WW International, Inc. (NASDAQ: WW) (“WeightWatchers,” “WW,” or the
“Company”) today announced its results for the third quarter of
fiscal 2023.
“We have successfully returned WeightWatchers to subscriber
growth, with Q3 end of period subscribers up 6% year-over-year to
4.0 million. This is a significant achievement and a direct result
of our work in reinvigorating our core product,” said Sima Sistani,
the Company’s CEO. “Clinical subscribers ended the quarter at 45
thousand, up 23% from Q2. We are encouraged by the trends across
our business and we expect to end the year with total subscribers
slightly above 3.7 million, representing the best seasonal slope in
the Company’s reporting history.”
“We are executing well against our strategy and are on track for
meeting, and in some cases exceeding, our 2023 objectives. As
anticipated, the strategic decisions to promote long-term
commitment plans and to wind down our low-margin consumer products
business pressured revenues in the quarter. However, as
demonstrated by our record gross margin, I am confident we are
making the right decisions to return the business to profitable
growth,” said Heather Stark, the Company’s CFO.
Q3 2023 Consolidated Results
| |
% Change Adjusted
forConstant Currency(1) |
| |
Three Months Ended |
|
|
|
|
| |
September 30, |
|
October 1, |
|
|
|
|
| |
2023 |
|
2022 |
|
% Change |
|
| (in millions except
percentages and per share amounts) |
|
|
|
|
|
|
|
|
Subscription Revenues, net |
$ |
203.5 |
|
$ |
220.7 |
|
|
(7.8 |
%) |
|
(9.2 |
%) |
| Product Sales and Other,
net |
|
11.4 |
|
|
29.0 |
|
|
(60.7 |
%) |
|
(61.0 |
%) |
| Revenues,
net |
$ |
214.9 |
|
$ |
249.7 |
|
|
(14.0 |
%) |
|
(15.3 |
%) |
| Gross
Profit |
$ |
141.8 |
|
$ |
152.4 |
|
|
(7.0 |
%) |
|
(8.7 |
%) |
| Non-GAAP Adjustments(1) |
|
|
|
|
|
|
|
|
Net Restructuring Charges(2) |
|
0.4 |
|
|
0.0 |
|
|
|
|
|
| Adjusted Gross
Profit(1) |
$ |
142.2 |
|
$ |
152.4 |
|
|
(6.7 |
%) |
|
(8.5 |
%) |
| Operating Income
(Loss) |
$ |
30.6 |
|
($ |
254.5 |
) |
|
112.0 |
% |
|
111.4 |
% |
| Non-GAAP Adjustments(1) |
|
|
|
|
|
|
|
|
Franchise Rights Acquired Impairments |
|
- |
|
|
312.7 |
|
|
|
|
|
|
Net Restructuring Charges(2) |
|
6.0 |
|
|
3.7 |
|
|
|
|
|
| Adjusted Operating
Income(1) |
$ |
36.6 |
|
$ |
61.9 |
|
|
(40.9 |
%) |
|
(43.5 |
%) |
| Net Income
(Loss) |
$ |
43.7 |
|
($ |
206.0 |
) |
|
100.0%* |
|
100.0%* |
| EPS |
$ |
0.54 |
|
($ |
2.93 |
) |
|
100.0%* |
|
100.0%* |
| Total Paid
Weeks |
|
52.5 |
|
|
51.9 |
|
|
1.0 |
% |
|
N/A |
|
Digital(3) Paid Weeks |
|
42.8 |
|
|
41.6 |
|
|
2.9 |
% |
|
N/A |
|
Workshops + Digital(4) Paid Weeks |
|
9.1 |
|
|
10.3 |
|
|
(11.6 |
%) |
|
N/A |
|
Clinical(5) Paid Weeks |
|
0.5 |
|
|
- |
|
|
N/A |
|
N/A |
| End of Period
Subscribers(6) |
|
4.0 |
|
|
3.8 |
|
|
6.0 |
% |
|
N/A |
|
Digital Subscribers |
|
3.3 |
|
|
3.0 |
|
|
7.8 |
% |
|
N/A |
|
Workshops + Digital Subscribers |
|
0.7 |
|
|
0.7 |
|
|
(7.3 |
%) |
|
N/A |
|
Clinical Subscribers |
|
0.0 |
|
|
- |
|
|
N/A |
|
N/A |
|
___________________________________Note: Totals may not sum due to
rounding. *Note: Percentage in excess of 100.0% and not meaningful.
(1) See “Reconciliation of Non-GAAP Financial Measures” attached to
this release for further detail on adjustments to GAAP financial
measures.(2) See “Reconciliation of Non-GAAP Financial Measures”
attached to this release for further detail on the Company’s
previously disclosed 2023, 2022, and 2021 restructuring plans, and
the reversal of certain of the charges associated therewith. (3)
“Digital” refers to providing subscriptions to the Company’s
digital product offerings, which formerly included Digital 360 (as
applicable).(4) “Workshops + Digital” refers to providing unlimited
access to the Company’s workshops combined with the Company’s
digital subscription product offerings to commitment plan
subscribers, including former Digital 360 members (as applicable).
It also formerly included the provision of access to workshops for
members who did not subscribe to commitment plans, which included
the Company’s “pay-as-you-go” members.(5) “Clinical” refers to
providing subscriptions to the Company’s clinical product offerings
included in its Sequence program.(6) “Subscribers” refers to
Digital subscribers, Workshops + Digital subscribers, and Clinical
subscribers who participate in recurring bill programs in
Company-owned operations. |
| |
Q3 2023 Business and Financial Highlights
- End of Period Subscribers in Q3 2023 were up
6.0% versus the prior year period, driven by the Digital business
and the inclusion of 45 thousand Clinical Subscribers. Q3 2023 End
of Period Digital Subscribers increased 7.8% versus the prior year
period. Q3 2023 End of Period Workshops + Digital Subscribers
decreased 7.3% versus the prior year period.
- Total Paid Weeks in Q3 2023 were up 1.0%
versus the prior year period, driven by the Digital business in
North America and the inclusion of 534 thousand Clinical Paid
Weeks. Q3 2023 Digital Paid Weeks increased 2.9% versus the prior
year period. Q3 2023 Workshops + Digital Paid Weeks decreased 11.6%
versus the prior year period.
- Revenues in Q3 2023 were $214.9 million. On a
constant currency basis, Q3 2023 revenues decreased 15.3% versus
the prior year period.
- Subscription
Revenues in Q3 2023 were $203.5 million. On a
constant currency basis, these revenues decreased 9.2% versus the
prior year period. Subscription Revenues included $10.0 million of
Clinical Subscription Revenues.
- Product Sales and Other in Q3 2023 were $11.4
million. On a constant currency basis, these revenues decreased
61.0% versus the prior year period driven by the continued wind
down of the consumer products business.
- Gross Profit in Q3 2023 was $141.8 million,
compared to $152.4 million in the prior year period.
Adjusted gross profit in Q3 2023, which excluded
the net impact of $0.4 million of restructuring charges, was $142.2
million. Adjusted gross profit in Q3 2022, which excluded the net
impact of $0.0 million of restructuring charges, was $152.4
million.
- Gross Margin in Q3 2023 was 66.0%, as compared
to 61.0% in the prior year period. Adjusted gross
margin in Q3 2023 was 66.2%, up from an adjusted gross
margin of 61.0% in the prior year period, primarily driven by
actions to reduce the fixed cost base within the Workshops +
Digital business and a revenue mix shift to the Company’s higher
margin Digital business.
- Operating Income in Q3 2023 was $30.6 million,
compared to operating loss of $254.5 million in the prior year
period. Adjusted operating income in Q3 2023,
which excluded the net impact of $6.0 million of restructuring
charges, was $36.6 million. Adjusted operating income in Q3 2022,
which excluded the impact of non-cash intangible impairment charges
totaling $312.7 million and the net impact of $3.7 million of
restructuring charges, was $61.9 million.
- Income Tax Benefit in Q3 2023 was $38.4
million, which reflected the impact of an unusually high negative
annual effective tax rate driven by a valuation allowance and small
pretax loss reflected in the Company’s full year fiscal 2023
guidance. In the prior year period, income tax was a benefit of
$70.7 million.
- Net Income in Q3 2023 was $43.7 million
compared to net loss of $206.0 million in the prior year
period.
- Diluted earnings per share in Q3 2023 was
$0.54 compared to diluted net loss per share of $2.93 in the prior
year period.
- Certain items affect year-over-year comparability.
- Q3 2023 diluted earnings per share incorporated the net
positive impact of $0.48 per diluted share in the aggregate due to
the following items:
- $0.54 per diluted share positive tax impact arising from an
unusually high negative annual effective tax rate as a result of a
valuation allowance and small pretax loss reflected in the
Company’s full year fiscal 2023 guidance, mentioned above.
- $0.06 per diluted share net negative impact of restructuring
charges.
- Q3 2022 diluted net loss per share incorporated the negative
impact of $3.38 per diluted share in the aggregate due to the
following items:
- $3.34 per diluted share negative impact of non-cash intangible
impairment charges for Franchise Rights Acquired.
- $0.04 per diluted share net negative impact of restructuring
charges.
Other Items
- Cash balance as of September 30, 2023 was
$107.5 million. On that same date, the Company had no outstanding
borrowings under its revolving credit facility.
