UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 13, 2018

 

 

GNC HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-35113   20-8536244

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

300 Sixth Avenue

Pittsburgh, Pennsylvania 15222

(Address of principal executive offices, including zip code)

(412) 288-4600

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 7.01 Regulation FD Disclosure

On February 13, 2018, GNC Holdings, Inc. (the “Company”) launched certain amendments to its the credit agreement (the “Existing Credit Agreement”) dated as of November 26, 2013, among GNC Corporation (the “Parent”), General Nutrition Centers, Inc. (the “Borrower”), the several banks and other financial institutions or entities parties thereto as lenders, JPMorgan Chase Bank, N.A., as administrative agent, and the other parties thereto. In connection therewith, the Company made available to the lenders under the Existing Credit Agreement a presentation discussing the Company and the proposed amendments. A copy of that presentation is furnished herewith as Exhibit 99.1 and is incorporated by reference herein.

The information in the lender presentation should be read in conjunction with the Company’s other filings with the SEC, including its most recent Quarterly Report on Form 10-Q, filed on November 8, 2017, and the Current Report on Form 8-K filed on February 13, 2018. For a reconciliation of certain Non-GAAP measures included in the lender presentation to the most comparable GAAP measures, see the Company’s earnings release furnished with the Current Report on Form 8-K filed on February 13, 2018.

The foregoing information (including Exhibit 99.1) is furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act, except as may be expressly set forth by specific reference in such filing.

 

Item 8.01 Other Events.

To the extent required, the information included in Item 7.01 of this Current Report on Form 8-K is incorporated into this Item 8.01.

Forward-Looking Statements

This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Company’s financial condition, results of operations and business that is not historical information. Forward-looking statements can be identified by the use of terminology such as “subject to,” “believes,” “anticipates,” “plans,” “expects,” “intends,” “estimates,” “projects,” “may,” “will,” “should,” “can,” the negatives thereof, variations thereon and similar expressions, or by discussions regarding dividend, share repurchase plan, strategy and outlook. While GNC believes there is a reasonable basis for its expectations and beliefs, they are inherently uncertain. The Company may not realize its expectations and its beliefs may not prove correct. Many factors could affect future performance and cause actual results to differ materially from those matters expressed in or implied by forward-looking statements, including but not limited to unfavorable publicity or consumer perception of the Company’s products; costs of compliance and any failure on management’s part to comply with new and existing governmental regulations governing our products; limitations of or disruptions in the manufacturing system or losses of manufacturing certifications; disruptions in the distribution network; or failure to successfully execute the Company’s growth strategy, including any inability to expand franchise operations or attract new franchisees, any inability to expand company-owned retail operations, any inability to grow the international footprint, any inability to expand the e-commerce businesses, or any inability to successfully integrate businesses that are acquired. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Actual results could differ materially from those described or implied by such forward-looking statements. For a listing of factors that may materially affect such forward-looking statements, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.


GNC cannot provide any assurances about the timing, terms or interest rate associated with the proposed amendments to the Credit Agreement, or that any agreement will ultimately be reached. This document will not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

Additional Information About the Equity Investment and Where to Find It

As previously disclosed in the Company’s Current Report on Form 8-K filed on February 13, 2018, the Company entered into a Securities Purchase Agreement by and between the Company and Harbin Pharmaceutical Group Holdings Co., Ltd. (the “Investor”), pursuant to which the Company agreed to issue and sell to the Investor, and the Investor agreed to purchase from the Company shares of a newly created series of convertible perpetual preferred stock of the Company, designated as “Series A Convertible Preferred Stock”. This communication is being made in respect of the proposed transaction involving the Company and the Investor. A special stockholder meeting will be announced soon to obtain stockholder approval in connection with the proposed issuance of Convertible Preferred Stock to the Investor. The Company expects to file with the Securities and Exchange Commission (the “SEC”) a proxy statement and other relevant documents in connection with the proposed equity issuance. The definitive proxy statement will be sent or given to the shareholders of the Company and will contain important information about the proposed equity issuance and related matters. INVESTORS OF THE COMPANY ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT MATERIALS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE INVESTOR AND THE PROPOSED ISSUANCE OF CONVERTIBLE PREFERRED STOCK. Investors may obtain a free copy of these materials (when they are available) and other documents filed by GNC with the SEC at the SEC’s website at www.sec.gov, at the Company’s website at www.gnc.com or by sending a written request to the Company at GNC Holdings, Inc., 300 Sixth Avenue, Pittsburgh, Pennsylvania 15222, Attention: Secretary.

Participants in Solicitation

The Company and its directors, executive officers and certain other members of management and employees may be deemed to be participants in soliciting proxies from its stockholders in connection with the proposed issuance of convertible preferred shares. Information regarding the persons who may, under the rules of the SEC, be considered to be participants in the solicitation of the Company’s stockholders in connection with the proposed issuance of convertible preferred shares will be set forth in the Company’s definitive proxy statement for its special stockholder meeting. Additional information regarding these individuals and any direct or indirect interests they may have in the proposed issuance of convertible preferred shares will be set forth in the definitive proxy statement when and if it is filed with the SEC in connection with the proposed issuance of convertible preferred shares.

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit
No.
  

Description

99.1    Lender Presentation


EXHIBIT INDEX

 

Exhibit
No.
  

Description

99.1    Lender Presentation


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    GNC HOLDINGS, INC.
Date: February 13, 2018     By:  

/s/ Tricia K. Tolivar

    Name:   Tricia K. Tolivar
    Title:   Executive Vice President and Chief Financial Officer

