10% . On the Company’s Consolidated Balance Sheets as of September 30, 2019, the Company had lease liabilities of $463.1 million , of which $115.5 million are classified as current, and right-of-use assets of $362.8 million . The Company has elected to apply the short-term lease exemption for all asset classes and excluded them from the balance sheet. Lease payments for short-term leases are recognized on a straight-line basis over the lease term. The short-term rent expense recognized during the three months and nine months ended September 30, 2019 is immaterial. The components of the Company's rent expense, which is recorded within cost of sales on the Consolidated Statements of Operations, was as follows: Three months ended September 30, 2019 Nine months ended September 30, 2019 (in thousands) Company-owned and franchise stores: Operating leases $ 36,833 $ 107,710 Variable lease costs (1) 20,300 62,824 Total company-owned and franchise stores 57,133 170,534 Other 1,822 5,976 Total rent expense $ 58,955 $ 176,510 (1) Includes percent and contingent rent, landlord related taxes and common operating expenses. Supplemental cash flow information related to leases was as follows: Nine months ended September 30, 2019 (in thousands) Operating cash flow information: Cash paid for amounts included in the measurement of operating lease liabilities $ 130,374 Right-of-use assets obtained in exchange for new operating lease liabilities $ 23,829 The Company recorded sublease revenue relating to subleases with its franchisees, which includes rental income and other occupancy related items, within revenue on the Consolidated Statements of Operations, of $10.5 million and $32.0 million , respectively, in the three and nine months ended September 30, 2019, and $11.1 million and $34.5 million , respectively, in the three and nine months ended September 30, 2018 Maturities of the lease liabilities (undiscounted lease payments, as defined in Note 2 "Basis of Presentation") as of September 30, 2019 were as follows: Operating Leases for Company-Owned and Franchise Stores Operating Leases for Other (1) Total Operating Leases Sublease Income from Franchisees Rent on Operating Leases, net of Sublease Revenue (in thousands) 2019 (remainder) $ 40,348 $ 1,823 $ 42,171 $ (7,641 ) $ 34,530 2020 140,618 6,611 147,229 (27,431 ) 119,798 2021 111,072 4,739 115,811 (21,938 ) 93,873 2022 82,612 2,721 85,333 (16,713 ) 68,620 2023 61,422 1,355 62,777 (12,370 ) 50,407 Thereafter 137,869 6,703 144,572 (28,900 ) 115,672 Total future obligations $ 573,941 $ 23,952 $ 597,893 $ (114,993 ) $ 482,900 Less amounts representing interest (134,762 ) Present value of lease obligations $ 463,131 (1) Includes various leases for warehouses, vehicles, and various equipment at the Company's facilities. As of September 30, 2019, leases that the Company has entered into but have not yet commenced are immaterial. In connection with the transaction with IVC for the Manufacturing JV effective March 1, 2019, the Company leased warehouse space within the Anderson facility from the Manufacturing JV for a term of one year . The lease was accounted for as a sale leaseback transaction and classified as an operating lease included in the current lease liabilities on the Consolidated Balance Sheet. Disclosures related to periods prior to adoption of ASU 2016-02 The Company adopted ASU 2016-02 using a modified retrospective adoption method at January 1, 2019 as noted in Note 2. "Basis of Presentation." As required, the following disclosure is provided for periods prior to adoption. Minimum future rent obligations for non-cancelable operating leases, excluding optional renewal periods, were as follows for the period ended December 31, 2018 and exclude landlord related taxes, common operating expenses, and percent and contingent rent. Operating Leases for Company-Owned and Franchise Stores Operating Leases for Other (1) Total Operating Leases Sublease Income from Franchisees Rent on Operating Leases, net of Sublease Revenue (in thousands) 2019 $ 162,910 $ 6,071 $ 168,981 $ (29,867 ) $ 139,114 2020 126,312 5,574 131,886 (23,631 ) 108,255 2021 95,000 4,185 99,185 (16,782 ) 82,403 2022 64,735 2,479 67,214 (10,285 ) 56,929 2023 39,798 1,290 41,088 (4,717 ) 36,371 Thereafter 56,200 6,703 62,903 (4,238 ) 58,665 Total future obligations $ 544,955 $ 26,302 $ 571,257 $ (89,520 ) $ 481,737 (1) Includes various leases for warehouses, vehicles, and various equipment at the Company's facilities. |
LEASES | LEASES The Company has operating leases for retail stores, distribution centers, other leased office locations, vehicles and certain equipment with remaining lease terms of one to 15 years , some of which include options to extend the leases for up to 10 years . As of September 30, 2019, the weighted average remaining lease term was 5.2 years and the weighted average discount rate was 10% . On the Company’s Consolidated Balance Sheets as of September 30, 2019, the Company had lease liabilities of $463.1 million , of which $115.5 million are classified as current, and right-of-use assets of $362.8 million . The Company has elected to apply the short-term lease exemption for all asset classes and excluded them from the balance sheet. Lease payments for short-term leases are recognized on a straight-line basis over the lease term. The short-term rent expense recognized during the three months and nine months ended September 30, 2019 is immaterial. The components of the Company's rent expense, which is recorded within cost of sales on the Consolidated Statements of Operations, was as follows: Three months ended September 30, 2019 Nine months ended September 30, 2019 (in thousands) Company-owned and franchise stores: Operating leases $ 36,833 $ 107,710 Variable lease costs (1) 20,300 62,824 Total company-owned and franchise stores 57,133 170,534 Other 1,822 5,976 Total rent expense $ 58,955 $ 176,510 (1) Includes percent and contingent rent, landlord related taxes and common operating expenses. Supplemental cash flow information related to leases was as follows: Nine months ended September 30, 2019 (in thousands) Operating cash flow information: Cash paid for amounts included in the measurement of operating lease liabilities $ 130,374 Right-of-use assets obtained in exchange for new operating lease liabilities $ 23,829 The Company recorded sublease revenue relating to subleases with its franchisees, which includes rental income and other occupancy related items, within revenue on the Consolidated Statements of Operations, of $10.5 million and $32.0 million , respectively, in the three and nine months ended September 30, 2019, and $11.1 million and $34.5 million , respectively, in the three and nine months ended September 30, 2018 Maturities of the lease liabilities (undiscounted lease payments, as defined in Note 2 "Basis of Presentation") as of September 30, 2019 were as follows: Operating Leases for Company-Owned and Franchise Stores Operating Leases for Other (1) Total Operating Leases Sublease Income from Franchisees Rent on Operating Leases, net of Sublease Revenue (in thousands) 2019 (remainder) $ 40,348 $ 1,823 $ 42,171 $ (7,641 ) $ 34,530 2020 140,618 6,611 147,229 (27,431 ) 119,798 2021 111,072 4,739 115,811 (21,938 ) 93,873 2022 82,612 2,721 85,333 (16,713 ) 68,620 2023 61,422 1,355 62,777 (12,370 ) 50,407 Thereafter 137,869 6,703 144,572 (28,900 ) 115,672 Total future obligations $ 573,941 $ 23,952 $ 597,893 $ (114,993 ) $ 482,900 Less amounts representing interest (134,762 ) Present value of lease obligations $ 463,131 (1) Includes various leases for warehouses, vehicles, and various equipment at the Company's facilities. As of September 30, 2019, leases that the Company has entered into but have not yet commenced are immaterial. In connection with the transaction with IVC for the Manufacturing JV effective March 1, 2019, the Company leased warehouse space within the Anderson facility from the Manufacturing JV for a term of one year . The lease was accounted for as a sale leaseback transaction and classified as an operating lease included in the current lease liabilities on the Consolidated Balance Sheet. Disclosures related to periods prior to adoption of ASU 2016-02 The Company adopted ASU 2016-02 using a modified retrospective adoption method at January 1, 2019 as noted in Note 2. "Basis of Presentation." As required, the following disclosure is provided for periods prior to adoption. Minimum future rent obligations for non-cancelable operating leases, excluding optional renewal periods, were as follows for the period ended December 31, 2018 and exclude landlord related taxes, common operating expenses, and percent and contingent rent. Operating Leases for Company-Owned and Franchise Stores Operating Leases for Other (1) Total Operating Leases Sublease Income from Franchisees Rent on Operating Leases, net of Sublease Revenue (in thousands) 2019 $ 162,910 $ 6,071 $ 168,981 $ (29,867 ) $ 139,114 2020 126,312 5,574 131,886 (23,631 ) 108,255 2021 95,000 4,185 99,185 (16,782 ) 82,403 2022 64,735 2,479 67,214 (10,285 ) 56,929 2023 39,798 1,290 41,088 (4,717 ) 36,371 Thereafter 56,200 6,703 62,903 (4,238 ) 58,665 Total future obligations $ 544,955 $ 26,302 $ 571,257 $ (89,520 ) $ 481,737 (1) Includes various leases for warehouses, vehicles, and various equipment at the Company's facilities. |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
