WeightWatchers 2005 Annual Report Download - page 50

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Sources and Uses of Cash
Fiscal 2005
At the end of fiscal 2005, cash and cash equivalents were $31.5 million, a decrease of $3.7 million
from the end of the fiscal 2004. Cash flows provided by operating activities in fiscal 2005 were
$296.8 million, including $46.2 million of cash provided by WeightWatchers.com’s operating activities.
Investing activities utilized $400.3 million of cash, including $380.8 million for the acquisition of the
remaining interests in WeightWatchers.com and $17.8 million for capital spending. Net cash provided
for financing activities totaled $103.2 million, comprised of net borrowings of $277.0 million and the
use of $176.0 million for the repurchase of 3.7 million shares of our common stock pursuant to our
stock repurchase plan. See Part II, Item 5 of this Annual Report on Form 10-K for more information
regarding our stock repurchase plan.
Fiscal 2004
At the end of fiscal 2004, cash and cash equivalents were $35.2 million, an increase of
$11.8 million from the end of fiscal 2003. Cash flows provided by operating activities were
$252.4 million and the net use of funds for investing and financing activities totaled $246.3 million.
Investing activities used cash of $65.8 million, primarily comprised of the $60.5 million cash paid for
the acquisitions of our Fort Worth and Washington D.C. area franchises. Cash used for financing
activities totaled $180.4 million, including $177.1 million used to repurchase 4.7 million of our shares
pursuant to our stock repurchase plan. Our pay-down of debt which included the impact of refinancings
that took place in January 2004 and the retirement of the remainder of our 13% Senior Subordinated
Notes in the third quarter of fiscal 2004 were completely offset by a new Term Loan and Revolver
borrowings. In addition, in the first quarter of fiscal 2004, as is required by FIN 46R, we recorded a
$5.7 million net increase in cash as a result of the impact of consolidating WeightWatchers.com.
Impact of FIN 46R on Cash Flow
The FIN 46R impact on cash was to add $16.5 million to fiscal 2004. In fiscal 2004, cash flows
increased $10.8 million from the operations of WeightWatchers.com, net of intercompany eliminations
and investing activities. In addition, in the first quarter of fiscal 2004, as is required by this
pronouncement, we recorded a $5.7 million net increase in cash as a result of the impact of
consolidating WeightWatchers.com.
The remainder of this section will address the financial position of Weight Watchers International
on a stand-alone basis, excluding the impact of FIN 46R.
Weight Watchers International on a Stand-Alone Basis
For fiscal 2004, cash and cash equivalents were $18.7 million, a decrease of $4.7 million from fiscal
2003. Cash flows provided by operating activities in fiscal 2004 were $234.0 million and funds used for
investing and financing activities totaled $238.6 million. Investing activities utilized $58.2 million of
cash, which included the acquisitions of our Fort Worth and Washington D.C. area franchises for
$60.5 million. Cash used for financing activities totaled $180.4 million primarily related to the
repurchase of 4.7 million shares of our common stock for $177.1 million pursuant to our stock
repurchase plan. See Part II, Item 5 of this Annual Report on Form 10-K for more information
regarding our stock repurchase plan.
For fiscal 2003, cash and cash equivalents decreased $34.1 million to $23.4 million. Cash flows
provided by operating activities were $233.1 million. Investing activities in the year used $211.6 million
of cash and included $208.8 million paid in connection with the acquisition of the assets of The WW
Group and Dallas/New Mexico franchises. In addition, $5.0 million was invested in capital expenditures.
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