• Q2 2020 End of Period Subscribers up 9% year-over-year to 5.0 million, an all-time Q2-end high
     
  • Q2 2020 End of Period Digital Subscribers at all-time high and up 23% year-over-year
     
  • Q2 2020 Revenues of $334 million, down 10%, or 9% on a constant currency basis, year-over-year due to studio closures
     
  • Q2 2020 Gross Margin of 58%; excluding one-time charges, Q2 2020 adjusted gross margin of 60%, the highest level in 8 years

NEW YORK, Aug. 04, 2020 (GLOBE NEWSWIRE) -- WW International, Inc. (NASDAQ: WW) today announced its results for the second quarter of fiscal 2020.

“We ended the quarter with our highest-ever Q2 subscriber base of 5.0 million, driven by a record level of digital subscribers, which were up 23% year-over-year.  These milestones combined with the strength in digital revenues and our high margins are all testament to the work of our teams and talent around the world,” said Mindy Grossman, the Company’s President and CEO. “The impact of our accelerated digital transformation is evident in our second quarter results and will continue to be a key driver of our future growth and profitability.  Creating exciting new coaching experiences, adding new digital features and producing creative content that is insightful, interactive and engaging will greatly increase our ability to attract new members to WW, retain them longer, help them achieve their weight loss and wellness goals, and deliver on our mission to democratize wellness for all.”

“Our second quarter results demonstrate the benefits of our digital focus with strength in digital revenues, ecommerce, and gross margin,” said Nick Hotchkin, the Company’s CFO, Operating Officer, North America and President, Emerging Markets. “While our Q2 2020 GAAP EPS was $0.20, excluding one-time charges in the quarter, adjusted EPS was $0.67, demonstrating strong performance despite the COVID-19 environment.  We are nimbly managing our studio cost structure and are on-track to deliver on our $100 million cost-savings initiative, while maintaining strong liquidity and financial flexibility.”

Q2 2020 Consolidated Results 

      

 

 

% Change
 % Change
Adjusted for
Constant
Currency(1)
 Three Months Ended  
 June 27, June 29,  
  2020  2019  
(in millions except percentages and per share amounts)

 
       
Service Revenues, net$ 293.0 $ 313.8 (6.6%)   (5.7%)
Product Sales and Other, net 40.6    55.3 (26.5%)   (25.7%)
Revenues, net$ 333.6 $ 369.0   (9.6%) (8.7%)
Gross Profit 194.7  215.8 (9.8%) (8.8%)
Adjustments       
2020 Restructuring Charges$6.5  --    
Adjusted Gross Profit(1)$201.2 $215.8 (6.8%) (5.8%)
Operating Income$ 51.0 $ 105.5 (51.7%)   (50.4%)
Adjustments       
Winfrey Stock Compensation Expense$32.7  --    
2020 Restructuring Charges $11.2  --    
Adjusted Operating Income(1)$94.9 $105.5 (10.0%) (8.7%)
Net Income*$ 14.0 $53.8 (74.0%)   (72.1%)
EPS$ 0.20 $0.78   (74.2%)   (72.4%)
 

Total Paid Weeks
   63.9    60.8   5.1%  N/A 
Digital(2) Paid Weeks   48.3    41.3   16.8%  N/A 
Studio + Digital(3) Paid Weeks   15.6    19.5   (19.7%)  N/A 
End of Period Subscribers(4) 5.0  4.6 8.6%  N/A 
Digital Subscribers   3.9  3.2 23.2%  N/A 
Studio + Digital Subscribers   1.1    1.4   (24.2%)  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 the Personal Coaching + Digital product.
  3. “Studio + Digital” refers to providing access to the Company’s weekly in-person workshops combined with the Company’s digital subscription product offerings to commitment plan subscribers. The “Studio + Digital” business 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 Studio + Digital subscribers who participate in recur bill programs in Company-owned operations.
*Except in the case of the financials attached to this release, “Net Income” refers to Net Income attributable to WW International, Inc.

 

Q2 2020 Business and Financial Highlights

  • End of Period Subscribers in Q2 2020 were up 8.6% versus the prior year period, driven by Digital subscriber growth across all major geographic markets. Q2 2020 End of Period Digital Subscribers were up 23.2% and End of Period Studio + Digital Subscribers were down 24.2% versus the prior year period.
     
