WTW
$43.13
Weight Watchers International
$1.69
4.08%
Earnings Details
2nd Quarter June 2017
Thursday, August 3, 2017 4:15:00 PM
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Summary

Weight Watchers International Beats

Weight Watchers International (WTW) reported 2nd Quarter June 2017 earnings of $0.67 per share on revenue of $341.7 million. The consensus earnings estimate was $0.50 per share on revenue of $334.1 million. The Earnings Whisper number was $0.53 per share. Revenue grew 10.3% on a year-over-year basis.

The company said it expects 2017 earnings of $1.57 to $1.67 per share. The company's previous guidance was earnings of $1.40 to $1.50 per share and the current consensus earnings estimate is $1.28 per share for the year ending December 31, 2017.

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
$0.67
Earnings Whisper
$0.53
Consensus Estimate
$0.50
Reported Revenue
$341.7 Mil
Revenue Estimate
$334.1 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Weight Watchers Announces Second Quarter 2017 Results And Raises Full Year 2017 Guidance

Weight Watchers International, Inc. (WTW) today announced its results for the second quarter of fiscal 2017 and raised its full year fiscal 2017 earnings guidance.

"Weight Watchers’ strong performance is due to the broad-based improvements the Company has implemented, including updating the program, enhancing the digital offerings, and refreshing the meetings experience," said Mindy Grossman, the Company’s President and CEO. "With a proven, science-based program, strong digital capabilities, and the support and community offered by thousands of coaches and millions of members worldwide, Weight Watchers offers a strong value-proposition that positions the Company for continued growth. By leveraging technology, innovation, and the power of community, Weight Watchers will be able to realize the full growth potential of the business and make a major impact on our members’ lives."

"Weight Watchers delivered another quarter of continued momentum with revenue growth in constant currency in every geographic segment, driven by compelling marketing programs in our major markets," said Nick Hotchkin, the Company’s CFO. "We expect strong growth in revenues and operating income in the second half of this year."

Q2 2017 Consolidated Results
% Change
Three Months Ended
Adjusted for
July 1,
July 2,
Constant
2017
2016
% Change
Currency
(in millions except percentages and per share amounts)
Service Revenues, net
$283.0
$251.6
12.5%
14.2%
Product Sales and Other, net
58.7
58.2
0.8%
2.8%
Revenues, net
$341.7
$309.8
10.3%
12.1%
Operating Income
$96.2
$73.7
30.5%
32.5%
Net Income*
$45.2
$30.5
48.1%
51.3%
EPS
$0.67
$0.46
44.2%
47.2%
Total Paid Weeks
48.1
41.1
16.8%
N/A
Meeting(1) Paid Weeks
20.3
18.5
9.7%
N/A
Online(2) Paid Weeks
27.7
22.6
22.6%
N/A
End of Period Subscribers(3)
3.5
2.9
20.1%
N/A
Meeting Subscribers
1.4
1.3
12.5%
N/A
Online Subscribers
2.1
1.7
25.8%
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 2017 Business and Financial Highlights

End of Period Subscribers in Q2 2017 were up 20.1% versus the prior year period, driven by growth in all major geographic markets. Q2 2017 End of Period Meeting Subscribers were up 12.5% and End of Period Online Subscribers were up 25.8% versus the prior year period.

Total Paid Weeks in Q2 2017 were up 16.8% versus the prior year period, driven by growth in all major geographic markets. Q2 2017 Meeting Paid Weeks increased 9.7% and Online Paid Weeks increased 22.6% versus the prior year period.

Revenues in Q2 2017 were $341.7 million. On a constant currency basis, Q2 2017 revenues increased 12.1% versus the prior year period.

Service Revenues in Q2 2017 were $283.0 million. On a constant currency basis, these revenues increased 14.2% versus the prior year period. This increase was driven by growth in all major geographic markets on a constant currency basis.

