WEIGHT WATCHERS INTERNATIONAL, INC. NEW YORK, Oct. 29, 2014 /PRNewswire/ -- Weight Watchers International, Inc. (NYSE: WTW) today announced its results for the third quarter of fiscal 2014 and updated its full year fiscal 2014 earnings guidance. Third quarter 2014 results include:
-- Revenues of $345.2 million, down 12.9% versus the prior year period,
with total paid weeks down 12.4%
-- Earnings per fully diluted share (EPS) were $0.67
-- Cash flow provided by operating activities totaled $76 million, and $221
million year-to-date, with a cash balance of $327 million at the end of
the third quarter
"While our Q3 financial results were substantially below 2013 levels, they reflect a slight improvement in our topline trends and demonstrate continued cost discipline," commented Jim Chambers, the Company's President and Chief Executive Officer. "Turning around recruitment declines remains our top priority for 2015. To do this, we are focusing on the upcoming launches of our new offerings and the repositioning of our brand."
Q3 2014 Consolidated Summary
----------------------------
Net Income* (in millions) Fully Diluted EPS
------------------------ -----------------
Three Months Ended Three Months Ended
------------------ ------------------
September 27, September 28, % September 27, September 28, %
2014 2013 2014 2013
Change Change
------ ------
Net Income / EPS $37.9 $60.3 (37.1)% $0.67 $1.07 (37.4)%
Adjustments
-----------
Restructuring Charges 0.4 --- 0.01 ---
$38.3 $60.3 (36.4)% $0.68 $1.07 (36.7)%
Adjusted Net Income / EPS
_________________________________
Note: Totals may not sum due to rounding.
See "Reconciliation of Non-GAAP Financial Measures" attached to this
release for further detail on adjustments to GAAP financial measures.
*Excluding the financials attached to this release, "Net Income"
refers to Net Income attributable to Weight Watchers International,
Inc.
Third quarter 2014 net income was $37.9 million versus $60.3 million in the prior year period. EPS for Q3 2014 was $0.67 versus $1.07 in the prior year period. Foreign currency had a $0.01 benefit to EPS in the third quarter 2014.
Net income for Q3 2014 included $0.7 million ($0.4 million after-tax or $0.01 per fully diluted share) of charges the Company incurred in connection with its previously disclosed plan to restructure its organization. Excluding the restructuring charges, net income was $38.3 million and EPS was $0.68 in Q3 2014.
Q3 2014 Global Results
----------------------
Three Months Ended
------------------
(in millions except percentages September 27, September 28, % Change % Change
and as noted) 2014 2013 Adjusted for
Constant
Currency
--------
Revenues $345.2 $396.3 (12.9)% (13.5)%
Operating Income $91.4 $124.5 (26.6)% (27.2)%
Adjustments
-----------
Restructuring Charges $0.7 ---
---- ---
Adjusted Operating Income $92.1 $124.5 (26.0)% (26.6)%
Total Paid Weeks 42.2 48.1 (12.4)% N/A
Meeting Paid Weeks 18.6 21.2 (12.2)% N/A
Online Paid Weeks 23.5 26.9 (12.6)% N/A
End of Period Active Subscribers (in thousands) 2,946.4 3,368.5 (12.5)% N/A
Monthly Pass (in thousands) 1,247.2 1,423.1 (12.4)% N/A
Online (in thousands) 1,699.3 1,945.5 (12.7)% N/A
_________________________________
Note: Totals may not sum due to rounding.
See "Reconciliation of Non-GAAP Financial Measures" attached to this release for further detail on adjustments to GAAP financial measures.
Third quarter 2014 revenues decreased 13.5% on a constant currency basis versus the prior year period. This decrease was primarily driven by lower revenues in North America. Q3 2014 total paid weeks were down 12.4% as compared to the prior year period, with an Online paid weeks decline of 12.6% and meeting paid weeks decline of 12.2%. These declines were driven by lower active subscriber bases at the start of the quarter for both Monthly Pass and Online and lower recruitments versus the prior year period.
Third quarter 2014 operating income decreased 27.2% on a constant currency basis versus the prior year period. Excluding the Q3 2014 $0.7 million of restructuring charges, Q3 2014 operating income decreased 26.6% on a constant currency basis versus the prior year period. The operating income decline was driven primarily by lower revenues in North America.