  • Total Paid Weeks in Q2 2020 were up 5.1% versus the prior year period, driven by Digital growth across all major geographic markets. Q2 2020 Digital Paid Weeks increased 16.8% and Studio + Digital Paid Weeks decreased 19.7% versus the prior year period. 
     
  • Revenues in Q2 2020 were $333.6 million. On a constant currency basis, Q2 2020 revenues decreased 8.7% versus the prior year period.
     
    • Service Revenues in Q2 2020 were $293.0 million. On a constant currency basis, these revenues decreased 5.7% versus the prior year period, primarily driven by declines in Studio + Digital Fees as a result of the closure of our studios due to  COVID-19.
       
    • Product Sales and Other in Q2 2020 were $40.6 million. On a constant currency basis, these revenues decreased 25.7% versus the prior year period, primarily due to lower in-studio product sales as a result of the closure of our studios due to COVID-19.
       
  • Gross Profit in Q2 2020 was $194.7 million. Adjusted gross profit in Q2 2020 was $201.2 million, which excluded $6.5 million in charges associated with the Company’s previously disclosed 2020 organizational restructuring plan.  On a constant currency basis, adjusted gross profit would have decreased 5.8% versus the prior year period.
     
    • Gross Margin in Q2 2020 was 58.3% and adjusted gross margin was 60.3%.  This compares to a gross margin of 58.5% in the prior year period.
       
  • Operating Income in Q2 2020 was $51.0 million. Adjusted operating income in Q2 2020 was $94.9 million, which excluded the $32.7 million one-time stock compensation expense associated with the previously disclosed option granted to Ms. Oprah Winfrey in connection with the Company extending its partnership with Ms. Winfrey and the $11.2 million in charges associated with the Company’s previously disclosed 2020 organizational restructuring plan. On a constant currency basis, adjusted operating income would have decreased 8.7% versus the prior year period. This decrease was due to lower revenues related to the Company’s Studio + Digital business.
     
    • Operating Income Margin for Q2 2020 was 15.3% and adjusted operating income margin was 28.4%.  This compares to an operating income margin of 28.6% in the prior year period.
       
  • Effective Tax Rate in Q2 2020 was 28.6%, versus 23.6% in the prior year period.
     
  • Net Income in Q2 2020 was $14.0 million compared to $53.8 million in the prior year period.
     
  • Earnings per fully diluted share (EPS) in Q2 2020 was $0.20 compared to $0.78 in the prior year period.
    • Certain items affect year-over-year comparability. The following items in the aggregate negatively impacted Q2 2020 fully diluted EPS by $0.47:
      • $0.35 per fully diluted share impact from the one-time stock compensation expense associated with the previously disclosed option granted to Ms. Winfrey in connection with the Company extending its partnership with Ms. Winfrey.
      • $0.12 per fully diluted share impact from charges associated with the Company’s previously disclosed 2020 organizational restructuring plan.

Other Items

  • Cash balance as of June 27, 2020 was $150.4 million. On June 5, 2020, WW fully repaid the borrowings outstanding under its revolving credit facility, which it previously drew down in Q1 2020 as a precautionary measure in light of the COVID-19 outbreak.

