WTW
$10.29
Weight Watchers International
($.06)
(.58%)
Earnings Details
2nd Quarter June 2016
Thursday, August 04, 2016 4:15:00 PM
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Summary

Weight Watchers International Misses

Weight Watchers International (WTW) reported 2nd Quarter June 2016 earnings of $0.46 per share on revenue of $309.8 million. The consensus earnings estimate was $0.49 per share on revenue of $319.0 million. The Earnings Whisper number was $0.49 per share. Sales were flat year-over-year.

The company said it now expects 2016 earnings of $0.90 to $1.05 per share, including a one-time benefit of $0.10 per share. The company's previous guidance was earnings of $0.80 to $1.05 per share and the current consensus earnings estimate is $0.98 per share for the year ending December 31, 2016.

Weight Watchers International Inc is a provider of weight management services. The Company operates through a network of Company-owned and franchise operations. The Company' products include Weight Watchers Online and Weight Watchers eTools.

Results
Reported Earnings
$0.46
Earnings Whisper
$0.49
Consensus Estimate
$0.49
Reported Revenue
$309.8 Mil
Revenue Estimate
$319.0 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Weight Watchers Announces Second Quarter 2016 Results

Revenues of $310 million and EPS of $0.46

-- North America business continues positive growth trend, with:

-- End of Period Subscribers up 9% year-over-year

-- Paid Weeks up 8% year-over-year

-- Revenues up 5% year-over-year

-- Global End of Period Subscribers up 5% year-over-year to 2.9 million

-- Global Operating Income up 5% year-over-year to $74 million

-- Full year 2016 EPS guidance range of $0.90 to $1.05

-- Reflecting expected revenue and profit growth for the second half and the full year

Incorporating an estimated benefit from an R&D tax credit of approximately $0.10 per share in Q3 2016

Weight Watchers International, Inc. (WTW) today announced its results for the second quarter of fiscal 2016 and updated its full year fiscal 2016 earnings guidance.

"Our second quarter represents our third successive quarter of year-over-year member recruitment growth, keeping us on-track to deliver revenue and profit growth for the full year 2016. We are encouraged by our transformation momentum and the solid foundation we are building for 2017 and beyond," said Jim Chambers, the Company’s President and Chief Executive Officer.

Q2 2016 Consolidated Global Results

(in millions except percentages, per share amounts, and as noted)
Three Months Ended
% Change
% Change Adjusted for Constant Currency
July 2,
July 4,
2016
2015
Service Revenues, net
$251.6
$250.4
0.5%
1.2%
Product Sales and Other, net
58.2
59.4
(2.0)% (1.1)%
Revenues, net
$309.8 $309.8
0.0%
0.7%
Operating Income
$73.7
$70.6
4.5%
Adjustments
4.9%
Restructuring Charges
-
0.2
Adjusted Operating Income
$73.7
$70.8
4.1%
4.6%
Net Income*
$30.5
$27.9
9.4%
10.2%
EPS
$0.46
$0.49
(5.2)% (4.5)%
Total Paid Weeks
41.1
39.5
4.2%
N/A
Meeting(1) Paid Weeks
18.5
17.6
5.5%
N/A
Online(2) Paid Weeks
22.6
21.9
3.1%
N/A
End of Period Subscribers(3) (in thousands)
2,937.0
2,797.9
5.0%
N/A
Meeting Subscribers (in thousands)
1,262.8
1,184.9
6.6%
N/A
Online Subscribers
(in thousands)
1,674.2
1,613.0
3.8%
N/A
Total Attendance (in millions)
9.0
8.6
4.5%
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.

(1) "Meetings" refers to monthly commitment plan subscribers, "pay-as-you-go" members, Total Access subscribers and other meetings members.

(2) "Online" refers to Weight Watchers Online, Weight Watchers OnlinePlus, Personal Coaching and other digital subscription products.

(3) "Subscribers" refers to meetings members and Online subscribers who participate in recurring billing programs, such as the Company’s monthly commitment plans for its meetings business.