Q3 2014 North America Performance
---------------------------------
Three Months Ended % Change
Adjusted for
(in millions except percentages and as noted) Constant
Currency
% Change
--------
September 27, September 28,
2014 2013
---- ----
Service Revenues* $188.7 228.9 (17.6)% (17.2)%
Total Paid Weeks 27.6 33.2 (16.9)% N/A
End of Period Active Subscribers 1,933.1 2,320.4 (16.7)% N/A
(in thousands)
_____________________________
See "Reconciliation of Non-GAAP Financial Measures" attached to this release for further detail on adjustments to GAAP financial measures.
* See Consolidated Statements of Net Income for Service Revenues definition.
Third quarter 2014 service revenues for the North America business were down 17.2% on a constant currency basis versus the prior year period driven by a 16.9% decline in total paid weeks. The paid weeks decline was driven by lower Monthly Pass and Online active subscriber bases at the start of the quarter and lower recruitments as compared to the prior year period. As has been the case throughout 2014, the North America business continued to face strong competition for consumer trial from an evolving competitor set, including mobile apps and activity monitors, during the third quarter 2014.
Q3 2014 UK Performance
----------------------
Three Months Ended % Change % Change
Adjusted for
(in millions except percentages and as noted) Constant
Currency
--------
September 27, September 28,
2014 2013
---- ----
Service Revenues* $26.9 $27.4 (2.0)% (9.5)%
Total Paid Weeks 4.9 5.3 (8.6)% N/A
End of Period Active Subscribers 332.0 357.9 (7.2)% N/A
(in thousands)
_____________________________
See "Reconciliation of Non-GAAP Financial Measures" attached to this release for further detail on adjustments to GAAP financial measures.
* See Consolidated Statements of Net Income for Service Revenues definition.
Third quarter 2014 service revenues for the UK business were down 9.5% on a constant currency basis versus the prior year period driven by an 8.6% decline in total paid weeks. The paid weeks decline was driven by lower Monthly Pass and Online active subscriber bases at the start of the quarter, partially offset by an increase in third quarter 2014 recruitments, as compared to the prior year period.
Q3 2014 CE Performance
----------------------
Three Months Ended % Change
Adjusted for
Constant
(in millions except percentages and as noted) % Change Currency
-------- --------
September 27, September 28,
2014 2013
---- ----
Service Revenues* $53.9 $53.9 (0.1)% 0.1%
Total Paid Weeks 8.5 8.4 1.0% N/A
End of Period Active Subscribers 614.7
(in thousands)
609.5 0.8% N/A
_____________________________
See "Reconciliation of Non-GAAP Financial Measures" attached to this release for further detail on adjustments to GAAP financial measures.
* See Consolidated Statements of Net Income for Service Revenues definition.
Third quarter 2014 service revenues for the Continental Europe (CE) business were up 0.1% on a constant currency basis versus the prior year period. Total paid weeks increased by 1.0%, driven by a 3.8% increase in Online paid weeks. Service revenue was negatively impacted by a 3.9% paid weeks decline in the meetings business. The increase in total paid weeks was primarily driven by the higher active Online subscriber base at the beginning of the quarter and increased Online recruitments compared to the prior year period, which more than offset a lower Monthly Pass starting active base and lower recruitments in the meetings business compared to the prior year period.
Full Year Fiscal 2014 Earnings Guidance
The Company raised its full year fiscal 2014 adjusted earnings guidance to between $1.95 and $2.05 per fully diluted share compared to its previously provided adjusted earnings guidance of between $1.65 and $1.85 per fully diluted share. The Company's full year 2014 earnings guidance incorporates the fact that fiscal 2014 includes a 53rd week, which bridges the last week of December 2014 and the first week of January 2015 and has an expected negative $0.04 per share impact on the full year EPS. Excluded from the above earnings guidance are the following items: the one-time gain of $0.11 per share associated with the Weight Watchers Brazil acquisition, the anticipated full year, aggregate charges of approximately $0.12 per share in connection with the Company's organizational restructuring and the net tax benefit of $0.04 per share associated with the closure of the Company's China business and the establishment of a valuation allowance.
Third Quarter 2014 Conference Call
The Company has scheduled a conference call today at 5:00 p.m. ET. During the conference call, Jim Chambers, President and Chief Executive Officer, Nick Hotchkin, Chief Financial Officer, and Lesya Lysyj, President, North America, will discuss third quarter 2014 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 approximately 90 days.