Second Quarter 2020 Conference Call and Webcast

The Company has scheduled a conference call today at 5:00 p.m. ET.  During the conference call, Mindy Grossman, President and Chief Executive Officer, and Nicholas Hotchkin, Chief Financial Officer, Operating Officer, North America & President, Emerging Markets, will discuss the second quarter of fiscal 2020 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 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 earnings per fully diluted share are discussed both as reported (on a GAAP basis) and, with respect to the second quarter of fiscal 2020, as adjusted (on a non-GAAP basis), to exclude the impact of the one-time stock compensation expense associated with the previously disclosed option granted to Ms. Winfrey in connection with the Company extending its partnership with Ms. Winfrey and charges associated with the Company’s previously disclosed 2020 organizational restructuring plan, as applicable. 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, 2020 restructuring charges and goodwill impairment (“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.
WW – Weight Watchers reimagined – is a global wellness company powered by the world’s leading commercial weight management program. We inspire millions of people to adopt healthy habits for real life. Through our engaging tech-enabled experience and face-to-face group workshops, members follow our livable and sustainable program of healthy eating, physical activity, and a helpful mindset. Leveraging more than five decades of experience in building inspired communities and our deep expertise in behavioral science, we aim to democratize wellness and to deliver 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 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” 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 global outbreak of the COVID-19 virus on the Company’s business and liquidity and on the business 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 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; the ability to successfully implement new strategic initiatives, including the Company’s strategic digital transformation; the effectiveness 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 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 or privacy concerns, including the costs of compliance with evolving privacy laws and regulations; 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 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; risks and uncertainties associated with the Company’s international operations, including regulatory, economic, political, social, intellectual property and foreign currency risks; uncertainties related to a downturn in general economic conditions or consumer confidence; the Company’s ability to successfully make acquisitions or enter into joint ventures, 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 accessing resources; 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; the outcomes of litigation or regulatory actions; the impact of existing and future laws and regulations; the Company’s failure to maintain effective internal control over financial reporting; 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 
CONDENSED CONSOLIDATED BALANCE SHEETS 
(IN THOUSANDS) 
UNAUDITED 
     
     
     
 June 27, December 28, 
  2020   2019  
     
ASSETS    
Cash and cash equivalents$150,409  $182,736  
Other current assets 127,229   112,654  
TOTAL CURRENT ASSETS 277,638   295,390  
Property and equipment, net 60,924   54,066  
Operating lease assets 140,723   151,983  
Goodwill, franchise rights and other intangible assets, net 961,454   970,392  
Other assets 28,801   26,483  
TOTAL ASSETS$1,469,540  $1,498,314  
     
LIABILITIES AND TOTAL DEFICIT    
Portion of long-term debt due within one year$96,250  $96,250  
Portion of operating lease liabilities due within one year 37,829   33,236  
Other current liabilities 237,306   264,584  
TOTAL CURRENT LIABILITIES 371,385   394,070  
Long-term debt 1,444,360   1,479,920  
Long-term operating lease liabilities 117,254   128,464  
Deferred income taxes, other 182,085   177,681  
TOTAL LIABILITIES$2,115,084  $2,180,135  
     
Redeemable noncontrolling interest 3,609   3,722  
     
Shareholders’ deficit (649,153)  (685,543) 
     
TOTAL LIABILITIES AND TOTAL DEFICIT$1,469,540  $1,498,314  
     



WW INTERNATIONAL, INC. AND SUBSIDIARIES 
CONSOLIDATED STATEMENTS OF NET INCOME 
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 
UNAUDITED 
     
 Three Months Ended 
 June 27, June 29, 
  2020  2019 
Service revenues, net (1)$292,997 $313,768 
Product sales and other, net (2) 40,640  55,255 
Revenues, net 333,637  369,023 
Cost of services (3) 108,006  122,121 
Cost of product sales and other 30,960  31,088 
Cost of revenues 138,966  153,209 
Gross profit 194,671  215,814 
Marketing expenses 41,894  49,967 
Selling, general and administrative expenses 101,792  60,374 
Operating income 50,985  105,473 
Interest expense 30,995  34,732 
Other expense, net 416  438 
Income before income taxes 19,574  70,303 
Provision for income taxes 5,592  16,586 
Net income 13,982  53,717 
Net loss attributable to the noncontrolling interest 24  117 
Net income attributable to WW International, Inc.$14,006 $53,834 
     
Earnings Per Share attributable to WW International, Inc.    
Basic$0.21 $0.80 
Diluted$0.20 $0.78 
     
Weighted average common shares outstanding:    
Basic 67,641  67,124 
Diluted 69,799  69,141 
     
     
Note: Totals may not sum due to rounding.    
(1) Consists of net “Digital Subscription Revenues” and net “Studio + Digital Fees”. “Digital Subscription Revenues” consist of the fees associated with subscriptions for the Company’s Digital offerings, including the Personal Coaching + Digital product. “Studio + 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 in studios, via e-commerce, and through several trusted retail partners, revenues from licensing, magazine subscriptions, publishing and third-party advertising in publications and on the Company’s websites and sales from the By Mail product, 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 Studio + Digital services. 
     