*Except in the case of the financials attached to this release, "Net Income" refers to Net Income attributable to Weight Watchers International, Inc.

Q2 2016 Business and Financial Highlights

End of Period Subscribers were up 5.0% for Q2 2016 versus the prior year period, driven by continued recruitment growth in North America where End of Period Subscribers increased 8.6%, partially offset by declines in the United Kingdom and Continental Europe. Globally in Q2 2016, End of Period Meetings Subscribers were up 6.6% and End of Period Online Subscribers were up 3.8%, both driven by solid gains in North America.

Total Paid Weeks in Q2 2016 were up 4.2% as compared to the prior year period, with a Meeting Paid Weeks increase of 5.5% and an Online Paid Weeks increase of 3.1%. These gains were driven by strength in North America where Total Paid Weeks grew 8.1% year-over-year, partially offset by declines in international segments.

Total Revenues in Q2 2016 were $309.8 million. On a constant-currency basis, total revenues increased 0.7% versus the prior year period.

Service Revenues in Q2 2016 were $251.6 million. On a constant-currency basis, these revenues increased 1.2% versus the prior year period, as growth in North America of 4.8% on a constant currency basis was partially offset by declines in international markets.

Product Sales and Other in Q2 2016 were $58.2 million. On a constant-currency basis, these revenues decreased 1.1% versus the prior year period as growth in North America of 10.9% on a constant currency basis was offset by declines in international markets.

Operating Income in Q2 2016 was $73.7 million. On a constant-currency basis, operating income increased 4.9% versus the prior year period. Adjusted Operating Income in Q2 2016 was also $73.7 million, up 4.6% on a constant-currency basis versus the prior year period.

Tax Rate in Q2 2016 was 31.5%, as compared to 40.2% in the prior year period. Q2 2016 results include a $2.5 million reversal of a valuation allowance related to tax benefits for foreign losses that are now expected to be realized.

GAAP Net Income was $30.5 million in Q2 2016, compared to $27.9 million in the prior year period.

GAAP Earnings per fully diluted share (EPS) was $0.46 in Q2 2016, compared to $0.49 per fully diluted share in the prior year period.

Items Affecting Year Over Year EPS Comparability

Q2 2016 had a higher share count as compared to Q2 2015 which negatively impacted Q2 2016 EPS by $0.07.

Q2 2016 results benefited from a $2.5 million (or $0.04 per fully diluted share) reversal of a valuation allowance related to tax benefits for foreign losses that are now expected to be realized.

Q2 2015 results benefited from a gain on early extinguishment of debt of $6.7 million ($4.1 million after tax or $0.07 per fully diluted share) for its previously disclosed debt prepayment in the quarter.

Other Items

Cash balance was $114.5 million as of July 2, 2016, which included $48.0 million outstanding under the Company’s revolving credit facility.

Revolving Credit Facility: Subsequent to the end of Q2 2016, the Company paid down $25.0 million of the $48.0 million outstanding on its revolving credit facility. The Company anticipates paying down the remaining balance during Q3 2016.

R&D Tax Credit: Prompted by Congress’ decision to make the Federal R&D tax credit permanent in December 2015, the Company has undertaken a comprehensive assessment of its U.S. taxes and its technology investments. While the analysis is not yet complete, it is currently estimated that the Company may be eligible for tax credits relating to its previously incurred technology investments. Subject to completion of its more comprehensive assessment, in Q3 2016, the Company expects to record a tax benefit which will positively impact Q3 EPS by approximately $0.10 per share.

Full Year Fiscal 2016 Earnings Guidance

The Company is providing 2016 earnings guidance of between $0.90 and $1.05 per fully diluted share. This GAAP earnings guidance incorporates an estimated $0.10 per fully diluted share benefit from an R&D tax credit in Q3 2016 as described above.

