NEW YORK, Aug. 6 /PRNewswire-FirstCall/ -- Weight Watchers International, Inc. today announced its results for the second quarter ended July 4, 2009.

Second Quarter 2009 Results

For the second quarter of 2009, net revenues were $372.5 million versus $400.0 million in the second quarter of 2008. Net income for the second quarter of 2009 was $58.8 million versus $46.6 million in the prior year period. Net income in the quarter was reduced by after-tax restructuring charges of $1.2 million associated with the Company's previously disclosed cost savings initiatives. Excluding these restructuring charges from the second quarter of 2009 results and adjusting the second quarter of 2008 results to exclude a $30.3 million offset to revenue associated with the previously reported adverse U.K. VAT ruling, net income for the second quarter of 2009 was $60.0 million versus $67.2 million in the prior year period.

Earnings per fully diluted share were $0.76 for the second quarter of 2009 versus $0.59 for the prior year period. Excluding the restructuring charges from the second quarter of 2009 results and adjusting the second quarter of 2008 results for the U.K. VAT ruling, earnings per fully diluted share were $0.78 for the second quarter of 2009 versus $0.85 for the prior year period.

First Half 2009 Results

In the first half 2009, net revenues were $763.1 million versus $837.0 million in the first half 2008. Net income for the first half 2009 was $106.1 million versus $104.0 million in the prior year period. Net income for the first half 2009 was reduced by after-tax restructuring charges of $3.1 million associated with the Company's previously disclosed cost savings initiatives. Excluding these restructuring charges from the first half 2009 results and adjusting the first half 2008 results to exclude a $27.9 million offset to revenue associated with the previously reported adverse U.K. VAT ruling, net income for the first half 2009 was $109.2 million versus $122.9 million in the prior year period.

Earnings per fully diluted share were $1.38 for the first half 2009 versus $1.31 for the prior year period. Excluding the restructuring charges from the first half 2009 results and adjusting the first half 2008 results for the U.K. VAT ruling, earnings per fully diluted share were $1.42 for the first half 2009 versus $1.55 for the prior year period.

"In the midst of this difficult economic environment, we were able to deliver second quarter earnings per fully diluted share nearly comparable to the prior year level, after adjusting for $0.06 per fully diluted share of unfavorable year-over-year foreign currency fluctuation," commented David Kirchhoff, President and Chief Executive Officer of the Company. "While we are closely managing our operations for the near-term given this uncertain economic climate, we are continuing to invest in multiple initiatives that will result in a meaningful and substantial improvement in our long-term growth trajectory."

The Company narrowed its full year 2009 earnings guidance range from between $2.50 to $2.75 per fully diluted share to between $2.52 and $2.70 per fully diluted share, excluding restructuring charges associated with the Company's previously disclosed cost savings initiatives.

Second Quarter 2009 Conference Call

The Company has scheduled a conference call today at 5:00 p.m. ET. During the conference call, David Kirchhoff, President and Chief Executive Officer, and Ann Sardini, Chief Financial Officer, will discuss second quarter 2009 results and answer questions from the investment community. Live audio of the conference call will be simultaneously webcast over the Internet on the Company's corporate website, http://www.weightwatchersinternational.com/. A replay of the webcast will be available on this site for 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 statement of operations presented in accordance with accounting principles generally accepted in the United States, or GAAP, the Company has disclosed non-GAAP measures of operating results that exclude or adjust certain items. Net revenues, net income and earnings per fully diluted share are discussed in this release both as reported (on a GAAP basis) and excluding the impact of the previously disclosed cost savings initiatives from the results of the second quarter and first half 2009, and adjusting the results of the second quarter and first half 2008 to exclude the impact of the previously reported adverse U.K. VAT ruling. Management believes these non-GAAP financial measures provide useful supplemental information to investors regarding the performance of the Company's business and are useful for period-over-period comparisons of the performance of the Company's business. While the Company believes that these financial measures are useful in evaluating the Company's business, this information should be considered as supplemental in nature and is not meant to 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 "Consolidated Statements of Operations" for the three and six months ended July 4, 2009 and June 28, 2008 included with this release for a reconciliation of the non-GAAP financial measures excluding the impact of the cost savings initiatives from the second quarter and first half 2009, and excluding the impact of the adverse U.K. VAT ruling for the second quarter and first half 2008 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 over 50,000 weekly meetings where members receive group support and learn about healthy eating patterns, behavior modification and physical activity. WeightWatchers.com provides innovative, subscription weight management products over the Internet and is the leading Internet-based weight management provider in the world. In addition, Weight Watchers offers a wide range of products, publications and programs for those interested in weight loss and weight control.