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'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 for such matters. 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, prior to the formation of the Manufacturing JV, 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, 2019, the Company was named in 27 personal injury lawsuits involving products containing DMAA and/or Aegeline. These matters are currently stayed pending final resolution. 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 their insurers. 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 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, 2019, 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. Trial is currently scheduled for January 2020. 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 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. Oral argument occurred in April 2019 and the Company awaits the Court’s ruling. 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 trial 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. On November 16, 2018, the Company filed a motion for reconsideration of the Court’s decision. On December 27, 2018, the Court reversed, in part, its November 2, 2018 ruling and held that there was no prevailing party for the purposes of the attorneys’ fee award. Olive has filed a petition for review with the Supreme Court of the State of California and the Company has opposed that petition. On April 17, 2019, the California Supreme Court denied Olive’s petition for review. Oregon Attorney General. On October 22, 2015, the Attorney General for the State of Oregon sued the Company 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 2020. 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. 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. A tentative agreement was reached in the third quarter of 2017 on many of the key terms of a settlement. In September 2019, the Court granted preliminary approval of the parties’ settlement agreement. A final hearing is scheduled for December 2019. The Company currently expects any settlement to be in a form that does not require the recording of a contingent liability. 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 Federal Food, Drug and Cosmetic Act (the "FDCA"). Under the agreement, which included 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 own 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 As part of soil and groundwater remediation conducted at the Nutra manufacturing facility pursuant to an investigation conducted in partnership with the South Carolina Department of Health and Environmental Control (the "DHEC"), we completed additional investigations with the DHEC's approval, including the installation and operation of 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. After an initial monitoring period, in October of 2017 the DHEC approved a work plan for extended monitoring of such system and the contamination into 2021. While the Company contributed the net assets of the Nutra manufacturing and Anderson facilities to the Manufacturing JV in March of 2019 (refer to Note 6 “Equity Method Investments” for additional information), we retained certain liabilities, including historical environmental liabilities, related to the facilities. As such, the Company and the Manufacturing Joint Venture 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 our 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 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, including certain historic liabilities retained by the Company pursuant to the terms of the Manufacturing JV. 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. 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 current or former 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. |
MEZZANINE EQUITY
MEZZANINE EQUITY | 9 Months Ended |
Sep. 30, 2019 | |
Temporary Equity Disclosure [Abstract] | |
MEZZANINE EQUITY | MEZZANINE EQUITY Holdings is authorized to issue up to 60.0 million shares of preferred stock, par value $0.001 per share. 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, and the Investor agreed to purchase from the Company, 299,950 shares of a newly created series of convertible preferred stock of the Company, designated the “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 “Securities Purchase”). The Convertible Preferred Stock is convertible into 56.1 million shares of the Company's Common Stock at an initial conversion price of $5.35 per share, subject to customary anti-dilution adjustments. On November 7, 2018, The Company entered into an Amendment to the Securities Purchase Agreement with the Investor. Pursuant to the terms of the Securities Purchase Agreement, the Investor assigned its interest in the Securities Purchase Agreement to Harbin and funded the $300 million investment in three separate tranches. The shares of Convertible Preferred Stock were issued as follows: (i) 100,000 shares of Convertible Preferred Stock issued on November 8, 2018 for a total purchase price of $100 million (the "Initial Issuance"), (ii) 50,000 shares of Convertible Preferred Stock issued on January 2, 2019 for a total purchase price of $50 million (the "Second Issuance") and (iii) 149,950 shares of Convertible Preferred Stock issued on February 13, 2019 for a total purchase price of approximately $150 million (the “Third Issuance”). Holders of shares of Convertible Preferred Stock are entitled to receive cumulative preferential dividends, payable quarterly in arrears, at an annual rate of 6.5% of the stated value of $1,000 per share, subject to increase in connection with the payment of dividends in kind. Dividends are payable, at the Company's option, in cash from legally available funds or in kind by issuing additional shares of Convertible Preferred Stock with such stated value equal to the amount of payment being made or by increasing the stated value of the outstanding Convertible Preferred Stock by the amount per share of the dividend or in a combination thereof. As of September 30, 2019, the Company had issued a total of 299,950 shares of Convertible Preferred Stock. The Convertible Preferred Stock was recorded as Mezzanine Equity, net of issuance cost, on the Consolidated Balance Sheets because the shares are redeemable at the option of the holder if a fundamental change occurs, which includes change in control or delisting. The guaranteed Second Issuance and Third Issuance were considered forward contracts that represented an obligation to both parties until the shares were issued. The forward contracts were recorded at fair value on the Consolidated Balance Sheets as of December 31, 2018, with any changes in fair value recorded in earnings in the Consolidated Statements of Operations. The Company recorded a $16.8 million loss on forward contracts for the issuance of Convertible Preferred Stock during the first quarter of 2019. Upon issuance of the shares associated with the forward contracts, the carrying value of the forward contracts were recorded to Mezzanine Equity. The Convertible Preferred Stock is not currently redeemable and is only redeemable upon a Fundamental Change at the Stated Value plus any accumulated and unpaid dividends on such shares on the Fundamental Change date. The Company does not believe a fundamental change is considered probable until it occurs. Subsequent adjustment of the amount presented in temporary equity is unnecessary if it is not probable that the instrument will become redeemable. As the Convertible Preferred Stock is only redeemable upon a fundamental change, the occurrence of which is not probable, we will not accrete the Convertible Preferred Stock until a fundamental change becomes probable to occur. As such, the Company will recognize changes in the redemption value to the Convertible Preferred Stock as they occur and adjust the carrying value to the redemption value at the end of each reporting period as if the end of the reporting period were also the redemption date for the Convertible Preferred Stock. As of September 30, 2019, the Stated Value of the Convertible Preferred Stock is $300.0 million ( 299,950 shares at $1,000 per share) and there are accumulated and unpaid dividends on such shares of $14.7 million |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 2018 2019 2018 (in thousands) Basic weighted average shares 83,823 83,412 83,667 83,326 Effect of dilutive stock-based compensation awards — — — 105 Diluted weighted average shares 83,823 83,412 83,667 83,431 For the three months and nine months ended September 30, 2019 and 2018, the following awards were excluded from the computation of diluted (loss) earnings per share because the impact of applying the treasury method was 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, 2019 2018 2019 2018 Anti-dilutive: (in thousands) Time-based options and restricted stock awards 3,064 3,076 3,064 3,022 Performance-based restricted stock awards 917 1,241 917 1,013 Contingently issuable: Performance-based restricted stock awards with a market condition 147 294 147 308 Total stock-based awards excluded from diluted EPS 4,128 4,611 4,128 4,343 All 4.1 million outstanding stock-based awards for the three months and nine months ended September 30, 2019 and all 4.6 million outstanding stock-based awards for the three months ended September 30, 2018 were excluded from the computation of diluted loss per share because the Company was in a net loss position and the inclusion of the awards would have been anti-dilutive. The Company has applied the if-converted method to calculate dilution on the Convertible Preferred Stock and Notes in the three and nine-months ended September 30, 2019, which has resulted in 58.0 million and 52.7 million , respectively, weighted average underlying shares from the Convertible Preferred Stock, which included the cumulative undeclared dividends, and 2.4 million weighted average underlying shares from the Notes being anti-dilutive. The computations for basic and diluted (loss) earnings per common share are as follows: Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (in thousands, except per share data) (Loss) earnings per common share - Basic Net (loss) income $ (2,418 ) $ (8,590 ) $ (1,622 ) $ 10,941 Cumulative undeclared convertible preferred stock dividend 5,031 — 13,697 — Net (loss) income attributable to common shareholders (7,449 ) (8,590 ) (15,319 ) 10,941 Weighted average common shares outstanding - basic 83,823 83,412 83,667 83,326 (Loss) earnings per common share - basic $ (0.09 ) $ (0.10 ) $ (0.18 ) $ 0.13 (Loss) earnings per common share - Diluted Net (loss) income $ (2,418 ) $ (8,590 ) $ (1,622 ) $ 10,941 Cumulative undeclared convertible preferred stock dividends 5,031 — 13,697 — Net (loss) income attributable to common shareholders (7,449 ) (8,590 ) (15,319 ) 10,941 Weighted average common shares outstanding - diluted 83,823 83,412 83,667 83,431 (Loss) earnings per common share - diluted $ (0.09 ) $ (0.10 ) $ (0.18 ) $ 0.13 |
