WW International, Inc. (NASDAQ: WW) (“WeightWatchers,” “WW,” or the
“Company”) today announced its results for the fourth quarter and
full year fiscal 2023.
“2023 was a pivotal year as we began transforming our business
for the future. We returned WeightWatchers to year end subscriber
growth – for the first time in 3 years - up 7% year-over-year,”
said Sima Sistani, the Company’s CEO. “We are on track to deliver
growth in total subscribers in 2024, expecting to end the year with
subscribers in the range of 3.8 million to 4.0 million, including
between 140 thousand and 160 thousand subscribers to our new
WeightWatchers Clinic.”
“WeightWatchers is creating the category of Weight Health, and
to do so requires us to go further in the transformation and expand
our offerings to deliver the support, services, and treatments that
many need to advance their weight loss journeys. We are making
intentional choices to prioritize these initiatives that we believe
will have the greatest benefit for the long-term health of our
business,” continued Sistani.
“We executed against our 2023 objectives with a return to sign
up and subscriber growth, record adjusted gross margin, and
improved cost structure,” said Heather Stark, the Company’s CFO.
“We anticipate returning to year-over-year growth in subscription
revenues in the second half of 2024, and we are committed to
improving margins and driving operating income growth.”
Q4 2023 Consolidated Results
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% Change |
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% ChangeAdjusted
forConstantCurrency(1) |
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Three Months Ended |
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December 30, |
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December 31, |
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2023 |
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2022(7) |
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(in millions except percentages and per share amounts) |
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Subscription Revenues, net |
$196.1 |
|
$200.9 |
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(2.4%) |
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|
(3.6%) |
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Product Sales and Other, net |
9.9 |
|
22.0 |
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(55.1%) |
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(55.3%) |
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Revenues, net |
$206.0 |
|
$222.9 |
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(7.6%) |
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(8.7%) |
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Gross Profit |
$124.9 |
|
$126.0 |
|
(0.9%) |
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(2.4%) |
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Non-GAAP Adjustments(1) |
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Net Restructuring Charges(2) |
1.5 |
|
3.1 |
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Adjusted Gross Profit(1) |
$126.4 |
|
$129.1 |
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(2.1%) |
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(3.6%) |
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Operating Loss |
($6.0) |
|
($51.8) |
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(88.4%) |
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(86.7%) |
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Non-GAAP Adjustments(1) |
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Franchise Rights Acquired and Goodwill Impairments |
3.6 |
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57.6 |
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Net Restructuring Charges(2) |
23.6 |
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17.4 |
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Adjusted Operating Income(1) |
$21.3 |
|
$23.1 |
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(8.1%) |
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(12.4%) |
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Net Loss |
($88.1) |
|
($35.8) |
|
100.0%* |
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|
100.0%* |
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EPS |
($1.11) |
|
($0.51) |
|
100.0%* |
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|
100.0%* |
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Total Paid Weeks |
50.4 |
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47.3 |
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6.5% |
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|
N/A |
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Digital(3) Paid Weeks |
41.0 |
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37.8 |
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8.6% |
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|
N/A |
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Workshops + Digital(4) Paid Weeks |
8.7 |
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9.6 |
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(9.2%) |
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|
N/A |
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Clinical(5) Paid Weeks |
0.7 |
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- |
|
N/A |
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|
N/A |
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End of Period
Subscribers(6) |
3.8 |
|
3.5 |
|
7.1% |
|
|
N/A |
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Digital Subscribers |
3.1 |
|
2.8 |
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8.6% |
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|
N/A |
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Workshops + Digital Subscribers |
0.7 |
|
0.7 |
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(8.3%) |
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|
N/A |
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Clinical Subscribers |
0.1 |
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- |
|
N/A |
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|
N/A |
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___________________________________ Note: Totals may not sum due to
rounding. *Note: Percentage in excess of 100.0% and not
meaningful.
- See “Reconciliation of Non-GAAP Financial Measures” attached to
this release for further detail on adjustments to GAAP financial
measures.
- See “Reconciliation of Non-GAAP Financial Measures” attached to
this release for further detail on the Company’s previously
disclosed 2023, 2022, 2021, and 2020 restructuring plans, and the
reversal of certain of the charges associated therewith.
- “Digital” refers to providing subscriptions to the Company’s
digital product offerings, which formerly included Digital 360 (as
applicable).
- “Workshops + Digital” refers to providing unlimited access to
the Company’s workshops combined with the Company’s digital
subscription product offerings to commitment plan subscribers,
including former Digital 360 members (as applicable). It also
formerly included the provision of access to workshops for members
who did not subscribe to commitment plans, which included the
Company’s “pay-as-you-go” members.
- “Clinical” refers to providing subscriptions to the Company’s
clinical product offerings provided by WeightWatchers Clinic
(formally referred to as Sequence).
- “Subscribers” refers to Digital subscribers, Workshops +
Digital subscribers, and Clinical subscribers who participate in
recurring bill programs in Company-owned operations.
- Certain amounts have been revised for the three months ended
December 31, 2022 to correct immaterial misstatements related to
certain income tax and other matters, which will be more fully
described in the Company's Form 10-K filing for the fiscal year
ended December 30, 2023.
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Q4 2023 Business and Financial Highlights
- End of Period Subscribers in Q4 2023 were up
7.1% versus the prior year period, driven by the Digital business
and the inclusion of 67 thousand Clinical Subscribers. Q4 2023 End
of Period Digital Subscribers increased 8.6% versus the prior year
period. Q4 2023 End of Period Workshops + Digital Subscribers
decreased 8.3% versus the prior year period.
- Total Paid Weeks in Q4 2023 were up 6.5%
versus the prior year period, driven by the Digital business and
the inclusion of 719 thousand Clinical Paid Weeks. Q4 2023 Digital
Paid Weeks increased 8.6% versus the prior year period. Q4 2023
Workshops + Digital Paid Weeks decreased 9.2% versus the prior year
period.
- Revenues in Q4 2023 were $206.0 million. On a
constant currency basis, Q4 2023 revenues decreased 8.7% versus the
prior year period.
- Subscription Revenues in Q4 2023 were $196.1
million. On a constant currency basis, these revenues decreased
3.6% versus the prior year period. Subscription Revenues included
$13.0 million of Clinical Subscription Revenues.
- Product Sales and Other in Q4 2023 were $9.9
million. On a constant currency basis, these revenues decreased
55.3% versus the prior year period driven by the wind down of the
consumer products business.
- Gross Profit in Q4 2023 was $124.9 million,
compared to $126.0 million in the prior year period.
Adjusted gross profit in Q4 2023, which excluded
the net impact of $1.5 million of restructuring charges, was $126.4
million. Adjusted gross profit in Q4 2022, which excluded the net
impact of $3.1 million of restructuring charges, was $129.1
million.
- Gross Margin in Q4 2023 was 60.6%, as compared
to 56.5% in the prior year period. Adjusted gross
margin in Q4 2023 was 61.4%, up from an adjusted gross
margin of 57.9% in the prior year period, primarily driven by
actions to reduce the fixed cost base within the Workshops +
Digital business.
- Non-Cash Intangible Impairment Charges: During
Q4 2023, the Company fully impaired the goodwill and franchise
rights acquired balances for past franchise acquisitions in the
Republic of Ireland and Northern Ireland, resulting in total
charges of $3.6 million.
- Operating Loss in Q4 2023 was $6.0 million,
compared to operating loss of $51.8 million in the prior year
period. Adjusted operating income in Q4 2023,
which excluded the net impact of $23.6 million of restructuring
charges and non-cash intangible impairment charges of $3.6 million,
was $21.3 million. Adjusted operating income in Q4 2022, which
excluded the impact of non-cash intangible impairment charges
totaling $57.6 million and the net impact of $17.4 million of
restructuring charges, was $23.1 million.
- Income Tax Expense in Q4 2023 was $57.6
million, which reflected an increase in the valuation allowance to
offset all U.S. deferred tax assets due to the uncertainty of
realizing future tax benefits of the assets. In the prior year
period, income tax was a benefit of $36.7 million.
- Net Loss in Q4 2023 was $88.1 million compared
to net loss of $35.8 million in the prior year period.
- Diluted Net Loss per share in Q4 2023 was
$1.11 compared to diluted net loss per share of $0.51 in the prior
year period.
- Certain items affect year-over-year comparability.
- Q4 2023 diluted net loss per share incorporated the net
negative impact of $1.05 per diluted share in the aggregate due to
the following items:
- $0.78 per diluted share negative tax impact due to an increase
in the valuation allowance to offset all U.S. deferred tax assets
due to the uncertainty of realizing future tax benefits of the
assets.
- $0.22 per diluted share net negative impact of restructuring
charges.
- $0.05 per diluted share negative impact of non-cash intangible
impairment charges for franchise rights acquired and goodwill.
- Q4 2022 diluted net loss per share incorporated the negative
impact of $0.52 per diluted share in the aggregate due to the
following items:
- $0.63 per diluted share negative impact of non-cash intangible
impairment charges for franchise rights acquired and goodwill.
- $0.18 per diluted share net negative impact of restructuring
charges.
- $0.68 per diluted share positive tax impact of a legal entity
restructuring that resulted in a reversal of certain deferred tax
liabilities.
- $0.38 per diluted share negative tax impact of establishing a
valuation allowance to offset certain deferred tax assets due to
the uncertainty of realizing future tax benefits from interest
expense carryforwards.
Full Year Fiscal 2023 Consolidated Results
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% Change |
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% ChangeAdjusted
forConstantCurrency(1) |
|
|
Twelve Months Ended |
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|
|
December 30, |
|
December 31, |
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|
2023 |
|
2022(7) |
|
|
|
(in millions except percentages and per share amounts) |
|
|
|
|
|
|
|
|
Subscription Revenues, net |
$ 822.8 |
|
$ 919.1 |
|
(10.5%) |
|
|
(10.6%) |
|
|
Product Sales and Other, net |
66.8 |
|
120.8 |
|
(44.7%) |
|
|
(44.3%) |
|
|
Revenues, net |
$889.6 |
|
$1,039.8 |
|
(14.5%) |
|
|
(14.5%) |
|
|
Gross Profit |
$529.3 |
|
$621.4 |
|
(14.8%) |
|
|
(15.0%) |
|
|
Non-GAAP Adjustments(1) |
|
|
|
|
|
|
|
|
Net Restructuring Charges(2) |
21.2 |
|
7.0 |
|
|
|
|
|
Adjusted Gross Profit(1) |
$550.5 |
|
$628.4 |
|
(12.4%) |
|
|
(12.6%) |
|
|
Operating Income (Loss) |
$22.3 |
|
($284.0) |
|
100.0%* |
|
|
100.0%* |
|
|
Non-GAAP Adjustments(1) |
|
|
|
|
|
|
|
|
Franchise Rights Acquired and Goodwill Impairments |
3.6 |
|
396.7 |
|
|
|
|
|
Net Restructuring Charges(2) |
54.9 |
|
39.7 |
|
|
|
|
|
Acquisition Transaction Costs |
8.6 |
|
- |
|
|
|
|
|
Adjusted Operating Income(1) |
$89.5 |
|
$152.5 |
|
(41.3%) |
|
|
(42.7%) |
|
|
Net Loss |
($112.3) |
|
($256.9) |
|
(56.3%) |
|
|
(55.8%) |
|
|
EPS |
($1.46) |
|
($ 3.65) |
|
(59.9%) |
|
|
(59.4%) |
|
|
Total Paid Weeks |
207.2 |
|
215.7 |
|
(3.9%) |
|
|
N/A |
|
|
Digital(3) Paid Weeks |
167.9 |
|
175.8 |
|
(4.5%) |
|
|
N/A |
|
|
Workshops + Digital(4) Paid Weeks |
37.7 |
|
39.9 |
|
(5.3%) |
|
|
N/A |
|
|
Clinical(5) Paid Weeks |
1.6 |
|
- |
|
N/A |
|
|
N/A |
|
|
End of Period
Subscribers(6) |
3.8 |
|
3.5 |
|
7.1% |
|
|
N/A |
|
|
Digital Subscribers |
3.1 |
|
2.8 |
|
8.6% |
|
|
N/A |
|
|
Workshops + Digital Subscribers |
0.7 |
|
0.7 |
|
(8.3%) |
|
|
N/A |
|
|
Clinical Subscribers |
0.1 |
|
- |
|
N/A |
|
|
N/A |
|
___________________________________ Note: Totals may not sum due to
rounding. *Note: Percentage in excess of 100.0% and not
meaningful.
