Exhibit 99.1
Contact Information:
Investors:
Weight Watchers International, Inc. Sarika Sahni Investor Relations (212) 589-2751 | Brainerd Communicators, Inc. Corey Kinger (212) 986-6667 |
FOR IMMEDIATE RELEASE
WEIGHT WATCHERS RECEIVES ADVERSE U.K. TAX RULING
NEW YORK, N.Y., February 16, 2010 – Weight Watchers International, Inc. (NYSE: WTW) today announced that it recently received an adverse tax ruling from the U.K. First Tier Tribunal (Tax Chamber) that its U.K. leaders should have been classified as employees for U.K. tax purposes and, as such, the Company should have withheld tax from its leaders pursuant to the U.K. “Pay As You Earn” and national insurance contributions collection rules for the period from April 2001 to April 2007 with respect to services performed by the leaders for the Company’s U.K. subsidiary, Weight Watchers (UK) Limited. The U.K. First Tier Tax Tribunal issued permission to the Company to publish this adverse ruling earlier today. Although the Company is considering all of its options, it fully expects to seek an appeal of this adverse ruling.
The Company previously disclosed, most recently in its Quarterly Report on SEC Form 10-Q for the third quarter of fiscal 2009, that this adverse ruling, if received, could result in a charge covering the period from April 2001 to April 2007 for certain U.K. taxes that should have been withheld from its leaders. In addition, although the Company has not yet been assessed for any period after April 2007, the Company previously disclosed that this adverse ruling, if received, could also result in a charge covering periods subsequent to April 2007. At the time of this prior disclosure, the Company did not record any charge in accordance with accounting guidance for contingencies.
In light of this recent adverse ruling, the Company now expects to record a charge in the fourth quarter of fiscal 2009 in the amount of approximately $37 million for the period from April 2001 through the end of fiscal 2009, inclusive of estimated accrued interest. This current and prior period charge results in a reduction to fiscal 2009 earnings per fully diluted share of approximately $0.33, of which approximately $0.29 relates to prior periods and approximately $0.04 relates to fiscal 2009. Both the prior period and the current year reduction to fiscal 2009 earnings per fully diluted share were not included in the Company’s full year 2009 earnings guidance range.
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 learn 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 and any attachments include “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, including, in particular, earnings guidance and any statements about the Company’s plans, strategies and prospects. The Company generally uses the words “may,” “will,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend” and similar expressions in this news release and any attachments to identify forward-looking statements. The Company bases these forward-looking statements on its current views with respect to future events and financial performance. Actual results could differ materially from those projected in the forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things: competition from other weight management industry participants or the development of more effective or more favorably perceived weight management methods; the Company’s ability to continue to develop innovative new services and products and enhance its existing services and products, or the failure of its services and products to continue to appeal to the market; the effectiveness of the Company’s marketing and advertising programs; the impact on the Weight Watchers brand of actions taken by the Company’s franchisees and licensees; risks and uncertainties associated with the Company’s international operations, including economic, political and social risks and foreign currency risks; the Company’s ability to successfully make acquisitions or enter into joint ventures, including its ability to successfully integrate, operate or realize the projected benefits of such businesses; uncertainties related to a downturn in general economic conditions or consumer confidence; the seasonal nature of the Company’s business; the impact of events that discourage people from gathering with others; the Company’s ability to enforce its intellectual property rights both domestically and internationally, as well as the impact of its involvement in any claims related to intellectual property rights; uncertainties regarding the satisfactory operation of the Company’s information technology or systems; risks associated with unauthorized penetration of the Company’s information security; the impact of disputes with the Company’s franchise operators; the impact of existing and future laws and regulations; the impact of the Company’s debt service obligations and restrictive debt covenants; the possibility that the interests of the Company’s majority owner will conflict with the other holders of the Company’s common stock; and other risks and uncertainties, including those detailed from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission. You should not put undue reliance on any forward-looking statements. You should understand that many important factors, including those discussed herein, could cause the Company’s results to differ materially from those expressed or suggested in any forward-looking statement. Except as required by law, the Company does not undertake any obligation to update or revise these forward-looking statements to reflect new information or events or circumstances that occur after the date of this news release or to reflect the occurrence of unanticipated events or otherwise. Readers are advised to review the Company’s filings with the 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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