WeightWatchers 2004 Annual Report Download - page 3

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Dear Shareholders
Looking back over more than four decades since the first Weight
Watchers®meeting, our Company has grown and evolved dramatically.
The need for our services is just as great today as it was then, in fact,
it is even greater. People from a variety of cultures continue to search for
help in meeting their weight-loss goals. And, most importantly, Weight
Watchers remains the only commercial weight-loss program backed by credible scientific evidence
demonstrating that our programs actually work. It’s no wonder that we are the world’s leading
provider of weight-loss services.
According to the World Health Organization, up to 1.7 billion people worldwide are overweight or
obese. In the United States alone, the Centers for Disease Control and Prevention estimates that
64% of the adult population is overweight or obese. These numbers are cause for serious concern, as
dozens of scientific studies have linked obesity to a series of conditions that include several forms of
cancer, stroke, type 2 diabetes, and heart disease.
There is no question that the demand for weight-loss services is growing and that people from all
walks of life are searching for weight-loss solutions. Our Program works and we have hundreds
of thousands of Lifetime Members to prove it. Only Weight Watchers offers the sustainable solution
for weight loss based on group support, behavior modification, healthful eating, and exercise.
The recent rise of the low-carb, self-help diet craze was fueled by people’s desire for a quick fix.
But, as we predicted, the low-carb phenomenon is now in decline as people have figured out that such
approaches are neither healthy nor sustainable. Despite the market share challenges that this crash
diet produced, we never wavered from our proven approach to weight loss and weight management.
Our 2004 North American organic attendance declines gradually lessened as the year progressed
and we expect organic attendance trends to return to positive territory in 2005. The fact is that people
keep coming back to Weight Watchers, even after they have tried the latest diet fads.
For the full year, excluding the consolidation impact of WeightWatchers.com, we achieved revenue
of $966 million and net income of $179 million. We were solidly profitable with a 2004 operating
income margin of 30%, a strong performance in the face of short-term competitive pressure from the
Linda A. Huett
President and
Chief Executive Officer