WeightWatchers 2013 Annual Report Download - page 30

We may not be able to successfully implement new strategic initiatives, which could adversely impact our
business.
We are continuously evaluating changing consumer preferences and the competitive environment of our
industry and seeking out opportunities to improve our performance through the implementation of selected
strategic initiatives, such as our healthcare initiative. The goal of these efforts is to develop and implement a
comprehensive and competitive business strategy which addresses the continuing changes in the weight
management industry environment and our position within the industry. We may not be able to successfully
implement our strategic initiatives and realize the intended business opportunities, growth prospects, including
new business channels, and competitive advantages. Our efforts to capitalize on business opportunities may not
bring the intended results. Assumptions underlying expected financial results or customer demand may not be
met or economic conditions may deteriorate. We also may be unable to attract and retain highly qualified and
skilled personnel to implement our strategic initiatives. If these or other factors limit our ability to successfully
execute our strategic initiatives, our business activities, financial condition and results of operations may be
adversely affected.
Our business depends on the effectiveness of our marketing and advertising programs to attract and retain
members and subscribers.
Our business success depends on our ability to attract and retain members to our meetings and subscribers to
WeightWatchers.com. Our ability to attract and retain members and subscribers depends significantly on the
effectiveness of our marketing practices. From time to time, we use the success stories of our members and
subscribers, including in some cases celebrities, in our marketing and advertising programs to communicate on a
personal level with consumers. Actions taken by these members and subscribers that harm their personal
reputation, or include the cessation of using our services and products, could have an adverse impact on the
marketing and advertising campaigns in which they are featured. We also use social media channels as a means
of communicating with consumers. Unauthorized or inappropriate use of these channels could result in harmful
publicity or negative consumer experience which could have an adverse impact on the effectiveness of our
marketing in these channels. If our marketing and advertising campaigns do not generate a sufficient number of
members and subscribers, our results of operations will be adversely affected.
The Weight Watchers brand could be impaired due to actions taken by our franchisees, licensees and
suppliers.
We believe that the Weight Watchers brand, including its widespread recognition and strong reputation in
the market, is one of our most valuable assets and that it provides us with a competitive advantage. Our
franchisees operate their businesses under our brand. In addition, we license the Weight Watchers brand to third
parties for the manufacture and sale in retail stores by such parties of a variety of goods, including food products,
and also endorse third-party branded consumer products. We also sell in our meeting rooms food and non-food
products manufactured by third-party suppliers. Because our franchisees, licensees and suppliers are independent
third parties with their own financial objectives, actions taken by them, including breaches of their contractual
obligations, such as not following our program or not maintaining our quality and safety standards, could harm
our brand. Also, these Weight Watchers-branded products may be subject to product recalls, litigation or other
deficiencies. Any negative publicity associated with these actions would adversely affect our brand and may
result in decreased meeting attendance, Internet subscriptions and product sales and, as a result, lower revenues
and profits.
Our debt service obligations could adversely affect our financial condition, and the restrictions of our debt
covenants could impede our operations and flexibility.
Our financial performance could be affected by our level of debt. As of December 28, 2013, our total debt
was $2,388.0 million. In addition, at December 28, 2013, we had $248.4 million available under our revolving
credit facility. We expect to generate the cash necessary to pay our expenses and to pay the principal and interest
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