- 2023 Restructuring Plan: In connection with
the previously announced 2023 restructuring plan, the Company
recorded aggregate restructuring charges of $6.2 million in Q3
2023. The Company anticipates recording restructuring charges of up
to $10.0 million in Q4 2023, increasing the Company’s estimated
range for the 2023 restructuring plan to be between $47.0 million
to $54.0 million.
Full Year Fiscal 2023 Guidance
The Company is updating its full year fiscal
2023 guidance:
- Revenues are expected to be at the low end of the previously
provided range of $890.0 million to $910.0 million.
- Operating income is now expected to be in the range of $31.0
million to $43.0 million, compared to the previously provided range
of $39.0 million to $51.0 million, due to increased anticipated
restructuring charges. Adjusted operating income, which excludes
the net impact of restructuring charges and acquisition transaction
costs, is still expected to be towards the high end of the
previously provided range of $80.0 million to $85.0 million.
Third Quarter 2023 Conference Call and
WebcastThe Company has scheduled a conference call today
at 4:30 p.m. ET. During the conference call, Sima Sistani, Chief
Executive Officer, and Heather Stark, Chief Financial Officer, will
discuss the third quarter of fiscal 2023 results and answer
questions from the investment community.
The live webcast of the conference call will be available on the
Company’s corporate website, corporate.ww.com, in the Investors
section under Presentations and Events. Supplemental investor
materials will also be available in the same location prior to the
start of the webcast. A replay of the webcast will be available on
this site for approximately 90 days.
Statement regarding Non-GAAP Financial
MeasuresThe following provides information regarding
non-GAAP financial measures used in this earnings release and
today’s scheduled conference call:
To supplement the Company's consolidated results presented in
accordance with accounting principles generally accepted in the
United States (“GAAP”), the Company has disclosed non-GAAP
financial measures of operating results that exclude or adjust
certain items. Gross profit, gross margin, operating income (loss),
operating income (loss) margin, and selling, general and
administrative expenses are discussed both as reported (on a GAAP
basis) and as adjusted (on a non-GAAP basis), as applicable, with
respect to (i) the third quarter of fiscal 2023 to exclude the net
impact of (a) charges associated with the Company's previously
disclosed 2023 restructuring plan (the “2023 plan”) and (b) the
reversal of certain of the charges associated with the Company's
previously disclosed 2022 restructuring plan (the “2022 plan”);
(ii) the first nine months of fiscal 2023 to exclude (a) the net
impact of (w) charges associated with the 2023 plan, (x) charges
associated with the 2022 plan or the reversal of certain of the
charges associated with the 2022 plan, as applicable, (y) charges
associated with the Company's previously disclosed 2021
organizational restructuring plan (the “2021 plan”) or the reversal
of certain of the charges associated with the 2021 plan, as
applicable, and (z) the reversal of certain of the charges
associated with the Company's previously disclosed 2020
organizational restructuring plan (the “2020 plan”) and (b) the
impact of certain non-recurring transaction costs in connection
with the acquisition of Sequence (as defined below); (iii) the
third quarter of fiscal 2022 to exclude (a) the impact of
impairment charges for the Company's franchise rights acquired
related to its United States, Canada and New Zealand units of
account and (b) the net impact of (x) charges associated with the
2022 plan and (y) charges associated with the 2021 plan; and (iv)
the first nine months of fiscal 2022 to exclude (a) the impact of
impairment charges for the Company's franchise rights acquired
related to its United States, Canada and New Zealand units of
account and the impairment charge for the Company's goodwill
related to its wholly-owned subsidiary Kurbo, Inc. (“Kurbo”) and
(b) the net impact of (x) charges associated with the 2022 plan,
(y) charges associated with the 2021 plan or the reversal of
certain of the charges associated with the 2021 plan, as
applicable, and (z) the reversal of certain of the charges
associated with the 2020 plan. We generally refer to such non-GAAP
measures as follows: (i) with respect to the adjustments for the
third quarter of fiscal 2023, as excluding or adjusting for the net
impact of restructuring charges; (ii) with respect to the
adjustments for the first nine months of fiscal 2023, as excluding
or adjusting for the net impact of restructuring charges and the
impact of acquisition transaction costs; (iii) with respect to the
adjustments for the third quarter of fiscal 2022, as excluding or
adjusting for the impact of the franchise rights acquired
impairments and the net impact of restructuring charges; and (iv)
with respect to the adjustments for the first nine months of fiscal
2022, as excluding or adjusting for the impact of franchise rights
acquired and goodwill impairments and the net impact of
restructuring charges. The Company also presents in the attachments
to this release the non-GAAP financial measures earnings before
interest, taxes, depreciation, amortization and stock-based
compensation (“EBITDAS”); earnings before interest, taxes,
depreciation, amortization, stock-based compensation, franchise
rights acquired and goodwill impairments, net restructuring
charges, and certain non-recurring transaction costs in connection
with the acquisition of Sequence (“Adjusted EBITDAS”); total debt
less unamortized deferred financing costs, unamortized debt
discount and cash on hand (i.e., net debt); and a net debt/Adjusted
EBITDAS ratio. Adjusted EBITDAS for the first quarter of fiscal
2023 as presented herein was recast to reflect certain
non-recurring transaction costs in connection with the acquisition
of Sequence. In addition, the Company presents certain of its
financial results on a constant currency basis in addition to GAAP
results. Constant currency information compares results between
periods as if exchange rates had remained constant
period-over-period. The Company calculates constant currency by
calculating current-year results using prior-year foreign currency
exchange rates.
Management believes these non-GAAP financial measures provide
useful supplemental information for its and investors' evaluation
of the Company's business performance and are useful for
period-over-period comparisons of the performance of the Company's
business. While management believes that these non-GAAP financial
measures are useful in evaluating the Company's business, this
information should be considered as supplemental in nature and
should not be considered in isolation or as a substitute for the
related financial information prepared in accordance with GAAP. In
addition, these non-GAAP financial measures may not be the same as
similarly entitled measures reported by other companies. See
"Reconciliation of Non-GAAP Financial Measures" attached to this
release and reconciliations, if any, included elsewhere in this
release for a reconciliation of the non-GAAP financial measures to
the most directly comparable GAAP measures.
About WW International, Inc. WeightWatchers is
a human-centric technology company powered by our proven,
science-based, clinically effective weight loss and weight
management program. For six decades, we have inspired millions of
people to adopt healthy habits for real life. We combine technology
and community to help members reach and sustain their goals on our
program. To learn more about the WeightWatchers approach to healthy
living, please visit ww.com. For more information about our global
business, visit our corporate website at corporate.ww.com.
For more information, contact:Investors:Corey
Kingercorey.kinger@ww.com
Media:Kelsey Merkelkelsey.merkel@ww.com
This news release and any attachments include “forward-looking
statements,” within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, including, in particular, any guidance and
any statements about the Company’s plans, strategies, objectives,
initiatives, roadmap and prospects. The Company generally uses the
words “may,” “will,” “could,” “expect,” “anticipate,” “believe,”
“estimate,” “plan,” “intend,” “aim” and similar expressions in this
news release and any attachments to identify forward-looking
statements. The Company bases these forward-looking statements on
its current views with respect to future events and financial
performance. Actual results could differ materially from those
projected in the forward-looking statements. These forward-looking
statements are subject to risks, uncertainties and assumptions,
including, among other things: the impact of the COVID-19 pandemic
on the Company's business and on the consumer environment and
markets in which the Company operates; competition from other
weight management and wellness industry participants or the
development of more effective or more favorably perceived weight
management methods; the Company's failure to continue to retain and
grow its subscriber base; the Company's ability to continue to
develop new, innovative services and products and enhance its
existing services and products or the failure of its services,
products or brands to continue to appeal to the market, or its
ability to successfully expand into new channels of distribution or
respond to consumer trends or sentiment; the ability to
successfully implement strategic initiatives; the Company's ability
to transform its Workshops + Digital business strategy to meet the
evolving needs of its members; the effectiveness and efficiency of
the Company's advertising and marketing programs, including the
strength of the Company's social media presence; the impact on the
Company's reputation of actions taken by its franchisees,
licensees, suppliers and other partners, including as a result of
its acquisition of Weekend Health, Inc., which is doing business as
Sequence (“Sequence”) (the “Acquisition”); the recognition of asset
impairment charges; the loss of key personnel, strategic partners
or consultants or failure to effectively manage and motivate the
Company's workforce; the Company's chief executive officer
transition; the inability to renew certain of the Company's
licenses, or the inability to do so on terms that are favorable to
the Company; the early termination by the Company of leases;
uncertainties related to a downturn in general economic conditions
or consumer confidence, including as a result of the existing
inflationary environment, the potential impact of political and
social unrest and instability in the banking system as a result of
several recent bank failures; the Company's ability to successfully
make acquisitions or enter into joint ventures or collaborations,
including its ability to successfully integrate, operate or realize
the anticipated benefits of such businesses, including with respect
to Sequence; the seasonal nature of the Company's principal
business; the impact of events that discourage or impede people
from gathering with others or impede accessing resources; the
Company's failure to maintain effective internal control over
financial reporting; the impact of the Company's substantial amount
of debt, debt service obligations and debt covenants, and its
exposure to variable rate indebtedness; the ability to generate
sufficient cash to service the Company's debt and satisfy its other
liquidity requirements; uncertainties regarding the satisfactory
operation of the Company's technology or systems; the impact of
data security breaches and other malicious acts or privacy
concerns, including the costs of compliance with evolving privacy
laws and regulations; the Company's ability to enforce its
intellectual property rights both domestically and internationally,
as well as the impact of its involvement in any claims related to
intellectual property rights; risks and uncertainties associated
with the Company's international operations, including regulatory,
economic, political, social, intellectual property, and foreign
currency risks, which risks may be exacerbated as a result of war
and terrorism; the outcomes of litigation or regulatory actions;
the impact of existing and future laws and regulations; risks
related to the Company's Acquisition, including risks that the
Acquisition may not achieve its intended results; risks related to
the Company's exposure to extensive and complex healthcare laws and
regulations as a result of the Acquisition; the impact that the
sale of substantial amounts of the Company's common stock by
existing large shareholders, or the perception that such sales
could occur, could have on the market price of the Company's common
stock; and other risks and uncertainties, including those detailed
from time to time in the Company's periodic reports filed with the
United States Securities and Exchange Commission (the “SEC”) (which
are available on the SEC’s EDGAR database at www.sec.gov and via
the Company’s website at corporate.ww.com). You should not put
undue reliance on any forward-looking statements. You should
understand that many important factors, including those discussed
herein, could cause the Company’s results to differ materially from
those expressed or suggested in any forward-looking statement.
