8-K/A 1 y47152e8-ka.txt WEIGHT WATCHERS INTERNATIONAL INC 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A [X] CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): January 16, 2001 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 --------------- Not Applicable -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS This current report on Form 8-K/A amends the Company's Current Report on Form 8-K dated January 16, 2001 related to the Company's acquisition of Weighco Enterprises, Incorporated and Subsidiaries ("Weighco") to file historical financial statements of the business being acquired and the pro forma statements related to this acquisition. 1 2 (a) FINANCIAL STATEMENTS OF THE BUSINESS ACQUIRED. Report of Independent Accountants Consolidated Balance Sheet as of December 30, 2000 Consolidated Statement of Operations for the Year Ended December 30, 2000 Consolidated Statement of Changes in Stockholders' Equity for the Year Ended December 30, 2000 Consolidated Statement of Cash Flows for the Year Ended December 30, 2000 Notes to Consolidated Financial Statements (b) PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION. The following unaudited pro forma condensed combined financial information of the Company and Weighco is submitted herewith. Pro Forma Condensed Combined Balance Sheet as of December 30, 2000 Pro Forma Condensed Combined Statement of Operations For the Eight Months Period Ended December 30, 2000. Pro Forma Condensed Combined Statement of Operations For the Year Ended April 29, 2000. Notes to Pro Forma Condensed Combined Financial Statements PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION OF WEIGHT WATCHERS INTERNATIONAL, INC. AND WEIGHCO ENTERPRISES INCORPORATED AND SUBSIDIARIES On January 16, 2001, the Company acquired franchised territories and certain business assets, including inventory and property and equipment, of Weighco Enterprises, Incorporated and Subsidiaries ("Weighco") for $83.8 million. The acquisition was financed with available cash of $23.8 million and additional borrowings of $60.0 million. Weighco's balance sheet has been combined with the Company's as of December 30, 2000. The pro forma condensed combined balance sheet and statements of operations assume the acquisition had occurred on May 1, 1999. The pro forma condensed combined balance sheets and statements of operations do not give effect to any synergies that might result from the acquisition of Weighco. Accordingly, the pro forma condensed combined balance sheet and statements of operations are not necessarily indicative of what actually would have occurred if the acquisition had been consummated on May 1, 1999, nor are they necessarily indicative of future combined operating results. Certain amounts included in the Weighco historical consolidated statements of operations for the eight months ended December 30, 2000 and for the year ended April 29, 2000 have been reclassified to conform with the Company's presentation on the pro forma condensed combined balance sheet and statements of operations. The pro forma condensed combined balance sheet and statements of operations should be read in conjunction with the historical financial statements of the Company for the period ended December 30, 2000, filed with the Securities and Exchange Commission on the Company's Current Report of Form 10-K dated March 30, 2001 and the historical financial statements of Weighco for the year ended December 30, 2000, filed herein. 2 3 WEIGHT WATCHERS INTERNATIONAL, INC. AND WEIGHCO ENTERPRISES, INCORPORATED AND SUBSIDIARIES PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF DECEMBER 30, 2000 (In thousands) (Unaudited)