SLIDE 1

Lender Presentation February 13, 2018 Exhibit 99.1


SLIDE 2

Forward Looking Statement THIS PRESENTATION CONTAINS “FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934. THE FORWARD LOOKING STATEMENTS HEREIN INCLUDE INFORMATION CONCERNING OUR FUTURE RESULTS, TRENDS, AND OTHER INFORMATION THAT IS NOT HISTORICAL INFORMATION. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PRESENTATION ARE BASED ON INFORMATION AVAILABLE TO US ON THE DATE OF THIS CALL, CURRENT EXPECTATIONS, AND VARIOUS ASSUMPTIONS. WE BELIEVE THERE IS A REASONABLE BASIS FOR OUR EXPECTATIONS AND ASSUMPTIONS, BUT THEY ARE INHERENTLY UNCERTAIN, AND MAY NOT PROVE CORRECT. WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE, OR REVISE, ANY FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS, OR OTHERWISE. ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS, ATTRIBUTABLE TO US, OR PERSONS ACTING ON OUR BEHALF, ARE EXPRESSLY QUALIFIED, IN THEIR ENTIRETY, BY THE CAUTIONARY STATEMENTS CONTAINED THROUGHOUT THIS PRESENTATION. FOR A LIST OF IMPORTANT FACTORS THAT COULD CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE FORWARD-LOOKING STATEMENTS IN THIS PRESENTATION, PLEASE REFER TO OUR PUBLIC FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. THIS PRESENTATION INCLUDES non-GAAP financial measures because THE COMPANY believes they represent an effective supplemental means by which to measure the Company’s operating performance. However, these measures are not measurements of the Company’s performance under GAAP and should not be considered as alternatives to earnings per share, net income or any other performance measures derived in accordance with GAAP, or as an alternative to GAAP cash flow from operating activities, or as a measure of the Company’s profitability or liquidity. For more information, see the reconciliations of non-GAAP financial measures AVAILABLE ON THE COMPANY’S WEBSITE. 2


SLIDE 3

Disclaimer Additional Information About the Equity Investment and Where to Find It This communication is being made in respect of the proposed transaction involving GNC and Hayao. A special stockholder meeting will be announced soon to obtain stockholder approval in connection with the proposed issuance of convertible perpetual preferred stock to Hayao. GNC expects to file with the Securities and Exchange Commission (the “SEC”) a proxy statement and other relevant documents in connection with the proposed equity issuance. The definitive proxy statement will be sent or given to the shareholders of the Company and will contain important information about the proposed equity issuance and related matters. INVESTORS OF GNC ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT MATERIALS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT GNC, HAYAO AND THE PROPOSED EQUITY ISSUANCE. Investors may obtain a free copy of these materials (when they are available) and other documents filed by GNC with the SEC at the SEC’s website at www.sec.gov, at GNC’s website at www.gnc.com or by sending a written request to GNC at GNC Holdings, Inc., 300 Sixth Avenue, Pittsburgh, Pennsylvania 15222, Attention: Secretary. Participants in Solicitation The Company and its directors, executive officers and certain other members of management and employees may be deemed to be participants in soliciting proxies from its stockholders in connection with the proposed equity issuance. Information regarding the persons who may, under the rules of the SEC, be considered to be participants in the solicitation of the Company’s stockholders in connection with the proposed equity issuance will be set forth in the Company’s definitive proxy statement for its special stockholder meeting. Additional information regarding these individuals and any direct or indirect interests they may have in the proposed equity issuance will be set forth in the definitive proxy statement when and if it is filed with the SEC in connection with the proposed equity issuance. 3


SLIDE 4

Table of Contents Transaction Overview Business Overview Credit Highlights Financial Overview Appendix 4


SLIDE 5

I. Transaction Overview 5


SLIDE 6

Executive Summary 6 General Nutrition Centers, Inc. (“GNC” or the “Company”) is a leading vertically integrated specialty retailer of nutritional supplements with an 80+ year history During the year ended December 31, 2017, the Company generated revenue and Adj. EBITDA of $2,453 million and $274 million1, respectively GNC’s current capital structure consists of a $225 million Revolving Credit Facility maturing September 2018, $1,131 million Term Loan B Facility maturing March 2019 and $189 million Senior Unsecured Convertible Notes maturing August 2020 (as of December 31, 2017) The Transaction. The Company is seeking to amend its existing Credit Agreement in order to, among other things, extend the maturity of the existing Term Loan B Facility to March 2021 (the “Term Loan Extension”) Strategic Investment Update. On February 13, 2018: GNC and Harbin Pharmaceutical Group Holding (“Hayao”) announced that they have reached an agreement regarding a $300 million strategic investment of perpetual convertible preferred by Hayao in GNC (conditioned on at least 90% participation in the proposed Term Loan Extension) Additionally, GNC and Hayao have agreed to form a joint venture for the manufacture, sale, and distribution of GNC-branded products in China The proposed Term Loan Extension is expected to close in February 2018 and the strategic investment later this year, subject to regulatory approval Together, the proposed Term Loan Extension and announced strategic investment are important steps in extending the Company’s maturity profile and will provide GNC with additional runway and operational flexibility to realize the positive impact of ongoing business initiatives and the growth of its international business 1 As defined per the Credit Agreement.


SLIDE 7

Transaction Overview 7 Transaction Overview. GNC is seeking an amendment & extension of its existing Term Loan B Facility by 24 months to March 4, 2021 (the “Term Loan Extension”) Revolver Lenders. GNC is requesting that its existing Revolver Lenders consent to the proposed Term Loan Extension and, upon closing of the amendment, the Company’s existing Revolving Credit Facility will be canceled and GNC will enter into a 4.5-year New ABL Revolver Consenting Revolver Lenders will not receive an amendment fee Term Loan Lenders. GNC is requesting that its Existing Term Loan Lenders participate in the proposed Term Loan Extension. Existing Term Loan Lenders that do participate (“Extending Term Lenders”) will receive: The option to elect consideration in either: (i) Extended Term Loan and New ABL FILO or (ii) Extended Term Loan and cash1 (for additional detail on participation scenarios, refer to slide 8) For participating Term Loan Lenders electing to receive cash: cash repayment received will be fixed at 20% For participating Term Loan Lenders that elect New ABL FILO: lenders will have the ability to receive a greater than pro-rata portion of New ABL FILO depending on the cash election amount and overall participation Participation & Voting. Amendment terms that will be voted upon will include, among other things: Extend Term Loan B maturity by 24 months Require GNC to prepay $275 million of Extended Term Loan immediately upon extension with a combination of ABL FILO Term Loans and, if elected by extending lenders, cash (refer to slide 8) Amend the “going concern” qualification under existing Credit Agreement to carve out a going concern qualification resulting solely from near-term maturities Amend Change of Control definition under existing Credit Agreement to 51% from 35% 1 The Borrower intends to obtain new money with respect to the FILO Term Loans, solely to the extent needed to pay Extended Lenders who have elected to take a portion of consideration in cash.