Except as required by law, the Company does not undertake any
obligation to update or revise these forward-looking statements to
reflect new information or events or circumstances that occur after
the date of this news release or to reflect the occurrence of
unanticipated events or otherwise. Readers are advised to review
the Company’s filings with the SEC (which are available on the
SEC’s EDGAR database at www.sec.gov and via the Company’s website
at corporate.ww.com).
|
WW INTERNATIONAL, INC. AND SUBSIDIARIES |
|
|
CONSOLIDATED BALANCE SHEETS AT |
|
|
(IN THOUSANDS) |
|
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
107,498 |
|
|
$ |
178,326 |
|
|
|
Receivables (net of allowances: September 30, 2023 - $1,435 and
December 31, 2022 - $976) |
|
|
19,178 |
|
|
|
24,273 |
|
|
|
Inventories |
|
|
10,141 |
|
|
|
20,528 |
|
|
|
Prepaid income taxes |
|
|
53,880 |
|
|
|
19,447 |
|
|
|
Prepaid expenses and other current assets |
|
|
28,092 |
|
|
|
38,757 |
|
|
|
TOTAL CURRENT ASSETS |
|
|
218,789 |
|
|
|
281,331 |
|
|
|
Property and equipment, net |
|
|
22,608 |
|
|
|
28,229 |
|
|
|
Operating lease assets |
|
|
55,414 |
|
|
|
75,696 |
|
|
|
Franchise rights acquired |
|
|
386,168 |
|
|
|
386,745 |
|
|
|
Goodwill |
|
|
244,927 |
|
|
|
155,998 |
|
|
|
Other intangible assets, net |
|
|
66,532 |
|
|
|
63,306 |
|
|
|
Deferred income taxes |
|
|
20,728 |
|
|
|
22,246 |
|
|
|
Other noncurrent assets |
|
|
17,087 |
|
|
|
14,879 |
|
|
|
TOTAL ASSETS |
|
$ |
1,032,253 |
|
|
$ |
1,028,430 |
|
|
|
LIABILITIES AND TOTAL DEFICIT |
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
Portion of operating lease liabilities due within one year |
|
$ |
9,804 |
|
|
$ |
17,955 |
|
|
|
Accounts payable |
|
|
19,732 |
|
|
|
18,890 |
|
|
|
Salaries and wages payable |
|
|
61,794 |
|
|
|
72,577 |
|
|
|
Accrued marketing and advertising |
|
|
13,645 |
|
|
|
17,927 |
|
|
|
Accrued interest |
|
|
10,969 |
|
|
|
5,289 |
|
|
|
Other accrued liabilities |
|
|
44,569 |
|
|
|
30,118 |
|
|
|
Income taxes payable |
|
|
987 |
|
|
|
1,646 |
|
|
|
Deferred revenue |
|
|
32,445 |
|
|
|
32,156 |
|
|
|
TOTAL CURRENT LIABILITIES |
|
|
193,945 |
|
|
|
196,558 |
|
|
|
Long-term debt, net |
|
|
1,425,419 |
|
|
|
1,422,284 |
|
|
|
Long-term operating lease liabilities |
|
|
56,643 |
|
|
|
68,099 |
|
|
|
Deferred income taxes |
|
|
15,932 |
|
|
|
25,084 |
|
(1) |
|
Other |
|
|
15,481 |
|
|
|
2,185 |
|
|
|
TOTAL LIABILITIES |
|
|
1,707,420 |
|
|
|
1,714,210 |
|
(1) |
|
|
|
|
|
|
|
|
TOTAL DEFICIT |
|
|
|
|
|
|
Common stock, $0 par value; 1,000,000 shares authorized; 130,048
shares issued at September 30, 2023 and 122,052 shares issued at
December 31, 2022 |
|
|
0 |
|
|
|
0 |
|
|
|
Treasury stock, at cost, 51,030 shares at September 30, 2023 and
51,496 shares at December 31, 2022 |
|
|
(3,073,196 |
) |
|
|
(3,097,304 |
) |
|
|
Retained earnings |
|
|
2,409,997 |
|
|
|
2,416,994 |
|
(1) |
|
Accumulated other comprehensive loss |
|
|
(11,968 |
) |
|
|
(5,470 |
) |
|
|
TOTAL DEFICIT |
|
|
(675,167 |
) |
|
|
(685,780 |
) |
(1) |
|
TOTAL LIABILITIES AND TOTAL DEFICIT |
|
$ |
1,032,253 |
|
|
$ |
1,028,430 |
|
|
|
___ |
|
|
|
|
|
|
(1) Certain amounts have been revised at December 31, 2022 to
correct immaterial errors related to certain tax matters, which
will be more fully described in the Company's Form 10-Q filing for
the fiscal quarter ended September 30, 2023. |
|
|
|
WW INTERNATIONAL, INC. AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|
UNAUDITED |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
Three Months Ended |
| |
|
|
|
September 30, |
|
October 1, |
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
Subscription revenues, net (1) |
|
|
$ |
203,496 |
|
|
$ |
220,746 |
|
|
Product sales and other, net (2) |
|
|
|
11,375 |
|
|
|
28,972 |
|
|
|
Revenues, net |
|
|
|
214,871 |
|
|
|
249,718 |
|
|
Cost of subscription revenues (3) |
|
|
|
67,080 |
|
|
|
73,541 |
|
|
Cost of product sales and other |
|
|
|
6,036 |
|
|
|
23,826 |
|
|
|
Cost of revenues |
|
|
|
73,116 |
|
|
|
97,367 |
|
|
|
Gross profit |
|
|
|
141,755 |
|
|
|
152,351 |
|
|
Marketing expenses |
|
|
|
48,114 |
|
|
|
35,696 |
|
|
Selling, general and administrative expenses |
|
|
|
63,034 |
|
|
|
58,443 |
|
|
Franchise rights acquired impairments |
|
|
|
— |
|
|
|
312,741 |
|
|
|
Operating income (loss) |
|
|
|
30,607 |
|
|
|
(254,529 |
) |
|
Interest expense |
|
|
|
24,508 |
|
|
|
20,912 |
|
|
Other expense, net |
|
|
|
815 |
|
|
|
1,344 |
|
|
|
Income (loss) before income taxes |
|
|
|
5,284 |
|
|
|
(276,785 |
) |
|
Benefit from income taxes |
|
|
|
(38,447 |
) |
|
|
(70,749 |
) |
|
|
Net income (loss) |
|
|
$ |
43,731 |
|
|
$ |
(206,036 |
) |
|
|
|
|
|
|
|
|
|
Earnings (net loss) per share |
|
|
|
|
|
|
|
Basic |
|
|
$ |
0.55 |
|
|
$ |
(2.93 |
) |
|
|
Diluted |
|
|
$ |
0.54 |
|
|
$ |
(2.93 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
|
|
78,979 |
|
|
|
70,383 |
|
|
|
Diluted |
|
|
|
80,638 |
|
|
|
70,383 |
|
|
|
|
|
|
|
|
|
|
___ |
|
|
|
|
|
|
| Note: Totals may
not sum due to rounding. |
|
|
|
|
|
|
(1) Consists of net “Digital Subscription Revenues”, net “Workshops
+ Digital Fees” and net “Clinical Subscription Revenues”. “Digital
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Digital offerings, which formerly
included Digital 360 (as applicable). “Workshops + Digital Fees”
consist of the fees associated with the Company's subscription
plans for combined workshops and digital offerings and other
payment arrangements for access to workshops. “Clinical
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Clinical offerings. |
|
(2) Consists of sales of consumer products via e-commerce, in
studios and through the Company's trusted partners, revenues from
licensing and publishing, other revenues, and franchise fees with
respect to commitment plans and royalties. |
|
(3) Consists of cost of revenues and operating expenses for the
Company's Digital, Workshops + Digital and Clinical services. |
|
|
|
WW INTERNATIONAL, INC. AND SUBSIDIARIES |
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
Nine Months Ended |
|
| |
|
|
|
September 30, |
|
October 1, |
|
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
Subscription revenues, net (1) |
|
|
$ |
626,667 |
|
|
$ |
718,122 |
|
|
|
Product sales and other, net (2) |
|
|
|
56,927 |
|
|
|
98,810 |
|
|
|
|
Revenues, net |
|
|
|
683,594 |
|
|
|
816,932 |
|
|
|
Cost of subscription revenues (3) |
|
|
|
233,354 |
|
|
|
243,710 |
|
|
|
Cost of product sales and other |
|
|
|
45,794 |
|
|
|
77,811 |
|
|
|
|
Cost of revenues |
|
|
|
279,148 |
|
|
|
321,521 |
|
|
|
|
Gross profit |
|
|
|
404,446 |
|
|
|
495,411 |
|
|
|
Marketing expenses |
|
|
|
187,468 |
|
|
|
195,123 |
|
|
|
Selling, general and administrative expenses |
|
|
|
188,638 |
|
|
|
193,320 |
|
|
|
Franchise rights acquired and goodwill impairments |
|
|
— |
|
|
|
339,161 |
|
|
|
|
Operating income (loss) |
|
|
|
28,340 |
|
|
|
(232,193 |
) |
|
|
Interest expense |
|
|
|
71,429 |
|
|
|
58,837 |
|
|
|
Other (income) expense, net |
|
|
|
(36 |
) |
|
|
3,303 |
|
|
|
|
Loss before income taxes |
|
|
|
(43,053 |
) |
|
|
(294,333 |
) |
|
|
Benefit from income taxes |
|
|
|
(18,933 |
) |
|
|
(73,246 |
) |
(4) |
|
|
Net loss |
|
|
$ |
(24,120 |
) |
|
$ |
(221,087 |
) |
(4) |
|
|
|
|
|
|
|
|
|
|
Net loss per share |
|
|
|
|
|
|
|
|
Basic |
|
|
$ |
(0.32 |
) |
|
$ |
(3.15 |
) |