  
  
  
  
     


WW INTERNATIONAL, INC. AND SUBSIDIARIES 
CONSOLIDATED STATEMENTS OF NET INCOME 
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 
UNAUDITED 
     
 Six Months Ended 
 June 27, June 29, 
  2020  2019 
Service revenues, net (1)$617,654 $620,494 
Product sales and other, net (2) 116,344  111,694 
Revenues, net 733,998  732,188 
Cost of services (3) 243,572  251,078 
Cost of product sales and other 84,764  64,347 
Cost of revenues 328,336  315,425 
Gross profit 405,662  416,763 
Marketing expenses 159,828  164,216 
Selling, general and administrative expenses 166,318  125,176 
Goodwill impairment 3,665  - 
Operating income 75,851  127,371 
Interest expense 62,546  69,927 
Other expense, net 438  741 
Income before income taxes 12,867  56,703 
Provision for income taxes 4,942  13,711 
Net income 7,925  42,992 
Net loss attributable to the noncontrolling interest 18  156 
Net income attributable to WW International, Inc.$7,943 $43,148 
     
Earnings Per Share attributable to WW International, Inc.    
Basic$0.12 $0.64 
Diluted$0.11 $0.62 
     
Weighted average common shares outstanding:    
Basic 67,538  67,044 
Diluted 69,898  69,268 
     
     
Note: Totals may not sum due to rounding.    
(1) Consists of net “Digital Subscription Revenues” and net “Studio + Digital Fees”. “Digital Subscription Revenues” consist of the fees associated with subscriptions for the Company’s Digital offerings, including the Personal Coaching + Digital product. “Studio + 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 in studios, via e-commerce, and through several trusted retail partners, revenues from licensing, magazine subscriptions, publishing and third-party advertising in publications and on the Company’s websites and sales from the By Mail product, other revenues (including revenues from the WW Presents: Oprah’s 2020 Vision tour), 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 Studio + Digital services. 
     
     
  
     


WW INTERNATIONAL, INC. AND SUBSIDIARIES 
OPERATIONAL STATISTICS  
(IN THOUSANDS, EXCEPT PERCENTAGES) 
UNAUDITED 
        
  Three Months Ended   
  June 27, June 29, Variance 
  2020 2019  
        
Digital Paid Weeks (1)       
North America 30,439 26,027 17.0% 
CE 13,941 11,992 16.3% 
UK 3,010 2,536 18.7% 
Other (2) 893 774 15.4% 
Total Digital Paid Weeks 48,282 41,329 16.8% 
        
Studio + Digital Paid Weeks (1)       
North America 10,670 13,134 (18.8%) 
CE 2,568 3,094 (17.0%) 
UK 1,970 2,672 (26.3%) 
Other (2) 434 572 (24.2%) 
Total Studio + Digital Paid Weeks 15,642 19,473 (19.7%) 
        
Total Paid Weeks (1)       
North America 41,109 39,161 5.0% 
CE 16,509 15,086 9.4% 
UK 4,979 5,208 (4.4%) 
Other (2) 1,327 1,346 (1.4%) 
Total Paid Weeks 63,924 60,802 5.1% 
        
End of Period Digital Subscribers (3)       
North America 2,475 1,996 24.0% 
CE 1,105 914 20.8% 
UK 250 195 28.1% 
Other (2) 70 59 17.4% 
Total End of Period Digital Subscribers 3,900 3,165 23.2% 
        
End of Period Studio + Digital Subscribers (3)       
North America 734 945 (22.3%) 
CE 168 223 (24.8%) 
UK 134 192 (30.3%) 
Other (2) 28 43 (35.8%) 
Total End of Period Studio + Digital Subscribers 1,063 1,403 (24.2%) 
        
Total End of Period Subscribers (3)       
North America 3,209 2,941 9.1% 
CE 1,273 1,138 11.9% 
UK 384 387 (0.9%) 
Other (2) 98 103 (5.0%) 
Total End of Period Subscribers 4,963 4,568 8.6% 
        
        
        
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 Personal Coaching + Digital); (ii) “Studio + 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 Studio + 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 Personal Coaching + Digital, subscribers; (ii) “End of Period Studio + 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 Studio + Digital Subscribers. 
        