- See “Reconciliation of Non-GAAP Financial Measures” attached to
this release for further detail on adjustments to GAAP financial
measures.
- See “Reconciliation of Non-GAAP Financial Measures” attached to
this release for further detail on the Company’s previously
disclosed 2023, 2022, 2021, and 2020 restructuring plans, and the
reversal of certain of the charges associated therewith.
- “Digital” refers to providing subscriptions to the Company’s
digital product offerings, which formerly included Digital 360 (as
applicable).
- “Workshops + Digital” refers to providing unlimited access to
the Company’s workshops combined with the Company’s digital
subscription product offerings to commitment plan subscribers,
including former Digital 360 members (as applicable). It also
formerly included the provision of access to workshops for members
who did not subscribe to commitment plans, which included the
Company’s “pay-as-you-go” members.
- “Clinical” refers to providing subscriptions to the Company’s
clinical product offerings provided by WeightWatchers Clinic
(formally referred to as Sequence).
- “Subscribers” refers to Digital subscribers, Workshops +
Digital subscribers, and Clinical subscribers who participate in
recurring bill programs in Company-owned operations.
- Certain amounts have been revised for the twelve months ended
December 31, 2022 to correct immaterial misstatements related to
certain income tax and other matters, which will be more fully
described in the Company's Form 10-K filing for the fiscal year
ended December 30, 2023.
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Full Year Fiscal 2023 Business and Financial
Highlights
- Total Paid Weeks in fiscal 2023 were down 3.9%
versus the prior year, driven by declines in the Digital and
Workshops + Digital businesses. Fiscal 2023 Digital Paid Weeks
decreased 4.5% versus the prior year. Fiscal 2023 Workshops +
Digital Paid Weeks decreased 5.3% versus the prior year. Fiscal
2023 included 1.6 million Clinical Paid Weeks.
- Revenues in fiscal 2023 were $889.6 million.
On a constant currency basis, fiscal 2023 revenues decreased 14.5%
versus the prior year.
- Subscription Revenues in fiscal 2023 were
$822.8 million. On a constant currency basis, these revenues
decreased 10.6% versus the prior year. Subscription Revenues
included $30.5 million of Clinical Subscription
Revenues.
- Product Sales and Other in fiscal 2023 were
$66.8 million. On a constant currency basis, these revenues
decreased 44.3% versus the prior year driven by the wind down of
the consumer products business.
- Gross Profit in fiscal 2023 was $529.3
million, compared to $621.4 million in the prior year.
Adjusted gross profit in fiscal 2023, which
excluded the net impact of $21.2 million of restructuring charges,
was $550.5 million. Adjusted gross profit in fiscal 2022, which
excluded the net impact of $7.0 million of restructuring charges,
was $628.4 million.
- Gross Margin in fiscal 2023 was 59.5%, as
compared to 59.8% in the prior year. Adjusted gross
margin in fiscal 2023 was 61.9%, up from an adjusted gross
margin of 60.4% in the prior year, primarily driven by actions to
reduce the fixed cost base within the Workshops + Digital
business.
- Operating Income in fiscal 2023 was $22.3
million, compared to operating loss of $284.0 million in the prior
year. Adjusted operating income in fiscal 2023,
which excluded the net impact of $54.9 million of restructuring
charges, $8.6 million of acquisition transaction costs, and $3.6
million of non-cash intangible impairment charges was $89.5
million. Adjusted operating income in fiscal 2022, which excluded
the impact of non-cash intangible impairment charges totaling
$396.7 million and the net impact of $39.7 million of restructuring
charges, was $152.5 million.
- Income Tax Expense in fiscal 2023 was $38.6
million, which reflected an increase in the valuation allowance to
offset all U.S. deferred tax assets due to the uncertainty of
realizing future tax benefits of the assets. In the prior year,
income tax was a benefit of $109.9 million.
- Net Loss in fiscal 2023 was $112.3 million
compared to net loss of $256.9 million in the prior
year.
- Diluted Net Loss per share in fiscal 2023 was
$1.46 compared to diluted net loss per share of $3.65 in the prior
year.
- Certain items affect year-over-year comparability.
- Fiscal 2023 diluted net loss per share incorporated the net
negative impact of $1.34 per diluted share in the aggregate due to
the following items:
- $0.66 per diluted share negative tax impact due to an increase
in the valuation allowance to offset all U.S. deferred tax assets
due to the uncertainty of realizing future tax benefits of the
assets.
- $0.54 per diluted share net negative impact of restructuring
charges.
- $0.10 per diluted share negative impact from acquisition
transaction costs.
- $0.05 per diluted share negative impact of non-cash intangible
impairment charges for franchise rights acquired and
goodwill.
- Fiscal 2022 diluted net loss per share incorporated the
negative impact of $4.38 per diluted share in the aggregate due to
the following items:
- $4.28 per diluted share negative impact of non-cash intangible
impairment charges for franchise rights acquired and goodwill.
- $0.42 per diluted share net negative impact of restructuring
charges.
- $0.69 per diluted share positive tax impact of a legal entity
restructuring that resulted in a reversal of certain deferred tax
liabilities.
- $0.39 per diluted share negative tax impact of establishing a
valuation allowance to offset certain deferred tax assets due to
the uncertainty of realizing future tax benefits from interest
expense carryforwards.
- $0.03 per diluted share tax benefit due to out-of-period income
tax adjustments.
Other Items
- Cash balance as of December 30, 2023 was
$109.4 million. On that same date, the Company had no outstanding
borrowings under its revolving credit facility.
- 2023 Restructuring Plan: In connection with
the previously announced 2023 restructuring plan, the Company
recorded aggregate restructuring charges of $23.1 million in Q4
2023. This is higher than the previously disclosed estimate of up
to $10.0 million as the Company continued to centralize and
streamline its organization resulting in additional charges.
- Reporting Segment Update: As a result of the
continued evolution of the Company’s centralized organizational
structure in fiscal 2023, and management’s 2024 strategic planning
process, the Company’s reporting segments changed commencing with
the first day of fiscal 2024 to one segment based on total revenue.
This segment reflects the Company’s global management of the
business and will present results on a global basis. The
Company’s reporting segments in fiscal 2023 were North America and
International.
Full Year Fiscal 2024 Guidance
The Company is providing the following full year
fiscal 2024 guidance:
- Revenues are expected to be in the range of $830.0 million to
$860.0 million, reflecting a $55 million year-over-year headwind
from the strategic decision to wind down the Company’s low-margin
consumer products business.
- Operating Income is expected to be in the range of $100.0
million to $110.0 million. Changes to modernize the Company’s
technology organization required the Company to update its
capitalized labor rate expectations. Based on these updated
expectations, an estimated $9.0 million of expenses that were
previously expected to be capitalized will now be reflected on the
income statement in 2024. This shift in operating methodology does
not impact cash.
Fourth Quarter and Full Year 2023 Conference Call and
WebcastThe Company has scheduled a conference call today
at 5:00 p.m. ET. During the conference call, Sima Sistani,
Chief Executive Officer, and Heather Stark, Chief Financial
Officer, will discuss the fourth quarter and full year fiscal 2023
results and answer questions from the investment community.
The live webcast of the conference call will be available on the
Company’s corporate website, corporate.ww.com, under Events and
Presentations. Supplemental investor materials will also be
available in the same location prior to the start of the webcast. A
replay of the webcast will be available on this site for
approximately 90 days.
