1273886--3/10/2006--GNC

related topics

{debt, indebtedness, cash}

{customer, product, revenue}

{property, intellectual, protect}

{regulation, change, law}

{provision, law, control}

{operation, international, foreign}

{product, market, service}

{loss, insurance, financial}

{personnel, key, retain}

{cost, regulation, environmental}

{investment, property, distribution}

Changes in our management team could affect our business strategy and adversely impact our performance and results of operations. Compliance with new and existing governmental regulations could increase our costs significantly and adversely affect our results of operations. A substantial amount of our revenues are generated from our franchisees, and our revenues could decrease significantly if our franchisees do not conduct their operations profitably or if we fail to attract new franchisees. Economic, political and other risks associated with our international operations could adversely affect our revenues and international growth prospects. Our failure to appropriately respond to changing consumer preferences and demand for new products and services could significantly harm our customer relationships and product sales. We rely on our manufacturing operations to produce nearly all of the proprietary products we sell. Disruptions in our manufacturing system or losses of manufacturing certifications could adversely affect our sales and customer relationships. Our failure to comply with FTC regulations and existing consent decrees imposed on us by the FTC could result in substantial monetary penalties and could adversely affect our operating results. If we fail to protect our brand name, competitors may adopt trade names that dilute the value of our brand name. Intellectual property litigation and infringement claims against us could cause us to incur significant expenses or prevent us from manufacturing, selling or using some aspect of our products, which could adversely affect our revenues and market share. We are not insured for a significant portion of our claims exposure, which could materially and adversely affect our operating income and profitability. Franchise regulations could limit our ability to terminate or replace under-performing franchises, which could adversely impact franchise revenues. Our controlling stockholder may take actions that conflict with other stockholders and investors interests. This control may have the effect of delaying or preventing changes of control or changes in management, or limiting the ability of other stockholders to approve transactions they may deem to be in their best interest. Risks Related to Our Substantial Indebtedness Our substantial indebtedness could adversely affect our financial condition and otherwise adversely impact our operating income and growth prospects. We will require a significant amount of cash to service our indebtedness. Our ability to generate cash depends on many factors beyond our control and, as a result, we may not be able to make payments on our debt obligations. Despite our and our subsidiaries current significant level of indebtedness, we may still be able to incur more indebtedness, which would increase the risks described above.

Full 10-K form ▸

1273886--3/10/2006--GNC_CORP