0000902664-14-001953.txt : 20140325 0000902664-14-001953.hdr.sgml : 20140325 20140325113427 ACCESSION NUMBER: 0000902664-14-001953 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20140325 DATE AS OF CHANGE: 20140325 GROUP MEMBERS: CLINTON GROUP, INC. GROUP MEMBERS: CLINTON MAGNOLIA MASTER FUND, LTD. GROUP MEMBERS: CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P. GROUP MEMBERS: CLINTON RELATIONAL OPPORTUNITY, LLC GROUP MEMBERS: CLINTON SPOTLIGHT MASTER FUND, L.P. GROUP MEMBERS: GEH CAPITAL, INC. GROUP MEMBERS: GEORGE E. HALL SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NUTRI SYSTEM INC /DE/ CENTRAL INDEX KEY: 0001096376 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CATALOG & MAIL-ORDER HOUSES [5961] IRS NUMBER: 233012204 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-58605 FILM NUMBER: 14714986 BUSINESS ADDRESS: STREET 1: FORT WASHINGTON EXECUTIVE CENTER STREET 2: 600 OFFICE CENTER DRIVE CITY: FORT WASHINGTON STATE: PA ZIP: 19034 BUSINESS PHONE: 2157065332 MAIL ADDRESS: STREET 1: FORT WASHINGTON EXECUTIVE CENTER STREET 2: 600 OFFICE CENTER DRIVE CITY: FORT WASHINGTON STATE: PA ZIP: 19034 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CLINTON GROUP INC CENTRAL INDEX KEY: 0001134119 IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 601 LEXINGTON AVE. STREET 2: 51ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2128250400 MAIL ADDRESS: STREET 1: 601 LEXINGTON AVE. STREET 2: 51ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 SC 13D/A 1 p14-0980sc13da.htm NUTRISYSTEM, INC.

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934
(Amendment No. 3)*

NutriSystem, Inc.
(Name of Issuer)

Common Stock, par value $0.001 per share
(Title of Class of Securities)

67069D108
(CUSIP Number)


Marc Weingarten and David E. Rosewater Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 (212) 756-2000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

March 24, 2014
(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. [ ]

(Page 1 of 19 Pages)

______________________________

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 2 of 19

1	NAME OF REPORTING PERSON Clinton Spotlight Master Fund, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 0
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 0
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.0%
14	TYPE OF REPORTING PERSON PN

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 3 of 19

1	NAME OF REPORTING PERSON Clinton Magnolia Master Fund, Ltd.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 977,338 shares of Common Stock (including options to purchase 384,900 shares of Common Stock)
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 977,338 shares of Common Stock (including options to purchase 384,900 shares of Common Stock)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 977,338 shares of Common Stock (including options to purchase 384,900 shares of Common Stock)
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.4%
14	TYPE OF REPORTING PERSON CO

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 4 of 19

1	NAME OF REPORTING PERSON Clinton Relational Opportunity Master Fund, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 504,213 shares of Common Stock
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 504,213 shares of Common Stock
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 504,213 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.8%
14	TYPE OF REPORTING PERSON PN

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 5 of 19

1	NAME OF REPORTING PERSON Clinton Relational Opportunity, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 504,213 shares of Common Stock
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 504,213 shares of Common Stock
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 504,213 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.8%
14	TYPE OF REPORTING PERSON CO; IA

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 6 of 19

1	NAME OF REPORTING PERSON GEH Capital, Inc.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 50,000 shares of Common Stock
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 50,000 shares of Common Stock
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 50,000 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.2%
14	TYPE OF REPORTING PERSON CO

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 7 of 19

1	NAME OF REPORTING PERSON Clinton Group, Inc.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 1,650,045 shares of Common Stock (including options to purchase 384,900 shares of Common Stock)
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 1,650,045 shares of Common Stock (including options to purchase 384,900 shares of Common Stock)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 1,650,045 shares of Common Stock (including options to purchase 384,900 shares of Common Stock)
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.8%
14	TYPE OF REPORTING PERSON CO; IA

