-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HSjmfw+a3MNx9aexMvYoxqyAv7cBb7g5e8POorF/N72jFo9FZWaPBa0K6FJ9iLs9 5zx5Boe37S9h11fgxrp9wQ== 0000950123-00-011453.txt : 20001214 0000950123-00-011453.hdr.sgml : 20001214 ACCESSION NUMBER: 0000950123-00-011453 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001028 FILED AS OF DATE: 20001213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEIGHT WATCHERS INTERNATIONAL INC CENTRAL INDEX KEY: 0000105319 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 116040273 STATE OF INCORPORATION: VA FISCAL YEAR END: 0429 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 000-03389 FILM NUMBER: 787944 BUSINESS ADDRESS: STREET 1: 175 CROSSWAYS PARK WEST CITY: WOODBURY STATE: NY ZIP: 11797 BUSINESS PHONE: 5163901400 MAIL ADDRESS: STREET 1: 175 CROSSWAYS PARK WEST CITY: WOODBURY STATE: NY ZIP: 11797 10-Q/A 1 y43477a1e10-qa.txt WEIGHT WATCHERS INTERNATIONAL, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period year ended October 28, 2000 Commission File no. 000-03389 WEIGHT WATCHERS INTERNATIONAL, INC. - ------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Virginia 11-6040273 - ------------------------------------- ---------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 175 Crossways Park West, Woodbury, New York 11797-2055 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (516) 390-1400 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ____ ------ The number of common shares outstanding as of October 28, 2000 was 23,800,000. PART I - - FINANCIAL INFORMATION 2 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES INDEX
Part I. FINANCIAL INFORMATION PAGE NO. - ------------------------------ -------- Item 1. Financial Statements Consolidated Balance Sheets as of October 28, 2000 (unaudited) and April 29, 2000 2 Unaudited Consolidated Statements of Operations and Comprehensive Income for the three months ended October 28, 2000 and October 23, 1999 3 Unaudited Consolidated Statements of Operations and Comprehensive Income for the six months ended October 28, 2000 and October 23, 1999 4 Unaudited Consolidated Statements of Cash Flows for the six months ended October 28, 2000 and October 23, 1999 5 Notes to Unaudited Consolidated Financial Statements 6 - 17 Item 2. Management's Discussion and Analysis of Financial Condition 18 - 20 and Results of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk 21 Part II. OTHER INFORMATION 22 - 23 Item 1. Legal Proceedings Item 2. Changes in Securities Item 3. Defaults Upon Senior Securities Item 4. Submission of Matters To a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K
3 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 2 CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
OCTOBER 28, APRIL 29, 2000 2000 ASSETS (UNAUDITED) Current assets Cash and cash equivalents $ 55,890 $ 44,043 Receivables, net 14,978 12,877 Notes receivable, current 1,943 2,791 Inventories 12,110 9,328 Prepaid expenses, other 10,304 8,454 --------- --------- Total current assets 95,225 77,493 Property and equipment, net 6,641 7,001 Notes and other receivables, noncurrent 6,154 7,045 Goodwill, net 150,452 152,565 Trademarks and other intangible assets, net 6,373 7,163 Deferred income taxes 67,561 67,574 Deferred financing costs, other 14,488 15,366 --------- --------- Total assets $ 346,894 $ 334,207 ========= ========= LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT Current liabilities Short-term borrowings due to related party $ 1,602 $ 1,489 Portion of long-term debt due within one year 14,120 14,120 Accounts payable 10,925 12,362 Accrued liabilities 49,272 39,062 Income taxes 8,606 6,786 Deferred revenue 7,407 4,632 --------- --------- Total current liabilities 91,932 78,451 Long-term debt 446,350 460,510 Deferred income taxes 2,522 2,941 Other 96 546 --------- --------- Total long-term debt and other liabilities 448,968 463,997 Redeemable preferred stock 25,746 25,875 Stockholders' deficit Common stock, par value $0 per share, 23,800 shares authorized, issued and outstanding -- -- Accumulated deficit (211,352) (231,663) Accumulated other comprehensive loss (8,400) (2,453) --------- --------- Total stockholders' deficit (219,752) (234,116) --------- --------- Total liabilities, redeemable preferred stock, and stockholders' deficit $ 346,894 $ 334,207 ========= =========
The accompanying notes are an integral part of the consolidated financial statements. 4 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 3 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (IN THOUSANDS)
THREE MONTHS ENDED --------------------------- OCTOBER 28, OCTOBER 23, 2000 1999 (UNAUDITED) Revenues, net $ 101,113 $83,931 Cost of revenues 53,187 43,947 --------- ------- Gross profit 47,926 39,984 Marketing expenses 10,964 11,406 Selling, general and administrative expenses 11,757 9,824 Transaction costs -- 8,345 --------- ------- Operating income 25,205 10,409 Interest income 1,117 1,451 Interest expense 14,943 5,020 Other (income) expenses, net (177) 3,096 --------- ------- Income before income taxes and minority interest 11,556 3,744 Provision for income taxes 2,450 1,287 --------- ------- Income before minority interest 9,106 2,457 Minority interest 14 218 --------- ------- Net income 9,092 2,239 Other comprehensive income: Foreign currency translation adjustment (5,060) 2,519 --------- ------- Comprehensive income $ 4,032 $ 4,758 ========= =======
The accompanying notes are an integral part of the consolidated financial statements. 5 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 4 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (IN THOUSANDS)
