Nutrisystem 2007 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2007 Nutrisystem annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 78

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78

Dear Fellow Stockholders:
Our incessant focus on improving the lives of our customers helped propel our company to another year of
strong financial results. Revenues in 2007 grew to $777 million, up 37% over 2006, while earnings per diluted
share grew to $2.96, up 29% versus 2006.
Although we saw a more competitive environment in 2007, our solid financial results were driven by:
1. Increasing profitable marketing spend in our three main customer demographics: women, men and
seniors. Our marketing spend approached $180 million in 2007 and it helped us attract approximately
1.3 million customers in the United States. Our women’s program continues to be our largest making up
70% of our customer base, but our men’s business, in just its first full year, exceeded $200 million in sales.
We continue to believe that the men’s weight loss market is large and getting larger, and that we’re perfectly
positioned to be a leader in this category.
2. Increasing reactivation of ex-customers by over 150% in 2007, to almost $96 million in sales.
Customers return to our program in greater numbers each year because of one reason—it works! When
ex-customers return to NutriSystem, they tend to be more profitable for us than a new customer, and this
should be an increasingly larger part of our business going forward.
The future is bright as 2008 starts with a focus on product innovation and diversification.
• We launched a new, breakthrough weight loss program called NutriSystem®Advanced™ to start the
year. This revolutionary program features new recipes, omega-3 fatty acids, patented soluble fiber, and
new approaches to exercise and behavior modification, customized by gender and age.
• We also launched our first international business in Canada and we expect additional international
businesses to follow.
• As always, we will continue to invest profitable marketing dollars in new and existing channels to
expand our customer base and to make our brand more relevant.
At NutriSystem, we are excited about our opportunity to be a leading, global player in the weight
management industry,and we take pride in serving our customers and building our business one success story at
a time. I thank our employees, management team and stockholders for their support in these efforts.
Sincerely,
Michael J. Hagan
Chairman and Chief Executive Officer
April 2008