WeightWatchers 2011 Annual Report Download - page 6

In 2011, U.S. News and
World Report ranked
Weight Watchers as the
“Best Diet Plan for Weight
Loss” and the “Best
Commercial Diet Plan.”
Today, Weight Watchers not only enjoys a compelling
and strengthening consumer proposition and business
model – we also deliver a critical healthcare solution.
We offer a clinically proven, affordable and scalable
means to achieve long-term weight loss, which can
become the leading frontline solution to address
the obesity epidemic and subsequently help to
reduce healthcare costs. In our view, it is increasingly
important for preventive care to become a more
prominent component of the healthcare industry.
Simply stated: It makes much more sense to prevent
a patient from becoming diabetic, for example, than to
wait to treat them once they do become diabetic. We
expect to play a key role in this effort and will continue
to focus on making Weight Watchers a widely
acknowledged healthcare solution.
For the full-year 2011, Weight Watchers grew
revenues 25.3% to $1.8 billion, a new record for
the company. WeightWatchers.com continued
to grow – with revenue up a remarkable 67.3%
to $399.5 million and active Online subscribers
exceeding 1.5 million at year end – demonstrating
the increasing contribution this business is making
to our current and future success.
Worldwide meeting attendance grew by 11.9%
to approximately 57.0 million, particularly driven
by strength in North America. Paid weeks rose
38.1% to 193.9 million due to a combination of
strong enrollment levels and sustained retention
characteristics in both our meetings and Online
businesses. Our Monthly Pass commitment plan,
which offers unlimited meeting entrance and
free access to eTools, our Internet weight-loss
companion, which has become even more popular
among meeting members, generates substantially
higher revenue per customer, while providing
members with as many outlets as possible to help
in their weight loss journey in an affordable package
– a win-win for everyone.
In 2011, we expanded gross margin to 57.6%,
delivered operating income of $546.3 million, or
30.0% of total revenues, delivered net income of
$304.9 million, or $4.11 per fully diluted share, and
generated cash fl ow from operations of $401.9
million. These results demonstrate the strength
of our business model with its high growth potential,
strong margins, variable cost structure, negative
working capital and extremely high returns on invested
capital. Weight Watchers remains committed to
delivering returns to our shareholders. In 2011, we paid
out approximately $51.6 million in dividends.
Our PointsPlus program – our most revolutionary
program launch in more than 13 years – helped drive
our performance throughout the year. Members
embraced this improved program, which updated
our world-renowned POINTS® formula by factoring
the mix of protein, fi ber, carbs and fat when valuing
foods. This allocation of PointsPlus values more
directly nudges people toward nutrient dense, highly
satisfying food choices such as fruits, vegetables,
lean proteins and whole grains. PointsPlus gives our
members and subscribers the knowledge and direction
to choose foods more wisely and understand which
foods would offer the most satisfaction for longer
periods of time. They tell us the new program even
better helps them to “stick with it.” Weight Watchers
has always been committed to educating our members
about how they can live a healthy lifestyle and make
smart food decisions a normal part of their day,
enabling them to maintain results over the long term.
PointsPlus is a simple method that our members can
follow to see lasting results.