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Weight Watchers International Inc WTW
Q1 2011 Earnings Call Transcript

Transcript Call Date 05/06/2011

Operator: Ladies and gentlemen, welcome to Weight Watchers International First Quarter 2011 Earnings Teleconference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, you will be invited to participate in the question-and-answer session and instructions will be given at that time. As a reminder, this conference call is being recorded today, May 06, 2011.

At this time, I would like to turn the call over to Sarika Sahni of Weight Watchers International. Please go ahead.

Sarika Sahni - Manager, IR: Thank you to everyone for joining us today for Weight Watchers International's first quarter 2011 conference call. With us on the call are David Kirchhoff, President and Chief Executive Officer; and Ann Sardini, Chief Financial Officer.

At about 7.00 am Eastern Time today, the Company issued a press release reporting its financial results for the first quarter of fiscal 2011. The purpose of this call is to provide investors with some further details regarding the Company's financial results, as well as to provide a general update on the Company's progress. The press release is available on the Company's corporate website located at www.weightwatchersinternational.com.

Reconciliations of non-GAAP measures disclosed on this conference call to the most directly comparable GAAP financial measures are also available as part of the press release. Before we begin, let me remind everyone that this call will contain forward-looking statements. Investors should be aware that any forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those discussed here today.

These risk factors are explained in detail in the Company's filings with the Securities and Exchange Commission. Please refer to these filings for a more detailed discussion of forward-looking statements and risks and uncertainties of such statements. All forward-looking statements are made as of today and except as required by law, the Company undertakes no obligations to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

I would now like to turn the call over to Mr. Kirchhoff. Please go ahead, David.

David Kirchhoff - President and CEO: Good morning and thank you for joining for us as we review Weight Watchers International's performance for the first quarter of fiscal 2011.

Benefiting from a powerful combination of effective marketing, extensive PR coverage and a strong new program launch, Weight Watchers enjoyed excellent Q1 results. We saw robust enrolment levels in all of our English speaking markets and our WeightWatchers.com business reached new heights with surging signup volumes, particularly in the U.S.

This more than compensated for our anticipated stock results in our continental European business. Before we review our numbers, it's important to note that our year-over-year operating results benefited from comparing to a weak Q1 in 2010.

On a constant currency basis, Q1 2011 revenues grew 28% over the prior year period, with meeting fees up 22% and meeting product sales up 25% and Internet revenues growing 65%. This increase compares very favorably to the 16% total revenue growth we saw in Q4 of 2010.

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