WeightWatchers 2005 Annual Report Download - page 83

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE FISCAL YEARS ENDED
(IN THOUSANDS)
December 31, January 1, January 3,
2005 2005 2004
(52 Weeks) (52 Weeks) (53 Weeks)
Operating activities:
Net income .......................................... $174,402 $ 183,084 $ 143,941
Adjustments to reconcile net income to cash provided by operating activities:
Cumulative effect of accounting change ....................... — 11,941 —
Depreciation and amortization ............................. 12,817 8,935 5,894
Amortization of deferred financing costs ....................... 879 1,308 1,248
Restricted stock compensation expense ........................ 2,901 143 53
(Gain) loss on settlement of hedge .......................... — (1,255) 5,381
Deferred tax provision .................................. 11,184 22,023 16,677
Unrealized loss (gain) on derivative instruments .................. — 1,318 (5,097)
Repayments from equity investee ........................... — (4,916) (5,000)
Allowance for doubtful accounts ............................ 629 728 552
Reserve for inventory obsolescence, other ...................... 6,044 5,474 4,627
Foreign currency exchange rate (gain) loss ..................... 1,576 (803) 7,271
Early extinguishment of debt .............................. — 4,264 47,368
Compensation expense associated with the WW.com acquisition ........ 43,590 — —
Tax benefit of stock options exercised ......................... 26,770 7,678 7,319
Other items, net ...................................... 2,714 144 (63)
Changes in cash due to:
Receivables ........................................ (9,125) (6,193) 861
Inventories ........................................ (6,014) 2,718 1,149
Prepaid expenses .................................... 6,302 (549) (1,555)
Accounts payable .................................... (1,026) (1,067) (563)
Accrued liabilities .................................... 25,102 (676) (3,469)
Deferred revenue .................................... 13,225 4,533 (42)
Income taxes ....................................... (15,174) 13,606 6,547
Cash provided by operating activities ....................... 296,796 252,438 233,099
Investing activities:
Capital expenditures ..................................... (14,634) (5,163) (5,029)
Web site development expeditures ............................ (3,184) (1,557) —
Repayments from equity investee ............................. — 4,916 5,000
Cash paid for acquisitions ................................. (380,832) (61,881) (210,470)
Other items, net ....................................... (1,617) (2,189) (1,121)
Cash used for investing activities .......................... (400,267) (65,874) (211,620)
Financing activities:
Net increase in short-term borrowings .......................... 1,329 (1,609) 998
Proceeds from borrowings ................................. 65,000 321,000 85,000
Payments on long-term debt ................................ (3,000) (456,055) (58,447)
Proceeds from new term loan ............................... 215,000 150,000 227,326
Repayment of high-yield loan ............................... — (15,541) (244,919)
Proceeds from settlement of hedge ............................ — 1,255 2,710
Premium paid on extinguishment of debt and other costs .............. — (1,331) (42,980)
Deferred financing costs .................................. (3,758) (2,896) (2,366)
Purchase of treasury stock ................................. (175,980) (177,081) (28,815)
Proceeds from stock options exercised .......................... 4,563 1,879 2,003
Cash provided by/(used for) financing activities ................. 103,154 (180,379) (59,490)
Effect of exchange rate changes on cash and cash equivalents and other ..... (3,365) (164) 3,923
Impact of consolidating WeightWatchers.com ....................... — 5,693 —
Net (decrease) increase in cash and cash equivalents .................. (3,680) 11,714 (34,088)
Cash and cash equivalents, beginning of fiscal year ................... 35,156 23,442 57,530
Cash and cash equivalents, end of fiscal year ....................... $ 31,476 $ 35,156 $ 23,442
The accompanying notes an integral part of the consolidated financial statements.
F-7