Statement regarding Non-GAAP Financial Measures
The following provides information regarding non-GAAP financial measures used in this earnings release:
To supplement the Company's consolidated results presented in accordance with accounting principles generally accepted in the United States (GAAP), the Company has disclosed non-GAAP financial measures of operating results that exclude or adjust certain items. Net income, earnings per fully diluted share and operating income with respect to the third quarter of fiscal 2014 are discussed in this release both as reported (on a GAAP basis) and as adjusted (on a non-GAAP basis) to exclude the impact of expenses associated with the Company's previously disclosed restructuring of its organization. Earnings before interest, taxes, depreciation, amortization and stock-based compensation (EBITDAS) is presented in the attachments to this release. In addition, the Company presents certain of its financial results on a constant currency basis in addition to GAAP results. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. In this release and any attachments, the Company calculates constant currency by calculating current-year results using prior-year foreign currency exchange rates.
Management believes these non-GAAP financial measures provide useful supplemental information for its and investors' evaluation of the Company's business performance and are useful for period-over-period comparisons of the performance of the Company's business. While management believes that these financial measures are useful in evaluating the Company's business, this information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly entitled measures reported by other companies. See "Reconciliation of Non-GAAP Financial Measures" attached to this release and reconciliations, if any, included elsewhere in this release for a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures.
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 more than 40,000 meetings each week where members receive group support and learn about healthy eating patterns, behavior modification and physical activity. Weight Watchers provides innovative, digital weight management products through its websites, mobile sites and apps. Weight Watchers is the leading provider of digital weight management products 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, 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, or the Company's ability to successfully expand into new channels of distribution; the ability to successfully implement new strategic initiatives; 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, licensees and suppliers; the impact of the Company's debt service obligations and restrictive debt covenants; uncertainties regarding the satisfactory operation of the Company's information technology or systems; the recognition of asset impairment charges; 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 or impede people from gathering with others or accessing resources; 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; the impact of security breaches or privacy concerns; the impact of disputes with the Company's franchise operators; the impact of existing and future laws and regulations; the possibility that the interests of the Company's majority owner will conflict with other holders of its 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).
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
UNAUDITED
September 27, December 28,
2014 2013
---- ----
ASSETS
Current assets $439.0 $315.7
Property and equipment, net 76.8 87.1
Goodwill, franchise rights and other intangible assets, net 1,002.0 961.4
Deferred financing costs, other 40.5 44.7
TOTAL ASSETS $1,558.3 $1,408.9
======== ========
LIABILITIES AND TOTAL DEFICIT
Current liabilities $378.4 $345.8
Long-term debt 2,340.0 2,358.0
Deferred income taxes, other 197.6 179.7
TOTAL LIABILITIES $2,916.0 $2,883.5
-------- --------
Redeemable noncontrolling interest 6.0 -
Shareholders' deficit (1,363.7) (1,474.6)
-------- --------
TOTAL LIABILITIES AND TOTAL DEFICIT $1,558.3 $1,408.9
======== ========
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
UNAUDITED
Three Months Ended
------------------
September 27, September 28,
2014 2013
---- ----
Service revenues, net (1) $281.9 $322.0
Product sales and other, net
(2) 63.3 74.4
---- ----
Revenues, net 345.2 396.3
Cost of services (3) 122.1 130.3
Cost of product sales and
other (4) 35.5 34.1
---- ----
Cost of revenues 157.6 164.4
Gross profit 187.6 232.0
Marketing expenses 36.8 48.2
Selling, general and
administrative expenses 59.4 59.3
---- ----
Operating income 91.4 124.5
Interest expense 33.0 26.9
Other expense (income), net 1.5 (0.4)
--- ----
Income before income taxes 56.9 98.0
Provision for income taxes 19.1 37.7
---- ----
Net income 37.8 60.3
Net loss attributable to the
noncontrolling interest 0.1 -
--- ---
Net income
attributable
to Weight
Watchers
International,
Inc. $37.9 $60.3
Earnings Per Share
Basic $0.67 $1.07
Diluted $0.67 $1.07
Weighted average common shares
outstanding
Basic 56.7 56.3
Diluted 56.8 56.5
Dividends declared per common
share $ - $0.18
====================== =====
Note: Totals may not sum due
to rounding.
