In prior articles, we have written extensively (and sometimes critically) about GNC (NYSE: GNC) and various aspects of the company’s operations. We have complemented management for its responsiveness to our inquiries but have also criticized management for providing unnecessarily optimistic free cash flow projections. We have provided detailed projections for probable free cash flow outcomes and the company’s likelihood of achieving various operating metrics. We have defined what a potential refinancing of the company’s debt could look like and developed projections of the impact on earnings, free cash flows, and interest coverage ratios. Finally, we have commented on the essential irrelevance of speculative acquisition rumors, divestitures, unrelated transactions, and the occasional cheerleading from some we consider overly optimistic about the company.
In the process, we have sometimes been labelled bears on the company, but we prefer to consider ourselves skeptics willing to direct the same critical eye towards companies we consider opportunities as those we consider unjustifiably expensive. Our focus is on separating the proverbial wheat from the chaff – and allowing our estimates, projections, and infrequent prognostications to stand on their relative to actual outcomes. In other words, we won’t cheerlead – we’ll present our case and allow that case to stand on its own merits.