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 8 of 19

1	NAME OF REPORTING PERSON George E. Hall
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 1,700,045 shares of Common Stock (including options to purchase 384,900 shares of Common Stock)
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 1,700,045 shares of Common Stock (including options to purchase 384,900 shares of Common Stock)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 1,700,045 shares of Common Stock (including options to purchase 384,900 shares of Common Stock)
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.9%
14	TYPE OF REPORTING PERSON IN

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 9 of 19

This Amendment No. 3 ("Amendment No. 3") amends and supplements the statement on Schedule 13D filed with the Securities and Exchange Commission (the "SEC") on September 30, 2013 (the "Original Schedule 13D"), Amendment No. 1 filed with the SEC on November 6, 2013 ("Amendment No. 1") and Amendment No. 2 filed with the SEC on February 18, 2014 ("Amendment No. 2" together with the Original Schedule 13D, Amendment No. 1 and this Amendment No. 3, the "Schedule 13D") with respect to the common stock, par value $0.001 per share (the "Common Stock"), of NutriSystem, Inc., a Delaware corporation (the "Issuer"). Capitalized terms used herein and not otherwise defined in this Amendment No. 3 have the meanings set forth in the Schedule 13D. This Amendment No. 3 amends Items 2, 3, 4, 5, 6 and 7 as set forth below. As of March 17, 2014, SPOT ceased to beneficially own any shares of Common Stock. Accordingly, this Amendment No. 3 constitutes an exit filing for SPOT.

Item 2.	IDENTITY AND BACKGROUND

	Paragraphs (a) – (c) of Item 2 of the Schedule 13D are hereby amended and restated in their entirety as follows:

	(a) This Schedule 13D is filed by: (i) Clinton Spotlight Master Fund, L.P., a Cayman Islands exempted limited partnership ("SPOT"); (ii) Clinton Magnolia Master Fund, Ltd., a Cayman Islands exempted company ("CMAG"); (iii) Clinton Relational Opportunity Master Fund, L.P., a Cayman Islands exempted limited partnership ("CREL"); (iv) Clinton Relational Opportunity, LLC, a Delaware limited liability company, which serves as the investment manager to CREL ("CRO"); (v) GEH Capital, Inc., a Delaware corporation ("GEHC"); (vi) Clinton Group, Inc., a Delaware corporation, which serves as the investment manager to SPOT and CMAG (“CGI”); and (vi) George E. Hall, a United States citizen, who serves as Chief Executive Officer of CGI ("Mr. Hall", and together with SPOT, CMAG, CREL, CRO, GEHC and CGI, “Clinton”). (b) The principal business address of CRO, GEHC, CGI and Mr. Hall is 601 Lexington Avenue, 51^st Floor, New York, New York 10022. The principal business address of SPOT, CMAG and CREL is c/o Credit Suisse Administration Services (Cayman) Ltd., P.O. Box 2003 GT, Grand Pavilion Commercial Centre, 802 West Bay Road, Grand Cayman, Cayman Islands. (c) The principal business of CRO and CGI is to provide investment management services to private individuals and institutions. The principal business of SPOT, CMAG, CREL and GEHC is to invest in securities. The principal business of Mr. Hall is to serve as Chief Executive Officer of CGI. The name, citizenship, present principal occupation or employment and business address of each director and executive officer or general partner, as applicable, of CGI, SPOT, CMAG, CREL, CRO and GEHC is set forth in Appendix A attached hereto. To the best of the Reporting Persons' knowledge, except as set forth in this statement on Schedule 13D, none of such individuals owns any shares of Common Stock.

Item 3.	SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

	Item 3 of the Schedule 13D is hereby amended and restated in its entirety as follows:

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 10 of 19

The Reporting Persons used approximately $20,596,000 (including brokerage commissions) in the aggregate to purchase the Common Stock reported in this Schedule 13D.

