WeightWatchers 2003 Annual Report Download - page 73

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
7. Redeemable Preferred Stock (Continued)
was financed through additional borrowings of $12,000 under the Credit Facility (as defined in Note 6),
which was repaid by the end of the second quarter 2002, and cash from operations.
8. Treasury Stock
On April 18, 2001, the Company entered into a Put/Call Agreement with Heinz, pursuant to which
Heinz acquired the right and option to sell during the period ending on or before May 15, 2002, and
the Company acquired the right and option to purchase after that date and on or before August 15,
2002, 6,719 shares of the common stock of the Company owned by Heinz. Under this agreement,
during the fiscal year ended December 29, 2001, Heinz sold all of its shares to the Company at fair
value for an aggregate purchase price of $27,132, which was funded with cash from operations. Heinz
no longer holds any common stock of the Company.
On October 9, 2003, the Company’s Board of Directors authorized a program to repurchase up to
$250,000 of the Company’s 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. In the fourth
quarter of 2003, the Company purchased 784 shares of stock in the open market at a total cost of
$28,815.
9. Earnings Per Share
Basic earnings per share (‘‘EPS’’) computations are calculated utilizing the weighed average
number of common shares outstanding during the periods presented. Diluted EPS includes the
weighted average number of common shares outstanding and the effect of dilutive common stock
equivalents.
The following table sets forth the computation of basic and diluted EPS.
January 3, December 28, December 29,
2004 2002 2001
Numerator:
Net income ...................................... $143,941 $143,694 $147,187
Preferred stock dividends ............................ — 254 1,500
Numerator for basic and diluted EPS—income available to
common shareholders ........................... $143,941 $143,440 $145,687
Denominator:
Denominator for basic EPS—weighted-average shares ....... 106,676 105,959 108,676
Effect of dilutive stock options ........................ 3,048 3,704 2,947
Denominator for diluted EPS—weighted-average shares .... 109,724 109,663 111,623
EPS:
Basic .......................................... $ 1.35 $ 1.35 $ 1.34
Diluted ......................................... $ 1.31 $ 1.31 $ 1.31
F-19