Statement regarding Non-GAAP Financial
MeasuresThe following provides information regarding
non-GAAP financial measures used in this earnings release and
today’s scheduled conference call:
To supplement the Company's consolidated results presented in
accordance with accounting principles generally accepted in the
United States (“GAAP”), the Company has disclosed non-GAAP
financial measures of operating results that exclude or adjust
certain items. Gross profit, gross margin, operating income (loss),
operating income (loss) margin, and selling, general and
administrative expenses are discussed both as reported (on a GAAP
basis) and as adjusted (on a non-GAAP basis), as applicable, with
respect to (i) the fourth quarter of fiscal 2023 to exclude (a) the
net impact of (w) charges associated with the Company's previously
disclosed 2023 restructuring plan (the “2023 plan”) and (x) charges
associated with the Company's previously disclosed 2022
restructuring plan (the “2022 plan”), and (b) the impact of the
impairment charges for the Company's goodwill related to its
Republic of Ireland and Northern Ireland reporting units and the
impairment charge for the Company's franchise rights acquired
related to its Northern Ireland unit of account; (ii) the full year
of fiscal 2023 to exclude (a) the net impact of (w) charges
associated with the Company's 2023 plan, (x) charges associated
with the Company's 2022 plan or the reversal of certain of the
charges associated with the 2022 plan, as applicable, (y) charges
associated with the Company's previously disclosed 2021
organizational restructuring plan (the “2021 plan”) or the reversal
of certain of the charges associated with the 2021 plan, as
applicable, and (z) the reversal of certain of the charges
associated with the Company's previously disclosed 2020
organizational restructuring plan (the “2020 plan”), (b) the impact
of certain non-recurring transaction costs in connection with the
acquisition of Sequence (as defined below), and (c) the impact of
the impairment charges for the Company's goodwill related to its
Republic of Ireland and Northern Ireland reporting units and the
impairment charge for the Company's franchise rights acquired
related to its Northern Ireland unit of account; (iii) the fourth
quarter of fiscal 2022 to exclude (a) the impact of impairment
charges for the Company's franchise rights acquired related to its
United States, Canada, United Kingdom and Australia units of
account and an impairment charge for the Company's goodwill related
to its Republic of Ireland reporting unit and (b) the net impact of
(w) charges associated with the Company's 2023 plan, (x) charges
associated with the Company's 2022 plan, (y) the reversal of
certain of the charges associated with the Company's 2021 plan, and
(z) the reversal of certain of the charges associated with the
Company's 2020 plan; and (iv) the full year of fiscal 2022 to
exclude (a) the impact of impairment charges for the Company's
franchise rights acquired related to its United States, Canada,
United Kingdom, New Zealand and Australia units of account and
impairment charges for the Company's goodwill related to its
Republic of Ireland reporting unit and its wholly-owned subsidiary
Kurbo, Inc., and (b) the net impact of (w) charges associated with
the 2023 plan, (x) charges associated with the 2022 plan, (y)
charges associated with the 2021 plan or the reversal of certain of
the charges associated with the 2021 plan, as applicable, and (z)
the reversal of certain of the charges associated with the 2020
plan. We generally refer to such non-GAAP measures as follows: (i)
with respect to the adjustments for the fourth quarter of fiscal
2023, as excluding or adjusting for the net impact of restructuring
charges and the impact of franchise rights acquired and goodwill
impairments; (ii) with respect to the adjustments for the full year
of fiscal 2023, as excluding or adjusting for the net impact of
restructuring charges, the impact of acquisition transaction costs,
and the impact of franchise rights acquired and goodwill
impairments; and (iii) with respect to the adjustments for the
fourth quarter and full year of fiscal 2022, as excluding or
adjusting for the impact of franchise rights acquired and goodwill
impairments and the net impact of restructuring charges. The
Company also presents in the attachments to this release the
non-GAAP financial measures earnings before interest, taxes,
depreciation, amortization and stock-based compensation
(“EBITDAS”); earnings before interest, taxes, depreciation,
amortization, stock-based compensation, franchise rights acquired
and goodwill impairments, net restructuring charges, and certain
non-recurring transaction costs in connection with the acquisition
of Sequence (“Adjusted EBITDAS”); total debt less unamortized
deferred financing costs, unamortized debt discount and cash on
hand (i.e., net debt); and a net debt/Adjusted EBITDAS ratio. In
addition, the Company presents certain of its financial results on
a constant currency basis in addition to GAAP results. Constant
currency information compares results between periods as if
exchange rates had remained constant period-over-period. The
Company calculates constant currency by calculating current-year
results using prior-year foreign currency exchange rates. A
reconciliation of the forward-looking full year EBITDAS outlook to
net income cannot be provided without unreasonable effort because
of the inherent difficulty of accurately forecasting the occurrence
and financial impact of the various adjusting items necessary for
such reconciliation that have not yet occurred, are out of our
control, or cannot be reasonably predicted. For the same reasons,
the Company is unable to assess the probable significance of the
unavailable information, which could have a material impact on its
future GAAP financial results.
Management believes these non-GAAP financial measures provide
useful supplemental information for its and investors' evaluation
of the Company's business performance and are useful for
period-over-period comparisons of the performance of the Company's
business. While management believes that these non-GAAP financial
measures are useful in evaluating the Company's business, this
information should be considered as supplemental in nature and
should not be considered in isolation or as a substitute for the
related financial information prepared in accordance with GAAP. In
addition, these non-GAAP financial measures may not be the same as
similarly titled measures reported by other companies. See
"Reconciliation of Non-GAAP Financial Measures" attached to this
release and reconciliations, if any, included elsewhere in this
release for a reconciliation of the non-GAAP financial measures to
the most directly comparable GAAP measures.
About WW International, Inc. WeightWatchers is
a human-centric technology company powered by our proven,
science-based, clinically effective weight loss and weight
management programs. For six decades, we have inspired millions of
people to adopt healthy habits for real life. We combine technology
and community to help members reach and sustain their goals on our
programs. To learn more about the WeightWatchers approach to
healthy living, please visit ww.com. For more information about our
global business, visit our corporate website at
corporate.ww.com.
This news release and any attachments include “forward-looking
statements,” within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, including, in particular, any guidance and
any statements about the Company’s plans, strategies, objectives,
initiatives, roadmap and prospects. The Company generally uses the
words “may,” “will,” “could,” “expect,” “anticipate,” “believe,”
“estimate,” “plan,” “intend,” “aim” and similar expressions in this
news release and any attachments to identify forward-looking
statements. The Company bases these forward-looking statements on
its current views with respect to future events and financial
performance. Actual results could differ materially from those
projected in the forward-looking statements. These forward-looking
statements are subject to risks, uncertainties and assumptions,
including, among other things: competition from other weight
management and health and wellness industry participants or the
development of more effective or more favorably perceived weight
management methods; the Company's failure to continue to retain and
grow its subscriber base; the Company’s ability to be a leader in
the rapidly evolving and increasingly competitive clinical weight
management and weight loss market; the Company's ability to
continue to develop new, innovative services and products and
enhance its existing services and products or the failure of its
services, products or brands to continue to appeal to the market,
or its ability to successfully expand into new channels of
distribution or respond to consumer trends or sentiment; the
ability to successfully implement strategic initiatives; the
Company’s ability to evolve its community offerings to meet the
evolving tastes and preferences of its members; the effectiveness
and efficiency of the Company's advertising and marketing programs,
including the strength of the Company's social media presence; the
impact on the Company's reputation of actions taken by its
franchisees, licensees, suppliers, affiliated provider entities,
PCs’ healthcare professionals, and other partners, including as a
result of its acquisition of Weekend Health, Inc., doing business
as Sequence (“Sequence”) (the “Acquisition”); the recognition of
asset impairment charges; the loss of key personnel, strategic
partners or consultants or failure to effectively manage and
motivate the Company's workforce; the Company’s ability to
successfully make acquisitions or enter into collaborations or
joint ventures, including its ability to successfully integrate,
operate or realize the anticipated benefits of such businesses,
including with respect to Sequence; uncertainties related to a
downturn in general economic conditions or consumer confidence,
including as a result of the existing inflationary environment,
rising interest rates, the potential impact of political and social
unrest and increased volatility in the credit and capital markets;
the seasonal nature of the Company's business; the Company's
failure to maintain effective internal control over financial
reporting; the impact of events that impede accessing resources or
discourage or impede people from gathering with others; the early
termination by the Company of leases; the inability to renew
certain of the Company's licenses, or the inability to do so on
terms that are favorable to the Company; the impact of the
Company's substantial amount of debt, debt service obligations and
debt covenants, and its exposure to variable rate indebtedness; the
ability to generate sufficient cash to service the Company's debt
and satisfy its other liquidity requirements; uncertainties
regarding the satisfactory operation of the Company's technology or
systems; the impact of data security breaches and other malicious
acts or privacy concerns, including the costs of compliance with
evolving privacy laws and regulations; the Company’s ability to
successfully integrate and use artificial intelligence in its
business; the Company's ability to enforce its intellectual
property rights both domestically and internationally, as well as
the impact of its involvement in any claims related to intellectual
property rights; risks and uncertainties associated with the
Company's international operations, including regulatory, economic,
political, social, intellectual property, and foreign currency
risks, which risks may be exacerbated as a result of war and
terrorism; the outcomes of litigation or regulatory actions; the
impact of existing and future laws and regulations; risks related
to the Acquisition, including risks that the Acquisition may not
achieve its intended results; risks related to the Company's
exposure to extensive and complex healthcare laws and regulations
as a result of the Acquisition; and other risks and uncertainties,
including those detailed from time to time in the Company's
periodic reports filed with the United States Securities and
Exchange Commission (the “SEC”) (which are available on the SEC’s
EDGAR database at www.sec.gov and via the Company’s website at
corporate.ww.com). You should not put undue reliance on any
forward-looking statements. You should understand that many
important factors, including those discussed herein, could cause
the Company’s results to differ materially from those expressed or
suggested in any forward-looking statement. Except as required by
law, the Company does not undertake any obligation to update or
revise these forward-looking statements to reflect new information
or events or circumstances that occur after the date of this news
release or to reflect the occurrence of unanticipated events or
otherwise. Readers are advised to review the Company’s filings with
the SEC (which are available on the SEC’s EDGAR database at
www.sec.gov and via the Company’s website at corporate.ww.com).
