- End of Period Subscribers in Q2 2019 of 4.6 million
- Revenues in Q2 2019 of $369 million
- Q2 2019 EPS of $0.78
- Raising FY 2019 EPS guidance to a range of $1.55 to $1.70
NEW YORK, Aug. 06, 2019 (GLOBE NEWSWIRE) -- Weight Watchers International, Inc. (NASDAQ: WW) today announced its results for the second quarter of fiscal 2019 and raised its full year fiscal 2019 EPS guidance.
“Member recruitment trends improved throughout the second quarter as we saw good response to our spring campaigns. End of period subscribers increased 1.5% year-over-year to 4.6 million – our highest level ever for a second quarter,” said Mindy Grossman, the Company’s President and CEO. “We are focused on building momentum and look forward to launching our new program innovation later this year, which we believe will accelerate subscriber growth in 2020. We are still early in our journey as a global holistic wellness company with the best-in-class weight management program, and we see tremendous opportunities ahead to drive growth in 2020 as well as over the long-term.”
“Solid execution drove our results to be above our expectations for the quarter. With improving trends, particularly in Digital, we are raising our earnings guidance for the full year to a range of $1.55 to $1.70 per fully diluted share,” said Nick Hotchkin, the Company’s CFO, Operating Officer, North America and President, Emerging Markets.
Q2 2019 Consolidated Results
| % Change | % Change Adjusted for Constant Currency(1) | ||||||||||
| Three Months Ended | |||||||||||
| June 29, | June 30, | ||||||||||
| 2019 | 2018 | ||||||||||
| (in millions except percentages and per share amounts) | |||||||||||
| Service Revenues, net | $ | 313.8 | $ | 343.7 | (8.7 | %) | (6.9 | %) | |||
| Product Sales and Other, net | 55.3 | 66.0 | (16.3 | %) | (14.5 | %) | |||||
| Revenues, net | $ | 369.0 | $ | 409.7 | (9.9 | %) | (8.1 | %) | |||
| Operating Income | $ | 105.5 | $ | 127.7 | (17.4 | %) | (15.6 | %) | |||
| Net Income * | $ | 53.8 | $ | 70.7 | (23.9 | %) | (21.6 | %) | |||
| EPS | $ | 0.78 | $ | 1.01 | (22.8 | %) | (20.4 | %) | |||
| Total Paid Weeks | 60.8 | 61.2 | (0.6 | %) | N/A | ||||||
| Digital(2) Paid Weeks | 41.3 | 38.8 | 6.6 | % | N/A | ||||||
| Studio + Digital(3) Paid Weeks | 19.5 | 22.4 | (13.2 | %) | N/A | ||||||
| End of Period Subscribers(4) | 4.6 | 4.5 | 1.5 | % | N/A | ||||||
| Digital Subscribers | 3.2 | 2.9 | 8.3 | % | N/A | ||||||
| Studio + Digital Subscribers | 1.4 | 1.6 | (11.1 | %) | N/A | ||||||
| ___________________________________ Note: Totals may not sum due to rounding.
| |||||||||||
Q2 2019 Business and Financial Highlights
- End of Period Subscribers in Q2 2019 were up 1.5% versus the prior year period. Q2 2019 End of Period Digital Subscribers were up 8.3% and End of Period Studio Subscribers were down 11.1% versus the prior year period.
- Total Paid Weeks in Q2 2019 were down 0.6% versus the prior year period. Q2 2019 Digital Paid Weeks increased 6.6% and Studio Paid Weeks decreased 13.2% versus the prior year period.
- Revenues in Q2 2019 were $369.0 million. On a constant currency basis, Q2 2019 revenues decreased 8.1% versus the prior year period.
º Service Revenues in Q2 2019 were $313.8 million. On a constant currency basis, these revenues decreased 6.9% versus the prior year period, primarily driven by Studio member recruitment declines.
º Product Sales and Other in Q2 2019 were $55.3 million. On a constant currency basis, these revenues decreased 14.5% versus the prior year period, primarily due to a decline in product sales.
- Operating Income in Q2 2019 was $105.5 million compared to $127.7 million in the prior year period. This decrease in operating income was primarily driven by operating deleverage on lower revenues in the quarter versus the prior year period.
- Effective Tax Rate in Q2 2019 was 23.6% compared to 21.9% in the prior year period.
- Net Income in Q2 2019 was $53.8 million compared to $70.7 million in the prior year period.
- Earnings per fully diluted share (EPS) in Q2 2019 was $0.78 compared to $1.01 in the prior year period.
Other Items
- Cash balance as of June 29, 2019 was $180.6 million. On that same date, the Company had no outstanding borrowings under its $150 million revolving credit facility. As previously disclosed, during Q2 2019 the Company voluntarily prepaid $50.0 million of term loans outstanding under its credit agreement.