WEIGHT WATCHERS PROFORMA PROFORMA ASSETS INTERNATIONAL WEIGHCO ADJUSTMENTS COMBINED Current assets Cash and cash equivalents $44,501 $6,172 $(6,172) 1 $20,701 (23,800) 1 Notes and other receivables, current 22,148 25 2,695 2 24,868 Inventories 15,044 2,139 17,183 Prepaid expenses 11,099 970 (493) 1 11,576 Deferred income tax 648 648 -------- ------- ------- -------- Total current assets 93,440 9,306 (27,770) 74,976 Property and equipment, net 8,145 1,554 9,699 Goodwill, net 150,901 80,805 1 231,706 Trademarks and other intangible assets, net 6,648 35,647 (35,647) 1 6,648 Deferred income taxes 67,207 67,207 Other noncurrent assets 20,454 707 (707) 1 20,454 -------- ------- ------- -------- Total assets $346,795 $47,214 $16,681 $410,690 ======== ======= ======= ======== LIABILITIES, REDEEMABLE PREFERRED STOCK AND PARENT COMPANY'S INVESTMENT/ STOCKHOLDERS' DEFICIT Current liabilities Portion of long-term debt due within one year $ 15,850 $ 4,080 $ (4,080) 1 $ 15,850 Accounts payable, other 38,918 2,502 (2,502) 1 38,918 Other accrued liabilities 23,215 7,455 (7,455) 1 23,215 Deferred revenue 5,836 2,695 8,531 -------- ------- ------- -------- Total current liabilities 83,819 16,732 (14,037) 86,514 Long-term debt 456,530 21,203 (21,203) 1 516,530 60,000 1 Deferred income taxes 3,107 3,107 Other 121 1,200 1 1,321 -------- ------- ------- -------- Total long-term debt and other liabilities 459,758 21,203 39,997 520,958 Redeemable preferred stock 25,996 25,996 Stockholders' deficit - Common stock 6 (6) 1 - Additional paid-in capital 3,108 (3,108) 1 - Treasury Stock (2) 2 1 - Accumulated (deficit) equity (216,507) 6,167 (6,167) 1 (216,507) Accumulated other comprehensive loss (6,271) (6,271) -------- ------- ------- -------- Tota stockholders' (deficit)/equity (222,778) 9,279 (9,279) (222,778) -------- ------- ------- -------- Total liabilities, redeemable preferred stock, and stockholders' deficit $346,795 $47,214 $16,681 $410,690 ======== ======= ======= ========
See Notes to Pro Forma Condensed Combined Financial Statements 3 4 WEIGHT WATCHERS INTERNATIONAL, INC. AND WEIGHCO ENTERPRISES, INCORPORATED AND SUBSIDIARIES PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED APRIL 29, 2000 (In thousands) (Unaudited)
WEIGHT WATCHERS PROFORMA PROFORMA INTERNATIONAL WEIGHCO ADJUSTMENTS COMBINED ------------- ------- ----------- -------- Revenues, net $399,574 $44,949 $(7,998) 6 $436,525 Cost of revenues 201,389 23,443 (7,998) 6 216,834 -------- ------- ------- -------- Gross profit 198,185 21,506 - 219,691 Marketing expenses 51,453 3,452 54,905 Selling, general and administrative expenses 50,743 11,244 4,190 3 60,539 (5,638) 7 Transaction costs 8,345 - 8,345 -------- ------- ------- -------- Operating income 87,644 6,810 1,448 95,902 Interest income 5,792 225 (1,309) 5 4,708 Interest expense 36,871 2,175 5,700 4 44,746 Other (income) expense, net (10,351) (86) (10,437) -------- ------- ------- -------- Income before income taxes and minority interest 66,916 4,946 (5,561) 66,301 Provision for income taxes 28,323 1,830 (2,336) 8 27,817 -------- ------- ------- -------- Income before minority interest 38,593 3,116 (3,225) 38,484 Minority interest 834 - 834 -------- ------- ------- -------- Net income $37,759 $3,116 $(3,225) $37,650 ======= ====== ======= =======
See Notes to Pro Forma Condensed Combined Financial Statements 4 5 WEIGHT WATCHERS INTERNATIONAL, INC. AND WEIGHCO ENTERPRISES, INCORPORATED AND SUBSIDIARIES PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE EIGHT MONTH PERIOD ENDED DECEMBER 30, 2000 (In thousands) (Unaudited)
