WeightWatchers 2015 Annual Report Download - page 114

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
In July 2015, the FASB issued updated guidance to simplify the measurement of inventory. Under this
amendment, an entity using an inventory method other than last-in, first out or the retail inventory method should
measure inventory at the lower of cost and net realizable value. The new guidance clarifies that net realizable
value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of
completion, disposal, and transportation. This guidance is effective for fiscal years beginning after December 15,
2016, including interim periods within those fiscal years, and should be applied prospectively with earlier
adoption permitted as of the beginning of the interim or annual reporting period. The Company is currently
evaluating the impact that the adoption of this guidance will have on the consolidated financial position of the
Company.
In September 2015, the FASB issued updated guidance to simplify the accounting for adjustments made to
provisional amounts recognized in a business combination, eliminating the requirement to retrospectively
account for those adjustments. This guidance is effective for fiscal years beginning after December 15, 2015,
including interim periods within those fiscal years, and should be applied prospectively with earlier adoption
permitted as of the beginning of the interim or annual reporting period. There is no impact on the consolidated
financial position, results of operations or cash flows of the Company as a result of this guidance.
In November 2015, the FASB issued updated guidance that in a classified statement of financial position, an
entity shall classify deferred tax assets and liabilities as noncurrent amounts. This guidance is effective for fiscal
years beginning after December 15, 2016, including interim periods within those fiscal years and earlier adoption
is permitted. The Company does not expect the adoption to have a material impact on the financial statements.
21. Related Party
As more fully described in Note 3, on October 18, 2015, the Company entered into the Strategic
Collaboration Agreement with Ms. Winfrey, under which she will consult with the Company and participate in
developing, planning, executing and enhancing the Weight Watchers program and related initiatives, and provide
it with services in her discretion to promote the Company and its programs, products and services.
In addition to the Strategic Collaboration Agreement, Ms. Winfrey and her related entities provided services
to the Company totaling $647 for the fiscal year ended January 2, 2016, which services included advertising,
production and related fees.
The Company’s accounts payable to parties related to Ms. Winfrey at January 2, 2016 was $574.
22. Quarterly Financial Information (Unaudited)
The following is a summary of the unaudited quarterly consolidated results of operations for the fiscal years
ended January 2, 2016 and January 3, 2015.
For the Fiscal Quarters Ended
April 4,
2015
July 4,
2015
October 3,
2015
January 2,
2016
Fiscal year ended January 2, 2016
Revenues, net ........................................ $322,103 $309,754 $273,324 $259,238
Gross profit ......................................... 157,303 159,364 136,622 120,798
Operating income .................................... 18,044 70,580 63,108 16,326
Net (loss) income attributable to the Company .............. (5,433) 27,877 21,790 (11,309)
Basic earnings per share ............................... $ (0.10) $ 0.49 $ 0.38 $ (0.18)
Diluted earnings per share .............................. $ (0.10) $ 0.49 $ 0.38 $ (0.18)
F-39