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General Nutrition Centers, Inc. is an indirect wholly-owned subsidiary ofGNC Parent LLC which was acquired on March 16, 2007 by affiliates of AresManagement LLC and Ontario Teachers' Pension Plan Board. As such, thefinancial results presented in this press release represent the aggregate ofthe financial results of General Nutrition Centers, Inc. from January 1, 2007through March 15, 2007, predecessor, and the results from March 16, 2007 toSeptember 30, 2007, successor.
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For the quarter, the Company reported revenues of $395.3 million, a 7.5%increase over the same quarter in 2006. This increase was the result of a 5.6%increase in the retail segment, an 8.4% increase in franchising, and a 21.9%increase in manufacturing/wholesale. In retail, same stores sales increased3.3% in company-owned domestic stores and 9.0% in its Canadian stores.
For the quarter, the Company reported earnings before interest, incometaxes, depreciation and amortization (EBITDA) of $44.0 million compared to$41.9 million for the same quarter in 2006. Included in EBITDA for the thirdquarter of 2007 was $7.1 million of non-cash purchase accounting adjustmentsincluded in cost of sales related to the acquisition of the Company on March16, 2007. Included in EBITDA for the third quarter of 2006 was a $1.1 millionloss associated with the sale of the Company's Australian manufacturingfacility, which closed in the fourth quarter of 2006.
Excluding this non-cash expense, adjusted EBITDA was $51.1 million for thethird quarter of 2007, an increase of 19.0% over adjusted EBITDA of $43.0million in the same quarter in 2006. Also included in adjusted EBITDA was $0.6million and $0.7 million of recurring non-cash compensation expense for thethree months ended September 30, 2007 and September 30, 2006, respectively.
Revenue for the first nine months of 2007 was $1,176.7 million, a 3.5%increase over the same period in 2006.
For the first nine months of 2007, the Company reported EBITDA of $79.9million compared to $120.0 million for the same period in 2006. Included inEBITDA in 2007, as a result of the acquisition, was $65.3 million oftransaction-related costs which were recorded in the first nine months'operating results, including $34.6 million of transaction fees and expenses;$15.3 million of compensation expenses related to the transaction (including$3.8 million of non-cash stock based compensation resulting from thecancellation of all outstanding stock options), and $15.4 million of non-cashpurchase accounting adjustments included in cost of sales. Included in expensefor the first nine months of 2006 were $4.8 million of discretionary paymentsmade to stock option holders in conjunction with a distribution made toshareholders in March 2006 and a loss of $1.1 million associated with the saleof the Company's Australian manufacturing facility. Excluding the above items,adjusted EBITDA was $145.2 million for the first nine months of 2007, anincrease of 15.4% over adjusted EBITDA of $125.9 million in the same period of2006. Additionally, the Company recorded $1.7 million and $1.9 million ofrecurring non-cash stock-based compensation expense in the first nine monthsof 2007 and 2006, respectively.
GNC, headquartered in Pittsburgh, Pa., is the largest global specialtyretailer of nutritional products; including vitamin, mineral, herbal and otherspecialty supplements and sports nutrition, diet and energy products. GNC hasmore than 4,800 retail locations throughout the United States (including morethan 1,000 franchise and 1,290 Rite Aid store-within-a-store locations) andfranchise operations in 46 international markets. The company -- which isdedic