SLIDE 8

A&E Participation Scenarios In all scenarios, New ABL FILO tranche size will be $275 million 1 Calculated by New ABL FILO Term Loan tranche size of $275 million divided by total outstanding existing Term Loan B of ~$1.1 billion (i.e. if 100% of lenders participate in the A&E, each extending lender would receive ~24% of participating principal in ABL FILO. Participation Before 5:00pm ET on February 16th Participation After 5:00pm ET on February 16th ABL FILO Pro rata share of participating principal in ABL FILO If 100% participation is achieved, extending lenders will receive ~24% of participating principal1 May receive greater than pro rata share as other lenders may elect to receive cash, participate in the A&E after 5:00pm ET on February 16th or choose not to participate in the A&E None 20% of participating principal in ABL FILO None Cash None 20% of participating principal in cash None 20% of participating principal in cash Extended Term Loan B Remaining portion of participating principal in Extended Term Loans 80% of participating principal in Extended Term Loans 80% of participating principal in Extended Term Loans 80% of participating principal in Extended Term Loans Fee 2.50% 1.50% 1.50% 1.50% Elect to Receive ABL FILO Elect to Receive Cash Elect to Receive ABL FILO Elect to Receive Cash 1 2 a b a b Participating Term Loan Lenders will benefit from amendment fees, structural improvements and potential for significant debt paydown


SLIDE 9

Sources & Uses and Pro Forma Capitalization Note: Illustrative transaction assumes 100% of existing Term Loan lenders participate. Assumes participating lenders receive each $856 million of Extended Term Loan B Facility and $275 million of New ABL FILO on a pro rata basis.


SLIDE 10

Summary of Indicative Terms 1 Assumes 100% lender participation in the proposed Term Loan Extension, with all lenders electing to receive New ABL FILO. Existing Terms Extended Term Loan Borrower General Nutrition Centers, Inc. (the “Borrower”) Guarantors GNC Corporation, each wholly owned material domestic restricted subsidiary of the Borrower, subject to certain exceptions, and General Nutrition Centers, Inc. Ranking Senior Secured Lead Arrangers J.P.Morgan, Barclays, BMO, Citizens Security First priority lien on substantially all tangible and intangible assets, subject to certain exceptions First priority lien on substantially all tangible and intangible assets, excluding ABL priority collateral and subject to certain exceptions Second priority lien on ABL priority collateral Facility Size $1,131 million $[856] million1 Maturity March 4, 2019 24 month maturity extension (March 4, 2021) Springing maturity to 91 days prior to maturity of Convertible Notes if >$50 million outstanding Indicative Pricing L + 250 bps, 0.75% LIBOR floor L + 875 bps, no LIBOR floor If tranche ratings are not B2 / B or higher, then L + 925 bps If tranche ratings are Ba3 / BB- or higher OR prepayments on first lien debt totaling at least $275 million, then L + 825 bps Amendment Fees N/A 2.5% to lenders participating before Feb. 16 and electing to receive ABL FILO 1.5% to lenders electing to receive cash or lenders participating after Feb. 16 and electing to receive ABL FILO Duration Fees N/A 2.0% paid on the earlier of (i) March 4, 2019 and (ii) 5 business days following the consummation of one or more asset sales or equity issuances yielding net cash proceeds greater than $150 million in aggregate Amortization ~$5mm per annum ~$43mm per annum Call Protection 101 soft call for 6 months 100 during Year 1; 102 during Year 2; 101 during subsequent 6 months Subject to make-whole in the event of an automatic acceleration event due to a bankruptcy at any time within first 2 years Negative Covenants Negative covenants with customary baskets / carve-outs, including limitations on asset sales, liens, debt incurrence, investments, transactions with affiliates, mergers and consolidations, acquisitions, dividends and prepayments of other indebtedness Financial Covenants None Consolidated Net First Lien Leverage


SLIDE 11

Summary of Indicative Terms (Cont’d) ABL FILO Term Loan Borrower General Nutrition Centers, Inc. (the “Borrower”) Guarantors GNC Corporation, each wholly owned material domestic restricted subsidiary of the Borrower, subject to certain exceptions, and General Nutrition Centers, Inc. Ranking Senior Secured Lead Arrangers J.P.Morgan, Barclays, BMO, Citizens Security First priority lien on ABL priority collateral Second priority lien on substantially all other tangible and intangible assets, subject to certain exceptions Facility Size $275 million Maturity December 2022 Springing maturity to 91 days prior to maturity of Convertible Notes if >$50 million outstanding Indicative Pricing L + 700 bps stepping down to L + 650 if FILO tranche ratings are Ba3/BB- or higher Call Protection 102 / 101 hard call Negative Covenants Negative covenants with customary baskets / carve-outs “Payment Conditions” baskets subject to: No Event of Default Either (i) Availability is at least the greater of 17.5% of the Line Cap and $17.5 million or (ii) Availability is at least the greater of 12.5% of the Line Cap and $12.5 million and compliance with Springing Fixed Charge Coverage Ratio Financial Covenants Springing Fixed Charge Coverage Ratio (1.00 : 1.00) Other The proposed Term Loan Extension will not be conditioned on the strategic investment by Hayao; strategic investment will be subject to shareholder and other regulatory approvals and will close after the Term Loan Extension has closed


SLIDE 12

Execution Timeline February 2018 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Date Event February 13th Launch Transaction via Lender Call February 16th Early Amendment Date (Friday, 5:00pm ET) February 22nd Commitments & Consents due from Lenders February 23rd Allocation February 27th Closing & Funding Advisors: Goldman Sachs Contacts Greg Berube: (212) 357-0486 – gregory.berube@gs.com Evan Chase: (212) 357-6939 – evan.chase@gs.com Anwer Gheddai: (212) 902-3846 – anwer.gheddai@gs.com Latham & Watkins Contacts Michele Penzer: (212) 906-1245 – michele.penzer@lw.com Jonathan Wry: (212) 906-4580 – jonathan.wry@lw.com Alex Harris: (212) 906-2915 – alex.harris@lw.com Execution Timeline Key execution event Bank holiday