SEGMENTS
SEGMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTS The Company aggregates its operating segments into three reportable segments, which include U.S. and Canada, International and Manufacturing / Wholesale. Warehousing and distribution costs have been allocated to each reportable segment based on estimated utilization and benefit. The Company's chief operating decision maker (its chief executive officer) evaluates segment operating results based primarily on performance indicators, including revenue and operating income. Operating income of each reportable segment excludes certain items that are managed at the consolidated level, such as 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. 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, 2019 2018 2019 2018 (in thousands) Revenue: U.S. and Canada $ 444,734 $ 476,519 $ 1,409,951 $ 1,506,250 International 36,940 51,407 117,311 140,107 Manufacturing / Wholesale: Intersegment revenues — 63,695 35,505 193,596 Third-party 17,402 52,259 70,575 159,305 Subtotal Manufacturing / Wholesale 17,402 115,954 106,080 352,901 Total reportable segment revenues 499,076 643,880 1,633,342 1,999,258 Elimination of intersegment revenues — (63,695 ) (35,505 ) (193,596 ) Total revenue $ 499,076 $ 580,185 $ 1,597,837 $ 1,805,662 Operating income: U.S. and Canada $ 32,715 $ 11,466 $ 134,017 $ 100,559 International 12,653 16,468 40,972 46,624 Manufacturing / Wholesale 5,052 16,869 32,514 47,722 Total reportable segment operating income 50,420 44,803 207,503 194,905 Corporate costs (23,766 ) (24,732 ) (75,106 ) (79,511 ) Loss on net asset exchange for the formation of the joint ventures — — (21,293 ) — Other — (110 ) (250 ) (160 ) Unallocated corporate costs, loss on net asset exchange and other (23,766 ) (24,842 ) (96,649 ) (79,671 ) Total operating income 26,654 19,961 110,854 115,234 Interest expense, net 24,456 35,732 82,376 90,448 Gain on purchase of convertible debt — — (3,214 ) — Loss on forward contracts for the issuance of convertible preferred stock — — 16,787 — Loss on debt refinancing — — — 16,740 Income (loss) before income taxes $ 2,198 $ (15,771 ) $ 14,905 $ 8,046 Refer to Note 3, "Revenue" for more information on the Company's reportable segments. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recognized $5.7 million of income tax expense during the three months ended September 30, 2019 compared with $7.2 million of income tax benefit in the prior year quarter. The Company recognized $20.7 million of income tax expense during the nine months ended September 30, 2019 compared with $2.9 million of income tax benefit in the same period in 2018. The Company's income tax expense is based on income, statutory tax rates and tax planning opportunities available in the jurisdictions in which it operates. The Company’s year-to-date tax provision is calculated by applying the most recent annualized effective tax rate to year-to - date pre-tax ordinary income. The Company’s most recent annualized effective tax rate was significantly impacted by a gain for tax purposes resulting from the transfer of the Nutra manufacturing net assets to the Manufacturing JV and the establishment of a partial valuation allowance for attributes generated in the current year that may not be realizable, partially offset by discrete tax benefits associated with the finalization of the Company's 2018 federal income tax return. The tax impacts of unusual or infrequent items are recorded discretely in the interim period in which they occur. The Company discretely recorded the tax impact of the loss on forward contracts for the issuance of Convertible Preferred Stock. This loss was not deductible for income tax purposes. At September 30, 2019 and December 31, 2018 , the Company had $9.8 million and $6.9 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 $2.1 million at September 30, 2019 and $2.0 million at December 31, 2018 , for potential interest and penalties associated with uncertain tax positions. To the extent interest and penalties are not assessed with respect to the ultimate settlement of uncertain tax positions, amounts previously accrued will be reversed as a reduction to income tax expense. Holdings files a consolidated federal tax return and various consolidated and separate tax returns as prescribed by the tax laws of the state, local and international jurisdictions in which it and its subsidiaries operate. The statutes of limitation for the Company’s U.S. federal income tax returns are closed for years through 2013. The Company has various state and local jurisdiction tax years open to examination (the earliest open period is generally 2011). |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
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 ("SEC"), include all adjustments (of a normal and recurring nature) that management considers necessary to fairly state the Company's results of operations, financial position and cash flows. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements Adoption of the New Lease Standard In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 adopted ASU 2016-02 and its related amendments (collectively known as "ASC 842") during the first quarter of fiscal 2019 electing the optional transition relief amendment that allows for a cumulative-effect adjustment in the period of adoption and did not restate prior periods. In transitioning to ASC 842, the Company elected to use the practical expedient package available under the guidance for leases that commenced before the effective date and did not elect to use hindsight. The Company has implemented a new lease management and accounting system and updated its processes and internal controls to comply with the new standard. The Company leases substantially all of its retail stores in the U.S. and Canada segment, including most of the domestic franchise stores that are leased and subleased to franchisees, its distribution centers in the United States and retail stores in Ireland. In addition, the Company has leased office locations and vehicle and equipment leases to support our store and supply chain operations. All of the Company's leases are classified as operating leases. The Company determines if a contract contains a lease at inception. The lease liabilities are recognized based on the present value of the future minimum lease payments over the term at the commencement date for leases exceeding 12 months. The lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. The minimum lease payments include only fixed lease components, as well as any variable rate payments that depend on an index, initially measured using the index at the lease commencement date. Lease terms may include options to renew when it is reasonably certain that the Company will exercise an option. The Company estimates its incremental borrowing rate, which was estimated to approximate the interest rate on a collateralized basis with similar terms and payments for each lease, using a portfolio approach. The right-of-use assets recognized are initially equal to the lease liability, adjusted for any lease payments made on or before the commencement dates and lease incentives. The Company recognized lease liabilities of $550.2 million on January 1, 2019. A right-of-use asset of $504.2 million was recognized based on the lease liability, adjusted for the reclassification of deferred rent of $53.3 million and prepaid rent of $7.3 million . Additionally, the Company recognized $79.8 million of right-of-use asset impairment charges related to certain of the Company's stores for which it was previously determined that the carrying value of the stores' assets were not recoverable. The right-of-use asset impairment charges were recorded as a reduction to January 1, 2019 (opening day) retained earnings, net of tax of $19.8 million . The new lease standard has no impact on the timing or classification of the Company's cash flows as reported in the Consolidated Statement of Cash Flows. The lease liabilities for the operating leases are amortized using the effective interest method. The right-of-use asset is amortized by taking the difference between total rent expense recorded on straight-line basis and the lease liability amortization. When the right-of-use asset for an operating lease is impaired, lease expense is no longer recognized on a straight-line basis. For impaired leases, the Company continues to amortize the lease liability using the same effective interest method as before the impairment charge and the right-of-use asset is amortized on a straight-line basis. Refer to Note 8 "Leases" for additional information. Recently Issued Accounting Pronouncements |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 2018 2019 2018 U.S. company-owned product sales: (1) (in thousands) Protein $ 73,103 $ 76,738 $ 230,520 $ 251,480 Performance supplements 70,704 68,809 218,565 217,525 Weight management 22,279 29,575 82,665 108,048 Vitamins 43,107 48,322 135,099 148,188 Herbs / Greens 13,939 15,872 45,348 48,975 Wellness 41,995 46,245 135,565 143,626 Health / Beauty 44,356 43,332 137,279 138,911 Food / Drink 23,806 28,325 78,308 82,394 General merchandise 5,051 5,637 17,370 18,577 Total U.S. company-owned product sales $ 338,340 $ 362,855 $ 1,080,719 $ 1,157,724 Wholesale sales to franchisees 55,729 58,199 173,855 176,034 Royalties and franchise fees 7,592 7,939 24,239 25,219 Sublease income 10,508 11,087 31,982 34,485 Cooperative advertising and other franchise support fees 4,558 4,739 14,379 16,245 Other (2) 28,007 31,700 84,777 96,543 Total U.S. and Canada revenue $ 444,734 $ 476,519 $ 1,409,951 $ 1,506,250 (1) Includes e-commerce sales. (2) Includes revenue primarily related to operations in Canada and the loyalty programs, myGNC Rewards and PRO Access, as further discussed below. International Revenues The following is a summary of revenue disaggregated by major source in the International reportable segment: Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (in