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  • Page 1
    GNC HOLDINGS, INC. (GNC) 10-K Annual report pursuant to section 13 and 15(d) Filed on 02/27/2012 Filed Period 12/31/2011
  • Page 2
    ... Washington, D.C. 20549 FORM 10-K (Mark One) ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) ...period from to Commission file number: 001-35113 GNC Holdings, Inc. (Exact name of registrant ... incorporated by reference in Part III of this Form 10K or any amendment to this Form 10-K. ý Indicate ...
  • Page 3
    ...(Do not check if a smaller reporting company) Smaller reporting company o No ý Indicate by... Rule 12b-2 of the Act). Yes o As of February 15, 2012, the number of outstanding shares of Class A common ... together with the Class A common stock, the "common stock"), of GNC Holdings, Inc. were 103,832,...
  • Page 4
    Table of Contents TABLE OF CONTENTS Page Part I Item 1 Business Item 1A Risk Factors Item 1B Unresolved Staff Comments Item 2 Properties Item 3 Legal Proceedings Item 4 Mine Safety Disclosures Part II Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases ...
  • Page 5
    Table of Contents FORWARD LOOKING STATEMENTS This Annual Report on Form 10-K (this "Annual Report") contains forward-looking statements within the meaning ... may be found in Items 1, 2, 3, 7 and 7A hereof, as well as within this report generally. Forward-looking statements can often be identified by ...
  • Page 6
    ...under the heading "Risk Factors" in this Annual Report. PART I Item 1. BUSINESS. GNC Holdings, Inc.... Stock Exchange (the "NYSE") under the symbol "GNC." Based on our worldwide network of more ... partnerships. We believe that the strength of our GNC brand, which is distinctively associated with health ...
  • Page 7
    ... maintain and make available on GNC.com, free of charge, our Annual Reports on Form 10-K, ..., references to "we," "us," "our," "Company" or "GNC" refer collectively to Holdings and its subsidiaries. ... and Plan of Merger (the "Merger Agreement") with GNC Parent Corporation on February 8, 2007. Pursuant ...
  • Page 8
    ... share, as with our acquisition of LuckyVitamin.com. Further leveraging of the GNC brand. As with our Rite Aid, Sam's ...our customers, building the brand and reinforcing GNC's credibility with consumers. Attractive, loyal customer ... two times more than other GNC customers. We believe that our customer ...
  • Page 9
    Table of Contents sales from GNC.com, royalties, wholesale sales and fees from both domestic and international franchisees, revenue from third-party contract manufacturing, wholesale revenue and fees from our Rite Aid store-within-a-store locations, and wholesale revenues from Sam's Club and ...
  • Page 10
    ...: Revenue by Segment U.S. Retail Revenue by Product* * includes domestic retail and GNC.com In 2011, we did not have a material concentration of sales ... and total assets by geographic area, see Note 16, "Segments," to our audited consolidated financial statements included in this Annual Report. 8
  • Page 11
    ... and Puerto Rico and through our websites, GNC.com and LuckyVitamin.com. Locations As of December 31, 2011,... our store graphics to better identify with our GNC customers and provide product information to ...and customer-friendly layout, while promoting our GNC Live Well® theme. Websites Our website,...
  • Page 12
    ... fee of $40,000 for a franchise license. Existing GNC franchise operators may purchase an additional ... geographical exclusivity and are required to utilize the standard GNC store format. Generally, we enter ..., and we conduct periodic field visit reports to ensure our minimum standards are maintained. ...
  • Page 13
    Table of Contents pay an initial fee of approximately $25,000 for a franchise license for each full size store and continuing royalty fees that vary depending on the country and the store type. Our international franchise program has enabled us to expand into international markets with limited ...
  • Page 14
    ... strategic alliance with Rite Aid in December 1998 to open GNC franchise store-within-a-store locations. As... recognized third-party brand names. We report our sales in four major nutritional supplement ... and products. Through our online channels, GNC.com and LuckyVitamin.com, we offer additional SKUs ...
  • Page 15
    ... 11.0% 8.1% 100.0% The data above represents the revenue reported for the domestic portion of our retail segment,... vessels and the digestive system. Overall, GNC-branded proprietary products constituted approximately ... popular third-party products. Our GNC-branded proprietary products, including Pro ...
  • Page 16
    ... 27% of sales in 2001. Overall, we estimate that GNC-branded proprietary products constituted approximately 31...and condition specific products, resulting in the introduction of the GNC Total LeanTM, Sport Vitapaks and Beyond Raw®. In 2011, we estimate that GNC-branded products generated more than ...
  • Page 17
    ... our products. We own or have rights to material trademarks or trade names that we use in conjunction with the sale of our products, including the GNC brand name. We also rely upon trade secrets, know-how, continuing technological innovations and licensing opportunities to develop and maintain our ...
  • Page 18
    Table of Contents vendors' products. In most cases, our insurance covers such claims that are not adequately covered by a vendor's insurance and provides for excess secondary coverage above the limits provided by our product vendors. We self-insure certain property and casualty risks due to our ...
  • Page 19
    ... found to violate the law; require a distributor to submit a yearly report on all nonserious Adverse Event ... information received through FDC Act-mandated reporting of serious adverse events. For example, the FDC ... to the FDA, and based in part on such reports, in May 2009, the FDA warned consumers to...
  • Page 20
    ... a public warning or notice of violation letter to a company, publicize information about illegal products, detain products intended for import, require the reporting of serious adverse events, require a recall of illegal or unsafe products from the market, and request the Department of Justice to ...
  • Page 21
    ... ingredient dehydroepiandrosterone ("DHEA") to the requirements of the Controlled Substances Act, which would prevent the sale of products containing DHEA. In March 2009, the General Accounting Office (the "GAO") issued a report that made four recommendations to enhance the FDA's oversight of 19
  • Page 22
    ... themselves as a dietary supplement company and update this information annually, provide a list of all dietary supplement products they sell and a copy of the labels and update this information annually, and report all adverse events related to dietary supplements, not...
  • Page 23
    ...following risk factors could cause our financial performance to differ significantly from the goals, plans, objectives, intentions and expectations expressed in this Annual Report. If any of the following risks and uncertainties actually occur, our business...
  • Page 24
    ... particular products or the ingredients they contain and may not be consistent with earlier favorable research or publicity. A future research report or publicity that is perceived by our consumers as less favorable or that questions earlier research or publicity could have a material adverse effect...
  • Page 25
    Table of Contents Our failure to appropriately respond to changing consumer preferences and demand for new products could significantly harm our customer relationships and product sales. Our business is particularly subject to changing consumer trends and preferences. Our continued success depends ...
  • Page 26
    Table of Contents Our ability to continue to access credit on the terms previously obtained for the funding of our operations and capital projects may be limited due to changes in credit markets. In recent periods, the credit markets and the financial services industry have experienced disruption ...
  • Page 27
    Table of Contents • • entering into transactions with our affiliates; and incurring capital expenditures in excess of limitations set within the agreement. The Revolving Credit Facility also requires that, to the extent borrowings thereunder exceed $25 million, we meet a senior secured...
  • Page 28
    Table of Contents impermissible drug claim, is not substantiated, or is an unauthorized version of a "health claim." See Item 1, "Business-Government Regulation-Product Regulation" for additional information. Any of these actions could prevent us from marketing particular dietary supplement ...
  • Page 29
    ... side effects and interactions with other substances. For example, as of December 31, 2011, there were 75 pending lawsuits related to Hydroxycut in which GNC had been named, including 69 individual, largely personal injury claims and six putative class action cases. See Item 3, "Legal Proceedings." ...
  • Page 30
    Table of Contents As is common in our industry, we rely on our third-party vendors to ensure that the products they manufacture and sell to us comply with all applicable regulatory and legislative requirements. In general, we seek representations and warranties, indemnification and/or insurance ...
  • Page 31
    ... to increase significantly, it could result in a significant increase to us in the prices our contract manufacturers and third-party manufacturers charge us for our GNC-branded products and third-party products. Raw material prices may increase in the future and we may not be able to pass on such ...
  • Page 32
    ... market share. We have invested significant resources to promote our GNC brand name in order to obtain the public recognition that we have ... or against challenges by others. For example, third parties are challenging our "GNC Live Well" trademark in foreign jurisdictions. Our failure to successfully ...
  • Page 33
    Table of Contents Franchisee support of our marketing and advertising programs is critical to our success. The support of our franchisees is critical for the success of our marketing programs and other strategic initiatives we seek to undertake, and the successful execution of these initiatives ...
  • Page 34
    ...condition could be adversely affected by the financial and operational performance of Rite Aid. As of December 31, 2011, Rite Aid operated 2,125 GNC franchise store-within-a-store locations and has committed to open additional franchise storewithin-a-store locations. Revenue from sales to Rite Aid (...
  • Page 35
    Table of Contents inconsistent product regulation or sudden policy changes by foreign agencies or governments; the imposition of, or increase in, duties, taxes, government royalties or non-tariff trade barriers; difficulty in collecting international accounts receivable and potentially longer ...
  • Page 36
    Table of Contents Internet to conduct our business, any system disruptions could have a material adverse effect on our business, financial condition or results of operations. We must successfully maintain and/or upgrade our information technology systems, and our failure to do so could have a ...
  • Page 37
    Table of Contents Complying with recently enacted healthcare reform legislation could increase our costs and have a material adverse effect on our business, financial condition or results of operations. Recently enacted healthcare reform legislation could significantly increase our costs and have a...
  • Page 38
    ... or changes in management or limiting the ability of other stockholders to approve transactions they deem to be in their best interest. As of February 15, 2012, Ares Corporate Opportunities Fund II, L.P. ("Ares") and Ontario Teachers' Pension Plan Board ("OTPP" and, together with Ares, the "Sponsors...