SIX MONTHS ENDED ---------------------------- OCTOBER 28, OCTOBER 23, 2000 1999 (UNAUDITED) Revenues, net $ 204,655 $176,105 Cost of revenues 100,973 86,656 --------- -------- Gross profit 103,682 89,449 Marketing expenses 21,049 20,175 Selling, general and administrative expenses 23,176 22,218 Transaction costs -- 8,345 --------- -------- Operating income 59,457 38,711 Interest income 1,998 4,575 Interest expense 29,919 6,474 Other expenses, net 4,083 4,261 --------- -------- Income before income taxes and minority interest 27,453 32,551 Provision for income taxes 6,283 12,625 --------- -------- Income before minority interest 21,170 19,926 Minority interest 109 592 --------- -------- Net income 21,061 19,334 Other comprehensive income: Foreign currency translation adjustment (5,947) 12,465 --------- -------- Comprehensive income $ 15,114 $ 31,799 ========= ========
The accompanying notes are an integral part of the consolidated financial statements. 6 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 5 CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
SIX MONTHS ENDED ------------------------------- OCTOBER 28, OCTOBER 23, 2000 1999 (UNAUDITED) Operating activities: Net income $ 21,061 $ 19,334 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 5,767 4,743 Deferred tax benefit (405) (512) Accounting for equity investment 10,500 -- Allowance for doubtful accounts 191 (676) Reserve for inventory obsolescence 2,122 1,471 Other items, net (1,018) (2,347) Changes in cash due to: Receivables (3,953) 17,868 Inventories (4,998) (2,957) Prepaid expense (1,870) 380 Due to related parties 113 (14,195) Accounts payable (5,043) 2,611 Accrued liabilities 10,369 (1,817) Deferred revenue 2,806 (3,602) Income taxes 2,116 (2,324) -------- --------- Cash provided by operating activities 37,758 17,977 -------- --------- Investing activities: Capital expenditures (1,436) (999) Advances to equity investment (8,500) -- Acquisitions of minority interest (2,400) (15,900) Other items, net 459 1,180 -------- --------- Cash used for investing activities (11,877) (15,719) -------- --------- Financing activities: Net increase (decrease) in short-term borrowings 3,658 (7,570) Proceeds from borrowings -- 491,452 Repurchase of common stock -- (324,476) Payment of dividends (879) (2,047) Payments of long-term debt (7,060) -- Deferred financing costs -- (15,696) Net Parent (settlements) advances -- (131,014) -------- --------- Cash (used for) provided by financing activities (4,281) 10,649 -------- --------- Effect of exchange rate changes on cash and cash equivalents (9,753) 1,012 Net increase in cash and cash equivalents 11,847 13,919 Cash and cash equivalents, beginning of period 44,043 19,515 -------- --------- Cash and cash equivalents, end of period $ 55,890 $ 33,434 ======== =========
The accompanying notes are an integral part of the consolidated financial statements. 7 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 6 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. GENERAL The accompanying consolidated financial statements include the accounts of Weight Watchers International, Inc. and Subsidiaries (the "Company"). The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and include amounts that are based on management's best estimates and judgments. While all available information has been considered, actual amounts could differ from those estimates. The consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation. This report should be read in conjunction with the Company's annual report filed on Form 10K for the fiscal year ended April 29, 2000. 2. RECAPITALIZATION On September 29, 1999, the Company effected a recapitalization and stock purchase agreement (the "Transaction") with its former parent, H.J. Heinz Company ("Heinz"). The Company redeemed shares of common stock from Heinz for $349.5 million. The $349.5 million consisted of $324.5 million of cash and $25.0 million of the Company's redeemable Series A Preferred Stock. After the redemption, Artal Luxembourg S.A. purchased 94% of the Company's remaining common stock from Heinz for $223.7 million. The Transaction was financed through borrowings under credit facilities amounting to approximately $237.0 million and by issuing Senior Subordinated Notes amounting to $255.0 million, due 2009. The balance of the borrowings was utilized to refinance debt incurred prior to the Transaction relating to the transfer of ownership and acquisition of the minority interest in the Weight Watchers businesses that operate in Australia and New Zealand. The acquisition of the minority interest resulted in approximately $15.9 million of goodwill. In connection with the Transaction, the Company incurred approximately $8.3 million in transaction costs and $15.9 million in deferred financing costs. For U.S. Federal and State tax purposes, the Transaction is being treated as a taxable sale under Section 338(h)(10) of the Internal Revenue Code of 1986 as amended. As a result, for tax purposes, the Company will record a step-up in the tax basis of net assets. For financial reporting purposes, a valuation allowance of approximately $72.1 million had been established against the corresponding deferred tax asset as management has concluded it is more likely than not that this amount will not be utilized to reduce future tax payments. 3. RECENTLY ISSUED ACCOUNTING STANDARDS: In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". This statement established accounting and reporting standards for derivative instruments. The statement requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. In June 1999, the FASB issued SFAS No.137, "Accounting for Derivative Instruments and Hedging Activities-Deferral of the Effective Date of Statement 133," which postponed the adoption date of SFAS No. 133. As such, the Company is not required to adopt the statement until fiscal year ended 2002. The Company does not believe this standard will have a material impact on its financial statements. 