The source of the funds used to acquire the Common Stock reported herein is the working capital of CMAG, CREL and GEHC for the shares of Common Stock held by each of them, and margin borrowings described in the following sentence. Such shares of Common Stock are held by the Reporting Persons in commingled margin accounts, which may extend margin credit to the Reporting Persons from time to time, subject to applicable federal margin regulations, stock exchange rules and credit policies. In such instances, the positions held in the margin account are pledged as collateral security for the repayment of debit balances in the account. The margin accounts bear interest at a rate based upon the broker’s call rate from time to time in effect. Because other securities are held in the margin accounts, it is not possible to determine the amounts, if any, of margin used to purchase the Common Stock reported herein.

Item 4.	PURPOSE OF TRANSACTION

	Item 4 of the Schedule 13D is hereby amended and supplemented by the addition of the following:

	On March 24, 2014, CGI sent a letter to Dawn Zier, Chief Executive Officer of the Issuer (the "Letter"), commending the Issuer for a number of positive developments and expressing CGI's continued enthusiasm for the Issuer's value and future. CGI expressed its view that the stock is undervalued and that the Issuer should buy $80 million of its own stock at prices up to $18 per share. The Letter included CGI's analysis regarding the proposed buyback and its conclusion that such a buyback would not limit the Issuer's ability to execute its business plan or capital spending program because each share carries a $0.70 dividend today, which would no longer be paid if the share were bought back. As an alternative to a buyback, CGI suggested the acquisition of the Issuer by a private equity firm. The foregoing summary of the Letter is qualified in its entirety by reference to the full text of the Letter, a copy of which is attached as Exhibit 3 to the Schedule 13D and is incorporated by reference herein.

Item 5.	INTEREST IN SECURITIES OF THE ISSUER

	Paragraphs (a) – (c) and (e) of Item 5 of the Schedule 13D are hereby amended and restated in their entirety as follows:

	(a) The aggregate number and percentage of shares of Common Stock to which this Schedule 13D relates is 1,700,045 shares of Common Stock, constituting approximately 5.9% of the Issuer’s currently outstanding Common Stock. The aggregate number and percentage of shares of Common Stock reported herein are based upon the 28,669,225 shares of Common Stock outstanding as of February 28, 2014, as reported in the Issuer's Annual on Form 10-K for the fiscal year ended December 31, 2013, filed with the Securities and Exchange Commission on March 10, 2014.

(i)	SPOT:
	(a)	As of the date hereof, SPOT may be deemed the beneficial owner of 0 shares of Common Stock.
		Percentage: Approximately 0.0% as of the date hereof.

		(b)	1. Sole power to vote or direct vote: 0
			2. Shared power to vote or direct vote: 0

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 11 of 19

		3. Sole power to dispose or direct the disposition: 0
		4. Shared power to dispose or direct the disposition: 0

(ii)	CMAG:
	(a)	As of the date hereof, CMAG may be deemed the beneficial owner of 977,338 shares of Common Stock (including options to purchase 384,900 shares of Common Stock).
		Percentage: Approximately 3.4% as of the date hereof.
	(b):	1. Sole power to vote or direct vote: 0
		2. Shared power to vote or direct vote: 977,338 shares of Common Stock (including options to purchase 384,900 shares of Common Stock).
		3. Sole power to dispose or direct the disposition: 0
		4. Shared power to dispose or direct the disposition: 977,338 shares of Common Stock (including options to purchase 384,900 shares of Common Stock).

(iii)	CREL:
	(a)	As of the date hereof, CREL may be deemed the beneficial owner of 504,213 shares of Common Stock.
		Percentage: Approximately 1.8% as of the date hereof.
	(b)	1. Sole power to vote or direct vote: 0
		2. Shared power to vote or direct vote: 504,213 shares of Common Stock.
		3. Sole power to dispose or direct the disposition: 0
		4. Shared power to dispose or direct the disposition: 504,213 shares of Common Stock.

