WEIGHT WATCHERS INTERNATIONAL INC - 10-Q Quarterly Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 28, 2002

Commission File No. 000-03389

WEIGHT WATCHERS INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)

Virginia 11-6040273
- ------------------------------------ ------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

175 Crossways Park West, Woodbury, New York 11797-2055
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (516) 390-1400

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes /X/ No / /

The number of common shares outstanding as of October 31, 2002 was
106,183,498.

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX

2

ITEM I. FINANCIAL STATEMENTS

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

The accompanying notes are an integral part of the consolidated financial
statements.

3

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The accompanying notes are an integral part of the consolidated financial
statements.

4

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The accompanying notes are an integral part of the consolidated financial
statements.

5

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY (DEFICIT) AND COMPREHENSIVE INCOME
(IN THOUSANDS)

The accompanying notes are an integral part of the consolidated financial
statements.

6

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

The accompanying notes are an integral part of the consolidated financial
statements.

7

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

1. BASIS OF PRESENTATION

The accompanying consolidated financial statements include the
accounts of Weight Watchers International, Inc. and subsidiaries (the
"Company"). The consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United
States of America and include amounts that are based on management's best
estimates and judgments. While all available information has been
considered, actual amounts could differ from those estimates. The
consolidated financial statements are unaudited but, in the opinion of
management, reflect all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation.

The Management's Discussion and Analysis of Financial Condition and
Results of Operations which follows these notes contains additional
information on the results of operations, the financial position and cash
flows of the Company. Those comments should be read in conjunction with
these notes. The Company's Annual Report on Form 10-K for the fiscal year
ended December 29, 2001 includes additional information about the Company,
its results of operations, its financial position and its cash flows, and
should be read in conjunction with this Quarterly Report on Form 10-Q.

RECENTLY ISSUED ACCOUNTING STANDARDS:

In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards, or SFAS No. 142, "Goodwill and
Other Intangible Assets." SFAS No. 142 addresses the mandatory use of the
purchase method of accounting for business combinations, elimination of
indefinite life goodwill amortization, a revised framework for testing
goodwill, impairment at a "reporting unit" level and new criteria for the
identification and potential amortization of other intangible assets. The
Company adopted SFAS No. 142 on December 30, 2001. See Note 3.

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations," and SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." SFAS No. 143 addresses financial
accounting and reporting for obligations associated with the retirement of
tangible long-lived assets and the associated asset retirement costs. SFAS
No. 144 supersedes SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," and the
accounting and reporting provisions of AICPA Accounting Principles Board
Opinion No. 30, "Reporting the Results of Operations - Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions," and addresses
financial accounting and reporting for the impairment or disposal of
long-lived assets. The Company adopted SFAS No. 144 on December 30, 2001
and will adopt SFAS No. 143 on December 29, 2002. The adoption of SFAS No.
144 did not have a material impact on the Company's results of operations,
the financial position or cash flows, nor does the Company expect the
adoption of SFAS No. 143 to have any such material impact.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB No. 13 and Technical
Corrections." SFAS No. 145 rescinds SFAS No. 4, which required all gains
and losses from the extinguishment of debt to be classified as an
extraordinary item, and amends other existing authoritative pronouncements
to make various technical corrections, clarify meanings, or describe their
applicability under changed conditions. The provisions of SFAS No. 145 are
effective for the Company beginning December 29, 2002. The Company does not
expect the adoption of SFAS No. 145 to have a material impact on its
results of operations, financial position or cash flows.

8

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." SFAS No. 146 requires that a
liability for the cost associated with an exit or disposal activity be
recognized when the liability is incurred and also establishes that fair
value is the objective for initial measurement of the liability. The
provisions of SFAS No. 146 are effective for exit or disposal activities
that are initiated after December 31, 2002.

RECLASSIFICATION:

Certain prior year amounts have been reclassified to conform to the
current year presentation.

2. ACQUISITIONS

During the period December 30, 2000 to September 28, 2002, the Company
acquired the assets of five of its franchises as outlined below.

On September 1, 2002, the Company completed the acquisition of the
assets of one of its franchisees, AZIS Properties of Raleigh Durham, Inc.
(d/b/a Weight Watchers of Raleigh Durham), pursuant to the terms of an
Asset Purchase Agreement among Weight Watchers of Raleigh Durham, the
Company and Weight Watchers North America, Inc., a wholly owned subsidiary
of the Company. Substantially all of the purchase price in excess of the
net assets acquired has been recorded as goodwill. The purchase price for
the acquisition was $10,600 and was financed through cash from operations.

On July 2, 2002, the Company completed the acquisition of the assets
of one of its franchisees, Weight Watchers of San Diego and The Inland
Empire, Inc., pursuant to the terms of an Asset Purchase Agreement among
Weight Watchers of San Diego, the Company and Weight Watchers North
America, Inc. Substantially all of the purchase price in excess of the net
assets acquired has been recorded as goodwill. The purchase price for the
acquisition was $11,000 and was financed through cash from operations.

On January 18, 2002, the Company completed the acquisition of its
franchisee Weight Watchers of North Jersey, Inc., pursuant to the terms of
an Asset Purchase Agreement executed on December 31, 2001 among Weight
Watchers of North Jersey, Inc., the Company and Weight Watchers North
America, Inc. Substantially all of the purchase price in excess of the net
assets acquired has been recorded as goodwill. The purchase price for the
acquisition was $46,500. The acquisition was financed through additional
borrowings from the Company's Revolving Credit Facility under its Amended
and Restated Credit Agreement, as amended on January 16, 2001 and December
21, 2001 (the "Credit Facility"). This borrowing was subsequently repaid by
the end of the second quarter 2002. See Note 4.

