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GENERAL NUTRITION INCORPORATED REPORTS EARNINGS

 GENERAL NUTRITION INCORPORATED REPORTS EARNINGS
 PITTSBURGH, May 28 /PRNewswire/ -- General Nutrition,


Incorporated, the nation's largest specialty retailer of vitamins, sports nutrition and other food supplement products, today reported that for the first quarter ended April 25, 1992, operating earnings (earnings before interest, income taxes and extraordinary items) increased by 63.5 percent on a net revenue increase of 14.1 percent over the first quarter of 1991.
 General Nutrition's net income was $955,000 on consolidated revenue of $106,972,000 for the first quarter of 1992, as compared with a net loss of $1,289,000 on consolidated revenue of $93,741,000 for the first quarter of 1991. Net income for the first quarter of 1992 and 1991 was adjusted for an extraordinary expense of $812,000 in 1992 and an extraordinary gain of $182,000 in 1991. The extraordinary expense in 1992 is a one time charge for deferred financing fees related to the retirement of the company's increasing rate notes on March 12, 1992.
 The company's operating earnings were $12,208,000 in the first quarter of 1992, or 11.4 percent of net revenue as compared with $7,465,000 or 8.0 percent of net revenue in the first quarter of 1991. The improved operating earnings were generated from growth in each of its operating divisions: retail, franchising, and manufacturing. In the continued weak economic environment, the retail division had a comparative store sales increase of 13.5 percent for the quarter as compared with the same period in 1991. Franchising opened 25 franchised GNC stores in the first quarter of 1992 and has grown to 176 operating stores at the end of the first quarter. Franchising awarded an additional 49 stores in the quarter.
 On March 12, 1992, General Nutrition issued $135 million of 11-3/8 percent senior subordinated notes due March 1, 2000. The net proceeds of this offering were used to redeem all of the company's outstanding $61.6 million in aggregate principal amount of increasing rate notes, to repay $45.6 million of the company's junior subordinated indebtedness and to repay $16 million of outstanding bank term indebtedness. In addition, the remaining 15 percent junior subordinated indebtedness of $34.4 million was converted to senior preferred stock with no cash dividend for one year. As a result of this transaction, interest expense for 1992 is expected to decrease to approximately $27,000,000 from $38,153,000 in 1991. This decrease in interest expense will begin in the second quarter of 1992.
 General Nutrition, Incorporated is a wholly owned subsidiary of General Nutrition Companies, Inc. Substantially all of the outstanding capital stock of General Nutrition Companies, Inc. is held by the Thomas H. Lee Company (a private investment firm), its affiliates and General Nutrition's Management.
 GENERAL NUTRITION, INCORPORATED AND SUBSIDIARIES
 Consolidated Statements of Operations
 (Unaudited)
 (in thousands)
 12 Weeks Ended April 25, 1992 April 27, 1991
 Net revenue $106,972 $93,741
 Cost of sales, including
 costs of warehousing,
 distribution and occupancy 66,917 61,333
 40,055 32,408
 Selling, general and
 administrative 26,285 23,380
 Amortization of goodwill 1,562 1,563
 Operating earnings 12,208 7,465
 Interest expense 8,204 8,854
 Earnings (loss) before income
 taxes and extraordinary items 4,004 (1,389)
 Income taxes 2,237 82
 Earnings (loss) before
 extraordinary items 1,767 (1,471)
 Extraordinary gain (loss) from
 early retirement of debt, net of
 income tax (tax benefits) of
 ($418), $94 (812) 182
 Net earnings (loss) 955 (1,289)
 -0- 5/28/92
 /CONTACT: Edwin J. Kozlowski, senior vice president & chief financial officer, General Nutrition, 412-288-4661/ CO: General Nutrition, Incorporated ST: Pennsylvania IN: REA SU: ERN


CD-JT -- PG015 -- 4910 05/28/92 16:16 EDT
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Date:May 28, 1992
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