Profile: Weight Watchers International, Inc. (WTW.N)

Weight Watchers International, Inc. (WWI), incorporated in 1974, is a provider of weight management services, operating through a network of Company-owned and franchise operations. The Company sells its products through Weight Watchers branded products and services, including meetings conducted by the Company and its franchisees, products sold at meetings, Internet subscription products sold by WeightWatchers.com, licensed products sold in retail channels and magazine subscriptions and other publications. Through WeightWatchers.com, the Company offers Internet subscription weight management products to consumers and maintains an interactive presence on the Internet for the Weight Watchers brand. The Company provides two Internet subscription offerings: Weight Watchers Online and Weight Watchers eTools. As of January 3, 2009, the Company offered these two products in the United States, the United Kingdom, Canada, Germany, France, the Netherlands and Australia.

Weight Management Plans

In each of its markets, WWI offers services and products that are built upon weight management systems tailored to local tastes and habits. These weight management systems include a range of nutritional, exercise and behavioral tools and approaches. For instance, at January 3, 2009, the Company began offering the Momentum program in the United States and Canada. Momentum is a plan developed from a combination of the latest scientific research and insights of customers who have succeeded on prior Weight Watchers plans, such as the Flex Plan and the Core Plan. The Momentum program is based on the POINTS Weight Loss System, where each food has a POINTS value determined by a patented formula based on the food’s calories, fat and dietary fiber. Subject to certain nutritional guidelines, consumers following the Momentum program can eat any food as long as their total food consumption stays within their POINTS budget for the week. Since nutritious foods generally have low POINTS values, this approach guides consumers toward healthier eating habits. Under the Momentum program, consumers are taught different techniques shown to help them in their weight loss efforts, such as being encouraged to choose specified Filling Foods as part of their daily POINTS Target to keep hunger at bay. These Filling Foods are scientifically proven to help keep people feeling fuller longer because they are low in calories, but contain more water, air or fiber per serving, relative to the food’s weight.

Meetings

The Company offers group support system, which remains the cornerstone of its meetings. Members provide each other support by sharing their experiences and by providing encouragement and empathy with other people experiencing similar weight management challenges. This group support provides the reassurance that no one must overcome their weight management challenge alone. Group support assists members in dealing with issues, such as emotional eating and finding time to exercise. It facilitates this support through interactive meetings that encourage learning through group activities and discussions.

The Company presents its program in a series of weekly meetings of approximately one hour in duration. Meetings are conveniently scheduled throughout the day. In WWI’s meetings, its leaders present its program that combines group support and education with a structured approach to food, activity and lifestyle modification developed by credentialed weight management experts. Meetings begin with registration and a confidential weigh-in to track each member’s progress.

Product Sales

WWI sells a range of products, including bars, snacks, cookbooks, POINTS value guides, Weight Watchers magazines and POINTS calculators. It sells its products primarily through its meeting operations and to its franchisees. During the fiscal year ended January 3, 2009, sales of its products represented approximately 22% of the Company’s revenues.

WeightWatchers.com Offerings

Through WeightWatchers.com, the Company benefits from several trends taking place in the Internet marketplace, including an increased willingness of consumers to access and pay for Web content, the proliferation of broadband access, and e-Commerce and Internet advertising. Since 2001, WWI had offered two Internet subscription products in the United States: Weight Watchers Online and Weight Watchers eTools.

Weight Watchers Online

Weight Watchers Online is a product based on the Weight Watchers approach to weight management and is designed to attract self-help-inclined consumers. Weight Watchers Online helps consumers adopt a healthier lifestyle, with a view toward long-term behavior modification. Weight Watchers Online allows consumers to learn how to make healthier food choices and lead an active lifestyle by providing them with online content, functionality, resources and interactive Web-based weight management plans.

Weight Watchers eTools

Weight Watchers eTools is an Internet weight management offering available only to consumers who are Weight Watchers meetings members. Weight Watchers eTools allows users to interactively manage the day-to-day aspects of their weight management plan online, discover different food options and keep track of their weight management efforts. As of January 3, 2008, WeightWatchers.com had approximately 679,000 active Weight Watchers Online subscribers.