(4) |
|
|
Diluted |
|
|
$ |
(0.32 |
) |
|
$ |
(3.15 |
) |
(4) |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
|
75,861 |
|
|
|
70,258 |
|
|
|
|
Diluted |
|
|
|
75,861 |
|
|
|
70,258 |
|
|
|
|
|
|
|
|
|
|
|
|
___ |
|
|
|
|
|
|
|
| Note: Totals may
not sum due to rounding. |
|
|
|
|
|
|
|
(1) Consists of net “Digital Subscription Revenues”, net “Workshops
+ Digital Fees” and net “Clinical Subscription Revenues”. “Digital
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Digital offerings, which formerly
included Digital 360 (as applicable). “Workshops + Digital Fees”
consist of the fees associated with the Company's subscription
plans for combined workshops and digital offerings and other
payment arrangements for access to workshops. “Clinical
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Clinical offerings. |
|
|
(2) Consists of sales of consumer products via e-commerce, in
studios and through the Company's trusted partners, revenues from
licensing and publishing, other revenues, and franchise fees with
respect to commitment plans and royalties. |
|
|
(3) Consists of cost of revenues and operating expenses for the
Company's Digital, Workshops + Digital and Clinical services. |
|
|
(4) Certain amounts have been revised for the nine months ended
October 1, 2022 to correct immaterial errors related to certain tax
matters, which will be more fully described in the Company's Form
10-Q filing for the fiscal quarter ended September 30, 2023. |
|
| |
| |
WW INTERNATIONAL, INC. AND SUBSIDIARIES |
|
| |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
| |
(IN THOUSANDS) |
|
| |
UNAUDITED |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
Nine Months Ended |
|
| |
|
|
September 30, |
|
October 1, |
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
Operating activities: |
|
|
|
|
|
|
|
Net loss |
|
$ |
(24,120 |
) |
|
$ |
(221,087 |
) |
(1) |
| |
Adjustments to reconcile net loss to cash (used for) provided by
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
39,805 |
|
|
|
33,371 |
|
|
|
|
Amortization of deferred financing costs and debt discount |
|
|
3,763 |
|
|
|
3,763 |
|
|
|
|
Impairment of franchise rights acquired and goodwill |
|
|
— |
|
|
|
339,161 |
|
|
|
|
Impairment of intangible and long-lived assets |
|
|
197 |
|
|
|
2,088 |
|
|
|
|
Share-based compensation expense |
|
|
12,838 |
|
|
|
10,362 |
|
|
|
|
Deferred tax benefit |
|
|
(7,449 |
) |
|
|
(107,879 |
) |
|
|
|
Allowance for doubtful accounts |
|
|
407 |
|
|
|
54 |
|
|
|
|
Reserve for inventory obsolescence |
|
|
1,897 |
|
|
|
4,712 |
|
|
|
|
Foreign currency exchange rate (gain) loss |
|
|
(31 |
) |
|
|
3,562 |
|
|
|
|
Changes in cash due to: |
|
|
|
|
|
|
|
Receivables |
|
|
9,117 |
|
|
|
(9,760 |
) |
|
|
|
Inventories |
|
|
9,009 |
|
|
|
(725 |
) |
|
|
|
Prepaid expenses |
|
|
(27,301 |
) |
|
|
17,613 |
|
|
|
|
Accounts payable |
|
|
1,221 |
|
|
|
(3,634 |
) |
|
|
|
Accrued liabilities |
|
|
(17,010 |
) |
|
|
15,390 |
|
|
|
|
Deferred revenue |
|
|
309 |
|
|
|
(3,576 |
) |
|
|
|
Other long term assets and liabilities, net |
|
|
(2,701 |
) |
|
|
(4,662 |
) |
|
|
|
Income taxes |
|
|
(1,104 |
) |
|
|
1,793 |
|
(1) |
|
|
Cash (used for) provided by operating activities |
|
|
(1,153 |
) |
|
|
80,546 |
|
|
|
Investing activities: |
|
|
|
|
|
|
|
Capital expenditures |
|
|
(2,143 |
) |
|
|
(1,756 |
) |
|
|
|
Capitalized software expenditures |
|
|
(26,190 |
) |
|
|
(27,584 |
) |
|
|
|
Cash paid for acquisitions, net of cash acquired |
|
|
(38,362 |
) |
|
|
(4,350 |
) |
|
|
|
Other items, net |
|
|
(14 |
) |
|
|
(29 |
) |
|
|
|
Cash used for investing activities |
|
|
(66,709 |
) |
|
|
(33,719 |
) |
|
|
Financing activities: |
|
|
|
|
|
|
|
Taxes paid related to net share settlement of equity awards |
|
|
(1,417 |
) |
|
|
(1,938 |
) |
|
|
|
Proceeds from stock options exercised |
|
|
710 |
|
|
|
— |
|
|
|
|
Cash paid for acquisitions |
|
|
(1,178 |
) |
|
|
(113 |
) |
|
|
|
Other items, net |
|
|
(43 |
) |
|
|
(86 |
) |
|
|
|
Cash used for financing activities |
|
|
(1,928 |
) |
|
|
(2,137 |
) |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(1,038 |
) |
|
|
(10,193 |
) |
|
|
Net (decrease) increase in cash and cash equivalents |
|
|
(70,828 |
) |
|
|
34,497 |
|
|
|
Cash and cash equivalents, beginning of period |
|
|
178,326 |
|
|
|
153,794 |
|
|
|
Cash and cash equivalents, end of period |
|
$ |
107,498 |
|
|
$ |
188,291 |
|
|
| |
|
|
|
|
|
|
|
___ |
|
|
|
|
|
|
|
(1) Certain amounts have been revised for the nine months ended
October 1, 2022 to correct immaterial errors related to certain tax
matters, which will be more fully described in the Company's Form
10-Q filing for the fiscal quarter ended September 30, 2023. |
| |
|
WW INTERNATIONAL, INC. AND SUBSIDIARIES |
|
OPERATIONAL STATISTICS |
|
(IN THOUSANDS, EXCEPT PERCENTAGES) |
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
| |
|
|
September 30, |
|
October 1, |
|
Variance |
| |
|
|
2023 |
|
2022 |
|
| |
|
|
|
|
|
|
|
|
Digital Paid Weeks (1) |
|
|
|
|
|
|
North America |
27,605 |
|
26,274 |
|
5.1% |
|
International |
15,205 |
|
15,325 |
|
(0.8%) |
|
Total Digital Paid Weeks |
42,810 |
|
41,599 |
|
2.9% |
|
|
|
|
|
|
|
|
|
|
Workshops + Digital Paid Weeks
(1) |
|
|
|
|
|
|
North America |
6,882 |
|
7,753 |
|
(11.2%) |
|
International |
2,251 |
|
2,581 |
|
(12.8%) |
|
Total Workshops + Digital Paid Weeks |
9,133 |
|
10,334 |
|
(11.6%) |
| |
|
|
|
|
|
|
|
|
Clinical Paid Weeks (1) |
|
|
|
|
|
|
North America |
534 |
|
— |
|
N/A |
|
International |
— |
|
— |
|
— |
|
Total Clinical Paid Weeks |
534 |
|
— |
|
N/A |
| |
|
|
|
|
|
|
|
|
Total Paid Weeks (1) |
|
|
|
|
|
|
North America |
35,021 |
|
34,028 |
|
2.9% |
|
International |
17,457 |
|
17,905 |
|
(2.5%) |
|
Total Paid Weeks |
52,478 |
|
51,933 |
|
1.0% |
| |
|
|
|
|
|
|
|
|
End of Period Digital Subscribers
(2) |
|
|
|
|
|
|
North America |
2,112 |
|
1,908 |
|
10.7% |
|
International |
1,172 |
|
1,138 |
|
3.0% |
|
Total End of Period Digital Subscribers |
3,284 |
|
3,046 |
|
7.8% |
|
|
|
|
|
|
|
|
|
|
End of Period Workshops + Digital Subscribers
(2) |
|
|
|
|
|
|
North America |
518 |
|
555 |
|
(6.7%) |
|
International |
175 |
|
192 |
|
(9.2%) |
|
Total End of Period Workshops + Digital Subscribers |
693 |
|
748 |
|
(7.3%) |
| |
|
|
|
|
|
|
|
|
End of Period Clinical Subscribers
(2) |
|
|
|
|
|
|
North America |
45 |
|
— |
|
N/A |
|
International |
— |
|
— |
|
— |
|
Total End of Period Clinical Subscribers |
45 |
|
— |
|
N/A |
| |
|
|
|
|
|
|
|
|
Total End of Period Subscribers
(2) |
|
|
|
|
|
|
North America |
2,676 |
|
2,464 |
|
8.6% |
|
International |
1,346 |
|
1,330 |
|
1.2% |
|
Total End of Period Subscribers |
4,022 |
|
3,794 |
|
6.0% |
|
|
|
|
|
|
|
|
|
|
___ |
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding. |
|
|
|
|
|
|
(1) The “Paid Weeks” metric reports paid weeks by WW customers in
Company-owned operations for a given period as follows: (i)
“Digital Paid Weeks” is the total paid subscription weeks for the
Company’s digital subscription products, which formerly included
Digital 360 (as applicable); (ii) “Workshops + Digital Paid Weeks”
is the sum of total paid commitment plan weeks which include
workshops and digital offerings and formerly included total
“pay-as-you-go” weeks; (iii) “Clinical Paid Weeks” is the total
paid subscription weeks for the Company’s Clinical subscription
