GNC to weigh options — again
For the second time in less than two years, GNC Holdings is reviewing its alternatives.
The struggling retailer on Monday said it was not moving ahead with its previously announced plans to refinance debt that comes due in 2022, and also said it has retained Goldman Sachs and Co. as a strategic advisor to help the board "evaluate alternatives to optimize GNC's capital structure and other alternatives to enhance shareholder value." The company did not specify its options.
GNC said the terms and conditions related to its debt "were not sufficiently attractive to the company for GNC to move forward." It also withdrew its plans to enter into a new senior secured term loan facility and a new senior secured asset-based revolving credit facility at this time.
"Following a thorough process, we determined that the terms offered to GNC under the potential refinancing were not in the Company's best interests at this time," said CEO Ken Martindale, who took the reins at GNC in September. "Our focus remains on continuing to build momentum behind our One New GNC strategy and ensuring we have the appropriate capital structure to support those efforts."
In a release, GNC noted that it maintains a strong liquidity position, including $40.1 million in cash and cash equivalents and $246.1 million available in revolving credit. In addition, the company reiterated its full year free cash flow target of $190 million to $210 million and reconfirmed its plans to repay the remainder of its revolver in the fourth quarter.
"As we work with our advisors to review and optimize our capital structure, we are confident that our cash flow and liquidity will enable us to continue to invest behind our key initiatives to provide customers innovative, highly differentiated products and experiences, drive sales growth and improved performance, and deliver shareholder value ," Martindale said.
GNC has struggled in recent years as sales of vitamins and nutritional supplements have skyrocketed online, with Amazon and Walmart among the company's biggest competitors. The retailer y is working to turnaround its business with new marketing, a simplified pricing structure for customers and a revamped loyalty program.
The struggling retailer on Monday said it was not moving ahead with its previously announced plans to refinance debt that comes due in 2022, and also said it has retained Goldman Sachs and Co. as a strategic advisor to help the board "evaluate alternatives to optimize GNC's capital structure and other alternatives to enhance shareholder value." The company did not specify its options.
GNC said the terms and conditions related to its debt "were not sufficiently attractive to the company for GNC to move forward." It also withdrew its plans to enter into a new senior secured term loan facility and a new senior secured asset-based revolving credit facility at this time.
"Following a thorough process, we determined that the terms offered to GNC under the potential refinancing were not in the Company's best interests at this time," said CEO Ken Martindale, who took the reins at GNC in September. "Our focus remains on continuing to build momentum behind our One New GNC strategy and ensuring we have the appropriate capital structure to support those efforts."
In a release, GNC noted that it maintains a strong liquidity position, including $40.1 million in cash and cash equivalents and $246.1 million available in revolving credit. In addition, the company reiterated its full year free cash flow target of $190 million to $210 million and reconfirmed its plans to repay the remainder of its revolver in the fourth quarter.
"As we work with our advisors to review and optimize our capital structure, we are confident that our cash flow and liquidity will enable us to continue to invest behind our key initiatives to provide customers innovative, highly differentiated products and experiences, drive sales growth and improved performance, and deliver shareholder value ," Martindale said.
GNC has struggled in recent years as sales of vitamins and nutritional supplements have skyrocketed online, with Amazon and Walmart among the company's biggest competitors. The retailer y is working to turnaround its business with new marketing, a simplified pricing structure for customers and a revamped loyalty program.