WeightWatchers 2010 Annual Report Download - page 64

The table above shows that, including the impact of these charges, the Company’s fiscal 2009 gross profit
was
$
727.9 million, as com
p
ared to
$
835.0 million in fiscal 2008, a decrease of
$
107.1 million or 12.8%, an
d
that our gross profit margin of
5
2.0% declined 240 basis points from the prior year’s gross profit margin o
f
5
4.4%
.
I
n addition to the two adjustments for the UK tax rulings noted above, the Company recorded
$
5.5 million
o
f restructuring charges in fiscal 2009 associated with the cost savings initiatives announced in the first quarter o
f
f
iscal 2009. Selling, general and administrative expenses were 6.
5
% lower in fiscal 2009 versus fiscal 2008
.
Excluding the restructuring charges in fiscal 2009, selling, general and administrative expenses were
$
17.3
million, or 9.
5
%, lower than in fiscal 2008.
F
iscal 2009 operating income of
$
356.6 million declined
$
68.4 million, or 16.1%, from the fiscal 2008 level
o
f
$
425.0 million, and fiscal 2009 operating income margin declined to 25.5% compared to 27.7% in fiscal 2008.
Net income attributable to the Company of
$
177.3 million in fiscal 2009 was reduced by after-tax charges of
$
25.6 million related to the adverse UK tax ruling relating to the self-employment status of the Company’s U
K
leaders and
$
3.4 million for restructuring charges. Fiscal 2009 net income attributable to the Company declined
$
27.0 million, or 13.2%, from
$
204.3 million in fiscal 2008, which included after-tax charges of
$
12.7 million
f
or the adverse UK VAT ruling. Fiscal 2009 diluted earnings per share of
$
2.30, including
$
0.38 of decline for
the two fiscal 2009 items noted above, com
p
ared to
$
2.60 in fiscal 2008, which included
$
0.17 of decline related
to the fiscal 2008 charge noted above.
The table below illustrates the Company’s fiscal 2009 and fiscal 2008 results for certain selected financia
l
data on a comparable basis, after all adjustments as noted and discussed above are reflected.
S
ummar
y
of Selected Financial Data as Adjuste
d
(
In millions, exce
p
t
p
er share amounts
)
A
sAd
j
usted
(
1
)
Fi
sca
l
2009
Fi
sca
l
2008
Increase
/
(
Decrease
)
%
C
hang
e
R
evenues, net
.............................................
$
1,398.9 $1,554.5 $(155.6) (10.0%)
C
ost o
f
re
v
enues
..........................................
634.3 700.8 (66.5) (9.5%)
Gross Profi
t
..........................................
764.6 8
5
3.7 (89.1) (10.4%)
Gross Margin
%
......................................
5
4
.7
%
5
4
.
9%
Marketing expense
s
........................................
2
00.
5
227.4 (26.9) (11.8%)
Selling, general and administrative expenses
....................
1
6
5
.3 182.6 (17.3) (9.
5
%)
Operat
i
ng Incom
e
.
....................................
398
.
8 443
.7
(44
.
9) (10
.
1%)
O
perating Income Margin
%
............................
28
.5
%28
.5
%
N
et
i
ncome attr
ib
uta
bl
etot
h
e Compan
y
....................
$
2
06.3 $ 217.0 $ (10.7) (4.9%)
W
e
igh
te
d
avera
g
e
dil
ute
d
s
h
ares outstan
di
n
g
....................
77.1 78.5 (1.4) (1.8%)
Diluted EP
S
.
.............................................
$
2.68 $ 2.77 $ (0.09) (3.2%)
(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 periods prior to fiscal 2008. The UK VAT ruling impact pertainin
g
s
pecifically to fiscal 2008 of
$
7.8 million has not been adjusted herein as both years presented include th
e
impact of this ruling. See “Non-GAAP Financial Measures” above for an explanation of our use of
non-GAAP financial measures. Set forth below is a reconciliation of gross profit, operating income, net
income attributable to the Company and diluted earnings per share to the as reported amounts.
48