WW International Inc.(WW) - 2023 Q4 - Annual Results

Subscriber Metrics - End of Period Subscribers reached 3.8 million, a 7.1% increase year-over-year, including 67 thousand Clinical Subscribers[9] - The Company expects to end 2024 with subscribers in the range of 3.8 million to 4.0 million, including 140 thousand to 160 thousand from the new WeightWatchers Clinic[2] - Total Paid Weeks in Q4 2023 increased by 6.5% year-over-year, driven by the Digital business and Clinical Paid Weeks[9] - End of Period Digital Subscribers increased by 8.6% to 3,079 thousand in December 2023, compared to 2,836 thousand in December 2022[46] - The total end of period Workshops + Digital Subscribers decreased by 8.3% to 652 thousand in December 2023, down from 711 thousand in December 2022[46] Financial Performance - Q4 2023 Revenues were $206.0 million, a decrease of 7.6% compared to Q4 2022; Subscription Revenues were $196.1 million, down 2.4%[5] - Full Year Fiscal 2023 Revenues totaled $889.6 million, a decline of 14.5% from the previous year; Subscription Revenues were $822.8 million, down 10.5%[11] - Consolidated Company Revenues for Q4 2023 were $205,955 million, a decrease of 7.6% compared to Q4 2022's $222,902 million[50] - For the full year 2023, Consolidated Company Revenues were $889,551 million, a decrease of 14.5% from $1,039,835 million in 2022[56] - Total revenues for fiscal 2023 were $889.6 million, a decrease of 14.5% on a constant currency basis compared to the prior year[16] Profitability and Loss - Gross Margin for Q4 2023 was 60.6%, up from 56.5% in the prior year period; Adjusted Gross Margin was 61.4%, compared to 57.9%[9] - Operating Loss in Q4 2023 was $6.0 million, significantly improved from a loss of $51.8 million in Q4 2022; Adjusted Operating Income was $21.3 million[9] - Net Loss for Q4 2023 was $88.1 million, compared to a loss of $35.8 million in the prior year; Diluted Net Loss per share was $1.11[10] - Full Year Fiscal 2023 Adjusted Operating Income was $89.5 million, a decrease of 41.3% compared to the previous year[11] - Net loss for fiscal 2023 was $112.3 million, an improvement from a net loss of $256.9 million in the prior year[16] Cash and Debt Management - Cash balance as of December 30, 2023, was $109.4 million, with no outstanding borrowings under the revolving credit facility[18] - Long-term debt increased slightly to $1,426,464 thousand as of December 30, 2023, compared to $1,422,284 thousand in the previous year[28] - Total debt stood at $1,426,464, with net debt calculated at $1,317,098 after accounting for cash of $109,366[85] Future Outlook - The Company anticipates returning to year-over-year growth in subscription revenues in the second half of 2024[4] - The company expects fiscal 2024 revenues to be in the range of $830.0 million to $860.0 million, reflecting a $55 million headwind from winding down the low-margin consumer products business[22] - Operating income for fiscal 2024 is expected to be between $100.0 million and $110.0 million, with an estimated $9.0 million of expenses previously expected to be capitalized now reflected on the income statement[22] - Future outlook includes potential market expansion and new product development initiatives to drive revenue growth[70] Restructuring and Impairments - The company plans to continue its restructuring efforts, with a focus on improving operational efficiency and reducing costs[70] - The company incurred impairment of franchise rights acquired and goodwill amounting to $3,633 thousand in 2023, a significant decrease from $396,727 thousand in 2022[40] - Impairment charges for franchise rights acquired totaled $324,030 for the United States unit, with additional charges for Canada, the United Kingdom, New Zealand, and Australia[83] Marketing and Operational Expenses - Marketing expenses for the three months ended December 30, 2023, were $50,920 thousand, up from $49,660 thousand in the same period of 2022[30] - The total selling, general and administrative expenses for the full year 2023 were $264,950, a decrease of 3.7% compared to $263,840 in 2022[68] Acquisition and Growth Initiatives - The company acquired Weekend Health, Inc., doing business as Sequence, which may impact its future growth and service offerings[26] - Acquisition transaction costs related to the acquisition of Sequence were $8,605, including $3,719 for Q1 2023[87]