Second Quarter 2016 Conference Call and Webcast

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, and Nick Hotchkin, Chief Financial Officer, will discuss the second quarter 2016 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. Operating income and operating income margin, gross profit and gross profit margin, and selling, general and administrative expenses are discussed in this release both as reported (on a GAAP basis) and, with respect to the second quarter of fiscal 2015, as adjusted (on a non-GAAP basis), as applicable, to exclude the impact of charges associated with the Company’s previously disclosed 2015 plan to restructure 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 commercial provider of weight management services, operating globally through a network of Company-owned and franchise operations. Weight Watchers holds more than 32,000 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 paid digital subscription 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 new, innovative 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 or respond to consumer trends; the ability to successfully implement new strategic initiatives; the effectiveness of the Company’s advertising and marketing programs, including the strength of its social media presence; the impact on the Weight Watchers brand of actions taken by the Company’s franchisees, licensees, suppliers and other partners; the impact of the Company’s debt service obligations and restrictive debt covenants; the inability to refinance the Company’s debt obligations on favorable terms or at all; uncertainties regarding the satisfactory operation of the Company’s information technology or systems; the impact of security breaches or privacy concerns; the recognition of asset impairment charges; the loss of key personnel, strategic partners, or consultants or failure to effectively manage and motivate the Company’s workforce; the inability to renew certain of the Company’s licenses, or the inability to do so on terms that are favorable to the Company; the expiration or early termination by the Company of leases; risks and uncertainties associated with the Company’s international operations, including regulatory, economic, political and social risks and foreign currency risks; uncertainties related to a downturn in general economic conditions or consumer confidence; the Company’s ability to successfully make acquisitions or enter into joint ventures, including its ability to successfully integrate, operate or realize the anticipated benefits of such businesses; 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 outcomes of litigation or regulatory actions; the impact of existing and future laws and regulations; the Company’s failure to maintain effective internal control over financial reporting; the possibility that the interests of Artal Group S.A., who effectively controls the Company, will conflict with 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).

