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WW Announces First Quarter 2022 Results

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·24 min read
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  • Q1 2022 End of Period Subscribers of 4.5 million

  • Q1 2022 Revenues of $298 million

  • Q1 2022 Gross Margin of 60.5%

  • Q1 2022 Operating Income of $9.0 million

  • 2022 Restructuring Plan expected to result in nearly $30 million of annual run-rate cost savings

  • FY 2022 Guidance: Revenues in the range of $1.09 billion to $1.14 billion and GAAP EPS in the range of $0.72 to $0.78 per fully diluted share, incorporating the negative impact of approximately $0.20 to $0.24 per fully diluted share of estimated restructuring charges

NEW YORK, May 05, 2022 (GLOBE NEWSWIRE) -- WW International, Inc. (NASDAQ: WW) (“WeightWatchers,” “WW,” or “the Company”) today announced its results for the first quarter of fiscal 2022.

“WeightWatchers has long been recognized as the leader in weight loss, positioned at the intersection of science and community. I am excited to bring my expertise in building digital communities to WW and to take our product to the next level,” said Sima Sistani, the Company’s CEO. “By narrowing our focus, I am confident we will be able to return the Company to profitable growth.”

Amy O’Keefe, the Company’s CFO, said, “We delivered EPS ahead of our guidance range for Q1, primarily due to lower marketing spend in our international markets, strong gross margin, and cost management. We have taken significant and decisive action to reset the cost structure, while shifting the organization’s focus to executing on a narrowed set of priorities. 2022 will serve as the foundation for future growth and operating margin expansion.”

Q1 2022 Consolidated Results

% Change

Three Months Ended

Adjusted for

April 2,

April 3,

Constant

2022

2021

% Change

Currency(1)

(in millions except percentages and per share amounts)

Subscription Revenues, net

$257.0

$279.8

(8.2

%)

(6.2

%)

Product Sales and Other, net

40.8

52.0

(21.5

%)

(20.0

%)

Revenues, net

$297.8

$331.8

(10.3

%)

(8.4

%)

Gross Profit

$180.1

$193.4

(6.9

%)

(4.6

%)

Adjustments(1)

2021 Plan Restructuring Charges

0.0

5.2

2020 Plan Restructuring Charges

(0.1

)

--

Adjusted Gross Profit(1)

$180.0

$198.6

(9.4

%)

(7.1

%)

Operating Income

$9.0

$2.8

216.8

%

275.9

%

Adjustments(1)

2021 Plan Restructuring Charges

0.3

5.5

2020 Plan Restructuring Charges

(0.1

)

--

Adjusted Operating Income(1)

$9.1

$8.4

9.0

%

29.0

%

Net Loss

($8.2

)

($18.2

)

(54.8

%)

(61.3

%)

EPS

($0.12

)

($0.26

)

(55.4

%)

(61.8

%)



Total Paid Weeks

58.9

63.1

(6.6

%)

N/A

Digital(2) Paid Weeks

49.2

53.5

(8.0

%)

N/A

Workshops + Digital(3) Paid Weeks

9.7

9.6

1.5

%

N/A

End of Period Subscribers(4)

4.5

5.0

(8.3

%)

N/A

Digital Subscribers

3.8

4.2

(9.3

%)

N/A

Workshops + Digital Subscribers

0.7

0.7

(2.8

%)

N/A

___________________________________
Note: Totals may not sum due to rounding.
(1) See “Reconciliation of Non-GAAP Financial Measures” attached to this release for further detail on adjustments to GAAP financial measures.
(2) “Digital” refers to providing subscriptions to the Company’s digital product offerings, including Digital 360 and Personal Coaching + Digital.
(3) “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. It also includes the provision of access to workshops for members who do not subscribe to commitment plans, including the Company’s “pay-as-you-go” members.
(4) “Subscribers” refers to Digital subscribers and Workshops + Digital subscribers who participate in recur bill programs in Company-owned operations.

