WeightWatchers 2015 Annual Report Download - page 42

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• Incoming Active Subscribers/Active Base—“Subscribers” refer to meetings members and Online
subscribers who participate in recurring billing programs, such as our monthly commitment plans for
our meetings business. The “Incoming Active Subscribers” metric reports active Weight Watchers
subscribers in Company-owned operations at a given period start as follows: (i) “Incoming Active
Meeting Subscribers” is the total Weight Watchers monthly commitment plan active subscribers
(including Total Access); (ii) “Incoming Active Online Subscribers” is the total number of Weight
Watchers Online, Weight Watchers OnlinePlus and Personal Coaching active subscribers; and
(iii) “Incoming Active Subscribers” is the sum of Incoming Active Meeting Subscribers and Incoming
Active Online Subscribers, in each case at a given period start. We also at times refer to such metrics as
the “Incoming Active Base”.
• End of Period Active Subscribers/Active Base—The “End of Period Active Subscribers” metric reports
active Weight Watchers subscribers in Company-owned operations at a given period end as follows:
(i) “End of Period Active Meeting Subscribers” is the total Weight Watchers monthly commitment
plan active subscribers (including Total Access); (ii) “End of Period Active Online Subscribers” is the
total number of Weight Watchers Online, Weight Watchers OnlinePlus and Personal Coaching active
subscribers; and (iii) “End of Period Active Subscribers” is the sum of End of Period Active Meeting
Subscribers and End of Period Active Online Subscribers, in each case at a given period end. We also
at times refer to such metrics as the “End of Period Active Base”.
• recruitments
• attendance
• Meeting Fees per Paid Week and in-meeting product sales per attendee
• gross profit and operating expenses as a percentage of revenue
Transformation Plan
As previously disclosed, the Company is currently executing a multi-year transformation plan. The four
strategic areas of focus of this transformation plan are as follows: improving near-term performance, including
strong cost management; repositioning our brand and improving our service and product offerings; targeting new
channel growth in healthcare; and building organizational capabilities. As part of our focus on strong cost
management, we successfully reduced our gross annualized expenses by $250 million by the end of fiscal 2015
versus our fiscal 2012 cost base. Prior to fiscal 2015, we achieved a gross cost-savings initiative totaling
$150 million annually and, in fiscal 2015, we established an incremental $100 million annual gross cost-savings
initiative, which we successfully achieved. See Note 19 of our consolidated financial statements, contained in
Part IV, Item 15 of this Annual Report on Form 10-K for additional details on this initiative. The December 2015
launch of our comprehensive program innovation, Beyond the Scale, is a key component of our strategy to
reposition our brand and improve our service and product offerings. This innovation expands our purpose from
weight loss alone to more broadly helping people lead healthier, more active, happier lives. Management is
confident that this innovation, together with our groundbreaking partnership with Ms. Winfrey, will accelerate
the successful repositioning of our brand. As part of our partnership, and in furtherance of this repositioning of
our brand, Ms. Winfrey was featured in our 2016 winter season television advertising in certain key markets. She
will also continue to be a member and may, from time to time, candidly share her experiences and perspectives
along the way of her weight loss journey. A key component of the organizational capabilities upgrade is our
technology transformation, whereby we are replacing legacy technology systems and architecture to enable us to
deliver product and program enhancements in a more agile, cost-effective manner. In fiscal 2015, we achieved
significant milestones in this arena. For additional details on our investments in fiscal 2015 related to this
technology transformation, see “—Liquidity and Capital Resources—Investing Activities—”. As we execute this
transformation plan, management, from time to time, reviews the resulting revenues and associated costs to
refine the plan in order to ensure resources are allocated efficiently and optimized. As management determines
resources should be reallocated, they refine the transformation plan accordingly. For example, our investment
strategy in the healthcare channel and related technology has evolved to focus on proving our internal capabilities
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