Investors:
Media:
Brainerd Communicators, Inc. Stacie Sherer
Corey Kinger
(212) 589-2737
(212) 986-6667
stacie.sherer@weightwatchers.com
kinger@braincomm.com
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
UNAUDITED
July 2,
January 2,
2016
2016
ASSETS
Current assets
$
216.2
$
351.5
Property and equipment, net
51.9
58.2
Goodwill, franchise rights and other intangible assets, net 984.4
973.0
Other assets
13.3
11.5
TOTAL ASSETS
$
1,265.8
$
1,394.2
LIABILITIES AND TOTAL DEFICIT
Current liabilities
$
362.3
$
503.1
Long-term debt
1,988.9
1,996.3
Deferred income taxes, other
181.0
180.5
TOTAL LIABILITIES
$
2,532.2
$
2,679.9
Redeemable noncontrolling interests
4.8
4.5
Shareholders’ deficit
(1,271.2)
(1,290.2)
TOTAL LIABILITIES AND TOTAL DEFICIT
$
1,265.8
$
1,394.2
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
UNAUDITED
Three Months Ended
July 2,
July 4,
2016
2015
Services revenues, net (1)
$
251.6
$
250.4
Product sales and other, net (2)
58.2
59.4
Revenues, net
309.8
309.8
Cost of services (3)
119.8
120.0
Cost of product sales and other (4)
29.0
30.4
Cost of revenues
148.7
150.4
Gross profit
161.0
159.4
Marketing expenses
41.2
40.3
Selling, general and administrative expenses
46.1
48.5
Operating income
73.7
70.6
Interest expense
28.6
30.5
Other expense, net
0.6
0.3
Extinguishment of debt
-
(6.7)
Income before income taxes
44.5
46.5
Provision for income taxes
14.0
18.7
Net income
30.5
27.8
Net loss attributable to the noncontrolling interest
0.0
0.1
Net income attributable to Weight Watchers International, Inc.
$
30.5
$
27.9
Earnings Per Share
Basic
$
0.48
$
0.49
Diluted
$
0.46
$
0.49
Weighted average common shares outstanding:
Basic
63.7
57.1
Diluted
65.9
57.2
Note: Totals may not sum due to rounding.
(1)
Consists of net "Meeting Fees" and "Online Subscription Revenues". "Meeting Fees" consist of the fees associated with the Company’s monthly commitment plans for unlimited access to meetings and other payment arrangements for access to meetings, including the Company’s "pay-as-you-go" payment arrangement and fees associated with the Company’s Total Access product. "Online Subscription Revenues" consist of the fees associated with subscriptions for the Company’s Online subscription products, including the Company’s Personal Coaching product.
(2)
Consists of sales of products to members in meetings and Online, revenues from licensing, magazine subscriptions, third-party advertising in publications, payments from the sale of third-party Internet advertising and By Mail, and franchise fees with respect to commitment plans and commissions.
(3)
Consists of meeting operating expense and Internet cost of revenues excluding Internet advertising costs.
(4)
Consists of meetings cost of product, Internet 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
Six Months Ended
July 2,
July 4,
2016
2015
Services revenues, net (1)
$
495.3
$
500.3
Product sales and other, net (2)
121.4
131.5
Revenues, net
616.7
631.9
Cost of services (3)
244.4
250.3
Cost of product sales and other (4)
61.5
64.9
Cost of revenues
306.0
315.2
Gross profit
310.7
316.7
Marketing expenses
127.7
127.6
Selling, general and administrative expenses
95.7
100.4
Operating income
87.3
88.6
Interest expense
58.6
61.6
Other expense, net
0.5
0.9
Extinguishment of debt
-
(11.5)
Income before income taxes
28.1
37.6
Provision for income taxes
8.4
15.3
Net income
19.7
22.3
Net loss attributable to the noncontrolling interest
0.1
0.1
Net income attributable to Weight Watchers International, Inc.
$
19.7
$
22.4
Earnings Per Share
Basic
$
0.31
$