Product Sales and Other in Q2 2017 were $58.7 million. On a constant currency basis, these revenues increased 2.8% versus the prior year period, primarily reflecting revenue gains in North America.

Operating Income in Q2 2017 was $96.2 million. On a constant currency basis, operating income increased 32.5% versus the prior year period. This increase was primarily driven by higher member volumes in the quarter versus the prior year period.

-- Tax Rate in Q2 2017 was 36.5% as compared to 31.5% in the prior year period.

Net Income in Q2 2017 was $45.2 million compared to $30.5 million in the prior year period.

Earnings per fully diluted share (EPS) in Q2 2017 was $0.67 compared to $0.46 in the prior year period.

Certain Items Affecting Year-Over-Year Comparability

Q2 2017 results include a gain on early extinguishment of debt of $1.6 million (or $0.01 per fully diluted share) for the Company’s previously disclosed debt prepayment in the quarter.

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 expected to be realized.

Other Items

Cash balance was $104.5 million as of July 1, 2017. During Q2 2017, pursuant to a previously announced offer to prepay at a discount to par, the Company made a cash payment of $73.0 million (plus an amount sufficient to pay accrued and unpaid interest on the prepaid amount) to prepay $75.5 million of the Company’s Tranche B-2 Term Loans maturing in April 2020. At July 1, 2017, under the Company’s credit facility, the Company had $1,935.4 million outstanding consisting entirely of Tranche B-2 Term Loans and had $48.2 million in available unused commitments under the revolving facility thereunder.

Full Year Fiscal 2017 Earnings Guidance

The Company is raising its full year fiscal 2017 earnings guidance to between $1.57 and $1.67 per fully diluted share.

Second Quarter 2017 Conference Call and Webcast

The Company has scheduled a conference call today at 5:00 p.m. ET. During the conference call, Mindy Grossman, President and Chief Executive Officer, and Nicholas Hotchkin, Chief Financial Officer, will discuss the second quarter fiscal 2017 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. The Company presents in the attachments to this release the non-GAAP financial measure earnings before interest, taxes, depreciation, amortization and stock-based compensation (EBITDAS). 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 non-GAAP 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 one of the most recognized and trusted brand names among weight-conscious consumers. Weight Watchers provides commercial weight management services through a global network of Company-owned and franchise operations and offers innovative, digital weight management products through its websites, mobile sites and apps. These services and products are built on the Company’s weight management program, which helps millions of people around the world lose weight through sensible and sustainable food plans, activity, behavior modification and group support. Weight Watchers has an unparalleled network of service providers to assist members on their journey and also offers a wide range of products, publications and programs for those interested in weight loss and healthier living.

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 inability to refinance the Company’s debt obligations on favorable terms or at all; 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 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 Company’s chief executive officer transition; 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).