thousands) Wholesale sales to franchisees $ 22,965 $ 32,321 $ 75,421 $ 81,266 Royalties and franchise fees 6,792 7,150 19,111 20,347 Other (1) 7,183 11,936 22,779 38,494 Total International revenue $ 36,940 $ 51,407 $ 117,311 $ 140,107 (1) Includes revenue related to China operations prior to the transfer of the China business to the HK JV and China JV, which was effective February 13, 2019, wholesale sales to the HK JV and China JV, and revenue from company-owned locations in Ireland. Manufacturing / Wholesale Revenue The following is a summary of revenue disaggregated by major source in the Manufacturing / Wholesale reportable segment: Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (in thousands) Third-party contract manufacturing (1) $ — $ 31,212 $ 15,783 $ 94,514 Intersegment sales (1) — 63,695 35,505 193,596 Wholesale partner sales 17,402 21,047 54,792 64,791 Total Manufacturing / Wholesale revenue $ 17,402 $ 115,954 $ 106,080 $ 352,901 (1) The decrease in third-party contract manufacturing and intersegment sales for the three and nine months ended September 30, 2019 compared to the prior year period is due to the transfer of the Nutra manufacturing business to the newly formed Manufacturing JV effective March 1, 2019. Revenue by Geography The following is a summary of revenue by geography: Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Total revenues by geographic areas (1) : (in thousands) United States $ 477,306 $ 545,332 $ 1,526,111 $ 1,696,887 Foreign 21,770 34,853 71,726 108,775 Total revenues $ 499,076 $ 580,185 $ 1,597,837 $ 1,805,662 (1) Geographic areas are defined based on legal entity jurisdiction. |
Contract with Customer | The following table presents changes in the Company’s contract liabilities: Nine months ended September 30, 2019 Balance at Beginning of Period Recognition of revenue included in beginning balance Contract liability, net of revenue, recognized during the period Balance at the End of Period (in thousands) Deferred franchise and license fees $ 33,464 (7,931 ) 3,476 $ 29,009 PRO Access and loyalty program points 24,836 (21,266 ) 22,562 26,132 Gift card liability 3,416 (1,945 ) 324 1,795 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Net Realizable Value of Inventory | The net realizable value of inventory consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Finished product ready for sale $ 394,763 $ 416,113 Work-in-process, bulk product and raw materials (1) — 46,520 Packaging supplies (1) — 2,939 Inventory $ 394,763 $ 465,572 (1) The decrease in work-in-process, bulk product and raw materials and packaging supplies as of September 30, 2019 compared with December 31, 2018 is due to the transfer of the Nutra manufacturing net assets to the Manufacturing JV effective March 1, 2019. |
LONG-TERM DEBT _ INTEREST EXP_2
LONG-TERM DEBT / INTEREST EXPENSE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 $ — $ 147,289 Tranche B-2 Term Loan (net of $8.5 million and $17.5 million discount) 440,009 554,760 FILO Term Loan (net of $8.9 million and $10.9 million discount) 266,132 264,086 Unpaid original issuance discount — 11,445 Notes 152,944 175,504 Debt issuance costs (499 ) (762 ) Total debt 858,586 1,152,322 Less: current debt (152,919 ) (158,756 ) Long-term debt $ 705,667 $ 993,566 |
Components of Convertible Debt | As of September 30, 2019, the Company maintains $ 159.1 million in principal amount of 1.5% convertible senior notes due in August 2020 (the "Notes"). The Notes consist of the following components: September 30, 2019 December 31, 2018 (in thousands) Liability component Principal $ 159,097 $ 188,565 Conversion feature (5,419 ) (11,489 ) Discount related to debt issuance costs (734 ) (1,572 ) Net carrying amount $ 152,944 $ 175,504 |
Schedule of Derivative Financial Instruments | The fair values of the derivative financial instruments included in the Consolidated Balance Sheets consisted of the following: (in thousands, except percentages) Fair Value at Notional Amount Fixed Rate Balance Sheet Classification September 30, 2019 December 31, 2018 Accounting cash flow hedges: Interest rate swap $ 275,000 2.82 % Other long-term liabilities $ 6,258 $ 2,371 Interest rate swap (1) 175,000 2.74 % Other long-term liabilities 2,283 839 Net carrying amount $ 450,000 Total liabilities $ 8,541 $ 3,210 (1) The notional amount of the $225 million interest rate swap had decreased to $175 million on June 30, 2019 as scheduled. |
Schedule of Interest Expense | Interest expense consisted of the following: Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (in thousands) Tranche B-1 Term Loan coupon $ — $ 1,755 $ 928 $ 11,496 Tranche B-2 Term Loan coupon 12,849 20,447 42,271 45,976 FILO Term Loan coupon 6,901 6,901 20,479 15,241 Revolving Credit Facility 97 285 316 655 Terminated revolving credit facility — — — 316 Amortization of discount and debt issuance costs 2,522 3,659 11,087 8,954 Subtotal 22,369 33,047 75,081 82,638 Notes: Coupon 597 707 2,033 2,121 Amortization of conversion feature 1,413 1,655 4,725 4,898 Amortization of discount and debt issuance costs 193 244 679 731 Total Notes 2,203 2,606 7,437 7,750 Other (116 ) 79 (142 ) 60 Interest expense, net $ 24,456 $ 35,732 $ 82,376 $ 90,448 |
EQUITY METHOD INVESTMENTS (Tabl
EQUITY METHOD INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Equity Method Investments | The following table provides a reconciliation of equity method investments on the Company’s Consolidated Balance Sheets: September 30, 2019 (in thousands) Manufacturing JV $ 75,434 Manufacturing JV capital contribution 10,714 HK JV and China JV 10,180 Income from equity method investments 4,192 Distributions received from equity method investments (791 ) Total Equity method investments $ 99,729 |
FAIR VALUE MEASUREMENTS AND F_2
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Actual and Estimated Fair Values of the Financial Instruments | The carrying value and estimated fair value of the forward contracts for the issuance of convertible preferred stock, the Term Loan Facility, net of discount, Notes (net of the equity component classified in stockholders' equity and discount) and the interest rate swaps were as follows: September 30, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Assets: Forward contracts for the issuance of convertible preferred stock $ — $ — $ 88,942 $ 88,942 Liabilities: Tranche B-1 Term Loan $ — $ — $ 147,289 $ 145,080 Tranche B-2 Term Loan 440,009 418,559 554,760 511,766 FILO Term Loan 266,132 266,417 264,086 260,125 Notes 152,944 142,620 175,504 131,628 Interest rate swaps 8,541 8,541 3,210 3,210 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Summary of Rent Expense | The components of the Company's rent expense, which is recorded within cost of sales on the Consolidated Statements of Operations, was as follows: Three months ended September 30, 2019 Nine months ended September 30, 2019 (in thousands) Company-owned and franchise stores: Operating leases $ 36,833 $ 107,710 Variable lease costs (1) 20,300 62,824 Total company-owned and franchise stores 57,133 170,534 Other 1,822 5,976 Total rent expense $ 58,955 $ 176,510 (1) Includes percent and contingent rent, landlord related taxes and common operating expenses. Supplemental cash flow information related to leases was as follows: Nine months ended September 30, 2019 (in thousands) Operating cash flow information: Cash paid for amounts included in the measurement of operating lease liabilities $ 130,374 Right-of-use assets obtained in exchange for new operating lease liabilities $ 23,829 |
Summary of Minimum Future Rent Obligations After Adoption | Maturities of the lease liabilities (undiscounted lease payments, as defined in Note 2 "Basis of Presentation") as of September 30, 2019 were as follows: Operating Leases for Company-Owned and Franchise Stores Operating Leases for Other (1) Total Operating Leases Sublease Income from Franchisees Rent on Operating Leases, net of Sublease Revenue (in thousands) 2019 (remainder) $ 40,348 $ 1,823 $ 42,171 $ (7,641 ) $ 34,530 2020 140,618 6,611 147,229 (27,431 ) 119,798 2021 111,072 4,739 115,811 (21,938 ) 93,873 2022 82,612 2,721 85,333 (16,713 ) 68,620 2023 61,422 1,355 62,777 (12,370 ) 50,407 Thereafter 137,869 6,703 144,572 (28,900 ) 115,672 Total future obligations $ 573,941 $ 23,952 $ 597,893 $ (114,993 ) $ 482,900 Less amounts representing interest (134,762 ) Present value of lease obligations $ 463,131 (1) Includes various leases for warehouses, vehicles, and various equipment at the Company's facilities. |
Summary of Minimum Future Rent Obligations Before Adoption | Minimum future rent obligations for non-cancelable operating leases, excluding optional renewal periods, were as follows for the period ended December 31, 2018 and exclude landlord related taxes, common operating expenses, and percent and contingent rent. Operating Leases for Company-Owned and Franchise Stores Operating Leases for Other (1) Total Operating Leases Sublease Income from Franchisees Rent on Operating Leases, net of Sublease Revenue (in thousands) 2019 $ 162,910 $ 6,071 $ 168,981 $ (29,867 ) $ 139,114 2020 126,312 5,574 131,886 (23,631 ) 108,255 2021 95,000 4,185 99,185 (16,782 ) 82,403 2022 64,735 2,479 67,214 (10,285 ) 56,929 2023 39,798 1,290 41,088 (4,717 ) 36,371 Thereafter 56,200 6,703 62,903 (4,238 ) 58,665 Total future obligations $ 544,955 $ 26,302 $ 571,257 $ (89,520 ) $ 481,737 (1) Includes various leases for warehouses, vehicles, and various equipment at the Company's facilities. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 2018 2019 2018 (in thousands) Basic weighted average shares 83,823 83,412 83,667 83,326 Effect of dilutive stock-based compensation awards — — — 105 Diluted weighted average shares 83,823 83,412 83,667 83,431 |
Schedule of Antidilutive and Contingently Issuable Securities Excluded from Computation of Earnings Per Share | Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Anti-dilutive: (in thousands) Time-based options and restricted stock awards 3,064 3,076 3,064 3,022 Performance-based restricted stock awards 917 1,241 917 1,013 Contingently issuable: Performance-based restricted stock awards with a market condition 147 294 147 308 Total stock-based awards excluded from diluted EPS 4,128 4,611 4,128 4,343 |