        
      
      
      
        


WW INTERNATIONAL, INC. AND SUBSIDIARIES 
OPERATIONAL STATISTICS  
(IN THOUSANDS, EXCEPT PERCENTAGES) 
UNAUDITED 
        
  Six Months Ended   
  June 27, June 29, Variance 
  2020 2019  
        
Digital Paid Weeks (1)       
North America 59,859 50,635 18.2% 
CE 26,901 23,146 16.2% 
UK 5,891 4,972 18.5% 
Other (2) 1,836 1,566 17.3% 
Total Digital Paid Weeks 94,487 80,318 17.6% 
        
Studio + Digital Paid Weeks (1)       
North America 23,634 26,378 (10.4%) 
CE 5,584 6,219 (10.2%) 
UK 4,584 5,388 (14.9%) 
Other (2) 1,027 1,205 (14.8%) 
Total Studio + Digital Paid Weeks 34,829 39,190 (11.1%) 
        
Total Paid Weeks (1)       
North America 83,493 77,013 8.4% 
CE 32,485 29,365 10.6% 
UK 10,475 10,360 1.1% 
Other (2) 2,863 2,770 3.3% 
Total Paid Weeks 129,316 119,508 8.2% 
        
End of Period Digital Subscribers (3)       
North America 2,475 1,996 24.0% 
CE 1,105 914 20.8% 
UK 250 195 28.1% 
Other (2) 70 60 17.4% 
Total End of Period Digital Subscribers 3,900 3,165 23.2% 
        
End of Period Studio + Digital Subscribers (3)       
North America 734 945 (22.3%) 
CE 168 223 (24.8%) 
UK 134 192 (30.3%) 
Other (2) 28 43 (35.8%) 
Total End of Period Studio + Digital Subscribers 1,063 1,403 (24.2%) 
        
Total End of Period Subscribers (3)       
North America 3,209 2,941 9.1% 
CE 1,273 1,138 11.9% 
UK 384 387 (0.9%) 
Other (2) 98 103 (5.0%) 
Total End of Period Subscribers 4,963 4,568 8.6% 
        
        
        
        
      
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 Personal Coaching + Digital); (ii) “Studio + 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 Studio + 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 Personal Coaching + Digital, subscribers; (ii) “End of Period Studio + 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 Studio + Digital Subscribers. 
        
        
      
      
      
        


WW INTERNATIONAL, INC. AND SUBSIDIARIES 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 
(IN THOUSANDS, EXCEPT PERCENTAGES) 
UNAUDITED 
              
              
              
              
              
              
          Q2 2020 Variance 
            2020 
        Constant 
  Q2 2020 Q2 2019 2020  Currency 
    Currency Constant   vs vs 
  GAAP Adjustment Currency GAAP 2019  2019 
Selected Financial Data            
Consolidated Company Revenues$333,637 $3,405 $337,043 $369,023 (9.6%) (8.7%) 
Consolidated Digital Subscription Revenues (1)$177,921 $1,813 $179,734 $156,969 13.3% 14.5% 
Consolidated Studio + Digital Fees (2)$115,076 $1,158 $116,234 $156,799 (26.6%) (25.9%) 
Consolidated Service Revenues (3)$292,997 $2,971 $295,968 $313,768 (6.6%) (5.7%) 
Consolidated Product Sales and Other (4)$40,640 $434 $41,074 $55,255 (26.5%) (25.7%) 
              
North America            
Digital Subscription Revenues (1)$115,922 $303 $116,225 $102,851 12.7% 13.0% 
Studio + Digital Fees (2)$86,131 $194 $86,325 $116,958 (26.4%) (26.2%) 
Service Revenues (3)$202,053 $496 $202,549 $219,809 (8.1%) (7.9%) 
Product Sales and Other (4)$25,472 $49 $25,521 $35,835 (28.9%) (28.7%) 
Total Revenues$227,525 $544 $228,069 $255,644 (11.0%) (10.8%) 
              