Contact Information:
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 1,
December 31,
2017
2016
ASSETS
Current assets
$
214.9
$
235.2
Property and equipment, net
47.8
49.6
Goodwill, franchise rights and other intangible assets, net 972.0
973.4
Other assets
12.6
12.8
TOTAL ASSETS
$
1,247.3
$
1,271.0
LIABILITIES AND TOTAL DEFICIT
Current liabilities
$
272.8
$
292.4
Long-term debt
1,899.7
1,981.3
Deferred income taxes, other
213.4
200.2
TOTAL LIABILITIES
$
2,385.9
$
2,473.9
Redeemable noncontrolling interest
4.6
4.7
Shareholders’ deficit
(1,143.2)
(1,207.6)
TOTAL LIABILITIES AND TOTAL DEFICIT
$
1,247.3
$
1,271.0
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
UNAUDITED
Three Months Ended
July 1,
July 2,
2017
2016
Service revenues, net (1)
$
283.0
$
251.6
Product sales and other, net (2)
58.7
58.2
Revenues, net
341.7
309.8
Cost of services (3)
120.3
119.8
Cost of product sales and other (4)
32.3
29.0
Cost of revenues
152.7
148.7
Gross profit
189.0
161.0
Marketing expenses
42.0
41.2
Selling, general and administrative expenses
50.8
46.1
Operating income
96.2
73.7
Interest expense
27.1
28.6
Other (income) expense, net
(0.5)
0.6
Gain on early extinguishment of debt
(1.6)
-
Income before income taxes
71.2
44.5
Provision for income taxes
26.0
14.0
Net income
45.2
30.5
Net loss attributable to the noncontrolling interest
0.0
0.0
Net income attributable to Weight Watchers International, Inc.
$
45.2
$
30.5
Earnings Per Share attributable to Weight Watchers International, Inc.
Basic
$
0.70
$
0.48
Diluted
$
0.67
$
0.46
Weighted average common shares outstanding:
Basic
64.3
63.7
Diluted
67.7
65.9
Note: Totals may not sum due to rounding.
(1) Consists of net "Meeting Fees" and net "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, publishing and third-party advertising in publications, payments from the sale of third-party online advertising and By Mail, other revenues, and franchise fees with respect to commitment plans and commissions.
(3) Consists of meeting operating expense and online cost of revenues excluding online advertising costs.
(4) Consists of meetings cost of product, 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
Six Months Ended
July 1,
July 2,
2017
2016
Service revenues, net (1)
$
544.5
$
495.3
Product sales and other, net (2)
126.3
121.4
Revenues, net
670.7
616.7
Cost of services (3)
245.2
244.4
Cost of product sales and other (4)
72.4
61.5
Cost of revenues
317.6
306.0
Gross profit
353.1
310.7
Marketing expenses
128.4
127.7
Selling, general and administrative expenses
98.3
95.7
Operating income
126.4
87.3
Interest expense
55.2
58.6
Other expense, net
0.2
0.5
Gain on early extinguishment of debt
(1.6)
0.0
Income before income taxes
72.6
28.1
Provision for income taxes
16.9
8.4
Net income
55.7
19.7
Net loss attributable to the noncontrolling interest
0.1
0.1
Net income attributable to Weight Watchers International, Inc.
$
55.8
$
19.7
Earnings Per Share attributable to Weight Watchers International, Inc.
Basic
$
0.87
$
0.31
Diluted
$
0.83
$
0.30
Weighted average common shares outstanding:
Basic
64.1
63.6
Diluted
67.3
65.9