(iv)	CRO:
	(a)	As of the date hereof, CRO may be deemed the beneficial owner of 504,213 shares of Common Stock.
		Percentage: Approximately 1.8% as of the date hereof.
	(b)	1. Sole power to vote or direct vote: 0
		2. Shared power to vote or direct vote: 504,213 shares of Common Stock.
		3. Sole power to dispose or direct the disposition: 0
		4. Shared power to dispose or direct the disposition: 504,213 shares of Common Stock.

(v)	GEHC:
	(a)	As of the date hereof, GEHC may be deemed the beneficial owner of 50,000 shares of Common Stock.
		Percentage: Approximately 0.2% as of the date hereof.
		1. Sole power to vote or direct vote: 0
		2. Shared power to vote or direct vote: 50,000 shares of Common Stock.
		3. Sole power to dispose or direct the disposition: 0
		4. Shared power to dispose or direct the disposition: 50,000 shares of Common Stock.

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 12 of 19


(vi)	CGI:
	(a)	As of the date hereof, CGI may be deemed the beneficial owner of 1,650,045 shares of Common Stock (including options to purchase 384,900 shares of Common Stock).
		Percentage: Approximately 5.8% as of the date hereof.
	(b)	1. Sole power to vote or direct vote: 0
		2. Shared power to vote or direct vote: 1,650,045 shares of Common Stock (including options to purchase 384,900 shares of Common Stock).
		3. Sole power to dispose or direct the disposition: 0
		4. Shared power to dispose or direct the disposition: 1,650,045 shares of Common Stock (including options to purchase 384,900 shares of Common Stock).

(vii)	Mr. Hall:
	(a)	As of the date hereof, Mr. Hall may be deemed the beneficial owner of 1,700,045 shares of Common Stock (including options to purchase 384,900 shares of Common Stock).
		Percentage: Approximately 5.9% as of the date hereof.
	(b)	1. Sole power to vote or direct vote: 0
		2. Shared power to vote or direct vote: 1,700,045 shares of Common Stock (including options to purchase 384,900 shares of Common Stock).
		3. Sole power to dispose or direct the disposition: 0
		4. Shared power to dispose or direct the disposition: 1,700,045 shares of Common Stock (including options to purchase 384,900 shares of Common Stock).


	(b) By virtue of investment management agreements with CMAG, its ownership of CRO and a sub-advisory agreement governing a portion of a mutual fund portfolio ("CASF") that beneficially owns 168,494 shares of Common Stock, CGI has the power to vote or direct the voting, and to dispose or direct the disposition, of all of the 1,650,045 shares of Common Stock beneficially owned by CMAG, CREL and CASF. By virtue of his direct and indirect control of CGI and indirect ownership of GEHC, Mr. Hall is deemed to have shared voting power and shared dispositive power with respect to all Common Stock as to which CGI and GEHC has voting power or dispositive power.

	(c) Information concerning transactions in the Common Stock effected by the Reporting Persons since the filing of Amendment No. 2 is set forth in Appendix B hereto and is incorporated herein by reference. Unless otherwise indicated, all of such transactions were effected in the open market.

	(e) As of March 17, 2014, SPOT ceased to beneficially own any shares of Common Stock. Accordingly, this Amendment No. 3 constitutes an exit filing for SPOT.

Item 6.	CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER

	Item 6 of the Schedule 13D is hereby amended and supplemented by the addition of the following:

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SCHEDULE 13D/A

Page 13 of 19

Clinton is currently party to option contracts on 685,600 shares of Common Stock with strike prices ranging from $13.00 to $17.00 and expiration dates ranging from April 19, 2014 to January 17, 2015.

The Reporting Persons are parties to an agreement with respect to the joint filing of this Schedule 13D and any amendments thereto. A copy of such agreement is attached as Exhibit 4 to this Schedule 13D and is incorporated by reference herein.

Other than the options described in this Item 6 or as otherwise disclosed in the Schedule 13D, there are no contracts, arrangements, understandings or relationships among the Reporting Persons or between the Reporting Persons and any other person with respect to securities of the Issuer.