  • Page 39
    Table of Contents their best interests. In addition, our governance documents do not contain any provisions applicable to deadlocks among the members of the Board, and as a result we may be precluded from taking advantage of opportunities due to disagreements among the Sponsors and their respective...
  • Page 40
    ... likely drop significantly. Future sales of the Class A common stock could cause the market price for the Class A common stock to decline. As of February 15, 2012, there were 103,832,767 shares of the Class A common stock outstanding, of which 45,047,336 shares were restricted securities held by our...
  • Page 41
    ... A common stock to decline. As of February 15, 2012, the Sponsors collectively held 44,953,... A common stock. Additionally, as of February 15, 2012, (i) 5,795,943 shares of the Class A common... A common stock is influenced by the research and reports that industry or securities analysts publish about us...
  • Page 42
    ... to enforcement actions by the NYSE. Item 1B. None. Item 2. PROPERTIES. UNRESOLVED STAFF COMMENTS. As of December 31, 2011, there were 7,685 GNC store locations globally (including distribution centers where retail sales are made). In our Retail segment, all but one of our company-owned stores are ...
  • Page 43
    ... 1 38 8 1,589 925 Total * includes distribution centers where retail sales are made In our Manufacturing/Wholesale segment, there are 2,125 GNC franchise "store-within-a-store" locations under our strategic alliance with Rite Aid. Also, in our Manufacturing/Wholesale segment, we lease facilities...
  • Page 44
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  • Page 45
    ...-branded products manufactured by Iovate. The FDA warning was based on 23 reports of liver injuries from consumers who claimed to have used the products ... voluntarily recalled 14 Hydroxycut-branded products. Following the recall, GNC was named, among other defendants, in approximately 85 lawsuits ...
  • Page 46
    ...full recovery in respect of any claims against GNC in connection with products manufactured by Iovate under ... of significant defenses by such insurer. To the extent GNC is not fully compensated by Iovate's insurer, it can seek recovery directly from Iovate. GNC's ability to fully recover such amounts...
  • Page 47
    ... Jersey, 10CV1728 (filed April 5, 2010); Donna Natali v. GNC Corporation, et al., Superior Court of New...-L-001499-10 (filed April 5, 2010); Matthew Carhart v. GNC Corporation, et al., Court of Common Pleas ... (filed September 16, 2010); Andrea Saunders v. GNC Corporation, et al., Court of Common Pleas ...
  • Page 48
    ...10CV9698 (filed December 30, 2010); Marek Kosciesza v. GNC Corporation, et al., Superior Court of ..., 2011); Orlando Jones, III, et al. v. GNC Corporation, U.S. District Court, Northern District of ...filed March 3, 2011); Steven D. Polley, et al. v. GNC Corporation, et al., U.S. District Court, Northern...
  • Page 49
    ... 11-0403330 (filed May 2, 2011); Matthew Williams v. GNC Corporation, et al., Circuit Court of St... 00472224-CXC (filed May 5, 2011); Jorge Delvalle v. GNC Corporation, et al., Superior Court of California..., ATL-L- 00270510 (filed June 24, 2010 (GNC added to amended complaint on May 2, 2011)). •...
  • Page 50
    ...6, 2009, the United States Judicial Panel on Multidistrict Litigation consolidated pretrial proceedings of many of the pending actions (including the above-listed GNC class actions) in the Southern District of California (In re: Hydroxycut Marketing and Sales Practices Litigation, MDL No. 2087). Any...
  • Page 51
    ...been traded on the NYSE under the symbol "GNC." As of February 15, 2012, there were 103,...sales prices by quarter for the Class A common stock, as reported by the NYSE: 2011 Quarter ended: High ... B common stock, was entitled to receive ratably an annual special dividend payment equal to an aggregate...
  • Page 52
    Table of Contents (the "2007 Stock Plan") and the GNC Holdings, Inc. 2011 Stock and Incentive Plan (the "2011 Stock Plan") as of December 31, 2011: Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, ...
  • Page 53
    ... to which we were authorized to purchase 2.4 million shares of Class A common stock. We concluded such share repurchase program in January 2012. In February 2012, the Board authorized a new share repurchase program pursuant to which Holdings may purchase up to 1.0 million shares of Class A common ...
  • Page 54
    ... financial statements and footnotes included in this Annual Report. The selected consolidated financial data..., 2007 represent the period during which GNC Parent Corporation was owned by an investment fund... owned subsidiary of Holdings, completed the Merger with GNC Parent Corporation on March 16, 2007...
  • Page 55
    Table of Contents You should read the following financial information together with the information under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our audited consolidated financial statements and their related notes. (dollars in millions,...
  • Page 56
    ... uncertainties. See Item 1A, "Risk Factors" in this Annual Report for a discussion of important factors that could ... company-owned stores and online through GNC.com and LuckyVitamin.com, domestic and international ...a worldwide network of more than 7,600 locations operating under the GNC brand name. 53
  • Page 57
    ... international footprint, expanding our e-commerce business and further leveraging of the GNC brand. These goals are designed to drive both short-term and ... store sales increased by 10.1%, which includes a 37.3% increase from our GNC.com business. We increased our company-owned domestic store count ...
  • Page 58
    ... by sales at our company-owned stores and online through GNC.com and LuckyVitamin.com. Although we believe that our retail and ... to Nutrition Business Journal's Supplement Business Report 2011, our industry is expected to grow at an annual average rate of approximately 3.7% through 2017. As a leader ...
  • Page 59
    ... period if the store was not open during the same period of the prior year. We also include our internet sales, as generated through GNC.com, LuckyVitamin.com and www.drugstore.com, in our company-owned domestic same store sales calculation. When a store's square footage has been changed as a result...
  • Page 60
    Table of Contents Results of Operations (Dollars in millions and percentages expressed as a percentage of total net revenue) Year Ended December 31, 2011 Revenues: Retail Franchise Manufacturing / Wholesale: Intersegment revenues(1) Third Party Subtotal Manufacturing / Wholesale Intersegment ...
  • Page 61
    ... retail revenues was primarily due to sales increases in the sports nutrition and vitamin product categories, and also included an increase in sales from GNC.com of $22.1 million, or 37.3%, to $81.1 million in 2011 compared to $59.0 million for 2010. Sales from LuckyVitamin.com contributed $14.5 ...
  • Page 62
    Table of Contents Other SG&A. Other SG&A expenses, including amortization expense, increased $12.8 million, or 12.9%, to $113.5 million for the year ended December 31, 2011 compared to $100.7 million in 2010. This increase was due to increases in credit card fees, third-party sales commissions, bad...
  • Page 63
    ... million as a result of an increase in our same store sales and $17.1 million in our non-same store sales. The same store sales increase includes GNC.com revenue, which increased $12.2 million, or 26.2%, to $59.0 million, compared to $46.8 million in 2009. Sales increases occurred primarily in the ...
  • Page 64
    Table of Contents $107.6 million in 2010, compared to $85.5 million in 2009, primarily the result of increases in product sales and royalties. Our international franchise store base increased by 130 stores to 1,437 at December 31, 2010 compared to 1,307 at December 31, 2009. Manufacturing/Wholesale...
  • Page 65
    Table of Contents Operating Income As a result of the foregoing, consolidated operating income increased $31.4 million, or 17.3%, to $212.4 million for the year ended December 31, 2010 compared to $181.0 million in 2009. Operating income, as a percentage of net revenue, was 11.7% and 10.6% for the ...
  • Page 66
    ... will be affected by general economic, financial and other factors beyond our control. We are currently in compliance with our debt covenant reporting and compliance obligations under the Senior Credit Facility. Cash Provided by Operating Activities Cash provided by operating activities was $174.7 ...
  • Page 67
    ... facilities and information technology systems. In each of 2012 and 2013, we expect our capital ... square footage. We anticipate funding our 2012 capital requirements with cash flows from operations and, if ... Interbank Offering ("LIBO") Rate breakage costs). GNC Corporation, our indirect wholly owned ...
  • Page 68
    ...without incurring penalties (except LIBOR breakage costs). GNC Corporation and Centers' then existing indirect ... Notes. Interest on the Senior Notes was payable semi-annually in arrears on March 15 and September 15 ... March 16, 2007 and was payable semi-annually in arrears on March 15 and September 15 ...
  • Page 69
    Table of Contents Contractual Obligations The following table summarizes our future minimum non-cancelable contractual obligations at December 31, 2011: Payments due by period (in millions) Total Less than 1 year 1-3 years 3-5 years After 5 years Long-term debt obligations(1) Scheduled interest ...
  • Page 70
    ... Policies," to our audited consolidated financial statements included in this Annual Report. Use of Estimates Certain amounts in our audited ... require management to use estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities at the date of the financial ...
  • Page 71
    Table of Contents franchise renewal or transfer, as applicable. Franchise royalties are earned based on a percentage of the franchisees' sales and recognized in the period in which the franchisees' sales occur. Accounts Receivable and Allowance for Doubtful Accounts The majority of our retail ...
  • Page 72
    ... our brand name, management performs an annual test for impairment in the fourth quarter of each ... consolidated financial statements included elsewhere in this Annual Report. We do not currently... of historical claims, including the timing of claims reported versus payment of claims, to estimate future...
  • Page 73
    ...to our audited consolidated financial statements included in this Annual Report, and was $1.9 million as of December 31, .... Income Taxes We compute our annual tax rate based on the statutory tax ... and the amount of benefit recognized for financial reporting represents unrecognized tax benefits. These ...
  • Page 74
    ... Exchange Rate Market Risk We are subject to the risk of foreign currency exchange rate changes in the conversion from local currencies to the U.S. dollar of the reported financial position and operating results of our non-U.S. based subsidiaries. We are also subject to foreign currency exchange ...
  • Page 75
    Table of Contents Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. TABLE OF CONTENTS Page Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets As of December 31, 2011 and 2010 Consolidated Statements of Income For the years ended December 31, 2011, 2010 and ...
