Nutrisystem 2008 Annual Report Download - page 19

We may experience fluctuations in our operating results which may cause our stock price to be volatile.
In view of the rapidly evolving nature of our business and the seasonality inherent in the weight loss
industry, our operating results may fluctuate significantly. The market price of our common stock is subject to
fluctuations in response to our operating results, general trends in the weight loss industry, announcements by our
competitors, our ability to meet or exceed securities analysts’ expectations, recommendations by securities
analysts, the condition of the financial markets and other factors. These fluctuations, as well as general economic
and market conditions, may adversely affect the market price of our common stock and cause it to fluctuate
significantly.
Expansion into international markets may expose us to economic, political and social risks in the countries
in which we operate.
In January 2008, we expanded operations into Canada and expect to enter Japan, through a partner, by the
end of 2009. This expansion may be costly as we will be required to divert management time and resources and it
could require us to adapt our program to conform to local cultures. We may not be successful in expanding into
particular international markets and this expansion could expose our financial results to additional risks in the
countries in which we operate. Financial results could be adversely affected by changes in foreign currency rates,
changes in worldwide economic conditions, changes in trade policies or tariffs and political unrest.
Future acquisitions and the pursuit of new business opportunities present risks, and we may be unable to
achieve the financial and strategic goals of any acquisition or new business.
A component of our growth strategy may be to acquire existing businesses or pursue other business
opportunities in the market for weight management and fitness products and services. Even if we succeed in
acquiring or building such businesses, we will face a number of risks and uncertainties, including:
• difficulties in integrating newly acquired or newly started businesses into existing operations, which
may result in increasing operating costs that would adversely affect our operating income and earnings;
• the risk that our current and planned facilities, information systems, personnel and controls will not be
adequate to support our future operations;
• diversion of management time and capital resources from our existing businesses, which could
adversely affect their performance and our operating results;
• dependence on key management personnel of acquired or newly started businesses and the risk that we
will be unable to integrate or retain such personnel;
• the risk that the new products or services we may introduce or begin offering, whether as a result of
internal expansion or business acquisitions, will not gain acceptance among consumers and existing
customers;
• the risk that new efforts may have a detrimental effect on our brand;
• the risk that we will face competition from established or larger competitors in the new markets we
may enter, which could adversely affect the financial performance of any businesses we might acquire
or start; and
• the risk that the anticipated benefits of any acquisition or of the commencement of any new business
may not be realized, in which event we will not be able to achieve any return on our investment in that
new business.
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