SLIDE 13

Hayao Investment Overview On February 13, 2018, GNC and Harbin Pharmaceutical Group Holding ("Hayao") announced that they have reached an agreement regarding a strategic partnership Hayao will invest approximately $300 million in GNC in the form of newly issued convertible perpetual preferred shares with a conversion price of $5.35 and a 6.5% annual coupon payable in cash or in kind Following the closing, Hayao will own approximately 40% of GNC on an as converted basis, becoming the single largest shareholder in GNC In addition, GNC and Hayao have agreed to form a joint venture for the manufacturing, marketing, sale and distribution of GNC-branded products in China, leveraging the synergies between Hayao and GNC in the fast growing Chinese market Transaction Overview Transaction Terms & Details Convertible Preferred Structure Perpetual Convertible Preferred Stock Amount $300 million, representing ~40% of Company’s outstanding Common Stock on an as-converted basis Dividend 6.5% coupon payable in cash or in kind Dilution Conversion into Common Stock at Conversion Price: $5.35 Governance In connection with the investment, the GNC board will be expanded to 11 members including five members from GNC, five members from Hayao and CEO Ken Martindale China Joint Venture China is the largest international market for supplements and GNC is one of the most recognized brands by consumers in the market As a leading player in China, Hayao provides established networks and relationships in the market which will support GNC’s efforts to expand in China, including the ability to accelerate product introduction by leveraging existing “Blue Hat” registrations required for sales in China Hayao will provide GNC with access to a leading pharmaceutical distribution network in China as well as expertise in operational and manufacturing which will serve as critical resources as GNC works to expand its reach in China


SLIDE 14

Hayao Investment Overview (Cont’d) Strategic Benefits to GNC Important step in GNC’s efforts to optimize its capital structure with investment proceeds expected to be used to repay outstanding debt and for general corporate purposes Selected Hayao as the Company’s partner to leverage the GNC brand and capitalize on the demand for nutritional supplements in China through a leading pharmaceutical company with a strong distribution network Provides GNC with regulatory, operational, distribution, and manufacturing expertise in China, the largest international market for supplements Enables accelerated introduction of GNC-branded products by leveraging existing “Blue Hat” registrations required for health food sales in China Overview of CITIC Founded in 2002, CITIC Capital Holdings Limited is an alternative investment management and advisory company The firm manages over $22 billion of capital across 100 funds and investment products through its multiple asset class platform covering private equity, real estate, structured investment & finance, and asset management CITIC Capital has over 130 portfolio companies that span 11 sectors and employ over 820,000 people around the world Hayao is one of the leading pharma and VMS companies in China Hayao has access to an extensive distribution and retailing network by directly operating more than 300 chain retail pharmacies and collaboration with around 800 drug and VMS distributors to build Nation-wide coverage CITIC Capital Holdings Limited is a major shareholder of Hayao Strategic Benefits to Hayao Overview of Hayao Strategic alignment with a leading global specialty health, wellness and performance retailer Establishes partnership with one of the most recognized supplement brands in China and globally Provides access to GNC’s premium assortment of health, wellness and performance products, including proprietary GNC brands


SLIDE 15

Recent Developments Highlights 5.7% same store sales growth in Q4’2017 (domestic company-owned stores including GNC.com sales) driven by transaction comps of +11.7%, marking four consecutive quarters of transaction growth Full year 2017 SSS turned positive at 0.2% as initiatives continued to get traction Q4’2017 adjusted diluted earnings per share (“EPS”) of $0.25, compared to adjusted diluted EPS of $0.07 in the prior year quarter1 Financial Performance Full year 2017 free cash flow generation of $197 million compared to $186 million during FY 2016, primarily driven by lower inventory through supply chain optimization >90% of stores are cash flow and EBITDA positive Revenue in the U.S. and Canada segment increased $4 million, or 1.0%, to $456 million during Q4’2017; e-commerce sales were 8.6% of segment revenue compared to 4.6% in the prior year quarter Revenue in the International segment increased $6 million, or 14.1%, to $45 million during Q4’2017 due to higher cross-border e-commerce sales 1 Excludes long-lived asset impairments in the current quarter and prior year quarter; the impact of tax reform, the convertible debt exchange, legal-related charges and executive placement costs in the current quarter; and gains on Refranchising and store closing-related costs in the prior year quarter. Q4 / Full Year 2017 Update


SLIDE 16

Recent Developments (Cont’d) Business Updates 10.8 million consumers have joined the Company’s loyalty programs, 0.8 million of whom are enrolled in the ProAccess membership program (as of December 2017) Company continues to strengthen its omnichannel strategy with in-store subscription services piloted in December 2017 with a full rollout to all domestic corporate stores expected in the first half of 2018 Continued focus on innovation exclusive to GNC with launch of Slimvance, a natural weight loss product that delivers clinically proven results – Slimvance is the first of several new, exclusive products planned for this year Supply chain initiative launched at the end of 2016 delivering quantifiable results during second half of 2017 – initiatives included a reduction of weeks of supply on hand, strengthening forecasting practices and optimization of product assortment at the store level Exchanged $98.9mm of convertible senior notes due 2020 for shares of common stock in December 2017 GNC’s recently introduced relationship with Amazon is encouraging Business operations in Florida and Texas are back to normal after the hurricanes; Puerto Rico recovery is slower Q4 / Full Year 2017 Update


SLIDE 17

II. Business Overview


SLIDE 18

Leading Global Specialty Retailer of Nutritional Supplements 2017 Revenue2: $2.4bn Store Count (as of Dec. 31, 2017) 2017 Revenue Leading vertically integrated specialty retailer of nutritional supplements with 80+ year history Approximately 9,000 locations worldwide + online sales channels Company owned + franchise stores + online storefront (GNC.com and Amazon marketplace) Highly valued, trusted, and well-recognized brand Broad product portfolio across protein, performance supplements, vitamins and other categories Proprietary GNC brand offerings + robust innovation capabilities Vertically integrated & sophisticated manufacturing, warehousing and distribution facilities Store Count: 8,955 Business Overview Global Footprint Breakdown of Store Count and Financials by Store Type Source: Company filings and management. Global footprint as of 2016A. 1 Excludes intersegment revenue. 2 Excludes Lucky Vitamin of $66mm. Colors Denote # of Locations U.S. >100 51 - 100 11 - 50 1 - 10 India Qatar Pakistan Bangladesh Myanmar Sri Lanka Bahrain Oman Bulgaria China Thailand Hong Kong Mexico U.S. 6,822 El Salvador Costa Rica Honduras Panama Guatemala Cayman Islands Canada Paraguay Peru Chile Bolivia U.A.E Saudi Arabia Romania Ukraine Lebanon Turks & Caicos Aruba Dominican Republic Trinidad & Tobago Singapore Indonesia Brunei Vietnam Malaysia Philippines Taiwan Guam South Korea Montenegro Latvia Lithuania Ireland Mongolia Nigeria Russian South Africa


