NEW YORK, Feb. 14 /PRNewswire-FirstCall/ -- Weight Watchers International, Inc. (NYSE:WTW) today announced results for the fourth quarter and the full year ended December 29, 2007.
Fourth Quarter 2007 Results For the fourth quarter of 2007, net revenues increased 21%, or $58.6 million, to $344.0 million. Fully diluted earnings per share in the fourth quarter of 2007 were $0.50 versus $0.45 in the prior year period. The prior year included a benefit of $0.06 per share resulting from a $6.3 million reversal of tax reserves. Excluding this benefit, fully diluted earnings per share increased by 28% to $0.50 from $0.39 in the prior year's fourth quarter.
Net income in the fourth quarter of 2007 was $39.8 million versus $44.3 million in the fourth quarter of 2006. As previously explained, the Company reversed a tax reserve in the fourth quarter of 2006. In addition, during the first quarter of 2007, the Company increased its debt level to finance its self-tender and repurchase of 19.1 million shares. As a result of these transactions, interest expense in the fourth quarter of 2007 was $26.7 million, up from $13.6 million in the fourth quarter of 2006, while fully diluted shares of the Company in the fourth quarter of 2007 decreased to 79.7 million shares from 98.1 million shares in the fourth quarter of 2006.
Full Year 2007 Results For the full year 2007, net revenues increased 19%, or $233.8 million, to $1,467.2 million. Fully diluted earnings per share were $2.48 in 2007 versus $2.11 in the prior year period. Excluding non-recurring items in both years, fully diluted earnings per share were up 21% to $2.50 as compared to $2.06 in the prior year period. These items consist of early extinguishment of debt expense in both years ($0.02 per share in 2007 and $0.01 per share in 2006) and a benefit associated with the reversal of tax reserves in 2006 ($0.06 per share).
Full year 2007 net income was $201.2 million versus $209.8 million in 2006. As previously explained, the Company increased its debt level during the first quarter of 2007. As a result, interest expense in the full year 2007 was $109.3 million, up from $49.5 million in the full year 2006, while fully diluted shares of the Company in the full year 2007 decreased 18%.
Full Year 2008 Guidance The Company provided full year 2008 earnings guidance of between $2.80 and $3.00 per fully diluted share.
Commenting on the Company's full year 2007 results and 2008 guidance, David Kirchhoff, President and Chief Executive Officer, said, "During 2007, we delivered solid financial performance while taking the necessary steps to lay the foundation that will enable us to realize our long-term strategic goals. As I look to 2008, we again anticipate solid financial performance as we continue to strengthen our business and capitalize on our opportunities." 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 fourth quarter and full year 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, http://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 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 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 the Company's filings with the United States Securities and Exchange Commission (which are available from the SEC's EDGAR database at http://www.sec.gov/, at various SEC reference facilities in the United States and via the Company's website at http://www.weightwatchersinternational.com/).
Contact Information: Weight Watchers International, Inc. Brainerd Communicators, Inc. Sarika Sahni Corey Kinger
Manager, Investor Relations (212) 986-6667
(212) 589-2751 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
UNAUDITED December 29, December 30,
2007 2006 ASSETS
Current assets $186.3 $168.5
Property and equipment, net 37.6 31.0
Goodwill, franchise rights acquired and
other intangible assets, net 803.1 764.3
Deferred income taxes 9.9 28.5
Other 9.3 8.4
TOTAL ASSETS $1,046.2 $1,000.7 LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $358.4 $232.9
Long-term debt 1,602.5 830.2
Other 11.6 6.0
TOTAL LIABILITIES 1,972.5 1,069.1 Shareholders' deficit (926.3) (68.4) TOTAL LIABILITIES AND SHAREHOLDERS'
DEFICIT $1,046.2 $1,000.7 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
UNAUDITED Three Months Ended Twelve Months Ended
December 29, December 30, December 29, December 30,
2007 2006 2007 2006 Revenues, net $344.0 $285.5 $1,467.2 $1,233.3
Cost of revenues 163.7 138.0 653.3 557.1
Gross profit 180.3 147.5 813.9 676.2
Marketing expenses 41.7 33.5 205.3 158.9
Selling, general
and administrative
expenses 48.5 35.7 173.0 137.3
Operating income 90.1 78.3 435.6 380.0
Interest expense 26.7 13.6 109.3 49.5
Other income, net 0.7 0.6 3.2 1.4
Early extinguishment
of debt - - 3.0 1.3
Income before income
taxes 64.1 65.3 326.5 330.6
Provision for income
taxes 24.3 21.0 125.3 120.8
Net income $39.8 $44.3 $201.2 $209.8 Earnings Per Share:
Basic $0.50 $0.45 $2.50 $2.13
Diluted $0.50 $0.45 $2.48 $2.11 Weighted average common shares
outstanding:
Basic 79.4 97.4 80.6 98.7
Diluted 79.7 98.1 81.1 99.4 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
OPERATIONAL STATISTICS
UNAUDITED Three Months Ended Twelve Months Ended
December 29, December 30, December 29, December 30,
2007 2006 2007 2006 Total Revenues
(in $ millions)
Meeting Fees 208.7 170.4 880.7 723.1
Product Sales 70.7 61.4 337.7 293.3
Internet Revenues 39.0 31.5 151.6 129.4
Franchise Commissions 3.6 3.3 17.0 19.2
All Other 22.1 18.9 80.1 68.4
Total Revenues 344.0 285.5 1,467.2 1,233.3 North America
(in $ millions)
Meeting Fees 142.6 113.2 603.7 471.8
Product Sales 37.8 35.0 182.9 163.3
Total 180.4 148.3 786.6 635.1 International Revenues
(in $ millions)
Meeting Fees 66.1 57.2 277.0 251.3
Product Sales 33.0 26.4 154.8 130.0
Total 99.1 83.6 431.8 381.2 Paid Weeks (in
millions) (1)
North America Meeting
Paid Weeks 13.8 10.7 58.4 42.7
UK Meeting Paid Weeks 3.0 2.5 12.8 11.6
CE Meeting Paid Weeks 2.4 2.5 10.7 11.4
Other Meeting Paid Weeks 0.6 0.8 2.7 3.1
Sub-total Meeting Paid
Weeks 19.8 16.5 84.6 68.8
Online Paid Weeks 7.9 6.2 31.0 25.2
Total Paid Weeks 27.7 22.7 115.6 94.0 Attendance (in millions)
North America 8.0 7.9 38.1 35.4
UK 2.4 2.5 11.9 11.6
CE 2.1 2.4 10.2 11.1
Other 0.5 0.6 2.5 3.0
Total Attendance 13.0 13.4 62.7 61.1 WeightWatchers.com
(in thousands)
End of Period Active
Online Subscribers (2) 584.0 460.0 584.0 460.0 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 internet companion for
meeting members. A corresponding adjustment to remove eTools
subscribers was made to the first and second fiscal quarters of 2006
for comparability purposes. DATASOURCE: Weight Watchers International, Inc.
CONTACT: Sarika Sahni, Manager, Investor Relations of Weight Watchers International, Inc., +1-212-589-2751; Corey Kinger of Brainerd Communicators, Inc., +1-212-986-6667 Web site: http://www.weightwatchers.com/ http://www.weightwatchersinternational.com/
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