Item 7.	MATERIAL TO BE FILED AS EXHIBITS

	Item 7 of the Schedule 13D is hereby amended and supplemented by the addition of the following:

Exhibit	Description
3	Letter to Ms. Dawn Zier, dated March 24, 2014.
4	Joint Filing Agreement, dated March 25, 2014.

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 14 of 19

SIGNATURES

After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Date: March 25, 2014

	CLINTON SPOTLIGHT MASTER FUND, L.P.
	By: Clinton Group, Inc., its investment manager

	/s/ Francis Ruchalski
	Name: Francis Ruchalski
	Title: Chief Financial Officer

	CLINTON MAGNOLIA MASTER FUND, LTD.

	By: Clinton Group, Inc., its investment manager

	/s/ Francis Ruchalski
	Name: Francis Ruchalski
	Title: Chief Financial Officer

	CLINTON RELATIONAL OPPORTUNITY
	MASTER FUND, L.P.

	By: Clinton Relational Opportunity, LLC, its
	investment manager

	/s/ John Hall
	Name: John Hall
	Title: Authorized Signatory

	CLINTON RELATIONAL OPPORTUNITY, LLC

	/s/ John Hall
	Name: John Hall
	Title: Authorized Signatory

	GEH CAPITAL, INC.

	/s/ Francis Ruchalski
	Name: Francis Ruchalski
	Title: Comptroller

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SCHEDULE 13D/A

Page 15 of 19


	CLINTON GROUP, INC.

	/s/ Francis Ruchalski
	Name: Francis Ruchalski
	Title: Chief Financial Officer

	/s/ George E. Hall
	George E. Hall

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SCHEDULE 13D/A

Page 16 of 19

Appendix A

Directors and Executive Officers of Certain Reporting Persons

CLINTON GROUP, INC.

The following sets forth the name, position and principal occupation of each director and executive officer of CGI. Each such person is a citizen of the United States of America. The business address of each director and executive officer is 601 Lexington Avenue, 51^st Floor, New York, New York 10022.

Name	Position and Principal Occupation
George E. Hall	Director and Chief Executive Officer
Gregory P. Taxin	President
Francis A. Ruchalski	Director and Chief Financial Officer
John L. Hall	Director and Secretary
Nader Behbehani	Chief Compliance Officer

CLINTON SPOTLIGHT MASTER FUND, L.P.

Clinton Spotlight GP, LLC, a Delaware limited liability company, is the general partner of SPOT. George Hall is the controlling person of Clinton Spotlight GP, LLC.

CLINTON MAGNOLIA MASTER FUND, LTD.

The following sets forth the name, principal occupation and business address of each director of CMAG. There are no executive officers of CMAG. Each such person is a citizen of the United Kingdom.

Name	Principal Occupation	Business Address
Jane Fleming	Client Accountant of Queensgate Bank & Trust Company Ltd.	c/o Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands
Dennis Hunter	Director of Queensgate Bank & Trust Company Ltd.	c/o Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands
Roger Hanson	Director of dms Management Ltd.	c/o dms Management Ltd., P.O. Box 31910 SMB, Ansbacher House, 20 Genesis Close, Grand Cayman, Cayman Islands

CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P.

Clinton Relational Opportunity GP LLC, a Delaware limited liability company, is the general partner of CREL. George Hall is the controlling person of Clinton Relational Opportunity GP LLC.

CLINTON RELATIONAL OPPORTUNITY, LLC

George Hall is the controlling person of CRO.

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 17 of 19

GEH CAPITAL, INC.

The following sets forth the name, position and principal occupation of each director and executive officer of GEHC. Each such person is a citizen of the United States of America. The business address of each director and executive officer is 601 Lexington Avenue, 251st Floor, New York, New York 10022.

Name	Position and Principal Occupation
George E. Hall	Director, Chief Executive Officer and President
Francis A. Ruchalski	Director and Comptroller
John L. Hall	Director, Chief Financial Officer, Secretary and Treasurer

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 18 of 19

Appendix B

TRANSACTIONS IN THE ISSUER'S SHARES OF COMMON STOCK

BY THE REPORTING PERSONS

The following table sets forth all transactions with respect to the shares of Common Stock effected since the filing of Amendment No. 2 by any of the Reporting Persons. Except as otherwise noted, all such transactions in the table were effected in the open market through a broker.