SLIDE 19

2017 Revenue 2017 Adj. EBIT2 Segment Description $ % of Total $ % of Total U.S. & Canada 1,099 franchise stores in the U.S. 3,423 company-owned stores in the U.S., Puerto Rico, and Canada E-Commerce operations $1,9931mm $166mm International 1,999 franchise locations in approximately 50 countries 11 Company-owned The Health Store locations in Ireland 5 Company-owned locations in China $177mm $62mm Manufacturing / Wholesale Manufactured products sold to other segments Third-party contract manufacturing Sales to wholesale partners, the largest of which are Rite Aid, Sam’s Club and PetSmart $216mm3 $72mm Three Revenue Generating Segments [55%] [21%] [24%] [21%] [24%] 1 Excludes Lucky Vitamin of $66mm. 2 EBIT adjusted for expenses outlined in quarterly earnings releases to calculate adjusted EPS (unallocated corporate overhead is disclosed separately). 3 Excludes intersegment sales.


SLIDE 20

III. Credit Highlights


SLIDE 21

Credit Highlights Favorable Industry Dynamics 1 Attractive and Loyal Customer Base 3 Operating Improvements Gaining Traction through One-GNC 4 Strong Free-Cash-Flow Profile 6 Highly Experienced and Committed Management Team 7 Differentiated Brand, Products and Customer Experience 2 Diversified and Flexible Store Portfolio 5


SLIDE 22

Favorable Industry Dynamics Broad momentum in the health & wellness space will continue driving growth in an already multi-billion dollar nutritional supplement market Health &Wellness Mega Trends 1 Total U.S. Supplement Sales by Category ($ in bn) 5.0% 8.3% 6.6% 7.3% 2006–2016 CAGR 2016–2020 CAGR by Category Focus on Self-Care due to Rising Healthcare Costs Rising Obesity Rates Increase in Specialist Diets Scientific Substantiation of Supplement Benefits Aging Population Increased Participation of Millennials Global Emergence of the Middle Class Focused on Healthy Living Scientific Substantiation of Supplement Benefits Consumer access to and desire for health related knowledge Physician Support of Supplement Use Lifestyle Demographics Consumer Education & Engagement Vitamins Herbs & Botanicals Sports Nutrition Meal Replacements 2016–2020 CAGR 6.2% 6.2% Specialty / Other Minerals 5.1% 6.0%


SLIDE 23

Channel GNC Other Examples Channel Mix % of ~$41bn U.S. Supplement Sales 2016 – 2020 Sales CAGR % of Total Natural / Specially Sales by Product Category GNC Market Share Specialty Retail & Natural ~$15bn Mass Market ~$11bn Multi-Level / Network Marketing ~$7bn Practitioner ~$4bn Internet ~$2bn Mail & Radio ~$2bn Favorable Industry Dynamics GNC is favorably positioned in the large and growing specialty retail & natural channel as well as the high growth internet channel 1 U.S. Supplement Industry by Channel Specialty Retail & Natural Channel by Category Meal Replacements Minerals Herbs and Botanicals Specialty / Other Sports Nutrition Vitamins Within the Specialty / Natural Channel, GNC is a leader Sports Nutrition with significant opportunity in Vitamins 1% 2% 3% 22% 36% 5% ~$15bn 6.2% Total 2016-2020 CAGR


SLIDE 24

Favorable Industry Dynamics Significant international opportunity remains in an estimated ~$122bn global supplement market (2016) 1 North America1 $ 45bn 5.9% 7,571 China $ 20bn 6.9% 5 Other APAC (ex China/Japan) $ 20bn 3.3% 659 Europe $ 18bn 3.0% 49 Japan $ 11bn 0.7% 0 Latin America $ 5bn 1.8% 396 Middle East & Africa $ 2bn 4.8% 275 Total $ 122bn 4.6% 8,955 Supplement Market ($ in bn, 2016) # of GNC Stores Commentary China: Opportunity for expansion though partnership Europe: Whitespace to develop new European operations by entering new markets Japan: High consumer demand and awareness for dietary supplements makes Japan a leading opportunity for growth eCommerce: Room to Increase international e-Commerce presence by penetrating in-country marketplaces and developing GNC platform International Opportunity Supplement Market (2016-2020 CAGR) 1 Includes supplement market in the U.S. of ~$41 billion, Canada of ~$2bn and Mexico of ~$2bn as of 2016.


SLIDE 25

Brand Awareness Source: Decision Analyst Q4’17 GNC Brand Equity Study Brand Awareness includes aided and unaided awareness. 2 Differentiated Brand, Products and Customer Experience Brand Differentiation


SLIDE 26

Differentiated Brand, Products and Customer Experience Product Differentiation:~60% of Sales are GNC Branded or 3rd Party Products Sold Exclusively through GNC 2 Differentiated Offering GNC Branded Products ~48% of total Sales are GNC branded products Proprietary products drive significant margin capture GNC branded products are increasing as share of sales and expected to continue New product introductions in 2017 have been well received ~48% Total Sales are GNC Branded Products 3rd Party Exclusive Products Exclusive provider of Performix & other key brands Exclusive partner for 3rd party brands to get new innovations to market ~12% Total Sales are 3rd Party Products Exclusively Sold in GNC Robust pipeline of new product launches1 150+ new GNC Brand SKUs (+25% vs. 2016) Over $100mm of total gross new brand sales including new, reforms and extensions (+42% vs. 2016) 150+ New GNC Brand SKUs Product Mix Comprehensive mix of sports & wellness products 2,000+ SKUs in-stores 3,500+ additional SKUs in expanded aisle 9 different categories Ongoing product rationalization 5,500+ Total SKUs 9 categories 1 Includes scientists, nutritionists, formulators, chemists, engineers and quality control experts GNC Branded Products 3rd Party Exclusive Products


