Ww International, Inc DEFA14A, filed Feb 27, 2020

WW INTERNATIONAL, INC.

DATED: February 26, 2020

/s/ Nicholas P. Hotchkin

Nicholas P. Hotchkin

Chief Financial Officer, Operating Officer, North America and President, Emerging Markets

Ww International, Inc. (WW)

DEFA14A 2020-02-27

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Added on October 18, 2026

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	December 28, 2019			December 29, 2018

ASSETS
Cash and cash equivalents	$	182,736		$	236,974
Other current assets		112,654			129,450

TOTAL CURRENT ASSETS		295,390			366,424
Property and equipment, net		54,066			52,202
Operating lease assets		151,983			—
Goodwill, franchise rights and other intangible assets, net		970,392			960,815
Other assets		26,483			35,100

TOTAL ASSETS	$	1,498,314		$	1,414,541


LIABILITIES AND TOTAL DEFICIT
Portion of long-term debt due within one year	$	96,250		$	77,000
Portion of operating lease liabilities due within one year		33,236			—
Other current liabilities		264,584			264,316

TOTAL CURRENT LIABILITIES		394,070			341,316
Long-term debt		1,479,920			1,669,708
Long-term operating lease liabilities		128,464			—
Deferred income taxes, other		177,681			208,547

TOTAL LIABILITIES	$	2,180,135		$	2,219,571


Redeemable noncontrolling interest		3,722			3,913

Shareholders’ deficit		(685,543	)		(808,943	)

TOTAL LIABILITIES AND TOTAL DEFICIT	$	1,498,314		$	1,414,541


	Three Months Ended
	December 28,			December 29,
	2019			2018
Service revenues, net ⁽¹⁾	$	288,731		$	288,834
Product sales and other, net ⁽²⁾		43,852			41,552

Revenues, net		332,583			330,386

Cost of services ⁽³⁾		129,454			118,181
Cost of product sales and other		27,978			26,985

Cost of revenues		157,432			145,166

Gross profit		175,151			185,220
Marketing expenses		43,455			36,464
Selling, general and administrative expenses		65,810			68,409

Operating income		65,886			80,347
Interest expense		32,222			35,108
Other expense, net		(443	)		600

Income before income taxes		34,107			44,639
Provision for income taxes		4,679			912

Net income		29,428			43,727
Net (income) loss attributable to the noncontrolling interest		(45	)		58

Net income attributable to WW International, Inc.	$	29,383		$	43,785

Earnings Per Share attributable to WW International, Inc.
Basic	$	0.44		$	0.65

Diluted	$	0.42		$	0.63

Weighted average common shares outstanding:
Basic		67,365			66,895

Diluted		70,018			69,942


	Twelve Months Ended
	December 28,		December 29,
	2019		2018
Service revenues, net ⁽¹⁾	$	1,207,266	$	1,273,196
Product sales and other, net ⁽²⁾		206,071		240,925

Revenues, net		1,413,337		1,514,121

Cost of services ⁽³⁾		502,907		508,477
Cost of product sales and other		123,748		139,234

Cost of revenues		626,655		647,711

Gross profit		786,682		866,410
Marketing expenses		243,998		226,319
Selling, general and administrative expenses		254,699		251,106

Operating income		287,985		388,985
Interest expense		135,267		142,346
Other expense, net		1,758		2,578

Income before income taxes		150,960		244,061
Provision for income taxes		31,513		20,493

Net income		119,447		223,568
Net loss attributable to the noncontrolling interest		169		181

Net income attributable to WW International, Inc.	$	119,616	$	223,749

Earnings Per Share attributable to WW International, Inc.
Basic	$	1.78	$	3.38

Diluted	$	1.72	$	3.19

Weighted average common shares outstanding:
Basic		67,188		66,280

Diluted		69,550		70,115


										Q4 2019 Variance
													2019
													Constant
	Q4 2019							Q4 2018		2019			Currency
			Currency			Constant				vs			vs
	GAAP		Adjustment			Currency		GAAP		2018			2018
Selected Financial Data
Consolidated Company Revenues	$	332,583	$	2,763		$	335,346	$	330,386		0.7	%		1.5	%
Consolidated Digital Subscription Revenues ⁽¹⁾	$	150,232	$	1,542		$	151,774	$	134,902		11.4	%		12.5	%
Consolidated Studio + Digital Fees ⁽²⁾	$	138,498	$	878		$	139,376	$	153,932		(10.0	%)		(9.5	%)
Consolidated Service Revenues ⁽³⁾	$	288,731	$	2,420		$	291,151	$	288,834		(0.0	%)		0.8	%
Consolidated Product Sales and Other ⁽⁴⁾	$	43,852	$	343		$	44,195	$	41,552		5.5	%		6.4	%