| |
WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
| |
CONSOLIDATED
BALANCE SHEETS AT |
|
| |
(IN
THOUSANDS) |
|
| |
UNAUDITED |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
December
30, |
|
December
31, |
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
| |
Cash and
cash equivalents |
|
$ |
109,366 |
|
|
$ |
178,326 |
|
|
| |
Receivables
(net of allowances: December 30, 2023 - $1,041 and December 31,
2022 - $976) |
|
|
14,938 |
|
|
|
24,273 |
|
|
| |
Inventories |
|
|
68 |
|
|
|
20,528 |
|
|
| |
Prepaid
income taxes |
|
|
25,370 |
|
|
|
19,447 |
|
|
| |
Prepaid
marketing and advertising |
|
|
10,149 |
|
|
|
7,927 |
|
|
| |
Prepaid
expenses and other current assets |
|
|
19,583 |
|
|
|
30,830 |
|
|
| |
TOTAL CURRENT ASSETS |
|
|
179,474 |
|
|
|
281,331 |
|
|
|
Property and equipment, net |
|
|
19,741 |
|
|
|
28,229 |
|
|
|
Operating lease assets |
|
|
52,272 |
|
|
|
75,696 |
|
|
|
Franchise rights acquired |
|
|
386,526 |
|
|
|
386,745 |
|
|
|
Goodwill |
|
|
243,441 |
|
|
|
155,998 |
|
|
|
Other intangible assets, net |
|
|
63,208 |
|
|
|
63,306 |
|
|
|
Deferred income taxes |
|
|
19,683 |
|
|
|
22,246 |
|
|
|
Other noncurrent assets |
|
|
17,685 |
|
|
|
14,879 |
|
|
| |
TOTAL ASSETS |
|
$ |
982,030 |
|
|
$ |
1,028,430 |
|
|
|
LIABILITIES AND TOTAL DEFICIT |
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
| |
Portion of
operating lease liabilities due within one year |
|
$ |
9,613 |
|
|
$ |
17,955 |
|
|
| |
Accounts
payable |
|
|
18,507 |
|
|
|
18,890 |
|
|
| |
Salaries and
wages payable |
|
|
79,096 |
|
|
|
72,577 |
|
|
| |
Accrued
marketing and advertising |
|
|
18,215 |
|
|
|
17,927 |
|
|
| |
Accrued
interest |
|
|
5,346 |
|
|
|
5,289 |
|
|
| |
Deferred
acquisition payable |
|
|
16,500 |
|
|
|
1,166 |
|
|
| |
Other
accrued liabilities |
|
|
22,610 |
|
|
|
28,952 |
|
|
| |
Income taxes
payable |
|
|
1,609 |
|
|
|
1,646 |
|
|
| |
Deferred
revenue |
|
|
33,966 |
|
|
|
32,156 |
|
|
| |
TOTAL CURRENT LIABILITIES |
|
|
205,462 |
|
|
|
196,558 |
|
|
|
Long-term debt, net |
|
|
1,426,464 |
|
|
|
1,422,284 |
|
|
|
Long-term operating lease liabilities |
|
|
53,461 |
|
|
|
68,099 |
|
|
|
Deferred income taxes |
|
|
41,994 |
|
|
|
25,084 |
|
(1) |
|
Other |
|
|
15,743 |
|
|
|
2,185 |
|
|
| |
TOTAL LIABILITIES |
|
|
1,743,124 |
|
|
|
1,714,210 |
|
(1) |
|
TOTAL DEFICIT |
|
|
|
|
|
| |
Common
stock, $0 par value; 1,000,000 shares authorized; 130,048 shares
issued at December 30, 2023 and 122,052 shares issued at December
31, 2022 |
|
|
0 |
|
|
|
0 |
|
|
| |
Treasury
stock, at cost, 50,859 shares at December 30, 2023 and 51,496
shares at December 31, 2022 |
|
|
(3,064,628 |
) |
|
|
(3,097,304 |
) |
|
| |
Retained
earnings |
|
|
2,314,834 |
|
|
|
2,416,994 |
|
(1) |
| |
Accumulated
other comprehensive loss |
|
|
(11,300 |
) |
|
|
(5,470 |
) |
|
| |
TOTAL DEFICIT |
|
|
(761,094 |
) |
|
|
(685,780 |
) |
(1) |
| |
TOTAL LIABILITIES AND TOTAL DEFICIT |
|
$ |
982,030 |
|
|
$ |
1,028,430 |
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| (1) Certain amounts
have been revised at December 31, 2022 to correct immaterial
misstatements related to certain income tax matters, which will be
more fully described in the Company's Form 10-K filing for the
fiscal year ended December 30, 2023. |
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
| CONSOLIDATED
STATEMENTS OF OPERATIONS |
|
| (IN
THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
Three Months Ended |
|
| |
|
|
|
December
30, |
|
December
31, |
|
| |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
Subscription revenues, net (1) |
|
|
$ |
196,087 |
|
|
$ |
200,932 |
|
|
|
Product sales and other, net (2) |
|
|
|
9,868 |
|
|
|
21,970 |
|
(4) |
| |
Revenues,
net |
|
|
|
205,955 |
|
|
|
222,902 |
|
(4) |
|
Cost of subscription revenues (3) |
|
|
|
67,707 |
|
|
|
77,817 |
|
|
|
Cost of product sales and other |
|
|
|
13,391 |
|
|
|
19,117 |
|
|
| |
Cost of
revenues |
|
|
|
81,098 |
|
|
|
96,934 |
|
|
| |
Gross
profit |
|
|
|
124,857 |
|
|
|
125,968 |
|
(4) |
|
Marketing expenses |
|
|
|
50,920 |
|
|
|
49,660 |
|
|
|
Selling, general and administrative expenses |
|
|
|
76,312 |
|
|
|
70,520 |
|
|
|
Franchise rights acquired and goodwill impairments |
|
|
3,633 |
|
|
|
57,566 |
|
|
| |
Operating
loss |
|
|
|
(6,008 |
) |
|
|
(51,778 |
) |
(4) |
|
Interest expense |
|
|
|
24,464 |
|
|
|
22,304 |
|
|
|
Other expense (income), net |
|
|
|
107 |
|
|
|
(1,611 |
) |
|
| |
Loss before
income taxes |
|
|
|
(30,579 |
) |
|
|
(72,471 |
) |
(4) |
|
Provision for (benefit from) income taxes |
|
|
|
57,556 |
|
|
|
(36,690 |
) |
(4) |
| |
Net
loss |
|
|
$ |
(88,135 |
) |
|
$ |
(35,781 |
) |
(4) |
| |
|
|
|
|
|
|
|
|
Net loss per share |
|
|
|
|
|
|
| |
Basic |
|
|
$ |
(1.11 |
) |
|
$ |
(0.51 |
) |
(4) |
| |
Diluted |
|
|
$ |
(1.11 |
) |
|
$ |
(0.51 |
) |
(4) |
| |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
| |
Basic |
|
|
|
79,125 |
|
|
|
70,509 |
|
|
| |
Diluted |
|
|
|
79,125 |
|
|
|
70,509 |
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding. |
|
|
|
|
|
|
| (1) Consists of net
“Digital Subscription Revenues”, net “Workshops + Digital Fees” and
net “Clinical Subscription Revenues”. “Digital Subscription
Revenues” consist of the fees associated with subscriptions for the
Company’s Digital offerings, which formerly included Personal
Coaching + Digital and Digital 360 (as applicable). “Workshops +
Digital Fees” consist of the fees associated with the Company's
subscription plans for combined workshops and digital offerings and
other payment arrangements for access to workshops. “Clinical
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Clinical offerings. |
|
| (2) Consists of sales
of consumer products via e-commerce, in studios and through the
Company's trusted partners, revenues from licensing and publishing,
other revenues, and franchise fees with respect to commitment plans
and royalties. |
|
| (3) Consists of cost
of revenues and operating expenses for the Company's Digital,
Workshops + Digital and Clinical services. |
|
| (4) Certain amounts
have been revised for the three months ended December 31, 2022 to
correct immaterial misstatements related to certain income tax and
other matters, which will be more fully described in the Company's
Form 10-K filing for the fiscal year ended December 30, 2023. |
|
| |
|
|
|
|
|
|
|
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
| CONSOLIDATED
STATEMENTS OF OPERATIONS |
|
| (IN
THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
Twelve Months Ended |
|
| |
|
|
|
December
30, |
|
December
31, |
|
| |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
Subscription revenues, net (1) |
|
|
$ |
822,755 |
|
|
$ |
919,055 |
|
|
|
Product sales and other, net (2) |
|
|
|
66,796 |
|
|
|
120,780 |
|
(4) |
| |
Revenues,
net |
|
|
|
889,551 |
|
|
|
1,039,835 |
|
(4) |
|
Cost of subscription revenues (3) |
|
|
|
301,062 |
|
|
|
321,528 |
|
|
|
Cost of product sales and other |
|
|
|
59,186 |
|
|
|
96,928 |
|
|
| |
Cost of
revenues |
|
|
|
360,248 |
|
|
|
418,456 |
|
|
| |
Gross
profit |
|
|
|
529,303 |
|
|
|
621,379 |
|
(4) |
|
Marketing expenses |
|
|
|
238,387 |
|
|
|
244,783 |
|
|
|
Selling, general and administrative expenses |
|
|
|
264,950 |
|
|
|
263,840 |
|
|
|
Franchise rights acquired and goodwill impairments |
|
|
3,633 |
|
|
|
396,727 |
|
|
| |
Operating
income (loss) |
|
|
|
22,333 |
|
|
|
(283,971 |
) |
(4) |
|
Interest expense |
|
|
|
95,893 |
|
|
|
81,141 |
|
|
|
Other expense, net |
|
|
|
72 |
|
|
|
1,691 |
|
|
| |
Loss before
income taxes |
|
|
|
(73,632 |
) |
|
|
(366,803 |
) |
(4) |
|
Provision for (benefit from) income taxes |
|
|
|
38,623 |
|
|
|
(109,935 |
) |
(4) |
| |
Net
loss |
|
|
$ |
(112,255 |
) |
|
$ |
(256,868 |
) |
(4) |
| |
|
|
|
|
|
|
|
|
Net loss per share |
|
|
|
|
|
|
| |
Basic |
|
|
$ |
(1.46 |
) |
|
$ |
(3.65 |
) |
(4) |
| |
Diluted |
|
|
$ |
(1.46 |
) |
|
$ |
(3.65 |
) |
(4) |
| |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
| |
Basic |
|
|
|
76,677 |
|
|
|
70,321 |
|
|
| |
Diluted |
|
|
|
76,677 |
|
|
|
70,321 |
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding. |
|
|
|
|
|
|
| (1) Consists of net
“Digital Subscription Revenues”, net “Workshops + Digital Fees” and
net “Clinical Subscription Revenues”. “Digital Subscription
Revenues” consist of the fees associated with subscriptions for the
Company’s Digital offerings, which formerly included Personal
Coaching + Digital and Digital 360 (as applicable). “Workshops +
Digital Fees” consist of the fees associated with the Company's
subscription plans for combined workshops and digital offerings and
other payment arrangements for access to workshops. “Clinical
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Clinical offerings. |
|
| (2) Consists of sales
of consumer products via e-commerce, in studios and through the
Company's trusted partners, revenues from licensing and publishing,
other revenues, and franchise fees with respect to commitment plans
and royalties. |
|
| (3) Consists of cost
of revenues and operating expenses for the Company's Digital,
Workshops + Digital and Clinical services. |
|
| (4) Certain amounts
have been revised for the twelve months ended December 31, 2022 to
correct immaterial misstatements related to certain income tax and
other matters, which will be more fully described in the Company's
Form 10-K filing for the fiscal year ended December 30, 2023. |
|
| |
|
|
|
|
|
|
|
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
| CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
| (IN
THOUSANDS) |
|
|
UNAUDITED |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
Twelve Months Ended |
|
