Nutrisystem 2007 Annual Report Download - page 9

Special Note Regarding Forward-Looking Statements
Except for the historical information contained herein, this Annual Report (“Report”) on Form 10-K
contains certain forward-looking statements that involve substantial risks and uncertainties. Words such as
“may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,”
“continue,” or similar words are intended to identify forward-looking statements, although not all forward-
looking statements contain these words. Our actual results, performance or achievements could differ materially
from the results expressed in, or implied by, these forward-looking statements. Factors that could cause or
contribute to such differences include those set forth in “Risk Factors.” Accordingly, there is no assurance that
the results in the forward-looking statements will be achieved.
PART I
ITEM 1. BUSINESS
Overview
We are a leading marketer and provider of a weight management system based on a portion-controlled,
prepared meal program. Typically, our customers purchase monthly food packages containing a 28-day supply of
breakfasts, lunches, dinners and desserts, which they supplement with fresh dairy, fruit, salad, vegetables and
low-glycemic carbohydrate items. Most of our customers order on an auto-delivery basis (“Auto-Delivery”), in
which we send a month’s food supply on an ongoing basis until notified by the customer to stop our shipments.
Our Auto-Delivery program is currently priced between $294 and $320 per shipment, or about $10 to $11 per
day for a full 28 days of NutriSystem food. Our food is shelf stable at room temperature and will last for up to
two years, making it relatively inexpensive to ship and store.
Our program is based on the following cornerstones that represent who we are to our customers:
Success. We believe our program enables our customers to lose weight successfully. Our NutriSystem®
Advanced™ program consists of over 100 portion-controlled food items that are designed to rank low on the
Glycemic Index thereby providing dieters with a balanced intake of “good” carbohydrates, proteins and fats. The
Glycemic Index is a measure of the quality of carbohydrates in foods. Foods on the lower end of the index are
generally considered “good” carbohydrates.
Convenience. We sell our weight management programs primarily through a direct-to-consumer sales and
distribution approach using the Internet and telephone. Our customers can order 24 hours a day, seven days a
week on our website, www.nutrisystem.com, and the food is shipped directly to the customer’s door.
Simplicity. We provide a comprehensive weight management program, consisting of a pre-packaged food
program and counseling. Our customers can either choose one of our pre-set food packages or customize their
monthly food orders for their specific tastes. There are no center visits, no measuring foods or counting calories.
Value. Our Auto-Delivery program is currently priced at about $10 to $11 per day for a full 28 days of
NutriSystem food. We do not charge membership fees.
Anonymity. The direct-to-consumer approach using the Internet provides the privacy that our customers
value. We provide online and telephone counseling and support to our customers using our trained diet
counselors resulting in no need to travel for a face-to-face meeting.
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