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Weight Watchers International, Inc. WTW
Q2 2011 Earnings Call Transcript

Transcript Call Date 08/05/2011

Operator: Good morning, ladies and gentlemen. Welcome to the Weight Watchers International Second 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 call is being recorded today, August 5, 2011.

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

Sarika Sahni - Manager, IR: Thank you. Thank you to everyone for joining us today for Weight Watchers International's second 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 second 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 in this conference call to the most directly comparable GAAP financial measure 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 the 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 obligation 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 P. Kirchhoff - President and CEO: Good morning, and thank you for joining for us as we review Weight Watchers International's performance for the second quarter of fiscal 2011.

Weight Watchers continued to deliver excellent top and bottom line results in the second quarter driven by a strong performance in our North America, U.K. and WeightWatchers.com businesses.

Despite the impact of a late Easter and a tougher prior year comparable than in Q1, second quarter meeting enrollments in our NACO and U.K. markets remained strong benefiting from effective marketing and sustained consumer interest on the Weight Watchers' proposition.

In the second quarter, sign-ups for Weight Watchers Online products were once again at record levels. On a constant currency basis, Q2 2011 revenues grew 24% over the prior-year period as compared to 28% revenue growth we experienced in the first quarter of this year. Meeting fees were up 21% and Internet revenues grew 70%.

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