On September 4, 2001, the Company completed the acquisition of Weight
Watchers of Oregon, Inc., for an aggregate purchase price of $13,500.
Substantially all of the purchase price in excess of the net assets
acquired was recorded as goodwill.

On January 16, 2001, the Company completed the acquisition of one of
its largest franchised territories, Weighco Enterprises, Inc., Weighco of
Northwest, Inc., and Weighco of Southwest, Inc. (collectively "Weighco"),
for an aggregate purchase price of $83,800 plus acquisition costs of $577.
Assets acquired included inventory ($1,884) and property and equipment
($1,801). The excess of

9

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

investment over the net book value of assets acquired at the date of
acquisition resulted in goodwill of $80,692. The acquisition was financed
through additional borrowings of $60,000 obtained pursuant to the Company's
Credit Facility, and cash from operations.

These acquisitions have been accounted for under the purchase method
of accounting and, accordingly, earnings have been included in the
consolidated operating results of the Company since the date of
acquisition.

3. INTANGIBLE ASSETS

In accordance with SFAS No. 142, the Company no longer amortizes
goodwill. The Company performed a fair value impairment test as of December
30, 2001 on its goodwill which determined that no impairment loss was
necessary. Unamortized goodwill is due mainly to acquisitions of the
Company's franchised territories. For the nine months ended September 28,
2002, goodwill increased due to the acquisitions of Weight Watchers of
North Jersey, Inc. ($46,309), Weight Watchers of San Diego and The Inland
Empire, Inc. ($10,804), Weight Watchers of Raleigh Durham ($10,600) and due
to the translation of the assets of the Company's foreign subsidiaries into
U.S. Dollars ($1,005).

Also, in accordance with SFAS No. 142, aggregate amortization expense
for definite lived intangible assets was recorded in the amounts of $221
and $684 for the three and nine months ended September 28, 2002,
respectively. Aggregate amortization expense of definite lived intangible
assets for the three and nine months ended September 29, 2001 was $190 and
$555, respectively.

The carrying amount of amortized intangible assets as of September 28,
2002 and December 29, 2001 was as follows:

Estimated amortization expense of definite lived intangible assets for
the next five fiscal years is as follows:

Remainder of 2002 $ 257
2003 $ 690
2004 $ 621
2005 $ 474
2006 $ 79

10

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

As required by SFAS No. 142, the results for the three and nine months
ended September 29, 2001 have not been restated. A reconciliation of net
income, as if SFAS No. 142 had been adopted, is presented below for the
three and nine months ended September 28, 2002 and September 29, 2001:

11

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

4. LONG-TERM DEBT

In connection with the Transaction (See Note 5), the Company entered
into the Credit Facility. As amended on January 16, 2001, the Credit
Facility provided for (i) a $90,000 term loan A facility ("Term Loan A"),
(ii) a $75,000 term loan B facility ("Term Loan B"), (iii) an $87,000
transferable loan certificate ("TLC"), (iv) a $20,000 term loan D facility
("Term Loan D") and (v) a revolving credit facility with borrowings up to
$45,000 ("Revolving Credit Facility"). On December 21, 2001, the Credit
Facility was refinanced as follows: (i) Term Loan B, Term Loan D and the
TLC in the amount of $71,000, $19,000 and $82,000, respectively, were
repaid and replaced with a new Term Loan B of $108,000 and a new TLC of
$64,000. Borrowings under the Credit Facility are paid quarterly and bear
interest at rates which varied through the three and nine months ended
September 28, 2002 from 3.72% to 5.50%.

In addition, as part of the Transaction, the Company issued 150,000
USD denominated and 100,000 EUR denominated principal amount of 13% Senior
Subordinated Notes due 2009 (the "Notes"). At September 28, 2002, the
100,000 EUR Notes translated into 98,090 USD denominated equivalent.

5. REDEEMABLE PREFERRED STOCK

The Company issued one million shares of Series A Preferred Stock in
conjunction with a recapitalization and stock purchase agreement (the
"Transaction") on September 29, 1999 with its former parent, H.J. Heinz
Company ("Heinz"). The liquidation preference of the Series A Preferred
Stock was $25 per share.

On March 1, 2002, the Company redeemed from Heinz all of the Company's
Series A Preferred Stock for a redemption price of $25,000 plus accrued and
unpaid dividends. The redemption was financed through additional borrowings
of $12,000 under the Revolving Credit Facility, which was repaid by the end
of the second quarter 2002, and cash from operations.

6. EARNINGS PER SHARE

Basic earnings per share ("EPS") computations are calculated utilizing
the weighted average number of common shares outstanding during the periods
presented. Diluted EPS includes the weighted average number of common
shares outstanding and the effect of common stock equivalents.

12

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The following table sets forth the computation of basic and diluted EPS.