CE             
Digital Subscription Revenues (1)$50,704 $913 $51,617 $43,586 16.3% 18.4% 
Studio + Digital Fees (2)$17,858 $346 $18,204 $23,681 (24.6%) (23.1%) 
Service Revenues (3)$68,562 $1,259 $69,821 $67,267 1.9% 3.8% 
Product Sales and Other (4)$9,257 $186 $9,443 $10,062 (8.0%) (6.2%) 
Total Revenues$77,819 $1,445 $79,264 $77,329 0.6% 2.5% 
              
UK             
Digital Subscription Revenues (1)$7,571 $259 $7,830 $6,993 8.3% 12.0% 
Studio + Digital Fees (2)$8,001 $283 $8,284 $11,498 (30.4%) (28.0%) 
Service Revenues (3)$15,572 $541 $16,113 $18,491 (15.8%) (12.9%) 
Product Sales and Other (4)$4,165 $141 $4,306 $6,034 (31.0%) (28.6%) 
Total Revenues$19,737 $682 $20,419 $24,525 (19.5%) (16.7%) 
              
Other (5)            
Digital Subscription Revenues (1)$3,724 $338 $4,062 $3,539 5.2% 14.8% 
Studio + Digital Fees (2)$3,086 $336 $3,422 $4,662 (33.8%) (26.6%) 
Service Revenues (3)$6,810 $674 $7,484 $8,201 (17.0%) (8.7%) 
Product Sales and Other (4)$1,746 $60 $1,806 $3,324 (47.5%) (45.7%) 
Total Revenues$8,556 $735 $9,291 $11,525 (25.8%) (19.4%) 
              
              
              
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 the Personal Coaching + Digital product. 
(2) “Studio + 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) “Service Revenues” equal “Digital Subscription Revenues” plus “Studio + Digital Fees”. 
(4) “Product Sales” are sales of consumer products in studios, via e-commerce, and through several trusted retail partners, and “Other” are revenues from licensing, magazine subscriptions, publishing and third-party advertising in publications and on the Company’s websites and sales from the By Mail product, other revenues, and, in the case of the consolidated financial results and Other reportable segment, includes 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 
              
              
              
              
              
              
          First Half 2020 Variance 
            2020 
        Constant 
  First Half 2020 First Half 2019 2020  Currency 
    Currency Constant   vs vs 
  GAAP AdjustmentCurrency GAAP 2019  2019 
Selected Financial Data            
Consolidated Company Revenues$733,998 $7,093 $741,092 $732,188 0.2% 1.2% 
Consolidated Digital Subscription Revenues (1)$352,467 $3,731 $356,198 $305,824 15.3% 16.5% 
Consolidated Studio + Digital Fees (2)$265,188 $2,422 $267,610 $314,670 (15.7%) (15.0%) 
Consolidated Service Revenues (3)$617,654 $6,153 $623,808 $620,494 (0.5%) 0.5% 
Consolidated Product Sales and Other (4)$116,344 $940 $117,284 $111,694 4.2% 5.0% 
              
North America            
Digital Subscription Revenues (1)$232,272 $365 $232,637 $201,611 15.2% 15.4% 
Studio + Digital Fees (2)$198,974 $248 $199,222 $234,557 (15.2%) (15.1%) 
Service Revenues (3)$431,246 $614 $431,860 $436,169 (1.1%) (1.0%) 
Product Sales and Other (4)$79,986 $48 $80,034 $69,488 15.1% 15.2% 
Total Revenues$511,232 $661 $511,893 $505,656 1.1% 1.2% 
              
CE             
Digital Subscription Revenues (1)$97,341 $2,281 $99,622 $83,769 16.2% 18.9% 
Studio + Digital Fees (2)$39,377 $949 $40,326 $47,630 (17.3%) (15.3%) 
Service Revenues (3)$136,718 $3,231 $139,949 $131,399 4.0% 6.5% 
Product Sales and Other (4)$21,091 $530 $21,621 $22,087 (4.5%) (2.1%) 
Total Revenues$157,809 $3,760 $161,569 $153,486 2.8% 5.3% 
              