  • Page 76
    Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of GNC Holdings, Inc.: In our ... the degree of compliance with the policies or procedures may deteriorate. /s/ PricewaterhouseCoopers LLP Pittsburgh, Pennsylvania February 24, 2012 73
  • Page 77
    Table of Contents PART I-FINANCIAL INFORMATION Item 1. Financial Statements GNC HOLDINGS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands, except per share data) December 31, 2011 Current assets: Cash and cash equivalents Receivables, net Inventories (Note 3) Prepaids and other ...
  • Page 78
  • Page 79
    Table of Contents GNC HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Income (in thousands, except per share data) Year ended December 31, 2011 2010 2009 Revenue Cost of sales, including cost of warehousing, distribution and occupancy Gross profit Compensation and related benefits ...
  • Page 80
    Table of Contents GNC HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity and Comprehensive Income (in thousands, includes per share data) Common Stock Accumulated Other Total Treasury Paid-in- Retained Comprehensive Stockholders' Shares Dollars Shares Dollars Stock ...
  • Page 81
    Comprehensive - - - income Issuance of common 16,000 16 - stock 26 (26,109) Conversion of stock 26,109 Purchase of treasury (2,235) - - stock Preferred stock - - - dividends Exercise of stock 3,912 3 - options Non-cash stockbased - - - compensation Balance at December 31, 102,985 $ 105 2,060 $ 2011...
  • Page 82
    Table of Contents GNC HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2011 2010 2009 CASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activities: Loss on early ...
  • Page 83
    ... Rico and in addition the Company offers products domestically through GNC.com, LuckyVitamin.com and www.drugstore.com. Franchise stores are located in the ... (the "Refinancing"), General Nutrition Centers, Inc. ("Centers") and GNC Corporation, each of which is an indirect wholly owned subsidiary of ...
  • Page 84
    ... the instructions to Form 10-K and Regulation S-X. The Company's normal reporting period is based on a calendar year. Summary of Significant Accounting ... contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting ...
  • Page 85
    ... value, an impairment provision is recorded. In performing the annual impairment test for goodwill, the Company performs... likely than not" that the fair value of the reporting unit is less than its carrying value... likely than not" that the fair value of a reporting unit is less than its carrying value...
  • Page 86
    ... company-owned stores, franchise stores and sales through its website, GNC.com and to a lesser extent through manufacturing and wholesale operations. The..., in order to match the discounts associated with the Gold Card program. For an annual fee, the card provides customers with a 20% discount on all ...
  • Page 87
    Table of Contents NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Distribution and Shipping Costs. The Company bills franchisees and third-party customers shipping and transportation costs and reflects these charges in revenue. The unreimbursed costs that ...
  • Page 88
    Table of Contents NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Pre-Opening Expenditures. The Company recognizes the cost associated with the opening of new stores as incurred. These costs are charged to expense and are not material for the periods ...
  • Page 89
    ... and expenses are translated using the average exchange rates for the reporting period. Gains or losses resulting from foreign currency transactions... agreements were to mature between April 2011 and September 2012. Amounts related to derivatives were reported in accumulated other comprehensive income...
  • Page 90
    Table of Contents NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Recently Issued Accounting Pronouncements In September 2011, the FASB issued updated guidance on the periodic testing of goodwill for impairment. This guidance will allow companies to assess ...
  • Page 91
    ... summarizes the differences between the Company's effective tax rate for financial reporting purposes and the federal statutory tax Year ended December ...differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. 86...
  • Page 92
    Table of Contents NOTE 4. INCOME TAXES (Continued) Significant components of the Company's deferred tax assets and liabilities consisted of the following: December 31, 2011 Assets Liabilities Net Assets (in thousands) 2010 Liabilities Net Deferred tax: Current assets (liabilities): Operating ...
  • Page 93
    ... an examination of the Company's 2005, 2006 and short period 2007 federal income tax returns in February 2008. The IRS issued an examination report in the second quarter of 2009, and the Company received notification from the IRS that the Joint Committee of Taxation had completed its review and had ...
  • Page 94
    Table of Contents NOTE 5. GOODWILL, BRANDS, AND OTHER INTANGIBLE ASSETS, NET (Continued) The following table summarizes the Company's goodwill activity: Retail Manufacturing/ Franchising Wholesale (in thousands) Total Balance at December 31. 2009 Acquired franchise stores Balance at December 31...
  • Page 95
    ... table represents future estimated amortization expense of intangible assets with finite lives: Estimated amortization expense (in thousands) Year ending December 31, 2012 2013 2014 2015 2016 Thereafter Total NOTE 6. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment consisted of the...
  • Page 96
    ...382 298,372 110,000 5,711 34 1,058,499 (28,070) 1,030,429 Year Ending December 31, Senior Credit Facility(a) Mortgage Loan/ Capital Leases (in thousands) Total 2012 2013 2014 2018 $ $ - - - 900,000 900,000 $ $ 1,592 1,812 751 - 4,155 $ $ 1,592 1,812 751 900,000 904,155 (a) The Senior ...
  • Page 97
    ... Interbank Offering Rate ("LIBOR") breakage costs). GNC Corporation, the Company's indirect wholly owned subsidiary ("GNC Corporation"), and Centers' existing and future domestic subsidiaries have ... incurring penalties (except LIBOR breakage costs). GNC Corporation and Centers' then existing ...
  • Page 98
    ...Agreement and Plan of Merger (the "Merger Agreement") with GNC Parent Corporation on February 8, 2007. Pursuant to the Merger Agreement, and on March 16, 2007, GNC Acquisition was merged with and into ...Notes. Interest on the Senior Notes was payable semi-annually in arrears on March 15 and September ...
  • Page 99
    ... or remaining terms of at least one year in effect at December 31, 2011 are as follows: Company Retail Stores Franchise Retail Stores Other (in thousands) Sublease Income Total 2012 2013 2014 2015 2016 Thereafter $ $ 113,968 92,328 74,760 58,071 43,748 73,536 456,412 $ $ 23,722 17,699 12,...
  • Page 100
    ... issued a warning on several Hydroxycut-branded products manufactured by Iovate Health Sciences U.S.A., Inc. ("Iovate"). The FDA warning was based on 23 reports of liver injuries from consumers who claimed to have used the products between 2002 and 2009. As a result, Iovate voluntarily recalled 14 ...
  • Page 101
    ... Jersey (Law Division/ Camden County). Plaintiff alleges that he purchased from a GNC store and consumed 6-OXO Extreme, which is manufactured by a ... damages. The Company tendered the claim to the insurance company of the franchisee whose GNC store sold and allegedly misrepresented the product. On or ...
  • Page 102
    ...similar wage and hour complaint was filed by Jennifer Mell and Jose Munoz, on behalf of themselves and all others similarly situated against GNC Corporation (U.S. District Court, Western District of Pennsylvania, Case No. 10CV945). The complaint alleges that plaintiffs' job duties were non-exempt in...
  • Page 103
    Table of Contents NOTE 11. COMMITMENTS AND CONTINGENCIES (Continued) owned or operated properties, or for properties to which substances or wastes that were sent in connection with current or former operations at its facilities. The presence of contamination from such substances or wastes could ...
  • Page 104
    ...the "Board") under the following two stock-based employee compensation plans: • • the GNC Holdings, Inc. 2011 Stock and Incentive Plan (the "2011 Stock Plan") adopted in March 2011; and the GNC Acquisition Holdings Inc. 2007 Stock Incentive Plan adopted in March 2007 ...
  • Page 105
    ... stock. Since the consummation of the IPO, the fair value of the stock has been based upon the closing price of the Class A common stock as reported on the New York Stock Exchange (the "NYSE"). Volatility is estimated based upon the Company utilizing its current peer group average to estimate the ...
  • Page 106
    Table of Contents NOTE 14. STOCK-BASED COMPENSATION PLANS (Continued) The assumptions used in the Company's Black Scholes valuation related to stock option grants made during each period below were as follows: Year ended December 31, 2011 2010 2009 0.00% 0.00% 0.00% Dividend yield 4.5-7.0 years ...
  • Page 107
    ... the 2011 plan year will make a cash contribution of $1.3 million in February 2012. The Company has a Non-qualified Executive Retirement Arrangement Plan ...the United States, Canada, Puerto Rico and its GNC.com and LuckyVitamin.com businesses. The Franchise reportable segment represents the Company's ...
  • Page 108
    Table of Contents NOTE 16. SEGMENTS (Continued) The following table represents key financial information of the Company's segments: Year ended December 31, 2011 2010 (in thousands) 2009 Revenue: Retail Franchise Manufacturing/Wholesale: Intersegment(1) Third Party Sub total Manufacturing/...
  • Page 109
    Table of Contents NOTE 16. SEGMENTS (Continued) December 31, 2011 2010 (in thousands) 2009 Depreciation and amortization: Retail Franchise Manufacturing / Wholesale Corporate / Other Total depreciation and amortization Capital expenditures: Retail Franchise Manufacturing / Wholesale Corporate / ...
  • Page 110
    Table of Contents NOTE 16. SEGMENTS (Continued) The following table represents sales by general product category. The category "Other Wellness Products" includes other wellness products sales from the Company's point of sales system, sales from LuckyVitamin.com of $14.5 million, which is not on the...
  • Page 111
    ...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 following table presents the Company's financial assets and liabilities that were accounted for at fair value...
  • Page 112
    ... upon the consummation of the IPO. The Management Services Agreement provided for an annual management fee of $0.8 million, payable quarterly and in advance to... the holder of Class B common stock, was entitled to receive ratably an annual special dividend payment equal to an aggregate amount of $0.8 ...