Q1 2022 Business and Financial Highlights

  • End of Period Subscribers in Q1 2022 were down 8.3% versus the prior year period, driven by declines in all major geographic markets. Q1 2022 End of Period Digital Subscribers decreased 9.3% and End of Period Workshops + Digital Subscribers decreased 2.8% versus the prior year period.

  • Total Paid Weeks in Q1 2022 were down 6.6% versus the prior year period, driven by declines in all major geographic markets. Q1 2022 Digital Paid Weeks decreased 8.0% and Workshops + Digital Paid Weeks increased 1.5% versus the prior year period.

  • Revenues in Q1 2022 were $297.8 million. On a constant currency basis, Q1 2022 revenues decreased 8.4% versus the prior year period.

    • Subscription Revenues in Q1 2022 were $257.0 million. On a constant currency basis, these revenues decreased 6.2% versus the prior year period, driven by declines in both Digital Subscription Revenues and Workshops + Digital Fees driven primarily by worsened consumer sentiment in the current environment.

    • Product Sales and Other in Q1 2022 were $40.8 million. On a constant currency basis, these revenues decreased 20.0% versus the prior year period, primarily due to lower e-commerce sales in the quarter.

  • Gross Profit in Q1 2022 was $180.1 million. Adjusted gross profit in Q1 2022, which excluded the net impact of ($0.1) million of restructuring charges, was $180.0 million. Gross profit in Q1 2021 was $193.4 million. Adjusted gross profit in Q1 2021, which excluded the impact of $5.2 million of restructuring charges, was $198.6 million.

    • Gross Margin in Q1 2022 was 60.5%, as compared to 58.3% in the prior year period. Adjusted gross margin in Q1 2022 was 60.5%, up 60 basis points from an adjusted gross margin of 59.9% in the prior year period primarily driven by a revenue mix shift to the Company’s higher margin Digital business.

  • Operating Income in Q1 2022 was $9.0 million. Adjusted operating income in Q1 2022, which excluded the net impact of $0.1 million of restructuring charges, was $9.1 million, up 9% versus the prior year period. Operating income in Q1 2021 was $2.8 million. Adjusted operating income in Q1 2021, which excluded the impact of $5.5 million of restructuring charges, was $8.4 million.

  • Effective Tax Rate in Q1 2022 was 17.9%, compared to 30.0% in the prior year period.

  • Net Loss in Q1 2022 was $8.2 million compared to a net loss of $18.2 million in the prior year period.

  • Diluted Net Loss per share in Q1 2022 was $0.12 compared to a diluted net loss per share of $0.26 in the prior year period.

    • Certain items affect year-over-year comparability.

      • Q1 2022 results were negatively impacted by $0.1 million, a de minimis per share impact, due to the net impact of restructuring charges.

      • Q1 2021 results were negatively impacted by $0.06 per fully diluted share due to the impact of restructuring charges.

Other Items

  • Cash balance as of April 2, 2022 was $127.6 million. On that same date, the Company had no outstanding borrowings under its $175.0 million revolving credit facility.

  • 2022 Restructuring Plan: As previously announced, the Company committed to a restructuring plan consisting of an organizational realignment to simplify the Company’s corporate structure and reduce associated costs and a continued rationalization of its real estate portfolio. In connection with the 2022 Restructuring Plan, the Company anticipates recording restructuring charges which it currently estimates will range between $18.0 million to $22.0 million in the aggregate, the majority of which will be recorded in the second quarter of fiscal 2022. The plan is expected to result in nearly $30.0 million of annual run-rate cost savings, with in-year fiscal 2022 savings of $16.0 million to $20.0 million.

Full Year Fiscal 2022 Guidance

The Company is providing the following full year fiscal 2022 guidance:

  • Revenues are expected to be in the range of $1.09 billion to $1.14 billion.

  • GAAP EPS expected to be in the range of $0.72 to $0.78 per fully diluted share, incorporating the negative impact of approximately $0.20 to $0.24 per fully diluted share of estimated restructuring charges.

First Quarter 2022 Conference Call and Webcast
The Company has scheduled a conference call today at 5:00 p.m. ET. During the conference call, Sima Sistani, Chief Executive Officer, and Amy O’Keefe, Chief Financial Officer, will discuss the first quarter of fiscal 2022 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.