(1)Consists of net meeting fees, Online subscription revenue and eTools subscription
revenue.
(2)Consists of product sales meetings, Online advertising revenue, ecommerce fee, product sales and other, licensing,
publishing, advertising -sponsorship, other revenues, franchise commissions and Monthly Pass franchise fees.
(3)Consists of meeting operating expense and internet cost of revenues excluding Online advertising costs.
(4)Consists of cost of product meetings, Online advertising costs, non-meeting cost of products and other.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
UNAUDITED
Nine Months Ended
-----------------
September 27, September 28,
2014 2013
---- ----
Service revenues, net (1) $917.2 $1,065.9
Product sales and other, net
(2) 234.9 292.2
----- -----
Revenues, net 1,152.1 1,358.0
Cost of services (3) 402.0 427.6
Cost of product sales and
other (4) 113.8 131.1
----- -----
Cost of revenues 515.8 558.7
Gross profit 636.3 799.3
Marketing expenses 198.4 241.1
Selling, general and
administrative expenses 180.9 176.6
----- -----
Operating income 257.0 381.6
Interest expense 89.4 76.3
Other expense, net 2.7 0.8
Gain on Brazil acquisition (10.5) -
Early extinguishment of debt - 21.7
--- ----
Income before income taxes 175.5 282.8
Provision for income taxes 62.0 108.9
---- -----
Net income 113.4 173.9
Net loss attributable to the
noncontrolling interest 0.0 -
--- ---
Net income
attributable
to Weight
Watchers
International,
Inc. $113.4 $173.9
Earnings Per Share
Basic $2.00 $3.10
Diluted $2.00 $3.09
Weighted average common shares
outstanding
Basic 56.6 56.1
Diluted 56.6 56.3
Dividends declared per common
share $ - $0.53
====================== =====
Note: Totals may not sum due
to rounding.
(1)Consists of net meeting fees, Online subscription revenue and eTools subscription
revenue.
(2)Consists of product sales meetings, Online advertising revenue, ecommerce fee, product sales and other, licensing,
publishing, advertising -sponsorship, other revenues, franchise commissions and Monthly Pass franchise fees.
(3)Consists of meeting operating expense and internet cost of revenues excluding Online advertising costs.
(4)Consists of cost of product meetings, Online advertising costs, non-meeting cost of products and other.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
OPERATIONAL STATISTICS
UNAUDITED
Three Months Ended
------------------
September 27, September 28,
2014 2013
---- ----
Meeting Paid Weeks (in millions) (1)
------------------------------------
North America 12.0 14.3
UK 3.0 3.3
CE 2.9 3.1
Other (2) 0.7 0.6
--- ---
Total Meeting Paid Weeks 18.6 21.2
Online Paid Weeks (in millions) (1)
-----------------------------------
North America 15.6 18.9
UK 1.9 2.1
CE 5.6 5.3
Other (2) 0.5 0.6
--- ---
Total Online Paid Weeks 23.5 26.9
Total Paid Weeks (in millions) (1)
----------------------------------
North America 27.6 33.2
UK 4.9 5.3
CE 8.5 8.4
Other (2) 1.2 1.2
Total Paid Weeks 42.2 48.1
End of Period Active Monthly Pass Subscribers (in thousands) (3)
---------------------------------------------------------------
North America 813.1 958.6
UK 196.1 207.6
CE 208.6 219.6
Other (2) 29.3 37.2
---- ----
Total End of Period Active Monthly Pass Subscribers 1,247.2 1,423.1
End of Period Active Online Subscribers (in thousands) (3)
---------------------------------------------------------
North America 1,120.0 1,361.7
UK 135.9 150.4
CE 406.0 389.9
Other (2) 37.3 43.4
---- ----
Total End of Period Active Online Subscribers 1,699.3 1,945.5
Total End of Period Active Base (in thousands) (3)
-------------------------------------------------
North America 1,933.1 2,320.4
UK 332.0 357.9
CE 614.7 609.5
Other (2) 66.7 80.7
---- ----
Total End of Period Active Base 2,946.4 3,368.5
Attendance (in millions)
-----------------------
North America 5.3 6.1
UK 1.5 1.7
CE 1.3 1.4
Other (2) 0.5 0.3
--- ---
Total Attendance 8.6 9.5
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. Total Paid
Weeks is the sum
of Meeting Paid
Weeks and Online
Paid Weeks.