8 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 7 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 4. LONG-TERM DEBT In connection with the Transaction, the Company entered into a credit facility ("Credit Facility") with The Bank of Nova Scotia, Credit Suisse First Boston and certain other lenders providing (i) a $75.0 million term loan A facility ("Term Loan A"), (ii) a $75.0 million term loan B facility ("Term Loan B"), (iii) an $87.0 million transferable loan certificate ("TLC") and (iv) a revolving credit facility with borrowings up to $30.0 million ("Revolving Credit Facility"). Borrowings under the Credit Facility are paid quarterly and initially bear interest at a rate equal to LIBOR plus (a) in the case of Term Loan A and the Revolving Credit Facility, 3.25% or, at the Company's option, the alternate base rate, as defined, plus 2.25% or (b) in the case of Term Loan B and the TLC, 4.00% or, at the Company's option, the alternate base rate plus 3.00%. At October 28, 2000, the interest rates were 9.745% for Term Loan A and 10.870% for Term Loan B and the TLC. Borrowings under Term Loan A and the Revolving Credit Facility mature in six years and Term Loan B and the TLC mature in seven years. All assets of the Company collateralize the Credit Facility. In addition, the Company issued $150.0 million USD denominated and 100.0 million EUR denominated principal amount of 13% Senior Subordinated Notes due 2009 (the "Notes") to qualified institutional buyers under a private placement offering pursuant to Rule 144A. At October 28, 2000, the 100.0 million EUR notes translated into $84.1 million USD denominated equivalent. The impact of the change in foreign exchange rates related to euro denominated debt are reflected in the income statement. Interest is payable on the Notes semi-annually on April 1 and October 1 of each year, commencing April 1, 2000. The Company uses interest rate swaps and foreign currency forward contracts in association with its debt. The Notes are uncollateralized senior subordinated obligations of the Company, subordinated in right of payment to all existing and future senior indebtedness of the Company, including the Credit Facility. Each of the aforementioned debt facilities contains restrictive covenants and requires the Company to maintain certain financial ratios, as defined. The aggregate amounts of existing long-term debt maturing in each of the next five years and thereafter are as follows:
(IN THOUSANDS) 2001 $ 7,060 2002 14,120 2003 14,120 2004 14,120 2005 15,683 2006 and thereafter 395,367 -------- $460,470 ========
5. WEIGHT WATCHERS.COM NOTE On October 1, 2000 the Company amended its loan agreement with Weight Watchers.com increasing the aggregate principal amount from $10.0 million to $23.5 million. On that date, the unpaid principal and accumulated interest was rolled over into the new loan. The amount may be advanced 9 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 8 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS at any time or from time to time prior to July 31, 2003. The note bears interest at 13% per year. All principal and interest outstanding under the note are scheduled to be payable on September 30, 2003. The note may be prepaid at any time in whole or in part, without premium or penalty. As of October 28, 2000, the Company has advanced Weight Watchers.com $10.5 million pursuant to the note. The $10.5 million in advances were classified in other expenses, net. 6. LEGAL In November 2000, the Company reached an agreement with certain franchisees regarding the sharing of profits of prior and future product sales. The settlement provides for a payment of approximately $3.8 million and releases the Company from any future obligation to the franchisees under profit sharing arrangements which date back to 1969. Due to the nature of its activities, the Company is, at times, subject to pending and threatened legal actions that arise out of the normal course of business. In the opinion of management, based in part upon advice of legal counsel, the disposition of such matters will not have a material effect on the consolidated financial statements. 7. SUBSEQUENT EVENT Effective December 11, 2000, the Company signed an agreement to purchase the assets and certain franchised territories operated by Weighco Enterprises, Inc., Weighco of Northwest, Inc and Weighco of Southwest, Inc.; for $83.8 million. The transaction will be accounted for by the purchase method of accounting. Substantially, all of the purchase price of the acquisition in excess of the net assets acquired will be recorded as intangibles. It is anticipated that the transaction will be finalized in January 2001. 8. GUARANTOR SUBSIDIARIES The Company's payment obligations under the Senior Subordinated Notes are fully and unconditionally guaranteed on a joint and several basis by the following wholly-owned subsidiaries: 58 WW Food Corp.; Waist Watchers, Inc.; Weight Watchers Camps, Inc.; W.W. Camps and Spas, Inc.; Weight Watchers Direct, Inc.; W/W Twentyfirst Corporation; W.W. Weight Reduction Services, Inc.; W.W.I. European Services Ltd.; W.W. Inventory Service Corp.; Weight Watchers North America, Inc.; Weight Watchers UK Holdings Ltd.; Weight Watchers International Holdings Ltd.; Weight Watchers (U.K.) Limited; Weight Watchers (Accessories & Publication) Ltd.; Weight Watchers (Food Products) Limited; Weight Watchers New Zealand Limited; Weight Watchers International Pty Limited; Fortuity Pty Ltd.; and Gutbusters Pty Ltd. (collectively, the "Guarantor Subsidiaries"). The obligations of each Guarantor Subsidiary under its guarantee of the Notes are subordinated to such subsidiary's obligations under its guarantee of the new senior credit facility. The following presentations are consolidating financial information for Weight Watchers International, Inc. ("Parent Company"), the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries (primarily companies incorporated in European countries other than the United Kingdom). In the Company's opinion, separate financial statements and other disclosures concerning each of the Guarantor Subsidiaries would not provide additional information that is material to investors. Therefore, the Guarantor Subsidiaries are combined in the presentation below. 10 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 9 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Investments in subsidiaries are accounted for by the Parent Company on the equity method of accounting. Earnings of subsidiaries are, therefore, reflected in the Parent Company's investments in subsidiaries' accounts. The elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. 11 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 10 SUPPLEMENTAL UNAUDITED CONSOLIDATING BALANCE SHEET AS OF OCTOBER 28, 2000 (IN THOUSANDS)
