WeightWatchers 2013 Annual Report Download - page 80

Agreement, with Artal Holdings whereby Artal Holdings agreed to sell to us, at the same price as was determined
in the Tender Offer, such number of its shares of our common stock that, upon the closing of this purchase after
the completion of the Tender Offer, Artal Holdings’ percentage ownership in the outstanding shares of our
common stock would be substantially equal to its level prior to the Tender Offer. Artal Holdings also agreed not
to participate in the Tender Offer so that it would not affect the determination of the purchase price of the shares
in the Tender Offer.
The Tender Offer expired at midnight, New York time, on March 22, 2012, and on March 28, 2012 we
repurchased approximately 8.8 million shares at a purchase price of $82.00 per share. On April 9, 2012, we
repurchased approximately 9.5 million of Artal Holdings’ shares at a purchase price of $82.00 per share pursuant
to the Purchase Agreement. In March 2012, we amended and extended our then existing credit facilities to
finance these repurchases. See “—Long-Term Debt”.
The WWI Credit Facility provides that we are permitted to pay dividends and extraordinary dividends, as
well as repurchase shares of our common stock, so long as we are not in default under the WWI Credit Facility
agreement. However, payment of extraordinary dividends and stock repurchases shall not exceed $100.0 million
in the aggregate in any fiscal year if the Consolidated Leverage Ratio is greater than 3.25:1. As of December 28,
2013, our Consolidated Leverage Ratio was greater than 3.25:1 and we expect that it will remain above 3.25:1 for
the foreseeable future.
Factors Affecting Future Liquidity
Any future acquisitions, joint ventures or other similar transactions could require additional capital and we
cannot be certain that any additional capital will be available on acceptable terms or at all. Our ability to fund our
capital expenditure requirements, interest, principal and dividend payment obligations and working capital
requirements and to comply with all of the financial covenants under our debt agreements depends on our future
operations, performance and cash flow. These are subject to prevailing economic conditions and to financial,
business and other factors, some of which are beyond our control.
Off-Balance Sheet Transactions
As part of our ongoing business, we do not participate in transactions that generate relationships with
unconsolidated entities or financial partnerships established for the purpose of facilitating off-balance sheet
arrangements or other contractually narrow or limited purposes, such as entities often referred to as structured
finance or special purpose entities.
Related Parties
For a discussion of related party transactions affecting us, see “Item 12. Certain Relationships and Related
Transactions, and Director Independence” in Part III of this Annual Report on Form 10-K.
Seasonality
Our business is seasonal, with revenues generally decreasing at year end and during the summer months.
Our operating income for the first half of the year is generally the strongest, and the first quarter of the fiscal year
typically results in the greatest revenue due to the importance of the winter diet season to our overall recruitment
environment. Our advertising schedule generally supports the three key recruitment-generating seasons of the
year: winter, spring and fall, with winter having the highest concentration of advertising spending. The timing of
certain holidays, particularly Easter, which precedes the spring marketing campaign and occurs between
March 22 and April 25, may affect our results of operations and the year-to-year comparability of our results.
The introduction of Monthly Pass in the meetings business has resulted in less seasonality with regard to our
meeting fee revenues because its revenues are amortized over the related subscription period. While
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