UK             
Digital Subscription Revenues (1)$15,147 $395 $15,542 $13,411 12.9% 15.9% 
Studio + Digital Fees (2)$19,130 $472 $19,602 $22,761 (16.0%) (13.9%) 
Service Revenues (3)$34,277 $866 $35,143 $36,172 (5.2%) (2.8%) 
Product Sales and Other (4)$10,488 $213 $10,701 $12,964 (19.1%) (17.5%) 
Total Revenues$44,765 $1,079 $45,844 $49,136 (8.9%) (6.7%) 
              
Other (5)            
Digital Subscription Revenues (1)$7,706 $691 $8,397 $7,033 9.6% 19.4% 
Studio + Digital Fees (2)$7,707 $753 $8,460 $9,722 (20.7%) (13.0%) 
Service Revenues (3)$15,413 $1,443 $16,856 $16,755 (8.0%) 0.6% 
Product Sales and Other (4)$4,779 $151 $4,930 $7,155 (33.2%) (31.1%) 
Total Revenues$20,192 $1,594 $21,786 $23,910 (15.5%) (8.9%) 
              
              
              
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 the Personal Coaching + Digital product. 
(2) “Studio + 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) “Service Revenues” equal “Digital Subscription Revenues” plus “Studio + Digital Fees”. 
(4) “Product Sales” are sales of consumer products in studios, via e-commerce, and through several trusted retail partners, and “Other” are revenues from licensing, magazine subscriptions, publishing and third-party advertising in publications and on the Company’s websites and sales from the By Mail product, other revenues (including revenues from the WW Presents: Oprah’s 2020 Vision tour), and, in the case of the consolidated financial results and Other reportable segment, includes 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
                       
                       
                       
                       
                       
                       
             
                Q2 2020 Variance
                    2020 Constant Currency
  Q2 2020 Q2 2019   2020    2020 
            Adjusted   2020  Adjusted 2020  Adjusted
        Currency Constant Constant   vs vs vs vs
  GAAP Adjustment Adjusted AdjustmentCurrency Currency GAAP 2019  2019  2019  2019 
Selected Financial Data                     
Gross Profit$194,671  $6,503 (1)$201,174  $2,212 $196,883  $203,386  $215,814  (9.8%) (6.8%) (8.8%) (5.8%)
Gross Margin 58.3%     60.3%     58.4%   60.3%   58.5%         
                       
Selling, General and Administrative Expenses$101,792  $(37,392)(2)$64,400  $518 $102,310  $64,918  $60,374  68.6% 6.7% 69.5% 7.5%
                       
Operating Income$50,985  $43,895 (3)$94,879  $1,372 $52,357  $96,251  $105,473  (51.7%) (10.0%) (50.4%) (8.7%)
Operating Income Margin 15.3%     28.4%     15.5%   28.6%   28.6%         
                       
                       
                       
Note: Totals may not sum due to rounding.               
                       
(1)   Excludes $6,503 of charges associated with the Company’s previously disclosed 2020 organizational restructuring plan.
(2)   Excludes the one-time stock compensation expense of $32,686 associated with the previously disclosed option granted to Ms. Oprah Winfrey in connection with the Company extending its partnership with Ms. Winfrey and $4,706 of charges associated with the Company’s previously disclosed 2020 organizational restructuring plan.
(3)   Excludes the one-time stock compensation expense of $32,686 associated with the previously disclosed option granted to Ms. Oprah Winfrey in connection with the Company extending its partnership with Ms. Winfrey and the $6,503 and $4,706 of charges associated with the Company’s previously disclosed 2020 organizational restructuring plan recorded to cost of services and selling, general and administrative expenses, respectively.
                       


WW INTERNATIONAL, INC. AND SUBSIDIARIES 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 
(IN THOUSANDS, EXCEPT PERCENTAGES) 
UNAUDITED 
                       
                       
                       
                       
                       
                       
                       
      First Half 2020 Variance
                    2020 Constant Currency
  First Half 2020 First Half 2019   2020    2020 
            Adjusted   2020  Adjusted 2020  Adjusted
        Currency Constant Constant   vs vs vs vs
  GAAP Adjustment Adjusted AdjustmentCurrency Currency GAAP 2019  2019  2019  2019 
Selected Financial Data                     
Gross Profit$405,662  $6,503 (1)$412,165  $4,417 $410,079  $416,582  $416,763  (2.7%) (1.1%) (1.6%) (0.0%)
Gross Margin 55.3%     56.2%     55.3%   56.2%   56.9%         
                       