Computations for Basic and Diluted Earnings per Common Share | The computations for basic and diluted (loss) earnings per common share are as follows: Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (in thousands, except per share data) (Loss) earnings per common share - Basic Net (loss) income $ (2,418 ) $ (8,590 ) $ (1,622 ) $ 10,941 Cumulative undeclared convertible preferred stock dividend 5,031 — 13,697 — Net (loss) income attributable to common shareholders (7,449 ) (8,590 ) (15,319 ) 10,941 Weighted average common shares outstanding - basic 83,823 83,412 83,667 83,326 (Loss) earnings per common share - basic $ (0.09 ) $ (0.10 ) $ (0.18 ) $ 0.13 (Loss) earnings per common share - Diluted Net (loss) income $ (2,418 ) $ (8,590 ) $ (1,622 ) $ 10,941 Cumulative undeclared convertible preferred stock dividends 5,031 — 13,697 — Net (loss) income attributable to common shareholders (7,449 ) (8,590 ) (15,319 ) 10,941 Weighted average common shares outstanding - diluted 83,823 83,412 83,667 83,431 (Loss) earnings per common share - diluted $ (0.09 ) $ (0.10 ) $ (0.18 ) $ 0.13 |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 2018 2019 2018 (in thousands) Revenue: U.S. and Canada $ 444,734 $ 476,519 $ 1,409,951 $ 1,506,250 International 36,940 51,407 117,311 140,107 Manufacturing / Wholesale: Intersegment revenues — 63,695 35,505 193,596 Third-party 17,402 52,259 70,575 159,305 Subtotal Manufacturing / Wholesale 17,402 115,954 106,080 352,901 Total reportable segment revenues 499,076 643,880 1,633,342 1,999,258 Elimination of intersegment revenues — (63,695 ) (35,505 ) (193,596 ) Total revenue $ 499,076 $ 580,185 $ 1,597,837 $ 1,805,662 Operating income: U.S. and Canada $ 32,715 $ 11,466 $ 134,017 $ 100,559 International 12,653 16,468 40,972 46,624 Manufacturing / Wholesale 5,052 16,869 32,514 47,722 Total reportable segment operating income 50,420 44,803 207,503 194,905 Corporate costs (23,766 ) (24,732 ) (75,106 ) (79,511 ) Loss on net asset exchange for the formation of the joint ventures — — (21,293 ) — Other — (110 ) (250 ) (160 ) Unallocated corporate costs, loss on net asset exchange and other (23,766 ) (24,842 ) (96,649 ) (79,671 ) Total operating income 26,654 19,961 110,854 115,234 Interest expense, net 24,456 35,732 82,376 90,448 Gain on purchase of convertible debt — — (3,214 ) — Loss on forward contracts for the issuance of convertible preferred stock — — 16,787 — Loss on debt refinancing — — — 16,740 Income (loss) before income taxes $ 2,198 $ (15,771 ) $ 14,905 $ 8,046 |
NATURE OF BUSINESS (Details)
NATURE OF BUSINESS (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 48 Months Ended | ||
Mar. 31, 2019USD ($) | Feb. 28, 2019USD ($)joint_ventures | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2019segmentcountry | Oct. 01, 2023USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||||
Number of reportable segments | segment | 3 | |||||
Number of international countries in which franchise stores are located | country | 50 | |||||
Number of joint ventures | joint_ventures | 2 | |||||
JV Framework | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity method investment ownership (percentage) | 35.00% | |||||
Manufacturing JV | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Proceeds for investment in newly formed joint venture | $ 101 | $ 101 | $ 101 | $ 101 | ||
Manufacturing JV | Subsequent Event | Forecast | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity method investment ownership (percentage) | 100.00% | |||||
Proceeds for investment in newly formed joint venture | $ 75 | |||||
Manufacturing JV | International Vitamin Corporation | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (percentage) | 43.00% | |||||
International Vitamin Corporation | Manufacturing JV | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity method investment ownership (percentage) | 43.00% | 43.00% | 43.00% | |||
Purchase price adjustment | $ 1.8 |
BASIS OF PRESENTATION - Recent
BASIS OF PRESENTATION - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jan. 02, 2019 | Sep. 30, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Present value of lease obligations | $ 463,131 | ||
Right-of-use assets | $ 362,774 | ||
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Present value of lease obligations | $ 550,200 | ||
Right-of-use assets | 504,200 | ||
Deferred rent | 53,300 | ||
Prepaid rent | 7,300 | ||
Right-of-use asset impairment | $ 79,800 | ||
Impact of the adoption of ASC 842 | 59,936 | ||
Retained Earnings | Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Impact of the adoption of ASC 842 | 59,936 | ||
Retained Earnings | Accounting Standards Update 2016-02, Right-Of-Use Asset Impairment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Impact of the adoption of ASC 842 | $ 19,800 |
REVENUE - Disaggregation of Re
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 499,076 | $ 580,185 | $ 1,597,837 | $ 1,805,662 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 477,306 | 545,332 | 1,526,111 | 1,696,887 |
Foreign | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 21,770 | 34,853 | 71,726 | 108,775 |
Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 499,076 | 643,880 | 1,633,342 | 1,999,258 |
Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | (63,695) | (35,505) | (193,596) |
U.S. and Canada | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 444,734 | 476,519 | 1,409,951 | 1,506,250 |
U.S. and Canada | Product Sales | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 338,340 | 362,855 | 1,080,719 | 1,157,724 |
U.S. and Canada | Protein | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 73,103 | 76,738 | 230,520 | 251,480 |
U.S. and Canada | Performance supplements | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 70,704 | 68,809 | 218,565 | 217,525 |
U.S. and Canada | Weight management | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 22,279 | 29,575 | 82,665 | 108,048 |
U.S. and Canada | Vitamins | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 43,107 | 48,322 | 135,099 | 148,188 |
U.S. and Canada | Herbs / Greens | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 13,939 | 15,872 | 45,348 | 48,975 |
U.S. and Canada | Wellness | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 41,995 | 46,245 | 135,565 | 143,626 |
U.S. and Canada | Health / Beauty | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 44,356 | 43,332 | 137,279 | 138,911 |
U.S. and Canada | Food / Drink | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 23,806 | 28,325 | 78,308 | 82,394 |
U.S. and Canada | General merchandise | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 5,051 | 5,637 | 17,370 | 18,577 |
U.S. and Canada | Wholesale sales to franchisees | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 55,729 | 58,199 | 173,855 | 176,034 |
U.S. and Canada | Royalties and franchise fees | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 7,592 | 7,939 | 24,239 | 25,219 |
U.S. and Canada | Sublease income | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 10,508 | 11,087 | 31,982 | 34,485 |
U.S. and Canada | Cooperative advertising and other franchise support fees | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 4,558 | 4,739 | 14,379 | 16,245 |
U.S. and Canada | Other | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 28,007 | 31,700 | 84,777 | 96,543 |
International | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 36,940 | 51,407 | 117,311 | 140,107 |
International | Wholesale sales to franchisees | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 22,965 | 32,321 | 75,421 | 81,266 |
International | Royalties and franchise fees | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,792 | 7,150 | 19,111 | 20,347 |
International | Other | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 7,183 | 11,936 | 22,779 | 38,494 |
Manufacturing / Wholesale | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,800 | 8,100 | ||
Manufacturing / Wholesale | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 17,402 | 115,954 | 106,080 | 352,901 |
Manufacturing / Wholesale | Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 63,695 | 35,505 | 193,596 |
Manufacturing / Wholesale | Third-party contract manufacturing | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 31,212 | 15,783 | 94,514 |
Manufacturing / Wholesale | Intersegment sales | Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 63,695 | 35,505 | 193,596 |
Manufacturing / Wholesale | Wholesale partner sales | Operating Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 17,402 | $ 21,047 | $ 54,792 | $ 64,791 |
REVENUE - Contract with Custom
REVENUE - Contract with Customer (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Contract With Customer [Line Items] | ||
Contract assets | $ 0 | $ 25,500,000 |
Deferred franchise and license fees | ||
Contract liabilities: | ||
Balance at Beginning of Period | 33,464,000 | |
Recognition of revenue included in beginning balance | (7,931,000) | |
Contract liability, net of revenue, recognized during the period | 3,476,000 | |
Balance at the End of Period | 29,009,000 | |
Deferred revenue, expected to be recognized over next 12 months | 6,300,000 | |
PRO Access and loyalty program points | ||
Contract liabilities: | ||
Balance at Beginning of Period | 24,836,000 | |
Recognition of revenue included in beginning balance | (21,266,000) | |
Contract liability, net of revenue, recognized during the period | 22,562,000 | |
Balance at the End of Period | 26,132,000 | |
Gift card liability | ||
Contract liabilities: | ||
Balance at Beginning of Period | 3,416,000 | |
Recognition of revenue included in beginning balance | (1,945,000) | |
Contract liability, net of revenue, recognized during the period | 324,000 | |
Balance at the End of Period | $ 1,795,000 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Finished product ready for sale | $ 394,763 | $ 416,113 |
Work-in-process, bulk product and raw materials | 0 | 46,520 |