WEIGHT WATCHERS PROFORMA PROFORMA INTERNATIONAL WEIGHCO ADJUSTMENTS COMBINED ------------- ------- ----------- -------- Revenues, net $273,175 $39,916 $(6,582) 6 $306,509 Cost of revenues 139,283 20,967 (6,582) 6 153,668 ------- ------- ------ ------- Gross profit 133,892 18,949 - 152,841 Marketing expenses 26,986 2,049 29,035 Selling, general and administrative expenses 32,222 9,628 2,793 3 39,784 (4,859) 7 Transaction costs - - ------- ------- ------ ------- Operating income 74,684 7,272 2,066 84,022 Interest income 3,119 145 (873) 5 2,391 Interest expense 40,244 1,692 3,800 4 45,736 Other (income) expense, net 16,536 9,002 (8,584) 7 16,954 ------- ------- ------ ------- Income before income taxes and minority interest 21,023 (3,277) 5,977 23,723 Provision for income taxes 5,857 (1,212) 1,674 8 6,319 ------- ------- ------ ------- Income before minority interest 15,166 (2,065) 4,303 17,404 Minority interest 147 147 ------- ------- ------ ------- Net income $15,019 $(2,065) $4,303 $17,257 ======= ======= ====== =======
See Notes to Pro Forma Condensed Combined Financial Statements 5 6 WEIGHT WATCHERS INTERNATIONAL, INC AND WEIGHCO ENTERPRISES, INCORPORATED AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS FOR THE EIGHT MONTH PERIOD ENDED DECEMBER 30, 2000 AND THE YEAR ENDED APRIL 29, 2000 (Unaudited) The pro forma condensed combined balance sheet and statements of operations assume that the acquisition of Weighco occurred at December 20, 2000, and at the beginning of the periods presented, respectively. The pro forma condensed combined balance sheet and statements of operations do not give any effect to the synergies that might result from the acquisition of Weighco's operations. Accordingly, the pro forma results are not indicative of what would have occurred if the acquisition had been consummated on May 1, 1999, nor are they necessarily indicative of future combined results. The following is a summary of the estimated adjustments, based upon available information and upon certain assumptions that management believes are reasonable, that are reflected in the pro forma condensed combined statements of operations. (1) Represents the acquisition of inventory, property and equipment and other assets and the elimination of non-assumed liabilities for $83.8 million, which was financed with $23.8 million of existing cash and additional borrowings of $60.0 million. The excess of the total purchase price over assets acquired and liabilities assumed has been recorded as goodwill. (2) Represents a receivable due to the Company from Weighco for the assumption of deferred revenue.
December 30 April 29 2000 2000 ------- ------- (3) Represents the amortization of acquisition goodwill of $80.8 million $ 2,793 $ 4,190 over 20 years utilizing the straight-line method. (4) Acquisition borrowings of $60 million at an average interest $ 3,800 $ 5,700 rate of 9.5%. (5) Cash used to fund acquisition of $23.8 million at 5.5%. $ 873 $ 1,309 (6) Represents the elimination of royalty revenue $ 6,582 $ 7,998 and expense and products sales to Weighco. (7) The elimination of non-recurring costs and charges incurred by Weighco relating to the sale to Weight Watchers: General & Administrative Expenses $ 4,859 $ 5,638 Other (Income) Expense $ 8,584 (8) Recognition of income taxes at 28% of the pre-tax income $ 1,674 $(2,336) for the eight months ended December 30, 2000 and 42% for the year ended April 29, 2000.
(c) EXHIBITS (i) Exhibit 99 (a): Weighco Consolidated Balance Sheet as of December 30, 2000, Consolidated Statement of Operations For the Year Ended December 30, 2000, Consolidated Statement of Changes in Stockholders' Equity For the Year Ended December 30, 2000, Consolidated Statement of Cash Flows and Report of PricewaterhouseCoopers LLP, Independent Accountants. 6 7 SIGNATURE 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: March 30, 2001 By: /s/ LINDA HUETT ------------------------------------------- Linda Huett President and Director (Principal Executive Officer) Date: March 30, 2001 By: /s/ THOMAS S. KIRITSIS ------------------------------------------- Thomas S. Kiritsis Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 7