CEO Video Message
To introduce the investment community to WW’s new CEO, a short video message from Sima Sistani is available on the Company’s corporate website in the Investors section at corporate.ww.com/Investors. The video will be available on this site for approximately 90 days.

Statement regarding Non-GAAP Financial Measures
The 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 profit margin, operating income, operating income 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 first quarter of fiscal 2022 to exclude (a) the net impact of (x) charges associated with our previously disclosed 2021 organizational restructuring plan (the “2021 plan”), and (y) the reversal of certain of the charges associated with our previously disclosed 2020 organizational restructuring plan (the “2020 plan”) or (b) the impact of charges associated with the 2021 plan; and (ii) the first quarter of fiscal 2021 to exclude the impact of charges associated with the 2021 plan. We generally refer to such non-GAAP measures as follows: (i) with respect to the adjustments for the first quarter of fiscal 2022, as excluding or adjusting for the net impact of restructuring charges or the impact of restructuring charges, as applicable; and (ii) with respect to the adjustments for the first quarter of fiscal 2021, as excluding or adjusting for the impact of the 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, early extinguishment of debt with respect to the Company’s previously disclosed April 2021 debt refinancing and voluntary debt prepayments, and restructuring charges (including the net impact where applicable) (“Adjusted EBITDAS”), net debt, and a net debt to Adjusted EBITDAS ratio. 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.
We are a human-centric technology company powered by the world's leading commercial weight management program. As a global wellness company, we inspire millions of people to adopt healthy habits for real life. Through our comprehensive digital app, expert Coaches and engaging experiences, members follow our proven, sustainable, science-based program focused on food, activity, mindset and sleep. Leveraging nearly six decades of expertise in nutritional and behavioral change science, providing real human connection and building inspired communities, our purpose is to democratize and deliver holistic wellness for all. To learn more about the WW approach to healthy living, please visit ww.com. For more information about our global business, visit our corporate website at corporate.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, revenue and earnings guidance and any statements about the Company’s plans, strategies, objectives, initiatives, roadmap and prospects and the impact of the COVID-19 virus. The Company generally uses the words “may,” “will,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend,” “aim,” "bring," "going to" 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 ongoing global outbreak of the COVID-19 virus on the Company’s business and liquidity and on the business and 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 the Company’s ability to successfully expand into new channels of distribution or respond to consumer trends or sentiment; the ability to successfully implement strategic initiatives; the effectiveness and efficiency of the Company’s advertising and marketing programs, including the strength of its social media presence; the impact on the Company’s reputation of actions taken by its franchisees, licensees, suppliers and other partners; 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 expiration or early termination by the Company of leases; uncertainties related to a downturn in general economic conditions or consumer confidence, including the potential impact of political and social unrest, and the existing inflationary environment; 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; the seasonal nature of the Company’s 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 the Company’s 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 the war in Ukraine; the outcomes of litigation or regulatory actions; the impact of existing and future laws and regulations; the possibility that the interests of Artal Group S.A., the largest holder of the Company’s common stock and a shareholder with significant influence over the Company, will conflict with the Company’s interests or the interests of other holders of the Company’s common stock; 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 Securities and Exchange Commission. 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 United States Securities and Exchange Commission (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

April 2,

January 1,

2022

2022

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

127,640

$

153,794

Receivables (net of allowances: April 2, 2022 - $1,891 and January 1, 2022 - $1,726)