This news release and any attachments include "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, including, in particular, earnings guidance and any statements about the Company's plans, strategies and prospects. The Company generally uses the words "may," "will," "could," "expect," "anticipate," "believe," "estimate," "plan," "intend" and similar expressions in this news release and any attachments to identify forward-looking statements. The Company bases these forward-looking statements on its current views with respect to future events and financial performance. Actual results could differ materially from those projected in the forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things: competition from other weight management industry participants or the development of more effective or more favorably perceived weight management methods; the Company's ability to continue to develop innovative new services and products and enhance its existing services and products, or the failure of its services and products to continue to appeal to the market; the effectiveness of its marketing and advertising programs; the impact on the Weight Watchers brand of actions taken by the Company's franchisees and licensees; risks and uncertainties associated with the Company's international operations, including economic, political and social risks and foreign currency risks; the Company's ability to successfully make acquisitions or enter into joint ventures, including its ability to successfully integrate, operate or realize the projected benefits of such businesses; uncertainties related to a downturn in general economic conditions or consumer confidence; the seasonal nature of the Company's business; the impact of events that discourage people from gathering with others; the Company's ability to enforce its intellectual property rights both domestically and internationally, as well as the impact of its involvement in any claims related to intellectual property rights; uncertainties regarding the satisfactory operation of the Company's information technology or systems; risks associated with unauthorized penetration of the Company's information security; the impact of disputes with the Company's franchise operators; the impact of existing and future laws and regulations; the impact of the Company's debt service obligations and restrictive debt covenants; the possibility that the interests of the Company's majority owner will conflict with the other holders of the Company's common stock; and other risks and uncertainties, including those detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. You should not put undue reliance on any forward-looking statements. You should understand that many important factors, including those discussed herein, could cause the Company's results to differ materially from those expressed or suggested in any forward-looking statement. Except as required by law, the Company does not undertake any obligation to update or revise these forward-looking statements to reflect new information or events or circumstances that occur after the date of this news release or to reflect the occurrence of unanticipated events or otherwise. Readers are advised to review the Company's filings with the Securities and Exchange Commission (which are available from the SEC's EDGAR database at http://www.sec.gov/, at various SEC reference facilities in the United States and via the Company's website at http://www.weightwatchersinternational.com/).

