Nutrisystem 2009 Annual Report Download - page 39

In the year ended December 31, 2009, net cash used in financing activities was $25.0 million and consisted
of the repurchase of 132,200 shares of common stock for an aggregate purchase price of $1.9 million and the
payment of dividends of $21.4 million.
In August 2006, we announced that our Board of Directors authorized the repurchase of up to $50 million of
our outstanding shares of common stock. In February 2007, our Board of Directors authorized a repurchase
program of up to $200 million of outstanding shares of common stock and, in October 2007, authorized the
repurchase of an additional $100 million of outstanding shares of common stock. The stock repurchase programs
from 2007 had an expiration date of March 31, 2009 but were extended by our Board of Directors until
March 31, 2011. These programs may be limited or terminated by us at any time without prior notice. The
repurchased shares have been retired. As of December 31, 2009, an additional $113.8 million was authorized to
be purchased under the existing repurchase programs.
The Board of Directors declared quarterly dividends of $0.175 per share, which were paid on March 16,
2009, May 18, 2009, August 17, 2009 and November 16, 2009. Subsequent to December 31, 2009, the Board of
Directors declared a quarterly dividend of $0.175 per share payable on March 22, 2010 to shareholders of record
as of March 11, 2010. Although the Company intends to continue to pay regular quarterly dividends, the
declaration and payment of future dividends are discretionary and will be subject to quarterly determination by
the Board of Directors following its review of the Company’s financial performance.
Seasonality
Typically in the weight loss industry, revenue is strongest in the first calendar quarter and lowest in the
fourth calendar quarter. We believe our business experiences seasonality, driven by the predisposition of dieters
to initiate a diet and the price and availability of certain media.
Recently Issued Accounting Pronouncements
In June 2008, the FASB issued an accounting pronouncement clarifying that unvested share-based payment
awards that contain rights to receive nonforfeitable dividends (whether paid or unpaid) are participating
securities, and should be included in the two-class method of computing EPS. The pronouncement was effective
for fiscal years beginning after December 15, 2008, and for interim periods within those years. Effective
January 1, 2009, the nonvested shares issued under the Company’s equity incentive plans were a second class of
stock for purposes of EPS calculations. This resulted in lower income allocations to the Company’s common
stock and impacted its reported diluted income per common share by $0.05 in 2009 and $0.03 in 2008. There was
no impact in 2007. Prior period income per share data was adjusted to conform to the provisions of this
pronouncement. The adoption of the pronouncement did not have any impact on the Company’s consolidated
financial position and results of operations.
In November 2008, the FASB ratified an accounting pronouncement which clarifies how to account for
certain transactions involving equity method investments. The initial measurement, decreases in value and
changes in the level of ownership of the equity method investment are addressed. The pronouncement was
effective for the Company beginning on January 1, 2009 and was applied prospectively. The adoption of the
pronouncement did not have a material impact on the Company’s consolidated financial position and results of
operations.
In June 2009, the FASB issued the Accounting Standards Codification as the source of authoritative
accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of
financial statements in conformity with GAAP. The pronouncement is effective for interim and annual periods
ending after September 15, 2009. The adoption of the pronouncement did not have any impact on the Company’s
consolidated financial position and results of operations.
35