  • Page 113
    ... $ 87,339 88,917 0.87 0.85 $ $ 0.25 $ 0.24 $ On February 15, 2012, the Board authorized and declared a cash dividend for the first quarter of 2012 of $0.11 per share of common stock, payable on or about March 30, 2012 to stockholders of record as of the close of business on March 15, 2012. 108
  • Page 114
    ... Equity," was largely completed in December 2011, and concluded in January 2012. In total, 2.4 million shares were repurchased for $67.5 million....and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report. Disclosure controls and procedures are designed to provide...
  • Page 115
    ..., our internal control over financial reporting was effective based on that framework. Our independent... of our internal control over financial reporting as of December 31, 2011, as stated in their... 8, "Financial Statements and Supplementary Data" of this Annual Report. Changes in Internal Control Over...
  • Page 116
    ...this Item will be included in our Proxy Statement to be filed on March 8, 2012, which is incorporated herein by reference, under the captions "Director ..., that the subsection entitled "Executive Compensation-Compensation Committee Report" shall not be deemed to be incorporated by reference. Item 12. ...
  • Page 117
    ...15. (a) EXHIBITS, FINANCIAL STATEMENT SCHEDULES. Documents filed as part of this Annual Report: (1) Financial statements filed in Part II, Item 8 of this Annual Report: • • Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets As of...
  • Page 118
    Table of Contents (2) Financial statement schedule: SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS GNC Holdings, Inc. and Subsidiaries Valuation and Qualifying Accounts Allowance for Doubtful Accounts(1) Year ended December 31, 2011 2010 (in thousands) 2009 Balance at beginning of period Additions...
  • Page 119
    ...: Listed below are all exhibits filed as part of this Annual Report. Certain exhibits are incorporated by reference from... 333-114396), filed February 25, 2011.) GNC Acquisition Holdings Inc. 2007 Stock Incentive... filed August 10, 2007.) Amendment No. 1 to the GNC Acquisition Holdings Inc. 2007 Stock ...
  • Page 120
    ... of Non-Qualified Stock Option Agreement Pursuant to the GNC Acquisition Holdings Inc. 2007 Stock Incentive ..., 2011.) Form of Restricted Stock Agreement pursuant to the GNC Holdings, Inc. 2011 Stock and Incentive ... reference to Exhibit 10.16.2 to Centers' Annual Report on Form 10K (File No. 333-144396...
  • Page 121
    ...333-114502), filed August 9, 2004.)†Amendment to the GNC/Rite Aid Retail Agreement, effective ... Collateral Agreement, dated as of March 4, 2011, by GNC Corporation, Centers and the other Grantors ... Security Agreement, dated as of March 4, 2011, by GNC Corporation, Centers and the other Grantors ...
  • Page 122
    Table of Contents 101.PRE 101.DEF * †Filed herewith XBRL Taxonomy Extension Presentation Linkbase XBRL Taxonomy Extension Definition Linkbase Portions of this exhibit have been omitted pursuant to a request for confidential treatment. The omitted portions have been separately filed with ...
  • Page 123
    ..., the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GNC HOLDINGS, INC. By: ... AXELROD Norman Axelrod Chairman of the Board of Directors Dated: February 27, 2012 By: /s/ JEFFREY P. BERGER Jeffrey P. Berger Director Dated: February 27...
  • Page 124
    ... Andrew Claerhout Director Dated: February 27, 2012 By: /s/ MICHAEL F. HINES Michael F. Hines Director ... Johann O. Koss Director Dated: February 27, 2012 By: /s/ AMY B. LANE Amy B. Lane Director ... Leemrijse Director Dated: February 27, 2012 By: /s/ RICHARD J. WALLACE Richard J. Wallace Director ...
  • Page 125
  • Page 126
    Exhibit 10.15 FORM OF INDEMNIFICATION AGREEMENT(1) AGREEMENT, executed this [Note 2], among GNC Acquisition Holdings Inc., a Delaware corporation (the "Company"), and [Note 1] (the "Indemnitee"), and, with respect to its guarantee set forth on the signature pages hereto only, General Nutrition ...
  • Page 127
    right is exercisable immediately or only after the passage of time. The term "beneficially own" shall have a correlative meaning. (c) (d) Board: The Board of Directors of the Company. Change of Control: the occurrence of any of the following events: (i) any "person" (as such term is used in ...
  • Page 128
    (e) Claim: any threatened, pending or completed action, suit or proceeding, or any inquiry or investigation, whether instituted by the Company or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, ...
  • Page 129
    such Claim. If so requested by Indemnitee, the Company shall advance to the fullest extent permitted by law (within two business days of such request) any and all Expenses to Indemnitee (an "Expense Advance"). Notwithstanding anything in this Agreement to the contrary, prior to a Change in Control ...
  • Page 130
    and all expenses (including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. Establishment of Trust. In the event of a Potential Change in Control, the Company shall, upon written request by 4. Indemnitee, create a ...
  • Page 131
    Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against...
  • Page 132
    Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the 16. parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the ...
  • Page 133
    17. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable in any respect, ...
  • Page 134
    IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date set forth above. GNC ACQUISITION HOLDINGS INC. By: Its:
  • Page 135
    INDEMNITEE [Note 1]
  • Page 136
    General Nutrition Centers, Inc. hereby unconditionally guarantees the due and punctual payment and performance of all obligations of the Company under this Agreement in accordance with the terms set forth herein. GENERAL NUTRITION CENTERS, INC. By: Name: Title:
  • Page 137
    SCHEDULE Schedule to Notes in Form of Indemnification Agreement Name (Note 1) Effective Date (Note 2) Norman Axelrod Jeffrey P. Berger Andrew Claerhout Joseph Fortunato Michael Hines David B. Kaplan Brian Klos Johann O. Koss Amy B. Lane Romeo Leemrijse Richard Wallace March 16, 2007 March 28, ...
  • Page 138
    .... GNC Corporation General Nutrition Centers, Inc. GNC Funding, Inc. General Nutrition Corporation General ... Rico, Inc. General Nutrition Centres Company GNC Columbia SAS Lucky Vitamin Corporation GNC ..., LLC Gustine Sixth Avenue Associates, Ltd. GNC Headquarters, Inc. Compania Nutricional Mexicana GNC ...
  • Page 139
    QuickLinks Exhibit 21.1 Subsidiaries of the Registrant
  • Page 140
    ... Joseph M. Fortunato, certify that: 1. I have reviewed this Annual Report on Form 10-K of GNC Holdings, Inc.; 2. Based on my ...the registrant's internal control over financial reporting. Date: February 27, 2012 /s/ JOSEPH M. FORTUNATO Joseph M. Fortunato Chief Executive Officer (Principal Executive ...
  • Page 141
    QuickLinks Exhibit 31.1 Certification of Chief Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a)
  • Page 142
    ... Michael M. Nuzzo, certify that: 1. I have reviewed this Annual Report on Form 10-K of GNC Holdings, Inc.; 2. Based on my knowledge...the registrant's internal control over financial reporting. Date: February 27, 2012 /s/ MICHAEL M. NUZZO Michael M. Nuzzo Chief Financial Officer (Principal Financial...
  • Page 143
    QuickLinks Exhibit 31.2 Certification of Chief Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a)
  • Page 144
    ...Oxley Act of 2002 In connection with the Annual Report on Form 10-K of GNC Holdings, Inc. (the "Company"),...Principal Executive Officer) Date: February 27, 2012 /s/ MICHAEL M. NUZZO Name: Title: Michael ... Financial Officer) Date: February 27, 2012 A signed original of this written statement required ...
  • Page 145
    QuickLinks Exhibit 32.1 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


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  • GNC 2012 Annual Report - Page 1
    GNC HOLDINGS, INC. (GNC) 10-K Annual report pursuant to section 13 and 15(d) Filed on 02/27/2012 Filed Period 12/31/2011
  • GNC 2012 Annual Report - Page 2
    ... Washington, D.C. 20549 FORM 10-K (Mark One) ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) ...period from to Commission file number: 001-35113 GNC Holdings, Inc. (Exact name of registrant ... incorporated by reference in Part III of this Form 10K or any amendment to this Form 10-K. ý Indicate ...
  • GNC 2012 Annual Report - Page 3
    ...(Do not check if a smaller reporting company) Smaller reporting company o No ý Indicate by... Rule 12b-2 of the Act). Yes o As of February 15, 2012, the number of outstanding shares of Class A common ... together with the Class A common stock, the "common stock"), of GNC Holdings, Inc. were 103,832,...
  • GNC 2012 Annual Report - Page 4
    Table of Contents TABLE OF CONTENTS Page Part I Item 1 Business Item 1A Risk Factors Item 1B Unresolved Staff Comments Item 2 Properties Item 3 Legal Proceedings Item 4 Mine Safety Disclosures Part II Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases ...
  • GNC 2012 Annual Report - Page 5
    Table of Contents FORWARD LOOKING STATEMENTS This Annual Report on Form 10-K (this "Annual Report") contains forward-looking statements within the meaning ... may be found in Items 1, 2, 3, 7 and 7A hereof, as well as within this report generally. Forward-looking statements can often be identified by ...
  • GNC 2012 Annual Report - Page 6
    ...under the heading "Risk Factors" in this Annual Report. PART I Item 1. BUSINESS. GNC Holdings, Inc.... Stock Exchange (the "NYSE") under the symbol "GNC." Based on our worldwide network of more ... partnerships. We believe that the strength of our GNC brand, which is distinctively associated with health ...
  • GNC 2012 Annual Report - Page 7
    ... maintain and make available on GNC.com, free of charge, our Annual Reports on Form 10-K, ..., references to "we," "us," "our," "Company" or "GNC" refer collectively to Holdings and its subsidiaries. ... and Plan of Merger (the "Merger Agreement") with GNC Parent Corporation on February 8, 2007. Pursuant ...
