___moody’s revises general nutrition centers’ outlook to stable from positive__

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New York, November 04, 2015 — Moody’s Investors Service today revised General Nutrition Centers,

Inc.’s (“GNC”) rating outlook to stable from positive and

affirmed the company’s ratings, including the Ba3 Corporate Family

Rating, Ba3-PD Probability of Default Rating, and Ba2

ratings on the secured credit facilities. GNC’s SGL-1

Speculative Grade Liquidity rating is unchanged.

“The outlook change to stable reflects GNC’s announcement

that


it expects to repurchase an additional $200 million in shares

in the open market before the end of 2015 and that as a result of this

activity, it will exceed its previously-announced targeted

net leverage range of 3.2 to 3.4 times,” stated

Moody’s Assistant Vice President — Analyst Michael Zuccaro.

“Operating performance, while showing sequential improvement,

has also been slightly below our expectations. Therefore we now

expect that debt/EBITDA, per our calculation, will modestly

increase over the current level of 3.6 times.”

Outlook Actions:

..Issuer: General Nutrition Centers, Inc.

…. Outlook, Changed To Stable from

Positive

Affirmations:

..Issuer: General Nutrition Centers, Inc.

…. Corporate Family Rating at Ba3

…. Probability of Default Rating at Ba3-PD

…. Senior Secured Bank Credit Facilities

at Ba2(LGD3)

GNC’s Ba3 Corporate Family Rating is supported by the company’s well-known

brand name in its target markets along with Moody’s favorable view of

the vitamin, mineral, and nutritional supplement (“VMS”) category,

which accounts for about one-third of GNC’s consolidated revenues.

Following recent sales declines, Moody’s anticipates that operating

performance will modestly improve over the next twelve months as GNC focuses

on realigning its pricing and promotional cadence. In addition,

Moody’s expects the company to prioritize product innovation in order

to grow brand equity over time. The rating also reflects GNC’s

relatively stable credit metrics, with moderate debt/EBITDA of around

3.6x as of September 30, 2015 and solid interest coverage

(EBIT to interest) of 4.2x. The company did not announce

how it plans to fund the incremental share repurchases, but Moody’s

believes a combination of cash, cash flow and, potentially,

modest borrowing, is likely. GNC indicated the share repurchases

are being driven by its view that the share price is undervalued.

Key credit concerns include GNC’s sizable concentration in sports nutrition,

which is a much more limited product segment with a relatively smaller

target market than the VMS product category. Also considered is

the potential risk arising from adverse publicity and product liability

claims with regard to certain products sold by GNC, particularly

diet products and herbs, two faddish product categories that are

more exposed to such product liability risks and earnings volatility.

The SGL-1 speculative-grade liquidity rating reflects GNC’s

very good liquidity supported by its internal sources of cash, projected

free cash flow, and undrawn $130 million revolving credit

facility expiring in March 2017. GNC had approximately $164

million of cash as of September 30, 2015 and Moody’s projects

free cash flow over the next 12 months will exceed $200 million.

The company has no material debt maturities until the March 2017 expiration

of its revolver. Moody’s also expects ample cushion within

the 4.25x maximum debt-to-consolidated EBITDA springing

revolver covenant. There are no financial maintenance covenants

in the term loan.

The stable outlook incorporates Moody’s view that that GNC’s operating

performance will modestly improve, benefitting from its highly regarded

brand and positive demographic trends. The stable outlook also

reflects Moody’s expectation that GNC will maintain financial policies

that support credit metrics remaining at levels appropriate for its Ba3

rating.

GNC’s ratings could be upgraded over time if the company demonstrates

stable growth while maintaining strong operating margins in the mid-teens.

An upgrade would require that GNC continue to adhere to a financial policy

that would support debt/EBITDA sustained below 3.5x.

Ratings could be downgraded if the company were to see a material decline

in sales trends or if operating margins were to erode, either through

a weakening competitive profile or material product-related risks.

Ratings could also be lowered if the company’s financial policies were

to become aggressive, such as maintaining higher leverage due to

increased shareholder friendly activities, or if liquidity were

to materially erode, for instance, through the inability to

extend the revolver beyond the current expiration date in March 2017.

Quantitatively, a ratings downgrade could occur if it appears that

debt/EBITDA will rise above 4.5x or EBIT/Interest fall near 2.5x

on a sustained basis.

General Nutrition Centers, Inc., (“GNC”) headquartered

in Pittsburgh, PA, manufactures and retails vitamins,

minerals, nutritional supplements domestically and internationally.

About 75% of its revenue is generated by over 3,500 company

owned stores and website. It also has nearly 3,200 franchise

locations in the U. S. and over 50 countries that generate

about 15% of its revenue, and 2,300 stores within-a-stores

with Rite Aid. Total revenues are about $2.6 billion.

The principal methodology used in these ratings was Retail Industry published

in October 2015. Please see the Credit Policy page on www. moodys. com

for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt,

this announcement provides certain regulatory disclosures in relation

to each rating of a subsequently issued bond or note of the same series

or category/class of debt or pursuant to a program for which the ratings

are derived exclusively from existing ratings in accordance with Moody’s

rating practices. For ratings issued on a support provider,

this announcement provides certain regulatory disclosures in relation

to the rating action on the support provider and in relation to each particular

rating action for securities that derive their credit ratings from the

support provider’s credit rating. For provisional ratings,

this announcement provides certain regulatory disclosures in relation

to the provisional rating assigned, and in relation to a definitive

rating that may be assigned subsequent to the final issuance of the debt,

in each case where the transaction structure and terms have not changed

prior to the assignment of the definitive rating in a manner that would

have affected the rating. For further information please see the

ratings tab on the issuer/entity page for the respective issuer on www. moodys. com.

For any affected securities or rated entities receiving direct credit

support from the primary entity(ies) of this rating action, and

whose ratings may change as a result of this rating action, the

associated regulatory disclosures will be those of the guarantor entity.

Exceptions to this approach exist for the following disclosures,

if applicable to jurisdiction: Ancillary Services, Disclosure

to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit

rating and, if applicable, the related rating outlook or rating

review.

Please see www. moodys. com for any updates on changes to

the lead rating analyst and to the Moody’s legal entity that has issued

the rating.

Please see the ratings tab on the issuer/entity page on www. moodys. com

for additional regulatory disclosures for each credit rating.

Michael M. Zuccaro

Asst Vice President – Analyst

Corporate Finance Group

Moody’s Investors Service, Inc.

250 Greenwich Street

New York, NY 10007

U. S.A.

JOURNALISTS: 212-553-0376

SUBSCRIBERS: 212-553-1653

Janice Hofferber, CFA

Associate Managing Director

Corporate Finance Group

JOURNALISTS: 212-553-0376

SUBSCRIBERS: 212-553-1653

Releasing Office:

Moody’s Investors Service, Inc.

250 Greenwich Street

New York, NY 10007

U. S.A.

JOURNALISTS: 212-553-0376

SUBSCRIBERS: 212-553-1653

Moody’s Revises General Nutrition Centers’ Outlook To Stable From Positive

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