products; and (iv) “Total Paid Weeks” is the sum of Digital Paid
Weeks, Workshops + Digital Paid Weeks and Clinical Paid Weeks. |
|
(2) The “End of Period Subscribers” metric reports WW subscribers
in Company-owned operations at a given period end as follows: (i)
“End of Period Digital Subscribers” is the total number of Digital,
including former Digital 360 (as applicable), subscribers; (ii)
“End of Period Workshops + Digital Subscribers” is the total number
of commitment plan subscribers that have access to combined
workshops and digital offerings; (iii) “End of Period Clinical
Subscribers” is the total number of Clinical subscribers; and (iv)
“End of Period Subscribers” is the sum of End of Period Digital
Subscribers, End of Period Workshops + Digital Subscribers and End
of Period Clinical Subscribers. |
| |
|
WW INTERNATIONAL, INC. AND SUBSIDIARIES |
|
OPERATIONAL STATISTICS |
|
(IN THOUSANDS, EXCEPT PERCENTAGES) |
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Nine Months Ended |
|
|
| |
|
September 30, |
|
October 1, |
|
Variance |
| |
|
2023 |
|
2022 |
|
| |
|
|
|
|
|
|
|
Digital Paid Weeks (1) |
|
|
|
|
|
|
North America |
81,392 |
|
87,743 |
|
(7.2%) |
|
International |
45,465 |
|
50,312 |
|
(9.6%) |
|
Total Digital Paid Weeks |
126,858 |
|
138,055 |
|
(8.1%) |
|
|
|
|
|
|
|
|
|
Workshops + Digital Paid Weeks
(1) |
|
|
|
|
|
|
North America |
21,914 |
|
22,724 |
|
(3.6%) |
|
International |
7,126 |
|
7,547 |
|
(5.6%) |
|
Total Workshops + Digital Paid Weeks |
29,039 |
|
30,271 |
|
(4.1%) |
| |
|
|
|
|
|
|
|
Clinical Paid Weeks (1) |
|
|
|
|
|
|
North America |
889 |
|
— |
|
N/A |
|
International |
— |
|
— |
|
— |
|
Total Clinical Paid Weeks |
889 |
|
— |
|
N/A |
| |
|
|
|
|
|
|
|
Total Paid Weeks (1) |
|
|
|
|
|
|
North America |
104,195 |
|
110,466 |
|
(5.7%) |
|
International |
52,591 |
|
57,860 |
|
(9.1%) |
|
Total Paid Weeks |
156,786 |
|
168,326 |
|
(6.9%) |
| |
|
|
|
|
|
|
|
End of Period Digital Subscribers
(2) |
|
|
|
|
|
|
North America |
2,112 |
|
1,908 |
|
10.7% |
|
International |
1,172 |
|
1,138 |
|
3.0% |
|
Total End of Period Digital Subscribers |
3,284 |
|
3,046 |
|
7.8% |
|
|
|
|
|
|
|
|
|
End of Period Workshops + Digital Subscribers
(2) |
|
|
|
|
|
|
North America |
518 |
|
555 |
|
(6.7%) |
|
International |
175 |
|
192 |
|
(9.2%) |
|
Total End of Period Workshops + Digital Subscribers |
693 |
|
748 |
|
(7.3%) |
| |
|
|
|
|
|
|
|
End of Period Clinical Subscribers
(2) |
|
|
|
|
|
|
North America |
45 |
|
— |
|
N/A |
|
International |
— |
|
— |
|
— |
|
Total End of Period Clinical Subscribers |
45 |
|
— |
|
N/A |
| |
|
|
|
|
|
|
|
Total End of Period Subscribers
(2) |
|
|
|
|
|
|
North America |
2,676 |
|
2,464 |
|
8.6% |
|
International |
1,346 |
|
1,330 |
|
1.2% |
|
Total End of Period Subscribers |
4,022 |
|
3,794 |
|
6.0% |
|
|
|
|
|
|
|
|
|
___ |
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding. |
|
|
|
|
|
|
(1) The “Paid Weeks” metric reports paid weeks by WW customers in
Company-owned operations for a given period as follows: (i)
“Digital Paid Weeks” is the total paid subscription weeks for the
Company’s digital subscription products, which formerly included
Digital 360 (as applicable); (ii) “Workshops + Digital Paid Weeks”
is the sum of total paid commitment plan weeks which include
workshops and digital offerings and formerly included total
“pay-as-you-go” weeks; (iii) “Clinical Paid Weeks” is the total
paid subscription weeks for the Company’s Clinical subscription
products; and (iv) “Total Paid Weeks” is the sum of Digital Paid
Weeks, Workshops + Digital Paid Weeks and Clinical Paid Weeks. |
|
(2) The “End of Period Subscribers” metric reports WW subscribers
in Company-owned operations at a given period end as follows: (i)
“End of Period Digital Subscribers” is the total number of Digital,
including former Digital 360 (as applicable), subscribers; (ii)
“End of Period Workshops + Digital Subscribers” is the total number
of commitment plan subscribers that have access to combined
workshops and digital offerings; (iii) “End of Period Clinical
Subscribers” is the total number of Clinical subscribers; and (iv)
“End of Period Subscribers” is the sum of End of Period Digital
Subscribers, End of Period Workshops + Digital Subscribers and End
of Period Clinical Subscribers. |
| |
|
|
|
|
|
|
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
| (IN
THOUSANDS, EXCEPT PERCENTAGES) |
|
UNAUDITED |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2023 Variance |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
| |
|
|
|
|
|
|
|
|
|
|
Constant |
| |
|
|
|
|
Q3 2023 |
|
Q3 2022 |
|
2023 |
|
Currency |
| |
|
|
|
|
|
|
Currency |
|
Constant |
|
|
|
vs |
|
vs |
| |
|
|
|
|
GAAP |
|
Adjustment |
|
Currency |
|
GAAP |
|
2022 |
|
2022 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Company Revenues |
$ |
214,871 |
|
$ |
(3,246 |
) |
|
$ |
211,625 |
|
$ |
249,718 |
|
(14.0 |
%) |
|
(15.3 |
%) |
|
Consolidated Digital Subscription Revenues (1) |
$ |
140,889 |
|
$ |
(2,671 |
) |
|
$ |
138,218 |
|
$ |
155,881 |
|
(9.6 |
%) |
|
(11.3 |
%) |
|
Consolidated Workshops + Digital Fees (2) |
$ |
52,618 |
|
$ |
(491 |
) |
|
$ |
52,127 |
|
$ |
64,865 |
|
(18.9 |
%) |
|
(19.6 |
%) |
|
Consolidated Clinical Subscription Revenues (3) |
$ |
9,989 |
|
$ |
— |
|
|
$ |
9,989 |
|
$ |
— |
|
N/A |
|
N/A |
|
Consolidated Subscription Revenues (4) |
$ |
203,496 |
|
$ |
(3,161 |
) |
|
$ |
200,335 |
|
$ |
220,746 |
|
(7.8 |
%) |
|
(9.2 |
%) |
|
Consolidated Product Sales and Other (5) |
$ |
11,375 |
|
$ |
(85 |
) |
|
$ |
11,290 |
|
$ |
28,972 |
|
(60.7 |
%) |
|
(61.0 |
%) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
|
|
|
|
|
|
|
|
|
|
Digital Subscription Revenues (1) |
$ |
92,437 |
|
$ |
151 |
|
|
$ |
92,588 |
|
$ |
102,735 |
|
(10.0 |
%) |
|
(9.9 |
%) |
|
Workshops + Digital Fees (2) |
$ |
42,867 |
|
$ |
54 |
|
|
$ |
42,921 |
|
$ |
52,113 |
|
(17.7 |
%) |
|
(17.6 |
%) |
|
Clinical Subscription Revenues (3) |
$ |
9,989 |
|
$ |
— |
|
|
$ |
9,989 |
|
$ |
— |
|
N/A |
|
N/A |
|
Subscription Revenues (4) |
$ |
145,293 |
|
$ |
205 |
|
|
$ |
145,498 |
|
$ |
154,848 |
|
(6.2 |
%) |
|
(6.0 |
%) |
|
Product Sales and Other (5) |
$ |
9,394 |
|
$ |
5 |
|
|
$ |
9,399 |
|
$ |
21,621 |
|
(56.6 |
%) |
|
(56.5 |
%) |
|
Total Revenues |
$ |
154,687 |
|
$ |
210 |
|
|
$ |
154,897 |
|
$ |
176,469 |
|
(12.3 |
%) |
|
(12.2 |
%) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
Digital Subscription Revenues (1) |
$ |
48,452 |
|
$ |
(2,821 |
) |
|
$ |
45,631 |
|
$ |
53,146 |
|
(8.8 |
%) |
|
(14.1 |
%) |
|
Workshops + Digital Fees (2) |
$ |
9,751 |
|
$ |
(545 |
) |
|
$ |
9,206 |
|
$ |
12,752 |
|
(23.5 |
%) |
|
(27.8 |
%) |
|
Clinical Subscription Revenues (3) |
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
N/A |
|
N/A |
|
Subscription Revenues (4) |
$ |
58,203 |
|
$ |
(3,366 |
) |
|
$ |
54,837 |
|
$ |
65,898 |
|
(11.7 |
%) |
|
(16.8 |
%) |
|
Product Sales and Other (5) |
$ |
1,981 |
|
$ |
(90 |
) |
|
$ |
1,891 |
|
$ |
7,351 |
|
(73.1 |
%) |
|
(74.3 |
%) |
|
Total Revenues |
$ |
60,184 |
|
$ |
(3,456 |
) |
|
$ |
56,728 |
|
$ |
73,249 |
|
(17.8 |
%) |
|
(22.6 |
%) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
| (1) “Digital
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Digital offerings, which formerly
included Digital 360 (as applicable). |
| (2) “Workshops +
Digital Fees” consist of the fees associated with the Company's
