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NUTRISYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Year Ended December 31,
2007 2006 2005
REVENUE ..................................................... $776,767 $565,950 $210,161
COSTS AND EXPENSES:
Cost of revenue .............................................. 363,874 270,625 108,356
Marketing .................................................. 178,700 118,150 47,327
General and administrative .................................... 65,527 41,655 19,351
Depreciation and amortization .................................. 5,812 2,464 700
Total costs and expenses .................................. 613,913 432,894 175,734
Operating income from continuing operations ................. 162,854 133,056 34,427
OTHER EXPENSE .............................................. (39) — —
EQUITY LOSS ................................................. (800) — —
INTEREST INCOME, net ......................................... 3,803 3,591 846
Income from continuing operations before income taxes ............. 165,818 136,647 35,273
INCOME TAXES ............................................... 60,871 50,969 13,567
Income from continuing operations .............................. 104,947 85,678 21,706
DISCONTINUED OPERATION (NOTE 10):
Loss on discontinued operation, net of income tax benefit of $461 in
2007, $326 in 2006 and $432 in 2005 .......................... (795) (548) (691)
Net income ................................................. $104,152 $ 85,130 $ 21,015
BASIC INCOME PER COMMON SHARE:
Income from continuing operations .............................. $ 3.05 $ 2.39 $ 0.66
Net loss from discontinued operation ............................ (0.02) (0.01) (0.02)
Net income ................................................. $ 3.03 $ 2.38 $ 0.64
DILUTED INCOME PER COMMON SHARE:
Income from continuing operations .............................. $ 2.98 $ 2.30 $ 0.61
Net loss from discontinued operation ............................ (0.02) (0.01) (0.02)
Net income ................................................. $ 2.96 $ 2.29 $ 0.59
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic ...................................................... 34,397 35,800 32,898
Diluted .................................................... 35,171 37,122 35,618
The accompanying notes are an integral part of these consolidated financial statements.
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