SLIDE 27

Proprietary Customer Research Global market , consumer and product trends Trade shows and publications Store Feedback Medical Trends ~50,000 Customer Research Participants Supplier Expertise Vertically integrated global supply chain Raw materials sourced from 250+ suppliers and 50+ third-party vendors New ingredient and technology discovery assures constant reformulation of products 250+ Suppliers 50+ 3rd Party Vendors Scientific and Medical Expertise Demonstrated ability to develop unique, branded, and scientifically verified product lines in-house Employ over 150 technical professionals including scientists, nutritionists, formulators, chemists, engineers and quality control experts Partnership access to 30+ world class medical research facilities and consultants Full visibility of intellectual property, regulatory status and clinical research 150+ Technical Professionals1 30+ Partnerships Manufacturing GNC’s own manufacturing facilities operate above the industry's highest US and International Standards GNC manufactures ~50% of GNC Branded Products ~50% GNC Branded Products are manufactured by GNC Quality Control Only high quality ingredients are sourced and tested before going into GNC branded products 150+ quality checks including raw materials, purity, potency and expiry 150+ Quality Checks Differentiated Brand, Products and Customer Experience Product Differentiation: GNC has built the leading customer centric nutritional supplement business with uncompromising standards for quality and innovation 2 Product Quality Overview 1 Includes scientists, nutritionists, formulators, chemists, engineers and quality control experts


SLIDE 28

2 Differentiated Customer Experience: Overview Differentiated Brand, Products and Customer Experience Customer Experience Differentiation: Overview In Store Experience Omnichannel Loyalty Programs Customer Education Inventory Selection GNC.com Amazon Storefront Initiatives myGNC Rewards Pro Access A B C


SLIDE 29

2 Differentiated Customer Experience In Store Experience Customer Education The nutritional supplement consumer often desires and seeks out knowledgeable customer service Our well-trained sales associates who are aided by regular trainings and in-store technology provide engaged customer service for a differentiated shopping experience Inventory Selection One of our continued priorities is working on improvements in product availability and in-store shopping experience that will differentiate us from our competitors in the mind of the consumer Differentiated Brand, Products and Customer Experience Customer Experience Differentiation: In Store Experience A


SLIDE 30

2 Differentiated Customer Experience Omnichannel GNC.com Recently aligned pricing and promotion between GNC.com and in-store and implemented platform changes 2017 showing positive trends at 88% comp Q4’17 and 22% comp FY 2017 Amazon Storefront Launched in January 2017 - Outperforming sales expectations and is leading with strong sales from GNC branded products 26% of those who purchased a GNC-branded product purchased it from Amazon (up from 13% in Q2’17). Initiatives GNC Delivers: –3,500 SKUs more than doubles the in-store offering Subscription Services: Direct to doorstep available now; in-store subscription available in Q1’18 Order online, pick up in store: available in the next 12 months Ship from Store: Reduces ship times and is cost effective Adding training / educational content to GNC.com driving heightened experiential environment Differentiated Brand, Products and Customer Experience Customer Experience Differentiation: Omnichannel B


SLIDE 31

2 Differentiated Customer Experience Loyalty Programs myGNC Rewards Free loyalty program Strong sign-up rate of more than 10mm total members as of December 2017 (exceeding 2017 goal) Loyalty members average order value (AOV) is more than non-member AOV Pro Access $39.99 Annual Membership 755,000+ members as of December 2017 Members visit 2x as often, and spend 2x as much Differentiated Brand, Products and Customer Experience Customer Experience Differentiation: Loyalty Programs C 1 Rewards Point for every dollar spent ü ü $5 Cash Back Reward for every 150 Rewards Points earned ü ü Bonus points events ü ü Free birthday gift1 ü ü Quarterly Pick-Your-Day sales – pick the day that works for you and shop your own personal sale with a new 3x Rewards Points offer every 90 days ü Free shipping all year on GNC.com – expedited shipping starts March 2018 ü PRO Boxes delivered to your door twice a year – free gifts, samples, coupons and more1 ü Stay healthy and win big: earn chances to win once-in-a-lifetime adventures and amazing health and fitness prizes with PRO Access Giveaways ü Upgraded amenities – 30 extra days to redeem rewards and the PRO Access Insider Line, a direct support line to program experts ü Benefits Free Annual fee $39.99


SLIDE 32

Product assortment Exclusive products Price Employee training / Customer service Vertical integration Loyalty program Specialty retailers Drug store Big box retailers Grocery Natural food retail e-Commerce Source: NBJ Supplement Business Report 2016, company filings and websites, management estimates and industry research. 1 Includes $4.8bn in meal replacement where GNC is not a major participant. 2 GNC Maintains Distinct Advantage vs. Peers Across Key Metrics Advantage Strength Neutral Weakness Lacks presence Differentiated Brand, Products and Customer Experience Combined, our brand and products customer experience provide a sustainable competitive advantage


SLIDE 33

Attractive and Loyal Customer Base Core Customer and Customer Segments 3 Core Customer Why GNC? Highly engaged in wellness goals (a.k.a. healthy living focused) Live active lifestyle Want results-based products (a.k.a. performance driven) Want latest and greatest innovations Higher than average income across range of ages Core age group 35-45 Slightly more male Reliable Trustworthy Quality products Proven to help performance Associates that support their goals Top Three Customer Segments Active Wellness Performance Driven Athlete Wellness Focused TBU TBU 23% Sales Engaged to improve health; Educated Shop for fish, eye/joint health, beauty, protein Drive by innovation, regimen support through enhanced marketing and associate training, building engagement with loyalty rewards, in future add influencers and content to grow connection 30% Sales Fit & Active Value total body health Shop for broad range: multis, fish oil, protein Drive by adding quality products, rewarding their loyalty, and provide online shopping options 29% Sales Value fitness goals and appearance Shop for performance supps, protein, thermogenics Drive by innovation (Beyond Raw), upgrading brands (Amp), exclusive access (Pro), in future add influencers and content to grow connection