SPOT

Trade Date	Shares Purchased (Sold)	Price Per Share ($)
2/18/2014	35,000	15.3883
2/18/2014	10,000	15.2813
2/20/2014	(88,800)	15.82
2/28/2014	10,000	14.7898
3/3/2014	(500)	14
3/10/2014	(2,513)	14.854
3/10/2014	(6,400)	14.8517
3/11/2014	(341,100)	15.3172
3/11/2014	(50,000)	15.2482
3/11/2014	(12,000)	15.5956
3/11/2014	(25,000)	15.3508
3/12/2014	(29,000)	15.3664
3/12/2014	(1,000)	15.27
3/13/2014	(5,000)	15.4759
3/13/2014	(5,000)	15.1701
3/13/2014	(77)	15.19
3/17/2014	(3,027)	15.2735

CMAG

Trade Date	Shares Purchased (Sold)	Price Per Share ($)
2/19/2014	7,200	15.5857
2/19/2014	5,000	15.5407
2/20/2014	52,474	15.9005
2/20/2014	10,000	15.802
2/21/2014	(49,800)	15
2/21/2014	6,900	15.5822
2/24/2014	5,000	16.0768
2/24/2014	25,000	16.1488
2/25/2014	5,000	16.2522
2/26/2014	57,600	16.6814
2/26/2014	5,000	16.6109
2/28/2014	47,000	14.72
3/3/2014	6,854	14.405
3/3/2014	17,600	14.2764
3/3/2014	43,205	14.4504
3/3/2014	366	14.2601

CUSIP No. 67069D108

SCHEDULE 13D/A

Page 19 of 19

3/4/2014	5,000	14.5714
3/4/2014	14,000	14.5563
3/6/2014	(20,000)	14.0053
3/6/2014	(100,000)	14.01
3/7/2014	(100,000)	14.13
3/7/2014	(50,000)	14.01
3/7/2014	7,681	14.6645
3/7/2014	(7,681)	14.6389
3/14/2014	(1,600)	15.0522
3/17/2014	(11,973)	15.2735
3/18/2014	1,900	15.5911
3/18/2014	10,000	15.81
3/18/2014	(1,900)	15.6123
3/18/2014	15,000	15.7985
3/19/2014	5,000	15.6499
3/21/2014	(80,100)	14
3/21/2014	24,500	15
3/24/2014	50,000	14.9586
3/24/2014	5,000	14.96

CREL

Trade Date	Shares Purchased (Sold)	Price Per Share ($)
2/21/2014	(45,000)	15
2/24/2014	5,000	16.0768
2/24/2014	25,000	16.1488
2/25/2014	5,000	16.2522
2/28/2014	(47,000)	14.72

GEHC

Trade Date	Shares Purchased (Sold)	Price Per Share ($)
3/14/2014	25,000	15.1969
3/24/2014	25,000	14.9639

CASF

Trade Date	Shares Purchased (Sold)	Price Per Share ($)
2/21/2014	(10,800)	15

EX-99 2 exhibit3.htm EXHIBIT 3

EXHIBIT 3

March 24, 2014

Ms. Dawn Zier
Chief Executive Officer
NutriSystem, Inc.
600 Office Center Drive
Fort Washington, PA 19034

Re: Creating Additional Shareholder Value at NutriSystem, Inc.

Dear Ms. Zier:

I write again on behalf of Clinton Group, Inc., the investment manager to several partnerships and funds (“Clinton Group”) that collectively own more than 6% of the common stock of NutriSystem, Inc. (“NutriSystem” or the “Company”). We have owned the stock since 2011 and believe, now more than ever, in the value of the Company and its franchise.

