Exhibit 99.1
Contact Information:
| | |
| Weight Watchers International, Inc. | | Brainerd Communicators, Inc. |
| Sarika Sahni | | Corey Kinger |
| Manager, Investor Relations | | (212) 986-6667 |
| (212) 589-2751 | | |
WEIGHT WATCHERS ANNOUNCES FIRST QUARTER 2007 RESULTS
NEW YORK, N.Y., May 3, 2007 – Weight Watchers International, Inc. (NYSE: WTW) today announced results for the first quarter ended March 31, 2007.
For the first quarter of 2007, net revenues increased $57.4 million or 16.8% to $399.4 million, up from $342.0 million in the first quarter of 2006. Fully diluted earnings per share were $0.63 in the first quarter of 2007, including a $0.02 per share non-recurring expense associated with the early extinguishment of debt, versus $0.56 in the prior year period. Excluding this non-recurring expense, fully diluted earnings per share were $0.65 for the first quarter of 2007, up 16.1% from the prior year period.
During the first quarter of 2007, the Company increased its debt level to finance the self-tender and repurchase of 19.1 million shares and retired the WeightWatchers.com debt. Net income in the first quarter of 2007 was $53.8 million, lower than the prior year’s first quarter by 5.6% or $3.2 million, primarily because of higher interest expense.
Commenting on results, David Kirchhoff, President and Chief Executive Officer of the Company, said, “During the first quarter, we began to see some of the benefits of our transforming initiatives, particularly Monthly Pass. The Company is taking meaningful steps to achieve its long-term growth aspirations by focusing on improving member success and increasing our overall relevance.”
The Company reaffirms its full year 2007 earnings guidance of between $2.33 and $2.47 per fully diluted share, including $0.02 per share of non-recurring expense associated with the early extinguishment of debt in the first quarter of 2007.
The Company has scheduled a conference call today at 5:00 p.m. ET. During the conference call, David Kirchhoff, President and Chief Executive Officer, and Ann Sardini, Chief Financial Officer, will discuss first quarter results and answer questions from the investment community. Live audio of the conference call will be simultaneously webcast over the Internet on the Company’s corporate website, www.weightwatchersinternational.com. A replay of the webcast will be available on this site for 30 days.
About Weight Watchers International, Inc.
Weight Watchers International, Inc. is the world’s leading provider of weight management services, operating globally through a network of Company-owned and franchise operations. Weight Watchers holds over 50,000 weekly meetings where members receive group support and education about healthy eating patterns, behavior modification and physical activity. WeightWatchers.com provides innovative, subscription weight management products over the Internet and is the leading Internet-based weight management provider in the world. In addition, Weight Watchers offers a wide range of products, publications and programs for those interested in weight loss and weight control.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and beliefs, as well as a number of assumptions concerning future events. These statements are subject to risks, uncertainties, assumptions and other important factors. Readers are cautioned not to put undue reliance on such forward-looking statements because actual results may vary materially from those expressed or implied. The reports filed by the Company pursuant to United States securities laws contain discussions of these risks and uncertainties. The Company assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are advised to review our filings with the United States Securities and Exchange Commission (which are available from the SEC’s EDGAR database at www.sec.gov, at various SEC reference facilities in the United States and via the Company’s website at www.weightwatchersinternational.com).