NON- PARENT GUARANTOR GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED --------------- --------------- --------------- --------------- ------------ ASSETS Currentt assets Cash and cash equivalents $ 15,696 $ 29,356 $10,838 $ -- $ 55,890 Receivables, net 8,648 4,435 1,895 -- 14,978 Notes receivable, current 1,943 -- -- -- 1,943 Inventories -- 10,411 1,699 -- 12,110 Prepaid expenses, other 4,148 4,129 2,027 -- 10,304 Intercompany receivables (payables) (58,925) 57,056 1,869 -- -- --------- -------- ------- --------- -------- Total current assets (28,490) 105,387 18,328 -- 95,225 Investment in consolidated subsidiaries 184,351 -- -- (184,351) -- Property and equipment, net 1,867 3,629 1,145 -- 6,641 Notes and other receivables, noncurrent 6,154 -- -- -- 6,154 Goodwill, net 28,597 121,172 683 -- 150,452 Trademarks and other intangible assets, net 1,871 4,494 8 -- 6,373 Deferred income taxes (1,746) 69,307 -- -- 67,561 Deferred financing costs, other 13,952 367 169 -- 14,488 --------- -------- ------- --------- -------- Total assets $ 206,556 $304,356 $20,333 $(184,351) $346,894 ========= ======== ======= ========= ======== LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS EQUITY (DEFICIT) Current liabilities Short-term borrowings due to related party $ 1,602 $ -- $ -- $ -- $ 1,602 Portion of long-term debt due within one year 13,250 870 -- -- 14,120 Accounts payable 744 8,896 1,285 -- 10,925 Accrued liabilities 20,779 21,464 7,029 -- 49,272 Income taxes 1,411 4,633 2,562 -- 8,606 Deferred revenue -- 6,330 1,077 -- 7,407 --------- -------- ------- --------- -------- Total current liabilities 37,786 42,193 11,953 -- 91,932 Long-term debt 360,873 85,477 -- -- 446,350 Deferred income taxes 1,903 28 591 -- 2,522 Other -- -- 96 -- 96 --------- -------- ------- --------- -------- Total long term debt and other liabilities 362,776 85,505 687 -- 448,968 Redeemable preferred stock 25,746 -- -- -- 25,746 Stockholders' equity (deficit) (219,752) 176,658 7,693 (184,351) (219,752) --------- -------- ------- --------- -------- Total liabilities, redeemable preferred stock and stockholders' equity (deficit) $ 206,556 $304,356 $20,333 $(184,351) $346,894 ========= ======== ======= ========= ========
The accompanying notes are an integral part of the consolidated financial statements. 12 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 11 SUPPLEMENTAL UNAUDITED CONSOLIDATING BALANCE SHEET AS OF APRIL 29, 2000 (IN THOUSANDS)
NON- PARENT GUARANTOR GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED --------------- --------------- --------------- --------------- ------------ ASSETS Current assets Cash and cash equivalents $ 10,984 $ 22,465 $10,594 $ -- $ 44,043 Receivables, net 6,006 5,606 1,265 -- 12,877 Notes receivable, current 2,791 -- -- -- 2,791 Inventories -- 7,827 1,501 -- 9,328 Prepaid expenses, other 3,594 3,488 1,372 -- 8,454 Intercompany receivables (payables) (32,114) 27,742 4,372 -- -- --------- -------- ------- --------- -------- Total current assets (8,739) 67,128 19,104 -- 77,493 Investment in consolidated subsidiaries 162,320 -- -- (162,320) -- Property and equipment, net 1,809 3,974 1,218 -- 7,001 Notes and other receivables, noncurrent 7,045 -- -- -- 7,045 Goodwill, net 25,833 125,977 755 -- 152,565 Trademarks and other intangible assets, net 1,960 5,193 10 -- 7,163 Deferred income taxes (9,854) 77,428 -- -- 67,574 Deferred financing costs, other 14,912 282 172 -- 15,366 --------- -------- ------- --------- -------- Total assets $ 195,286 $279,982 $21,259 $(162,320) $334,207 --------- -------- ------- --------- -------- LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS EQUITY (DEFICIT) Current liabilities Short-term borrowings due to related party $ 1,489 $ -- $ -- $ -- $ 1,489 Portion of long-term debt due within one year 13,250 870 -- -- 14,120 Accounts payable 1,438 9,084 1,840 -- 12,362 Accrued liabilities 12,695 18,652 7,715 -- 39,062 Income taxes (1,846) 5,965 2,667 -- 6,786 Deferred revenue -- 3,824 808 -- 4,632 --------- -------- ------- --------- -------- Total current liabilities 27,026 38,395 13,030 -- 78,451 -- Long-term debt 374,598 85,912 -- -- 460,510 Deferred income taxes 1,903 390 648 -- 2,941 Other -- -- 546 -- 546 --------- -------- ------- --------- -------- Total long term debt and other liabilities 376,501 86,302 1,194 -- 463,997 Redeemable preferred stock 25,875 2,507 254 (2,761) 25,875 Stockholders' equity (deficit) (234,116) 152,778 6,781 (159,559) (234,116) --------- -------- ------- --------- -------- Total liabilities, redeemable preferred stock and stockholders' equity (deficit) $ 195,286 $279,982 $21,259 $(162,320) $334,207 --------- -------- ------- --------- --------
The accompanying notes are an integral part of the consolidated financial statements. 13 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 12 SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED OCTOBER 28, 2000 (IN THOUSANDS)
NON- PARENT GUARANTOR GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED --------------- --------------- --------------- --------------- ------------ Revenues, net $ 8,187 $ 77,166 $15,760 $ -- $101,113 Cost of revenues 4,174 39,392 9,621 53,187 --------- -------- ------- --------- -------- Gross profit 4,013 37,774 6,139 -- 47,926 Marketing expenses 1,328 7,572 2,064 -- 10,964 Selling, general & administrative expenses 5,074 4,826 1,857 -- 11,757 --------- -------- ------- --------- -------- Operating income (loss) (2,389) 25,376 2,218 -- 25,205 Interest income 578 482 57 -- 1,117 Interest expense 9,715 5,223 5 -- 14,943 Other (income) expenses, net (628) 451 -- -- (177) Equity in income of consolidated subsidiaries 18,329 -- -- (18,329) -- Franchise commission income (loss) 3,101 (2,285) (816) -- -- --------- -------- ------- --------- -------- Income before income taxes and minority interest 10,532 17,899 1,454 (18,329) 11,556 Provision for (benefit from) income taxes 1,440 (25) 1,035 -- 2,450 --------- -------- ------- --------- -------- Income before minority interest 9,092 17,924 419 (18,329) 9,106 Minority interest -- -- 14 -- 14 --------- -------- ------- --------- -------- Net income $ 9,092 $ 17,924 $ 405 $ (18,329) $ 9,092 ========= ======== ======= ========= ========