Full Year Fiscal 2019 Guidance
The Company now expects full year fiscal 2019 revenues of at least $1.4 billion and is raising its earnings guidance to between $1.55 and $1.70 per fully diluted share.
Second Quarter 2019 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, Operating Officer, North America & President, Emerging Markets, will discuss the second quarter of fiscal 2019 results and answer questions from the investment community.
The live webcast of the conference call will be available on the Company’s corporate website, corporate.ww.com, in the Investors section under Presentations and Events. Supplemental investor materials will also be available in the same location prior to the start of the webcast. 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 and today’s scheduled conference call:
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. A reconciliation of the forward-looking full year EBITDAS outlook to net income cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliation that have not yet occurred, are out of the Company’s control, or cannot be reasonably predicted. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a material impact on its future GAAP financial results.
About Weight Watchers International, Inc.
WW – Weight Watchers reimagined – is a global wellness company and the world's leading commercial weight management program. We inspire millions of people to adopt healthy habits for real life. Through our engaging digital experience and face-to-face group workshops, members follow our livable and sustainable program that encompasses healthy eating, physical activity, and a helpful mindset. With more than five decades of experience in building communities and our deep expertise in behavioral science, we aim to deliver wellness for all. To learn more about the WW approach to healthy living, please visit ww.com. For more information about our global business, visit our corporate website at corporate.ww.com.
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, revenue and 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 and wellness 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, products or brands 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 Company’s reputation of actions taken by its franchisees, licensees, suppliers and other partners; the impact of the Company’s substantial amount of debt and its debt service obligations and debt covenants; the ability to generate sufficient cash to service the Company’s debt and satisfy its other liquidity requirements; uncertainties regarding the satisfactory operation of the Company’s 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., the largest holder of the Company’s common stock and a shareholder with significant influence over the Company, will conflict with the Company’s interests or the interests of other holders of the Company’s common stock; the impact that the sale of substantial amounts of the Company’s common stock by existing large shareholders, or the perception that such sales could occur, could have on the market price 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 United States Securities and Exchange Commission (which are available on the SEC’s EDGAR database at www.sec.gov and via the Company’s website at corporate.ww.com).
For more information, contact:
Investors:
Corey Kinger
VP Investor Relations
212.601.7569
corey.kinger@ww.com
Media:
Joe Quenqua
Chief Communications Officer
212.601.7519
joe.quenqua@ww.com
| WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| (IN THOUSANDS) | |||||||
| UNAUDITED | |||||||
| June 29, | December 29, | ||||||
| 2019 | 2018 | ||||||
| ASSETS | |||||||
| Cash and cash equivalents | $ | 180,645 | $ | 236,974 | |||
| Other current assets | 103,458 | 129,450 | |||||
| TOTAL CURRENT ASSETS | 284,103 | 366,424 | |||||
| Property and equipment, net | 51,131 | 52,202 | |||||
| Operating lease assets | 144,913 | - | |||||
| Goodwill, franchise rights and other intangible assets, net | 965,765 | 960,815 | |||||