39,266

29,321

Inventories

29,496

30,566

Prepaid income taxes

29,382

30,478

Prepaid expenses and other current assets

31,841

27,014

TOTAL CURRENT ASSETS

257,625

271,173

Property and equipment, net

34,688

37,219

Operating lease assets

86,302

89,902

Franchise rights acquired

785,852

785,195

Goodwill

163,353

157,374

Other intangible assets, net

62,268

61,126

Deferred income taxes

11,504

11,259

Other noncurrent assets

17,834

15,686

TOTAL ASSETS

$

1,419,426

$

1,428,934

LIABILITIES AND TOTAL DEFICIT

CURRENT LIABILITIES

Portion of long-term debt due within one year

$

$

Portion of operating lease liabilities due within one year

18,969

20,297

Accounts payable

29,339

22,444

Salaries and wages payable

53,112

57,401

Accrued marketing and advertising

10,191

15,904

Accrued interest

10,815

5,085

Other accrued liabilities

41,717

45,728

Derivative payable

2,912

14,670

Income taxes payable

618

1,748

Deferred revenue

48,991

45,855

TOTAL CURRENT LIABILITIES

216,664

229,132

Long-term debt, net

1,419,149

1,418,104

Long-term operating lease liabilities

75,527

78,157

Deferred income taxes

154,759

157,718

Other

2,656

2,227

TOTAL LIABILITIES

1,868,755

1,885,338

TOTAL DEFICIT

Common stock, $0 par value; 1,000,000 shares authorized; 122,052 shares issued at April 2, 2022 and 122,052 shares issued at January 1, 2022

0

0

Treasury stock, at cost, 51,923 shares at April 2, 2022 and 51,988 shares at January 1, 2022

(3,117,434

)

(3,120,149

)

Retained earnings

2,675,767

2,682,349

Accumulated other comprehensive loss

(7,662

)

(18,604

)

TOTAL DEFICIT

(449,329

)

(456,404

)

TOTAL LIABILITIES AND TOTAL DEFICIT

$

1,419,426

$

1,428,934


WW INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF NET INCOME

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

UNAUDITED

Three Months Ended

April 2,

April 3,

2022

2021

Subscription revenues, net (1)

$

256,985

$

279,820

Product sales and other, net (2)

40,776

51,976

Revenues, net

297,761

331,796

Cost of subscription revenues (3)

86,041

99,103

Cost of product sales and other

31,622

39,258

Cost of revenues

117,663

138,361

Gross profit

180,098

193,435

Marketing expenses

107,570

116,933

Selling, general and administrative expenses

63,558

73,671

Operating income

8,970

2,831

Interest expense

18,671

29,123

Other expense (income), net

344

(237

)

Loss before income taxes

(10,045

)

(26,055

)

Benefit from income taxes

(1,802

)

(7,828

)

Net loss

$

(8,243

)

$

(18,227

)

Net loss per share

Basic

$

(0.12

)

$

(0.26

)

Diluted

$

(0.12

)

$

(0.26

)

Weighted average common shares outstanding:

Basic

70,086

69,084

Diluted

70,086

69,084

Note: Totals may not sum due to rounding.

(1) Consists of net “Digital Subscription Revenues” and net “Workshops + Digital Fees”. "Digital Subscription Revenues" consist of the fees associated with subscriptions for the Company’s Digital offerings, including Digital 360 and Personal Coaching + Digital. "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.

(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 and Workshops + Digital services.


WW INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

UNAUDITED

Three Months Ended

April 2,

April 3,

2022

2021

Operating activities:

Net loss

$

(8,243

)

$

(18,227

)

Adjustments to reconcile net loss to cash used for operating activities:

Depreciation and amortization

10,759

13,180

Amortization of deferred financing costs and debt discount

1,254

2,231

Impairment of intangible and long-lived assets

42

184

Share-based compensation expense

4,700

5,341

Deferred tax benefit

(6,693

)

(1,361

)

Allowance for doubtful accounts

72

(12

)

Reserve for inventory obsolescence

1,254

2,416

Foreign currency exchange rate loss (gain)

623

(372

)

Changes in cash due to:

Receivables

(10,596

)

(6,008

)

Inventories

(120

)

2,792

Prepaid expenses

(4,106

)

(4,313

)

Accounts payable

7,118

(842

)

Accrued liabilities

(5,268

)

(1,756

)

Deferred revenue

3,560

(211

)

Other long term assets and liabilities, net

(3,003

)

(738

)

Income taxes

(1,807

)

(4,182

)

Cash used for operating activities

(10,454

)

(11,878

)

Investing activities:

Capital expenditures

(323

)

(688

)