7. INCOME TAXES

The effective tax rates for the three and nine months ended September
28, 2002 were 38.9% and 38.8%, respectively. The effective tax rates for
the three and nine months ended September 29, 2001 were 38.6% and 37.1%,
respectively. For the three and nine months ended September 28, 2002, the
primary differences between the U.S. federal statutory tax rate and the
Company's effective tax rate were state income taxes, offset by lower
statutory tax rates in certain foreign jurisdictions. For the three and
nine months ended September 29, 2001, the primary differences between the
U.S. federal statutory tax rate and the Company's effective tax rate were
state income taxes, offset by lower statutory tax rates in certain foreign
jurisdictions and adjustments to the deferred tax asset valuation
allowance.

8. WEIGHTWATCHERS.COM

LOAN AGREEMENT:

Pursuant to the amended loan agreement dated September 10, 2001 between the
Company and WeightWatchers.com, through fiscal year 2001, the Company
provided loans to WeightWatchers.com aggregating $34,500. The Company has
no further obligation to provide funding to WeightWatchers.com. Beginning
on January 1, 2002, the note bears interest at 13% per

13

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

year, and beginning March 31, 2002, interest has been and shall be paid to
the Company semi-annually. All principal outstanding under the agreement is
payable in six semi-annual installments commencing on March 31, 2004. For
the three and nine months ended September 28, 2002, the Company recorded
interest income of $1,118 and $3,336, respectively, on the note. As of
September 28, 2002, the interest receivable balance was $2,236 which was
paid in October 2002, and is included within receivables, net. As
WeightWatchers.com is an equity investee, and the Company has been the only
entity providing funding, through fiscal year 2001, the Company reduced its
loan receivable balances by 100% of WeightWatchers.com's losses.
Additionally, the remaining loan receivable balances were reviewed for
impairment on a quarterly basis and, accordingly, during fiscal 2001 the
Company recorded a full valuation allowance against the remaining balances.

INTELLECTUAL PROPERTY LICENSE:

The Company entered into an amended and restated intellectual property
license agreement dated September 29, 2001 with WeightWatchers.com. In
fiscal 2002, the Company began earning royalties pursuant to the agreement.
For the three and nine months ended September 28, 2002, the Company
recorded royalty income of $1,192 and $2,898, respectively, which was
included in product sales and other, net. As of September 28, 2002, the
receivable balance was $1,192 and is included within receivables, net.

SERVICE AGREEMENT:

Simultaneously with the signing of the amended and restated
intellectual property license agreement, the Company entered into a service
agreement with WeightWatchers.com, under which WeightWatchers.com provides
certain types of services. The Company is required to pay for all expenses
incurred by WeightWatchers.com directly attributable to the services it
performs under this agreement, plus a fee of 10% of those expenses. The
Company recorded service expense for the three and nine months ended
September 28, 2002, of $549 and $1,303, respectively, and for the three and
nine months ended September 29, 2001 of $120 and $360, respectively, all of
which was included in marketing expenses. The accrued service payable at
September 28, 2002 and September 29, 2001 was $449 and $360, respectively,
and is netted against receivables, net.

LEASE GUARANTEE:

The Company has guaranteed an operating lease of WeightWatchers.com
for office space. The annual rental rate is $459 plus increases for
operating expenses and real estate taxes. The lease expires in September
2003. If it is determined that WeightWatchers.com cannot meet its
obligations under the terms of the operating lease, the Company will be
required to fund this obligation and record a liability for the remaining
lease payments, less any estimated sublease revenues.

9. LEGAL

Due to the nature of its activities, the Company is, at times, subject
to pending and threatened legal actions that arise out of the normal course
of business. In the opinion of management, based in part upon advice of
legal counsel, the disposition of all such matters is not expected to have
a material effect on the Company's results of operations, financial
condition or cash flows.

14

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

10. DERIVATIVE INSTRUMENTS AND HEDGING

The Company enters into forward and swap contracts to hedge
transactions denominated in foreign currencies to reduce currency risk
associated with fluctuating exchange rates. These contracts are used
primarily to hedge certain foreign currency cash flows and for payments
arising from some of the Company's foreign currency denominated debt
obligations. In addition, the Company enters into interest rate swaps to
hedge a substantial portion of its variable rate debt. As of September 28,
2002 and September 29, 2001, the Company held currency and interest rate
swap contracts to purchase certain foreign currencies totaling $209,481 and
$207,556, respectively. The Company also held separate currency and
interest rate swap contracts to sell foreign currencies of $214,845 and
$212,920, respectively.

As of September 28, 2002, gains of $2,656 ($1,673 net of taxes) for
qualifying hedges were reported as a component of accumulated other
comprehensive loss. For the three and nine months ended September 28, 2002,
the ineffective portion of changes in fair values of cash flow hedges was
not material. Fair value adjustments for non-qualifying hedges resulted in
a reduction of net income of $1,493 ($2,369 before taxes) and $1 ($2 before
taxes) for the three months ended September 28, 2002 and September 29,
2001, respectively. Fair value adjustments for non-qualifying hedges
resulted in a (reduction of) net income of $(1,153) ($(1,831) before taxes)
for the nine months ended September 28, 2002. Fair value adjustments for
non-qualifying hedges resulted in an increase to net income of $427 ($679
before taxes) for the nine months ended September 29, 2001. In addition,
for the three months ended September 28, 2002, reclassification to earnings
from accumulated other comprehensive loss resulted in a reduction of net
income of $159 ($252 before taxes). For the nine months ended September 28,
2002, reclassification to earnings from accumulated other comprehensive
loss resulted in an increase to net income of $1,381 ($2,192 before taxes).