0.39
Diluted
$
0.30
$
0.39
Weighted average common shares outstanding:
Basic
63.6
56.9
Diluted
65.9
57.0
Note: Totals may not sum due to rounding.
(1)
Consists of net "Meeting Fees" and "Online Subscription Revenues". "Meeting Fees" consist of the fees associated with the Company’s monthly commitment plans for unlimited access to meetings and other payment arrangements for access to meetings, including the Company’s "pay-as-you-go" payment arrangement and fees associated with the Company’s Total Access product. "Online Subscription Revenues" consist of the fees associated with subscriptions for the Company’s Online subscription products, including the Company’s Personal Coaching product.
(2)
Consists of sales of products to members in meetings and Online, revenues from licensing, magazine subscriptions, third-party advertising in publications, payments from the sale of third-party Internet advertising and By Mail, and franchise fees with respect to commitment plans and commissions.
(3)
Consists of meeting operating expense and Internet cost of revenues excluding Internet advertising costs.
(4)
Consists of meetings cost of product, Internet advertising costs, non-meeting cost of products and other.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
OPERATIONAL STATISTICS
UNAUDITED
Three Months Ended
July 2,
July 4,
2016
2015
Meeting Paid Weeks (in millions)
(1)
North America
12.2
10.9
UK
2.7
2.8
CE
3.0
3.2
Other (2)
0.6
0.6
Total Meeting Paid Weeks
18.5
17.6
Online Paid Weeks (in millions)
(1)
North America
14.7
14.0
UK
1.6
1.7
CE
5.7
5.7
Other (2)
0.6
0.5
Total Online Paid Weeks
22.6
21.9
Total Paid Weeks (in millions)
(1)
North America
27.0
24.9
UK
4.3
4.6
CE
8.7
8.9
Other (2)
1.2
1.1
Total Paid Weeks
41.1
39.5
End of Period Meeting Subscribers (in thousands) (3)
North America
843.3
740.6
UK
178.0
187.9
CE
208.4
228.0
Other (2)
33.0
28.5
Total End of Period Meeting Subscribers
1,262.8
1,184.9
End of Period Online Subscribers (in thousands) (3)
North America
1,076.3
1,026.5
UK
122.1
129.0
CE
433.7
421.6
Other (2)
42.1
35.9
Total End of Period Online Subscribers
1,674.2
1,613.0
Total End of Period Subscribers (in thousands) (3)
North America
1,919.6
1,767.1
UK
300.1
316.8
CE
642.1
649.6
Other (2)
75.1
64.4
Total End of Period Subscribers
2,937.0
2,797.9
Attendance (in millions)
North America
5.9
5.1
UK
1.4
1.5
CE
1.4
1.5
Other (2)
0.3
0.4
Total Attendance
9.0
8.6
____
Note: Totals may not sum due to rounding.
(1) The "Paid Weeks" metric reports paid weeks by Weight Watchers customers in Company-owned operations for a given period as follows: (i) "Meeting Paid Weeks" is the sum of total paid commitment plan weeks (including Total Access) and total "pay-as-you-go" weeks; (ii) "Online Paid Weeks" is the total paid subscription weeks for the Company’s digital subscription products (including Personal Coaching); and (iii) "Total Paid Weeks" is the sum of Meeting Paid Weeks and Online Paid Weeks, in each case for a given period.
(2) Represents Asia Pacific and emerging markets.
(3) The "End of Period Subscribers" metric reports Weight Watchers subscribers in Company-owned operations at a given period end as follows: (i) "End of Period Meeting Subscribers" is the total Weight Watchers monthly commitment plan subscribers (including Total Access); (ii) "End of Period Online Subscribers" is the total number of Weight Watchers Online, Weight Watchers OnlinePlus and Personal Coaching subscribers; and (iii) "End of Period Subscribers" is the sum of End of Period Meeting Subscribers and End of Period Online Subscribers, in each case at a given period end.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