Packaging supplies | 0 | 2,939 |
Inventory | $ 394,763 | $ 465,572 |
LONG-TERM DEBT _ INTEREST EXP_3
LONG-TERM DEBT / INTEREST EXPENSE - Schedule of Long-Term Debt (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Nov. 30, 2018 | Sep. 30, 2018 |
Debt Instrument | ||||
Net carrying amount | $ 858,586,000 | $ 1,152,322,000 | ||
Unpaid original issuance discount | 0 | 11,445,000 | $ 13,231,000 | |
Debt issuance costs | (499,000) | (762,000) | ||
Less: current debt | (152,919,000) | (158,756,000) | ||
Long-term debt | 705,667,000 | 993,566,000 | ||
FILO Term Loan | Term Loan | FILO Asset-based Term Loan Facility | ||||
Debt Instrument | ||||
Origination issuance discount (OID) | 8,900,000 | 10,900,000 | ||
Net carrying amount | 266,132,000 | 264,086,000 | ||
FILO Term Loan | Revolving Credit Facility | ||||
Debt Instrument | ||||
Net carrying amount | 0 | |||
Convertible Senior Notes | Notes | ||||
Debt Instrument | ||||
Origination issuance discount (OID) | 5,419,000 | 11,489,000 | ||
Net carrying amount | 152,944,000 | 175,504,000 | ||
Tranche B-1 | Term Loan Facility | Term Loan Facility Due March 2019 | ||||
Debt Instrument | ||||
Net carrying amount | 0 | 147,289,000 | ||
Tranche B-2 | Term Loan Facility | Amended Term Loan Facility Due March 2021 | ||||
Debt Instrument | ||||
Origination issuance discount (OID) | 8,500,000 | 17,500,000 | ||
Net carrying amount | $ 440,009,000 | $ 554,760,000 | $ 100,000,000 |
LONG-TERM DEBT _ INTEREST EXP_4
LONG-TERM DEBT / INTEREST EXPENSE - Narrative (Details) - USD ($) | Mar. 11, 2019 | Feb. 28, 2018 | Mar. 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 01, 2019 |
Debt Instrument | ||||||||||||||||
Loss on debt refinancing | $ 0 | $ 0 | $ 0 | $ 16,740,000 | ||||||||||||
Borrowings outstanding | 858,586,000 | 858,586,000 | $ 1,152,322,000 | |||||||||||||
Payments on convertible notes repurchase | 24,708,000 | 0 | ||||||||||||||
Gain on convertible debt repurchase | 0 | $ 0 | 3,214,000 | 0 | ||||||||||||
Preferred Stock | Securities Purchase Agreement Amendment, Initial Issuance | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Amount received on investment | $ 100,000,000 | |||||||||||||||
Manufacturing JV | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Proceeds for investment in newly formed joint venture | $ 101,000,000 | $ 101,000,000 | $ 101,000,000 | $ 101,000,000 | ||||||||||||
Harbin Pharmaceutical Group Holdings Co., Ltd. | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Proceeds for investment in newly formed joint venture | $ 200,000,000 | |||||||||||||||
Revolving Credit Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Commitment fee on undrawn portion of revolving credit facility | 0.50% | |||||||||||||||
FILO Term Loan | Revolving Credit Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Borrowings outstanding | 0 | 0 | ||||||||||||||
Maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | $ 81,000,000 | |||||||||||||
FILO Asset-based Term Loan Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Loss on debt refinancing | $ 16,700,000 | |||||||||||||||
FILO Asset-based Term Loan Facility | FILO Term Loan | Term Loan | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Borrowings outstanding | $ 266,132,000 | $ 266,132,000 | $ 264,086,000 | |||||||||||||
Maximum borrowing capacity | $ 275,000,000 | |||||||||||||||
Effective interest rate | 9.10% | 9.10% | 9.50% | |||||||||||||
FILO Asset-based Term Loan Facility | FILO Term Loan | Term Loan | LIBOR | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 7.00% | |||||||||||||||
FILO Asset-based Term Loan Facility | FILO Term Loan | Term Loan | LIBOR | Minimum | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 6.50% | |||||||||||||||
Amended Term Loan Facility Due March 2021 | Term Loan Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Minimum for notes repayment, refinanced, converted, discharged, or prepaid, For maturity date extension trigger | $ 50,000,000 | |||||||||||||||
Revolving Credit Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Line of credit facility, remaining borrowing capacity | $ 68,200,000 | $ 68,200,000 | ||||||||||||||
Revolving Credit Facility | Letter Of Credit | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Effective interest rate | 12.50% | 12.50% | ||||||||||||||
Line of credit facility, remaining borrowing capacity | $ 12,500,000 | $ 12,500,000 | ||||||||||||||
Minimum fixed charge coverage ratio | 1 | 1 | ||||||||||||||
Revolving Credit Facility | Through December 31, 2018 | Letter Of Credit | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Maximum net first lien leverage ratio | 5.50 | 5.50 | ||||||||||||||
Revolving Credit Facility | March 31, 2019 to December 31, 2019 | Letter Of Credit | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Maximum net first lien leverage ratio | 5 | 5 | ||||||||||||||
Revolving Credit Facility | Thereafter | Letter Of Credit | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Maximum net first lien leverage ratio | 4.25 | 4.25 | ||||||||||||||
Revolving Credit Facility | FILO Term Loan | Letter Of Credit | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Letters of credit outstanding | $ 5,700,000 | $ 5,700,000 | ||||||||||||||
Reduction to borrowing ability | 7,100,000 | 7,100,000 | ||||||||||||||
Notes | Convertible Senior Notes | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Borrowings outstanding | 152,944,000 | 152,944,000 | $ 175,504,000 | |||||||||||||
Principal | $ 159,097,000 | $ 159,097,000 | $ 188,565,000 | |||||||||||||
Interest rate | 1.50% | 1.50% | ||||||||||||||
Aggregate principle amount repurchased | 29,500,000 | |||||||||||||||
Payments on convertible notes repurchase | 24,700,000 | |||||||||||||||
Gain on convertible debt repurchase | 3,200,000 | |||||||||||||||
Unamortized conversion feature | 1,300,000 | |||||||||||||||
Origination issuance discount (OID) | $ 200,000 | |||||||||||||||
Tranche B-1 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Payments on term loan facility | $ 147,312,000 | 3,413,000 | ||||||||||||||
Tranche B-1 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Effective interest rate | 5.70% | |||||||||||||||
Tranche B-1 | Term Loan Facility Due March 2019 | Term Loan Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Borrowings outstanding | $ 0 | 0 | $ 147,289,000 | |||||||||||||
Payments on term loan facility | $ 114,000,000 | |||||||||||||||
Tranche B-1 | Term Loan Facility Due March 2019 | FILO Term Loan | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Commitment fee on undrawn portion of revolving credit facility | 0.375% | |||||||||||||||
Potential increase of unused capacity fee | 0.50% | |||||||||||||||
Tranche B-1 | Term Loan Facility Due March 2019 | FILO Term Loan | Letter Of Credit | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Fee on outstanding balance | 2.00% | |||||||||||||||
Tranche B-1 | Term Loan Facility Due March 2019 | FILO Term Loan | LIBOR | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 1.75% | |||||||||||||||
Potential increase (decrease) on basis spread of variable rate | 0.25% | |||||||||||||||
Tranche B-2 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Payments on term loan facility | 123,774,000 | $ 32,100,000 | ||||||||||||||
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Borrowings outstanding | $ 100,000,000 | $ 440,009,000 | $ 440,009,000 | $ 554,760,000 | ||||||||||||
Annual principal payment | $ 43,000,000 | |||||||||||||||
Effective interest rate | 10.80% | 10.80% | 11.80% | |||||||||||||
Current OID due, percent | 2.00% | 2.00% | ||||||||||||||
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | Forecast | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Mandatory prepayment, percent of excess cash flows | 50.00% | |||||||||||||||
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | Initial Rate | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Mandatory prepayment, percent of excess cash flows | 75.00% | |||||||||||||||
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | Reduced Rate | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Mandatory prepayment, percent of excess cash flows | 50.00% | |||||||||||||||
Payments for excess cash flows | $ 9,800,000 | |||||||||||||||
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | Minimum | Reduced Rate | Forecast | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Payments for excess cash flows | $ 25,000,000 | |||||||||||||||
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | Maximum | Reduced Rate | Forecast | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Payments for excess cash flows | $ 35,000,000 | |||||||||||||||
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | LIBOR | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 8.75% | |||||||||||||||
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | LIBOR | Minimum | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 8.25% | |||||||||||||||
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | LIBOR | Maximum | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 9.25% | |||||||||||||||
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | Prime | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 7.75% | |||||||||||||||
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | Prime | Minimum | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 7.25% | |||||||||||||||
Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | Prime | Maximum | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Basis spread on variable rate | 8.25% |
LONG-TERM DEBT _ INTEREST EXP_5
LONG-TERM DEBT / INTEREST EXPENSE - Components of Convertible Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Liability component | ||
Net carrying amount | $ 858,586 | $ 1,152,322 |
Convertible Senior Notes | Notes | ||
Debt Instrument | ||
Interest rate | 1.50% | |
Liability component | ||
Principal | $ 159,097 | 188,565 |
Conversion feature | (5,419) | (11,489) |
Discount related to debt issuance costs | (734) | (1,572) |
Net carrying amount | $ 152,944 | $ 175,504 |
LONG-TERM DEBT _ INTEREST EXP_6