The accompanying notes are an integral part of the consolidated financial statements. 14 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 13 SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED OCTOBER 23, 1999 (IN THOUSANDS)
NON- PARENT GUARANTOR GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED ------- ------------ ------------ ------------ ------------ Revenues, net $ 7,949 $ 63,209 $ 12,773 $ -- $83,931 Cost of revenues 384 34,797 8,766 -- 43,947 -------- -------- -------- -------- ------- Gross profit 7,565 28,412 4,007 -- 39,984 Marketing expenses 1,700 7,571 2,135 -- 11,406 Selling, general & administrative expenses 2,419 6,118 1,287 -- 9,824 Transaction costs 8,345 -- -- -- 8,345 -------- -------- -------- -------- ------- Operating income (loss) (4,899) 14,723 585 -- 10,409 Interest income 294 746 411 -- 1,451 Interest expense 3,907 606 507 -- 5,020 Other (income) expenses, net 3,707 (620) 9 -- 3,096 Equity in income of consolidated subsidiaries 15,684 -- -- (15,684) -- Franchise commission income (loss) 2,198 (1,611) (587) -- -- -------- -------- -------- -------- ------- Income (loss) before income taxes and minority interest 5,663 13,872 (107) (15,684) 3,744 Provision for (benefit from) income taxes 3,424 (2,213) 76 -- 1,287 -------- -------- -------- -------- ------- Income (loss) before minority interest 2,239 16,085 (183) (15,684) 2,457 Minority interest -- 189 29 -- 218 -------- -------- -------- -------- ------- Net income (loss) $ 2,239 $ 15,896 $ (212) $(15,684) $ 2,239 ======== ======== ======== ======== =======
The accompanying notes are an integral part of the consolidated financial statements. 15 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 14 SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED OCTOBER 28, 2000 (IN THOUSANDS)
NON- PARENT GUARANTOR GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED -------- ------------ ------------ ------------ ------------ Revenues, net $ 16,114 $ 157,210 $ 31,331 $ -- $204,655 Cost of revenues 4,439 77,639 18,895 -- 100,973 -------- --------- -------- -------- -------- Gross profit 11,675 79,571 12,436 -- 103,682 Marketing expenses 2,428 15,277 3,344 -- 21,049 Selling, general & administrative expenses 9,571 9,936 3,669 -- 23,176 -------- --------- -------- -------- -------- -- Operating income (loss) (324) 54,358 5,423 -- 59,457 Interest income 1,034 817 147 -- 1,998 Interest expense 19,558 10,344 17 -- 29,919 Other expenses, net 3,724 352 7 -- 4,083 Equity in income of consolidated subsidiaries 33,627 -- -- (33,627) -- Franchise commission income (loss) 5,303 (4,015) (1,288) -- -- -------- --------- -------- -------- -------- Income before income taxes and minority interest 16,358 40,464 4,258 (33,627) 27,453 Provision for (benefit from) income taxes (4,703) 9,507 1,479 -- 6,283 -------- --------- -------- -------- -------- Income before minority interest 21,061 30,957 2,779 (33,627) 21,170 Minority interest -- -- 109 -- 109 -------- --------- -------- -------- -------- Net income $ 21,061 $ 30,957 $ 2,670 $(33,627) $ 21,061 ======== ========= ======== ======== ========
The accompanying notes are an integral part of the consolidated financial statements. 16 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 15 SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED OCTOBER 23, 1999 (IN THOUSANDS)
NON- PARENT GUARANTOR GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED -------- ------------ ------------ ------------ ------------ Revenues, net $ 15,838 $ 132,040 $ 28,227 $ -- $176,105 Cost of revenues 1,129 67,745 17,782 -- 86,656 -------- --------- -------- -------- -------- Gross profit 14,709 64,295 10,445 -- 89,449 Marketing expenses 3,292 13,399 3,484 -- 20,175 Selling, general & administrative expenses 7,837 11,070 3,311 -- 22,218 Transaction costs 8,345 -- -- -- 8,345 -------- --------- -------- -------- -------- Operating income (loss) (4,765) 39,826 3,650 -- 38,711 Interest income 911 1,527 2,137 -- 4,575 Interest expense 4,628 616 1,230 -- 6,474 Other expenses, net 4,084 110 67 -- 4,261 Equity in income of consolidated subsidiaries 31,264 -- -- (31,264) -- Franchise commission income (loss) 3,752 (2,607) (1,145) -- -- -------- --------- -------- -------- -------- Income before income taxes and minority interest 22,450 38,020 3,345 (31,264) 32,551 Provision for income taxes 3,116 8,780 729 -- 12,625 -------- --------- -------- -------- -------- Income before minority interest 19,334 29,240 2,616 (31,264) 19,926 Minority interest -- 446 146 -- 592 -------- --------- -------- -------- -------- Net income $ 19,334 $ 28,794 $ 2,470 $(31,264) $ 19,334 ======== ========= ======== ======== ========
The accompanying notes are an integral part of the consolidated financial statements. 17 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 16 SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED OCTOBER 28, 2000 (IN THOUSANDS)