11. COMPREHENSIVE INCOME

Comprehensive income for the Company includes net income, the effects
of foreign currency translation and changes in the fair value of derivative
instruments.

Comprehensive income is as follows:

15

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

12. GUARANTOR SUBSIDIARIES

The Company's payment obligations under the Notes are fully and
unconditionally guaranteed on a joint and several basis by the following
wholly-owned subsidiaries: 58 WW Food Corp.; Waist Watchers, Inc.; Weight
Watchers Camps, Inc.; W.W. Camps and Spas, Inc.; Weight Watchers Direct,
Inc.; W/W Twentyfirst Corporation; W.W. Weight Reduction Services, Inc.;
W.W.I. European Services Ltd.; W.W. Inventory Service Corp.; Weight
Watchers North America, Inc.; Weight Watchers UK Holdings Ltd.; Weight
Watchers International Holdings Ltd.; Weight Watchers (U.K.) Limited;
Weight Watchers (Exercise) Ltd.; Weight Watchers (Accessories &
Publication) Ltd.; Weight Watchers (Food Products) Limited; Weight Watchers
New Zealand Limited; BLTC Pty Ltd.; LLTC Pty Ltd.; Weight Watchers Asia
Pacific Finance Limited Partnership (APF); Weight Watchers International
Pty Limited; Fortuity Pty Ltd.; and Gutbusters Pty Ltd. (collectively, the
"Guarantor Subsidiaries"). The obligations of each Guarantor Subsidiary
under its guarantee of the Notes are subordinated to such subsidiary's
obligations under its guarantee of the Credit Facility.

Presented below is condensed consolidating financial information for
Weight Watchers International, Inc. ("Parent Company"), the Guarantor
Subsidiaries and the Non-Guarantor Subsidiaries (primarily companies
incorporated in European countries other than the United Kingdom). In the
Company's opinion, separate financial statements and other disclosures
regarding each of the Guarantor Subsidiaries would not provide additional
information that is material to investors. Therefore, the Guarantor
Subsidiaries are combined in the presentation below.

Investments in subsidiaries are accounted for by the Parent Company on
the equity method of accounting. Earnings of subsidiaries are, therefore,
reflected in the Parent Company's investments in subsidiaries' accounts.
The elimination entries eliminate investments in subsidiaries and
intercompany balances and transactions.

16

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
SUPPLEMENTAL UNAUDITED CONSOLIDATING BALANCE SHEET
AS OF SEPTEMBER 28, 2002
(IN THOUSANDS)

17

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
SUPPLEMENTAL UNAUDITED CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 29, 2001
(IN THOUSANDS)

18

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 28, 2002
(IN THOUSANDS)

19

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 29, 2001
(IN THOUSANDS)

20

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 28, 2002
(IN THOUSANDS)

21

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 29, 2001
(IN THOUSANDS)

22

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 28, 2002
(IN THOUSANDS)

23

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 29, 2001
(IN THOUSANDS)

24

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Company's
Annual Report on Form 10-K for the fiscal year ended December 29, 2001 that
includes additional information about the Company, its results of operations,
its financial position and its cash flows. Except for historical information
contained herein, the matters discussed in this Quarterly Report on Form 10-Q
include "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 with respect to the Company's results
of operations, financial position, cash flows, financing plans and business
strategies. The Company has used the words "may", "will", "expect",
"anticipate", "believe", "estimate", "plan", "intend", and similar expressions
in this Quarterly Report on Form 10-Q and the documents incorporated by
reference in this Quarterly Report on Form 10-Q to identify forward-looking
statements. The Company has based these forward-looking statements on the
Company's 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:

- competition, including price competition and competition with self-help,
medical and other weight-loss programs and products;

- risks associated with the relative success of the Company's marketing
and advertising;

- risks associated with the continued attractiveness of the Company's
programs;

- risks associated with the Company's ability to meet its obligations
related to its outstanding indebtedness;

- risks associated with general economic conditions; and

- adverse results in litigation and regulatory matters, the adoption of
adverse legislation or regulations, more aggressive enforcement of
existing legislation or regulations or a change in the interpretation of
existing legislation or regulations.

You should not put undue reliance on any forward-looking statements. You
should understand that many important factors could cause the Company's results
to differ materially from those expressed or suggested in any forward-looking
statements. Except as required by law, the Company does not undertake any
obligation to publicly release any revisions to these forward-looking statements
to reflect events or circumstances that occur after the date of this Quarterly
Report or to reflect the occurrence of unanticipated events.

CRITICAL ACCOUNTING POLICIES

For a discussion of the critical accounting policies affecting the Company,
see "Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations, Significant Accounting Policies" beginning on page 11 of
the Company's Annual Report on Form 10-K for the fiscal year ended December 29,
2001. The critical accounting policies affecting the Company have not changed
since December 29, 2001.

25

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Figures are rounded to the nearest one hundred thousand; percentage changes are
based on rounded figures. Attendance percentage changes are based on rounded
figures to the nearest thousand.

COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 28, 2002 TO THE THREE MONTHS
ENDED SEPTEMBER 29, 2001

Net revenues were $189.2 million for the three months ended September 28,
2002, an increase of $45.1 million or 31.3%, from $144.1 million for the three
months ended September 29, 2001. Of the $45.1 million increase in net revenues,
$24.8 million was attributable to classroom meeting fees, $16.5 million to total
Company product sales, $0.9 million to franchise royalties and $2.9 million to
publications, licensing and other royalties. On a geographical basis, net
revenues from classroom meeting fees and product sales were up 34.2% in North
America and 23.7% internationally. The positive impact of foreign currency
exchange rates on international net revenues was $5.1 million in the three
months ended September 28, 2002, accounting for 10.2% of the 23.7% total
international net revenue increase.

Classroom meeting fees were $123.2 million for the three months ended
September 28, 2002 as compared to $98.4 million for the three months ended
September 29, 2001. North American Company Owned ("NACO") classroom meeting fees
were $83.7 million for the three months ended September 28, 2002, an increase of
$19.3 million or 30.0%, from $64.4 million for the three months ended September
29, 2001. The increase in NACO classroom meeting fees was the result of a 29.2%
increase in member attendance. Excluding the impact of franchise acquisitions,
NACO organic attendance growth was 20.4%. International Company-owned classroom
meeting fees were $39.5 million for the three months ended September 28, 2002,
an increase of $5.5 million or 16.2%, from $34.0 million for the three months
ended September 29, 2001. The increase in international Company-owned classroom
meeting fees was the result of a 5.9% increase in international member
attendance, driven by a strong performance in Continental Europe and
Australasian operations, and the result of positive exchange rate variances.

Product sales were $53.8 million for the three months ended September 28,
2002, an increase of $16.5 million or 44.2%, from $37.3 million for the three
months ended September 29, 2001. Product sales increased 46.6% to $32.1 million
domestically and 40.3% to $21.6 million internationally as a result of increased
attendance and the Company's strategy to focus product sales efforts worldwide
on core classroom products. Average product sales per attendance increased in
all regions.

Franchise royalties were $6.4 million domestically and $1.3 million
internationally for the three months ended September 28, 2002. In total,
franchise royalties increased $0.9 million or 13.2%, from $6.8 million for the
three months ended September 29, 2001. The 13.2% increase is net of a reduction
in franchise royalties to the Company resulting from the acquisition by the
Company of three franchises subsequent to September 29, 2001. At the franchise
level, revenue growth was the direct result of increased member attendance in
their operations.

Revenues generated from publications, licensing and other royalties were
$4.5 million for the three months ended September 28, 2002, an increase of $2.9
million or 181.3%, from $1.6 million for the three months ended September 29,
2001. This increase was primarily the result of royalty income from
WeightWatchers.com, which began to pay royalties in the first quarter of 2002,
and higher revenues from advertising arrangements.

26

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Cost of revenues was $85.6 million for the three months ended September 28,
2002, an increase of $19.6 million or 29.7%, from $66.0 million for the three
months ended September 29, 2001. Gross profit margin was 54.7% for the three
months ended September 28, 2002, up from 54.2% for the three months ended
September 29, 2001.

Marketing expenses were $14.4 million for the three months ended September
28, 2002, an increase of $3.5 million or 32.1%, as compared to $10.9 million for
the three months ended September 29, 2001. Marketing expenses increased
primarily as a result of further efforts to drive and support continued
enrollment growth of the business, including investments made to support the
launch of a program innovation in Continental Europe. As a percentage of net
revenues, marketing expenses remained relatively flat for the three months ended
September 28, 2002 compared to the three months ended September 29, 2001.

Selling, general and administrative expenses were $14.8 million for the
three months ended September 28, 2002, a decrease of $3.3 million or 18.2%, from
$18.1 million for the three months ended September 29, 2001. The decrease in
selling, general and administrative expenses was primarily the result of $2.5
million of goodwill amortization recorded in the three months ended September
29, 2001. As a result of the adoption of SFAS Nos. 141 and 142, the Company no
longer amortizes goodwill, but rather reviews goodwill annually for impairment.
In addition, legal and other professional fees, which rose last year in
conjunction with our becoming a public company, are lower this year.

As a result of the above, operating income was $74.4 million for the three
months ended September 28, 2002, an increase of $25.3 million or 51.5%, from
$49.1 million for the three months ended September 29, 2001. The operating
income margin rose to 39.3% for the three months ended September 28, 2002 from
34.1% for the three months ended September 29, 2001 partially as a result of
lower selling, general and administrative expenses, as noted above.

Other expenses, net were $3.5 million for the three months ended September
28, 2002 as compared to $8.2 million for the three months ended September 29,
2001. For the three months ended September 28, 2002, the Company recorded
unrealized currency losses on its foreign currency denominated debt and other
obligations net of hedges of $2.8 million as compared to $7.1 million of losses
net of hedges, in the three months ended September 29, 2001.

COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 28, 2002 TO THE NINE MONTHS ENDED
SEPTEMBER 29, 2001

Net revenues were $619.6 million for the nine months ended September 28,
2002, an increase of $141.3 million or 29.5%, from $478.3 million for the nine
months ended September 29, 2001. Of the $141.3 million increase in net revenues,
$80.5 million was attributable to classroom meeting fees, $52.3 million to total
Company product sales, $3.3 million to franchise royalties and $5.2 million to
publications, licensing and other royalties. On a geographical basis, meeting
fees and product sales were up 40.7% in North America and 12.4% internationally,
with 3.0% of the international increase resulting from currency fluctuations.
The Company's business is seasonal, with revenues generally highest in the first
half of the fiscal year.

