Nutrisystem 2006 Annual Report Download - page 9

S
pecial Note Re
g
ardin
g
Forward-Lookin
g
Statement
s
E
xcept
f
or the historical in
f
ormation contained herein, this Annual Report (“Report”) on Form 10-K
contains certain forwar
d
-
l
oo
k
ing statements t
h
at invo
l
ve su
b
stantia
l
ris
k
san
d
uncertainties. Wor
d
s suc
h
a
s
“may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,
”
“continue,” or similar words are intended to identi
f
y
f
orward-looking statements, although not all
f
orward-
l
oo
k
ing statements contain t
h
ese wor
d
s. Our actua
l
resu
l
ts, performance or ac
h
ievements cou
ld d
iffer materia
ll
y
from the results expressed in, or implied by, these forward-looking statements. Factors that could cause o
r
contribute to such di
ff
erences include those set
f
orth in “Risk Factors.” Accordingly, there is no assurance tha
t
th
e resu
l
ts in t
h
e forwar
d
-
l
oo
k
ing statements wi
ll b
eac
h
ieve
d.
P
A
RT I
I
TEM 1. B
US
INE
SS
O
verview
We are a leadin
g
marketer and provider of a wei
g
ht mana
g
ement s
y
stem based on a portion-controlled,
prepared meal program. Typically, our customers purchase monthly food packages containing a 28-day supply o
f
b
rea
kf
asts,
l
unc
h
es,
di
nners an
dd
esserts, w
hi
c
h
t
h
ey supp
l
ement w
i
t
hf
res
h
m
ilk
,
f
ru
i
tan
d
vegeta
bl
es. Most o
f
o
ur customers order on an auto-deliver
y
basis, (“Auto-deliver
y
”) in which we send a month’s food suppl
y
on a
n
o
ngoing basis until notified by the customer to stop our shipments. Our Auto-delivery program is currently
priced at
$
294 per shipment, or about
$
10 per day for a full day’s supply of three entree meals and one snack
.
Our food is shelf stable at room temperature and will last for up to two
y
ears, makin
g
it relativel
y
inexpensive t
o
shi
p
and store
.
O
ur pro
g
ram is based on the followin
g
five cornerstones that represent who we are to our customers:
S
uccess. We believe our pro
g
ram enables our customers to lose wei
g
ht successfull
y
. Our NutriS
y
ste
m
Nourish program consists of over 130 portion-controlled food items that are designed to rank low on the
G
l
ycem
i
cIn
d
ex t
h
ere
b
y prov
idi
ng
di
eters w
i
t
h
a
b
a
l
ance
di
nta
k
eo
f
“goo
d
” car
b
o
h
y
d
rates, prote
i
ns an
df
ats. T
h
e
Gl
y
cemic Index is a measure of the qualit
y
of carboh
y
drates in foods. Foods on the lower end of the index ar
e
g
enerally considered “good” carbohydrates
.
Convenience
.
W
e sell our wei
g
ht mana
g
ement pro
g
rams primaril
y
throu
g
h a direct-to-consumer sales and
d
istribution approach using the internet and telephone. Our customers can order 24 hours a day, seven days
a
wee
k
on our we
b
s
i
te, www.nutr
i
system.com, an
d
t
h
e
f
oo
di
ss
hi
ppe
ddi
rect
l
ytot
h
e customer’s
d
oor.
S
implicit
y
.
W
e provide a comprehensive weight management program, consisting of a pre-packaged food
program an
d
counse
li
ng. Our customers can e
i
t
h
er c
h
oose one o
f
our pre-set
f
oo
d
pac
k
ages or custom
i
ze t
h
e
i
r
monthl
y
food orders for their specific tastes. There are no center visits, no measurin
g
foods or countin
g
calories
.
Va
l
ue
.
Our Auto-delivery program is currently priced at about
$
10 per day for a full day’s supply of thre
e
entree meals and one snack. We do not char
g
e membership fees
.
P
r
i
vacy.
Th
e
di
rect-to-consumer approac
h
us
i
ng t
h
e
i
nternet prov
id
es t
h
epr
i
vacy t
h
at our customers
v
alue. We provide online and telephone counselin
g
and support to our customers usin
g
our trained diet
counselors resulting in no need to travel for a face-to-face meeting.
3