| Other assets | 30,363 | 35,100 | |||||
| TOTAL ASSETS | $ | 1,476,275 | $ | 1,414,541 | |||
| LIABILITIES AND TOTAL DEFICIT | |||||||
| Portion of long-term debt due within one year | $ | 57,750 | $ | 77,000 | |||
| Portion of operating lease liabilities due within one year | 32,003 | - | |||||
| Other current liabilities | 260,445 | 264,316 | |||||
| TOTAL CURRENT LIABILITIES | 350,198 | 341,316 | |||||
| Long-term debt | 1,584,460 | 1,669,708 | |||||
| Long-term operating lease liabilities | 121,318 | - | |||||
| Deferred income taxes, other | 186,696 | 208,547 | |||||
| TOTAL LIABILITIES | $ | 2,242,672 | $ | 2,219,571 | |||
| Redeemable noncontrolling interest | 3,763 | 3,913 | |||||
| Shareholders' deficit | (770,160 | ) | (808,943 | ) | |||
| TOTAL LIABILITIES AND TOTAL DEFICIT | $ | 1,476,275 | $ | 1,414,541 | |||
| WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF NET INCOME | ||||||||
| (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | ||||||||
| UNAUDITED | ||||||||
| Three Months Ended | ||||||||
| June 29, | June 30, | |||||||
| 2019 | 2018 | |||||||
| Service revenues, net (1) | $ | 313,768 | $ | 343,730 | ||||
| Product sales and other, net (2) | 55,255 | 66,017 | ||||||
| Revenues, net | 369,023 | 409,747 | ||||||
| Cost of services (3) | 122,121 | 128,159 | ||||||
| Cost of product sales and other | 31,088 | 36,794 | ||||||
| Cost of revenues | 153,209 | 164,953 | ||||||
| Gross profit | 215,814 | 244,794 | ||||||
| Marketing expenses | 49,967 | 55,421 | ||||||
| Selling, general and administrative expenses | 60,374 | 61,665 | ||||||
| Operating income | 105,473 | 127,708 | ||||||
| Interest expense | 34,732 | 35,866 | ||||||
| Other expense, net | 438 | 1,333 | ||||||
| Income before income taxes | 70,303 | 90,509 | ||||||
| Benefit from income taxes | 16,586 | 19,825 | ||||||
| Net income | 53,717 | 70,684 | ||||||
| Net loss attributable to the noncontrolling interest | 117 | 36 | ||||||
| Net income attributable to Weight Watchers International, Inc. | $ | 53,834 | $ | 70,720 | ||||
| Earnings Per Share attributable to Weight Watchers International, Inc. | ||||||||
| Basic | $ | 0.80 | $ | 1.07 | ||||
| Diluted | $ | 0.78 | $ | 1.01 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 67,124 | 66,400 | ||||||
| Diluted | 69,141 | 70,154 | ||||||
| Note: Totals may not sum due to rounding. | ||||||||
| (1) Consists of net “Digital Subscription Revenues” and net “Studio + Digital Fees”. “Digital Subscription Revenues” consist of the fees associated with subscriptions for the Company’s Digital offerings, including the Personal Coaching + Digital product. “Studio + Digital Fees” consist of the fees associated with the Company's subscription plans for combined workshops and digital offerings and other payment arrangements for access to workshops. | ||||||||
| (2) Consists of sales of consumer products in workshops and via e-commerce, revenues from licensing, magazine subscriptions, publishing and third-party advertising in publications and on the Company's websites and sales from the By Mail product, other revenues, and franchise fees with respect to commitment plans and commissions. | ||||||||
| (3) Consists of cost of revenues and operating expenses for the Company's Digital and Studio + Digital services. | ||||||||
| WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF NET INCOME | ||||||||
| (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | ||||||||
| UNAUDITED | ||||||||
| Six Months Ended | ||||||||
| June 29, | June 30, | |||||||
| 2019 | 2018 | |||||||
| Service revenues, net (1) | $ | 620,494 | $ | 672,399 | ||||
| Product sales and other, net (2) | 111,694 | 145,571 | ||||||
| Revenues, net | 732,188 | 817,970 | ||||||
| Cost of services (3) | 251,078 | 267,939 | ||||||
| Cost of product sales and other | 64,347 | 84,236 | ||||||
| Cost of revenues | 315,425 | 352,175 | ||||||
| Gross profit | 416,763 | 465,795 | ||||||
| Marketing expenses | 164,216 | 154,340 | ||||||
