WeightWatchers 2004 Annual Report Download - page 39

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 $85.0 million.
On November 30, 2003, we completed the acquisition of certain assets 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 certain assets 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 certain assets 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 certain assets of our eastern North
Carolina franchise for a purchase price of $10.6 million. The acquisition was financed through cash
from operations.
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 fiscal year 2003, we
purchased 0.8 million shares of common stock in the open market for a total purchase price of
$28.8 million. During fiscal year 2004, we purchased 4.7 million shares of common stock in the open
market for a total purchase price of $177.1 million.
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.
SEASONALITY
Our business is seasonal, with revenues generally decreasing at year end and during the summer
months. Our advertising schedule supports the three key enrollment-generating seasons of the year:
winter, spring and fall, with winter having the highest concentration of advertising spending. Our
operating income for the first half of the year is generally the strongest.
WEIGHTWATCHERS.COM
Our affiliate and licensee, WeightWatchers.com, has the exclusive right to operate the Weight
Watchers web site and markets two online paid subscription products, Weight Watchers Online and
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