SLIDE 34

Operating Improvements Gaining Traction through One-GNC In December 2016, GNC launched its One New GNC strategy to refocus the business around GNC’s core strengths 4 Then Now Customer Experience Over emphasis on promotional activity Inconsistent associate knowledge and capabilities Legacy POS and inventory management systems Product depth / selection Trusted advisors – training associates in solutions-based selling Technology: new registers, tablets and mobile app including loyalty and personalization functionality Inventory management: improved in-stock position Pricing & Loyalty Multiple pricing structures across channels and membership levels Various membership levels with unclear benefits Single price for everyone Lower prices throughout the store Free rewards loyalty program (myGNC rewards) Clarifying our value proposition Increased customer data and insights Product Innovation Reformulation and line extensions Limited vendor selection Less trend focused New product & brand launches throughout 2017 ROI driven customer acquisition Includes new vendor relationships Increased focus on driving traffic Marketing Multiple strategies and customer targets Limited products Targeted marketing utilizing 10mm+ customer database Exclusive products Expanded GNC brand offering Online marketing: paid search, SEO, display Enhanced social media Targeted marketing leveraging 10+ million customer database Results Driving improved transaction comps Increased efficiency in marketing and advertising spend Shift toward higher margin GNC branded products Improved customer retention and share of wallet


SLIDE 35

Improved Transaction Comps, with an Expected Decline in Average Ticket1 Pilot Outperforming Rest of Company…2 …and GNC Outperforming Applied Predictive Technologies Retail Index2 Source: Company filings and management. 1 GNC quarterly numbers per company disclosure. 2 Excludes Gold Card sales and GNC.com. Transaction Comps Same Store Sales One New GNC launch 0% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Full Year Number of Transactions (5.4%) (2.5%) (0.8%) 0.0% (4.1%) (5.5%) (6.6%) (6.5%) 9.3% 12.3% 12.4% 11.7% 11.6% Average Transaction Amount 1.4% 0.5% 1.3% 1.4% 1.8% 1.7% (2.2%) (5.2%) (12.1%) (11.8%) (9.9%) (5.4%) (10.2%) Total Same Store Sales (4.1%) (2.0%) 0.5% 1.4% (2.3%) (3.9%) (8.6%) (11.3%) (3.9%) (0.9%) 1.3% 5.7% 0.2% 2015 2016 Impacted by hurricanes and loyalty account activations 4 One New GNC Launch Operating Improvements Gaining Traction through One-GNC One New GNC strategy is already driving noticeable improvement with more to come 2017


SLIDE 36

Operating Improvements Gaining Traction through One-GNC One New GNC strategy is already driving noticeable improvement with more to come GNC Brand Mix Strategies Opportunity to Rationalize Inventory Mix shift towards proprietary GNC products with meaningfully higher margin profile would drive higher operating profit – every 1% improvement in GNC brand mix drives $1 to $3mm incremental margin Defined owned brands that will be targets of marketing focus and spend (Beyond Raw, AMP, Total Lean, GNC Vitapaks) Compare & Save in-store & external marketing initiative to communicate superiority vs. specific 3rd party leaders In-store sampling of GNC brand newness, limited editions and hero categories Cash-wrap strategy to more effectively utilize impulse register area to highlight, sample, and sell GNC brands – increase basket size & attachment rate Source: Company filings and management 1 Includes U.S. company-owned and franchised stores, GNC.com and wholesale partners. 4 % of system-wide retail product sales1 One New GNC Launch GNC-branded 3rd Party Management sees a path to further inventory reductions Segmentation – evaluating the right inventory categories and quantity by store customer demographics to achieve efficiencies and appropriate ROI Vendor promoted sell-down and return to vendor initiatives Implementing core disciplines – vendor ship windows, concentrating on reducing weeks of supply and reducing lead times Optimizing reordering process and store delivery frequency to minimize out-of-stock inventory Improving inventory management of non-core decentralized entities Inventory % of LTM Sales One New GNC Launch Inventory rationalization initiatives expected to reduce inventory in-line with pre-2015 levels


SLIDE 37

Favorable Lease Contracts ~2.5 years1 Average remaining lease contracts Short lease terms allow for significant flexibility which provides a competitive advantage relative to other retailers Right Sizing the Footprint 207 stores Company owned stores closed in 2017 Targeted closures of company owned stores backed by analytics help right sizing the footprint bolster margins without losing sales ~200 more closures planned for 2018 Continued opportunistic refranchising Strong Store Level Economics 90%+ Stores are Cash Flow and EBITDA Positive Compelling store level economics drive the favorable cash flow profile of the business Diversified and Flexible Store Portfolio Favorable lease contracts provide significant flexibility as we continue to right size the footprint and improve already strong store level economics 5 Store Base Overview Domestic Company-Owned and Franchise Locations2 Typically range in size from 1k to 2k sq. feet U.S. and Canada company owned stores: 3,423 U.S. franchises: 1,099 Store-within-a-store (Rite Aid): 2,418 Store Details (as of Dec. 31, 2017) Colors Denote # of Stores >100 51 - 100 11 - 50 1 - 10 9 28 75 84 5 127 45 367 79 10 71 15 201 45 44 170 266 43 25 146 25 24 10 152 11 41 77 85 127 11 91 84 62 50 87 179 16 33 29 155 401 20 47 90 437 79 28 50 39 17 Source: Company filings. 1 2.5 years is the average lease contract remaining across the fleet. For corporate owned stores it is 2.6 years and for franchisee stores it is 2.3 years. 2 Company-owned and franchise stores in the United States as of December 31, 2016; map excludes 36 locations in Puerto Rico, 8 locations on U.S. military bases, and 8 locations in Washington, D.C.


SLIDE 38

Significant Free Cash Flow Generation Free Cash Flow1 ($mm) Highly profitable and productive store base with low capital intensity and continues to deliver strong free cash flow generation More than 90% of stores cash flow and EBITDA positive Consistently delivered >$180mm free cash flow during the past five year period CFFO $223 $239 $304 $355 $208 $112 $150 $188 $221 Capital Expenditures (42) (50) (70) (46) (60) (63) (59) (50) (32) Refranchising Proceeds – – 4 3 39 40 40 12 4 Store Acquisition Costs (1) – (9) (3) (2) (2) (1) (2) (2) Proceeds from Lucky Disposition – – – – – – – – 6 Free Cash Flow $180 $189 $228 $309 $186 $87 $129 $148 $197 6 1 Defined as operating cash flows less investing cash flows excluding acquisitions, except for store acquisitions. One New GNC Launch ~2x+ increase