Classroom meeting fees were $399.0 million for the nine months ended
September 28, 2002 as compared to $318.5 million for the nine months ended
September 29, 2001. NACO classroom meeting fees were $272.2 million for the nine
months ended September 28, 2002, an increase of $73.6 million or 37.1%, from
$198.6 million for the nine months ended September 29, 2001. The increase in
NACO classroom meeting fees was the result of a 34.1% increase in member
attendance. Excluding the impact of three franchise acquisitions made during
2002, NACO organic attendance rose 24.6%.

27

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

International Company-owned classroom meeting fees were $126.8 million for
the nine months ended September 28, 2002, an increase of $6.9 million or 5.8%,
from $119.9 million for the nine months ended September 29, 2001. On a year to
date basis, the impact of foreign currency exchange rates was 2.9%.
International member attendances increased 2.0% overall. Continental Europe and
Other regions posted gains of 4.2% and 6.5%, respectively, while attendances in
the United Kingdom were down slightly, 0.8%.

Product sales were $182.3 million for the nine months ended September 28,
2002, an increase of $52.3 million or 40.2%, from $130.0 million for the nine
months ended September 29, 2001. Product sales increased 50.2% to $112.2 million
domestically and 26.5% to $70.1 million internationally, reflecting attendance
growth in NACO as well as the Company's strategy to focus product sales efforts
worldwide on core classroom products. Average product sales per attendance have
increased in all regions.

Franchise royalties were $21.3 million domestically and $4.4 million
internationally for the nine months ended September 28, 2002. In total,
franchise royalties increased $3.3 million or 14.7%, from $22.4 million for the
nine months ended September 29, 2001, on the strength of increased member
attendance and product sales partially offset by the loss of franchise royalties
revenue from three franchises which were acquired by the Company subsequent to
September 29, 2001.

Revenues from publications, licensing and other royalties were $12.6
million for the nine months ended September 28, 2002, an increase of $5.2
million or 70.3%, from $7.4 million for the nine months ended September 29,
2001. This increase was in large part the result of licensing royalty income
from WeightWatchers.com which began to pay royalties in the first quarter of
2002.

Cost of revenues was $277.6 million for the nine months ended September 28,
2002, an increase of $62.5 million or 29.1%, from $215.1 million for the nine
months ended September 29, 2001. Gross profit margin was 55.2% for the nine
months ended September 28, 2002, slightly higher than the 55.0% level of the
nine months ended September 29, 2001.

Marketing expenses were $60.8 million for the nine months ended September
28, 2002, an increase of $9.3 million or 18.1%, as compared to $51.5 million for
the nine months ended September 29, 2001. Marketing expenses increased to
support the continuing growth of the business. As a percentage of net revenues,
marketing expenses decreased from 10.8% for the nine months ended September 29,
2001 to 9.8% for the nine months ended September 28, 2002, as the Company
continues to leverage its marketing efforts across the growing revenue base.

Selling, general and administrative expenses were $45.1 million for the
nine months ended September 28, 2002, a decrease of $11.7 million or 20.6%, from
$56.8 million for the nine months ended September 29, 2001. The decrease in
selling, general and administrative expenses was the result of two non-recurring
items in the nine months ended September 29, 2001: a one-time charge of $6.1
million for the write-off of a receivable from a licensing agreement and $7.3
million of goodwill amortization, which is no longer required under SFAS Nos.
141 and 142. Excluding these items selling, general and administrative expenses,
which were down as a percentage of revenues, rose 3.9% in absolute dollars as a
result of normal increases for salaries and other expenses.

As a result of the above, operating income was $236.0 million for the nine
months ended September 28, 2002, an increase of $81.1 million or 52.4%, from
$154.9 million for the nine months ended September 29, 2001. The operating
income margin for the nine months ended September 28, 2002 was 38.1% as compared
to 32.4% for the nine months ended September 29, 2001. Excluding the two
non-recurring

28

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

selling, general and administrative items mentioned above, last year's operating
income margin for the nine months was 35.2%.

Other expenses, net were $15.7 million for the nine months ended September
28, 2002 as compared to $8.8 million for the nine months ended September 29,
2001. For the nine months ended September 28, 2002, the Company recorded
unrealized currency losses on its foreign currency denominated debt and other
obligations net of hedges of $12.8 million as compared to a $2.4 million gain in
the nine months ended September 29, 2001, an unfavorable impact of $15.2
million. Reserves recorded against the loan to WeightWatchers.com in 2001 more
than offset the impact of the unrealized currency gains.

LIQUIDITY AND CAPITAL RESOURCES

For the nine months ended September 28, 2002, the Company's primary source
of funds to meet working capital needs was cash from operations. Cash and cash
equivalents increased $38.6 million during the nine month period ended September
28, 2002, to $61.9 million.

Cash provided by operating activities of $166.4 million in the nine months
ended September 28, 2002 was augmented during the first quarter of 2002 by
borrowings under the Company's Revolving Credit Facility. These borrowings were
fully repaid by the end of the second quarter. Funds were used primarily for
investing and financing activities.

Investing activities totaled $71.9 million in the nine months ended
September 28, 2002 and were partially attributable to $46.5 million paid in
connection with the acquisition of the Company's North Jersey franchise,
acquired on January 18, 2002, and $3.4 million invested in capital expenditures.
The North Jersey franchise acquisition was financed through borrowings under the
Company's Revolving Credit Facility. Two other acquisitions made during the
period were fully paid with $21.6 million of cash from operations. Capital
spending during the period consisted primarily of leasehold improvements,
furniture and equipment for meeting locations and information system
expenditures.