  • GNC 2012 Annual Report - Page 8
    ... share, as with our acquisition of LuckyVitamin.com. Further leveraging of the GNC brand. As with our Rite Aid, Sam's ...our customers, building the brand and reinforcing GNC's credibility with consumers. Attractive, loyal customer ... two times more than other GNC customers. We believe that our customer ...
  • GNC 2012 Annual Report - Page 9
    Table of Contents sales from GNC.com, royalties, wholesale sales and fees from both domestic and international franchisees, revenue from third-party contract manufacturing, wholesale revenue and fees from our Rite Aid store-within-a-store locations, and wholesale revenues from Sam's Club and ...
  • GNC 2012 Annual Report - Page 10
    ...: Revenue by Segment U.S. Retail Revenue by Product* * includes domestic retail and GNC.com In 2011, we did not have a material concentration of sales ... and total assets by geographic area, see Note 16, "Segments," to our audited consolidated financial statements included in this Annual Report. 8
  • GNC 2012 Annual Report - Page 11
    ... and Puerto Rico and through our websites, GNC.com and LuckyVitamin.com. Locations As of December 31, 2011,... our store graphics to better identify with our GNC customers and provide product information to ...and customer-friendly layout, while promoting our GNC Live Well® theme. Websites Our website,...
  • GNC 2012 Annual Report - Page 12
    ... fee of $40,000 for a franchise license. Existing GNC franchise operators may purchase an additional ... geographical exclusivity and are required to utilize the standard GNC store format. Generally, we enter ..., and we conduct periodic field visit reports to ensure our minimum standards are maintained. ...
  • GNC 2012 Annual Report - Page 13
    Table of Contents pay an initial fee of approximately $25,000 for a franchise license for each full size store and continuing royalty fees that vary depending on the country and the store type. Our international franchise program has enabled us to expand into international markets with limited ...
  • GNC 2012 Annual Report - Page 14
    ... strategic alliance with Rite Aid in December 1998 to open GNC franchise store-within-a-store locations. As... recognized third-party brand names. We report our sales in four major nutritional supplement ... and products. Through our online channels, GNC.com and LuckyVitamin.com, we offer additional SKUs ...
  • GNC 2012 Annual Report - Page 15
    ... 11.0% 8.1% 100.0% The data above represents the revenue reported for the domestic portion of our retail segment,... vessels and the digestive system. Overall, GNC-branded proprietary products constituted approximately ... popular third-party products. Our GNC-branded proprietary products, including Pro ...
  • GNC 2012 Annual Report - Page 16
    ... 27% of sales in 2001. Overall, we estimate that GNC-branded proprietary products constituted approximately 31...and condition specific products, resulting in the introduction of the GNC Total LeanTM, Sport Vitapaks and Beyond Raw®. In 2011, we estimate that GNC-branded products generated more than ...
  • GNC 2012 Annual Report - Page 17
    ... our products. We own or have rights to material trademarks or trade names that we use in conjunction with the sale of our products, including the GNC brand name. We also rely upon trade secrets, know-how, continuing technological innovations and licensing opportunities to develop and maintain our ...
  • GNC 2012 Annual Report - Page 18
    Table of Contents vendors' products. In most cases, our insurance covers such claims that are not adequately covered by a vendor's insurance and provides for excess secondary coverage above the limits provided by our product vendors. We self-insure certain property and casualty risks due to our ...
  • GNC 2012 Annual Report - Page 19
    ... found to violate the law; require a distributor to submit a yearly report on all nonserious Adverse Event ... information received through FDC Act-mandated reporting of serious adverse events. For example, the FDC ... to the FDA, and based in part on such reports, in May 2009, the FDA warned consumers to...
  • GNC 2012 Annual Report - Page 20
    ... a public warning or notice of violation letter to a company, publicize information about illegal products, detain products intended for import, require the reporting of serious adverse events, require a recall of illegal or unsafe products from the market, and request the Department of Justice to ...
  • GNC 2012 Annual Report - Page 21
    ... ingredient dehydroepiandrosterone ("DHEA") to the requirements of the Controlled Substances Act, which would prevent the sale of products containing DHEA. In March 2009, the General Accounting Office (the "GAO") issued a report that made four recommendations to enhance the FDA's oversight of 19
  • GNC 2012 Annual Report - Page 22
    ... themselves as a dietary supplement company and update this information annually, provide a list of all dietary supplement products they sell and a copy of the labels and update this information annually, and report all adverse events related to dietary supplements, not...
  • GNC 2012 Annual Report - Page 23
    ...following risk factors could cause our financial performance to differ significantly from the goals, plans, objectives, intentions and expectations expressed in this Annual Report. If any of the following risks and uncertainties actually occur, our business...
  • GNC 2012 Annual Report - Page 24
    ... particular products or the ingredients they contain and may not be consistent with earlier favorable research or publicity. A future research report or publicity that is perceived by our consumers as less favorable or that questions earlier research or publicity could have a material adverse effect...
  • GNC 2012 Annual Report - Page 25
    Table of Contents Our failure to appropriately respond to changing consumer preferences and demand for new products could significantly harm our customer relationships and product sales. Our business is particularly subject to changing consumer trends and preferences. Our continued success depends ...
  • GNC 2012 Annual Report - Page 26
    Table of Contents Our ability to continue to access credit on the terms previously obtained for the funding of our operations and capital projects may be limited due to changes in credit markets. In recent periods, the credit markets and the financial services industry have experienced disruption ...
  • GNC 2012 Annual Report - Page 27
    Table of Contents • • entering into transactions with our affiliates; and incurring capital expenditures in excess of limitations set within the agreement. The Revolving Credit Facility also requires that, to the extent borrowings thereunder exceed $25 million, we meet a senior secured...
  • GNC 2012 Annual Report - Page 28
    Table of Contents impermissible drug claim, is not substantiated, or is an unauthorized version of a "health claim." See Item 1, "Business-Government Regulation-Product Regulation" for additional information. Any of these actions could prevent us from marketing particular dietary supplement ...
  • GNC 2012 Annual Report - Page 29
    ... side effects and interactions with other substances. For example, as of December 31, 2011, there were 75 pending lawsuits related to Hydroxycut in which GNC had been named, including 69 individual, largely personal injury claims and six putative class action cases. See Item 3, "Legal Proceedings." ...
  • GNC 2012 Annual Report - Page 30
    Table of Contents As is common in our industry, we rely on our third-party vendors to ensure that the products they manufacture and sell to us comply with all applicable regulatory and legislative requirements. In general, we seek representations and warranties, indemnification and/or insurance ...
  • GNC 2012 Annual Report - Page 31
    ... to increase significantly, it could result in a significant increase to us in the prices our contract manufacturers and third-party manufacturers charge us for our GNC-branded products and third-party products. Raw material prices may increase in the future and we may not be able to pass on such ...
  • GNC 2012 Annual Report - Page 32
    ... market share. We have invested significant resources to promote our GNC brand name in order to obtain the public recognition that we have ... or against challenges by others. For example, third parties are challenging our "GNC Live Well" trademark in foreign jurisdictions. Our failure to successfully ...
  • GNC 2012 Annual Report - Page 33
    Table of Contents Franchisee support of our marketing and advertising programs is critical to our success. The support of our franchisees is critical for the success of our marketing programs and other strategic initiatives we seek to undertake, and the successful execution of these initiatives ...
  • GNC 2012 Annual Report - Page 34
    ...condition could be adversely affected by the financial and operational performance of Rite Aid. As of December 31, 2011, Rite Aid operated 2,125 GNC franchise store-within-a-store locations and has committed to open additional franchise storewithin-a-store locations. Revenue from sales to Rite Aid (...
  • GNC 2012 Annual Report - Page 35
    Table of Contents inconsistent product regulation or sudden policy changes by foreign agencies or governments; the imposition of, or increase in, duties, taxes, government royalties or non-tariff trade barriers; difficulty in collecting international accounts receivable and potentially longer ...
  • GNC 2012 Annual Report - Page 36
    Table of Contents Internet to conduct our business, any system disruptions could have a material adverse effect on our business, financial condition or results of operations. We must successfully maintain and/or upgrade our information technology systems, and our failure to do so could have a ...
  • GNC 2012 Annual Report - Page 37
    Table of Contents Complying with recently enacted healthcare reform legislation could increase our costs and have a material adverse effect on our business, financial condition or results of operations. Recently enacted healthcare reform legislation could significantly increase our costs and have a...
  • GNC 2012 Annual Report - Page 38
    ... or changes in management or limiting the ability of other stockholders to approve transactions they deem to be in their best interest. As of February 15, 2012, Ares Corporate Opportunities Fund II, L.P. ("Ares") and Ontario Teachers' Pension Plan Board ("OTPP" and, together with Ares, the "Sponsors...
  • GNC 2012 Annual Report - Page 39
    Table of Contents their best interests. In addition, our governance documents do not contain any provisions applicable to deadlocks among the members of the Board, and as a result we may be precluded from taking advantage of opportunities due to disagreements among the Sponsors and their respective...
  • GNC 2012 Annual Report - Page 40
    ... likely drop significantly. Future sales of the Class A common stock could cause the market price for the Class A common stock to decline. As of February 15, 2012, there were 103,832,767 shares of the Class A common stock outstanding, of which 45,047,336 shares were restricted securities held by our...
  • GNC 2012 Annual Report - Page 41
    ... A common stock to decline. As of February 15, 2012, the Sponsors collectively held 44,953,... A common stock. Additionally, as of February 15, 2012, (i) 5,795,943 shares of the Class A common... A common stock is influenced by the research and reports that industry or securities analysts publish about us...
  • GNC 2012 Annual Report - Page 42
    ... to enforcement actions by the NYSE. Item 1B. None. Item 2. PROPERTIES. UNRESOLVED STAFF COMMENTS. As of December 31, 2011, there were 7,685 GNC store locations globally (including distribution centers where retail sales are made). In our Retail segment, all but one of our company-owned stores are ...