SLIDE 39

Ken Martindale Chief Executive Officer 35+ Most recently served as CEO of Rite Aid Stores and President of Rite Aid Corporation since 2015 Prior to being appointed CEO of Rite Aid Stores, served in various senior management roles including President and COO, EVP and COO and EVP of Merchandising, Marketing and Logistics after joining in 2008 Previously served as Co-President, Chief Merchandising and Marketing Officer for Pathmark Stores Tricia Tolivar Executive Vice President, Chief Financial Officer 25+ Joined GNC as the Executive Vice President and Chief Financial Officer in March 2015 with significant senior executive experience and finance expertise Previously served in leadership positions with Ernst & Young from 2007 to 2015 including most recently as Americas Director of Finance, Advisory Also held CFO position at Greater Memphis Arts Council (2006 to 2008) and various leadership positions at AutoZone (1996 to 2005) Tim Mantel Executive Vice President, Chief Merchandising Officer 25+ Joined GNC as the Executive Vice President and Chief Merchandising Officer in February 2016 Previously held various management roles at Target Corporation including SVP Household Essentials and Food (2014 to 2015), President of Target’s Sourcing Services (2010 to 2014) and other executive positions Joined GNC as SVP and Chief Supply Chain Officer in January 2017 Held multiple leadership positions at PetSmart from 2007-2015 including SVP Supply Chain and SVP Real Estate Previously spent over 16 years with Target Corporation and 3 years with The Home Depot in various roles 25+ Name / Title Years Experience Selected Bio Guru Ramanathan Ph.D. Senior Vice President, Chief Innovation Officer SVP and Chief Innovation Officer since December 2009 and joined GNC in 1998 Industry experience spans clinical care, pharma, consumer health, animal health and the retail sectors Previously served as Director and Secretary for the Efamol of subsidiary of Scotia Pharmaceutical in Boston and held various industry consulting and management roles as well as clinical, research and teaching appointments both within and outside the United States 30+ Joined GNC in 2013 Previous experience in domestic and international operations for L Brands (Victoria's Secret, Bath & Body Works and La Senza), Abercrombie & Fitch, The Limited, Old Navy and The Gap Prior to current role, he served as Senior Vice President of International Store Operations for L Brands Eddie Burt Senior Vice President, Chief Supply Chain Officer Carl Seletz Senior Vice President, International 30+ Robert F. Moran Non-Executive Chairman Interim CEO from July 2016 to September 2017; joined GNC in 2013 Formerly served as the Chairman and Chief Executive Officer of PetSmart, Inc., President of Toys 'R' US Canada Worked for 30 years with Sears, Roebuck and Company 40+ Prior Experience 7 Experienced Management Team Joe Gorman Executive Vice President, Operations 25+ Joined GNC in 2015 Formerly Founder and President of Anomaly Clothing Previously spent over 17 years with Home Depot and 6 years with Gamestop in various roles


SLIDE 40

IV. Financial Overview


SLIDE 41

Overview of Historical Financial Performance 17.0% 8.2% (0.3%) 1.1% (5.3%) (3.4%) 11.4% 5.7% (3.6%) (1.2%) (6.3%) 0.2% Revenue Growth SSS Growth1 19.7% 20.0% 19.3% 18.6% 15.9% 11.2% Source: Company filings; SSS growth reflects domestic retail and GNC.com SSS performance. 1 Figures based on product sales only. 2 As defined per credit agreement. 3 Defined as operating cash flows less investing cash flows excluding acquisitions, except for store acquisitions. 4 As defined per credit agreement. Revenue & Same Store Sales Growth ($mm) Adjusted EBITDA2 & Margin ($mm) EBITDA margin Free Cash Flow3 ($mm) Total Leverage4


SLIDE 42

Consolidated Adjusted EBITDA Calculation Full Year Results ($mm) Note: 2017 subject to final closing 1 Adjustments as permitted per Credit Agreement. 2016 2017 Net loss ($286.3) (148.9) Plus:1 Income tax expense (benefit) 52.9 (164.8) Total interest expense (net of interest income) 60.4 64.2 Gain on convertible debt and debt refinancing costs 0.0 (11.0) Depreciation expense 51.8 49.4 Amortization of intangibles 8.2 7.4 Long-lived asset impairments 476.6 457.8 Unusual or non-recurring expenses/losses 11.8 3.0 Non-cash compensation and other non cash charges 14.6 8.4 Expenses for restructuring, closing stores, relocation, severance, integration, transition 2.9 5.1 One-time start up costs, new ventures, strategic initiatives, etc. 11.0 2.9 Consolidated adjusted EBITDA $403.9 $273.5 42


SLIDE 43

V. Appendix


SLIDE 44

Summary of Indicative Terms 1 Assumes February 27, 2018 closing ABL Revolver Borrower General Nutrition Centers, Inc. (the “Borrower”) Guarantors GNC Corporation, each wholly owned material domestic restricted subsidiary of the Borrower, subject to certain exceptions, and General Nutrition Centers, Inc. Ranking Senior Secured Lead Arrangers J.P.Morgan, Barclays, BMO, Citizens Security First priority lien on ABL priority collateral Second priority lien on substantially all other tangible and intangible assets, subject to certain exceptions Facility Size $100 million Maturity1 4.5 years (August 27, 2022) Springing maturity to 91 days prior to maturity of Convertible Notes if >$50 million outstanding Borrowing Base 90% Eligible Credit Card Receivables 85% Eligible Accounts Receivable 95% NOLV of Eligible Inventory 100% Unrestricted Cash & Cash Equivalents, less Customary Reserves Indicative Funded Rate L + 150-200 bps, pricing grid based on Availability Unused Fee 37.5 bps if Average Availability >50% 50.0 bps if Average Availability ≤50% Call Protection N/A Negative Covenants Negative covenants with customary baskets / carve-outs “Payments Conditions” baskets subject to: No Event of Default Either (i) Availability is at least the greater of 17.5% of the Line Cap and $17.5 million or (ii) Availability is at least the greater of 12.5% of the Line Cap and $12.5 million and compliance with Springing Fixed Charge Coverage Ratio Financial Covenants Springing Fixed Charge Coverage Ratio (1.00 : 1.00) Other The proposed Term Loan Extension will not be conditioned on the strategic investment by Hayao; strategic investment will be subject to shareholder and other regulatory approvals and will close after the Term Loan Extension has closed