Nutrisystem 2006 Annual Report Download - page 14

O
ur
C
ustomer
s
B
ased on our surveys and market research, our typical customer is female (over 7
6
%), approximately 44
y
ears of a
g
e and wei
g
hs 210 lbs. In Januar
y
200
6
we initiated advertisin
g
pro
g
rams directed toward men. As
a
result, men comprised approximately 24% of our new customers in 2006 compared to 13% in 200
5
. In earl
y
2007 we a
l
so
b
egan to mar
k
et to sen
i
ors
i
nte
l
ev
i
s
i
on a
d
vert
i
s
i
ng. We
b
e
li
eve t
h
at, on average, our customer
s
want to lose approximatel
y6
0 lbs. over a period of time. We believe our t
y
pical customers sta
y
on our pro
g
ra
m
f
or ten to eleven weeks (including the one free week most customers obtain with their initial order), lose 1.
5
to
2.0 poun
d
s per wee
k
an
dh
ave tr
i
e
d
ot
h
er popu
l
ar
di
et programs. Most o
f
our customers say t
h
ey wou
ld
recommend the pro
g
ram to others and value the followin
g
NutriS
y
stem pro
g
ram attributes:
•
effective weight loss;
•di
rect
d
e
li
very to t
h
e
i
r
d
oor
;
•
eas
y
to follow;
•
food can be easily prepared in minutes
;
•
w
id
e var
i
ety o
ff
oo
d
;an
d
•
the
y
do not feel hun
g
r
y
while on the pro
g
ram.
I
nformation S
y
stem
s
O
ur we
b
s
i
te, w
hi
c
hi
s
b
ase
d
on
i
nterna
ll
y
d
eve
l
ope
d
so
f
tware an
d
ot
h
er t
hi
r
d
party so
f
tware,
i
s
h
oste
din
New York, New York at an AT&T co-location facilit
y
. This facilit
y
provides redundant network connections, a
n
u
ninterruptible power supply, physical and fire security and diesel generated power back up for the equipment on
w
hi
c
h
our we
b
s
i
te re
li
es upon. Our servers an
d
our networ
k
are mon
i
tore
d
24
h
ours a
d
ay, seven
d
ays a wee
k.
We use a var
i
ety o
f
secur
i
ty tec
h
n
i
ques to protect our con
fid
ent
i
a
l
customer
d
ata. W
h
en our customers p
l
ac
e
a
nor
d
er or access t
h
e
i
r account
i
n
f
ormat
i
on, we use a secure server (SSL) to trans
f
er
i
n
f
ormat
i
on. Our secure
server software encr
y
pts all information entered before it is sent to our server. All customer data is protected
a
ga
i
nst unaut
h
or
i
ze
d
access. We use Ver
i
S
i
gn an
d
Cy
b
erSource so
f
tware to secure our cre
di
t car
d
transact
i
ons
.
S
lim and Tone Franchise Business
O
n Decem
b
er 2, 2004, we acqu
i
re
d
S
li
man
d
Tone LLC, a
f
ranc
hi
sor o
f
women’s express
fi
tness centers.
Slim and Tone franchisees provide women with an exercise facilit
y
that is safe, convenient, comfortable,
support
i
ve an
d
one t
h
at meets t
h
e
i
r
fi
tness nee
d
s. Mem
b
ers o
b
ta
i
n a 30-m
i
nute wor
k
out us
i
ng
h
y
d
rau
li
c
res
i
stance tra
i
n
i
ng equ
i
pment. Franc
hi
se operators now o
ff
er t
h
e Nutr
i
System Nour
i
s
h
program to t
h
e
i
r mem
b
ers,
providin
g
a comprehensive wei
g
ht loss pro
g
ram that brin
g
sto
g
ether diet and exercise. Revenue from our Slim
a
nd Tone operations represents less than 1% of 2006 revenue
.
I
ntellectual Pro
p
ert
y
We own numerous tra
d
emar
k
s
d
omest
i
ca
ll
yan
di
nternat
i
ona
ll
yan
d
ot
h
er propr
i
etary r
i
g
h
ts t
h
at are ver
y
important to our business. Dependin
g
upon the
j
urisdiction, trademarks are valid as lon
g
as the
y
are used in th
e
regular course of trade and/or their registrations are properly maintained.
Employees
A
s of December 31, 2006, we had approximately 595 administrative, sales, counseling and customer servic
e
personnel, 55 emplo
y
ees dedicated to fulfillment and 30 emplo
y
ees in marketin
g
. None of our emplo
y
ees are
represented b
y
a labor union, and we consider relations with our emplo
y
ees to be
g
ood.
8