TheTimesquotes the filing: “…management has concluded there is substantial doubt regarding the company’s ability to continue as a going concern within one year from the expected issuance date of the company’s consolidated financial statements.” The debts in question are a $154.7 million loan and a $441.5 million loan, due in 12 months.
TheTimesnotes that GNC’s stock price has been hovering around the $1 mark; it dropped farther, thanks in part to the stock market’s current volatility. TheTimesadded that if the company sustains a $1 stock price for 30 days, it can be delisted. According to GNC’s website, the stock is currently selling at $0.46 per share.
Related: GNC Appoints Chief U.S. Officer GNC Partners With BFG Brasil to Grow Presence in Brazil NPA on COVID-19: Natural Products Retailers are Essential Businesses and Must Remain Open
Jay Jacobowitz, WholeFoods Magazine Merchandising Editor and President and Founder of Retail Insights, reported on the state of GNC in "2020 Retail Insights® Retail Universe for U.S. Premium Natural, Organic Food, Supplement & Personal Care Sales," published in the March issue of WholeFoods. Jacobowitz reported that the vitamin chain channel in general continued to experience stress last year, shrinking by -$264.7 million. GNC continued closing U.S. stores, he added, reducing count by 163 corporate and 87 franchise units. More details can be foundhere.Regarding this latest GNC news,Seeking Alphasays that the filing blames several factors for the cash shortfall, “many long-known or self-inflicted, although it remains to be seen how much the company suffered in the final quarter of the prior year and the direction of operating results since then in the face of growing stress in domestic retail around the coronavirus.” It notes that the filing suggests GNC’s same store sales may have fallen below -4% in the fourth quarter, and says: “Bankruptcy is not necessarily on the immediate horizon, but whatever the outcome, the prospects for common shareholders appear dim.”
Seeking Alpha also reports that GNC will be unable to file its annual 10-K report on time, but expects to do so within 15 days after the deadline.