| Selling, general and administrative expenses | 125,176 | 121,676 | ||||||
| Operating income | 127,371 | 189,779 | ||||||
| Interest expense | 69,927 | 71,732 | ||||||
| Other expense, net | 741 | 1,097 | ||||||
| Income before income taxes | 56,703 | 116,950 | ||||||
| Benefit from income taxes | 13,711 | 7,208 | ||||||
| Net income | 42,992 | 109,742 | ||||||
| Net loss attributable to the noncontrolling interest | 156 | 90 | ||||||
| Net income attributable to Weight Watchers International, Inc. | $ | 43,148 | $ | 109,832 | ||||
| Earnings Per Share attributable to Weight Watchers International, Inc. | ||||||||
| Basic | $ | 0.64 | $ | 1.67 | ||||
| Diluted | $ | 0.62 | $ | 1.57 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 67,044 | 65,761 | ||||||
| Diluted | 69,268 | 69,914 | ||||||
| Note: Totals may not sum due to rounding. | ||||||||
| (1) Consists of net “Digital Subscription Revenues” and net “Studio + Digital Fees”. “Digital Subscription Revenues” consist of the fees associated with subscriptions for the Company’s Digital offerings, including the Personal Coaching + Digital product. “Studio + Digital Fees” consist of the fees associated with the Company's subscription plans for combined workshops and digital offerings and other payment arrangements for access to workshops. | ||||||||
| (2) Consists of sales of consumer products in workshops and via e-commerce, revenues from licensing, magazine subscriptions, publishing and third-party advertising in publications and on the Company's websites and sales from the By Mail product, other revenues, and franchise fees with respect to commitment plans and commissions. | ||||||||
| (3) Consists of cost of revenues and operating expenses for the Company's Digital and Studio + Digital services. | ||||||||
| WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||
| OPERATIONAL STATISTICS | |||||||
| (IN THOUSANDS, EXCEPT PERCENTAGES) | |||||||
| UNAUDITED | |||||||
| Three Months Ended | |||||||
| June 29, | June 30, | Variance | |||||
| 2019 | 2018 | ||||||
| Digital Paid Weeks (1) | |||||||
| North America | 26,027 | 25,469 | 2.2 | % | |||
| CE | 11,992 | 10,176 | 17.8 | % | |||
| UK | 2,536 | 2,382 | 6.5 | % | |||
| Other (2) | 774 | 744 | 4.0 | % | |||
| Total Digital Paid Weeks | 41,329 | 38,771 | 6.6 | % | |||
| Studio + Digital Paid Weeks (1) | |||||||
| North America | 13,134 | 15,429 | (14.9 | %) | |||
| CE | 3,094 | 3,457 | (10.5 | %) | |||
| UK | 2,672 | 2,905 | (8.0 | %) | |||
| Other (2) | 572 | 637 | (10.2 | %) | |||
| Total Studio + Digital Paid Weeks | 19,473 | 22,428 | (13.2 | %) | |||
| Total Paid Weeks (1) | |||||||
| North America | 39,161 | 40,898 | (4.2 | %) | |||
| CE | 15,086 | 13,633 | 10.7 | % | |||
| UK | 5,208 | 5,287 | (1.5 | %) | |||
| Other (2) | 1,346 | 1,381 | (2.6 | %) | |||
| Total Paid Weeks | 60,802 | 61,199 | (0.6 | %) | |||
| End of Period Digital Subscribers (3) | |||||||
| North America | 1,996 | 1,914 | 4.3 | % | |||
| CE | 914 | 773 | 18.3 | % | |||
| UK | 195 | 180 | 8.4 | % | |||
| Other (2) | 59 | 56 | 6.9 | % | |||
| Total End of Period Digital Subscribers | 3,165 | 2,923 | 8.3 | % | |||
| End of Period Studio + Digital Subscribers (3) | |||||||
| North America | 945 | 1,083 | (12.7 | %) | |||
| CE | 223 | 247 | (9.8 | %) | |||
| UK | 192 | 204 | (5.7 | %) | |||
| Other (2) | 43 | 45 | (4.0 | %) | |||
| Total End of Period Studio + Digital Subscribers | 1,403 | 1,579 | (11.1 | %) | |||
| Total End of Period Subscribers (3) | |||||||
| North America | 2,941 | 2,997 | (1.9 | %) | |||
| CE | 1,138 | 1,021 | 11.5 | % | |||
| UK | 387 | 384 | 0.9 | % | |||
| Other (2) | 103 | 101 | 2.0 | % | |||
| Total End of Period Subscribers | 4,568 | 4,502 | 1.5 | % | |||
| Note: Totals may not sum due to rounding. | |||||||