subscription plans for combined workshops and digital offerings and
other payment arrangements for access to workshops. |
| (3) “Clinical
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Clinical offerings. |
| (4) “Subscription
Revenues” equal “Digital Subscription Revenues” plus “Workshops +
Digital Fees” plus “Clinical Subscription Revenues”. |
| (5) “Product Sales and
Other” are sales of consumer products via e-commerce, in studios
and through the Company's trusted partners, revenues from licensing
and publishing, other revenues, and, in the case of the
consolidated financial results and North America reportable
segment, franchise fees with respect to commitment plans and
royalties. |
| |
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
| (IN
THOUSANDS, EXCEPT PERCENTAGES) |
|
UNAUDITED |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
YTD 2023 Variance |
| |
|
|
|
|
|
|
|
|
|
|
|
2023 |
| |
|
|
|
|
|
|
|
Constant |
| |
|
YTD 2023 |
|
YTD 2022 |
|
2023 |
|
Currency |
| |
|
|
|
Currency |
|
Constant |
|
|
|
vs |
|
vs |
| |
|
GAAP |
|
Adjustment |
|
Currency |
|
GAAP |
|
2022 |
|
2022 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Company Revenues |
$ |
683,594 |
|
$ |
1,696 |
|
|
$ |
685,290 |
|
$ |
816,932 |
|
(16.3 |
%) |
|
(16.1 |
%) |
|
Consolidated Digital Subscription Revenues (1) |
$ |
437,613 |
|
$ |
610 |
|
|
$ |
438,223 |
|
$ |
521,582 |
|
(16.1 |
%) |
|
(16.0 |
%) |
|
Consolidated Workshops + Digital Fees (2) |
$ |
171,473 |
|
$ |
601 |
|
|
$ |
172,074 |
|
$ |
196,540 |
|
(12.8 |
%) |
|
(12.4 |
%) |
|
Consolidated Clinical Subscription Revenues (3) |
$ |
17,581 |
|
$ |
— |
|
|
$ |
17,581 |
|
$ |
— |
|
N/A |
|
N/A |
|
Consolidated Subscription Revenues (4) |
$ |
626,667 |
|
$ |
1,211 |
|
|
$ |
627,878 |
|
$ |
718,122 |
|
(12.7 |
%) |
|
(12.6 |
%) |
|
Consolidated Product Sales and Other (5) |
$ |
56,927 |
|
$ |
485 |
|
|
$ |
57,412 |
|
$ |
98,810 |
|
(42.4 |
%) |
|
(41.9 |
%) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
|
|
|
|
|
|
|
|
|
|
Digital Subscription Revenues (1) |
$ |
285,655 |
|
$ |
878 |
|
|
$ |
286,533 |
|
$ |
342,489 |
|
(16.6 |
%) |
|
(16.3 |
%) |
|
Workshops + Digital Fees (2) |
$ |
138,639 |
|
$ |
326 |
|
|
$ |
138,965 |
|
$ |
155,558 |
|
(10.9 |
%) |
|
(10.7 |
%) |
|
Clinical Subscription Revenues (3) |
$ |
17,581 |
|
$ |
— |
|
|
$ |
17,581 |
|
$ |
— |
|
N/A |
|
N/A |
|
Subscription Revenues (4) |
$ |
441,875 |
|
$ |
1,204 |
|
|
$ |
443,079 |
|
$ |
498,047 |
|
(11.3 |
%) |
|
(11.0 |
%) |
|
Product Sales and Other (5) |
$ |
46,025 |
|
$ |
116 |
|
|
$ |
46,141 |
|
$ |
71,478 |
|
(35.6 |
%) |
|
(35.4 |
%) |
|
Total Revenues |
$ |
487,900 |
|
$ |
1,320 |
|
|
$ |
489,220 |
|
$ |
569,525 |
|
(14.3 |
%) |
|
(14.1 |
%) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
Digital Subscription Revenues (1) |
$ |
151,958 |
|
$ |
(268 |
) |
|
$ |
151,690 |
|
$ |
179,093 |
|
(15.2 |
%) |
|
(15.3 |
%) |
|
Workshops + Digital Fees (2) |
$ |
32,834 |
|
$ |
276 |
|
|
$ |
33,110 |
|
$ |
40,982 |
|
(19.9 |
%) |
|
(19.2 |
%) |
|
Clinical Subscription Revenues (3) |
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
N/A |
|
N/A |
|
Subscription Revenues (4) |
$ |
184,792 |
|
$ |
7 |
|
|
$ |
184,799 |
|
$ |
220,075 |
|
(16.0 |
%) |
|
(16.0 |
%) |
|
Product Sales and Other (5) |
$ |
10,902 |
|
$ |
369 |
|
|
$ |
11,271 |
|
$ |
27,332 |
|
(60.1 |
%) |
|
(58.8 |
%) |
|
Total Revenues |
$ |
195,694 |
|
$ |
376 |
|
|
$ |
196,070 |
|
$ |
247,407 |
|
(20.9 |
%) |
|
(20.8 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ___ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
| (1) “Digital
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Digital offerings, which formerly
included Digital 360 (as applicable). |
| (2) “Workshops +
Digital Fees” consist of the fees associated with the Company's
subscription plans for combined workshops and digital offerings and
other payment arrangements for access to workshops. |
| (3) “Clinical
Subscription Revenues” consist of the fees associated with
subscriptions for the Company’s Clinical offerings. |
| (4) “Subscription
Revenues” equal “Digital Subscription Revenues” plus “Workshops +
Digital Fees” plus “Clinical Subscription Revenues”. |
| (5) “Product Sales and
Other” are sales of consumer products via e-commerce, in studios
and through the Company's trusted partners, revenues from licensing
and publishing, other revenues, and, in the case of the
consolidated financial results and North America reportable
segment, franchise fees with respect to commitment plans and
royalties. |
| |
|
WW INTERNATIONAL, INC. AND SUBSIDIARIES |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
|
(IN THOUSANDS, EXCEPT PERCENTAGES) |
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2023 Variance |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 Constant Currency |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
2023 |
| |
|
Q3 2023 |
|
Q3 2022 |
|
|
|
Adjusted |
|
|
|
Adjusted |
| |
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
|
|
|
|
|
|
2023 |
|
vs |
|
2023 |
|
vs |
| |
|
|
|
|
|
|
|
Currency |
|
Constant |
|
Constant |
|
|
|
|
|
|
|
vs |
|
2022 |
|
vs |
|
2022 |
| |
|
GAAP |
|
Adjustment |
|
Adjusted |
|
Adjustment |
|
Currency |
|
Currency |
|
GAAP |
|
Adjustment |
|
Adjusted |
|
2022 |
|
Adjusted |
|
2022 |
|
Adjusted |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selected Financial
Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross Profit |
$ |
141,755 |
|
$ |
398 |
|
(1) |
$ |
142,153 |
|
$ |
(2,672 |
) |
|
$ |
139,083 |
|
|
$ |
139,481 |
|
$ |
152,351 |
|
|
$ |
6 |
|
(4) |
$ |
152,357 |
|
(7.0% |
) |
|
(6.7% |
) |
|
(8.7% |
) |
|
(8.5%) |
| Gross Margin |
|
|
|
66.0% |
|
|
|
|
66.2% |
|
|
|
|
65.7% |
|
|
|
65.9% |
|
|
61.0% |
|
|
|
|
|
61.0% |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative Expenses |
|
|
$ |
63,034 |
|
$ |
(5,577 |
) |
(2) |
$ |
57,457 |
|
$ |
(485 |
) |
|
$ |
62,549 |
|
|
$ |
56,972 |
|
$ |
58,443 |
|
|
$ |
(3,654 |
) |
(5) |
$ |
54,789 |
|
7.9% |
|
|
4.9% |
|
|
7.0% |
|
|
4.0% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Income (Loss) |
|
|
$ |
30,607 |
|
$ |
5,975 |
|
(3) |
$ |
36,582 |
|
$ |
(1,598 |
) |
|
$ |
29,009 |
|
|
$ |
34,984 |
|
$ |
(254,529 |
) |
|
$ |
316,401 |
|
(6) |
$ |
61,872 |
|
112.0% |
|
|
(40.9% |
) |
|
111.4% |
|
|
(43.5%) |
| Operating Income (Loss)
Margin |
|
|
|
14.2% |
|
|
|
|
17.0% |
|
|
|
|
13.7% |
|
|
|
16.5% |
|
|
(101.9% |
) |
|
|
|
|
24.8% |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ___ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Note: Totals may
not sum due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes the net impact of $444 of charges associated with
the Company's previously disclosed 2023 restructuring plan and the
reversal of $46 of charges associated with the Company's previously
disclosed 2022 restructuring plan. |
|
(2) Excludes the net impact of $5,743 of charges associated
with the Company's previously disclosed 2023 restructuring plan and
the reversal of $166 of charges associated with the Company's
previously disclosed 2022 restructuring plan. |
|
(3) Excludes the net impact of (x) $444 of charges and $5,743
of charges associated with the Company's previously disclosed 2023
restructuring plan recorded to cost of subscription revenues and
selling, general and administrative expenses, respectively, and (y)