  • GNC 2012 Annual Report - Page 43
    ... 1 38 8 1,589 925 Total * includes distribution centers where retail sales are made In our Manufacturing/Wholesale segment, there are 2,125 GNC franchise "store-within-a-store" locations under our strategic alliance with Rite Aid. Also, in our Manufacturing/Wholesale segment, we lease facilities...
  • GNC 2012 Annual Report - Page 44
    41
  • GNC 2012 Annual Report - Page 45
    ...-branded products manufactured by Iovate. The FDA warning was based on 23 reports of liver injuries from consumers who claimed to have used the products ... voluntarily recalled 14 Hydroxycut-branded products. Following the recall, GNC was named, among other defendants, in approximately 85 lawsuits ...
  • GNC 2012 Annual Report - Page 46
    ...full recovery in respect of any claims against GNC in connection with products manufactured by Iovate under ... of significant defenses by such insurer. To the extent GNC is not fully compensated by Iovate's insurer, it can seek recovery directly from Iovate. GNC's ability to fully recover such amounts...
  • GNC 2012 Annual Report - Page 47
    ... Jersey, 10CV1728 (filed April 5, 2010); Donna Natali v. GNC Corporation, et al., Superior Court of New...-L-001499-10 (filed April 5, 2010); Matthew Carhart v. GNC Corporation, et al., Court of Common Pleas ... (filed September 16, 2010); Andrea Saunders v. GNC Corporation, et al., Court of Common Pleas ...
  • GNC 2012 Annual Report - Page 48
    ...10CV9698 (filed December 30, 2010); Marek Kosciesza v. GNC Corporation, et al., Superior Court of ..., 2011); Orlando Jones, III, et al. v. GNC Corporation, U.S. District Court, Northern District of ...filed March 3, 2011); Steven D. Polley, et al. v. GNC Corporation, et al., U.S. District Court, Northern...
  • GNC 2012 Annual Report - Page 49
    ... 11-0403330 (filed May 2, 2011); Matthew Williams v. GNC Corporation, et al., Circuit Court of St... 00472224-CXC (filed May 5, 2011); Jorge Delvalle v. GNC Corporation, et al., Superior Court of California..., ATL-L- 00270510 (filed June 24, 2010 (GNC added to amended complaint on May 2, 2011)). •...
  • GNC 2012 Annual Report - Page 50
    ...6, 2009, the United States Judicial Panel on Multidistrict Litigation consolidated pretrial proceedings of many of the pending actions (including the above-listed GNC class actions) in the Southern District of California (In re: Hydroxycut Marketing and Sales Practices Litigation, MDL No. 2087). Any...
  • GNC 2012 Annual Report - Page 51
    ...been traded on the NYSE under the symbol "GNC." As of February 15, 2012, there were 103,...sales prices by quarter for the Class A common stock, as reported by the NYSE: 2011 Quarter ended: High ... B common stock, was entitled to receive ratably an annual special dividend payment equal to an aggregate...
  • GNC 2012 Annual Report - Page 52
    Table of Contents (the "2007 Stock Plan") and the GNC Holdings, Inc. 2011 Stock and Incentive Plan (the "2011 Stock Plan") as of December 31, 2011: Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, ...
  • GNC 2012 Annual Report - Page 53
    ... to which we were authorized to purchase 2.4 million shares of Class A common stock. We concluded such share repurchase program in January 2012. In February 2012, the Board authorized a new share repurchase program pursuant to which Holdings may purchase up to 1.0 million shares of Class A common ...
  • GNC 2012 Annual Report - Page 54
    ... financial statements and footnotes included in this Annual Report. The selected consolidated financial data..., 2007 represent the period during which GNC Parent Corporation was owned by an investment fund... owned subsidiary of Holdings, completed the Merger with GNC Parent Corporation on March 16, 2007...
  • GNC 2012 Annual Report - Page 55
    Table of Contents You should read the following financial information together with the information under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our audited consolidated financial statements and their related notes. (dollars in millions,...
  • GNC 2012 Annual Report - Page 56
    ... uncertainties. See Item 1A, "Risk Factors" in this Annual Report for a discussion of important factors that could ... company-owned stores and online through GNC.com and LuckyVitamin.com, domestic and international ...a worldwide network of more than 7,600 locations operating under the GNC brand name. 53
  • GNC 2012 Annual Report - Page 57
    ... international footprint, expanding our e-commerce business and further leveraging of the GNC brand. These goals are designed to drive both short-term and ... store sales increased by 10.1%, which includes a 37.3% increase from our GNC.com business. We increased our company-owned domestic store count ...
  • GNC 2012 Annual Report - Page 58
    ... by sales at our company-owned stores and online through GNC.com and LuckyVitamin.com. Although we believe that our retail and ... to Nutrition Business Journal's Supplement Business Report 2011, our industry is expected to grow at an annual average rate of approximately 3.7% through 2017. As a leader ...
  • GNC 2012 Annual Report - Page 59
    ... period if the store was not open during the same period of the prior year. We also include our internet sales, as generated through GNC.com, LuckyVitamin.com and www.drugstore.com, in our company-owned domestic same store sales calculation. When a store's square footage has been changed as a result...
  • GNC 2012 Annual Report - Page 60
    Table of Contents Results of Operations (Dollars in millions and percentages expressed as a percentage of total net revenue) Year Ended December 31, 2011 Revenues: Retail Franchise Manufacturing / Wholesale: Intersegment revenues(1) Third Party Subtotal Manufacturing / Wholesale Intersegment ...
  • GNC 2012 Annual Report - Page 61
    ... retail revenues was primarily due to sales increases in the sports nutrition and vitamin product categories, and also included an increase in sales from GNC.com of $22.1 million, or 37.3%, to $81.1 million in 2011 compared to $59.0 million for 2010. Sales from LuckyVitamin.com contributed $14.5 ...
  • GNC 2012 Annual Report - Page 62
    Table of Contents Other SG&A. Other SG&A expenses, including amortization expense, increased $12.8 million, or 12.9%, to $113.5 million for the year ended December 31, 2011 compared to $100.7 million in 2010. This increase was due to increases in credit card fees, third-party sales commissions, bad...
  • GNC 2012 Annual Report - Page 63
    ... million as a result of an increase in our same store sales and $17.1 million in our non-same store sales. The same store sales increase includes GNC.com revenue, which increased $12.2 million, or 26.2%, to $59.0 million, compared to $46.8 million in 2009. Sales increases occurred primarily in the ...
  • GNC 2012 Annual Report - Page 64
    Table of Contents $107.6 million in 2010, compared to $85.5 million in 2009, primarily the result of increases in product sales and royalties. Our international franchise store base increased by 130 stores to 1,437 at December 31, 2010 compared to 1,307 at December 31, 2009. Manufacturing/Wholesale...
  • GNC 2012 Annual Report - Page 65
    Table of Contents Operating Income As a result of the foregoing, consolidated operating income increased $31.4 million, or 17.3%, to $212.4 million for the year ended December 31, 2010 compared to $181.0 million in 2009. Operating income, as a percentage of net revenue, was 11.7% and 10.6% for the ...
  • GNC 2012 Annual Report - Page 66
    ... will be affected by general economic, financial and other factors beyond our control. We are currently in compliance with our debt covenant reporting and compliance obligations under the Senior Credit Facility. Cash Provided by Operating Activities Cash provided by operating activities was $174.7 ...
  • GNC 2012 Annual Report - Page 67
    ... facilities and information technology systems. In each of 2012 and 2013, we expect our capital ... square footage. We anticipate funding our 2012 capital requirements with cash flows from operations and, if ... Interbank Offering ("LIBO") Rate breakage costs). GNC Corporation, our indirect wholly owned ...
  • GNC 2012 Annual Report - Page 68
    ...without incurring penalties (except LIBOR breakage costs). GNC Corporation and Centers' then existing indirect ... Notes. Interest on the Senior Notes was payable semi-annually in arrears on March 15 and September 15 ... March 16, 2007 and was payable semi-annually in arrears on March 15 and September 15 ...
  • GNC 2012 Annual Report - Page 69
    Table of Contents Contractual Obligations The following table summarizes our future minimum non-cancelable contractual obligations at December 31, 2011: Payments due by period (in millions) Total Less than 1 year 1-3 years 3-5 years After 5 years Long-term debt obligations(1) Scheduled interest ...
  • GNC 2012 Annual Report - Page 70
    ... Policies," to our audited consolidated financial statements included in this Annual Report. Use of Estimates Certain amounts in our audited ... require management to use estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities at the date of the financial ...
  • GNC 2012 Annual Report - Page 71
    Table of Contents franchise renewal or transfer, as applicable. Franchise royalties are earned based on a percentage of the franchisees' sales and recognized in the period in which the franchisees' sales occur. Accounts Receivable and Allowance for Doubtful Accounts The majority of our retail ...
  • GNC 2012 Annual Report - Page 72
    ... our brand name, management performs an annual test for impairment in the fourth quarter of each ... consolidated financial statements included elsewhere in this Annual Report. We do not currently... of historical claims, including the timing of claims reported versus payment of claims, to estimate future...
  • GNC 2012 Annual Report - Page 73
    ...to our audited consolidated financial statements included in this Annual Report, and was $1.9 million as of December 31, .... Income Taxes We compute our annual tax rate based on the statutory tax ... and the amount of benefit recognized for financial reporting represents unrecognized tax benefits. These ...
  • GNC 2012 Annual Report - Page 74
    ... Exchange Rate Market Risk We are subject to the risk of foreign currency exchange rate changes in the conversion from local currencies to the U.S. dollar of the reported financial position and operating results of our non-U.S. based subsidiaries. We are also subject to foreign currency exchange ...