OPERATIONAL STATISTICS
UNAUDITED
Six Months Ended
July 2,
July 4,
2016
2015
Meeting Paid Weeks (in millions)
(1)
North America
23.7
21.5
UK
5.4
5.7
CE
5.9
6.4
Other (2)
1.3
1.2
Total Meeting Paid Weeks
36.2
34.8
Online Paid Weeks (in millions)
(1)
North America
28.8
27.5
UK
3.1
3.5
CE
11.1
11.3
Other (2)
1.1
1.0
Total Online Paid Weeks
44.1
43.3
Total Paid Weeks (in millions)
(1)
North America
52.5
49.0
UK
8.5
9.1
CE
17.0
17.6
Other (2)
2.4
2.2
Total Paid Weeks
80.3
78.0
End of Period Meeting Subscribers (in thousands) (3)
North America
843.3
740.6
UK
178.0
187.9
CE
208.4
228.0
Other (2)
33.0
28.5
Total End of Period Meeting Subscribers
1,262.8
1,184.9
End of Period Online Subscribers (in thousands) (3)
North America
1,076.3
1,026.5
UK
122.1
129.0
CE
433.7
421.6
Other (2)
42.1
35.9
Total End of Period Online Subscribers
1,674.2
1,613.0
Total End of Period Subscribers (in thousands) (3)
North America
1,919.6
1,767.1
UK
300.1
316.8
CE
642.1
649.6
Other (2)
75.1
64.4
Total End of Period Subscribers
2,937.0
2,797.9
Attendance (in millions)
North America
12.0
10.3
UK
3.0
3.2
CE
2.9
3.3
Other (2)
0.7
0.8
Total Attendance
18.6
17.7
____
Note: Totals may not sum due to rounding.
(1) The "Paid Weeks" metric reports paid weeks by Weight Watchers customers in Company-owned operations for a given period as follows: (i) "Meeting Paid Weeks" is the sum of total paid commitment plan weeks (including Total Access) and total "pay-as-you-go" weeks; (ii) "Online Paid Weeks" is the total paid subscription weeks for the Company’s digital subscription products (including Personal Coaching); and (iii) "Total Paid Weeks" is the sum of Meeting Paid Weeks and Online Paid Weeks, in each case for a given period.
(2) Represents Asia Pacific and emerging markets.
(3) The "End of Period Subscribers" metric reports Weight Watchers subscribers in Company-owned operations at a given period end as follows: (i) "End of Period Meeting Subscribers" is the total Weight Watchers monthly commitment plan subscribers (including Total Access); (ii) "End of Period Online Subscribers" is the total number of Weight Watchers Online, Weight Watchers OnlinePlus and Personal Coaching subscribers; and (iii) "End of Period Subscribers" is the sum of End of Period Meeting Subscribers and End of Period Online Subscribers, in each case at a given period end.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN MILLIONS, EXCEPT PERCENTAGES)
UNAUDITED
Q2 2016 Variance
2016
Constant
Q2 2016
Q2 2015
2016
Currency
Currency
Constant
vs
vs
GAAP
Adjustment
Currency
GAAP
2015
2015
Selected Financial Data
Consolidated Company Revenues
$
309.8
$
2.3
$
312.0
$
309.8
0.0%
0.7%
Consolidated Meeting Fees (1)
$
160.6
$
1.5
$
162.1
$
155.9
3.0%
4.0%
Consolidated Online Subscription Revenues (2)
$
90.9
$
0.3
$
91.2
$
94.5
-3.7%
-3.4%
Consolidated Service Revenues (3)
$
251.6
$
1.7
$
253.3
$
250.4
0.5%
1.2%
Consolidated Product Sales (4) and All Other (5) $
58.2
$
0.5
$
58.7
$
59.4
-2.0%
-1.1%
North America
Meeting Fees (1)
$
114.9
$
0.4
$
115.3
$
105.2
9.2%
9.6%
Online Subscription Revenues (2)
$
63.0
$
0.2
$
63.2
$
65.2
-3.3%
-3.0%
Service Revenues (3)
$
177.9
$
0.6
$
178.6
$
170.4
4.4%
4.8%
Product Sales and Other (4)
$
33.6
$
0.1
$
33.7
$
30.4
10.6%
10.9%
Total Revenues
$
211.5
$
0.7
$
212.3
$
200.8
5.4%
5.7%
UK
Meeting Fees (1)
$
15.1
$
1.1
$
16.1
$
17.1
-11.7%
-5.4%
Online Subscription Revenues (2)
$
5.1
$
0.4
$
5.4
$
6.0
-15.6%
-9.5%
Service Revenues (3)
$
20.1
