WeightWatchers 2010 Annual Report Download - page 63

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Statements of Income as Re
p
orted and Adjusted
(
In millions, except per share amounts
)
F
i
scal
2
009
F
i
scal
2
008
Increase
/
(
Decrease)
%
C
hang
e
R
evenues, net (as a
dj
uste
d
)
(1)
................................
$
1,398.9 $1,554.5 $(155.6) (10.0%)
UK VAT ruling impact on prior years 200
5
-200
7
(
1
)
...........
—
(18
.7
)18
.
7
R
evenues, net o
f
VAT ru
li
ng
.................................
1
,398.9 1,
5
3
5
.8
(
136.9
)(
8.9%
)
Cost of revenues (as adjusted
)
(
1
)
..............................
634.3 700.8 (66.
5
) (9.
5
%)
UK se
lf
-emp
l
o
y
ment ru
li
n
gi
mpact on 200
9
(1)
...............
4
.
2— 4
.2
UK se
lf
-emp
l
oyment ru
li
ng
i
mpact on pr
i
or year
s
2001
-
2008
(
1
)
........................................
3
2.
5
— 32.
5
Cost of revenues
..........................................
6
71.0 700.8 (29.8) (4.3%)
Gross Profi
t
..........................................
727.9 83
5
.0 (107.1) (12.8%)
Gross Mar
g
in
%
......................................
52.0% 54.4%
Mar
k
et
i
ng expense
s
.
.......................................
2
00.
5
227.4
(
26.9
)(
11.8%
)
Selling, general and administrative expenses (as adjusted)
(1)
........
1
6
5
.3 182.6 (17.3) (9.
5
%)
I
mpact o
f
restructur
i
n
g
c
h
ar
g
e
s
...........................
5
.
5
—
5
.
5
Se
lli
n
g
,
g
enera
l
an
d
a
d
m
i
n
i
strat
i
ve expenses
....................
1
70.8 182.6 (11.8) (6.5%)
Operat
i
ng Incom
e
.....................................
3
5
6.6 42
5
.0
(
68.4
)(
16.1%
)
O
perating Income Margin
%
............................
2
5.5
%2
7.7
%
I
nterest expense
...........................................
66
.7 92.7 (2
6
.0) (28.0%)
Ot
h
er
i
ncome
,
ne
t
.........................................
(0
.
2) (2
.
0) 1
.
8 (90
.
0%)
I
ncome
b
e
f
ore
i
ncome taxe
s
.............................
290
.
1 334
.
3 (44
.
2) (13
.
2%)
Provision for income taxes
..................................
1
1
5
.6 132.0 (16.4) (12.4%)
N
et incom
e
...........................................
1
74.
5
202.3 (27.8) (13.7%)
Net
l
oss attr
ib
uta
bl
e to non-contro
lli
n
gi
nterest .................. 2.
8
2.
00
.
8
40
.
0%
N
et
i
ncome attr
ib
uta
bl
etot
h
e Compan
y
....................
$
1
77.3 $ 204.3 $ (27.0) (13.2%)
W
e
i
g
h
te
d
average
dil
ute
d
s
h
ares outstan
di
n
g
....................
77.1 78.
5(
1.4
)(
1.8%
)
Diluted EPS
.
.............................................
$
2.30
$
2.60
$
(0.30) (11.5%)
(1) “As adjusted” is a non-GAAP financial measure that adjusts the consolidated statements of operations to
exclude from the results of operations for fiscal 2009 the impact of the UK self-employment ruling and th
e
impact of restructuring charges and exclude from the results of operations for fiscal 2008 the impact of th
e
UK VAT ruling pertaining to prior periods. The UK VAT ruling impact pertaining specifically to 2008 of
$
7.8 million has not been adjusted herein as both years presented include the impact of this ruling. Se
e
“Non-GAAP Financial Measures” above for an ex
p
lanation of our use of non-GAAP financial measures.
Dur
i
ng t
h
e secon
d
quarter o
ffi
sca
l
2008, t
h
e Company rece
i
ve
d
aru
li
ng w
i
t
h
respect to t
h
e
i
mpos
i
t
i
on o
f
U
K VAT on meeting fees collected by our UK subsidiary. This ruling resulted in an
$
18.7 million charge for
p
er
i
o
d
spr
i
or to
fi
sca
l
2008 aga
i
nst
fi
sca
l
2008 revenues. As t
h
ea
b
ove ta
bl
es
h
ows, w
h
en compar
i
ng our
fi
sca
l
2009 revenues of
$
1.4 billion to our fiscal 2008 revenues of
$
1.5 billion, revenues in fiscal 2009 decreased by
8
.9% versus the prior year; however, on an adjusted basis, removing the
$
18.7 million charge from fiscal 2008,
o
ur revenues
i
n
fi
sca
l
2009
d
ec
li
ne
db
y 10.0% versus
fi
sca
l
2008.
T
h
e Compan
y
rece
i
ve
d
an a
d
verse UK tax ru
li
n
g
re
l
at
i
n
g
to t
h
ese
lf
-emp
l
o
y
ment status o
fi
ts UK
l
ea
d
ers
i
n
Februar
y
2010 which caused the Compan
y
to record in fiscal 2009 a prior period char
g
e to expense of $32.5
million and a current period char
g
e of $4.2 million. This tax rulin
g
will impact cost of revenues on an on
g
oin
g
basis. As the table above shows, our cost of revenues decreased b
y
$29.8 million from $700.8 million in fisca
l
2008 to $671.0 million in fiscal 2009, a decrease of 4.3%; however, on an ad
j
usted basis, removin
g
the a
gg
re
g
ate
$
36.7 million char
g
e from fiscal 2009, our cost of revenues in fiscal 2009 actuall
y
declined b
y
9.5% versus fiscal
2
008
.
4
7