| |
|
|
December
30, |
|
December
31, |
|
| |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
Operating activities: |
|
|
|
|
|
| |
Net
loss |
|
$ |
(112,255 |
) |
|
$ |
(256,868 |
) |
(1) |
| |
Adjustments
to reconcile net loss to cash provided by operating
activities: |
|
|
|
|
|
| |
Depreciation and amortization |
|
|
52,471 |
|
|
|
43,801 |
|
|
| |
Amortization of deferred financing costs and debt discount |
|
|
5,018 |
|
|
|
5,018 |
|
|
| |
Impairment of franchise rights acquired and goodwill |
|
|
3,633 |
|
|
|
396,727 |
|
|
| |
Impairment of intangible and long-lived assets |
|
|
1,112 |
|
|
|
3,455 |
|
|
| |
Share-based compensation expense |
|
|
15,185 |
|
|
|
12,957 |
|
|
| |
Deferred tax provision (benefit) |
|
|
19,821 |
|
|
|
(145,829 |
) |
(1) |
| |
Allowance for doubtful accounts |
|
|
1,306 |
|
|
|
(460 |
) |
|
| |
Reserve for inventory obsolescence |
|
|
7,350 |
|
|
|
6,796 |
|
|
| |
Foreign currency exchange rate loss |
|
|
263 |
|
|
|
2,374 |
|
|
| |
Changes in
cash due to: |
|
|
|
|
|
| |
Receivables |
|
|
17,112 |
|
|
|
(7,558 |
) |
|
| |
Inventories |
|
|
14,018 |
|
|
|
3,733 |
|
|
| |
Prepaid expenses |
|
|
(4,133 |
) |
|
|
8,878 |
|
(1) |
| |
Accounts payable |
|
|
(54 |
) |
|
|
(2,691 |
) |
|
| |
Accrued liabilities |
|
|
(11,625 |
) |
|
|
20,925 |
|
(1) |
| |
Deferred revenue |
|
|
1,273 |
|
|
|
(11,733 |
) |
|
| |
Other long term assets and liabilities, net |
|
|
(3,598 |
) |
|
|
(2,291 |
) |
|
| |
Income taxes |
|
|
(211 |
) |
|
|
(588 |
) |
|
| |
Cash provided by operating activities |
|
|
6,686 |
|
|
|
76,646 |
|
|
|
Investing activities: |
|
|
|
|
|
| |
Capital
expenditures |
|
|
(2,485 |
) |
|
|
(2,065 |
) |
|
| |
Capitalized
software and website development expenditures |
|
|
(33,816 |
) |
|
|
(36,187 |
) |
|
| |
Cash paid
for acquisitions, net of cash acquired |
|
|
(38,362 |
) |
|
|
(4,350 |
) |
|
| |
Other items,
net |
|
|
(33 |
) |
|
|
(42 |
) |
|
| |
Cash used for investing activities |
|
|
(74,696 |
) |
|
|
(42,644 |
) |
|
|
Financing activities: |
|
|
|
|
|
| |
Taxes paid
related to net share settlement of equity awards |
|
|
(2,241 |
) |
|
|
(2,197 |
) |
|
| |
Proceeds
from stock options exercised |
|
|
718 |
|
|
|
— |
|
|
| |
Cash paid
for acquisitions |
|
|
(1,178 |
) |
|
|
(2,413 |
) |
|
| |
Other items,
net |
|
|
(48 |
) |
|
|
(112 |
) |
|
| |
Cash used for financing activities |
|
|
(2,749 |
) |
|
|
(4,722 |
) |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
1,799 |
|
|
|
(4,748 |
) |
|
|
Net (decrease) increase in cash and cash equivalents |
|
|
(68,960 |
) |
|
|
24,532 |
|
|
|
Cash and cash equivalents, beginning of period |
|
|
178,326 |
|
|
|
153,794 |
|
|
|
Cash and cash equivalents, end of period |
|
$ |
109,366 |
|
|
$ |
178,326 |
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| (1) Certain amounts
have been revised for the twelve months ended December 31, 2022 to
correct immaterial misstatements related to certain income tax and
other matters, which will be more fully described in the Company's
Form 10-K filing for the fiscal year ended December 30, 2023. |
| |
|
|
|
|
|
|
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
| OPERATIONAL
STATISTICS |
|
| (IN
THOUSANDS, EXCEPT PERCENTAGES) |
|
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
|
| |
|
December 30, |
|
December 31, |
|
Variance |
|
| |
|
2023 |
|
2022 |
|
|
| |
|
|
|
|
|
|
|
|
Digital Paid Weeks (1) |
|
|
|
|
|
|
|
North America |
26,124 |
|
23,714 |
|
10.2% |
|
|
|
International |
14,886 |
|
14,043 |
|
6.0% |
|
|
|
Total Digital Paid Weeks |
41,010 |
|
37,757 |
|
8.6% |
|
|
| |
|
|
|
|
|
|
|
|
Workshops + Digital Paid Weeks
(1) |
|
|
|
|
|
|
|
North America |
6,483 |
|
7,178 |
|
(9.7%) |
|
|
|
International |
2,220 |
|
2,407 |
|
(7.8%) |
|
|
|
Total Workshops + Digital Paid Weeks |
8,703 |
|
9,585 |
|
(9.2%) |
|
|
| |
|
|
|
|
|
|
|
|
Clinical Paid Weeks (1) |
|
|
|
|
|
|
|
North America |
719 |
|
— |
|
N/A |
|
|
|
International |
— |
|
— |
|
— |
|
|
|
Total Clinical Paid Weeks |
719 |
|
— |
|
N/A |
|
|
| |
|
|
|
|
|
|
|
|
Total Paid Weeks (1) |
|
|
|
|
|
|
|
North America |
33,327 |
|
30,892 |
|
7.9% |
|
|
|
International |
17,106 |
|
16,449 |
|
4.0% |
|
|
|
Total Paid Weeks |
50,432 |
|
47,342 |
|
6.5% |
|
|
| |
|
|
|
|
|
|
|
|
End of Period Digital Subscribers
(2) |
|
|
|
|
|
|
|
North America |
1,948 |
|
1,802 |
|
8.1% |
|
|
|
International |
1,131 |
|
1,033 |
|
9.5% |
|
|
|
Total End of Period Digital Subscribers |
3,079 |
|
2,836 |
|
8.6% |
|
|
| |
|
|
|
|
|
|
|
|
End of Period Workshops + Digital Subscribers
(2) |
|
|
|
|
|
|
|
North America |
484 |
|
534 |
|
(9.4%) |
|
|
|
International |
167 |
|
176 |
|
(4.9%) |
|
|
|
Total End of Period Workshops + Digital Subscribers |
652 |
|
711 |
|
(8.3%) |
|
|
| |
|
|
|
|
|
|
|
|
End of Period Clinical Subscribers
(2) |
|
|
|
|
|
|
|
North America |
67 |
|
— |
|
N/A |
|
|
|
International |
— |
|
— |
|
— |
|
|
|
Total End of Period Clinical Subscribers |
67 |
|
— |
|
N/A |
|
|
| |
|
|
|
|
|
|
|
|
Total End of Period Subscribers
(2) |
|
|
|
|
|
|
|
North America |
2,499 |
|
2,337 |
|
6.9% |
|
|
|
International |
1,299 |
|
1,209 |
|
7.4% |
|
|
|
Total End of Period Subscribers |
3,798 |
|
3,546 |
|
7.1% |
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding. |
|
|
|
|
|
|
|
(1) The “Paid Weeks” metric reports paid weeks by WW customers in
Company-owned operations for a given period as follows: (i)
“Digital Paid Weeks” is the total paid subscription weeks for the
Company’s digital subscription products, which formerly included
Personal Coaching + Digital and Digital 360 (as applicable); (ii)
“Workshops + Digital Paid Weeks” is the sum of total paid
commitment plan weeks which include workshops and digital
offerings; (iii) “Clinical Paid Weeks” is the total paid
subscription weeks for the Company’s Clinical subscription
products; and (iv) “Total Paid Weeks” is the sum of Digital Paid
Weeks, Workshops + Digital Paid Weeks and Clinical Paid Weeks. |
|
|
(2) The “End of Period Subscribers” metric reports WW subscribers
in Company-owned operations at a given period end as follows: (i)
“End of Period Digital Subscribers” is the total number of Digital,
including former Personal Coaching + Digital and Digital 360 (as
applicable), subscribers; (ii) “End of Period Workshops + Digital
Subscribers” is the total number of commitment plan subscribers
that have access to combined workshops and digital offerings; (iii)
“End of Period Clinical Subscribers” is the total number of
Clinical subscribers; and (iv) “End of Period Subscribers” is the
sum of End of Period Digital Subscribers, End of Period Workshops +
Digital Subscribers and End of Period Clinical Subscribers. |
|
| |
|
|
|
|
|
|
|
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
| OPERATIONAL
STATISTICS |
|
| (IN
THOUSANDS, EXCEPT PERCENTAGES) |
|
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Twelve Months Ended |
|
|
|
| |
|
December 30, |
|
December 31, |
|
Variance |
|
| |
|
2023 |
|
2022 |
|
|
| |
|
|
|
|
|
|
|
|
Digital Paid Weeks (1) |
|
|
|
|
|
|
|
North America |
107,516 |
|
111,457 |
|
(3.5%) |
|
|
|
International |
60,351 |
|
64,355 |
|
(6.2%) |
|
|
|
Total Digital Paid Weeks |
167,868 |
|
175,812 |
|
(4.5%) |
|
|
| |
|
|
|
|
|
|
|
|
Workshops + Digital Paid Weeks
(1) |
|
|
|
|
|
|
|
North America |
28,397 |
|
29,902 |
|
(5.0%) |
|
|
|
International |
9,345 |
|
9,954 |
|
(6.1%) |
|
|
|
Total Workshops + Digital Paid Weeks |
37,742 |
|
39,856 |
|
(5.3%) |
|
|
| |
|
|
|
|
|
|
|
|
Clinical Paid Weeks (1) |
|
|
|
|
|
|
|
North America |
1,608 |
|
— |
|
N/A |
|
|
|
International |
— |
|
— |
|
— |
|
|
|
Total Clinical Paid Weeks |
1,608 |
|
— |
|
N/A |
|
|
| |
|
|
|
|
|
|
|
|
Total Paid Weeks (1) |
|
|
|
|
|
|
|
North America |
137,522 |
|
141,359 |
|
(2.7%) |
|
|
|
International |
69,697 |
|
74,309 |
|
(6.2%) |
|
|
|
Total Paid Weeks |
207,218 |
|
215,668 |
|
(3.9%) |
|
|
| |
|
|
|
|
|
|
|
|
End of Period Digital Subscribers
(2) |
|
|
|
|
|
|
|
North America |
1,948 |
|
1,802 |
|
8.1% |
|
|
|
International |
1,131 |
|
1,033 |
|
9.5% |
|
|
|
Total End of Period Digital Subscribers |
3,079 |
|
2,836 |
|
8.6% |
|
|
| |
|
|
|
|
|
|
|
|
End of Period Workshops + Digital Subscribers
(2) |
|
|
|
|
|
|
|
North America |
484 |
|
534 |
|
(9.4%) |
|
|
|
International |
167 |
|
176 |
|
(4.9%) |
|
|
|
Total End of Period Workshops + Digital Subscribers |
652 |
|
711 |
|
(8.3%) |
|
|
| |
|
|
|
|
|
|
|
|
End of Period Clinical Subscribers
(2) |
|
|
|
|
|
|
|
North America |
67 |
|
— |
|
N/A |
|
|
|
International |
— |
|
— |
|
— |
|
|
|
Total End of Period Clinical Subscribers |
67 |
|
— |
|
N/A |
|
|
| |
|
|
|
|
|
|
|
|
Total End of Period Subscribers
(2) |
|
|
|
|
|
|
|
North America |
2,499 |
|
2,337 |
|
6.9% |
|
|
|
International |
1,299 |
|
1,209 |
|
7.4% |
|
|
|
Total End of Period Subscribers |
3,798 |
|
3,546 |
|
7.1% |
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding. |
|
|
|
|
|
|
|
(1) The “Paid Weeks” metric reports paid weeks by WW customers in
Company-owned operations for a given period as follows: (i)
“Digital Paid Weeks” is the total paid subscription weeks for the
Company’s digital subscription products, which formerly included
Personal Coaching + Digital and Digital 360 (as applicable); (ii)
“Workshops + Digital Paid Weeks” is the sum of total paid
commitment plan weeks which include workshops and digital
offerings; (iii) “Clinical Paid Weeks” is the total paid
subscription weeks for the Company’s Clinical subscription
products; and (iv) “Total Paid Weeks” is the sum of Digital Paid
Weeks, Workshops + Digital Paid Weeks and Clinical Paid Weeks. |
|
|
(2) The “End of Period Subscribers” metric reports WW subscribers