(2) Represents Asia
Pacific and
Emerging Markets.
(3) The End of Period
Active Base metric
reports total
active Weight
Watchers
subscribers in
Company-owned
operations at a
given period end.
End of Period
Active Monthly
Pass Subscribers
is the total
Weight Watchers
Monthly Pass
active subscribers
at a given period
end. End of Period
Active Online
Subscribers is the
total Weight
Watchers Online
active subscribers
at a given period
end. End of Period
Active Base is the
sum of Monthly
Pass active
subscribers and
Weight Watchers
Online active
subscribers at a
given period end.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
OPERATIONAL STATISTICS
UNAUDITED
Nine Months Ended
-----------------
September 27, September 28,
2014 2013
---- ----
Meeting Paid Weeks (in millions) (1)
------------------------------------
North America 38.6 46.6
UK 9.6 10.9
CE 9.9 10.2
Other (2) 2.0 2.0
--- ---
Total Meeting Paid Weeks 60.1 69.7
Online Paid Weeks (in millions) (1)
-----------------------------------
North America 52.5 64.3
UK 6.0 6.8
CE 17.4 16.6
Other (2) 1.6 1.9
--- ---
Total Online Paid Weeks 77.5 89.6
Total Paid Weeks (in millions) (1)
----------------------------------
North America 91.1 110.9
UK 15.6 17.6
CE 27.3 26.9
Other (2) 3.6 3.9
Total Paid Weeks 137.6 159.3
End of Period Active Monthly Pass Subscribers (in thousands) (3)
---------------------------------------------------------------
North America 813.1 958.6
UK 196.1 207.6
CE 208.6 219.6
Other (2) 29.3 37.2
---- ----
Total End of Period Active Monthly Pass Subscribers 1,247.2 1,423.1
End of Period Active Online Subscribers (in thousands) (3)
---------------------------------------------------------
North America 1,120.0 1,361.7
UK 135.9 150.4
CE 406.0 389.9
Other (2) 37.3 43.4
---- ----
Total End of Period Active Online Subscribers 1,699.3 1,945.5
Total End of Period Active Base (in thousands) (3)
-------------------------------------------------
North America 1,933.1 2,320.4
UK 332.0 357.9
CE 614.7 609.5
Other (2) 66.7 80.7
---- ----
Total End of Period Active Base 2,946.4 3,368.5
Attendance (in millions)
-----------------------
North America 18.1 21.8
UK 5.3 6.1
CE 5.1 5.4
Other (2) 1.3 1.1
--- ---
Total Attendance 29.8 34.4
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. Total Paid
Weeks is the sum of
Meeting Paid Weeks
and Online Paid
Weeks.
(2) Represents Asia
Pacific and Emerging
Markets.
(3) The End of Period
Active Base metric
reports total active
Weight Watchers
subscribers in
Company-owned
operations at a
given period end.
End of Period Active
Monthly Pass
Subscribers is the
total Weight
Watchers Monthly
Pass active
subscribers at a
given period end.
End of Period Active
Online Subscribers
is the total Weight
Watchers Online
active subscribers
at a given period
end. End of Period
Active Base is the
sum of Monthly Pass
active subscribers
and Weight Watchers