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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
UNAUDITED
| | | | | | | | |
| | | March 31,
2007 | | | December 30,
2006 | |
ASSETS | | | | | | | | |
Current assets | | $ | 186.6 | | | $ | 154.7 | |
Property and equipment, net | | | 31.9 | | | | 31.0 | |
Goodwill, franchise rights and other intangible assets, net | | | 767.4 | | | | 764.3 | |
Deferred income taxes | | | 22.9 | | | | 43.9 | |
Other | | | 10.4 | | | | 8.5 | |
| | | | | | | | |
TOTAL ASSETS | | $ | 1,019.2 | | | $ | 1,002.4 | |
| | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
Current liabilities | | $ | 268.2 | | | $ | 236.5 | |
Long-term debt | | | 1,795.6 | | | | 830.2 | |
Other | | | 8.3 | | | | 4.1 | |
| | | | | | | | |
TOTAL LIABILITIES | | | 2,072.1 | | | | 1,070.8 | |
| | | | | | | | |
Shareholders’ equity | | | (1,052.9 | ) | | | (68.4 | ) |
| | | | | | | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 1,019.2 | | | $ | 1,002.4 | |
| | | | | | | | |
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
UNAUDITED
| | | | | | | |
| | | Three Months
Ended | |
| | | March 31,
2007 | | April 1,
2006 | |
Revenues, net | | $ | 399.4 | | $ | 342.0 | |
Cost of revenues | | | 173.3 | | | 149.5 | |
| | | | | | | |
Gross profit | | | 226.1 | | | 192.5 | |
Marketing expenses | | | 70.8 | | | 53.9 | |
Selling, general and administrative expenses | | | 39.6 | | | 34.5 | |
| | | | | | | |
Operating income | | | 115.7 | | | 104.1 | |
Interest expense, net | | | 25.2 | | | 11.3 | |
Other income, net | | | — | | | (0.1 | ) |
Early extinguishment of debt | | | 3.0 | | | — | |
| | | | | | | |
Income before income taxes | | | 87.5 | | | 92.9 | |
Provision for income taxes | | | 33.7 | | | 35.9 | |
| | | | | | | |
Net income | | $ | 53.8 | | $ | 57.0 | |
| | | | | | | |
Earnings Per Share: | | | | | | | |
Basic | | $ | 0.63 | | $ | 0.57 | |
| | | | | | | |
Diluted | | $ | 0.63 | | $ | 0.56 | |
| | | | | | | |
Weighted average common shares outstanding: | | | | | | | |
Basic | | | 85.1 | | | 100.5 | |
| | | | | | | |
Diluted | | | 85.7 | | | 101.3 | |
| | | | | | | |
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
OPERATIONAL STATISTICS
UNAUDITED
| | | | |
| | | Three Months
Ended |
| | | March 31,
2007 | | April 1,
2006 |
Total Revenues (in $ millions) | | | | |
Meeting Fees | | 234.9 | | 198.5 |
Product Sales | | 105.3 | | 89.5 |
WeightWatchers.com Revenues | | 35.6 | | 31.2 |
Franchise Commissions | | 5.1 | | 6.2 |
All Other | | 18.5 | | 16.6 |
| | | | |
Total Revenues | | 399.4 | | 342.0 |
| | |
North America Revenues (in $ millions) | | | | |
Meeting Fees | | 155.0 | | 128.1 |
Product Sales | | 56.8 | | 49.7 |
| | | | |
Total | | 211.7 | | 177.8 |
| | |
International Revenues (in $ millions) | | | | |
Meeting Fees | | 79.8 | | 70.5 |
Product Sales | | 48.4 | | 39.8 |
| | | | |
Total | | 128.2 | | 110.3 |
| | |
Paid Weeks (in millions)(1) | | | | |
North America Meeting Paid Weeks | | 14.9 | | 11.8 |
UK Meeting Paid Weeks | | 3.7 | | 3.3 |
CE Meeting Paid Weeks | | 3.2 | | 3.4 |
Other Meeting Paid Weeks | | 0.9 | | 0.9 |
| | | | |
Sub-total Meeting Paid Weeks | | 22.7 | | 19.4 |
Online Paid Weeks | | 7.4 | | 6.1 |
| | | | |
Total Paid Weeks | | 30.1 | | 25.5 |
| | |
WeightWatchers.com (in thousands) | | | | |
End-of-Period Active Online Subscribers(2) | | 603.0 | | 497.0 |
| | |
Attendance (in millions) | | | | |
North America | | 11.1 | | 10.3 |
UK | | 3.7 | | 3.3 |
CE | | 3.2 | | 3.4 |
Other | | 0.8 | | 0.9 |
| | | | |
Total Attendance | | 18.8 | | 17.9 |
Note: Totals may not sum due to rounding.
| (1) | The Paid Week metric reports total paid weeks by Weight Watchers customers in Company-owned operations for a given period. For meetings, Paid Weeks is the sum of total paid commitment plan weeks and total pay-as-you-go weeks for a given period. For Online, Paid Weeks is the total paid Weight Watchers Online subscriber weeks for a given period. |
| (2) | As of the third fiscal quarter of 2006, we began reporting only our end-of-period active subscribers for Weight Watchers Online, our product for non-meeting members. Previously, we had also included subscribers for Weight Watchers eTools, our weight loss companion for meeting members. A corresponding adjustment to remove eTools subscribers was made to the first fiscal quarter of 2006 for comparability purposes. |
