Nutrisystem 2006 Annual Report Download - page 16

Thomas F. Connert
y
has served as our Chief Marketing Officer since November 2004 and our Executiv
e
Vice President, Program Development since July 200
6
. Prior to joining us, Mr. Connerty was the Vice President
o
f Marketin
g
at the Nautilus Group, a retailer of commercial and home use fitness equipment, includin
g
th
e
B
owflex Home Gym, from 1999 to 2004.
Br
uce
B
lair
h
as served as our Senior Vice President, O
p
erations and Chief Information Officer since A
p
ri
l
200
5
. Prior to joining us, Mr. Blair was the Chief Information Officer and Executive Vice President of Creditek,
a
finance and accounting outsourcing firm from March 2003 to March 2005. Before Creditek, Mr. Blair was the
President of GovXcel, a leadin
g
application provider of software used b
y
municipalities to automate back offic
e
f
unctions, from January 2001 to December 2001. He also served as Chief Information Officer and Senior Vic
e
Pres
id
ent o
f
Operat
i
ons at Vert
i
ca
l
net, Inc.
f
rom Marc
h
1999 to Decem
b
er 2000
.
I
TEM 1A.RI
S
K FACTOR
S
You s
h
ou
ld
cons
id
er care
f
u
ll
yt
h
e
f
o
ll
ow
i
ng r
i
s
k
san
d
uncerta
i
nt
i
es w
h
en rea
di
ng t
hi
s Annua
l
Report on
Form 10-K. I
f
an
y
o
f
t
h
e events
d
escr
ib
e
db
e
l
ow actua
lly
occurs, t
h
e Compan
y
’s
b
us
i
ness,
fi
nanc
i
a
l
con
di
t
i
on
a
nd operatin
g
results could be materiall
y
adversel
y
affected.
R
i
sks Related to
O
ur Bus
i
nes
s
O
ur
f
uture
g
rowth and pro
fi
tab
i
l
i
ty w
i
ll depend
i
n lar
g
e part upon the e
ff
ect
i
veness and e
ffi
c
i
ency o
f
our
market
i
ng expend
i
tures and our ab
i
l
i
ty to select the r
i
ght markets and med
i
a
i
nwh
i
ch to advert
i
se
.
O
ur marketing expenditures were
$
118.5 million,
$
47.8 million and
$
7.5 million in 2006, 2005 and 2004,
respect
i
ve
l
y. Our
f
uture growt
h
an
d
pro
fi
ta
bili
ty w
ill d
epen
di
n
l
arge part upon t
h
ee
ff
ect
i
veness an
d
e
ffi
c
i
enc
y
o
f our marketin
g
expenditures, includin
g
our abilit
y
to
:
•
create greater awareness of our brand and our program
;
•id
ent
if
yt
h
e most e
ff
ect
i
ve an
d
e
ffi
c
i
ent
l
eve
l
o
f
spen
di
ng
i
n eac
h
mar
k
et, me
di
aan
d
spec
ifi
cme
dia
ve
hi
c
l
e
;
•
determine the appropriate creative messa
g
e and media mix for advertisin
g
, marketin
g
and promotional
e
xpen
di
tures
;
•
e
ff
ect
i
ve
l
y manage mar
k
et
i
ng costs (
i
nc
l
u
di
ng creat
i
ve an
d
me
di
a)
i
nor
d
er to ma
i
nta
i
n accepta
bl
e
c
ustomer ac
q
uisition costs;
•
select the ri
g
ht market, media and specific media vehicle in which to advertise; an
d
•
convert consumer
i
nqu
i
r
i
es
i
nto actua
l
or
d
ers.
O
ur planned marketin
g
expenditures ma
y
not result in increased revenue or
g
enerate sufficient levels o
f
b
ran
d
name an
d
program awareness. We may not
b
ea
bl
e to manage our mar
k
et
i
ng expen
di
tures on a cost
-
e
ff
ect
i
ve
b
as
i
sw
h
ere
b
y our customer acqu
i
s
i
t
i
on cost may excee
d
t
h
e contr
ib
ut
i
on pro
fi
t generate
df
rom eac
h
a
dditional customer
.
I
f we are able to
g
row our business, we may not be able to mana
g
e our
g
rowth successfully.
If
we are a
bl
eto
i
ncrease our customer
b
ase an
d
grow our
b
us
i
ness, we w
ill f
ace
b
us
i
ness r
i
s
k
s common
ly
a
ssoc
i
ate
d
w
i
t
h
rap
idl
y grow
i
ng compan
i
es,
i
nc
l
u
di
ng t
h
er
i
s
k
t
h
at ex
i
st
i
ng management,
i
n
f
ormat
i
on systems an
d
f
inancial controls ma
y
be inadequate to support our
g
rowth. We cannot predict whether we will be able to respon
d
o
nat
i
me
l
y
b
as
i
s, or at a
ll
,tot
h
ec
h
ang
i
ng
d
eman
d
st
h
at our growt
h
may
i
mpose on our ex
i
st
i
ng management an
d
i
n
f
rastructure. For examp
l
e,
i
ncreas
i
n
gd
eman
d
s on our
i
n
f
rastructure cou
ld
cause an
y
o
f
t
h
e
f
o
ll
ow
i
n
g:
•
dela
y
s in order intake time both on our website as well as throu
g
h call centers
;
•
dela
y
s in order processin
g
, packa
g
in
g
and shippin
g
;
10