Capitalized software expenditures

(8,905

)

(9,447

)

Cash paid for acquisitions

(4,350

)

(10,849

)

Other items, net

(11

)

(16

)

Cash used for investing activities

(13,589

)

(21,000

)

Financing activities:

Payments on long-term debt

(19,250

)

Taxes paid related to net share settlement of equity awards

(374

)

(237

)

Proceeds from stock options exercised

2,468

Other items, net

(35

)

(43

)

Cash used for financing activities

(409

)

(17,062

)

Effect of exchange rate changes on cash and cash equivalents

(1,702

)

(2,634

)

Net decrease in cash and cash equivalents

(26,154

)

(52,574

)

Cash and cash equivalents, beginning of period

153,794

165,887

Cash and cash equivalents, end of period

$

127,640

$

113,313


WW INTERNATIONAL, INC. AND SUBSIDIARIES

OPERATIONAL STATISTICS

(IN THOUSANDS, EXCEPT PERCENTAGES)

UNAUDITED

Three Months Ended

April 2,

April 3,

2022

2021

Variance

Digital Paid Weeks (1)

North America

31,414

33,471

(6.1

%)

CE

14,096

15,549

(9.3

%)

UK

2,611

3,398

(23.2

%)

Other (2)

1,084

1,086

(0.2

%)

Total Digital Paid Weeks

49,205

53,505

(8.0

%)

Workshops + Digital Paid Weeks (1)

North America

7,269

6,669

9.0

%

CE

1,320

1,521

(13.2

%)

UK

880

1,040

(15.4

%)

Other (2)

248

339

(27.0

%)

Total Workshops + Digital Paid Weeks

9,717

9,569

1.5

%

Total Paid Weeks (1)

North America

38,683

40,140

(3.6

%)

CE

15,416

17,070

(9.7

%)

UK

3,491

4,438

(21.3

%)

Other (2)

1,332

1,425

(6.6

%)

Total Paid Weeks

58,922

63,074

(6.6

%)

End of Period Digital Subscribers (3)

North America

2,451

2,631

(6.8

%)

CE

1,088

1,238

(12.1

%)

UK

206

267

(22.9

%)

Other (2)

81

82

(0.3

%)

Total End of Period Digital Subscribers

3,827

4,217

(9.3

%)

End of Period Workshops + Digital Subscribers (3)

North America

535

530

1.1

%

CE

101

111

(9.1

%)

UK

64

73

(12.3

%)

Other (2)

18

25

(28.2

%)

Total End of Period Workshops + Digital Subscribers

719

739

(2.8

%)

Total End of Period Subscribers (3)

North America

2,986

3,161

(5.5

%)

CE

1,189

1,349

(11.8

%)

UK

270

340

(20.6

%)

Other (2)

100

107

(6.9

%)

Total End of Period Subscribers

4,545

4,957

(8.3

%)

______
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 (including Digital 360 and Personal Coaching + Digital); (ii) “Workshops + Digital Paid Weeks” is the sum of total paid commitment plan weeks which include workshops and digital offerings and total “pay-as-you-go” weeks; and (iii) “Total Paid Weeks” is the sum of Digital Paid Weeks and Workshops + Digital Paid Weeks.

(2) Represents Australia, New Zealand and emerging markets.

(3) 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 Digital 360 and Personal Coaching + Digital, 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; and (iii) “End of Period Subscribers” is the sum of End of Period Digital Subscribers and End of Period Workshops + Digital Subscribers.


WW INTERNATIONAL, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(IN THOUSANDS, EXCEPT PERCENTAGES)

UNAUDITED

Q1 2022 Variance

2022

Constant

Q1 2022

Q1 2021

2022

Currency

Currency

Constant

vs

vs

GAAP

Adjustment

Currency

GAAP

2021

2021

Selected Financial Data

Consolidated Company Revenues

$

297,761

$

6,287

$

304,048

$

331,796

(10.3

%)

(8.4

%)

Consolidated Digital Subscription Revenues (1)

$

191,482

$

4,598

$

196,080

$

206,062

(7.1

%)

(4.8

%)

