WeightWatchers 2006 Annual Report Download - page 70

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE FISCAL YEARS ENDED
(IN THOUSANDS)
December 30,
2006
December 31,
2005
January 1,
2005
(52 Weeks) (52 Weeks) (52 Weeks)
Operating activities:
Net income ............................................................ $209,825 $ 174,402 $ 183,084
Adjustments to reconcile net income to cash provided by operating activities:
Cumulative effect of accounting change ..................................... — — 11,941
Depreciation and amortization ............................................. 13,351 12,817 8,935
Amortization of deferred financing costs ..................................... 1,529 879 1,308
Share-based compensation expense ......................................... 11,789 2,901 143
Gain on settlement of hedge ............................................... — — (1,255)
Deferred tax provision ................................................... 28,819 11,184 22,023
Unrealized loss (gain) on derivative instruments ............................... — — 1,318
Repayments from equity investee .......................................... — — (4,916)
Allowance for doubtful accounts ........................................... (153) 629 728
Reserve for inventory obsolescence, other .................................... 6,990 6,044 5,474
Foreign currency exchange rate (gain) loss ................................... (1,075) 1,576 (803)
Early extinguishment of debt .............................................. 1,321 — 4,264
Compensation expense associated with the WW.com acquisition .................. — 43,590 —
Tax benefit of stock options exercised ....................................... — 26,770 7,678
Other items, net ........................................................ (356) 2,714 144
Changes in cash due to:
Receivables ........................................................ (10,656) (9,125) (6,193)
Inventories ........................................................ (9,250) (6,014) 2,718
Prepaid expenses ................................................... (9,292) 6,302 (549)
Accounts payable ................................................... 10,737 (1,026) (1,067)
Accrued liabilities ................................................... 23,852 25,102 (676)
Deferred revenue ................................................... 2,453 13,225 4,533
Income taxes ....................................................... (14,106) (15,174) 13,606
Cash provided by operating activities ................................... 265,778 296,796 252,438
Investing activities:
Capital expenditures ..................................................... (14,329) (14,634) (5,163)
Web site development expenditures ......................................... (5,083) (3,184) (1,557)
Capitalized software expenditures .......................................... (11,614) (1,615) (810)
Repayments from equity investee .......................................... — — 4,916
Cash paid for acquisitions ................................................ (140,374) (380,832) (61,881)
Other items, net ........................................................ 29 (2) (1,379)
Cash used for investing activities ....................................... (171,371) (400,267) (65,874)
Financing activities:
Net increase in short-term borrowings ....................................... — 1,329 (1,609)
Proceeds from borrowings ................................................ 202,500 65,000 321,000
Payments on long-term debt ............................................... (449,466) (3,000) (456,055)
Proceeds from new term loan .............................................. 350,000 215,000 150,000
Repayment of high-yield loan ............................................. — — (15,541)
Proceeds from settlement of hedge ......................................... — — 1,255
Premium paid on extinguishment of debt and other costs ........................ — — (1,331)
Payment of dividends .................................................... (51,792) — —
Secondary offering fees .................................................. (455) — —
Tax benefit of restricted stock units vested and stock options exercised ............. 6,234 — —
Deferred financing costs .................................................. (1,980) (3,758) (2,896)
Purchase of treasury stock ................................................ (151,678) (175,980) (177,081)
Proceeds from stock options exercised ...................................... 5,779 4,563 1,879
Cash (used for)/provided by financing activities ........................... (90,858) 103,154 (180,379)
Effect of exchange rate changes on cash and cash equivalents and other ................ 2,479 (3,365) (164)
Impact of consolidating WeightWatchers.com .................................... — — 5,693
Net increase/(decrease) in cash and cash equivalents ............................... 6,028 (3,680) 11,714
Cash and cash equivalents, beginning of fiscal year ................................ 31,476 35,156 23,442
Cash and cash equivalents, end of fiscal year ..................................... $ 37,504 $ 31,476 $ 35,156
The accompanying notes are an integral part of the consolidated financial statements.
F-7