| (1) The “Paid Weeks” metric reports paid weeks by WW customers in Company-owned operations for a given period as follows: (i) “Digital Paid Weeks” is the total paid subscription weeks for the Company’s digital subscription products (including Personal Coaching + Digital); (ii) “Studio + Digital Paid Weeks” is the sum of total paid commitment plan weeks which include workshops and digital offerings and total “pay-as-you-go” weeks; and (iii) “Total Paid Weeks” is the sum of Digital Paid Weeks and Studio + Digital Paid Weeks. | |||||||
| (2) Represents Australia, New Zealand and emerging markets. | |||||||
| (3) The “End of Period Subscribers” metric reports WW subscribers in Company-owned operations at a given period end as follows: (i) “End of Period Digital Subscribers” is the total number of Digital, including Personal Coaching + Digital, subscribers; (ii) “End of Period Studio + Digital Subscribers” is the total number of commitment plan subscribers that have access to combined workshops and digital offerings; and (iii) “End of Period Subscribers” is the sum of End of Period Digital Subscribers and End of Period Studio + Digital Subscribers. | |||||||
| WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||
| OPERATIONAL STATISTICS | |||||||
| (IN THOUSANDS, EXCEPT PERCENTAGES) | |||||||
| UNAUDITED | |||||||
| Six Months Ended | |||||||
| June 29, | June 30, | Variance | |||||
| 2019 | 2018 | ||||||
| Digital Paid Weeks (1) | |||||||
| North America | 50,635 | 47,982 | 5.5 | % | |||
| CE | 23,146 | 19,478 | 18.8 | % | |||
| UK | 4,972 | 4,610 | 7.8 | % | |||
| Other (2) | 1,565 | 1,451 | 7.9 | % | |||
| Total Digital Paid Weeks | 80,318 | 73,521 | 9.2 | % | |||
| Studio + Digital Paid Weeks (1) | |||||||
| North America | 26,378 | 30,225 | (12.7 | %) | |||
| CE | 6,219 | 6,781 | (8.3 | %) | |||
| UK | 5,388 | 5,695 | (5.4 | %) | |||
| Other (2) | 1,205 | 1,297 | (7.1 | %) | |||
| Total Studio + Digital Paid Weeks | 39,190 | 43,998 | (10.9 | %) | |||
| Total Paid Weeks (1) | |||||||
| North America | 77,013 | 78,207 | (1.5 | %) | |||
| CE | 29,365 | 26,259 | 11.8 | % | |||
| UK | 10,360 | 10,305 | 0.5 | % | |||
| Other (2) | 2,770 | 2,748 | 0.8 | % | |||
| Total Paid Weeks | 119,508 | 117,519 | 1.7 | % | |||
| End of Period Digital Subscribers (3) | |||||||
| North America | 1,996 | 1,914 | 4.3 | % | |||
| CE | 914 | 773 | 18.3 | % | |||
| UK | 195 | 180 | 8.4 | % | |||
| Other (2) | 60 | 56 | 6.9 | % | |||
| Total End of Period Digital Subscribers | 3,165 | 2,923 | 8.3 | % | |||
| End of Period Studio + Digital Subscribers (3) | |||||||
| North America | 945 | 1,083 | (12.7 | %) | |||
| CE | 223 | 247 | (9.8 | %) | |||
| UK | 192 | 204 | (5.7 | %) | |||
| Other (2) | 43 | 45 | (4.0 | %) | |||
| Total End of Period Studio + Digital Subscribers | 1,403 | 1,579 | (11.1 | %) | |||
| Total End of Period Subscribers (3) | |||||||
| North America | 2,941 | 2,997 | (1.9 | %) | |||
| CE | 1,137 | 1,020 | 11.5 | % | |||
| UK | 387 | 384 | 0.9 | % | |||
| Other (2) | 103 | 101 | 2.0 | % | |||
| Total End of Period Subscribers | 4,568 | 4,502 | 1.5 | % | |||
| Note: Totals may not sum due to rounding. | |||||||
| (1) The “Paid Weeks” metric reports paid weeks by WW customers in Company-owned operations for a given period as follows: (i) “Digital Paid Weeks” is the total paid subscription weeks for the Company’s digital subscription products (including Personal Coaching + Digital); (ii) “Studio + Digital Paid Weeks” is the sum of total paid commitment plan weeks which include workshops and digital offerings and total “pay-as-you-go” weeks; and (iii) “Total Paid Weeks” is the sum of Digital Paid Weeks and Studio + Digital Paid Weeks. | |||||||
| (2) Represents Australia, New Zealand and emerging markets. | |||||||
| (3) The “End of Period Subscribers” metric reports WW subscribers in Company-owned operations at a given period end as follows: (i) “End of Period Digital Subscribers” is the total number of Digital, including Personal Coaching + Digital, subscribers; (ii) “End of Period Studio + Digital Subscribers” is the total number of commitment plan subscribers that have access to combined workshops and digital offerings; and (iii) “End of Period Subscribers” is the sum of End of Period Digital Subscribers and End of Period Studio + Digital Subscribers. | |||||||
| WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||
| (IN THOUSANDS, EXCEPT PERCENTAGES) | ||||||||||||||||||
| UNAUDITED | ||||||||||||||||||
| Q2 2019 Variance | ||||||||||||||||||
| 2019 | ||||||||||||||||||
| Constant | ||||||||||||||||||
| Q2 2019 | Q2 2018 | 2019 | Currency | |||||||||||||||
| Currency | Constant | vs | vs | |||||||||||||||
| GAAP | Adjustment | Currency | GAAP | 2018 | 2018 | |||||||||||||
| Selected Financial Data | ||||||||||||||||||
| Consolidated Company Revenues | $ | 369,023 | $ | 7,523 | $ | 376,546 | $ | 409,747 | (9.9 | %) | (8.1 | %) | ||||||
| Consolidated Digital Subscription Revenues (1) | $ | 156,969 | $ | 3,618 | $ | 160,587 | $ | 151,018 | 3.9 | % | 6.3 | % | ||||||
| Consolidated Studio + Digital Fees (2) | $ | 156,799 | $ | 2,743 | $ | 159,542 | $ | 192,712 | (18.6 | %) | (17.2 | %) | ||||||
| Consolidated Service Revenues (3) | $ | 313,768 | $ | 6,361 | $ | 320,129 | $ | 343,730 | (8.7 | %) | (6.9 | %) | ||||||
| Consolidated Product Sales and Other (4) | $ | 55,255 | $ | 1,162 | $ | 56,417 | $ | 66,017 | (16.3 | %) | (14.5 | %) | ||||||
| North America | ||||||||||||||||||
| Digital Subscription Revenues (1) | $ | 102,851 | $ | 259 | $ | 103,110 | $ | 101,099 | 1.7 | % | 2.0 | % | ||||||
| Studio + Digital Fees (2) | $ | 116,958 | $ | 268 | $ | 117,226 | $ | 142,767 | (18.1 | %) | (17.9 | %) | ||||||
| Service Revenues (3) | $ | 219,809 | $ | 527 | $ | 220,336 | $ | 243,866 | (9.9 | %) | (9.6 | %) | ||||||
| Product Sales and Other (4) | $ | 35,835 | $ | 72 | $ | 35,907 | $ | 40,672 | (11.9 | %) | (11.7 | %) | ||||||
| Total Revenues | $ | 255,644 | $ | 599 | $ | 256,243 | $ | 284,538 | (10.2 | %) | (9.9 | %) | ||||||
| CE | ||||||||||||||||||
| Digital Subscription Revenues (1) | $ | 43,586 | $ | 2,670 | $ | 46,256 | $ | 39,342 | 10.8 | % | 17.6 | % | ||||||
| Studio + Digital Fees (2) | $ | 23,681 | $ | 1,441 | $ | 25,122 | $ | 29,402 | (19.5 | %) | (14.6 | %) | ||||||
| Service Revenues (3) | $ | 67,267 | $ | 4,111 | $ | 71,378 | $ | 68,744 | (2.1 | %) | 3.8 | % | ||||||
| Product Sales and Other (4) | $ | 10,062 | $ | 624 | $ | 10,686 | $ | 12,848 | (21.7 | %) | (16.8 | %) | ||||||
| Total Revenues | $ | 77,329 | $ | 4,735 | $ | 82,064 | $ | 81,592 | (5.2 | %) | 0.6 | % | ||||||
| UK | ||||||||||||||||||
| Digital Subscription Revenues (1) | $ | 6,993 | $ | 404 | $ | 7,397 | $ | 6,955 | 0.5 | % | 6.3 | % | ||||||
| Studio + Digital Fees (2) | $ | 11,498 | $ | 669 | $ | 12,167 | $ | 14,551 | (21.0 | %) | (16.4 | %) | ||||||
| Service Revenues (3) | $ | 18,491 | $ | 1,072 | $ | 19,563 | $ | 21,506 | (14.0 | %) | (9.0 | %) | ||||||
| Product Sales and Other (4) | $ | 6,034 | $ | 345 | $ | 6,379 | $ | 7,704 | (21.7 | %) | (17.2 | %) | ||||||
| Total Revenues | $ | 24,525 | $ | 1,418 | $ | 25,943 | $ | 29,210 | (16.0 | %) | (11.2 | %) | ||||||
| Other (5) | ||||||||||||||||||
| Digital Subscription Revenues (1) | $ | 3,539 | $ | 285 | $ | 3,824 | $ | 3,622 | (2.3 | %) | 5.6 | % | ||||||
| Studio + Digital Fees (2) | $ | 4,662 | $ | 365 | $ | 5,027 | $ | 5,992 | (22.2 | %) | (16.1 | %) | ||||||
| Service Revenues (3) | $ | 8,201 | $ | 651 | $ | 8,852 | $ | 9,614 | (14.7 | %) | (7.9 | %) | ||||||
| Product Sales and Other (4) | $ | 3,324 | $ | 118 | $ | 3,442 | $ | 4,793 | (30.6 | %) | (28.2 | %) | ||||||
| Total Revenues | $ | 11,525 | $ | 769 | $ | 12,294 | $ | 14,407 | (20.0 | %) | (14.7 | %) | ||||||
| Note: Totals may not sum due to rounding. | ||||||||||||||||||
| (1) “Digital Subscription Revenues” consist of the fees associated with subscriptions for the Company’s Digital offerings, including the Personal Coaching + Digital product. | ||||||||||||||||||
| (2) “Studio + Digital Fees” consist of the fees associated with the Company's subscription plans for combined workshops and digital offerings and other payment arrangements for access to workshops. | ||||||||||||||||||