NON- PARENT GUARANTOR GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED -------- ------------ ------------ ------------ ------------ Operating activities: Net income $ 21,061 $ 30,957 $ 2,670 $(33,627) $ 21,061 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 2,121 3,348 298 -- 5,767 Deferred tax provision (benefit) (8,108) 7,760 (57) -- (405) Accounting for equity investment 10,500 -- -- -- 10,500 Allowance for doubtful accounts -- 191 -- -- 191 Reserve for inventory obsolescence -- 2,110 12 -- 2,122 Other items, net -- (572) (446) -- (1,018) Changes in cash due to: Receivables (4,232) 909 (630) -- (3,953) Inventories -- (4,788) (210) -- (4,998) Prepaid expense (554) (661) (655) -- (1,870) Intercompany receivables/payables 26,811 (29,314) 2,503 -- -- Due to related parties 113 -- -- -- 113 Accounts payable (1,088) (3,400) (555) -- (5,043) Accrued liabilities 8,084 2,969 (684) -- 10,369 Deferred revenue -- 2,537 269 -- 2,806 Income taxes 3,257 (1,036) (105) -- 2,116 -------- -------- -------- -------- -------- Cash provided by operating activities 57,965 11,010 2,410 (33,627) 37,758 -------- -------- -------- -------- -------- Investing activities: Capital expenditures (300) (811) (325) -- (1,436) Advances to equity investment (8,500) -- -- -- (8,500) Acquisition of minority interest (2,400) -- -- -- (2,400) Other items, net 48 361 50 -- 459 -------- -------- -------- -------- -------- Cash used for investing activities (11,152) (450) (275) -- (11,877) -------- -------- -------- -------- -------- Financing activities: Net increase (decrease) in short-term borrowings 394 3,264 -- -- 3,658 Parent company investment in subsidiaries (22,031) -- -- 22,031 -- Payment of dividends (879) (4,355) (1,603) 5,958 (879) Payments on long-term debt (6,625) (435) -- -- (7,060) Net parent (settlements) advances -- -- 307 (307) -- -------- -------- -------- -------- -------- Cash used for financing activities (29,141) (1,526) (1,296) 27,682 (4,281) -------- -------- -------- -------- -------- Effect of exchange rate changes on cash and cash equivalents (12,960) (2,143) (595) 5,945 (9,753) Net increase in cash and cash equivalents 4,712 6,891 244 -- 11,847 Cash and cash equivalents, beginning of period 10,984 22,465 10,594 -- 44,043 -------- -------- -------- -------- -------- Cash and cash equivalents, end of period $ 15,696 $ 29,356 $ 10,838 $ -- $ 55,890 ======== ======== ======== ======== ========
The accompanying notes are an integral part of the consolidated financial statements. 18 WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES 17 SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED OCTOBER 23, 1999 (IN THOUSANDS)
NON- PARENT GUARANTOR GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED -------- ------------ ------------ ------------ ------------ Operating activities: Net income $ 19,334 $ 28,794 $ 2,470 $(31,264) $ 19,334 Adjustments to reconcile net income to cash provided by (used for) operating activities: Depreciation and amortization 1,326 3,146 350 (79) 4,743 Deferred tax provision (benefit) 3,159 (8,601) 4,930 -- (512) Allowance for doubtful accounts (552) (132) 8 -- (676) Reserve for inventory obsolescence -- 1,417 54 -- 1,471 Other items, net -- (2,158) (189) -- (2,347) Changes in cash due to: Receivables 6,752 1,722 9,394 -- 17,868 Inventories -- (2,803) (154) -- (2,957) Prepaid expense 2,187 (2,140) 333 -- 380 Due from related parties (14,583) 388 -- -- (14,195) Accounts payable 50 4,052 (1,491) -- 2,611 Accrued liabilities 10,963 (14,051) 1,271 -- (1,817) Deferred revenue -- (3,875) 273 -- (3,602) Income taxes 13,083 (14,922) (485) -- (2,324) --------- -------- -------- -------- --------- Cash provided by (used for) operating activities 41,719 (9,163) 16,764 (31,343) 17,977 --------- -------- -------- -------- --------- Investing activities: Capital expenditures (166) (512) (321) -- (999) Acquisitions of minority interest -- (15,900) -- -- (15,900) Other items, net 150 958 (7) 79 1,180 --------- -------- -------- -------- --------- Cash used for investing activities (16) (15,454) (328) 79 (15,719) --------- -------- -------- -------- --------- Financing activities: Net decrease in short-term borrowings -- (914) (6,656) -- (7,570) Proceeds from borrowings 404,260 87,192 -- -- 491,452 Repurchase of common stock (324,476) -- -- -- (324,476) Payment of dividends (2,048) (3,123) (4,224) 7,348 (2,047) Payments on long-term debt -- -- -- -- -- Deferred financing costs (15,696) -- -- -- (15,696) Net Parent settlements (93,085) (57,424) (4,998) 24,493 (131,014) --------- -------- -------- -------- --------- Cash provided by (used for) financing activities (31,045) 25,731 (15,878) 31,841 10,649 --------- -------- -------- -------- --------- Effect of exchange rate changes on cash and cash equivalents 662 261 666 (577) 1,012 Net increase in cash and cash equivalents 11,320 1,375 1,224 -- 13,919 Cash and cash equivalents, beginning of year (74) 12,376 7,213 -- 19,515 --------- -------- -------- -------- --------- Cash and cash equivalents, end of year $ 11,246 $ 13,751 $ 8,437 $ -- $ 33,434 ========= ======== ======== ======== =========
The accompanying notes are an integral part of the consolidated financial statements. 19 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 18 COMPARISON OF THREE MONTHS ENDED OCTOBER 28, 2000 TO THREE MONTHS ENDED OCTOBER 23, 1999 Net revenues were $101.1 million for the three months ended October 28, 2000, an increase of 21.5% from $83.2 million for the three months ended October 23, 1999 (excluding food royalties of $0.7 million). The increase in net revenues resulted from increased attendance strong growth in classroom product sales and a price increase in the majority of its North American NACO markets. Cost of revenues was $53.2 million for the three months ended October 28, 2000, an increase of 21.2% from $43.9 million for the three months ended October 23, 1999. This increase resulted from an increase in product sales and the number of meetings held in Company-owned classrooms. Marketing expenses were $11.0 million for the three months ended October 28, 2000, a decrease of 3.5% from $11.4 million for the three months ended October 23, 1999. As a percentage of revenue, marketing decreased from 13.6% to 10.9% for the three months ended October 28, 2000. Selling, general and administrative expenses increased by 20.4% to $11.8 million for the three months ended October 28, 2000, as compared to $9.8 million for the three months ended October 23, 1999. As a percentage of revenue, selling, general, and administrative remained flat from year to year. As a result of the above, operating income was $25.2 million for the three months ended October 28, 2000, an increase of 