Consolidated Workshops + Digital Fees (2)

$

65,503

$

874

$

66,377

$

73,758

(11.2

%)

(10.0

%)

Consolidated Subscription Revenues (3)

$

256,985

$

5,472

$

262,458

$

279,820

(8.2

%)

(6.2

%)

Consolidated Product Sales and Other (4)

$

40,776

$

814

$

41,590

$

51,976

(21.5

%)

(20.0

%)

North America

Digital Subscription Revenues (1)

$

125,319

$

7

$

125,326

$

132,090

(5.1

%)

(5.1

%)

Workshops + Digital Fees (2)

$

50,980

$

2

$

50,982

$

54,904

(7.1

%)

(7.1

%)

Subscription Revenues (3)

$

176,299

$

8

$

176,307

$

186,994

(5.7

%)

(5.7

%)

Product Sales and Other (4)

$

28,014

$

-

$

28,014

$

34,321

(18.4

%)

(18.4

%)

Total Revenues

$

204,313

$

9

$

204,322

$

221,315

(7.7

%)

(7.7

%)

CE

Digital Subscription Revenues (1)

$

53,475

$

4,071

$

57,546

$

58,915

(9.2

%)

(2.3

%)

Workshops + Digital Fees (2)

$

8,222

$

633

$

8,855

$

10,940

(24.8

%)

(19.1

%)

Subscription Revenues (3)

$

61,697

$

4,705

$

66,402

$

69,855

(11.7

%)

(4.9

%)

Product Sales and Other (4)

$

9,205

$

690

$

9,895

$

12,041

(23.6

%)

(17.8

%)

Total Revenues

$

70,902

$

5,395

$

76,297

$

81,896

(13.4

%)

(6.8

%)

UK

Digital Subscription Revenues (1)

$

7,805

$

231

$

8,036

$

9,809

(20.4

%)

(18.1

%)

Workshops + Digital Fees (2)

$

4,422

$

135

$

4,557

$

5,169

(14.5

%)

(11.9

%)

Subscription Revenues (3)

$

12,227

$

365

$

12,592

$

14,978

(18.4

%)

(15.9

%)

Product Sales and Other (4)

$

2,212

$

58

$

2,270

$

4,089

(45.9

%)

(44.5

%)

Total Revenues

$

14,439

$

423

$

14,862

$

19,067

(24.3

%)

(22.1

%)

Other (5)

Digital Subscription Revenues (1)

$

4,883

$

289

$

5,172

$

5,248

(6.9

%)

(1.4

%)

Workshops + Digital Fees (2)

$

1,879

$

106

$

1,985

$

2,745

(31.6

%)

(27.7

%)

Subscription Revenues (3)

$

6,762

$

395

$

7,157

$

7,993

(15.4

%)

(10.5

%)

Product Sales and Other (4)

$

1,345

$

66

$

1,411

$

1,525

(11.8

%)

(7.4

%)

Total Revenues

$

8,107

$

460

$

8,567

$

9,518

(14.8

%)

(10.0

%)

____________
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, including Digital 360 and Personal Coaching + Digital.

(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) “Subscription Revenues” equal “Digital Subscription Revenues" plus “Workshops + Digital Fees”.

(4) “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 Other reportable segment, franchise fees with respect to commitment plans and royalties.

(5) Represents Australia, New Zealand, emerging markets and franchise revenues.


WW INTERNATIONAL, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(IN THOUSANDS, EXCEPT PERCENTAGES)

UNAUDITED

Q1 2022 Variance

2022 Constant Currency

2022

2022

Q1 2022

Q1 2021

Adjusted

Adjusted

Adjusted

2022

vs

2022

vs

Currency

Constant

Constant

vs

2021

vs

2021

GAAP

Adjustment

Adjusted

Adjustment

Currency

Currency

GAAP

Adjustment

Adjusted

2021

Adjusted

2021

Adjusted

Selected Financial Data

Gross Profit

$

180,098

$

(92

)

(1)

$

180,006

$

4,467

$

184,565

$

184,473

$

193,435

$

5,202

(4)