LONG-TERM DEBT / INTEREST EXPENSE - Interest Rate Swaps (Details) $ in Thousands | Dec. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 13, 2018USD ($)interest_rate_swap |
Debt Instrument | |||||
Notional amount | $ 450,000 | ||||
Interest rate swaps | |||||
Debt Instrument | |||||
Number of interest rate swaps | interest_rate_swap | 2 | ||||
Interest Rate Swap One | |||||
Debt Instrument | |||||
Notional amount | 275,000 | $ 275,000 | |||
Floor interest rate (percentage) | 0.00% | ||||
Interest Rate Swap Two | |||||
Debt Instrument | |||||
Notional amount | $ 175,000 | $ 175,000 | $ 225,000 | ||
Floor interest rate (percentage) | 0.75% | ||||
Forecast | Interest Rate Swap Two | |||||
Debt Instrument | |||||
Notional amount | $ 75,000 | $ 125,000 |
LONG-TERM DEBT _ INTEREST EXP_7
LONG-TERM DEBT / INTEREST EXPENSE - Schedule of Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2018 | Jun. 13, 2018 | ||
Derivatives, Fair Value [Line Items] | ||||||||||
Notional amount | $ 450,000 | $ 450,000 | ||||||||
Derivative liability | 8,541 | 8,541 | $ 3,210 | |||||||
Cumulative unrealized loss, net of tax | [1] | (310) | $ 963 | (4,605) | $ (212) | |||||
Interest Rate Swap One | ||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||
Notional amount | $ 275,000 | $ 275,000 | $ 275,000 | |||||||
Fixed rate (percentage) | 2.82% | 2.82% | ||||||||
Derivative liability | $ 6,258 | $ 6,258 | 2,371 | |||||||
Interest Rate Swap Two | ||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||
Notional amount | $ 175,000 | $ 175,000 | $ 175,000 | $ 225,000 | ||||||
Fixed rate (percentage) | 2.74% | 2.74% | ||||||||
Derivative liability | $ 2,283 | $ 2,283 | $ 839 | |||||||
Interest rate swaps | ||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||
Cumulative unrealized loss, net of tax | $ (5,900) | |||||||||
Reclassification adjustment for interest recognized in Consolidated Statement of Operations, net of tax | $ 3,600 | $ 3,600 | ||||||||
Forecast | Interest Rate Swap Two | ||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||
Notional amount | $ 75,000 | $ 125,000 | ||||||||
[1] | Net of tax benefit of $0.1 million and tax expense of $0.4 million, respectively, for the three months ended September 30, 2019 and 2018, and net of tax benefit of $2.1 million and $0.1 million, respectively, for the nine months ended September 30, 2019 and 2018. |
LONG-TERM DEBT _ INTEREST EXP_8
LONG-TERM DEBT / INTEREST EXPENSE - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Debt Instrument | ||||
Other | $ (116) | $ 79 | $ (142) | $ 60 |
Interest expense, net | 24,456 | 35,732 | 82,376 | 90,448 |
Revolving Credit Facility | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | 0 | 0 | 0 | 316 |
Senior Credit Facility | ||||
Debt Instrument | ||||
Amortization of discount and debt issuance costs | 2,522 | 3,659 | 11,087 | 8,954 |
Interest expense | 22,369 | 33,047 | 75,081 | 82,638 |
Senior Credit Facility | FILO Term Loan | Revolving Credit Facility | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | 97 | 285 | 316 | 655 |
FILO Asset-based Term Loan Facility | FILO Term Loan | Term Loan | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | 6,901 | 6,901 | 20,479 | 15,241 |
Notes | Convertible Senior Notes | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | 597 | 707 | 2,033 | 2,121 |
Amortization of conversion feature | 1,413 | 1,655 | 4,725 | 4,898 |
Amortization of discount and debt issuance costs | 193 | 244 | 679 | 731 |
Interest expense | 2,203 | 2,606 | 7,437 | 7,750 |
Tranche B-1 | Senior Credit Facility | Term Loan Facility | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | 0 | 1,755 | 928 | 11,496 |
Tranche B-2 | Senior Credit Facility | Term Loan Facility | ||||
Debt Instrument | ||||
Interest expense (excluding amortization) | $ 12,849 | $ 20,447 | $ 42,271 | $ 45,976 |
EQUITY METHOD INVESTMENTS - Nar
EQUITY METHOD INVESTMENTS - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 48 Months Ended | |||||
Mar. 31, 2019 | Feb. 28, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Oct. 01, 2023 | |
Schedule of Equity Method Investments [Line Items] | |||||||||
Revenue | $ 499,076 | $ 580,185 | $ 1,597,837 | $ 1,805,662 | |||||
Accounts receivable | 6,400 | 6,400 | |||||||
Manufacturing / Wholesale | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Revenue | 3,800 | 8,100 | |||||||
China Business | Disposal group, dispsed of by sale | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Deconsolidation, gain (loss) | $ 5,800 | ||||||||
Nutra Manufacturing Business | Disposal group, dispsed of by sale | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Deconsolidation, gain (loss) | (27,100) | ||||||||
JV Framework | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity method investment ownership (percentage) | 35.00% | ||||||||
Cash contributed | 2,400 | ||||||||
Finished goods purchased | 46,000 | 118,000 | |||||||
Accounts payable | $ 10,000 | $ 10,000 | |||||||
Manufacturing JV | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Proceeds for investment in newly formed joint venture | $ 101,000 | $ 101,000 | $ 101,000 | $ 101,000 | |||||
Manufacturing JV | Forecast | Subsequent Event | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity method investment ownership (percentage) | 100.00% | ||||||||
Proceeds for investment in newly formed joint venture | $ 75,000 | ||||||||
Manufacturing JV capital contribution | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Capital contribution | $ 10,700 | ||||||||
GNC Hong Kong Limited | JV Framework | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity method investment ownership (percentage) | 35.00% | 35.00% | 35.00% | ||||||
Manufacturing JV | International Vitamin Corporation | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity method investment ownership (percentage) | 43.00% | 43.00% | 43.00% | 43.00% | |||||
Purchase price adjustment | $ 1,800 |
EQUITY METHOD INVESTMENTS - Sum
EQUITY METHOD INVESTMENTS - Summary of Equity Method Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Schedule of Equity Method Investments [Line Items] | ||
Income from equity method investments | $ 4,192 | |
Distributions received from equity method investments | (791) | |
Translation effect of exchange rates | (306) | |
Total Equity method investments | 99,729 | $ 0 |
Manufacturing JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment, unerlying equity in net assets | 75,434 | |
Manufacturing JV capital contribution | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment, unerlying equity in net assets | 10,714 | |
HK JV and China JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment, unerlying equity in net assets | $ 10,180 |
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) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Actual and estimated fair values of the financial instruments | ||
Derivative liability | $ 8,541 | $ 3,210 |
Level 2 | Carrying Amount | FILO Asset-based Term Loan Facility | FILO Term Loan | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 266,132 | 264,086 |
Level 2 | Carrying Amount | Notes | Notes | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 152,944 | 175,504 |
Level 2 | Carrying Amount | Tranche B-1 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 0 | 147,289 |
Level 2 | Carrying Amount | Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 440,009 | 554,760 |
Level 2 | Carrying Amount | Forward contracts for the issuance of convertible preferred stock | ||
Actual and estimated fair values of the financial instruments | ||
Derivative asset | 0 | 88,942 |
Level 2 | Carrying Amount | Interest rate swaps | ||
Actual and estimated fair values of the financial instruments | ||
Derivative liability | 8,541 | 3,210 |
Level 2 | Fair Value | FILO Asset-based Term Loan Facility | FILO Term Loan | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 266,417 | 260,125 |
Level 2 | Fair Value | Notes | Notes | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 142,620 | 131,628 |
Level 2 | Fair Value | Tranche B-1 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 0 | 145,080 |
Level 2 | Fair Value | Tranche B-2 | Amended Term Loan Facility Due March 2021 | Term Loan Facility | ||
Actual and estimated fair values of the financial instruments | ||
Long-term debt | 418,559 | 511,766 |
Level 2 | Fair Value | Forward contracts for the issuance of convertible preferred stock | ||
Actual and estimated fair values of the financial instruments | ||
Derivative asset | 0 | 88,942 |
Level 2 | Fair Value | Interest rate swaps | ||
Actual and estimated fair values of the financial instruments | ||
Derivative liability | $ 8,541 | $ 3,210 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Mar. 01, 2019 | |
Lessee, Lease, Description [Line Items] | |||||
Renewal term period | 10 years | 10 years | |||
Weighted average remaining lease term | 5 years 2 months 12 days | 5 years 2 months 12 days | |||
Weighted average discount rate (as a percentage) | 10.00% | 10.00% | |||
Sublease revenue | $ 10,500 | $ 32,000 | |||
Sublease revenue | $ 11,100 | $ 34,500 | |||
Present value of lease obligations | 463,131 | 463,131 | |||
Current lease liabilities | 115,473 | 115,473 | |||
Right-of-use assets | $ 362,774 | $ 362,774 | |||
Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Remaining lease term | 1 year | ||||
Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Remaining lease term | 15 years | ||||
JV Framework | |||||
Lessee, Lease, Description [Line Items] | |||||
Lease term | 1 year |
LEASES - Summary of Leases (Det
LEASES - Summary of Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Operating leases | $ 36,833 | $ 107,710 |
Variable lease costs | 20,300 | 62,824 |
Rent expense | 58,955 | 176,510 |
Cash paid for amounts included in the measurement of operating lease liabilities | 130,374 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | 23,829 | |
Operating Leases for Company-Owned and Franchise Stores | ||
Lessee, Lease, Description [Line Items] | ||
Rent expense | 57,133 | 170,534 |
Other | ||
Lessee, Lease, Description [Line Items] | ||
Rent expense | $ 1,822 | $ 5,976 |
LEASES - Minimum Future Rent Ob