in Company-owned operations at a given period end as follows: (i)
“End of Period Digital Subscribers” is the total number of Digital,
including former Personal Coaching + Digital and Digital 360 (as
applicable), subscribers; (ii) “End of Period Workshops + Digital
Subscribers” is the total number of commitment plan subscribers
that have access to combined workshops and digital offerings; (iii)
“End of Period Clinical Subscribers” is the total number of
Clinical subscribers; and (iv) “End of Period Subscribers” is the
sum of End of Period Digital Subscribers, End of Period Workshops +
Digital Subscribers and End of Period Clinical Subscribers. |
|
| |
|
|
|
|
|
|
|
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
| (IN
THOUSANDS, EXCEPT PERCENTAGES) |
|
UNAUDITED |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Q4 2023 Variance |
|
| |
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
| |
|
|
|
|
|
|
|
Constant |
|
| |
|
Q4 2023 |
|
Q4 2022 |
|
2023 |
|
Currency |
|
| |
|
|
|
Currency |
|
Constant |
|
|
|
vs |
|
vs |
|
| |
|
GAAP |
|
Adjustment |
|
Currency |
|
GAAP |
|
2022 |
|
2022 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Company Revenues |
$ |
205,955 |
|
$ |
(2,434 |
) |
|
$ |
203,521 |
|
$ |
222,902 |
(6) |
(7.6%) |
|
|
(8.7%) |
|
|
|
Consolidated Digital Subscription Revenues (1) |
$ |
133,459 |
|
$ |
(1,984 |
) |
|
$ |
131,475 |
|
$ |
141,085 |
|
(5.4%) |
|
|
(6.8%) |
|
|
|
Consolidated Workshops + Digital Fees (2) |
$ |
49,666 |
|
$ |
(395 |
) |
|
$ |
49,271 |
|
$ |
59,847 |
|
(17.0%) |
|
|
(17.7%) |
|
|
|
Consolidated Clinical Subscription Revenues (3) |
$ |
12,962 |
|
$ |
— |
|
|
$ |
12,962 |
|
$ |
— |
|
N/A |
|
|
N/A |
|
|
|
Consolidated Subscription Revenues (4) |
$ |
196,087 |
|
$ |
(2,379 |
) |
|
$ |
193,708 |
|
$ |
200,932 |
|
(2.4%) |
|
|
(3.6%) |
|
|
|
Consolidated Product Sales and Other (5) |
$ |
9,868 |
|
$ |
(55 |
) |
|
$ |
9,813 |
|
$ |
21,970 |
(6) |
(55.1%) |
|
|
(55.3%) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital Subscription Revenues (1) |
$ |
88,349 |
|
$ |
16 |
|
|
$ |
88,365 |
|
$ |
93,659 |
|
(5.7%) |
|
|
(5.7%) |
|
|
|
Workshops + Digital Fees (2) |
$ |
40,415 |
|
$ |
8 |
|
|
$ |
40,423 |
|
$ |
48,558 |
|
(16.8%) |
|
|
(16.8%) |
|
|
|
Clinical Subscription Revenues (3) |
$ |
12,962 |
|
$ |
— |
|
|
$ |
12,962 |
|
$ |
— |
|
N/A |
|
|
N/A |
|
|
|
Subscription Revenues (4) |
$ |
141,726 |
|
$ |
23 |
|
|
$ |
141,749 |
|
$ |
142,217 |
|
(0.3%) |
|
|
(0.3%) |
|
|
|
Product Sales and Other (5) |
$ |
8,570 |
|
$ |
1 |
|
|
$ |
8,571 |
|
$ |
15,616 |
(6) |
(45.1%) |
|
|
(45.1%) |
|
|
|
Total Revenues |
$ |
150,296 |
|
$ |
25 |
|
|
$ |
150,321 |
|
$ |
157,833 |
(6) |
(4.8%) |
|
|
(4.8%) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital Subscription Revenues (1) |
$ |
45,110 |
|
$ |
(1,999 |
) |
|
$ |
43,111 |
|
$ |
47,426 |
|
(4.9%) |
|
|
(9.1%) |
|
|
|
Workshops + Digital Fees (2) |
$ |
9,251 |
|
$ |
(403 |
) |
|
$ |
8,848 |
|
$ |
11,289 |
|
(18.1%) |
|
|
(21.6%) |
|
|
|
Clinical Subscription Revenues (3) |
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
N/A |
|
|
N/A |
|
|
|
Subscription Revenues (4) |
$ |
54,361 |
|
$ |
(2,402 |
) |
|
$ |
51,959 |
|
$ |
58,715 |
|
(7.4%) |
|
|
(11.5%) |
|
|
|
Product Sales and Other (5) |
$ |
1,298 |
|
$ |
(56 |
) |
|
$ |
1,242 |
|
$ |
6,354 |
|
(79.6%) |
|
|
(80.5%) |
|
|
|
Total Revenues |
$ |
55,659 |
|
$ |
(2,459 |
) |
|
$ |
53,200 |
|
$ |
65,069 |
|
(14.5%) |
|
|
(18.2%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
| (1) “Digital
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Digital offerings, which formerly
included Personal Coaching + Digital and Digital 360 (as
applicable). |
|
| (2) “Workshops +
Digital Fees” consist of the fees associated with the Company's
subscription plans for combined workshops and digital offerings and
other payment arrangements for access to workshops. |
|
| (3) “Clinical
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Clinical offerings. |
|
| (4) “Subscription
Revenues” equal “Digital Subscription Revenues” plus “Workshops +
Digital Fees” plus “Clinical Subscription Revenues”. |
|
| (5) “Product Sales and
Other” are sales of consumer products via e-commerce, in studios
and through the Company's trusted partners, revenues from licensing
and publishing, other revenues, and, in the case of the
consolidated financial results and North America reportable
segment, franchise fees with respect to commitment plans and
royalties. |
|
| (6) Certain amounts
have been revised for Q4 2022 to correct immaterial misstatements
related to certain matters, which will be more fully described in
the Company's Form 10-K filing for the fiscal year ended December
30, 2023. |
|
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
| (IN
THOUSANDS, EXCEPT PERCENTAGES) |
|
UNAUDITED |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Full Year 2023 Variance |
|
| |
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
| |
|
|
|
|
|
|
|
Constant |
|
| |
|
Full Year 2023 |
|
Full Year 2022 |
2023 |
|
Currency |
|
| |
|
|
|
Currency |
|
Constant |
|
|
|
vs |
|
vs |
|
| |
|
GAAP |
|
Adjustment |
|
Currency |
|
GAAP |
|
2022 |
|
2022 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Company Revenues |
$ |
889,551 |
|
$ |
(740 |
) |
|
$ |
888,811 |
|
$ |
1,039,835 |
(6) |
(14.5%) |
|
|
(14.5%) |
|
|
|
Consolidated Digital Subscription Revenues (1) |
$ |
571,074 |
|
$ |
(1,376 |
) |
|
$ |
569,698 |
|
$ |
662,668 |
|
(13.8%) |
|
|
(14.0%) |
|
|
|
Consolidated Workshops + Digital Fees (2) |
$ |
221,139 |
|
$ |
207 |
|
|
$ |
221,346 |
|
$ |
256,387 |
|
(13.7%) |
|
|
(13.7%) |
|
|
|
Consolidated Clinical Subscription Revenues (3) |
$ |
30,542 |
|
$ |
— |
|
|
$ |
30,542 |
|
$ |
— |
|
N/A |
|
|
N/A |
|
|
|
Consolidated Subscription Revenues (4) |
$ |
822,755 |
|
$ |
(1,169 |
) |
|
$ |
821,586 |
|
$ |
919,055 |
|
(10.5%) |
|
|
(10.6%) |
|
|
|
Consolidated Product Sales and Other (5) |
$ |
66,796 |
|
$ |
429 |
|
|
$ |
67,225 |
|
$ |
120,780 |
(6) |
(44.7%) |
|
|
(44.3%) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital Subscription Revenues (1) |
$ |
374,004 |
|
$ |
894 |
|
|
$ |
374,898 |
|
$ |
436,148 |
|
(14.2%) |
|
|
(14.0%) |
|
|
|
Workshops + Digital Fees (2) |
$ |
179,054 |
|
$ |
334 |
|
|
$ |
179,388 |
|
$ |
204,115 |
|
(12.3%) |
|
|
(12.1%) |
|
|
|
Clinical Subscription Revenues (3) |
$ |
30,542 |
|
$ |
— |
|
|
$ |
30,542 |
|
$ |
— |
|
N/A |
|
|
N/A |
|
|
|
Subscription Revenues (4) |
$ |
583,600 |
|
$ |
1,228 |
|
|
$ |
584,828 |
|
$ |
640,263 |
|
(8.8%) |
|
|
(8.7%) |
|
|
|
Product Sales and Other (5) |
$ |
54,596 |
|
$ |
117 |
|
|
$ |
54,713 |
|
$ |
87,095 |
(6) |
(37.3%) |
|
|
(37.2%) |
|
|
|
Total Revenues |
$ |
638,196 |
|
$ |
1,345 |
|
|
$ |
639,541 |
|
$ |
727,358 |
(6) |
(12.3%) |
|
|
(12.1%) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital Subscription Revenues (1) |
$ |
197,070 |
|
$ |
(2,270 |
) |
|
$ |
194,800 |
|
$ |
226,520 |
|
(13.0%) |
|
|
(14.0%) |
|
|
|
Workshops + Digital Fees (2) |
$ |
42,085 |
|
$ |
(127 |
) |
|
$ |
41,958 |
|
$ |
52,272 |
|
(19.5%) |
|
|
(19.7%) |
|
|
|
Clinical Subscription Revenues (3) |
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
N/A |
|
|
N/A |
|
|
|
Subscription Revenues (4) |
$ |
239,155 |
|
$ |
(2,397 |
) |
|
$ |
236,758 |
|
$ |
278,792 |
|
(14.2%) |
|
|
(15.1%) |
|
|
|
Product Sales and Other (5) |
$ |
12,200 |
|
$ |
312 |
|
|
$ |
12,512 |
|
$ |
33,685 |
|
(63.8%) |
|
|
(62.9%) |
|
|
|
Total Revenues |
$ |
251,355 |
|
$ |
(2,085 |
) |
|
$ |
249,270 |
|
$ |
312,477 |
|
(19.6%) |
|
|
(20.2%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
| (1) “Digital
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Digital offerings, which formerly
included Personal Coaching + Digital and Digital 360 (as
applicable). |
|
| (2) “Workshops +
Digital Fees” consist of the fees associated with the Company's
subscription plans for combined workshops and digital offerings and
other payment arrangements for access to workshops. |
|
| (3) “Clinical
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Clinical offerings. |
|
| (4) “Subscription
Revenues” equal “Digital Subscription Revenues” plus “Workshops +
Digital Fees” plus “Clinical Subscription Revenues”. |
|
| (5) “Product Sales and
Other” are sales of consumer products via e-commerce, in studios
and through the Company's trusted partners, revenues from licensing
and publishing, other revenues, and, in the case of the
consolidated financial results and North America reportable
segment, franchise fees with respect to commitment plans and
royalties. |
|
| (6) Certain amounts
have been revised for full year 2022 to correct immaterial
misstatements related to certain matters, which will be more fully
described in the Company's Form 10-K filing for the fiscal year
ended December 30, 2023. |
|
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
|
| (IN
THOUSANDS, EXCEPT PERCENTAGES) |
|
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2023 Variance |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 Constant Currency |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
2023 |
|
| |
|
Q4 2023 |
|
Q4 2022 |
|
|
|
Adjusted |
|
|
|
Adjusted |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
|
|
|
|
|
|
2023 |
|
vs |
|
2023 |
|
vs |
|
| |
|
|
|
|
|
|
|
Currency |
|
Constant |
|
Constant |
|
|
|
|
|
|
|
vs |
|
2022 |
|
vs |
|
2022 |
|
| |
|
GAAP |
|
Adjustment |
|
Adjusted |
|
Adjustment |
Currency |
|
Currency |
|
GAAP |
|
Adjustment |
|
Adjusted |
|
2022 |
|
Adjusted |
|
2022 |
|
Adjusted |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
$ |
124,857 |
|
$ |
1,512 |