  • GNC 2012 Annual Report - Page 75
    Table of Contents Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. TABLE OF CONTENTS Page Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets As of December 31, 2011 and 2010 Consolidated Statements of Income For the years ended December 31, 2011, 2010 and ...
  • GNC 2012 Annual Report - Page 76
    Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of GNC Holdings, Inc.: In our ... the degree of compliance with the policies or procedures may deteriorate. /s/ PricewaterhouseCoopers LLP Pittsburgh, Pennsylvania February 24, 2012 73
  • GNC 2012 Annual Report - Page 77
    Table of Contents PART I-FINANCIAL INFORMATION Item 1. Financial Statements GNC HOLDINGS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands, except per share data) December 31, 2011 Current assets: Cash and cash equivalents Receivables, net Inventories (Note 3) Prepaids and other ...
  • GNC 2012 Annual Report - Page 78
  • GNC 2012 Annual Report - Page 79
    Table of Contents GNC HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Income (in thousands, except per share data) Year ended December 31, 2011 2010 2009 Revenue Cost of sales, including cost of warehousing, distribution and occupancy Gross profit Compensation and related benefits ...
  • GNC 2012 Annual Report - Page 80
    Table of Contents GNC HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity and Comprehensive Income (in thousands, includes per share data) Common Stock Accumulated Other Total Treasury Paid-in- Retained Comprehensive Stockholders' Shares Dollars Shares Dollars Stock ...
  • GNC 2012 Annual Report - Page 81
    Comprehensive - - - income Issuance of common 16,000 16 - stock 26 (26,109) Conversion of stock 26,109 Purchase of treasury (2,235) - - stock Preferred stock - - - dividends Exercise of stock 3,912 3 - options Non-cash stockbased - - - compensation Balance at December 31, 102,985 $ 105 2,060 $ 2011...
  • GNC 2012 Annual Report - Page 82
    Table of Contents GNC HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2011 2010 2009 CASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activities: Loss on early ...
  • GNC 2012 Annual Report - Page 83
    ... Rico and in addition the Company offers products domestically through GNC.com, LuckyVitamin.com and www.drugstore.com. Franchise stores are located in the ... (the "Refinancing"), General Nutrition Centers, Inc. ("Centers") and GNC Corporation, each of which is an indirect wholly owned subsidiary of ...
  • GNC 2012 Annual Report - Page 84
    ... the instructions to Form 10-K and Regulation S-X. The Company's normal reporting period is based on a calendar year. Summary of Significant Accounting ... contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting ...
  • GNC 2012 Annual Report - Page 85
    ... value, an impairment provision is recorded. In performing the annual impairment test for goodwill, the Company performs... likely than not" that the fair value of the reporting unit is less than its carrying value... likely than not" that the fair value of a reporting unit is less than its carrying value...
  • GNC 2012 Annual Report - Page 86
    ... company-owned stores, franchise stores and sales through its website, GNC.com and to a lesser extent through manufacturing and wholesale operations. The..., in order to match the discounts associated with the Gold Card program. For an annual fee, the card provides customers with a 20% discount on all ...
  • GNC 2012 Annual Report - Page 87
    Table of Contents NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Distribution and Shipping Costs. The Company bills franchisees and third-party customers shipping and transportation costs and reflects these charges in revenue. The unreimbursed costs that ...
  • GNC 2012 Annual Report - Page 88
    Table of Contents NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Pre-Opening Expenditures. The Company recognizes the cost associated with the opening of new stores as incurred. These costs are charged to expense and are not material for the periods ...
  • GNC 2012 Annual Report - Page 89
    ... and expenses are translated using the average exchange rates for the reporting period. Gains or losses resulting from foreign currency transactions... agreements were to mature between April 2011 and September 2012. Amounts related to derivatives were reported in accumulated other comprehensive income...
  • GNC 2012 Annual Report - Page 90
    Table of Contents NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Recently Issued Accounting Pronouncements In September 2011, the FASB issued updated guidance on the periodic testing of goodwill for impairment. This guidance will allow companies to assess ...
  • GNC 2012 Annual Report - Page 91
    ... summarizes the differences between the Company's effective tax rate for financial reporting purposes and the federal statutory tax Year ended December ...differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. 86...
  • GNC 2012 Annual Report - Page 92
    Table of Contents NOTE 4. INCOME TAXES (Continued) Significant components of the Company's deferred tax assets and liabilities consisted of the following: December 31, 2011 Assets Liabilities Net Assets (in thousands) 2010 Liabilities Net Deferred tax: Current assets (liabilities): Operating ...
  • GNC 2012 Annual Report - Page 93
    ... an examination of the Company's 2005, 2006 and short period 2007 federal income tax returns in February 2008. The IRS issued an examination report in the second quarter of 2009, and the Company received notification from the IRS that the Joint Committee of Taxation had completed its review and had ...
  • GNC 2012 Annual Report - Page 94
    Table of Contents NOTE 5. GOODWILL, BRANDS, AND OTHER INTANGIBLE ASSETS, NET (Continued) The following table summarizes the Company's goodwill activity: Retail Manufacturing/ Franchising Wholesale (in thousands) Total Balance at December 31. 2009 Acquired franchise stores Balance at December 31...
  • GNC 2012 Annual Report - Page 95
    ... table represents future estimated amortization expense of intangible assets with finite lives: Estimated amortization expense (in thousands) Year ending December 31, 2012 2013 2014 2015 2016 Thereafter Total NOTE 6. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment consisted of the...
  • GNC 2012 Annual Report - Page 96
    ...382 298,372 110,000 5,711 34 1,058,499 (28,070) 1,030,429 Year Ending December 31, Senior Credit Facility(a) Mortgage Loan/ Capital Leases (in thousands) Total 2012 2013 2014 2018 $ $ - - - 900,000 900,000 $ $ 1,592 1,812 751 - 4,155 $ $ 1,592 1,812 751 900,000 904,155 (a) The Senior ...
  • GNC 2012 Annual Report - Page 97
    ... Interbank Offering Rate ("LIBOR") breakage costs). GNC Corporation, the Company's indirect wholly owned subsidiary ("GNC Corporation"), and Centers' existing and future domestic subsidiaries have ... incurring penalties (except LIBOR breakage costs). GNC Corporation and Centers' then existing ...
  • GNC 2012 Annual Report - Page 98
    ...Agreement and Plan of Merger (the "Merger Agreement") with GNC Parent Corporation on February 8, 2007. Pursuant to the Merger Agreement, and on March 16, 2007, GNC Acquisition was merged with and into ...Notes. Interest on the Senior Notes was payable semi-annually in arrears on March 15 and September ...
  • GNC 2012 Annual Report - Page 99
    ... or remaining terms of at least one year in effect at December 31, 2011 are as follows: Company Retail Stores Franchise Retail Stores Other (in thousands) Sublease Income Total 2012 2013 2014 2015 2016 Thereafter $ $ 113,968 92,328 74,760 58,071 43,748 73,536 456,412 $ $ 23,722 17,699 12,...
  • GNC 2012 Annual Report - Page 100
    ... issued a warning on several Hydroxycut-branded products manufactured by Iovate Health Sciences U.S.A., Inc. ("Iovate"). The FDA warning was based on 23 reports of liver injuries from consumers who claimed to have used the products between 2002 and 2009. As a result, Iovate voluntarily recalled 14 ...
  • GNC 2012 Annual Report - Page 101
    ... Jersey (Law Division/ Camden County). Plaintiff alleges that he purchased from a GNC store and consumed 6-OXO Extreme, which is manufactured by a ... damages. The Company tendered the claim to the insurance company of the franchisee whose GNC store sold and allegedly misrepresented the product. On or ...
  • GNC 2012 Annual Report - Page 102
    ...similar wage and hour complaint was filed by Jennifer Mell and Jose Munoz, on behalf of themselves and all others similarly situated against GNC Corporation (U.S. District Court, Western District of Pennsylvania, Case No. 10CV945). The complaint alleges that plaintiffs' job duties were non-exempt in...
  • GNC 2012 Annual Report - Page 103
    Table of Contents NOTE 11. COMMITMENTS AND CONTINGENCIES (Continued) owned or operated properties, or for properties to which substances or wastes that were sent in connection with current or former operations at its facilities. The presence of contamination from such substances or wastes could ...
  • GNC 2012 Annual Report - Page 104
    ...the "Board") under the following two stock-based employee compensation plans: • • the GNC Holdings, Inc. 2011 Stock and Incentive Plan (the "2011 Stock Plan") adopted in March 2011; and the GNC Acquisition Holdings Inc. 2007 Stock Incentive Plan adopted in March 2007 ...
  • GNC 2012 Annual Report - Page 105
    ... stock. Since the consummation of the IPO, the fair value of the stock has been based upon the closing price of the Class A common stock as reported on the New York Stock Exchange (the "NYSE"). Volatility is estimated based upon the Company utilizing its current peer group average to estimate the ...
  • GNC 2012 Annual Report - Page 106
    Table of Contents NOTE 14. STOCK-BASED COMPENSATION PLANS (Continued) The assumptions used in the Company's Black Scholes valuation related to stock option grants made during each period below were as follows: Year ended December 31, 2011 2010 2009 0.00% 0.00% 0.00% Dividend yield 4.5-7.0 years ...
  • GNC 2012 Annual Report - Page 107
    ... the 2011 plan year will make a cash contribution of $1.3 million in February 2012. The Company has a Non-qualified Executive Retirement Arrangement Plan ...the United States, Canada, Puerto Rico and its GNC.com and LuckyVitamin.com businesses. The Franchise reportable segment represents the Company's ...
  • GNC 2012 Annual Report - Page 108
    Table of Contents NOTE 16. SEGMENTS (Continued) The following table represents key financial information of the Company's segments: Year ended December 31, 2011 2010 (in thousands) 2009 Revenue: Retail Franchise Manufacturing/Wholesale: Intersegment(1) Third Party Sub total Manufacturing/...
