WeightWatchers 2003 Annual Report Download - page 33

Acquisitions
On March 30, 2003, we completed the acquisition of certain assets of eight of the 15 franchises of
the WW Group for a purchase price of $180.7 million. The acquisition was financed through cash and
additional borrowings of $85 million.
On November 30, 2003, we completed the acquisition of our Dallas and New Mexico franchises for
a purchase price of $27.2 million. The acquisition was financed through cash from operations.
On January 18, 2002, we completed the acquisition of our North Jersey franchise for a purchase
price of $46.5 million. The acquisition was financed through additional borrowings under our Credit
Facility, which were subsequently repaid by the end of the second quarter of 2002.
On July 2, 2002, we completed the acquisition of our San Diego franchise for a purchase price of
$11.0 million. The acquisition was financed through cash from operations.
On September 1, 2002, we completed the acquisition of our eastern North Carolina franchise for a
purchase price of $10.6 million. The acquisition was financed through cash from operations.
On January 16, 2001, we acquired the franchise territories and certain business assets of Weighco
for $83.8 million. We financed the acquisition with available cash of $23.8 million and additional
borrowings of $60.0 million under our Credit Facility.
Stock Transactions
On October 9, 2003, our Board of Directors authorized a program to repurchase up to
$250.0 million of our outstanding stock. The repurchase program allows for shares to be purchased
from time to time in the open market or through privately negotiated transactions. No shares will be
purchased from Artal Luxembourg or its affiliates under the program. During the fourth quarter of
2003, we purchased 784,000 shares of stock in the open market for a total of $28.8 million.
As of December 29, 2001, we had one million shares of Series A Preferred Stock issued and
outstanding with a preference value of $25.0 million. Holders of the Series A Preferred Stock were
entitled to receive dividends at an annual rate of 6% payable annually in arrears. On March 1, 2002,
we redeemed all of our Series A Preferred Stock held by Heinz for a redemption price of $25.0 million
plus accrued and unpaid dividends. The redemption was financed through additional borrowings of
$12.0 million under the Credit Facility and cash from operations.
Factors Affecting Future Liquidity
Any future acquisitions, joint ventures or other similar transactions could require additional capital
and we cannot be certain that any additional capital will be available on acceptable terms or at all. Our
ability to fund our capital expenditure requirements, interest, principal and dividend payment
obligations and working capital requirements and to comply with all of the financial covenants under
our debt agreements depends on our future operations, performance and cash flow. These are subject
to prevailing economic conditions and to financial, business and other factors, some of which are
beyond our control.
Off-Balance Sheet Transactions
As part of our ongoing business, we do not participate in transactions that generate relationships
with unconsolidated entities or financial partnerships established for the purpose of facilitating
off-balance sheet arrangements or other contractually narrow or limited purposes, such as entities often
referred to as structured finance or special purpose entities.
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