WeightWatchers 2009 Annual Report Download - page 102

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
For the Fiscal Quarters Ended
March 31,
2008
June 30,
2008
September 27,
2008
January 3,
2009
Fiscal year ended January 3, 2009
Revenues, net ....................................... $437,027 $400,014 $352,618 $346,153
Gross profit ......................................... 245,895 210,061 194,425 184,596
Operating income .................................... 116,012 101,273 107,836 99,926
Net income attributable to the Company .................. 57,367 46,638 52,670 47,656
Basic EPS attributable to the Company ................... $ 0.72 $ 0.59 $ 0.68 $ 0.62
Diluted EPS attributable to the Company .................. $ 0.72 $ 0.59 $ 0.67 $ 0.62
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.
As discussed in further detail in Note 14, the Company received an adverse tax ruling that its U.K. leaders
should have been classified as employees for U.K. tax purposes and, as such, the Company should have withheld
tax from its leaders pursuant to the PAYE and NIC collection rules and remitted such amounts to HMRC. In
connection with this ruling, the Company recorded a charge of approximately $36,660 to cost of revenues in the
fourth quarter of fiscal 2009.
As discussed in further detail in Note 14, in the second quarter of fiscal 2008, the Company received an
adverse tax ruling with respect to the imposition of U.K. VAT on revenues earned by its U.K. subsidiary. In
connection with this ruling, the Company recorded a charge of approximately $27,900 as an offset to revenue in
fiscal 2008. Beginning in the third quarter of fiscal 2008, the Company recorded as an offset to revenue VAT
charges associated with U.K. meeting fees as earned, consistent with the aforementioned ruling. Furthermore, as
a result of the expiration of the statutory time period with respect to U.K. VAT owed prior to October 1, 2005,
the Company recorded in the fourth quarter of fiscal 2008 as a benefit to revenue for the periods prior to
October 1, 2005 an amount of approximately $9,200 as an offset against reserves previously recorded including
in part the charge recorded against revenue in the second quarter of fiscal 2008.
19. Recently Issued Accounting Pronouncements
In October 2009, new revenue recognition guidance was issued regarding arrangements with multiple
deliverables. The new guidance permits companies to recognize revenue from certain deliverables earlier than
previously permitted, if certain criteria are met. The new guidance is effective for fiscal years beginning on or
after June 15, 2010 and is not expected to have a material impact to the Company’s financial position, results of
operations or cash flows.
F-30