  • GNC 2012 Annual Report - Page 109
    Table of Contents NOTE 16. SEGMENTS (Continued) December 31, 2011 2010 (in thousands) 2009 Depreciation and amortization: Retail Franchise Manufacturing / Wholesale Corporate / Other Total depreciation and amortization Capital expenditures: Retail Franchise Manufacturing / Wholesale Corporate / ...
  • GNC 2012 Annual Report - Page 110
    Table of Contents NOTE 16. SEGMENTS (Continued) The following table represents sales by general product category. The category "Other Wellness Products" includes other wellness products sales from the Company's point of sales system, sales from LuckyVitamin.com of $14.5 million, which is not on the...
  • GNC 2012 Annual Report - Page 111
    ...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 following table presents the Company's financial assets and liabilities that were accounted for at fair value...
  • GNC 2012 Annual Report - Page 112
    ... upon the consummation of the IPO. The Management Services Agreement provided for an annual management fee of $0.8 million, payable quarterly and in advance to... the holder of Class B common stock, was entitled to receive ratably an annual special dividend payment equal to an aggregate amount of $0.8 ...
  • GNC 2012 Annual Report - Page 113
    ... $ 87,339 88,917 0.87 0.85 $ $ 0.25 $ 0.24 $ On February 15, 2012, the Board authorized and declared a cash dividend for the first quarter of 2012 of $0.11 per share of common stock, payable on or about March 30, 2012 to stockholders of record as of the close of business on March 15, 2012. 108
  • GNC 2012 Annual Report - Page 114
    ... Equity," was largely completed in December 2011, and concluded in January 2012. In total, 2.4 million shares were repurchased for $67.5 million....and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report. Disclosure controls and procedures are designed to provide...
  • GNC 2012 Annual Report - Page 115
    ..., our internal control over financial reporting was effective based on that framework. Our independent... of our internal control over financial reporting as of December 31, 2011, as stated in their... 8, "Financial Statements and Supplementary Data" of this Annual Report. Changes in Internal Control Over...
  • GNC 2012 Annual Report - Page 116
    ...this Item will be included in our Proxy Statement to be filed on March 8, 2012, which is incorporated herein by reference, under the captions "Director ..., that the subsection entitled "Executive Compensation-Compensation Committee Report" shall not be deemed to be incorporated by reference. Item 12. ...
  • GNC 2012 Annual Report - Page 117
    ...15. (a) EXHIBITS, FINANCIAL STATEMENT SCHEDULES. Documents filed as part of this Annual Report: (1) Financial statements filed in Part II, Item 8 of this Annual Report: • • Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets As of...
  • GNC 2012 Annual Report - Page 118
    Table of Contents (2) Financial statement schedule: SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS GNC Holdings, Inc. and Subsidiaries Valuation and Qualifying Accounts Allowance for Doubtful Accounts(1) Year ended December 31, 2011 2010 (in thousands) 2009 Balance at beginning of period Additions...
  • GNC 2012 Annual Report - Page 119
    ...: Listed below are all exhibits filed as part of this Annual Report. Certain exhibits are incorporated by reference from... 333-114396), filed February 25, 2011.) GNC Acquisition Holdings Inc. 2007 Stock Incentive... filed August 10, 2007.) Amendment No. 1 to the GNC Acquisition Holdings Inc. 2007 Stock ...
  • GNC 2012 Annual Report - Page 120
    ... of Non-Qualified Stock Option Agreement Pursuant to the GNC Acquisition Holdings Inc. 2007 Stock Incentive ..., 2011.) Form of Restricted Stock Agreement pursuant to the GNC Holdings, Inc. 2011 Stock and Incentive ... reference to Exhibit 10.16.2 to Centers' Annual Report on Form 10K (File No. 333-144396...
  • GNC 2012 Annual Report - Page 121
    ...333-114502), filed August 9, 2004.)†Amendment to the GNC/Rite Aid Retail Agreement, effective ... Collateral Agreement, dated as of March 4, 2011, by GNC Corporation, Centers and the other Grantors ... Security Agreement, dated as of March 4, 2011, by GNC Corporation, Centers and the other Grantors ...
  • GNC 2012 Annual Report - Page 122
    Table of Contents 101.PRE 101.DEF * †Filed herewith XBRL Taxonomy Extension Presentation Linkbase XBRL Taxonomy Extension Definition Linkbase Portions of this exhibit have been omitted pursuant to a request for confidential treatment. The omitted portions have been separately filed with ...
  • GNC 2012 Annual Report - Page 123
    ..., the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GNC HOLDINGS, INC. By: ... AXELROD Norman Axelrod Chairman of the Board of Directors Dated: February 27, 2012 By: /s/ JEFFREY P. BERGER Jeffrey P. Berger Director Dated: February 27...
  • GNC 2012 Annual Report - Page 124
    ... Andrew Claerhout Director Dated: February 27, 2012 By: /s/ MICHAEL F. HINES Michael F. Hines Director ... Johann O. Koss Director Dated: February 27, 2012 By: /s/ AMY B. LANE Amy B. Lane Director ... Leemrijse Director Dated: February 27, 2012 By: /s/ RICHARD J. WALLACE Richard J. Wallace Director ...
  • GNC 2012 Annual Report - Page 125
  • GNC 2012 Annual Report - Page 126
    Exhibit 10.15 FORM OF INDEMNIFICATION AGREEMENT(1) AGREEMENT, executed this [Note 2], among GNC Acquisition Holdings Inc., a Delaware corporation (the "Company"), and [Note 1] (the "Indemnitee"), and, with respect to its guarantee set forth on the signature pages hereto only, General Nutrition ...
  • GNC 2012 Annual Report - Page 127
    right is exercisable immediately or only after the passage of time. The term "beneficially own" shall have a correlative meaning. (c) (d) Board: The Board of Directors of the Company. Change of Control: the occurrence of any of the following events: (i) any "person" (as such term is used in ...
  • GNC 2012 Annual Report - Page 128
    (e) Claim: any threatened, pending or completed action, suit or proceeding, or any inquiry or investigation, whether instituted by the Company or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, ...
  • GNC 2012 Annual Report - Page 129
    such Claim. If so requested by Indemnitee, the Company shall advance to the fullest extent permitted by law (within two business days of such request) any and all Expenses to Indemnitee (an "Expense Advance"). Notwithstanding anything in this Agreement to the contrary, prior to a Change in Control ...
  • GNC 2012 Annual Report - Page 130
    and all expenses (including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. Establishment of Trust. In the event of a Potential Change in Control, the Company shall, upon written request by 4. Indemnitee, create a ...
  • GNC 2012 Annual Report - Page 131
    Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against...
  • GNC 2012 Annual Report - Page 132
    Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the 16. parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the ...
  • GNC 2012 Annual Report - Page 133
    17. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable in any respect, ...
  • GNC 2012 Annual Report - Page 134
    IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date set forth above. GNC ACQUISITION HOLDINGS INC. By: Its:
  • GNC 2012 Annual Report - Page 135
    INDEMNITEE [Note 1]
  • GNC 2012 Annual Report - Page 136
    General Nutrition Centers, Inc. hereby unconditionally guarantees the due and punctual payment and performance of all obligations of the Company under this Agreement in accordance with the terms set forth herein. GENERAL NUTRITION CENTERS, INC. By: Name: Title:
  • GNC 2012 Annual Report - Page 137
    SCHEDULE Schedule to Notes in Form of Indemnification Agreement Name (Note 1) Effective Date (Note 2) Norman Axelrod Jeffrey P. Berger Andrew Claerhout Joseph Fortunato Michael Hines David B. Kaplan Brian Klos Johann O. Koss Amy B. Lane Romeo Leemrijse Richard Wallace March 16, 2007 March 28, ...
  • GNC 2012 Annual Report - Page 138
    .... GNC Corporation General Nutrition Centers, Inc. GNC Funding, Inc. General Nutrition Corporation General ... Rico, Inc. General Nutrition Centres Company GNC Columbia SAS Lucky Vitamin Corporation GNC ..., LLC Gustine Sixth Avenue Associates, Ltd. GNC Headquarters, Inc. Compania Nutricional Mexicana GNC ...
  • GNC 2012 Annual Report - Page 139
    QuickLinks Exhibit 21.1 Subsidiaries of the Registrant
  • GNC 2012 Annual Report - Page 140
    ... Joseph M. Fortunato, certify that: 1. I have reviewed this Annual Report on Form 10-K of GNC Holdings, Inc.; 2. Based on my ...the registrant's internal control over financial reporting. Date: February 27, 2012 /s/ JOSEPH M. FORTUNATO Joseph M. Fortunato Chief Executive Officer (Principal Executive ...
  • GNC 2012 Annual Report - Page 141
    QuickLinks Exhibit 31.1 Certification of Chief Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a)
  • GNC 2012 Annual Report - Page 142
    ... Michael M. Nuzzo, certify that: 1. I have reviewed this Annual Report on Form 10-K of GNC Holdings, Inc.; 2. Based on my knowledge...the registrant's internal control over financial reporting. Date: February 27, 2012 /s/ MICHAEL M. NUZZO Michael M. Nuzzo Chief Financial Officer (Principal Financial...
  • GNC 2012 Annual Report - Page 143
    QuickLinks Exhibit 31.2 Certification of Chief Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a)
  • GNC 2012 Annual Report - Page 144
    ...Oxley Act of 2002 In connection with the Annual Report on Form 10-K of GNC Holdings, Inc. (the "Company"),...Principal Executive Officer) Date: February 27, 2012 /s/ MICHAEL M. NUZZO Name: Title: Michael ... Financial Officer) Date: February 27, 2012 A signed original of this written statement required ...
  • GNC 2012 Annual Report - Page 145
    QuickLinks Exhibit 32.1 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002