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SEGMENTS
 12 Months Ended
Dec. 31, 2013
SEGMENTS  
SEGMENTS

 

NOTE 16. SEGMENTS

        The Company has three reportable segments, each of which represents an identifiable component of the Company for which separate financial information is available. This information is utilized by management to assess performance and allocate assets accordingly. The Company's management evaluates segment operating results based on several indicators. The primary key performance indicators are sales and operating income or loss for each segment. Operating income or loss, as evaluated by management, excludes certain items that are managed at the consolidated level, such as distribution and warehousing, impairments and other corporate costs. The following table represents key financial information for each of the Company's reportable segments, identifiable by the distinct operations and management of each: Retail, Franchising, and Manufacturing/Wholesale. The Retail reportable segment includes the Company's corporate store operations in the United States, Canada, Puerto Rico and its websites GNC.com, LuckyVitamin.com, and DiscountSupplements.com. The Franchise reportable segment represents the Company's franchise operations, both domestically and internationally. The Manufacturing/Wholesale reportable segment represents the Company's manufacturing operations in South Carolina and the Wholesale sales business. This segment supplies the Retail and Franchise segments, along with various third parties, with finished products for sale. The Warehousing and Distribution and Corporate costs represent the Company's administrative expenses. The accounting policies of the segments are the same as those described in Note 1, "Basis of Presentation and Summary of Significant Accounting Policies."

        The following table represents key financial information of the Company's segments:

 
   December 31,  
 
   2013   2012   2011  
 
   (in thousands)
  

Revenue:

                    

Retail

   $ 1,926,770   $ 1,785,001   $ 1,518,494  

Franchise

     440,464     408,108     334,792  

Manufacturing/Wholesale:

                    

Intersegment revenues

     269,488     263,177     224,127  

Third Party

     263,074     236,874     218,893  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Sub total Manufacturing/Wholesale

     532,562     500,051     443,020  

Sub total segment revenues

     2,899,796     2,693,160     2,296,306  

Elimination of intersegment revenues

     (269,488 )   (263,177 )   (224,127 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total revenue

   $ 2,630,308   $ 2,429,983   $ 2,072,179  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

Operating income:

                    

Retail

   $ 360,156   $ 346,420   $ 243,506  

Franchise

     156,035     136,463     111,261  

Manufacturing/Wholesale

     104,709     95,462     82,185  

Unallocated corporate and other costs:

                    

Warehousing and distribution costs

     (66,614 )   (63,297 )   (60,539 )

Corporate costs

     (81,435 )   (85,282 )   (80,370 )

Transaction and restructuring related costs

     (12,353 )   (1,926 )   (13,536 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Sub total unallocated corporate and other costs

     (160,402 )   (150,505 )   (154,445 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total operating income

     460,498     427,840     282,507  

Interest expense, net

     53,029     47,556     74,903  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Income before income taxes

     407,469     380,284     207,604  

Income tax expense

     142,448     140,088     75,271  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income

   $ 265,021   $ 240,196   $ 132,333  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               


 

 
   December 31  
 
   2013   2012   2011  
 
   (in thousands)
  

Depreciation and amortization:

                    

Retail

   $ 30,769   $ 28,309   $ 25,982  

Franchise

     3,004     3,052     2,873  

Manufacturing / Wholesale

     11,003     11,490     11,585  

Corporate / Other

     7,038     6,406     6,350  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total depreciation and amortization

   $ 51,814   $ 49,257   $ 46,790  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

Capital expenditures:

    
 		    
 		    
 		  

Retail

   $ 34,835   $ 27,249   $ 29,331  

Franchise

     229     91     684  

Manufacturing / Wholesale

     8,464     8,032     7,534  

Corporate / Other

     6,719     6,558     6,268  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total capital expenditures

   $ 50,247   $ 41,930   $ 43,817  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

Total assets

    
 		    
 		    
 		  

Retail

   $ 1,483,075   $ 1,412,325   $ 1,339,325  

Franchise

     522,996     506,021     491,008  

Manufacturing / Wholesale

     423,939     417,945     410,171  

Corporate / Other

     310,337     215,749     189,083  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total assets

   $ 2,740,347   $ 2,552,040   $ 2,429,587  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

Geographic areas

    
 		    
 		    
 		  

Total revenues:

                    

United States

   $ 2,490,089   $ 2,311,832   $ 1,972,121  

Foreign

     140,219     118,151     100,058  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total revenues

   $ 2,630,308   $ 2,429,983   $ 2,072,179  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

Long-lived assets:

    
 		    
 		    
 		  

United States

   $ 230,666   $ 213,208   $ 196,176  

Foreign

     8,557     8,447     9,251  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total long-lived assets

   $ 239,223   $ 221,655   $ 205,427  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

        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 and certain required accounting adjustments of $15.4 million, $8.1 million and $2.2 million for the years ended December 31, 2013, 2012 and 2011, respectively.

 
   December 31,  
 
   2013   2012   2011  
 
   (in thousands)
  

U.S. Retail Product Categories:

                    

VMHS

   $ 663,625   $ 624,647   $ 542,575  

Sports Nutrition Products

     764,908     686,208     621,751  

Diet Products

     198,834     192,335     139,612  

Other Wellness Products

     107,488     113,930     101,957  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total U.S. Retail revenues

     1,734,855     1,617,120     1,405,895  

Other Retail Revenue(1)

     191,915     167,881     112,599  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total Retail Revenue

   $ 1,926,770   $ 1,785,001   $ 1,518,494  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               
(1)
Included foreign sales that are presented in total and not by category, as product sales for foreign operations are managed in local currency. Also includes LuckyVitamin.com and DiscountSupplements.com sales, as categories are not consistent with the point of sale categories.

        In addition to the Retail product categories discussed above, Franchise revenues are primarily generated from product sales to franchisees, royalties from franchise retail sales and franchise fees, and Manufacturing/Wholesale sales are generated from sales of manufactured products to third parties, primarily in the VMHS product category.