North America
Digital Subscription Revenues⁽¹⁾	$	98,700	$	(5	)	$	98,695	$	89,675		10.1	%		10.1	%
Studio + Digital Fees ⁽²⁾	$	103,680	$	—		$	103,680	$	114,173		(9.2	%)		(9.2	%)
Service Revenues ⁽³⁾	$	202,381	$	(5	)	$	202,376	$	203,848		(0.7	%)		(0.7	%)
Product Sales and Other⁽⁴⁾	$	27,589	$	—		$	27,589	$	24,410		13.0	%		13.0	%
Total Revenues	$	229,969	$	(4	)	$	229,965	$	228,258		0.7	%		0.7	%
CE
Digital Subscription Revenues⁽¹⁾	$	41,010	$	1,359		$	42,369	$	36,140		13.5	%		17.2	%
Studio + Digital Fees ⁽²⁾	$	19,687	$	632		$	20,319	$	23,605		(16.6	%)		(13.9	%)
Service Revenues ⁽³⁾	$	60,697	$	1,990		$	62,687	$	59,745		1.6	%		4.9	%
Product Sales and Other⁽⁴⁾	$	7,905	$	286		$	8,191	$	8,062		(1.6	%)		1.6	%
Total Revenues	$	68,604	$	2,274		$	70,878	$	67,807		1.2	%		4.5	%
UK
Digital Subscription Revenues⁽¹⁾	$	6,879	$	(6	)	$	6,873	$	5,756		19.5	%		19.4	%
Studio + Digital Fees ⁽²⁾	$	10,651	$	8		$	10,659	$	11,124		(4.2	%)		(4.2	%)
Service Revenues ⁽³⁾	$	17,530	$	2		$	17,532	$	16,880		3.8	%		3.9	%
Product Sales and Other⁽⁴⁾	$	4,958	$	25		$	4,983	$	5,340		(7.2	%)		(6.7	%)
Total Revenues	$	22,488	$	27		$	22,515	$	22,221		1.2	%		1.3	%
Other ⁽⁵⁾
Digital Subscription Revenues⁽¹⁾	$	3,643	$	194		$	3,837	$	3,331		9.4	%		15.2	%
Studio + Digital Fees ⁽²⁾	$	4,480	$	239		$	4,719	$	5,030		(11.0	%)		(6.2	%)
Service Revenues ⁽³⁾	$	8,123	$	433		$	8,556	$	8,361		(2.9	%)		2.3	%
Product Sales and Other⁽⁴⁾	$	3,400	$	61		$	3,461	$	3,738		(9.0	%)		(7.4	%)
Total Revenues	$	11,522	$	494		$	12,016	$	12,099		(4.8	%)		(0.7	%)


									Full Year 2019 Variance
												2019
												Constant
	Full Year 2019						Full Year 2018		2019			Currency
			Currency		Constant				vs			vs
	GAAP		Adjustment		Currency		GAAP		2018			2018
Selected Financial Data
Consolidated Company Revenues	$	1,413,337	$	25,754	$	1,439,091	$	1,514,121		(6.7	%)		(5.0	%)
Consolidated Digital Subscription Revenues ⁽¹⁾	$	609,996	$	12,429	$	622,425	$	567,767		7.4	%		9.6	%
Consolidated Studio + Digital Fees ⁽²⁾	$	597,270	$	9,213	$	606,483	$	705,429		(15.3	%)		(14.0	%)
Consolidated Service Revenues ⁽³⁾	$	1,207,266	$	21,642	$	1,228,908	$	1,273,196		(5.2	%)		(3.5	%)
Consolidated Product Sales and Other ⁽⁴⁾	$	206,071	$	4,112	$	210,183	$	240,925		(14.5	%)		(12.8	%)

North America
Digital Subscription Revenues⁽¹⁾	$	401,890	$	675	$	402,565	$	378,678		6.1	%		6.3	%
Studio + Digital Fees ⁽²⁾	$	446,576	$	736	$	447,312	$	522,372		(14.5	%)		(14.4	%)
Service Revenues ⁽³⁾	$	848,466	$	1,411	$	849,877	$	901,050		(5.8	%)		(5.7	%)
Product Sales and Other⁽⁴⁾	$	130,836	$	204	$	131,040	$	146,201		(10.5	%)		(10.4	%)
Total Revenues	$	979,302	$	1,615	$	980,917	$	1,047,251		(6.5	%)		(6.3	%)
CE
Digital Subscription Revenues⁽¹⁾	$	167,008	$	9,467	$	176,475	$	149,571		11.7	%		18.0	%
Studio + Digital Fees ⁽²⁾	$	87,962	$	5,039	$	93,001	$	107,528		(18.2	%)		(13.5	%)
Service Revenues ⁽³⁾	$	254,970	$	14,505	$	269,475	$	257,099		(0.8	%)		4.8	%
Product Sales and Other⁽⁴⁾	$	38,263	$	2,297	$	40,560	$	47,226		(18.9	%)		(14.1	%)
Total Revenues	$	293,233	$	16,803	$	310,036	$	304,325		(3.6	%)		1.9	%
UK
Digital Subscription Revenues⁽¹⁾	$	26,898	$	1,216	$	28,114	$	25,557		5.2	%		10.0	%
Studio + Digital Fees ⁽²⁾	$	44,145	$	2,064	$	46,209	$	52,676		(16.2	%)		(12.3	%)
Service Revenues ⁽³⁾	$	71,043	$	3,280	$	74,323	$	78,233		(9.2	%)		(5.0	%)
Product Sales and Other⁽⁴⁾	$	23,514	$	1,168	$	24,682	$	28,839		(18.5	%)		(14.4	%)
Total Revenues	$	94,557	$	4,448	$	99,005	$	107,072		(11.7	%)		(7.5	%)
Other ⁽⁵⁾
Digital Subscription Revenues⁽¹⁾	$	14,200	$	1,071	$	15,271	$	13,961		1.7	%		9.4	%
Studio + Digital Fees ⁽²⁾	$	18,587	$	1,375	$	19,962	$	22,853		(18.7	%)		(12.7	%)
Service Revenues ⁽³⁾	$	32,787	$	2,446	$	35,233	$	36,814		(10.9	%)		(4.3	%)
Product Sales and Other⁽⁴⁾	$	13,458	$	464	$	13,922	$	18,659		(27.8	%)		(25.3	%)
Total Revenues	$	46,245	$	2,910	$	49,155	$	55,473		(16.6	%)		(11.4	%)