39.2% from $18.1 million for the three months ended October 23, 1999 (excluding revenues from food royalties of $0.7 million and a one-time charge of $8.3 million for transaction costs). Interest expense increased to $14.9 million for the three months ended October 28, 2000 from $5.0 million for the three months ended October 23, 1999 as a result of borrowings related to the Transaction. The effective income tax rate for the three months ended October 28, 2000 of 21.2% decreased from 34.4% for the three months ended October 23, 1999 due to several factors. The decrease was primarily due to the benefit of utilizing a net operating loss carryforward to reduce the current U.S. tax provision, with limited offset to the deferred provision due to the existence of a valuation allowance against the projected realization of the deferred tax asset. COMPARISON OF SIX MONTHS ENDED OCTOBER 28, 2000 TO SIX MONTHS ENDED OCTOBER 23, 1999 Net revenues were $204.7 million for the six months ended October 28, 2000, an increase of 17.4% from $174.3 million for the six months ended October 23, 1999 (excluding $1.8 from discontinued food royalties). This increase in net revenues resulted primarily from increased attendance in most of our markets, strong growth in classroom product sales and a price increase in the majority of our NACO markets. Cost of revenues was $101.0 million for the six months ended October 28, 2000, an increase of 16.5% from $86.7 million for the six months ended October 23, 1999. This increase was primarily the result of an increased number of meetings to accommodate attendance growth and growing product sales. Marketing expenses were $21.0 million for the six months ended October 28, 2000, an increase of 4.0% from $20.2 million for the six months ended October 23, 1999. As a percentage of revenue, marketing decreased from 11.5% to 10.3% for the six months ended October 28, 2000. 20 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 19 Selling, general and administrative expenses increased 4.5% to 23.2 million for the six months ended October 28, 2000 as compared to $22.2 million for the six months ended October 23, 1999. As a percentage of revenue, selling, general and administrative decreased from 12.6% to 11.3% for the six months ended October 28, 2000. As a result of the above, operating income was $59.5 million for the six months ended October 28, 2000, an increase of 31.6% from $45.2 million for the six months ended October 23, 1999 (excluding a one-time charge of $8.3 million for transaction costs and $1.8 million in revenue from discontinued food royalties). Interest Expenses increased to $29.9 million for the six months ended October 28, 2000 from $6.5 million for the six months ended October 23, 1999 as a result of borrowings related to the Transaction. The effective income tax rate for the six months ended October 28, 2000 of 22.9% decreased from 38.8% for the six months ended October 23, 1999 due to several factors. The decrease was primarily due to the benefit of utilizing a net operating loss carryforward to reduce the current U.S. tax provision, with limited offset to the deferred provision due to the existence of a valuation allowance against the projected realization of the deferred tax asset. LIQUIDITY AND CAPITAL RESOURCES For the six months ended October 28, 2000, the Company's primary source of funds to meet working capital needs was cash from operations. Cash and cash equivalents increased $11.8 million during the six months ended October 28, 2000. Cash flows provided by operating activities of $37.8 million funded net cash flows used for investing activities of $11.9 million and financing activities of $4.3 million. Capital spending has averaged $2.9 million annually over the last three years and has consisted primarily of leasehold improvements for meeting locations and administrative offices, computer equipment for field staff and call centers and Year 2000 upgrades. Capital expenditures for the six months ended October 28, 2000 was $1.4 million. The Company is significantly leveraged. As of October 28, 2000, after reflecting the repurchase of common stock and related borrowings, there was outstanding $460.5 million in aggregate indebtedness, with approximately $30.0 million of additional borrowing capacity available under the revolving credit facility. As a result of the Transaction, the Company's liquidity requirements are significantly increased primarily due to increased debt service obligations. The Company believes that cash flows from operating activities, together with borrowings available under the revolving credit facility, will be sufficient to fund currently anticipated capital investment requirements, debt service requirements and working capital requirements. In addition, the Company has 1.0 million shares of Series A Preferred Stock issued and outstanding. Holders of Series A Preferred Stock are entitled to receive dividends at an annual rate of 6% payable annually in arrears. 21 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 20 FORWARD-LOOKING STATEMENTS The information contained in this report, other than historical information, includes forward-looking statements including, in particular, the statements about plans, strategies and prospects under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operation," "Industry" and "Business." Words such as "may," "will," "expect," "anticipate," "believe," "estimate," "plan," "intend" and similar expressions in this report identify forward-looking statements. These forward-looking statements are based on 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: - - risks associated with the Company's ability to meet the Company's debt obligations; - - risks associated with the relative success of marketing and advertising; - - risks associated with the continued attractiveness of the Company's diets; - - competition, including price competition and competition with self-help weight loss and medical programs; and - - adverse results in litigation and regulatory matters, the adoption of adverse legislation or regulations, more aggressive enforcement of existing legislation or regulations or a change in the interpretation of existing legislation or regulations. 