Selling, General and Administrative Expenses$166,318  $(37,392)(2)$128,927  $1,017 $167,335  $129,944  $125,176  32.9% 3.0% 33.7% 3.8%
                       
Operating Income$75,851  $47,560 (3)$123,411  $1,167 $77,018  $125,542  $127,371  (40.4%) (3.1%) (39.5%) (1.4%)
Operating Income Margin 10.3%     16.8%     10.4%   16.9%   17.4%         
                       
                       
                       
                       
                       
                       
                       
Note: Totals may not sum due to rounding.               
                       
(1)   Excludes $6,503 of charges associated with the Company’s previously disclosed 2020 organizational restructuring plan.
(2)   Excludes the one-time stock compensation expense of $32,686 associated with the previously disclosed option granted to Ms. Oprah Winfrey in connection with the Company extending its partnership with Ms. Winfrey and $4,706 of charges associated with the Company’s previously disclosed 2020 organizational restructuring plan.
(3)   Excludes the one-time stock compensation expense of $32,686 associated with the previously disclosed option granted to Ms. Oprah Winfrey in connection with the Company extending its partnership with Ms. Winfrey, the $6,503 and $4,706 of charges associated with the Company’s previously disclosed 2020 organizational restructuring plan recorded to cost of services and selling, general and administrative expenses, respectively, and the impairment charge of $3,665 for the Company’s goodwill related to its Brazil operations.
                       


WW INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS)
UNAUDITED
               
               
      Three Months Ended  Six Months Ended 
      June 27, June 29,  June 27, June 29, 
       2020  2019   2020  2019 
               
 Net Income   $14,006 $53,834  $7,943 $43,148 
 Interest     30,995  34,732   62,546  69,927 
 Taxes     5,592  16,586   4,942  13,711 
 Depreciation and Amortization  12,771  11,288   24,983  22,693 
 Stock-based Compensation  38,686  4,872   42,651  9,684 
 EBITDAS   $102,049 $121,312  $143,064 $159,163 
 2020 Restructuring Charges (1)  11,209  -   11,209  - 
 Goodwill Impairment (2)  -  -   3,665  - 
 Adjusted EBITDAS   $113,258 $121,312  $157,938 $159,163 
               
               
               
 Note: Totals may not sum due to rounding.        
               
(1)Charges associated with the Company’s previously disclosed 2020 organizational restructuring plan.   
(2)Impairment charge of the Company’s goodwill related to its Brazil operations.      
               



WW INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT RATIO)
UNAUDITED
             
             
             
             
             
         
            Trailing Twelve
   Q3 2019 Q4 2019 Q1 2020 Q2 2020  Months
 Net Debt to Adjusted EBITDAS          
             
 Net Income (Loss)$47,086 $29,383 $(6,063) $14,006  $84,412
 Interest 33,118  32,222  31,551   30,995   127,886
 Taxes  13,123  4,679  (651)  5,592   22,743
 Depreciation and Amortization 10,850  11,474  12,211   12,771   47,306
 Stock-based Compensation 5,243  5,544  3,965   38,686   53,438
 EBITDAS$109,420 $83,302 $41,013  $102,049  $335,785
             
             
 2020 Restructuring Charges (1)$- $- $-  $11,209   11,209
 Goodwill Impairment (2)$- $- $3,665  $-  $3,665
 Adjusted EBITDAS$109,420 $83,302 $44,678  $113,258  $350,659
             
 Total Debt         $1,540,610
 Less: Cash          150,409
 Net Debt         $1,390,201
 Net Debt to Adjusted EBITDAS
        4 X
             
             
             
 Note: Totals may not sum due to rounding.        
             
(1)Charges associated with the Company’s previously disclosed 2020 organizational restructuring plan.   
(2)Impairment charge of the Company’s goodwill related to its Brazil operations.    
             

For more information, contact:

Investors:
Corey Kinger                                                                                                                                               
VP Investor Relations
212.601.7569
corey.kinger@ww.com

Media:
Nicole Penn
VP Corporate Communications
917.734.0802
nicole.penn@ww.com