Note: Totals may not sum due to rounding.
(1) Consists of net "Meeting Fees" and net "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, publishing and third-party advertising in publications, payments from the sale of third-party online advertising and By Mail, other revenues, and franchise fees with respect to commitment plans and commissions.
(3) Consists of meeting operating expense and online cost of revenues excluding online advertising costs.
(4) Consists of meetings cost of product, online advertising costs, non-meeting cost of products and other.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
OPERATIONAL STATISTICS
(IN MILLIONS, EXCEPT PERCENTAGES)
UNAUDITED
Three Months Ended
July 1,
July 2,
Variance
2017
2016
Meeting Paid Weeks (1)
North America
13.9
12.2
13.8%
UK
2.7
2.7
0.6%
CE
3.0
3.0
1.0%
Other (2)
0.7
0.6
8.8%
Total Meeting Paid Weeks
20.3
18.5
9.7%
Online Paid Weeks (1)
North America
17.9
14.7
21.8%
UK
1.9
1.6
17.7%
CE
7.3
5.7
28.4%
Other (2)
0.6
0.6
0.8%
Total Online Paid Weeks
27.7
22.6
22.6%
Total Paid Weeks (1)
North America
31.9
27.0
18.2%
UK
4.6
4.3
7.0%
CE
10.4
8.7
19.0%
Other (2)
1.3
1.2
5.0%
Total Paid Weeks
48.1
41.1
16.8%
End of Period Meeting Subscribers (3)
North America
1.0
0.8
16.2%
UK
0.2
0.2
6.1%
CE
0.2
0.2
4.0%
Other (2)
0.0
0.0
7.6%
Total End of Period Meeting Subscribers
1.4
1.3
12.5%
End of Period Online Subscribers (3)
North America
1.4
1.1
25.7%
UK
0.1
0.1
18.1%
CE
0.6
0.4
30.8%
Other (2)
0.0
0.0
0.1%
Total End of Period Online Subscribers
2.1
1.7
25.8%
Total End of Period Subscribers (3)
North America
2.3
1.9
21.5%
UK
0.3
0.3
10.9%
CE
0.8
0.6
22.1%
Other (2)
0.1
0.1
3.4%
Total End of Period Subscribers
3.5
2.9
20.1%
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.
(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 number of 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.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
OPERATIONAL STATISTICS
(IN MILLIONS, EXCEPT PERCENTAGES)
UNAUDITED
Six Months Ended
July 1,
July 2,
Variance
2017
2016
Meeting Paid Weeks (1)
North America
26.8
23.7
13.1%
UK
5.3
5.4
(1.3%)
CE
5.9
5.9
0.1%
Other (2)
1.4
1.3
10.0%
Total Meeting Paid Weeks
39.4
36.2
8.7%
Online Paid Weeks (1)
North America
34.3
28.8
19.0%
UK
3.6
3.1
14.8%
CE
13.9
11.1
25.3%
Other (2)
1.2
1.1
3.1%
Total Online Paid Weeks
52.9
44.1
19.9%
Total Paid Weeks (1)
North America
61.0
52.5
16.3%
UK
8.9
8.5
4.6%
CE
19.8
17.0
16.6%
Other (2)
2.6
2.4
6.8%
Total Paid Weeks
92.3
80.3
14.9%
End of Period Meeting Subscribers (3)
North America
1.0
0.8
16.2%
UK
0.2
0.2
6.1%
CE
0.2
0.2
4.0%
Other (2)
0.0
0.0
7.6%
Total End of Period Meeting Subscribers 1.4
1.3
12.5%
End of Period Online Subscribers (3)
North America
1.4
1.1
25.7%
UK
0.1
0.1
18.1%
CE
0.6
0.4
30.8%
Other (2)
0.0
0.0
0.1%
Total End of Period Online Subscribers
2.1
1.7
25.8%
Total End of Period Subscribers (3)
North America
2.3
1.9
21.5%
UK
0.3
0.3
10.9%
CE
0.8
0.6
22.1%
Other (2)
0.1
0.1
3.4%
Total End of Period Subscribers
3.5
2.9
20.1%
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.