Cash used for financing activities totaled $58.0 million. Included were
repayments of $66.1 million in principal on the Company's Credit Facility,
including $20.0 million in addition to the scheduled payments of $46.1 million,
the repurchase of one million shares of the Company's Series A Preferred Stock
held by Heinz for $25.0 million on March 1, 2002 and the cumulative final
payment of $1.2 million of dividends on the Company's Series A Preferred Stock.

The Company's total debt was $452.1 million and $474.0 million at September
28, 2002 and December 29, 2001, respectively. As of September 28, 2002, the
Company had approximately $45.0 million of additional borrowing capacity
available under the Company's Revolving Credit Facility.

The Company's debt consists of both fixed and variable-rate instruments. At
September 28, 2002, fixed-rate debt constituted approximately 55% of the
Company's total debt.

29

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following schedule sets forth the Company's long-term debt obligations as of
September 28, 2002.

LONG-TERM DEBT
AS OF SEPTEMBER 28, 2002
(in millions, except percentages)

The Term Loan A facility, the Term Loan B facility, the TLC facility and
the Revolving Credit Facility bear interest at a rate equal to (a) in the case
of the Term Loan A facility and the Revolving Credit Facility, LIBOR plus 1.75%
or, at the Company's option, the alternate base rate (as defined in the Credit
Facility) plus 0.75%, (b) in the case of the Term Loan B facility and the TLC
facility, LIBOR plus 2.50% or, at the Company's option, the alternate base rate
plus 1.50%. In addition to paying interest on outstanding principal under the
Credit Facility, the Company is required to pay a commitment fee to the lenders
under the Revolving Credit Facility with respect to the unused commitments at a
rate equal to 0.50% per year.

The Company's Credit Facility contains covenants that restrict the
Company's ability to incur additional indebtedness, pay dividends on and redeem
capital stock, make other restricted payments, including investments, sell the
Company's assets and enter into consolidations, mergers and transfers of all or
substantially all of the Company's assets. The Company's Credit Facility also
requires the Company to maintain specified financial ratios and satisfy
financial condition tests.

The Company's obligations under the Notes are subordinate and junior in
right of payment to all of the Company's existing and future senior
indebtedness, including all indebtedness under the Credit Facility. The
indentures, pursuant to which the Notes were issued, restrict the Company's
ability to incur additional indebtedness, issue shares of disqualified stock and
preferred stock, pay dividends, make other restricted payments, including
investments, create limitations on the ability of the Company's subsidiaries to
pay dividends or make certain payments to the Company, merge or consolidate with
any other person or sell, assign, transfer, lease, convey or otherwise dispose
of all or substantially all of the Company's assets. The Company and/or
affiliates of the Company, including entities related to Artal Luxembourg S.A.,
may from time to time, depending on market conditions, purchase the Notes in the
open market or by other means.

The Company's credit ratings by Moody's at September 28, 2002 for the
Credit Facility and the Notes were "Ba1" and "Ba3", respectively. The Company's
credit ratings by Standard & Poor's at September 28, 2002 for the Credit
Facility and the Notes were "BB - " and "B", respectively.

30

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following schedule sets forth the Company's year by year long-term debt
obligations as of September 28, 2002.

LONG-TERM DEBT OBLIGATIONS
(INCLUDING CURRENT PORTION)
AS OF SEPTEMBER 28, 2002
(in millions)
PAYMENTS DUE BY FISCAL YEAR

Remainder of Year 2002 $ 3.7
2003 18.3
2004 16.1
2005 15.5
2006 1.6
Thereafter 396.9
---------
Total $ 452.1
=========

Debt obligations due to be repaid in the next twelve months are expected to
be satisfied with operating cash flows. The Company is not aware of factors that
are reasonably likely to adversely affect liquidity trends or increase the
Company's risk beyond the risk factors presented in other Company filings. The
Company believes that cash flows from operating activities, together with
borrowings available under the Company's Revolving Credit Facility, will be
sufficient for the next twelve months to fund currently anticipated capital
expenditure requirements, debt service requirements and working capital
requirements.

Our expected capital expenditure requirements over the next 12 months
include, but are not limited to, leasehold improvements, furniture and equipment
for meeting locations and administrative offices and information system
upgrades.

Any future acquisitions, joint ventures or other similar transactions could
require additional capital and the Company cannot be certain that any additional
capital will be available on acceptable terms or at all. The Company's ability
to fund the Company's capital expenditure requirements, interest and principal
payment obligations, and working capital requirements as well as its ability to
comply with all of the financial covenants under the Company's debt agreements
depends on the Company's future operations, performance and cash flow. These are
subject to prevailing economic conditions and to financial, business and other
factors, some of which are beyond the Company's control.

OFF-BALANCE SHEET TRANSACTIONS

As part of its on-going business, the Company does not participate in
transactions that generate relationships with unconsolidated entities or
financial partnerships, such as entities often referred to as structured finance
or special purpose entities, which would have been established for the purpose
of facilitating off-balance sheet arrangements or other contractually narrow or
limited purposes.