	Q1 2019			Q2 2019		Q3 2019		Q4 2019		Trailing Twelve Months
Net Debt to EBITDAS
Net (Loss) Income	$	(10,687	)	$	53,834	$	47,086	$	29,383	$	119,616
Interest		35,195			34,732		33,118		32,222		135,267
Taxes		(2,875	)		16,586		13,123		4,679		31,513
Depreciation and Amortization		11,405			11,288		10,850		11,474		45,017
Stock-based Compensation		4,812			4,872		5,243		5,544		20,471

EBITDAS	$	37,850		$	121,312	$	109,420	$	83,302	$	351,884

Total Debt										$	1,576,170
Less: Cash											182,736

Net Debt										$	1,393,435

Net Debt to EBITDAS											4.0 X


675 Avenue of the Americas, 6th Floor, New York, New York		10010
(Address of principal executive offices)		(Zip Code)


	Three Months Ended
	December 28,		December 29,		Variance
	2019		2018		Variance
Digital Paid Weeks (1)
North America		24,800		22,174		11.8	%
CE		11,138		9,637		15.6	%
UK		2,544		2,112		20.4	%
Other (2)		817		729		12.1	%

Total Digital Paid Weeks		39,299		34,652		13.4	%

Studio + Digital Paid Weeks (1)
North America		11,892		13,182		(9.8	%)
CE		2,685		2,878		(6.7	%)
UK		2,494		2,507		(0.5	%)
Other (2)		548		622		(11.8	%)

Total Studio + Digital Paid Weeks		17,619		19,189		(8.2	%)

Total Paid Weeks (1)
North America		36,692		35,356		3.8	%
CE		13,822		12,515		10.4	%
UK		5,038		4,619		9.1	%
Other (2)		1,366		1,351		1.1	%

Total Paid Weeks		56,918		53,841		5.7	%

End of Period Digital Subscribers (3)
North America		1,871		1,648		13.5	%
CE		863		730		18.2	%
UK		190		160		18.5	%
Other (2)		61		56		11.0	%

Total End of Period Digital Subscribers		2,985		2,594		15.1	%

End of Period Studio + Digital Subscribers (3)
North America		852		910		(6.4	%)
CE		197		210		(6.4	%)
UK		172		174		(1.0	%)


	Twelve Months Ended
	December 28,		December 29,		Variance
	2019		2018		Variance
Digital Paid Weeks (1)
North America		100,920		93,906		7.5	%
CE		45,809		38,845		17.9	%
UK		10,056		8,944		12.4	%
Other (2)		3,180		2,899		9.7	%

Total Digital Paid Weeks		159,965		144,594		10.6	%

Studio + Digital Paid Weeks (1)
North America		50,735		57,305		(11.5	%)
CE		11,604		12,574		(7.7	%)
UK		10,454		10,886		(4.0	%)
Other (2)		2,291		2,521		(9.1	%)

Total Studio + Digital Paid Weeks		75,084		83,286		(9.8	%)

Total Paid Weeks (1)
North America		151,655		151,211		0.3	%
CE		57,413		51,419		11.7	%
UK		20,509		19,830		3.4	%
Other (2)		5,472		5,420		1.0	%

Total Paid Weeks		235,050		227,880		3.1	%

End of Period Digital Subscribers (3)
North America		1,871		1,648		13.5	%
CE		863		730		18.2	%
UK		190		160		18.5	%
Other (2)		61		56		11.0	%

Total End of Period Digital Subscribers		2,985		2,594		15.1	%

End of Period Studio + Digital Subscribers (3)
North America		852		910		(6.4	%)
CE		197		210		(6.4	%)
UK		172		174		(1.0	%)