Nutrisystem 2005 Annual Report Download - page 3

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April 2006
Dear Stockholders,
The momentum we generated in 2005 continues to strengthen in 2006 as we launch new products and
expand our target markets and marketing reach.
2005 Recap
Our new customer growth in the NutriSystem Direct channel was nothing short of fantastic. From 52,000
new customer starts in 2004 to 347,000 in 2005 – now that’s growth!
For 2005, we generated total net revenues of $213 million, an increase of 459% from the previous year, and
net income of $21 million, an increase of close to 2,000% from the previous year.
Our approach to building a large and valuable business in the weight management industry has always been
about three things: product innovation, aggressive multi-channel marketing, and a relentless focus on our
customer. Shareholders of NutriSystem were rewarded in 2005 by our obsession in these areas. We feel good
about what we’ve done and even more excited about what we want to do.
2006 Outlook
2006 will be another great year for us. We will market our customized program offerings more aggressively
to target different segments and test new marketing and distribution channels to broaden the reach of the
NutriSystem brand. We are a company firmly focused on managing our growth right and providing the most
innovative programs in the most cost effective manner to the end customer. Having made the right investments
on infrastructure during the last half of 2005, we are now well positioned to support the strong growth we are
already seeing in 2006.
We have come a long way since we began reawakening the NutriSystem brand in 2003, and I would like to
acknowledge all the hard work behind our growth – from our loyal employee base and dedicated management
team to all our shareholders. Their continued support in sharing our vision for the NutriSystem brand will
continue to pave the way for many more successes to come. I remain a large shareholder myself and am excited
to have the opportunity to give you further updates on our progress throughout 2006.
Sincerely,
Michael J. Hagan
Chief Executive Officer