WeightWatchers 2007 Annual Report Download - page 41

The following table sets forth our revenues by category for the past five fiscal years.
Revenue Sources
(in millions)
Fiscal 2007 Fiscal 2006 Fiscal 2005 Fiscal 2004 Fiscal 2003
(52 weeks) (52 weeks) (52 weeks) (52 weeks) (53 weeks)
Meetings fees ........................ $ 880.7 $ 723.1 $ 681.1 $ 629.1 $607.2
Product sales ........................ 337.7 293.3 285.5 274.6 276.8
Internet revenues ..................... 151.6 129.4 109.7 65.0 —
Licensing, franchise royalties and other . . . 97.2 87.5 75.0 56.2 59.9
Total ............................... $1,467.2 $1,233.3 $1,151.3 $1,024.9 $943.9
From fiscal 2003 through fiscal 2007, our revenues have increased at a compound annual growth rate of
11.7%. This increase is principally a result of:
•Increased meeting fees. From fiscal 2003 to fiscal 2007, meeting fees grew at a compound annual rate
of 9.7% led by our NACO operations, which grew at a compound annual rate of 11.4%. This growth
resulted from increases in our attendance, program innovations, pricing actions taken in many of our
markets and higher frequency of commitment plans, as well as from our acquisitions of franchise
operations over that period. From 2003 to 2006, our average meeting fee per attendee increased from
$9.99 to $11.84. From 2006 to 2007, our average meeting fee per attendee rose from $11.84 to $14.05
coincident with our introduction of Monthly Pass, a recurring billing model whereby the member
authorizes us to charge her credit card on a monthly basis, at a discounted rate, until the member elects
to cancel. The increase in the average meeting fee arises because not all members who purchase
Monthly Pass attend all the meetings for which they have paid.
•Increased product sales. Global product sales have grown at a compound annual rate of 5.1% from
fiscal 2003 to fiscal 2007, led by our Continental European operations which grew at a compound
annual rate of 7.7%. Product sales growth resulted from higher attendance volume and from successful
new product launches. In our meetings, we have increased average product sales per attendee from
$3.56 to $4.48 over the same period.
•Consolidation of WeightWatchers.com. Effective April 3, 2004, we began consolidating
WeightWatchers.com. As a result of this consolidation, we have included $65.0 million,
$109.7 million, $129.4 million and $151.6 million of Internet revenues in our results of operations for
fiscal 2004, fiscal 2005, fiscal 2006 and fiscal 2007, respectively. The increase in Internet revenues
during this time is primarily due to growth in the number of WeightWatchers.com’s of end-of-period
active online subscribers from 340,000 at December 2004 to 584,000 at December 2007.
•Increased licensing revenues. Licensing revenues grew at a compound annual rate of 57.3% from fiscal
2003 to fiscal 2007 primarily as a result of our increased focus on expanding the number of Weight
Watchers branded products worldwide and the reversion to us at the end of the third quarter of fiscal
2004 of revenues from certain third party licenses that had been paid to Heinz up until that time.
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