WeightWatchers 2003 Annual Report Download - page 4

Download and view the complete annual report

Please find page 4 of the 2003 WeightWatchers annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 112

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112

Globally across our current markets, there is significant
opportunity to drive our growth using multiple revenue levers.
We continue to drive our penetration of the overweight
population. We continue to grow our product sales as we share
our best practices across our diverse geographies. We see
significant opportunities to smartly leverage our dominant
global brand through licensing. Because of our unique business
model, we are able to maintain our high gross margins over
varying demand levels, and
through effective marketing
and G&A cost containment,
sustain high operating margins
and cash flow.
In the course of our history, we have faced competition
from a variety of diet methodologies. In each case, we have
met the competitive challenge successfully and learned a
great deal from each new competitor. In 2003, we faced an
unusually large challenge from the low-carb, self-help
approach to weight loss. Some of these self-help
programs were built on poorly researched pseudo-
science, but even when a diet is rooted in sound
medical science, self-help dieting is limited.
Our track record translated into
excellent EPS growth. In 2003, our
earnings per diluted share increased
by 21%, excluding a third quarter
charge for the early extinguishment
of debt.
Product sales fall into three
categories: One-time-purchase
products such as electronic POINTS®
calculators or pedometers,
once-per-membership-cycle
products like our POINTS®and
eating out guides or cookbooks,
and every-week products such
as consumables. Since 2000,
product sales have grown at a
compound annual rate of 35%.