LEASES - Minimum Future Rent Obligations, After Adoption (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Minimum Future Obligations | |
2019 (remainder) | $ 42,171 |
2020 | 147,229 |
2021 | 115,811 |
2022 | 85,333 |
2023 | 62,777 |
Thereafter | 144,572 |
Total future obligations | 597,893 |
Less amounts representing interest | (134,762) |
Present value of lease obligations | 463,131 |
Sublease Income from Franchisees | |
2019 (remainder) | (7,641) |
2020 | (27,431) |
2021 | (21,938) |
2022 | (16,713) |
2023 | (12,370) |
Thereafter | (28,900) |
Total future obligations | (114,993) |
Rent on Operating Leases, net of Sublease Revenue | |
2019 (remainder) | 34,530 |
2020 | 119,798 |
2021 | 93,873 |
2022 | 68,620 |
2023 | 50,407 |
Thereafter | 115,672 |
Total future obligations | 482,900 |
Operating Leases for Company-Owned and Franchise Stores | |
Minimum Future Obligations | |
2019 (remainder) | 40,348 |
2020 | 140,618 |
2021 | 111,072 |
2022 | 82,612 |
2023 | 61,422 |
Thereafter | 137,869 |
Total future obligations | 573,941 |
Operating Leases for Other | |
Minimum Future Obligations | |
2019 (remainder) | 1,823 |
2020 | 6,611 |
2021 | 4,739 |
2022 | 2,721 |
2023 | 1,355 |
Thereafter | 6,703 |
Total future obligations | $ 23,952 |
LEASES - Minimum Future Rent _2
LEASES - Minimum Future Rent Obligations, Before Adoption (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Minimum Future Obligations | |
2019 | $ 168,981 |
2020 | 131,886 |
2021 | 99,185 |
2022 | 67,214 |
2023 | 41,088 |
Thereafter | 62,903 |
Total future obligations | 571,257 |
Sublease Income from Franchisees | |
2019 | (29,867) |
2020 | (23,631) |
2021 | (16,782) |
2022 | (10,285) |
2023 | (4,717) |
Thereafter | (4,238) |
Total future obligations | (89,520) |
Rent on Operating Leases, net of Sublease Revenue | |
2019 | 139,114 |
2020 | 108,255 |
2021 | 82,403 |
2022 | 56,929 |
2023 | 36,371 |
Thereafter | 58,665 |
Total future obligations | 481,737 |
Operating Leases for Company-Owned and Franchise Stores | |
Minimum Future Obligations | |
2019 | 162,910 |
2020 | 126,312 |
2021 | 95,000 |
2022 | 64,735 |
2023 | 39,798 |
Thereafter | 56,200 |
Total future obligations | 544,955 |
Operating Leases for Other | |
Minimum Future Obligations | |
2019 | 6,071 |
2020 | 5,574 |
2021 | 4,185 |
2022 | 2,479 |
2023 | 1,290 |
Thereafter | 6,703 |
Total future obligations | $ 26,302 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) | Feb. 29, 2012action | Dec. 31, 2016 | Sep. 30, 2019USD ($)lawsuit |
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 | ||
Violations of Oregon Unlawful Trade Practices Act | |||
Commitments and contingencies | |||
Loss contingency accrual | $ 0 | ||
Subpoena from Department of Justice Related to USP Labs | |||
Commitments and contingencies | |||
Term of settlement agreement | 60 months |
MEZZANINE EQUITY Narrative (Det
MEZZANINE EQUITY Narrative (Details) $ / shares in Units, $ in Thousands | Feb. 13, 2019USD ($)shares | Jan. 02, 2019USD ($)shares | Nov. 09, 2018USD ($)shares | Nov. 08, 2018USD ($)tranche | Feb. 13, 2018USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) |
Temporary Equity [Line Items] | ||||||||||
Preferred stock, shares authorized (in shares) | shares | 60,000,000 | 60,000,000 | ||||||||
Preferred Stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||||||
Loss on forward contracts for the issuance of convertible preferred stock | $ | $ 0 | $ 16,800 | $ 0 | $ 16,787 | $ 0 | |||||
Accumulated and unpaid dividends | $ | $ 14,700 | $ 14,700 | ||||||||
Redeemable Convertible Preferred Stock | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Preferred Stock, par value (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | ||||||||
Convertible preferred stock, shares issued (in shares) | shares | 299,950 | 299,950 | ||||||||
Convertible preferred stock stated value | $ | $ 300,000 | |||||||||
Series A Preferred Stock | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Preferred Stock, par value (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | ||||||||
Dividend rate (as a percentage) | 6.50% | |||||||||
SPA Amendment, Private Placement | Redeemable Convertible Preferred Stock | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Convertible preferred stock issued (in shares) | shares | 299,950 | |||||||||
Price per share (in dollars per share) | $ / shares | $ 1,000 | |||||||||
Consideration received | $ | $ 300,000 | $ 300,000 | ||||||||
Number of tranches | tranche | 3 | |||||||||
Shares converted (in shares) | shares | 56,100,000 | |||||||||
Initial conversion price (in dollars per share) | $ / shares | $ 5.35 | |||||||||
SPA Amendment, Initial Issuance | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Convertible preferred stock issued (in shares) | shares | 100,000 | |||||||||
Consideration received | $ | $ 100,000 | |||||||||
SPA Amendment, First Subsequent Issuance | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Convertible preferred stock issued (in shares) | shares | 50,000 | |||||||||
Consideration received | $ | $ 50,000 | |||||||||
SPA Amendment, Second Subsequent Issuance | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Convertible preferred stock issued (in shares) | shares | 149,950 | |||||||||
Consideration received | $ | $ 150,000 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Weighted Average Number of Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Basic weighted-average shares (in shares) | 83,823 | 83,412 | 83,667 | 83,326 |
Effect of dilutive stock-based compensation awards (in shares) | 0 | 0 | 0 | 105 |
Diluted weighted-average shares (in shares) | 83,823 | 83,412 | 83,667 | 83,431 |
EARNINGS PER SHARE - Schedule_2
EARNINGS PER SHARE - Schedule of Antidilutive and Contingently Issuable Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based awards excluded from diluted EPS | 4,128 | 4,611 | 4,128 | 4,343 |
Performance-based restricted stock awards with a market condition | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contingently issuable awards excluded from diluted EPS (in shares) | 147 | 294 | 147 | 308 |
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) | 3,064 | 3,076 | 3,064 | 3,022 |
Performance-based restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Antidilutive awards excluded from diluted EPS (in shares) | 917 | 1,241 | 917 | 1,013 |
Outstanding Stock-based Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Antidilutive awards excluded from diluted EPS (in shares) | 4,100 | 4,600 | 4,100 | |
Convertible Preferred Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Effect of dilutive Convertible Preferred Stock (in shares) | 58,000 | 52,700 | ||
Convertible Debt Securities | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of anti-dilutive shares (in shares) | 2,400 | 2,400 |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computations for Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income | $ (2,418) | $ (8,590) | $ (1,622) | $ 10,941 |
Cumulative undeclared convertible preferred stock dividend | 5,031 | 0 | 13,697 | 0 |
Net (loss) income attributable to common shareholders | $ (7,449) | $ (8,590) | $ (15,319) | $ 10,941 |
Basic weighted-average shares (in shares) | 83,823 | 83,412 | 83,667 | 83,326 |
(Loss) earnings per common share - basic (in dollars per share) | $ (0.09) | $ (0.10) | $ (0.18) | $ 0.13 |
Cumulative undeclared convertible preferred stock dividends | $ 5,031 | $ 0 | $ 13,697 | $ 0 |
Net (loss) income attributable to common shareholders | $ (7,449) | $ (8,590) | $ (15,319) | $ 10,941 |
Diluted weighted-average shares (in shares) | 83,823 | 83,412 | 83,667 | 83,431 |
(Loss) earnings per common share - diluted (in dollars per share) | $ (0.09) | $ (0.10) | $ (0.18) | $ 0.13 |
SEGMENTS (Details)
SEGMENTS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 3 | ||||
Revenue: | |||||
Revenue | $ 499,076 | $ 580,185 | $ 1,597,837 | $ 1,805,662 | |
Operating income: | |||||
Operating income | 26,654 | 19,961 | 110,854 | 115,234 | |
Loss on net asset exchange for the formation of the joint ventures | 0 | 0 | (21,293) | 0 | |
Interest expense, net | 24,456 | 35,732 | 82,376 | 90,448 | |
Gain on convertible debt repurchase | 0 | 0 | (3,214) | 0 | |
Loss on forward contracts for the issuance of convertible preferred stock | 0 | $ 16,800 | 0 | 16,787 | 0 |
Loss on debt refinancing | 0 | 0 | 0 | 16,740 | |
Income (loss) before income taxes | 2,198 | (15,771) | 14,905 | 8,046 | |
Manufacturing / Wholesale | |||||
Revenue: | |||||
Revenue | 3,800 | 8,100 | |||
Operating Segment | |||||
Revenue: | |||||
Revenue | 499,076 | 643,880 | 1,633,342 | 1,999,258 | |
Operating income: | |||||
Operating income | 50,420 | 44,803 | 207,503 | 194,905 | |
Operating Segment | U.S. and Canada | |||||
Revenue: | |||||
Revenue | 444,734 | 476,519 | 1,409,951 | 1,506,250 | |
Operating income: | |||||
Operating income | 32,715 | 11,466 | 134,017 | 100,559 | |
Operating Segment | International | |||||
Revenue: | |||||
Revenue | 36,940 | 51,407 | 117,311 | 140,107 | |
Operating income: | |||||
Operating income | 12,653 | 16,468 | 40,972 | 46,624 | |
Operating Segment | Manufacturing / Wholesale | |||||
Revenue: | |||||
Revenue | 17,402 | 115,954 | 106,080 | 352,901 | |
Operating income: | |||||
Operating income | 5,052 | 16,869 | 32,514 | 47,722 | |
Intersegment Eliminations | |||||
Revenue: | |||||
Revenue | 0 | (63,695) | (35,505) | (193,596) | |
Intersegment Eliminations | Manufacturing / Wholesale | |||||
Revenue: | |||||
Revenue | 0 | 63,695 | 35,505 | 193,596 | |
Reportable Legal Entities | Manufacturing / Wholesale | |||||
Revenue: | |||||
Revenue | 17,402 | 52,259 | 70,575 | 159,305 | |
Corporate costs | |||||
Operating income: | |||||
Operating income | (23,766) | (24,842) | (96,649) | (79,671) | |
Corporate costs | (23,766) | (24,732) | (75,106) | (79,511) | |
Other | $ 0 | $ (110) | $ (250) | $ (160) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense (benefit) | $ 5,733 | $ (7,181) | $ 20,719 | $ (2,895) | |
Discrete tax benefit | 9,800 | 9,800 | $ 6,900 | ||
Interest and penalties accrued related to unrecognized tax benefits | $ 2,100 | $ 2,100 | $ 2,000 |