GNC 2011 Annual Report Download - page 6

Table of Contents
changes in raw material costs and pricing of our products;
failure to successfully execute our growth strategy, including any delays in our planned future growth, testing and development of our new store
formats, any inability to expand our franchise operations or attract new franchisees, or any inability to expand our company-owned retail
operations;
changes in applicable laws relating to our franchise operations;
damage or interruption to our information systems;
the impact of current economic conditions on our business;
natural disasters, unusually adverse weather conditions, pandemic outbreaks, boycotts and geo-political events; and
our failure to maintain effective internal controls.
Consequently, forward-looking statements should be regarded solely as our current plans, estimates and beliefs. You should not place undue reliance on
forward-looking statements. We cannot guarantee future results, events, levels of activity, performance or achievements. We do not undertake and specifically
decline any obligation to update, republish or revise forward-looking statements to reflect future events or circumstances or to reflect the occurrences of
unanticipated events.
Throughout this report, we use market data and industry forecasts and projections that were obtained from surveys and studies conducted by third
parties and from publicly available industry and general publications. Although we believe that the sources are reliable, we have not independently verified
the information contained therein. We note that estimates, in particular as they relate to general expectations concerning our industry, involve risks and
uncertainties and are subject to change based on various factors, including those discussed under the heading "Risk Factors" in this report.
PART I
Item 1. Business.
GNC
Based on our worldwide network of more than 7,200 locations and our GNC.com website, we believe we are the leading global specialty retailer of
health and wellness products, including vitamins, minerals, and herbal supplements ("VMHS") products, sports nutrition products, and diet products. Our
diversified, multi-channel business model derives revenue from product sales through domestic company-owned retail stores, domestic and international
franchise activities, third-party contract manufacturing, e-commerce and corporate partnerships. We believe that the strength of our GNC brand, which is
distinctively associated with health and wellness, combined with our stores and website, give us broad access to consumers and uniquely position us to benefit
from the favorable trends driving growth in the nutritional supplements industry and the broader health and wellness sector. Our broad and deep product mix,
which is focused on high-margin, premium, value-added nutritional products, is sold under our GNC proprietary brands, including Mega Men®, Ultra
Mega®, GNC WELLbeING®, Pro Performance®, Pro Performance® AMP and Longevity Factors, and under nationally recognized third-party brands.
Based on the information we compiled from the public securities filings of our primary competitors, our network of domestic retail locations is
approximately twelve times larger than the next largest U.S. specialty retailer of nutritional supplements and provides a leading platform for our vendors to
distribute their products to their target consumer. Our close relationship with our vendor
4
•
•
•
•
•
•
•