the reversal of $46 of charges and the reversal of $166 of charges
associated with the Company's previously disclosed 2022
restructuring plan recorded to cost of subscription revenues and
selling, general and administrative expenses, respectively. |
|
(4) Excludes the net impact of the reversal of $98 of charges
associated with the Company's previously disclosed 2022
restructuring plan and $104 of charges associated with the
Company's previously disclosed 2021 organizational restructuring
plan. |
|
(5) Excludes the net impact of $3,655 of charges associated
with the Company's previously disclosed 2022 restructuring plan and
the reversal of $1 of charges associated with the Company's
previously disclosed 2021 organizational restructuring plan. |
|
(6) Excludes (i) the impact of impairment charges of the
Company's franchise rights acquired of $298,291, $13,312 and $1,138
related to its United States, Canada and New Zealand operations,
respectively and (ii) the net impact of (x) the reversal of $98 of
charges and $3,655 of charges associated with the Company's
previously disclosed 2022 restructuring plan recorded to cost of
subscription revenues and selling, general and administrative
expenses, respectively, and (y) $104 of charges and the reversal of
$1 of charges associated with the Company's previously disclosed
2021 organizational restructuring plan recorded to cost of
subscription revenues and selling, general and administrative
expenses, respectively. |
|
|
|
|
WW INTERNATIONAL, INC. AND
SUBSIDIARIES |
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
|
|
(IN THOUSANDS, EXCEPT PERCENTAGES) |
|
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD 2023 Variance |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 Constant Currency |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
2023 |
| |
|
|
YTD 2023 |
|
YTD 2022 |
|
|
|
Adjusted |
|
|
|
Adjusted |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
|
|
|
|
|
|
2023 |
|
vs |
|
2023 |
|
vs |
| |
|
|
|
|
|
|
|
|
Currency |
|
Constant |
|
Constant |
|
|
|
|
|
|
|
vs |
|
2022 |
|
vs |
|
2022 |
| |
|
|
GAAP |
|
Adjustment |
|
Adjusted |
|
Adjustment |
Currency |
|
Currency |
|
GAAP |
|
Adjustment |
|
Adjusted |
|
2022 |
|
Adjusted |
|
2022 |
|
Adjusted |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
$ |
404,446 |
|
$ |
19,675 |
|
(1) |
$ |
424,121 |
|
$ |
556 |
|
|
$ |
405,002 |
|
$ |
424,676 |
|
$ |
495,411 |
|
|
$ |
3,853 |
|
(4) |
$ |
499,264 |
|
(18.4% |
) |
|
(15.1% |
) |
|
(18.2% |
) |
|
(14.9%) |
|
Gross Margin |
|
59.2% |
|
|
|
|
62.0% |
|
|
|
|
59.1% |
|
|
62.0% |
|
|
60.6% |
|
|
|
|
|
61.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative Expenses |
$ |
188,638 |
|
$ |
(20,215 |
) |
(2) |
$ |
168,423 |
|
$ |
376 |
|
|
$ |
189,014 |
|
$ |
168,800 |
|
$ |
193,320 |
|
|
$ |
(18,507 |
) |
(5) |
$ |
174,813 |
|
(2.4% |
) |
|
(3.7% |
) |
|
(2.2% |
) |
|
(3.4%) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) |
$ |
28,340 |
|
$ |
39,890 |
|
(3) |
$ |
68,230 |
|
$ |
(1,140 |
) |
|
$ |
27,200 |
|
$ |
67,089 |
|
$ |
(232,193 |
) |
|
$ |
361,521 |
|
(6) |
$ |
129,328 |
|
112.2% |
|
|
(47.2% |
) |
|
111.7% |
|
|
(48.1%) |
|
Operating Income (Loss) Margin |
|
4.1% |
|
|
|
|
10.0% |
|
|
|
|
4.0% |
|
|
9.8% |
|
|
(28.4% |
) |
|
|
|
|
15.8% |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding. |
|
(1) Excludes the net impact of $19,869 of charges associated
with the Company's previously disclosed 2023 restructuring plan,
the reversal of $269 of charges associated with the Company's
previously disclosed 2022 restructuring plan, $96 of charges
associated with the Company's previously disclosed 2021
organizational restructuring plan and the reversal of $21 of
charges associated with the Company's previously disclosed 2020
organizational restructuring plan. |
|
(2) Excludes (i) the net impact of $10,734 of charges
associated with the Company's previously disclosed 2023
restructuring plan, $915 of charges associated with the Company's
previously disclosed 2022 restructuring plan and the reversal of
$39 of charges associated with the Company's previously disclosed
2021 organizational restructuring plan, and (ii) the impact of
$8,605 of acquisition transaction costs. |
|
(3) Excludes (i) the net impact of (w) $19,869 of charges and
$10,734 of charges associated with the Company's previously
disclosed 2023 restructuring plan recorded to cost of subscription
revenues and selling, general and administrative expenses,
respectively, (x) the reversal of $269 of charges and $915 of
charges associated with the Company's previously disclosed 2022
restructuring plan recorded to cost of subscription revenues and
selling, general and administrative expenses, respectively, (y) $96
of charges and the reversal of $39 of charges associated with the
Company's previously disclosed 2021 organizational restructuring
plan recorded to cost of subscription revenues and selling, general
and administrative expenses, respectively, and (z) the reversal of
$21 of charges associated with the Company's previously disclosed
2020 organizational restructuring plan recorded to cost of
subscription revenues, and (ii) the impact of $8,605 of acquisition
transaction costs recorded to selling, general and administrative
expenses. |
|
(4) Excludes the net impact of $4,400 of charges associated
with the Company's previously disclosed 2022 restructuring plan,
the reversal of $431 of charges associated with the Company's
previously disclosed 2021 organizational restructuring plan and the
reversal of $116 of charges associated with the Company's
previously disclosed 2020 organizational restructuring plan. |
|
(5) Excludes the impact of $18,273 of charges associated with
the Company's previously disclosed 2022 restructuring plan and $234
of charges associated with the Company's previously disclosed 2021
organizational restructuring plan. |
|
(6) Excludes (i) the impact of impairment charges of the
Company's franchise rights acquired of $298,291, $37,797 and $1,972
related to its United States, Canada and New Zealand operations,
respectively, and an impairment charge of the Company's goodwill
related to its Kurbo operations of $1,101 and (ii) the net impact
of (w) $4,400 of charges and $18,273 of charges associated with the
Company's previously disclosed 2022 restructuring plan recorded to
cost of subscription revenues and selling, general and
administrative expenses, respectively, (x) the reversal of $431 of
charges associated with the Company's previously disclosed 2021
organizational restructuring plan recorded to cost of subscription
revenues, (y) $234 of charges associated with the Company's
previously disclosed 2021 organizational restructuring plan
recorded to selling, general and administrative expenses and (z)
the reversal of $116 of charges associated with the Company's
previously disclosed 2020 organizational restructuring plan
recorded to cost of subscription revenues. |
| |
|
WW INTERNATIONAL, INC. AND SUBSIDIARIES |
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
|
|
|
(IN THOUSANDS) |
|
|
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
| |
|
|
|
September 30, |
|
October 1, |
|
September 30, |
|
October 1, |
|
| |
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net Income (Loss) |
|
$ |
43,731 |
|
|
$ |
(206,036 |
) |
|
$ |
(24,120 |