(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 number of 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.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN MILLIONS, EXCEPT PERCENTAGES)
UNAUDITED
Q2 2017 Variance
2017
Constant
Q2 2017
Q2 2016
2017
Currency
Currency
Constant
vs
vs
GAAP
Adjustment
Currency
GAAP
2016
2016
Selected Financial Data
Consolidated Company Revenues
$
341.7
$
5.4
$
347.1
$ 309.8
10.3%
12.1%
Consolidated Meeting Fees (1)
$
175.0
$
2.6
$
177.6
$ 160.6
8.9%
10.6%
Consolidated Online Subscription Revenues (2) $
108.0
$
1.6
$
109.6
$
90.9
18.8%
20.6%
Consolidated Service Revenues (3)
$
283.0
$
4.3
$
287.3
$ 251.6
12.5%
14.2%
Consolidated Product Sales and Other (4)
$
58.7
$
1.2
$
59.8
$
58.2
0.8%
2.8%
North America
Meeting Fees (1)
$
129.7
$
0.4
$
130.1
$ 114.9
12.8%
13.2%
Online Subscription Revenues(2)
$
73.5
$
0.2
$
73.8
$
63.0
16.7%
17.1%
Service Revenues (3)
$
203.2
$
0.6
$
203.8
$ 177.9
14.2%
14.6%
Product Sales and Other(4)
$
35.8
$
0.1
$
35.9
$
33.6
6.4%
6.6%
Total Revenues
$
239.0
$
0.7
$
239.7
$ 211.5
13.0%
13.3%
UK
Meeting Fees (1)
$
14.0
$
1.7
$
15.7
$
15.1
(6.8%)
4.3%
Online Subscription Revenues(2)
$
5.7
$
0.7
$
6.4
$
5.1
13.6%
27.2%
Service Revenues (3)
$
19.8
$
2.4
$
22.1
$
20.1
(1.7%)
10.1%
Product Sales and Other(4)
$
6.7
$
0.8
$
7.5
$
7.6
(12.2%)
(1.8%)
Total Revenues
$
26.4
$
3.2
$
29.6
$
27.7
(4.6%)
6.9%
CE
Meeting Fees (1)
$
24.8
$
0.7
$
25.5
$
24.7
0.5%
3.4%
Online Subscription Revenues(2)
$
25.7
$
0.7
$
26.4
$
20.1
28.0%
31.7%
Service Revenues (3)
$
50.5
$
1.4
$
51.9
$
44.8
12.8%
16.1%
Product Sales and Other(4)
$
11.0
$
0.3
$
11.3
$
12.3
(10.5%)
(7.9%)
Total Revenues
$
61.5
$
1.8
$
63.3
$
57.0
7.8%
10.9%
Other (5)
Meeting Fees (1)
$
6.5
$
(0.2)
$
6.4
$
6.0
9.1%
6.5%
Online Subscription Revenues(2)
$
3.0
$
(0.0)
$
3.0
$
2.8
8.2%
7.4%
Service Revenues (3)
$
9.5
$
(0.2)
$
9.4
$
8.8
8.8%
6.8%
Product Sales and Other(4)
$
5.2
$
(0.0)
$
5.2
$
4.7
10.8%
10.5%
Total Revenues
$
14.7
$
(0.2)
$
14.5
$
13.5
9.5%
8.1%
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, publishing and third-party advertising in publications, payments from the sale of third-party online advertising and By Mail, other revenues, and, in the case of the consolidated financial results and Other reportable segment, includes franchise fees with respect to commitment plans and commissions.
(5) 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 2017 Variance
2017
Constant
First Half 2017
First Half 2016
2017
Currency
Currency
Constant
vs
vs
GAAP
Adjustment
Currency
GAAP
2016
2016
Selected Financial Data
Consolidated Company Revenues
$
670.7
$
9.9
$
680.6
$
616.7
8.8%
10.4%
Consolidated Meeting Fees (1)
$
339.4
$
4.5
$
343.8
$
316.4
7.3%
8.7%
Consolidated Online Subscription Revenues (2) $
205.1
$
2.8
$
207.9
$
178.9
14.6%
16.2%
Consolidated Service Revenues (3)
$
544.5
$
7.3
$
551.8
$
495.3
9.9%
11.4%
Consolidated Product Sales and Other (4)
$
126.3
$
2.6
$
128.8
$
121.4
4.0%
6.2%
North America
Meeting Fees (1)
$
253.7
$
0.1
$
253.8
$
226.6
12.0%
12.0%
Online Subscription Revenues(2)
$
141.7
$
0.1
$
141.8
$
125.7
12.7%
12.7%
Service Revenues (3)
$
395.3
$
0.2
$
395.6
$
352.3
12.2%