Online active
subscribers at a
given period end.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN MILLIONS, EXCEPT PERCENTAGES)
UNAUDITED
Q3 2014 Variance
----------------
2014
Constant
Q3 2014 Q3 2013 2014 Currency
------- -------
Currency Constant vs vs
GAAP Adjustment Currency GAAP 2013 2013
---- ---------- -------- ---- ---- ----
Selected Financial Data
Consolidated Company Revenues $345.2 $(2.2) $343.0 $396.3 -12.9% -13.5%
Consolidated Meeting Fees (1) $177.0 $(1.3) $175.7 $198.7 -10.9% -11.5%
Consolidated Online Revenues (2) $104.8 $(0.1) $104.7 $123.3 -15.0% -15.1%
Consolidated Service Revenues (3) $281.9 $(1.4) $280.4 $322.0 -12.5% -12.9%
Consolidated In-Meeting Product Sales (4) $36.0 $(0.5) $35.6 $43.7 -17.6% -18.6%
Consolidated All Other (5) $27.3 $(0.3) $27.0 $30.6 -11.0% -12.1%
North America
Meeting Fees (1) $118.3 $0.5 $118.7 $139.7 -15.3% -15.0%
Online Revenues(2) $70.4 $0.3 $70.7 $89.3 -21.1% -20.8%
Service Revenues (3) $188.7 $0.8 $189.5 $228.9 -17.6% -17.2%
In-Meeting Product Sales (4) $18.6 $0.1 $18.6 $24.1 -22.9% -22.6%
All Other (6) $13.9 $0.0 $13.9 $15.4 -9.8% -9.8%
Total Revenues $221.2 $0.9 $222.0 $268.4 -17.6% -17.3%
UK
Meeting Fees (1) $19.9 $(1.5) $18.4 $20.2 -1.3% -9.0%
Online Revenues(2) $7.0 $(0.5) $6.5 $7.3 -3.9% -10.9%
Service Revenues (3) $26.9 $(2.1) $24.8 $27.4 -2.0% -9.5%
In-Meeting Product Sales (4) $6.6 $(0.5) $6.1 $8.0 -17.4% -23.7%
All Other (6) $4.3 $(0.3) $3.9 $5.0 -15.7% -21.7%
Total Revenues $37.8 $(2.9) $34.9 $40.5 -6.7% -13.8%
CE
Meeting Fees (1) $29.9 $0.0 $29.9 $31.1 -3.9% -3.9%
Online Revenues(2) $24.0 $0.1 $24.1 $22.9 5.0% 5.5%
Service Revenues (3) $53.9 $0.1 $54.0 $53.9 -0.1% 0.1%
In-Meeting Product Sales (4) $9.0 $0.0 $9.1 $9.5 -5.0% -4.8%
All Other (6) $4.2 $0.0 $4.2 $4.4 -4.6% -4.6%
Total Revenues $67.1 $0.2 $67.2 $67.8 -1.1% -0.9%
Other (7)
Meeting Fees (1) $9.0 $(0.2) $8.8 $7.8 16.0% 12.9%
Online Revenues(2) $3.4 $(0.0) $3.4 $3.9 -12.4% -13.2%
Service Revenues (3) $12.4 $(0.3) $12.2 $11.7 6.5% 4.2%
In-Meeting Product Sales (4) $1.8 $(0.1) $1.8 $2.1 -13.9% -16.6%
All Other (6) $4.9 $(0.0) $4.9 $5.8 -14.9% -15.5%
Total Revenues $19.2 $(0.4) $18.8 $19.6 -2.0% -3.9%
Note: Totals may not sum
due to rounding.
(1) "Meeting Fees" are fees that members pay
to attend weekly meetings.
(2) "Online Revenues" are revenues from
Online and eTools subscription products.
(3) "Service Revenues" equal "Meeting Fees"
plus "Online Revenues".
(4) "In-Meeting Product Sales" are sales of
products to members in meetings.
(5) "Consolidated All Other" are revenues
from licensing, franchisees, magazine
subscriptions, third-party advertising
in publications, payments from the sale
of third-party Internet advertising and
By Mail.
(6) "All Other" are revenues from licensing,
magazine subscriptions, third-party
advertising in publications, payments
from the sale of third-party Internet
advertising and By Mail.