31

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

RELATED PARTY TRANSACTIONS

For a discussion of related party transactions affecting the Company, see
"Item 13. Certain Relationships and Related Transactions" beginning on page 32
of the Company's Annual Report on Form 10-K for the fiscal year ended December
29, 2001. Other than during the normal course of business and as set forth
below, the related party transactions affecting the Company have not changed
since December 29, 2001. Nellson Nutraceutical, a subsidiary of Artal
Luxembourg, S.A. and a supplier of Weight Watchers International, was sold by
Artal Luxembourg, S.A. on October 4, 2002. See Note 8 to the unaudited
consolidated financial statements contained herein for further discussion.

SEASONALITY

The Company's business is seasonal, with revenues generally decreasing at
year end and during the summer months. The Company's advertising schedule
supports the three key enrollment-generating seasons of the year: winter, spring
and fall. Due to the timing of the Company's marketing expenditures,
particularly the higher level of expenditures in the first quarter, the
Company's operating income for the second quarter is generally the strongest,
with the fourth quarter generally being the weakest.

ACCOUNTING STANDARDS

In June 2001, FASB issued Statement of Financial Accounting Standards, or
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142 addresses the
mandatory use of the purchase method of accounting for business combinations,
elimination of indefinite life goodwill amortization, a revised framework for
testing goodwill, impairment at a "reporting unit" level and new criteria for
the identification and potential amortization of other intangible assets. The
Company adopted SFAS No. 142 on December 30, 2001. See Note 3 to the unaudited
consolidated financial statements contained herein for further discussion.

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations," and SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS No. 143 addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. SFAS No. 144 supersedes SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," and the accounting and reporting provisions of AICPA
Accounting Principles Board Opinion No. 30, "Reporting the Results of Operations
- - Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions," and
addresses financial accounting and reporting for the impairment or disposal of
long-lived assets. The Company adopted SFAS No. 144 on December 30, 2001 and
will adopt SFAS No. 143 on December 29, 2002. The adoption of SFAS No. 144 did
not have a material impact on the Company's results of operations, the financial
position or cash flows nor does the Company expect the adoption of SFAS No. 143
to have any such material impact.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB No. 13 and Technical Corrections." SFAS No.
145 rescinds SFAS No. 4, which required all gains and losses from the
extinguishment of debt to be classified as an extraordinary item, and amends
other existing authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability under changed
conditions. The provisions of SFAS No. 145 are effective for the Company
beginning December 29, 2002. The Company does not expect the

32

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

adoption of SFAS No. 145 to have a material impact on its results of operations,
financial position or cash flows.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." SFAS No. 146 requires that a
liability for the cost associated with an exit or disposal activity be
recognized when the liability is incurred and also establishes that fair value
is the objective for initial measurement of the liability. The provisions of
SFAS No. 146 are effective for exit or disposal activities that are initiated
after December 31, 2002.

33

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK

Based on the overall interest rate exposure on the Company's fixed rate
borrowings at September 28, 2002, a 10% change in market interest rates would
have less than a 5% impact on the fair value of the Company's long-term debt.
Based on variable rate debt levels at September 28, 2002, a 10% change in market
interest rates would have less than a 5% impact on the Company's net interest
expense.

The Company uses foreign currency forward contracts to more properly align
the underlying sources of cash flow with the Company's debt servicing
requirements. At September 28, 2002, the Company had long-term foreign currency
forward contracts receivables with notional amounts of $44.0 million and Euro
76.0 million, offset by foreign currency forward contracts payables with
notional amounts of L59.2 million and $21.9 million.

For a more detailed discussion of the quantitative and qualitative
disclosures about market risks affecting the Company, see Item 7A "Quantitative
and Qualitative Disclosure About Market Risk" beginning on page 21 of the
Company's Annual Report on Form 10-K for the fiscal year ended December 29,
2001. The Company's exposure to market risks has not changed materially since
December 29, 2001.

34

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 4. CONTROLS AND PROCEDURES

Based on their evaluation, as of a date within 90 days of the filing of
this Quarterly Report on Form 10-Q, the Company's Chief Executive Officer and
Chief Financial Officer have concluded the Company's disclosure controls and
procedures (as defined in Rules 13a-14 and 15d-14 under the Securities Exchange
Act of 1934) are effective. There have been no significant changes in internal
controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

35

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
Nothing to report under this item.

ITEM 2. CHANGES IN SECURITIES
Nothing to report under this item.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Nothing to report under this item.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Nothing to report under this item.

ITEM 5. OTHER INFORMATION
Nothing to report under this item.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit 99.1 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 99.2 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the three months ended
September 28, 2002.

36

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date: November 12, 2002 By: /s/ LINDA HUETT
-----------------------------------------------
Linda Huett
President, Chief Executive Officer and Director
(Principal Executive Officer)

Date: November 12, 2002 By: /s/ ANN M. SARDINI
-----------------------------------------------
Ann M. Sardini
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

37

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION

CERTIFICATIONS

I, Linda Huett, President and Chief Executive Officer of Weight Watchers
International, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Weight Watchers
International, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data, and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: November 12, 2002 Signature: /s/ Linda Huett
-------------------------------
Linda Huett
President and Chief Executive Officer

38

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION

I, Ann M. Sardini, Vice President and Chief Financial Officer of Weight Watchers
International, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Weight Watchers
International, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data, and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: November 12, 2002 Signature: /s/ Ann M. Sardini
-------------------------------
Ann M. Sardini
Vice President and Chief Financial Officer