22 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 21 The Company is exposed to foreign currency fluctuations and interest rate changes. Its exposure to market risk for changes in interest rates relates to the fair value of long-term fixed rate debt and interest expense of variable rate debt. The Company has historically managed interest rates through the use of, and its long-term debt is currently composed of, a combination of fixed and variable rate borrowings. Generally, the fair market value of fixed rate debt will increase as interest rates fall and decrease as interest rates rise. Based on the overall interest rate exposure on the Company's fixed rate borrowings at October 28, 2000 a 10% change in market interest rates would have less than a 5% impact on the fair value of the Company's long-term debt. Other than intercompany transactions between its domestic and foreign entities and the portion of the notes which are denominated in euro dollars, the Company generally does not have significant transactions that are denominated in a currency other than the functional currency applicable to each entity. Fluctuations in currency exchange rates may also impact its stockholders' deficit. The assets and liabilities of its non-U.S. subsidiaries are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Revenues and expenses are translated into U.S. dollars at the weighted average exchange rate for period. The resulting translation adjustments are recorded in stockholders' deficit as accumulated other comprehensive income (loss). In addition, fluctuations in the value of the euro will cause the U.S. dollar translated amounts to change in comparison to prior periods and may impact interest expense. Furthermore, the Company translates the outstanding euro notes at the end of each period into U.S. dollars, and the resulting change will be reflected in the income statement of the corresponding period. Each of its subsidiaries derives revenues and incurs expenses primarily within a single country, and consequently, does not generally incur currency risks in connection with the conduct of normal business operations. The Company maintains foreign currency forward contracts denominated in the euro and pounds sterling to more properly align the underlying sources of cash flow with debt servicing requirements. At October 28, 2000, the Company had long-term foreign currency forward contracts receivable with notional amounts of USD 44.0 million and EUR 76.0 million offset by foreign currency forward contracts payable with notional amounts of GBP 59.2 million and USD 21.9 million. The Company's ability to fund capital investment requirements, interest, principal and dividend payment obligations and working capital requirements and to comply with all of the financial covenants under its debt agreements depends on the Company's future operations, performance and cash flow. These are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond its control. 23 22 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Nothing to report under this item. ITEM 2. CHANGES IN SECURITIES Nothing to report under this item. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Nothing to report under this item. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Nothing to report under this item. ITEM 5. OTHER INFORMATION This report contains forward-looking statements regarding the Company's future performance. These forward-looking statements are based on management's views and assumptions, and involve unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statement. These include, but are not limited to, sales, earnings and volume growth, competitive conditions, production costs, currency valuations, global economic and industry conditions, and the other factors described in "Forward-Looking Statements" in the Company's Form 10-K for the fiscal year ended April 29, 2000, as updated from time to time by the Company in its subsequent filings with the SEC. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits required to be furnished by Item 601 of Regulation S-K are filed as part hereof. The paragraph numbers correspond to the exhibit numbers designated in Item 601 of Regulations S-K. (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended October 28, 2000. 24 23 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: December 12, 2000 By: /s/ LINDA HUETT -------------------------------------------- Linda Huett President and Director (Principal Executive Officer) Date: December 12, 2000 By: /s/ THOMAS S. KIRITSIS -------------------------------------------- Thomas S. Kiritsis Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 25 EXHIBIT INDEX Exhibit Number Description *10.1 Agreement dated December 11, 2000, between Weighco Enterprises, Inc., Weighco of Northwest, Inc., Weighco of Southwest, Inc., Weight Watchers North America and Weight Watchers International, Inc. *10.2 Warrant Agreement & Warrant Certificate No. 02 dated October 1, 2000, between WeightWatchers.com, Inc. and Weight Watchers International, Inc. *10.3 Collateral Assignment and Security Agreement dated October 1, 2000, between WeightWatchers.com, Inc. and Weight Watchers International, Inc. 27 Financial Data Schedules for 6 month periods ending October 28, 2000 and October 23, 1999, respectively. * Previously submitted with Form 10-Q, filed on December 12, 2000. EX-27 2 y43477a1ex27.txt FINANCIAL DATA SCHEDULE
5 6-MOS 6-MOS OCT-28-2000 OCT-23-1999 APR-30-2000 APR-24-1999 OCT-28-2000 OCT-23-1999 55,890 0 0 0 14,328 0 650 0 12,110 0 95,225 0 49,326 0 42,685 0 346,894 0 91,932 0 0 0 0 0 25,746 0 0 0 (219,752) 0 346,894 0 204,655 176,105 204,655 176,105 100,973 86,656 145,198 137,394 4,083 4,261 191 (676) 29,919 6,474 27,453 32,551 6,283 12,625 21,061 19,334 0 0 0 0 0 0 21,061 19,334 0 0 0 0
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