As you know, we originally purchased our position in the Company with a belief that the then-current management team was doing a poor job exploiting the Company’s brand, efficacious diet program and market position. After encouraging the replacement of the prior Chief Executive we were pleased to see you hired in November 2012.

I wrote in late September 2013 to express our enthusiasm for all that you were doing, in those very early days of the turnaround, and to notify you of our purchase of additional stock. We indicated then that we believed the Company could return to its former glory, achieving 2016 EBITDA equal to the average EBITDA, as calculated by Capital IQ, generated from 2006 to 2010: $106 million.

We also noted that during the Company’s last turnaround (from 2005 to 2007), the Company’s financial performance had improved rapidly, consistent with the significant operating leverage in the Company’s model, with revenue tripling and EBITDA expanding five-fold in just those three years. A similar, rapid turnaround now could produce EBITDA in 2016 well above our own modeling assumption of $106 million.

Although your tenure was young and the signs of a turnaround faint, our view last September was that the Company would afford investors a 50% annualized return and hit a mid $30s stock price by Fall 2015 (well below its pre-recession peak of $75) as investors recognized the progress on the turnaround.

Much has changed for the better since our September 2013 letter:

Revenue and earnings for the last two quarters of 2013 and for the full year 2013 exceeded the Company’s guidance and the expectations of the sell-side analysts. For full year 2013, revenue was 4% higher and earnings were 18% higher than the average forecast in September of the analysts at Citibank, Wedbush and Sidoti. In late July, the

Company had guided investors to expect between $0.27 and $0.35 per share in earnings for 2013; the Company instead produced $0.40 of EPS for the year, exceeding the mid-point of its own guidance by 29%.
The Company’s recent guidance for full-year 2014 financial performance exceeds the expectations analysts had last September. As of the time we wrote our last letter, the Citibank, Wedbush and Sidoti analysts had, on average, expected 2014 revenue to be $369 million with EPS of $0.52. The midpoint of the Company’s current financial guidance is 7% higher on revenue and 8% higher on EPS, reflecting a more successful turnaround than analysts expected.
The Company has announced that it will grow revenue, year-over-year, in each of the three most recent quarters (September, December and March), with contributions from both the direct-to-consumer and retail business, demonstrating that the turnaround is well underway.
Objective evidence indicates the Company is out-performing its competition in a difficult environment. Other commercial weight loss companies have been struggling this diet season, while it appears NutriSystem’s new diet programs and marketing approaches have led to growth. You have guided investors to expect revenue growth during the First Quarter of approximately 12% and for the full year of 2014 on the order of 10%. Meanwhile, Weight Watchers and Medifast have each lowered expectations and guidance for 2014, with Weight Watchers saying it believes it will experience “revenue declines in the high teens” on a percentage basis in 2014; Medifast is guiding investors to a First Quarter year-over-year decline in revenue of approximately 9%. Executing well in a difficult environment is a clear sign of operational prowess, in our view, and of an effective turnaround plan.
The Company has continued to make significant progress on several growth initiatives, including its launch into new retailers and the imminent roll-out of a digital product for transition dieters and the do-it-yourself dieter, expanding the Company’s market opportunity.

Given these positive developments (as most recently confirmed in your full-year 2013 earnings release and call), our conviction with respect to NutriSystem’s value and future has grown since our September letter.

One thing, however, that has not changed significantly since our September letter is the stock price. When we wrote last, the stock was trading at $14.17. Today, the stock closed just 5.6% higher despite these positive developments and notable signs of progress and is well off its 52-week high of $20.54. Not surprisingly, then, we believe the stock is severely undervalued and are pleased to have increased our ownership stake by almost 10% since September at these attractive levels.

We believe the Company should buy its own stock as well.

