SEGMENTS

3 Months Ended

Mar. 31, 2013

SEGMENTS

SEGMENTS

NOTE 9.  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 Retail reportable segment includes the Company’s corporate store operations in the United States, Canada and Puerto Rico and its GNC.com and LuckyVitamin.com businesses. 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 the “Basis of Presentation and Summary of Significant Accounting Policies.”

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

	Three months ended March 31,
	2013		2012
	(unaudited)
	(in thousands)
Revenue:
Retail	$	493,467	$	469,821
Franchise	107,887		101,484
Manufacturing/Wholesale:
Intersegment revenues	65,470		66,508
Third Party	63,337		52,967
Subtotal Manufacturing/Wholesale	128,807		119,475
Subtotal segment revenues	730,161		690,780
Elimination of intersegment revenues	(65,470)		(66,508)
Total revenue	$	664,691	$	624,272
Operating income:
Retail	$	98,583	$	93,176
Franchise	38,425		34,428
Manufacturing/Wholesale	22,926		22,837
Unallocated corporate and other costs:
Warehousing and distribution costs	(16,355)		(15,795)
Corporate costs	(19,059)		(21,891)
Transaction related costs	-		(686)
Subtotal unallocated corporate and other costs	(35,414)		(38,372)
Total operating income	$	124,520	$	112,069