) |
|
$ |
(221,087 |
) |
(1) |
| |
Interest |
|
|
24,508 |
|
|
|
20,912 |
|
|
|
71,429 |
|
|
|
58,837 |
|
|
| |
Taxes |
|
|
|
(38,447 |
) |
|
|
(70,749 |
) |
|
|
(18,933 |
) |
|
|
(73,246 |
) |
(1) |
| |
Depreciation and Amortization |
|
|
13,428 |
|
|
|
10,544 |
|
|
|
35,633 |
|
|
|
31,941 |
|
|
| |
Stock-based Compensation |
|
|
3,225 |
|
|
|
3,376 |
|
|
|
8,956 |
|
|
|
10,362 |
|
|
| |
EBITDAS |
|
$ |
46,445 |
|
|
$ |
(241,953 |
) |
|
$ |
72,965 |
|
|
$ |
(193,193 |
) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Franchise Rights Acquired and Goodwill Impairments |
|
|
|
— |
|
|
|
312,741 |
|
(2) |
|
— |
|
|
|
339,161 |
|
(3) |
| |
2023 Plan Restructuring Charges (4) |
|
|
6,187 |
|
|
|
— |
|
|
|
30,603 |
|
|
|
— |
|
|
| |
2022 Plan Restructuring Charges (5) |
|
|
(212 |
) |
|
|
3,557 |
|
|
|
646 |
|
|
|
22,674 |
|
|
| |
2021 Plan Restructuring Charges (6) |
|
|
— |
|
|
|
103 |
|
|
|
57 |
|
|
|
(198 |
) |
|
| |
2020 Plan Restructuring Charges (7) |
|
|
— |
|
|
|
— |
|
|
|
(21 |
) |
|
|
(116 |
) |
|
| |
Acquisition Transaction Costs (8) |
|
|
— |
|
|
|
— |
|
|
|
8,605 |
|
|
|
— |
|
|
| |
Adjusted EBITDAS |
|
$ |
52,420 |
|
|
$ |
74,448 |
|
|
$ |
112,855 |
|
|
$ |
168,328 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ___ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Note: Totals may
not sum due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Certain amounts have been revised for the nine months
ended October 1, 2022 to correct immaterial errors related to
certain tax matters, which will be more fully described in the
Company's Form 10-Q filing for the fiscal quarter ended September
30, 2023. |
|
|
|
(2) Impairment charges of the Company's franchise rights
acquired of $298,291, $13,312 and $1,138 related to its United
States, Canada and New Zealand operations, respectively. |
|
|
|
(3) Impairment charges of the Company's franchise rights
acquired of $298,291, $37,797 and $1,972 related to its United
States, Canada and New Zealand operations, respectively, and an
impairment charge of the Company's goodwill related to its Kurbo
operations of $1,101. |
|
|
|
(4) Charges associated with the Company's previously disclosed
2023 restructuring plan. |
|
|
|
(5) The reversal of charges or charges, as applicable,
associated with the Company's previously disclosed 2022
restructuring plan. |
|
|
|
(6) Charges or the reversal of charges, as applicable,
associated with the Company's previously disclosed 2021
organizational restructuring plan. |
|
|
|
(7) The reversal of charges associated with the Company's
previously disclosed 2020 organizational restructuring plan. |
|
|
|
(8) Certain non-recurring transaction costs in connection with
the Company's acquisition of Sequence. |
|
|
| |
|
WW INTERNATIONAL, INC. AND SUBSIDIARIES |
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
|
|
(IN THOUSANDS, EXCEPT RATIOS) |
|
|
UNAUDITED |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Trailing Twelve |
|
| |
|
|
Q4 2022 |
|
Q1 2023 |
|
Q2 2023 |
|
Q3 2023 |
|
Months |
|
| |
Net Debt
to Adjusted EBITDAS |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net (Loss) Income |
$ |
(35,780 |
) |
(1) |
$ |
(118,679 |
) |
|
|
$ |
50,828 |
|
|
$ |
43,731 |
|
|
$ |
(59,900 |
) |
|
| |
Interest |
|
22,304 |
|
|
|
22,846 |
|
|
|
24,075 |
|
|
|
24,508 |
|
|
|
93,733 |
|
|
|
|
Taxes |
|
|
(36,689 |
) |
(1) |
|
67,580 |
|
|
|
(48,066 |
) |
|
|
(38,447 |
) |
|
|
(55,622 |
) |
|
| |
Depreciation and Amortization |
|
10,407 |
|
|
|
10,273 |
|
|
|
11,932 |
|
|
|
13,428 |
|
|
|
46,040 |
|
|
| |
Stock-based Compensation |
|
2,590 |
|
|
|
2,669 |
|
|
|
3,063 |
|
|
|
3,225 |
|
|
|
11,547 |
|
|
| |
EBITDAS |
$ |
(37,168 |
) |
(1) |
$ |
(15,311 |
) |
|
$ |
41,832 |
|
|
$ |
46,445 |
|
|
$ |
35,798 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Franchise Rights Acquired and Goodwill Impairments |
|
|
57,566 |
|
(2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
57,566 |
|
|
| |
2023 Plan Restructuring Charges (3) |
|
13,608 |
|
|
|
22,632 |
|
|
|
1,784 |
|
|
|
6,187 |
|
|
|
44,211 |
|
|
| |
2022 Plan Restructuring Charges (4) |
|
4,507 |
|
|
|
40 |
|
|
|
818 |
|
|
|
(212 |
) |
|
|
5,153 |
|
|
| |
2021 Plan Restructuring Charges (5) |
|
(142 |
) |
|
|
(7 |
) |
|
|
64 |
|
|
|
— |
|
|
|
(85 |
) |
|
| |
2020 Plan Restructuring Charges (6) |
|
(621 |
) |
|
|
(5 |
) |
|
|
(16 |
) |
|
|
— |
|
|
|
(642 |
) |
|
| |
Acquisition Transaction Costs (7) |
|
— |
|
|
|
3,719 |
|
|
|
4,886 |
|
|
|
— |
|
|
|
8,605 |
|
|
| |
Adjusted EBITDAS |
$ |
37,750 |
|
(1) |
$ |
11,068 |
|
|
$ |
49,368 |
|
|
$ |
52,420 |
|
|
$ |
150,606 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Debt |
|
|
|
|
|
|
|
|
$ |
1,425,419 |
|
|
| |
Less: Cash |
|
|
|
|
|
|
|
|
|
107,498 |
|
|
| |
Net Debt |
|
|
|
|
|
|
|
|
$ |
1,317,921 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Debt to Net Loss |
|
|
|
|
|
|
|
|
|
(23.8 |
) |
X |
| |
Net Debt to Adjusted EBITDAS |
|
|
|
|
|
|
|
|
|
8.8 |
|
X |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ___ |
|
|
|
|
|
|
|
|
|
|
|
| Note: Totals may
not sum due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
(1) Certain amounts have been revised for Q4 2022 to correct
immaterial errors related primarily to certain tax matters, which
will be more fully described in the Company's Form 10-Q filing for
the fiscal quarter ended September 30, 2023. |
|
|
(2) Impairment charges of the Company's franchise rights
acquired of $25,739, $19,657, $8,275 and $1,872 related to its
United States, Canada, United Kingdom and Australia units of
account, respectively, and an impairment charge of the Company's
goodwill related to its Republic of Ireland reporting unit of
$2,023. |
|
|
(3) Charges associated with the Company's previously disclosed
2023 restructuring plan. |
|
|
(4) Charges or the reversal of charges, as applicable,
associated with the Company's previously disclosed 2022
restructuring plan. |
|
|
(5) The reversal of charges or charges, as applicable,
associated with the Company's previously disclosed 2021
organizational restructuring plan. |
|
|
(6) The reversal of charges associated with the Company's
previously disclosed 2020 organizational restructuring plan. |
|
|
(7) Certain non-recurring transaction costs in connection with
the Company's acquisition of Sequence, which includes $3,719 recast
for Q1 2023. |
|
| |
| WW
INTERNATIONAL, INC. AND SUBSIDIARIES |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
| (IN
MILLIONS) |
|
UNAUDITED |
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
Full Year
2023 |
|
| |
|
|
Operating Income Guidance Reconciliation |
|
| |
|
|
|
|
| |
Operating Income |
$31.0 - $43.0 |
|
| |
Net Restructuring Charges (1) |
$(40.0) -
$(33.0) |
|
| |
Acquisition Transaction Costs (2) |
$(8.6) |
|
| |
Adjusted Operating Income |
$80.0 - $85.0 |
|
| |
|
|
|
|
|
(1) Reflects the remaining net restructuring charges incurred
and expected to be incurred in fiscal 2023 related to the Company's
previously disclosed 2023 restructuring plan, 2022 restructuring
plan, 2021 organizational restructuring plan and 2020
organizational restructuring plan. |
|
(2) Reflects certain non-recurring transaction costs in
connection with the Company's acquisition of Sequence, which
includes $3.7 million recast for the first quarter of fiscal
2023. |
| |
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