(7) Represents Asia Pacific, Emerging Markets
and Franchise revenues.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN MILLIONS, EXCEPT PERCENTAGES)
UNAUDITED
YTD 2014 Variance
-----------------
2014
YTD Constant
YTD 2014 2013 2014 Currency
-------- ----
Currency Constant vs vs
GAAP Adjustment Currency GAAP 2013 2013
---- ---------- -------- ---- ---- ----
Selected Financial Data
Consolidated Company Revenues $1,152.1 $(9.6) $1,142.5 $1,358.0 -15.2% -15.9%
Consolidated Meeting Fees (1) $573.6 $(4.8) $568.8 $665.8 -13.8% -14.6%
Consolidated Online Revenues (2) $343.6 $(1.2) $342.4 $400.1 -14.1% -14.4%
Consolidated Service Revenues (3) $917.2 $(6.0) $911.2 $1,065.9 -13.9% -14.5%
Consolidated In-Meeting Product Sales (4) $137.8 $(2.4) $135.5 $175.3 -21.4% -22.7%
Consolidated All Other (5) $97.0 $(1.2) $95.8 $116.9 -17.0% -18.0%
North America
Meeting Fees (1) $379.8 $2.3 $382.1 $466.7 -18.6% -18.1%
Online Revenues(2) $234.5 $1.6 $236.1 $293.9 -20.2% -19.7%
Service Revenues (3) $614.3 $3.9 $618.2 $760.6 -19.2% -18.7%
In-Meeting Product Sales (4) $69.5 $0.4 $69.9 $99.3 -30.0% -29.7%
All Other (6) $50.2 $0.0 $50.2 $58.9 -14.8% -14.8%
Total Revenues $734.1 $4.2 $738.3 $918.9 -20.1% -19.7%
UK
Meeting Fees (1) $62.9 $(4.8) $58.1 $66.8 -5.9% -13.1%
Online Revenues(2) $21.9 $(1.6) $20.2 $23.0 -5.0% -12.2%
Service Revenues (3) $84.8 $(6.5) $78.3 $89.8 -5.7% -12.8%
In-Meeting Product Sales (4) $24.2 $(1.8) $22.4 $29.5 -17.7% -23.8%
All Other (6) $14.4 $(1.1) $13.3 $17.4 -17.2% -23.3%
Total Revenues $123.4 $(9.3) $114.1 $136.7 -9.7% -16.5%
CE
Meeting Fees (1) $104.7 $(3.1) $101.6 $105.6 -0.9% -3.8%
Online Revenues(2) $76.4 $(1.9) $74.5 $69.8 9.5% 6.7%
Service Revenues (3) $181.1 $(5.0) $176.1 $175.4 3.2% 0.4%
In-Meeting Product Sales (4) $37.9 $(1.2) $36.8 $39.2 -3.2% -6.2%
All Other (6) $16.5 $(0.5) $16.0 $17.8 -7.4% -10.3%
Total Revenues $235.5 $(6.7) $228.8 $232.4 1.3% -1.6%
Other (7)
Meeting Fees (1) $26.2 $0.9 $27.1 $26.6 -1.6% 1.6%
Online Revenues(2) $10.8 $0.8 $11.6 $13.3 -19.1% -13.3%
Service Revenues (3) $37.0 $1.6 $38.6 $40.0 -7.4% -3.4%
In-Meeting Product Sales (4) $6.2 $0.2 $6.4 $7.3 -15.6% -12.5%
All Other (6) $15.9 $0.4 $16.3 $22.7 -30.0% -28.1%
Total Revenues $59.1 $2.3 $61.4 $70.0 -15.6% -12.3%
Note: Totals may not sum
due to rounding.
(1) "Meeting Fees" are fees that members
pay to attend weekly meetings.
(2) "Online Revenues" are revenues from
Online and eTools subscription
products.
(3) "Service Revenues" equal "Meeting
Fees" plus "Online Revenues".
(4) "In-Meeting Product Sales" are sales
of products to members in meetings.
(5) "Consolidated All Other" are revenues
from licensing, franchisees, magazine
subscriptions, third-party
advertising in publications, payments
from the sale of third-party
Internet advertising and By Mail.
(6) "All Other" are revenues from
licensing, magazine subscriptions,
third-party advertising in
publications, payments from the sale
of third-party Internet advertising
and By Mail.
(7) Represents Asia Pacific, Emerging
Markets and Franchise revenues.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN MILLIONS, EXCEPT PERCENTAGES)
UNAUDITED
Q3 2014 Variance
----------------
2014 Constant
Currency
--------
Q3 2014 Q3 2013 2014 2014
------- -------
Adjusted 2014 Adjusted 2014 Adjusted
Currency Constant Constant vs vs vs vs
GAAP Adjustment (1) Adjusted Adjustment Currency Currency GAAP 2013 2013 2013 2013
---- ------------- -------- ---------- -------- -------- ---- ---- ---- ---- ----
Selected Financial Data
Gross Profit $187.6 $(0.2) $187.4 $(1.0) $186.5 $186.3 $232.0 -19.1% -19.2% -19.6% -19.7%
Gross Margin 54.3% 54.3% 54.4% 54.3% 58.5%
Selling, General and Administrative Expenses $59.4 $(0.9) $58.4 $(0.3) $59.0 $58.1 $59.3 0.1% -1.4% -0.5% -2.0%
Operating Income $91.4 $0.7 $92.1 $(0.8) $90.6 $91.3 $124.5 -26.6% -26.0% -27.2% -26.6%
Operating Income Margin 26.5% 26.7% 26.4% 26.6% 31.4%
Net income attributable to Weight Watchers International, Inc. $37.9 $0.4 $38.3 $(0.5) $37.4 $37.8 $60.3 -37.1% -36.4% -38.0% -37.2%
Earnings Per Share $0.67 $0.01 $0.68 $(0.01) $0.66 $0.67 $1.07 -37.4% -36.7% -38.3% -37.5%
Note: Totals may not sum due to
rounding.