(1) |
$ |
126,369 |
|
$ |
(1,922) |
|
$ |
122,935 |
|
$ |
124,447 |
|
$ |
125,968 |
(5) |
$ |
3,128 |
(6) |
$ |
129,096 |
(5) |
(0.9%) |
|
(2.1%) |
|
(2.4%) |
|
(3.6%) |
|
|
Gross Margin |
60.6% |
|
|
|
61.4% |
|
|
|
60.4% |
|
61.1% |
|
56.5% |
(5) |
|
57.9% |
(5) |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling,
General and Administrative Expenses |
|
$ |
76,312 |
|
$ |
(22,117) |
(2) |
$ |
54,195 |
|
$ |
(402) |
|
$ |
75,910 |
|
$ |
53,793 |
|
$ |
70,520 |
|
$ |
(14,223) |
(7) |
$ |
56,297 |
|
8.2% |
|
(3.7%) |
|
7.6% |
|
(4.4%) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (Loss) Income |
$ |
(6,008) |
|
$ |
27,262 |
(3) |
$ |
21,254 |
|
$ |
(857) |
|
$ |
(6,865) |
|
$ |
20,276 |
(4) |
$ |
(51,778) |
(5) |
$ |
74,918 |
(8) |
$ |
23,140 |
(5) |
(88.4%) |
|
(8.1%) |
|
(86.7%) |
|
(12.4%) |
|
|
Operating Income (Loss) Margin |
(2.9%) |
|
|
|
10.3% |
|
|
|
(3.4%) |
|
10.0% |
|
(23.2%) |
(5) |
|
10.4% |
(5) |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Note: Totals may not
sum due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) Excludes the net
impact of $1,247 of charges associated with the Company's
previously disclosed 2023 restructuring plan and $265 of charges
associated with the Company's previously disclosed 2022
restructuring plan. |
|
| (2) Excludes the net
impact of $21,893 of charges associated with the Company's
previously disclosed 2023 restructuring plan and $224 of charges
associated with the Company's previously disclosed 2022
restructuring plan. |
|
| (3) Excludes (i) the
net impact of (y) $1,247 of charges and $21,893 of charges
associated with the Company's previously disclosed 2023
restructuring plan recorded to cost of subscription revenues and
selling, general and administrative expenses, respectively, and (z)
$265 of charges and $224 of charges associated with the Company's
previously disclosed 2022 restructuring plan recorded to cost of
subscription revenues and selling, general and administrative
expenses, respectively, and (ii) the impact of impairment charges
of the Company's goodwill related to its Republic of Ireland and
Northern Ireland reporting units of $2,383 and $1,203,
respectively, and the impairment charge of the Company's franchise
rights acquired related to its Northern Ireland unit of account of
$47. |
|
| (4) Includes $121 of
currency adjustment associated with the impairment charges of the
Company's goodwill related to its Republic of Ireland and Northern
Ireland reporting units of $2,383 and $1,203, respectively, and the
impairment charge of the Company's franchise rights acquired
related to its Northern Ireland unit of account of $47. |
|
| (5) Certain amounts
have been revised for Q4 2022 to correct immaterial misstatements
related to certain matters, which will be more fully described in
the Company's Form 10-K filing for the fiscal year ended December
30, 2023. |
|
| (6) Excludes the net
impact of $1,798 of charges associated with the Company's
previously disclosed 2023 restructuring plan, $2,075 of charges
associated with the Company's previously disclosed 2022
restructuring plan, the reversal of $132 of charges associated with
the Company's previously disclosed 2021 organizational
restructuring plan and the reversal of $613 of charges associated
with the Company's previously disclosed 2020 organizational
restructuring plan. |
|
| (7) Excludes the net
impact of $11,810 of charges associated with the Company's
previously disclosed 2023 restructuring plan, $2,432 of charges
associated with the Company's previously disclosed 2022
restructuring plan, the reversal of $10 of charges associated with
the Company's previously disclosed 2021 organizational
restructuring plan and the reversal of $8 of charges associated
with the Company's previously disclosed 2020 organizational
restructuring plan. |
|
| (8) Excludes (i) the
impact of impairment charges of the Company's franchise rights
acquired of $25,739, $19,657, $8,275 and $1,872 related to its
United States, Canada, United Kingdom and Australia units of
account, respectively, and an impairment charge of the Company's
goodwill related to its Republic of Ireland reporting unit of
$2,023 and (ii) the net impact of (w) $1,798 of charges and $11,810
of charges associated with the Company's previously disclosed 2023
restructuring plan recorded to cost of subscription revenues and
selling, general and administrative expenses, respectively, (x)
$2,075 of charges and $2,432 of charges associated with the
Company's previously disclosed 2022 restructuring plan recorded to
cost of subscription revenues and selling, general and
administrative expenses, respectively, (y) the reversal of $132 of
charges and the reversal of $10 of charges associated with the
Company's previously disclosed 2021 organizational restructuring
plan recorded to cost of subscription revenues and selling, general
and administrative expenses, respectively, and (z) the reversal of
$613 of charges and the reversal of $8 of charges associated with
the Company's previously disclosed 2020 organizational
restructuring plan recorded to cost of subscription revenues and
selling, general and administrative expenses, respectively. |
|
| |
|
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
|
| (IN
THOUSANDS, EXCEPT PERCENTAGES) |
|
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2023 Variance |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 Constant Currency |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
|
2023 |
|
|
| |
|
Full Year 2023 |
|
Full Year 2022 |
|
|
|
Adjusted |
|
|
|
Adjusted |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
|
|
|
|
|
|
2023 |
|
|
vs |
|
2023 |
|
|
vs |
|
| |
|
|
|
|
|
|
|
Currency |
|
Constant |
|
Constant |
|
|
|
|
|
|
|
vs |
|
2022 |
|
|
vs |
|
2022 |
|
|
| |
|
GAAP |
|
Adjustment |
|
Adjusted |
|
Adjustment |
Currency |
|
Currency |
|
GAAP |
|
Adjustment |
|
Adjusted |
|
2022 |
|
|
Adjusted |
|
2022 |
|
|
Adjusted |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
$ |
529,303 |
|
|
$ |
21,187 |
|
(1) |
$ |
550,490 |
|
|
$ |
(1,367 |
) |
|
$ |
527,936 |
|
|
$ |
549,123 |
|
|
$ |
621,379 |
|
(5) |
$ |
6,981 |
|
(6) |
$ |
628,360 |
|
(5) |
(14.8%) |
|
|
(12.4%) |
|
|
(15.0%) |
|
|
(12.6%) |
|
|
|
Gross Margin |
|
59.5% |
|
|
|
|
|
61.9% |
|
|
|
|
|
59.4% |
|
|
|
61.8% |
|
|
|
59.8% |
|
|
|
|
|
60.4% |
|
(5) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling,
General and Administrative Expenses |
|
$ |
264,950 |
|
|
$ |
(42,332 |
) |
(2) |
$ |
222,618 |
|
|
$ |
(26 |
) |
|
$ |
264,924 |
|
|
$ |
222,593 |
|
|
$ |
263,840 |
|
|
$ |
(32,730 |
) |
(7) |
$ |
231,110 |
|
|
0.4% |
|
|
(3.7%) |
|
|
0.4% |
|
|
(3.7%) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) |
$ |
22,333 |
|
|
$ |
67,152 |
|
(3) |
$ |
89,485 |
|
|
$ |
(1,999 |
) |
|
$ |
20,334 |
|
|
$ |
87,365 |
|
(4) |
$ |
(283,971 |
) |
(5) |
$ |
436,438 |
|
(8) |
$ |
152,467 |
|
(5) |
(107.9%) |
|
|
(41.3%) |
|
|
(107.2%) |
|
|
(42.7%) |
|
|
|
Operating Income (Loss) Margin |
|
2.5% |
|
|
|
|
|
10.1% |
|
|
|
|
|
2.3% |
|
|
|
9.8% |
|
|
|
(27.3%) |
|
(5) |
|
|
|
14.7% |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Note: Totals may not
sum due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) Excludes the net
impact of $21,116 of charges associated with the Company's
previously disclosed 2023 restructuring plan, the reversal of $4 of
charges associated with the Company's previously disclosed 2022
restructuring plan, $96 of charges associated with the Company's
previously disclosed 2021 organizational restructuring plan and the
reversal of $21 of charges associated with the Company's previously
disclosed 2020 organizational restructuring plan. |
|
| (2) Excludes (i) the
net impact of $32,627 of charges associated with the Company's
previously disclosed 2023 restructuring plan, $1,139 of charges
associated with the Company's previously disclosed 2022
restructuring plan and the reversal of $39 of charges associated
with the Company's previously disclosed 2021 organizational
restructuring plan, and (ii) the impact of $8,605 of acquisition
transaction costs. |
|
| (3) Excludes (i) the
net impact of (w) $21,116 of charges and $32,627 of charges
associated with the Company's previously disclosed 2023
restructuring plan recorded to cost of subscription revenues and
selling, general and administrative expenses, respectively, (x) the
reversal of $4 of charges and $1,139 of charges associated with the
Company's previously disclosed 2022 restructuring plan recorded to
cost of subscription revenues and selling, general and
administrative expenses, respectively, (y) $96 of charges and the
reversal of $39 of charges associated with the Company's previously
disclosed 2021 organizational restructuring plan recorded to cost
of subscription revenues and selling, general and administrative
expenses, respectively, and (z) the reversal of $21 of charges
associated with the Company's previously disclosed 2020
organizational restructuring plan recorded to cost of subscription
revenues, (ii) the impact of $8,605 of acquisition transaction
costs recorded to selling, general and administrative expenses, and
(iii) the impact of impairment charges of the Company's goodwill
related to its Republic of Ireland and Northern Ireland reporting
units of $2,383 and $1,203, respectively, and the impairment charge
of the Company's franchise rights acquired related to its Northern
Ireland unit of account of $47. |
|
| (4) Includes $121 of
currency adjustment associated with the impairment charges of the
Company's goodwill related to its Republic of Ireland and Northern