12.3%
Product Sales and Other(4)
$
76.4
$
(0.0)
$
76.4
$
68.1
12.2%
12.2%
Total Revenues
$
471.7
$
0.2
$
471.9
$
420.4
12.2%
12.3%
UK
Meeting Fees (1)
$
26.1
$
3.6
$
29.7
$
30.4
(14.1%)
(2.4%)
Online Subscription Revenues(2)
$
10.2
$
1.4
$
11.6
$
10.0
2.2%
15.9%
Service Revenues (3)
$
36.3
$
4.9
$
41.3
$
40.4
(10.1%)
2.2%
Product Sales and Other(4)
$
14.1
$
1.9
$
16.0
$
16.2
(13.0%)
(1.0%)
Total Revenues
$
50.4
$
6.9
$
57.3
$
56.6
(10.9%)
1.3%
CE
Meeting Fees (1)
$
46.8
$
1.5
$
48.3
$
48.1
(2.8%)
0.4%
Online Subscription Revenues(2)
$
47.2
$
1.6
$
48.8
$
37.9
24.6%
28.8%
Service Revenues (3)
$
94.0
$
3.1
$
97.1
$
86.0
9.3%
12.9%
Product Sales and Other(4)
$
24.9
$
0.8
$
25.7
$
26.7
(6.8%)
(3.7%)
Total Revenues
$
118.9
$
3.9
$
122.8
$
112.8
5.5%
8.9%
Other (5)
Meeting Fees (1)
$
12.8
$
(0.7)
$
12.0
$
11.2
13.7%
7.1%
Online Subscription Revenues(2)
$
6.0
$
(0.2)
$
5.8
$
5.3
12.7%
9.1%
Service Revenues (3)
$
18.8
$
(0.9)
$
17.8
$
16.6
13.4%
7.7%
Product Sales and Other(4)
$
10.9
$
(0.2)
$
10.7
$
10.3
5.2%
3.3%
Total Revenues
$
29.6
$
(1.1)
$
28.5
$
26.9
10.2%
6.0%
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, publishing and third-party advertising in publications, payments from the sale of third-party online advertising and By Mail, other revenues, and, in the case of the consolidated financial results and Other reportable segment, includes franchise fees with respect to commitment plans and commissions.
(5) 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 2017 Variance
2017
Q2 2017
Q2 2016
Constant
2017
Currency
Currency
Constant
vs
vs
GAAP
Adjustment
Currency
GAAP
2016
2016
Selected Financial Data
Gross Profit
$
189.0
$
3.1
$
192.1
$
161.0
17.4%
19.3%
Gross Margin
55.3%
55.3%
52.0%
Selling, General and Administrative Expenses $
50.8
$
0.6
$
51.4
$
46.1
10.2%
11.5%
Operating Income
$
96.2
$
1.5
$
97.7
$
73.7
30.5%
32.5%
Operating Income Margin
28.2%
28.1%
23.8%
Note: Totals may not sum due to rounding.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN MILLIONS, EXCEPT PERCENTAGES)
UNAUDITED
First Half 2017 Variance
2017
First Half 2017
First Half 2016
Constant
2017
Currency
Currency
Constant
vs
vs
GAAP
Adjustment
Currency
GAAP
2016
2016
Selected Financial Data
Gross Profit
$
353.1
$
5.4
$
358.5
$
310.7
13.6%
15.4%
Gross Margin
52.6%
52.7%
50.4%
Selling, General and Administrative Expenses $
98.3
$
1.0
$
99.2
$
95.7
2.7%
3.7%
Operating Income
$
126.4
$
2.2
$
128.6
$
87.3
44.9%
47.3%
Operating Income Margin
18.9%
18.9%
14.2%
Note: Totals may not sum due to rounding.
WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN MILLIONS)
UNAUDITED
Three Months Ended
Six Months Ended
July 1,
July 2,
July 1,
July 2,
2017
2016
2017
2016
Net Income
$
45.2
$
30.5
$
55.8
$
19.7
Interest
27.1
28.6
55.2
58.6
Taxes
26.0
14.0
16.9
8.4
Depreciation and Amortization
12.7
12.9
25.6
25.8
Stock-based Compensation
2.5
1.7
4.8
4.9
EBITDAS
$
113.4
$
87.8
$
158.3
$
117.5
Note: Totals may not sum due to rounding.

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SOURCE Weight Watchers International, Inc.

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