(1) Excludes the impact of the
$0.7 million ($0.4 million
after tax) of charges
associated with the Company's
previously disclosed plan to
restructure its organization.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN MILLIONS, EXCEPT PERCENTAGES)
UNAUDITED
YTD 2014 Variance
-----------------
2014 Constant Currency
----------------------
2014 2014
YTD 2014 YTD 2013 Adjusted Adjusted
-------- --------
Adjusted 2014 vs 2014 vs
Currency Constant Constant vs 2013 vs 2013
GAAP Adjustment (1) Adjusted Adjustment Currency Currency GAAP Adjustment (2) Adjusted 2013 Adjusted 2013 Adjusted
---- ------------- -------- ---------- -------- -------- ---- ------------- -------- ---- -------- ---- --------
Selected Financial Data
Gross Profit $636.3 $4.5 $640.8 $(4.9) $631.4 $635.9 $799.3 $ - $799.3 -20.4% -19.8% -21.0% -20.4%
Gross Margin 55.2% 55.6% 55.3% 55.7% 58.9% 58.9%
Selling, General and Administrative Expenses $180.9 $(6.4) $174.5 $(1.1) $179.8 $173.4 $176.6 $ - $176.6 2.4% -1.2% 1.8% -1.8%
Operating Income $257.0 $10.9 $267.9 $(2.3) $254.7 $265.6 $381.6 $ - $381.6 -32.7% -29.8% -33.3% -30.4%
Operating Income Margin 22.3% 23.3% 22.3% 23.2% 28.1% 28.1%
Gain on Brazil acquisition $(10.5) $(10.5) $ - $ - $(10.5) $ - $ - $ - $ - - - - -
Early extinguishment of debt $ - $ - $ - $ - $ - $ - $21.7 $(21.7) $ - -100.0% - -100.0% -
Net income attributable to Weight Watchers International, Inc. $113.4 $(2.1) $111.3 $(1.5) $112.0 $109.8 $173.9 $13.3 $187.3 -34.8% -40.6% -35.6% -41.3%
Earnings Per Share $2.00 $(0.04) $1.96 $(0.03) $1.98 $1.94 $3.09 $0.24 $3.32 -35.1% -40.9% -36.0% -41.6%
Note: Totals may not sum due to
rounding.
(1) Excludes the impact of the gain
of $10.5 million ($6.4 million
after tax) recognized in connection
with the Brazil acquisition due to
an adjustment of the Company's
previously held equity interest to
fair value offset by a charge
associated with the settlement of
the royalty-free arrangement of
the Brazil partnership, the $10.9
million ($6.6 million after tax) of
charges associated with the
Company's previously disclosed plan
to restructure its organization and
the $2.4 million tax benefit, net.
(2) Excludes the impact of the $21.7
million ($13.3 million after tax)
early extinguishment of debt charge
associated with the Company's
previously reported debt
refinancing.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN MILLIONS, EXCEPT RATIO)
UNAUDITED
Trailing Twelve
Q4 2013 Q1 2014 Q2 2014 Q3 2014 Months
------- ------- ------- ------- ------
Net Debt to EBITDAS
Net Income $30.8 $21.5 $54.0 $37.9 $144.2
Interest 26.8 25.3 31.2 33.0 116.2
Taxes 21.7 14.5 28.4 19.1 83.8
Depreciation and Amortization 11.8 11.5 12.2 12.7 48.1
Stock-based Compensation 1.7 1.4 3.0 2.8 9.0
EBITDAS $92.9 $74.2 $128.7 $105.5 $401.3
-----
Total Debt $2,370.0
Less: Cash 327.4
Net Debt $2,042.6
Net Debt to EBITDAS 5.1 X
Note: Totals may not sum due to rounding.
Contact Information:
Investors:
Brainerd Communicators, Inc.
Corey Kinger
(212) 986-6667
kinger@braincomm.com
SOURCE Weight Watchers International, Inc.
