WeightWatchers 2006 Annual Report Download - page 96

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
17. Quarterly Financial Information (Unaudited)
The following is a summary of the unaudited quarterly consolidated results of operations for the fiscal years
ended December 30, 2006 and December 31, 2005.
For the Fiscal Quarters Ended
April 1,
2006
July 1,
2006
September 30,
2006
December 30,
2006
Fiscal year ended December 30, 2006
Revenues, net ..................................... $342,048 $321,059 $284,753 $285,465
Gross profit ....................................... 192,493 180,491 155,723 147,453
Operating income .................................. 104,075 105,423 92,289 78,261
Net income ....................................... 56,997 57,917 50,615 44,296
Basic EPS ........................................ 0.57 0.58 0.52 0.45
Diluted EPS ....................................... 0.56 0.58 0.52 0.45
For the Fiscal Quarters Ended
April 2,
2005
July 2,
2005
October 1,
2005
December 31,
2005
Fiscal year ended December 31, 2005
Revenues, net ..................................... $329,998 $312,600 $257,483 $251,170
Gross profit ....................................... 181,920 176,221 142,172 130,256
Operating income .................................. 90,027 160,488 84,663 67,314
Net income ....................................... 51,628 34,472 49,452 38,850
Basic EPS ........................................ 0.50 0.33 0.48 0.38
Diluted EPS ....................................... 0.49 0.33 0.47 0.38
Basic and diluted EPS are computed independently for each of the periods presented. Accordingly, the sum
of the quarterly EPS amounts may not agree to the total for the year. During the fourth quarter of fiscal 2006, the
Company recorded a net tax benefit of approximately $6,300 by reversing tax reserves which due to the
resolution of certain tax matters were no longer necessary, partially offset by adjustments to its tax valuation
allowance for foreign tax net operating loss carryforwards. During the fiscal quarters ended July 2, 2005 and
October 1, 2005, the Company incurred expenses associated with the WW.com acquisition (See Note 3) of
$46,082 and $309, respectively.
18. Other Recently Issued Accounting Pronouncements
In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108,
“Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements” (“SAB 108”), which provides interpretive guidance on the consideration of the effects of prior year
misstatements in quantifying current year misstatements for the purpose of a materiality assessment. SAB 108 is
effective as of the end of the Company’s 2006 fiscal year, allowing a one-time transitional cumulative effect
adjustment to beginning retained earnings as of January 1, 2006, for errors that were not previously deemed
material, but are material under the guidance in SAB 108. The adoption of SAB 108 did not have an impact on
the Consolidated Financial Statements.
19. Subsequent Events
In January 2007, in connection with the Tender Offer (see Note 7), the Company increased its debt capacity
by adding an Additional Term Loan A in the amount of $700,000 and a new Term Loan B in the amount of
$500,000. The Company utilized $185,784 of these proceeds to pay off the WW.com Credit Facilities, $461,593
to repurchase 8,548 of its shares in the Tender Offer and $567,617 to repurchase 10,511 of its shares from Artal.
The Additional Term Loan A and Term Loan B mature in January 2013 and January 2014, respectively.
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