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN MILLIONS) UNAUDITED July 4, January 3, 2009 2009 ---- ---- ASSETS Current assets $197.5 $225.0 Property and equipment, net 37.3 37.5 Goodwill, franchise rights and other intangible assets, net 834.8 828.4 Deferred income taxes 4.5 8.1 Other 11.5 7.7 ------- ------- TOTAL ASSETS $1,085.6 $1,106.7 ======= ======= LIABILITIES AND TOTAL DEFICIT Current liabilities $507.3 $495.1 Long-term debt 1,341.5 1,485.0 Other 29.6 13.6 ------- ------- TOTAL LIABILITIES 1,878.4 1,993.7 ------- ------- Shareholders' deficit (794.5) (887.5) Noncontrolling interest 1.7 0.5 ------- ------- TOTAL DEFICIT (792.8) (887.0) ------- ------- TOTAL LIABILITIES AND TOTAL DEFICIT $1,085.6 $1,106.7 ======= ======= WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) UNAUDITED Three Months Ended July 4, 2009 ------------------------------- Adjustment for Reported Restructuring Adjusted Results Charges Results ------- ------- ------- Revenues, net $372.5 $- $372.5 Cost of revenues 165.0 - 165.0 ------- ------- ------- Gross profit 207.5 - 207.5 Marketing expenses 53.2 - 53.2 Selling, general and administrative expenses 43.0 (2.0) 41.0 ------- ------- ------- Operating income 111.3 2.0 113.3 Interest expense 16.9 - 16.9 Other expense (income), net (0.5) - (0.5) ------- ------- ------- Income before income taxes 94.9 2.0 96.9 Provision for income taxes 36.9 0.8 37.7 ------- ------- ------- Net income 58.0 1.2 59.2 Net loss attributable to noncontrolling interest 0.8 - 0.8 ------- ------- ------- Net income attributable to WWI $58.8 $1.2 $60.0 ======= ======= ======= Earnings Per Share attributable to WWI: Basic $0.76 $0.02 $0.78 ======= ======= ======= Diluted $0.76 $0.02 $0.78 ======= ======= ======= Weighted average common shares outstanding: Basic 77.0 77.0 77.0 ======= ======= ======= Diluted 77.1 77.1 77.1 ======= ======= ======= Three Months Ended June 28, 2008 -------------------------------- Adjustment for Reported U.K. VAT Adjusted Results Ruling Results ------- ------ ------- Revenues, net $400.0 $30.3 $430.3 Cost of revenues 190.0 - 190.0 ------- ------- ------- Gross profit 210.0 30.3 240.3 Marketing expenses 59.5 - 59.5 Selling, general and administrative expenses 49.2 - 49.2 ------- ------- ------- Operating income 101.3 30.3 131.6 Interest expense 21.6 - 21.6 Other expense (income), net - - - ------- ------- ------- Income before income taxes 79.7 30.3 110.0 Provision for income taxes 33.4 9.7 43.1 ------- ------- ------- Net income 46.3 20.5 66.9 Net loss attributable to noncontrolling interest 0.3 - 0.3 ------- ------- ------- Net income attributable to WWI $46.6 $20.5 $67.2 ======= ======= ======= Earnings Per Share attributable to WWI: Basic $0.59 $0.26 $0.85 ======= ======= ======= Diluted $0.59 $0.26 $0.85 ======= ======= ======= Weighted average common shares outstanding: Basic 78.8 78.8 78.8 ======= ======= ======= Diluted 79.1 79.1 79.1 ======= ======= ======= --- Note: Totals may not sum due to rounding. WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) UNAUDITED Six Months Ended July 4, 2009 ----------------------------- Adjustment for Reported Restructuring Adjusted Results Charges Results ------- ------- ------- Revenues, net $763.1 $- $763.1 Cost of revenues 343.5 - 343.5 ------ ------ ------ Gross profit 419.6 - 419.6 Marketing expenses 127.7 - 127.7 Selling, general and administrative expenses 86.7 (5.1) 81.6 ------ ------ ------ Operating income 205.2 5.1 210.3 Interest expense 33.7 - 33.7 Other expense (income), net - - - ------ ------ ------ Income before income taxes 171.5 5.1 176.6 Provision for income taxes 66.7 2.0 68.7 ------ ------ ------ Net income 104.8 3.1 107.9 Net loss attributable to noncontrolling interest 1.3 - 1.3 ------ ------ ------ Net income attributable to WWI $106.1 $3.1 $109.2 ====== ====== ====== Earnings Per Share attributable to WWI: Basic $1.38 $0.04 $1.42 ====== ====== ====== Diluted $1.38 $0.04 $1.42 ====== ====== ====== Weighted average common shares outstanding: Basic 77.0 77.0 77.0 ====== ====== ====== Diluted 77.1 77.1 77.1 ====== ====== ====== Six Months Ended June 28, 2008 ------------------------------ Adjustment for Reported U.K. VAT Adjusted Results Ruling Results ------- ------ ------- Revenues, net $837.0 $27.9 $864.9 Cost of revenues 381.1 - 381.1 ------ ------ ------ Gross profit 455.9 27.9 483.8 Marketing expenses 146.6 - 146.6 Selling, general and administrative expenses 92.0 - 92.0 ------ ------ ------ Operating income 217.3 27.9 245.2 Interest expense 46.9 - 46.9 Other expense (income), net (2.5) - (2.5) ------ ------ ------ Income before income taxes 172.9 27.9 200.8 Provision for income taxes 69.5 9.0 78.5 ------ ------ ------ Net income 103.4 18.9 122.3 Net loss attributable to noncontrolling interest 0.6 - 0.6 ------ ------ ------ Net income attributable to WWI $104.0 $18.9 $122.9 ====== ====== ====== Earnings Per Share attributable to WWI: Basic $1.31 $0.24 $1.55 ====== ====== ====== Diluted $1.31 $0.24 $1.55 ====== ====== ====== Weighted average common shares outstanding: Basic 79.2 79.2 79.2 ====== ====== ====== Diluted 79.5 79.5 79.5 ====== ====== ====== --- Note: Totals may not sum due to rounding. WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES OPERATIONAL STATISTICS UNAUDITED Three Months Ended -------------------- June 28, 2008 Adjusted July 4, June 28, for U.K. 2009 2008 VAT Ruling Reported Reported (2) ----------- ----------- ----------- Total Revenues (in $ millions) -------------------------------- Meeting Fees 216.0 224.9 255.2 Product Sales 82.1 97.9 97.9 Internet Revenues 50.2 49.4 49.4 Franchise Commissions 3.5 4.5 4.5 All Other 20.6 23.4 23.4 ------ ------ ------ Total Revenues 372.5 400.0 430.3 North America (in $ millions) ------------------------------- Meeting Fees 145.0 169.2 169.2 Product Sales 43.5 49.3 49.3 ------ ------ ------ Total 188.6 218.5 218.5 International (in $ millions) ------------------------------- Meeting Fees 71.0 55.7 86.0 Product Sales 38.6 48.6 48.6 ------ ------ ------ Total 109.6 104.3 134.6 Paid Weeks (in millions)(1) North America Meeting Paid Weeks 14.6 16.4 16.4 UK Meeting Paid Weeks 4.3 4.1 4.1 CE Meeting Paid Weeks 3.4 3.4 3.4 Other Meeting Paid Weeks 0.7 0.7 0.7 ------ ------ ------ Sub-total Meeting Paid Weeks 23.1 24.5 24.5 Online Paid Weeks 11.0 10.2 10.2 ------ ------ ------ Total Paid Weeks 34.2 34.8 34.8 Attendance (in millions) -------------------------- North America 8.5 10.0 10.0 UK 3.1 3.3 3.3 CE 2.3 2.8 2.8 Other 0.5 0.6 0.6 ------ ------ ------ Total Attendance 14.5 16.6 16.6 WeightWatchers.com (in thousands) ----------------------------------- End of Period Active Online Subscribers 843.0 781.0 781.0 Note: Totals may not sum due to rounding. (1) The Paid Week metric reports total paid weeks by Weight Watchers customers in Company-owned operations for a given period. For meetings, Paid Weeks is the sum of total paid commitment plan weeks and total pay-as-you-go weeks for a given period. For Online, Paid Weeks is the total paid Weight Watchers Online subscriber weeks for a given period. (2) In adjusting the 2008 reported results to exclude the offset to revenue for the previously reported U.K. VAT ruling with respect to the first quarter 2008 and periods prior to fiscal 2008 which was recorded in second quarter 2008, the reported results for "Total Revenues -- Meeting Fees", "Total Revenues -- Total Revenues", "International -- Meeting Fees" and "International -- Total" were adjusted by the aggregate amount of $30.3 million. WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES OPERATIONAL STATISTICS UNAUDITED Six Months Ended ------------------ June 28, 2008 Adjusted July 4, June 28, for U.K. 2009 2008 VAT Ruling Reported Reported (2) ----------- ----------- ----------- Total Revenues (in $ millions) -------------------------------- Meeting Fees 441.9 480.4 508.3 Product Sales 174.7 208.0 208.0 Internet Revenues 98.7 94.9 94.9 Franchise Commissions 7.6 9.7 9.7 All Other 40.2 44.0 44.0 ------ ------ ------ Total Revenues 763.1 837.0 864.9 North America (in $ millions) ------------------------------- Meeting Fees 301.0 335.5 335.5 Product Sales 92.6 107.1 107.1 ------ ------ ------ Total 393.6 442.6 442.6 International (in $ millions) ------------------------------- Meeting Fees 141.0 144.9 172.8 Product Sales 82.1 100.9 100.9 ------ ------ ------ Total 223.1 245.8 273.7 Paid Weeks (in millions)(1) North America Meeting Paid Weeks 29.8 32.4 32.4 UK Meeting Paid Weeks 8.6 8.0 8.0 CE Meeting Paid Weeks 7.0 6.8 6.8 Other Meeting Paid Weeks 1.5 1.5 1.5 ------ ------ ------ Sub-total Meeting Paid Weeks 46.9 48.7 48.7 Online Paid Weeks 21.8 19.7 19.7 ------ ------ ------ Total Paid Weeks 68.7 68.4 68.4 Attendance (in millions) -------------------------- North America 18.5 20.5 20.5 UK 6.5 6.6 6.6 CE 5.1 5.8 5.8 Other 1.2 1.2 1.2 ------ ------ ------ Total Attendance 31.2 34.1 34.1 WeightWatchers.com (in thousands) ----------------------------------- End of Period Active Online Subscribers 843.0 781.0 781.0 Note: Totals may not sum due to rounding. (1) The Paid Week metric reports total paid weeks by Weight Watchers customers in Company-owned operations for a given period. For meetings, Paid Weeks is the sum of total paid commitment plan weeks and total pay-as-you-go weeks for a given period. For Online, Paid Weeks is the total paid Weight Watchers Online subscriber weeks for a given period. (2) In adjusting the 2008 reported results to exclude the offset to revenue for the previously reported U.K. VAT ruling with respect to periods prior to fiscal 2008 which was recorded in second quarter 2008, the reported results for "Total Revenues -- Meeting Fees", "Total Revenues -- Total Revenues", "International -- Meeting Fees" and "International -- Total" were adjusted by the aggregate amount of $27.9 million. Contact Information: Investors: Weight Watchers International, Inc. Brainerd Communicators, Inc. Sarika Sahni Corey Kinger Investor Relations (212) 986-6667 (212) 589-2751

Weight Watchers International, Inc.

CONTACT: Investors, Sarika Sahni, Weight Watchers International, Inc.,
Investor Relations, +1-212-589-2751; or Corey Kinger, Brainerd Communicators,
Inc., +1-212-986-6667

Web Site: http://www.weightwatchers.com/