The Company has the means to do so without impacting its financial resources: The Company could use the same cash it distributes annually as a dividend on each share to finance debt to purchase that same share. On an after-tax basis, the Company would have the same (or more) financial resources and post-dividend cash flow to invest in the Company’s expansion projects, as shown in the following table:

	Status Quo	Buyback

Purchase Price of Share	$0.00	$18.00
Annual Financing Cost
6.0% Interest	$0.00	$1.08
Tax Effect of Interest	$0.00	-$0.38
Dividend Commitment	$0.70	$0.00
Annual Cost Per Share	$0.70	$0.70

With last year’s operating cash flow, we believe the Company could borrow at least $80 million at a 6% interest rate level, given the current fixed income market. We believe such a debt deal could be accomplished with very limited marketing and would not distract management for more than two business days.

An $80 million buyback executed at prices up to $18 per share (as much as a 20% premium to today’s close) would allow the Company to purchase 4.5 to 5.0 million shares of its own stock (equivalent to roughly eight days of trading volume). The Company’s outstanding share count would decline by approximately 17%.

For the current shareholders, such a transaction would be extremely positive, allowing us to own more of the Company’s future cash flow growth in exchange for a (low) fixed obligation and no change to the Company’s ability to execute its business plan or capital spending program. As cash flow grows, we (and other remaining shareholders) would own a greater stake in that cash flow, driving the stock price higher. After such a buyback, if the Company can give shareholders confidence that it will generate close to our projected 2016 $106 million EBITDA target (which is just 60% of NutriSystem’s all-time EBITDA high), the stock should be in the $40s within 18 months.

Given the progress that the management team has made in turning around NutriSystem, we believe now is the time for the Company to be in the market, borrowing capital and buying its own stock. If the Company waits to buy stock until after the First Quarter 2014 financial performance is made public, we believe the opportunity to buy stock at these prices will be gone. For the time being, it seems, the stock has suffered at the hands of investors who have lumped NutriSystem in with the other commercial weight loss companies in spite of NutriSystem’s significant fundamental outperformance.

As an alternative to a buyback, there are innumerable private equity firms that we believe would be happy to consider a leveraged buyout of NutriSystem, leaving the management team, strategy

and employees in place. Without the need for an ongoing dividend, a private equity firm could purchase NutriSystem at a significant premium to the current stock price using substantially more leverage than we advocate for the public company without impairing the Company’s ability to invest for future growth. If the fundamental turnaround continues apace, the financial rewards to such a buyer (and, presumably, to the management team and employees) could be enormous. After all, it was not that long ago that NutriSystem had an enterprise value over $2.5 billion, more than six times today’s value.

We would be pleased to send additional analyses on the Company’s significant opportunity to create value for its existing shareholders over-and-above the value being created by the turnaround. Please feel free to reach out and discuss these matters with me at your convenience.

Best regards.

Gregory P. Taxin

Gregory P. Taxin
President

cc: NutriSystem Board of Directors

EX-99 3 exhibit4.htm EXHIBIT 4

EXHIBIT 4

JOINT FILING AGREEMENT
PURSUANT TO RULE 13d-1(k)

The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D shall be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows or has reason to believe that such information is inaccurate.

DATE: March 25, 2014

	CLINTON SPOTLIGHT MASTER FUND, L.P.
	By: Clinton Group, Inc., its investment manager

	/s/ Francis Ruchalski
	Name: Francis Ruchalski
	Title: Chief Financial Officer

	CLINTON MAGNOLIA MASTER FUND, LTD.

	By: Clinton Group, Inc., its investment manager

	/s/ Francis Ruchalski
	Name: Francis Ruchalski
	Title: Chief Financial Officer

	CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P.

	By: Clinton Relational Opportunity, LLC, its
	investment manager
	/s/ John Hall
	Name: John Hall
	Title: Authorized Signatory


	CLINTON RELATIONAL OPPORTUNITY, LLC

	/s/ John Hall
	Name: John Hall
	Title: Authorized Signatory


	GEH CAPITAL, INC.

	/s/ Francis Ruchalski
	Name: Francis Ruchalski
	Title: Comptroller


	CLINTON GROUP, INC.

	/s/ Francis Ruchalski
	Name: Francis Ruchalski
	Title: Chief Financial Officer


	/s/ George E. Hall
	George E. Hall