$
1.4
$
21.6
$
23.0
-12.7%
-6.5%
Product Sales and Other (4)
$
7.6
$
0.5
$
8.1
$
9.7
-22.0%
-16.5%
Total Revenues
$
27.7
$
2.0
$
29.7
$
32.8
-15.5%
-9.4%
CE
Meeting Fees (1)
$
24.7
$
(0.4)
$
24.3
$
27.3
-9.7%
-11.1%
Online Subscription Revenues (2)
$
20.1
$
(0.4)
$
19.7
$
20.5
-2.2%
-4.1%
Service Revenues (3)
$
44.8
$
(0.7)
$
44.0
$
47.9
-6.5%
-8.1%
Product Sales and Other (4)
$
12.3
$
(0.2)
$
12.1
$
14.3
-14.2%
-15.6%
Total Revenues
$
57.0
$
(0.9)
$
56.1
$
62.2
-8.3%
-9.8%
Other (6)
Meeting Fees (1)
$
6.0
$
0.3
$
6.3
$
6.3
-5.2%
0.0%
Online Subscription Revenues (2)
$
2.8
$
0.1
$
2.9
$
2.8
0.5%
3.2%
Service Revenues (3)
$
8.8
$
0.4
$
9.2
$
9.1
-3.5%
1.0%
Product Sales (4) and All Other (5)
$
4.7
$
0.1
$
4.8
$
4.9
-4.4%
-2.5%
Total Revenues
$
13.5
$
0.5
$
14.0
$
14.0
-3.8%
-0.2%
____
Note: Totals may not sum due to rounding.
(1) "Meeting Fees" consist of the fees associated with the Company’s monthly commitment plans for unlimited access to meetings and other payment arrangements for access to meetings, including the Company’s "pay-as-you-go" payment arrangement and fees associated with the Company’s Total Access product.
(2) "Online Subscription Revenues" consist of the fees associated with subscriptions for the Company’s Online subscription products, including the Company’s Personal Coaching product.
(3) "Service Revenues" equal "Meeting Fees" plus "Online Subscription Revenues".
(4) "Product Sales" are sales of products to members in meetings and Online, and "Other" are revenues from licensing, magazine subscriptions, third-party advertising in publications, payments from the sale of third-party Internet advertising and By Mail.
(5) "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, and franchise fees with respect to commitment plans and commissions.
(6) 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
First Half 2016 Variance
2016
Constant
First Half 2016
First Half 2015
2016
Currency
Currency
Constant
vs
vs
GAAP
Adjustment
Currency
GAAP
2015
2015
Selected Financial Data
Consolidated Company Revenues
$
616.7
$
7.7
$
624.3
$
631.9
-2.4%
-1.2%
Consolidated Meeting Fees (1)
$
316.4
$
4.4
$
320.7
$
313.8
0.8%
2.2%
Consolidated Online Subscription Revenues (2)
$
178.9
$
1.5
$
180.5
$
186.5
-4.1%
-3.3%
Consolidated Service Revenues (3)
$
495.3
$
5.9
$
501.2
$
500.3
-1.0%
0.2%
Consolidated Product Sales (4) and All Other (5) $
121.4
$
1.8
$
123.2
$
131.5
-7.7%
-6.4%
North America
Meeting Fees (1)
$
226.6
$
1.2
$
227.8
$
212.0
6.9%
7.5%
Online Subscription Revenues (2)
$
125.7
$
0.6
$
126.4
$
128.3
-2.0%
-1.5%
Service Revenues (3)
$
352.3
$
1.9
$
354.2
$
340.3
3.5%
4.1%
Product Sales and Other (4)
$
68.1
$
0.3
$
68.3
$
66.1
3.1%
3.5%
Total Revenues
$
420.4
$
2.2
$
422.5
$
406.3
3.5%
4.0%
UK
Meeting Fees (1)
$
30.4
$
2.0
$
32.4
$
34.0
-10.5%
-4.7%
Online Subscription Revenues (2)
$
10.0
$
0.7
$
10.6
$
11.7
-14.5%
-8.9%
Service Revenues (3)
$
40.4
$
2.6
$
43.0
$
45.6
-11.5%
-5.8%
Product Sales and Other (4)
$
16.2
$
1.0
$
17.2
$
21.5
-24.7%
-19.9%
Total Revenues
$
56.6
$
3.6
$
60.2
$
67.2
-15.7%
-10.3%
CE
Meeting Fees (1)
$
48.1
$
0.0
$
48.2
$
54.9
-12.4%
-12.3%
Online Subscription Revenues (2)
$
37.9
$
(0.1)
$
37.8
$
40.9
-7.3%
-7.6%
Service Revenues (3)
$
86.0
$
(0.1)
$
86.0
$
95.8
-10.2%
-10.3%
Product Sales and Other (4)
$
26.7
$
0.1
$
26.9
$
33.1
-19.3%
-18.9%
Total Revenues
$
112.8
$
0.0
$
112.8
$
128.9
-12.6%
-12.5%
Other (6)
Meeting Fees (1)
$
11.2
$
1.1
$
12.4
$
12.9
-13.0%
-4.2%
Online Subscription Revenues (2)
$
5.3
$
0.3
$
5.6
$
5.7
-5.9%
-0.3%
Service Revenues (3)
$
16.6
$
1.5