Ireland reporting units of $2,383 and $1,203, respectively, and the
impairment charge of the Company's franchise rights acquired
related to its Northern Ireland unit of account of $47. |
|
| (5) Certain amounts
have been revised for full year 2022 to correct immaterial
misstatements related to certain matters, which will be more fully
described in the Company's Form 10-K filing for the fiscal year
ended December 30, 2023. |
|
| (6) Excludes the net
impact of $1,798 of charges associated with the Company's
previously disclosed 2023 restructuring plan, $6,476 of charges
associated with the Company's previously disclosed 2022
restructuring plan, the reversal of $564 of charges associated with
the Company's previously disclosed 2021 organizational
restructuring plan and the reversal of $729 of charges associated
with the Company's previously disclosed 2020 organizational
restructuring plan. |
|
| (7) Excludes the net
impact of $11,810 of charges associated with the Company's
previously disclosed 2023 restructuring plan, $20,705 of charges
associated with the Company's previously disclosed 2022
restructuring plan, $223 of charges associated with the Company's
previously disclosed 2021 organizational restructuring plan and the
reversal of $8 of charges associated with the Company's previously
disclosed 2020 organizational restructuring plan. |
|
| (8) Excludes (i) the
impact of impairment charges of the Company's franchise rights
acquired of $324,030, $57,454, $8,275, $1,972 and $1,872 related to
its United States, Canada, United Kingdom, New Zealand and
Australia units of account, respectively, and impairment charges of
the Company's goodwill related to its Republic of Ireland reporting
unit and its Kurbo operations of $2,023 and $1,101, respectively,
and (ii) the net impact of (v) $1,798 of charges and $11,810 of
charges associated with the Company's previously disclosed 2023
restructuring plan recorded to cost of subscription revenues and
selling, general and administrative expenses, respectively, (w)
$6,476 of charges and $20,705 of charges associated with the
Company's previously disclosed 2022 restructuring plan recorded to
cost of subscription revenues and selling, general and
administrative expenses, respectively, (x) the reversal of $564 of
charges associated with the Company's previously disclosed 2021
organizational restructuring plan recorded to cost of subscription
revenues, (y) $223 of charges associated with the Company's
previously disclosed 2021 organizational restructuring plan
recorded to selling, general and administrative expenses and (z)
the reversal of $729 of charges and the reversal of $8 of charges
associated with the Company's previously disclosed 2020
organizational restructuring plan recorded to cost of subscription
revenues and selling, general and administrative expenses,
respectively. |
|
| |
|
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
|
|
| (IN
THOUSANDS) |
|
|
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
| |
|
|
December
30, |
|
December
31, |
|
December
30, |
|
December
31, |
|
|
| |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(88,135) |
|
$ |
(35,781) |
(1) |
$ |
(112,255) |
|
$ |
(256,868) |
(1) |
|
Interest |
|
24,464 |
|
22,304 |
|
95,893 |
|
81,141 |
|
|
|
Taxes |
|
57,556 |
|
(36,690) |
(1) |
38,623 |
|
(109,935) |
(1) |
|
Depreciation and Amortization |
|
10,007 |
|
10,407 |
|
45,640 |
|
42,348 |
|
|
|
Stock-based Compensation |
|
2,346 |
|
2,590 |
|
11,303 |
|
12,952 |
|
|
| |
EBITDAS |
|
$ |
6,238 |
|
$ |
(37,170) |
(1) |
$ |
79,204 |
|
$ |
(230,362) |
(1) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
2023 Plan Restructuring Charges (2) |
|
23,140 |
|
13,608 |
|
53,743 |
|
13,608 |
|
|
|
2022 Plan Restructuring Charges (3) |
|
489 |
|
4,507 |
|
1,135 |
|
27,181 |
|
|
|
2021 Plan Restructuring Charges (4) |
|
— |
|
(142) |
|
57 |
|
(341) |
|
|
|
2020 Plan Restructuring Charges (5) |
|
— |
|
(621) |
|
(21) |
|
(737) |
|
|
|
Acquisition Transaction Costs (6) |
|
— |
|
— |
|
8,605 |
|
— |
|
|
|
Franchise Rights Acquired and Goodwill Impairments |
|
3,633 |
(7) |
57,566 |
(8) |
3,633 |
(7) |
396,727 |
(9) |
| |
Adjusted EBITDAS |
|
$ |
33,500 |
|
$ |
37,748 |
(1) |
$ |
146,356 |
|
$ |
206,076 |
(1) |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding. |
|
|
|
|
|
|
|
|
|
|
| (1) Certain amounts
have been revised for the three and twelve months ended December
31, 2022 to correct immaterial misstatements related to certain
income tax and other matters, which will be more fully described in
the Company's Form 10-K filing for the fiscal year ended December
30, 2023. |
|
|
| (2) Charges associated
with the Company's previously disclosed 2023 restructuring
plan. |
|
|
| (3) Charges associated
with the Company's previously disclosed 2022 restructuring
plan. |
|
|
| (4) The reversal of
charges or charges, as applicable, associated with the Company's
previously disclosed 2021 organizational restructuring plan. |
|
|
| (5) The reversal of
charges associated with the Company's previously disclosed 2020
organizational restructuring plan. |
|
|
| (6) Certain
non-recurring transaction costs in connection with the Company's
acquisition of Sequence. |
|
|
| (7) Impairment charges
of the Company's goodwill of $2,383 and $1,203 related to its
Republic of Ireland and Northern Ireland reporting units,
respectively, and the impairment charge of the Company's franchise
rights acquired of $47 related to its Northern Ireland unit of
account. |
|
|
| (8) Impairment charges
of the Company's franchise rights acquired of $25,739, $19,657,
$8,275 and $1,872 related to its United States, Canada, United
Kingdom and Australia units of account, respectively, and an
impairment charge of the Company's goodwill related to its Republic
of Ireland reporting unit of $2,023. |
|
|
| (9) Impairment charges
of the Company's franchise rights acquired of $324,030, $57,454,
$8,275, $1,972 and $1,872 related to its United States, Canada,
United Kingdom, New Zealand and Australia units of account,
respectively, and impairment charges of the Company's goodwill
related to its Republic of Ireland reporting unit and Kurbo
operations of $2,023 and $1,101, respectively. |
|
|
| |
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
|
|
| (IN
THOUSANDS, EXCEPT RATIOS) |
|
|
|
UNAUDITED |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Trailing
Twelve |
|
| |
|
Q1 2023 |
|
Q2 2023 |
|
Q3 2023 |
|
Q4 2023 |
|
Months |
|
|
|
Net Debt to Adjusted EBITDAS |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Income |
$ |
(118,679 |
) |
$ |
50,828 |
|
|
$ |
43,731 |
|
|
$ |
(88,135 |
) |
|
$ |
(112,255 |
) |
|
|
|
Interest |
|
22,846 |
|
|
|
24,075 |
|
|
|
24,508 |
|
|
|
24,464 |
|
|
|
95,893 |
|
|
|
|
Taxes |
|
67,580 |
|
|
|
(48,066 |
) |
|
|
(38,447 |
) |
|
|
57,556 |
|
|
|
38,623 |
|
|
|
|
Depreciation and Amortization |
|
10,273 |
|
|
|
11,932 |
|
|
|
13,428 |
|
|
|
10,007 |
|
|
|
45,640 |
|
|
|
|
Stock-based Compensation |
|
2,669 |
|
|
|
3,063 |
|
|
|
3,225 |
|
|
|
2,346 |
|
|
|
11,303 |
|
|
|
|
|
EBITDAS |
$ |
(15,311 |
) |
|
$ |
41,832 |
|
|
$ |
46,445 |
|
|
$ |
6,238 |
|
|
$ |
79,204 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 Plan Restructuring Charges (1) |
|
22,632 |
|
|
|
1,784 |
|
|
|
6,187 |
|
|
|
23,140 |
|
|
|
53,743 |
|
|
|
|
2022 Plan Restructuring Charges (2) |
|
40 |
|
|
|
818 |
|
|
|
(212 |
) |
|
|
489 |
|
|
|
1,135 |
|
|
|
|
2021 Plan Restructuring Charges (3) |
|
(7 |
) |
|
|
64 |
|
|
|
— |
|
|
|
— |
|
|
|
57 |
|
|
|
|
2020 Plan Restructuring Charges (4) |
|
(5 |
) |
|
|
(16 |
) |
|
|
— |
|
|
|
— |
|
|
|
(21 |
) |
|
|
|
Acquisition Transaction Costs (5) |
|
3,719 |
|
|
|
4,886 |
|
|
|
— |
|
|
|
— |
|
|
|
8,605 |
|
|
|
|
Franchise Rights Acquired and Goodwill Impairments (6) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,633 |
|
|
|
3,633 |
|
|
|
| |
Adjusted EBITDAS |
$ |
11,068 |
|
|
$ |
49,368 |
|
|
$ |
52,420 |
|
|
$ |
33,500 |
|
|
$ |
146,356 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt |
|
|
|
|
|
|
|
|
$ |
1,426,464 |
|
|
|
|
Less: Cash |
|
|
|
|
|
|
|
|
|
109,366 |
|
|
|
| |
Net
Debt |
|
|
|
|
|
|
|
|
$ |
1,317,098 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Debt to Net Loss |
|
|
|
|
|
|
|
|
|
(12.7 |
) |
X |
|
|
|
Net
Debt to Adjusted EBITDAS |
|
|
|
|
|
|
|
|
|
9.0 |
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
| (1) Charges associated
with the Company's previously disclosed 2023 restructuring
plan. |
|
|
| (2) Charges or the
reversal of charges, as applicable, associated with the Company's
previously disclosed 2022 restructuring plan. |
|
|
| (3) The reversal of
charges or charges, as applicable, associated with the Company's
previously disclosed 2021 organizational restructuring plan. |
|
|
| (4) The reversal of
charges associated with the Company's previously disclosed 2020
organizational restructuring plan. |
|
|
| (5) Certain
non-recurring transaction costs in connection with the Company's
acquisition of Sequence, which includes $3,719 recast for Q1
2023. |
|
|
| (6) Impairment charges
of the Company's goodwill of $2,383 and $1,203 related to its
Republic of Ireland and Northern Ireland reporting units,
respectively, and the impairment charge of the Company's franchise
rights acquired of $47 related to its Northern Ireland unit of
account. |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
For more information, contact:Investors:Corey
Kingercorey.kinger@ww.com
Media:Kelsey Merkelkelsey.merkel@ww.com
WW (NASDAQ:WW)
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WW (NASDAQ:WW)
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From Apr 2023 to Apr 2024
