WeightWatchers 2015 Annual Report Download - page 21

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recorded in shareholders’ equity as accumulated other comprehensive income (loss). Translation adjustments
arising from intercompany receivables and payables with our foreign subsidiaries are generally recorded as a
component of other expense (income). Accordingly, changes in currency exchange rates will cause our revenues,
operating costs, net income and shareholders’ equity to fluctuate. For example, these changes had a negative
impact on our fiscal 2015 financial results.
Our business may decline as a result of a downturn in general economic conditions or consumer
confidence.
Our business is highly dependent on meeting fees, Online product subscriptions and product sales. A
downturn in general economic conditions or consumer confidence in any of our major markets could result in
people curtailing or reallocating their discretionary spending which, in turn, could reduce attendance at our
meetings, Online product subscriptions and product sales. Any reduction in consumer spending may adversely
affect our business, financial condition or results of operations.
We may not successfully make acquisitions or enter into joint ventures and we may not successfully
integrate, operate or realize the anticipated benefits of such businesses.
As part of our strategic initiatives, we may pursue selected acquisitions or joint ventures. We may not be
able to effect these transactions on commercially reasonable terms or at all. Any future acquisitions or joint
ventures may require access to additional capital, and we may not have access to such capital on commercially
reasonable terms or at all. Even if we enter into these transactions, we may not realize the benefits we anticipate
or we may experience difficulties in integrating any acquired companies, technologies and products into our
existing business or in providing our services and products in newly acquired markets; attrition of key personnel
from acquired businesses; significant charges or expenses; higher costs of integration than we anticipated; or
unforeseen operating difficulties that require significant financial and managerial resources that would otherwise
be available for the ongoing development or expansion of our existing operations.
Our ability to influence the control of, or distributions from, our joint ventures may be limited by contract or
otherwise. If any of the other investors in one of our joint ventures fails to observe its commitments, or its
interests are different than ours, the joint venture may not be able to operate according to its business plan, we
may be required to increase our level of commitment, or such entities may take actions which are not in our best
interest. If we are unable to maintain our relationships with our joint venture partners, we could lose our ability to
operate in the geographies and/or markets in which they operate, which could have an adverse effect on our
business, financial condition or results of operations.
Consummating these transactions could also result in the incurrence of additional debt and related interest
expense, as well as unforeseen contingent liabilities, all of which could have an adverse effect on our business,
financial condition or results of operations. We may also issue additional equity in connection with these
transactions, which would dilute our existing shareholders.
The seasonal nature of our business could cause our operating results to fluctuate.
We have experienced and expect to continue to experience fluctuations in our quarterly results of operations
due to the seasonal nature of our business. The first quarter of the fiscal year typically results in the greatest
revenue due to the importance of the winter season to our overall recruitment environment. In addition, given the
subscription nature of our products, failure to realize recruitments during the winter season could negatively
impact our performance for the remainder of the year. This seasonality could cause our share price to fluctuate as
the results of an interim financial period may not be indicative of our full year results. Seasonality also impacts
relative revenue and profitability of each quarter of the year, both on a quarter-to-quarter and year-over-year
basis.
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