| (3) “Service Revenues” equal “Digital Subscription Revenues" plus “Studio + Digital Fees”. | ||||||||||||||||||
| (4) “Product Sales” are sales of consumer products in workshops and via e-commerce, and “Other” are revenues from licensing, magazine subscriptions, publishing and third-party advertising in publications and on the Company's websites and sales from the By Mail product, 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 Australia, New Zealand, emerging markets and franchise revenues. | ||||||||||||||||||
| WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||
| (IN THOUSANDS, EXCEPT PERCENTAGES) | ||||||||||||||||||
| UNAUDITED | ||||||||||||||||||
| First Half 2019 Variance | ||||||||||||||||||
| 2019 | ||||||||||||||||||
| Constant | ||||||||||||||||||
| First Half 2019 | First Half 2018 | 2019 | Currency | |||||||||||||||
| Currency | Constant | vs | vs | |||||||||||||||
| GAAP | Adjustment | Currency | GAAP | 2018 | 2018 | |||||||||||||
| Selected Financial Data | ||||||||||||||||||
| Consolidated Company Revenues | $ | 732,188 | $ | 17,708 | $ | 749,896 | $ | 817,970 | (10.5 | %) | (8.3 | %) | ||||||
| Consolidated Digital Subscription Revenues (1) | $ | 305,824 | $ | 8,258 | $ | 314,082 | $ | 289,565 | 5.6 | % | 8.5 | % | ||||||
| Consolidated Studio + Digital Fees (2) | $ | 314,670 | $ | 6,489 | $ | 321,159 | $ | 382,834 | (17.8 | %) | (16.1 | %) | ||||||
| Consolidated Service Revenues (3) | $ | 620,494 | $ | 14,747 | $ | 635,241 | $ | 672,399 | (7.7 | %) | (5.5 | %) | ||||||
| Consolidated Product Sales and Other (4) | $ | 111,694 | $ | 2,961 | $ | 114,655 | $ | 145,571 | (23.3 | %) | (21.2 | %) | ||||||
| North America | ||||||||||||||||||
| Digital Subscription Revenues (1) | $ | 201,611 | $ | 605 | $ | 202,216 | $ | 193,338 | 4.3 | % | 4.6 | % | ||||||
| Studio + Digital Fees (2) | $ | 234,557 | $ | 664 | $ | 235,221 | $ | 282,919 | (17.1 | %) | (16.9 | %) | ||||||
| Service Revenues (3) | $ | 436,169 | $ | 1,268 | $ | 437,437 | $ | 476,257 | (8.4 | %) | (8.2 | %) | ||||||
| Product Sales and Other (4) | $ | 69,488 | $ | 177 | $ | 69,665 | $ | 87,458 | (20.6 | %) | (20.3 | %) | ||||||
| Total Revenues | $ | 505,656 | $ | 1,447 | $ | 507,103 | $ | 563,715 | (10.3 | %) | (10.0 | %) | ||||||
| CE | ||||||||||||||||||
| Digital Subscription Revenues (1) | $ | 83,769 | $ | 6,146 | $ | 89,915 | $ | 75,503 | 10.9 | % | 19.1 | % | ||||||
| Studio + Digital Fees (2) | $ | 47,630 | $ | 3,476 | $ | 51,106 | $ | 58,482 | (18.6 | %) | (12.6 | %) | ||||||
| Service Revenues (3) | $ | 131,399 | $ | 9,622 | $ | 141,021 | $ | 133,985 | (1.9 | %) | 5.3 | % | ||||||
| Product Sales and Other (4) | $ | 22,087 | $ | 1,633 | $ | 23,720 | $ | 30,138 | (26.7 | %) | (21.3 | %) | ||||||
| Total Revenues | $ | 153,486 | $ | 11,255 | $ | 164,741 | $ | 164,123 | (6.5 | %) | 0.4 | % | ||||||
| UK | ||||||||||||||||||
| Digital Subscription Revenues (1) | $ | 13,411 | $ | 843 | $ | 14,254 | $ | 13,519 | (0.8 | %) | 5.4 | % | ||||||
| Studio + Digital Fees (2) | $ | 22,761 | $ | 1,441 | $ | 24,202 | $ | 28,933 | (21.3 | %) | (16.4 | %) | ||||||
| Service Revenues (3) | $ | 36,172 | $ | 2,284 | $ | 38,456 | $ | 42,452 | (14.8 | %) | (9.4 | %) | ||||||
| Product Sales and Other (4) | $ | 12,964 | $ | 822 | $ | 13,786 | $ | 17,043 | (23.9 | %) | (19.1 | %) | ||||||
| Total Revenues | $ | 49,136 | $ | 3,107 | $ | 52,243 | $ | 59,495 | (17.4 | %) | (12.2 | %) | ||||||
| Other (5) | ||||||||||||||||||
| Digital Subscription Revenues (1) | $ | 7,033 | $ | 664 | $ | 7,697 | $ | 7,205 | (2.4 | %) | 6.8 | % | ||||||
| Studio + Digital Fees (2) | $ | 9,722 | $ | 907 | $ | 10,629 | $ | 12,500 | (22.2 | %) | (15.0 | %) | ||||||
| Service Revenues (3) | $ | 16,755 | $ | 1,571 | $ | 18,326 | $ | 19,705 | (15.0 | %) | (7.0 | %) | ||||||
| Product Sales and Other (4) | $ | 7,155 | $ | 322 | $ | 7,477 | $ | 10,932 | (34.5 | %) | (31.5 | %) | ||||||
| Total Revenues | $ | 23,910 | $ | 1,893 | $ | 25,803 | $ | 30,637 | (21.9 | %) | (15.8 | %) | ||||||
| Note: Totals may not sum due to rounding. | ||||||||||||||||||
