WeightWatchers 2011 Annual Report Download - page 63

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The growth in the UK meetings business was partially offset by declining meeting fees and paid weeks
volume in the period in Continental Europe, which was cycling against a year earlier, less successful program
launch, and which has not yet developed sufficiently effective marketing campaigns. Continental European
meeting fees in fiscal 2011 decreased by 4.7%, or 10.0% on a constant currency basis, as compared to the prior
year, with paid weeks declining 9.8% and attendance declining 15.4% in the period.
In-Meeting Product Sales
Global in-meeting product sales in fiscal 2011 were $281.8 million, an increase of $21.3 million, or 8.2%,
from $260.5 million in fiscal 2010. Excluding the impact of foreign currency, which increased in-meeting
product sales by $6.9 million, global in-meeting product sales rose 5.6% in fiscal 2011 versus the prior year on
the strength of higher attendance volumes. On a per attendee basis, global in-meeting product sales decreased
3.3%, or 5.6% on a constant currency basis, in fiscal 2011 versus the prior year. This decline was primarily the
result of lower sales of consumable products, partially offset by higher sales of enrollment products.
In NACO, in-meeting product sales of $157.9 million in fiscal 2011 increased by $19.1 million, or 13.8%,
versus the prior year, on the strength of higher attendance volumes. NACO’s in-meeting product sales per
attendee decreased 4.2%, or 4.5% on a constant currency basis, versus the prior year. International in-meeting
product sales were $123.9 million in fiscal 2011, an increase of 1.8%, but declined 3.5% on a constant currency
basis, versus the prior year. On a per attendee basis, international product sales increased 0.2%, but declined
5.0% on a constant currency basis, versus the prior year.
Internet Revenues
Internet revenues, which include subscription revenues from sales of Weight Watchers Online and Weight
Watchers eTools as well as Internet advertising revenues, increased significantly, up $160.7 million, or 67.3%, to
$399.5 million for fiscal 2011 from $238.8 million for fiscal 2010. Excluding the impact of foreign currency,
which increased Internet revenues by $5.5 million, Internet revenues grew by 65.0% in fiscal 2011 versus the
prior year. We entered fiscal 2011 with an active Online subscriber base that was 38.2% higher than at the
beginning of fiscal 2010, and ended fiscal 2011 with approximately 1.6 million end of period active Online
subscribers, up 50.5% from approximately 1.1 million at the end of fiscal 2010. Online paid weeks increased
69.7% in fiscal 2011 versus the prior year. This increase in Online subscribers and paid weeks was driven
primarily by continued strong marketing campaigns starting in the second quarter of 2010 in the United States
and the United Kingdom, markets which also benefited from the new program launches at the end of fiscal 2010.
In addition, sign-ups grew in Continental Europe, reflecting the effectiveness of our marketing efforts in online
channels in these markets.
Other Revenues
Other revenues, comprised primarily of licensing revenues, franchise royalties, revenues from the sale of
products by mail and to our franchisees, and revenues from our publications, were $147.6 million for fiscal 2011,
an increase of $14.4 million, or 10.8%, from $133.1 million for fiscal 2010. Excluding the impact of foreign
currency, other revenues were 8.2% higher in fiscal 2011 than the prior year. The new programs in our North
American and UK markets also benefited our other revenues. Franchise commissions and sales of products to our
franchisees grew in the aggregate by 17.2%, or 16.0% on a constant currency basis, in fiscal 2011 versus the
prior year, accounting for $4.1 million of the total increase in other revenues on a constant currency basis in
fiscal 2011 versus the prior year. Our by mail product sales and revenues from our publications also rose in the
aggregate by 18.3%, or 15.4% on a constant currency basis, over the prior year. Global licensing revenues in
fiscal 2011, however, were up by 1.4%, but were down 1.7% on a constant currency basis, versus the prior year.
UK licensing revenues increased in fiscal 2011 versus the prior year; however, both North America and
Continental Europe experienced weak performance, primarily as a result of pricing challenges in a tough
economic environment.
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