$
18.0
$
18.6
-10.8%
-3.0%
Product Sales (4) and All Other (5)
$
10.3
$
0.4
$
10.7
$
10.8
-4.7%
-1.2%
Total Revenues
$
26.9
$
1.8
$
28.7
$
29.4
-8.6%
-2.3%
____
Note: Totals may not sum due to rounding.
(1) "Meeting Fees" consist of the fees associated with the Company’s monthly commitment plans for unlimited access to meetings and other payment arrangements for access to meetings, including the Company’s "pay-as-you-go" payment arrangement and fees associated with the Company’s Total Access product.
(2) "Online Subscription Revenues" consist of the fees associated with subscriptions for the Company’s Online subscription products, including the Company’s Personal Coaching product.
(3) "Service Revenues" equal "Meeting Fees" plus "Online Subscription Revenues".
(4) "Product Sales" are sales of products to members in meetings and Online, and "Other" are revenues from licensing, magazine subscriptions, third-party advertising in publications, payments from the sale of third-party Internet advertising and By Mail.
(5) "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, and franchise fees with respect to commitment plans and commissions.
(6) 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
Q2 2016 Variance
2016 Constant
Currency
Q2 2016
Q2 2015
2016
2016
Actual
Actual
2016
vs
2016
vs
Currency
Constant
vs
2015
vs
2015
GAAP
Adjustment
Currency
GAAP
Adjustment (1)
Adjusted
2015
Adjusted
2015
Adjusted
Selected Financial Data
Gross Profit
$
161.0
$
0.9
$
161.9
$
159.4
$
(0.3)
$
159.1
1.1%
1.3%
1.6%
1.8%
Gross Margin
52.0%
51.9%
51.4%
51.3%
Selling, General and Administrative Expenses $
46.1
$
0.4
$
46.5
$
48.5
$
(0.5)
$
47.9
-4.8%
-3.7%
-4.0%
-2.9%
Operating Income
$
73.7
$
0.3
$
74.0
$
70.6
$
0.2
$
70.8
4.5%
4.1%
4.9%
4.6%
Operating Income Margin
23.8%
23.7%
22.8%
22.9%
____
Note: Totals may not sum due to rounding.
(1)
Excludes the impact of the $0.2 million of charges associated with the Company’s previously disclosed 2015 plan to restructure its organization.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN MILLIONS, EXCEPT PERCENTAGES)
UNAUDITED
First Half 2016 Variance
2015 Constant
Currency
First Half 2016
First Half 2015
2016
2016
Actual
Actual
2016
vs
2016
vs
Currency
Constant
vs
2015
vs
2015
GAAP
Adjustment
Currency
GAAP
Adjustment (1)
Adjusted
2015
Adjusted
2015
Adjusted
Selected Financial Data
Gross Profit
$
310.7
$
3.4
$
314.1
$
316.7
$
1.7
$
318.4
-1.9%
-2.4%
-0.8%
-1.3%
Gross Margin
50.4%
50.3%
50.1%
50.4%
Selling, General and Administrative Expenses $
95.7
$
1.2
$
96.9
$
100.4
$
(4.3)
$
96.1
-4.7%
-0.4%
-3.5%
0.8%
Operating Income
$
87.3
$
(0.1)
$
87.2
$
88.6
$
6.0
$
94.6
-1.5%
-7.8%
-1.6%
-7.8%
Operating Income Margin
14.2%
14.0%
14.0%
15.0%
____
Note: Totals may not sum due to rounding.
(1)
Excludes the impact of the $6.0 million of charges associated with the Company’s previously disclosed 2015 plan to restructure its organization
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN MILLIONS)
UNAUDITED
Three Months Ended
Six Months Ended
July 2,
July 4,
July 2,
July 4,
2016
2015
2016
2015
Net Income
$
30.5
$
27.9
$
19.7
$
22.4
Interest
28.6
30.5
58.6
61.6
Taxes
14.0
18.7
8.4
15.3
Depreciation and Amortization
12.9
14.4
25.8
28.3
Stock-based Compensation
1.7
2.3
4.9
4.6
EBITDAS
$
87.8
$
93.7
$
117.5
$
132.2
____
Note: Totals may not sum due to rounding.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/weight-watchers-announces-second-quarter-2016-results-300309476.html

SOURCE Weight Watchers International, Inc.

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