| (1) “Digital Subscription Revenues” consist of the fees associated with subscriptions for the Company’s Digital offerings, including the Personal Coaching + Digital product. | ||||||||||||||||||
| (2) “Studio + Digital Fees” consist of the fees associated with the Company's subscription plans for combined workshops and digital offerings and other payment arrangements for access to workshops. | ||||||||||||||||||
| (3) “Service Revenues” equal “Digital Subscription Revenues" plus “Studio + Digital Fees”. | ||||||||||||||||||
| (4) “Product Sales” are sales of consumer products in workshops and via e-commerce, and “Other” are revenues from licensing, magazine subscriptions, publishing and third-party advertising in publications and on the Company's websites and sales from the By Mail product, 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 Australia, New Zealand, emerging markets and franchise revenues. | ||||||||||||||||||
| WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||||||||||||||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||||||||||||||||||
| (IN THOUSANDS, EXCEPT PERCENTAGES) | |||||||||||||||||||||||
| UNAUDITED | |||||||||||||||||||||||
| Q2 2019 Variance | |||||||||||||||||||||||
| 2019 | |||||||||||||||||||||||
| Constant | |||||||||||||||||||||||
| Q2 2019 | Q2 2018 | 2019 | Currency | ||||||||||||||||||||
| Currency | Constant | vs | vs | ||||||||||||||||||||
| GAAP | Adjustment | Currency | GAAP | 2018 | 2018 | ||||||||||||||||||
| Selected Financial Data | |||||||||||||||||||||||
| Gross Profit | $ | 215,814 | $ | 4,637 | $ | 220,451 | $ | 244,794 | (11.8 | %) | (9.9 | %) | |||||||||||
| Gross Margin | 58.5 | % | 58.5 | % | 59.7 | % | |||||||||||||||||
| Selling, General and Administrative Expenses | $ | 60,374 | $ | 981 | $ | 61,355 | $ | 61,665 | (2.1 | %) | (0.5 | %) | |||||||||||
| Operating Income | $ | 105,473 | $ | 2,315 | $ | 107,788 | $ | 127,708 | (17.4 | %) | (15.6 | %) | |||||||||||
| Operating Income Margin | 28.6 | % | 28.6 | % | 31.2 | % | |||||||||||||||||
| Note: Totals may not sum due to rounding. | |||||||||||||||||||||||
| WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||||||||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||
| (IN THOUSANDS, EXCEPT PERCENTAGES) | ||||||||||||||||||||||
| UNAUDITED | ||||||||||||||||||||||
| First Half 2019 Variance | ||||||||||||||||||||||
| 2019 | ||||||||||||||||||||||
| Constant | ||||||||||||||||||||||
| First Half 2019 | First Half 2018 | 2019 | Currency | |||||||||||||||||||
| Currency | Constant | vs | vs | |||||||||||||||||||
| GAAP | Adjustment | Currency | GAAP | 2018 | 2018 | |||||||||||||||||
| Selected Financial Data | ||||||||||||||||||||||
| Gross Profit | $ | 416,763 | $ | 10,563 | $ | 427,326 | $ | 465,795 | (10.5 | %) | (8.3 | %) | ||||||||||
| Gross Margin | 56.9 | % | 57.0 | % | 56.9 | % | ||||||||||||||||
| Selling, General and Administrative Expenses | $ | 125,176 | $ | 2,342 | $ | 127,518 | $ | 121,676 | 2.9 | % | 4.8 | % | ||||||||||
| Operating Income | $ | 127,371 | $ | 3,231 | $ | 130,602 | $ | 189,779 | (32.9 | %) | (31.2 | %) | ||||||||||
| Operating Income Margin | 17.4 | % | 17.4 | % | 23.2 | % | ||||||||||||||||
| Note: Totals may not sum due to rounding. | ||||||||||||||||||||||
| WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||
| (IN THOUSANDS) | ||||||||||||||||
| UNAUDITED | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 29, | June 30, | June 29, | June 30, | |||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Net Income | $ | 53,834 | $ | 70,720 | $ | 43,148 | $ | 109,832 | ||||||||
| Interest | 34,732 | 35,866 | 69,927 | 71,732 | ||||||||||||
| Taxes | 16,586 | 19,825 | 13,711 | 7,208 | ||||||||||||
| Depreciation and Amortization | 11,288 | 10,620 | 22,693 | 21,774 | ||||||||||||
| Stock-based Compensation | 4,872 | 5,291 | 9,684 | 9,675 | ||||||||||||
| EBITDAS | $ | 121,312 | $ | 142,322 | $ | 159,163 | $ | 220,221 | ||||||||
| Note: Totals may not sum due to rounding. | ||||||||||||||||