$

198,637

(6.9

%)

(9.4

%)

(4.6

%)

(7.1

%)

Gross Margin

60.5%

60.5%

60.7%

60.7%

58.3%

59.9%

Selling, General and Administrative Expenses

$

63,558

$

(241

)

(2)

$

63,317

$

716

$

64,274

$

64,034

$

73,671

$

(337

)

(5)

$

73,334

(13.7

%)

(13.7

%)

(12.8

%)

(12.7

%)

Operating Income

$

8,970

$

149

(3)

$

9,119

$

1,674

$

10,644

$

10,793

$

2,831

$

5,539

(6)

$

8,370

216.8

%

9.0

%

275.9

%

29.0

%

Operating Income Margin

3.0%

3.1%

3.5%

3.5%

0.9%

2.5%

______
Note: Totals may not sum due to rounding.

(1) Excludes the net impact of $24 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.

(2) Excludes $241 of charges associated with the Company's previously disclosed 2021 organizational restructuring plan.

(3) Excludes the net impact of (i) $24 of charges and $241 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 (ii) the reversal of $116 of charges associated with the Company's previously disclosed 2020 organizational restructuring plan recorded to cost of subscription revenues.

(4) Excludes $5,202 of charges associated with the Company's previously disclosed 2021 organizational restructuring plan.

(5) Excludes $337 of charges associated with the Company's previously disclosed 2021 organizational restructuring plan.

(6) Excludes $5,202 and $337 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)

UNAUDITED

Three Months Ended

April 2,

April 3,

2022

2021

Net Loss

$

(8,243

)

$

(18,227

)

Interest

18,671

29,123

Taxes

(1,802

)

(7,828

)

Depreciation and Amortization

10,759

11,925

Stock-based Compensation

4,700

5,341

EBITDAS

$

24,085

$

20,334

2021 Plan Restructuring Charges (1)

265

5,538

2020 Plan Restructuring Charges (2)

(116

)

-

Adjusted EBITDAS

$

24,234

$

25,872

______
Note: Totals may not sum due to rounding.

(1)

Charges associated with the Company's previously disclosed 2021 organizational restructuring plan.

(2)

The reversal of charges associated with the Company's previously disclosed 2020 organizational restructuring plan.


WW INTERNATIONAL, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(IN THOUSANDS, EXCEPT RATIO)

UNAUDITED

Trailing Twelve

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Months

Net Debt to Adjusted EBITDAS

Net Income (Loss)

$

8,860

$

46,330

$

29,929

$

(8,243

)

$

76,876

Interest

20,293

19,283

19,210

18,671

77,457

Taxes

970

13,346

3,285

(1,802

)

15,799

Depreciation and Amortization

11,411

11,130

11,017

10,759

44,316

Stock-based Compensation

7,851

3,405

4,752

4,700

20,706

EBITDAS

$

49,385

$

93,494

$

68,193

$

24,085

$

235,155

Early Extinguishment of Debt (1)

29,169

-

1,183

-

30,352

2021 Plan Restructuring Charges (2)

6,036

9,324

636

265

16,261

2020 Plan Restructuring Charges (3)

(846

)

(686

)

(74

)

(116

)

(1,722

)

Adjusted EBITDAS

$

83,744

$

102,132

$

69,938

$

24,234

$

280,046

Total Debt

$

1,419,149

Less: Cash

127,640

Net Debt

$

1,291,509

Net Debt to Adjusted EBITDAS

4.6 X

______
Note: Totals may not sum due to rounding.

(1)

Charges associated with the Company's previously disclosed April 2021 debt refinancing and voluntary debt prepayments.

(2)

Charges associated with the Company's previously disclosed 2021 organizational restructuring plan.

(3)

The reversal of charges associated with the Company's previously disclosed 2020 organizational restructuring plan.


For more information, contact:
Investors:
Corey Kinger
VP Investor Relations
corey.kinger@ww.com

Media:
Joe Quenqua
Chief Communications Officer
joe.quenqua@ww.com

Nicole Penn
VP Corporate Communications
nicole.penn@ww.com


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