WeightWatchers 2002 Annual Report Download - page 5

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System in these countries. Weight Watchers is currently offered in 30 countries
worldwide, highlighting both our global presence, as well as the opportunity
for future growth.
Record Financial Performance
Strong performances across almost all elements of our business fueled record
financial results in 2002, with improvements across all metrics. Full-year rev-
enues increased 30% to $809.6 million. Our variable cost business model
maintained our mid-50s gross margin percentage and operating income mar-
gins increased to 36.7%, up from 31.2% in 2001. As a result, we delivered
record earnings in 2002, with operating income up 52% to $297 million,
from $195 million in 2001.
In addition, during 2002, we generated cash flow from operating activities
after interest and taxes of $165 million. This allowed us to fully fund three
franchise acquisitions in New Jersey, San Diego and North Carolina; to redeem
all $25 million of preferred stock that had been held by Heinz; to finance
our capital expenditure needs for the year; and to retire an additional $35
million of our bank debt (including a $20 million voluntary pre-payment); while
increasing cash on our balance sheet by $34 million.
I am pleased to report 2002 results
reflect our strategy is working,
our financial position is strong and
our business continues to grow.
2003 and Beyond
Looking ahead, I am equally pleased with our outlook for the future. Obesity
and weight control continue to be a concern in an increasing proportion
of the population and Weight Watchers is focused on providing the very best
solutions available in the market.
Exciting key events in 2003 include the launch of new innovations to our
POINTS Weight-Loss System in both the United Kingdom and North America.
In January, the U.K. introduced “Time to Eat,” offering members 52 weeks
of seasonally appropriate program materials that correspond to the important
events and holidays (and may I add, the eating occasions) associated with
Strong performances
across almost all
elements of our business
fueled record financial
results in 2002, with
improvements across
all metrics. Full-year
revenues increased 30%
to $809.6 million…
As a result, we delivered
record earnings in 2002,
with operating income
up 52% to $297 million.