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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000912057-02-031572.txt : 20020813
<SEC-HEADER>0000912057-02-031572.hdr.sgml : 20020813
<ACCEPTANCE-DATETIME>20020813162750
ACCESSION NUMBER:		0000912057-02-031572
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20020629
FILED AS OF DATE:		20020813

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			WEIGHT WATCHERS INTERNATIONAL INC
		CENTRAL INDEX KEY:			0000105319
		IRS NUMBER:				116040273
		STATE OF INCORPORATION:			VA
		FISCAL YEAR END:			1230

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-16769
		FILM NUMBER:		02730067

	BUSINESS ADDRESS:	
		STREET 1:		175 CROSSWAYS PARK WEST
		CITY:			WOODBURY
		STATE:			NY
		ZIP:			11797
		BUSINESS PHONE:		5163901400

	MAIL ADDRESS:	
		STREET 1:		175 CROSSWAYS PARK WEST
		CITY:			WOODBURY
		STATE:			NY
		ZIP:			11797
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>a2086723z10-q.txt
<DESCRIPTION>FORM 10-Q
<TEXT>
<Page>


                       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 June 29, 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 July 31, 2002 was
106,088,546.

<Page>

              WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
                                      INDEX


<Table>
<Caption>
                                                                                       PAGE NO.
                                                                                       --------
<S>                                                                                    <C>
Part I.  FINANCIAL INFORMATION

Item 1.   Financial Statements

Unaudited Consolidated Balance Sheets as of June 29, 2002 and December 29, 2001           2

Unaudited Consolidated Statements of Operations for the three months ended
  June 29, 2002 and June 30, 2001                                                         3

Unaudited Consolidated Statements of Operations for the six months ended
  June 29, 2002 and June 30, 2001                                                         4

Unaudited Consolidated Statements of Changes in Shareholders' Deficit and
  Comprehensive Income for the six months ended June 29, 2002, and for the
  fiscal year ended December 29, 2001                                                     5

Unaudited Consolidated Statements of Cash Flows for the six months ended
  June 29, 2002 and June 30, 2001                                                         6

Notes to Unaudited Consolidated Financial Statements                                    7 - 23

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                                    24 - 31

Item 3.   Quantitative and Qualitative Disclosures About Market Risk                     32

Part II.  OTHER INFORMATION                                                            33 - 34

Item 1.   Legal Proceedings

Item 2.   Changes in Securities

Item 3.   Defaults Upon Senior Securities

Item 4.   Submission of Matters To a Vote of Security Holders

Item 5.   Other Information

Item 6.   Exhibits and Reports on Form 8-K
</Table>

<Page>

                                                                               2

ITEM 1. FINANCIAL STATEMENTS

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


<Table>
<Caption>
                                                                                                   JUNE 29,         DECEMBER 29,
                                                                                                     2002               2001
                                                                                                 -----------        ------------
                                                                                                          (UNAUDITED)
<S>                                                                                              <C>                <C>
ASSETS
CURRENT ASSETS

  Cash and cash equivalents                                                                      $    56,380        $     23,338
  Receivables, net                                                                                    15,806              13,619
  Inventories, net                                                                                    21,231              26,205
  Prepaid expenses and other current assets                                                           21,967              20,717
                                                                                                 -----------        ------------
    TOTAL CURRENT ASSETS                                                                             115,384              83,879

Property and equipment, net                                                                           11,427              10,725
Notes and other receivables, noncurrent                                                                  243                 325
Goodwill, net                                                                                        282,084             234,302
Trademarks and other intangible assets, net                                                            7,005               6,863
Deferred income taxes                                                                                132,304             136,281
Deferred financing costs, other                                                                        9,957              10,473
                                                                                                 -----------        ------------
    TOTAL ASSETS                                                                                 $   558,404        $    482,848
                                                                                                 ===========        ============

LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
  Portion of long-term debt due within one year                                                  $    16,129        $     15,699
  Accounts payable                                                                                    15,251              17,698
  Accrued liabilities                                                                                 53,589              52,454
  Income taxes                                                                                        12,203               9,139
  Deferred revenue                                                                                    20,088              13,020
                                                                                                 -----------        ------------
    TOTAL CURRENT LIABILITIES                                                                        117,260             108,010

Long-term debt                                                                                       461,015             458,320
Deferred income taxes                                                                                  3,255               3,169
Other                                                                                                    637                 870
                                                                                                 -----------        ------------
    TOTAL LONG-TERM DEBT AND OTHER LIABILITIES                                                       464,907             462,359

Redeemable preferred stock                                                                                 -              25,996
SHAREHOLDERS' DEFICIT
  Common stock, $0 par; 1,000,000 shares authorized; 111,988 shares issued;
   105,978 shares outstanding at June 29, 2002 and 105,500 shares at December 29, 2001                     -                   -
  Treasury stock, at cost, 6,010 shares at June 29, 2002 and 6,488 shares at December 29, 2001       (24,268)            (26,196)
  Accumulated income (deficit)                                                                         6,044             (73,998)
  Accumulated other comprehensive loss                                                                (5,539)            (13,323)
                                                                                                 -----------        ------------
    TOTAL SHAREHOLDERS' DEFICIT                                                                      (23,763)           (113,517)
                                                                                                 -----------        ------------

    TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' DEFICIT                          558,404        $    482,848
                                                                                                 ===========        ============
</Table>

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

<Page>

                                                                               3

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


<Table>
<Caption>
                                                                        THREE MONTHS ENDED
                                                                  -----------------------------
                                                                    JUNE 29,         JUNE 30,
                                                                      2002             2001
                                                                  ------------    -------------
                                                                           (UNAUDITED)
<S>                                                               <C>             <C>
Meeting fees, net                                                 $    141,441    $     108,639
Product sales and other, net                                            76,452           53,686
                                                                  ------------    -------------
    Revenues, net                                                      217,893          162,325

Cost of revenues                                                        96,012           71,701
                                                                  ------------    -------------
    Gross profit                                                       121,881           90,624

Marketing expenses                                                      17,135           13,469
Selling, general and administrative expenses                            14,225           19,659
                                                                  ------------    -------------
    Operating income                                                    90,521           57,496

Interest expense, net                                                   10,405           13,248
Other expenses, net                                                     12,796            1,516
                                                                  ------------    -------------
    Income before income taxes and minority interest                    67,320           42,732

Provision for income taxes                                              26,117           16,642
                                                                  ------------    -------------
    Income before minority interest                                     41,203           26,090

Minority interest                                                          (17)              12
                                                                  ------------    -------------
    Net income                                                    $     41,220    $      26,078
                                                                  ============    =============

Preferred stock dividends                                                    -              375
                                                                  ------------    -------------
    Net income available to common shareholders                   $     41,220    $      25,703
                                                                  ============    =============

Net income per share:
    Basic                                                         $       0.39    $        0.23
                                                                  ============    =============
    Diluted                                                       $       0.38    $        0.23
                                                                  ============    =============

Weighted average common shares outstanding:
    Basic                                                              105,883          109,943
                                                                  ============    =============
    Diluted                                                            108,180          111,688
                                                                  ============    =============
</Table>

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

<Page>

                                                                               4

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


<Table>
<Caption>
                                                                        SIX MONTHS ENDED
                                                                  ---------------------------
                                                                    JUNE 29,       JUNE 30,
                                                                      2002           2001
                                                                  ------------   ------------
                                                                          (UNAUDITED)
<S>                                                               <C>            <C>
Meeting fees, net                                                 $    275,797   $    220,085
Product sales and other, net                                           154,599        114,191
                                                                  ------------   ------------
    Revenues, net                                                      430,396        334,276

Cost of revenues                                                       192,029        149,144
                                                                  ------------   ------------
    Gross profit                                                       238,367        185,132

Marketing expenses                                                      46,460         40,569
Selling, general and administrative expenses                            30,330         38,822
                                                                  ------------   ------------
    Operating income                                                   161,577        105,741

Interest expense, net                                                   21,219         27,368
Other expenses, net                                                     12,175            530
                                                                  ------------   ------------
    Income before income taxes and minority interest                   128,183         77,843

Provision for income taxes                                              49,670         28,457
                                                                  ------------   ------------
    Income before minority interest                                     78,513         49,386

Minority interest                                                            9             70
                                                                  ------------   ------------
    Net income                                                    $     78,504   $     49,316
                                                                  ============   ============

Preferred stock dividends                                                  254            750
                                                                  ------------   ------------
    Net income available to common shareholders                   $     78,250   $     48,566
                                                                  ============   ============

Net income per share:
    Basic                                                         $       0.74   $       0.44
                                                                  ============   ============
    Diluted                                                       $       0.72   $       0.43
                                                                  ============   ============

Weighted average common shares outstanding:
    Basic                                                              105,761        110,965
                                                                  ============   ============
    Diluted                                                            108,180        112,601
                                                                  ============   ============
</Table>

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

<Page>

                                                                               5

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


<Table>
<Caption>
                                                                                 ACCUMULATED
                                       COMMON STOCK           TREASURY STOCK         OTHER      ACCUMULATED
                                  ----------------------   --------------------  COMPREHENSIVE    INCOME
                                    SHARES       AMOUNT     SHARES      AMOUNT       LOSS        (DEFICIT)      TOTAL
                                  ----------   ---------   --------   ---------  ------------   ----------   -----------
<S>                                  <C>       <C>            <C>     <C>        <C>            <C>          <C>
Balance at December 30, 2000         111,988           -          -           -  $     (6,271)  $ (216,507)  $  (222,778)

Comprehensive Income:
    Net income                                                                                     147,187       147,187
    Translation adjustment                                                             (3,132)                    (3,132)
    Change in fair value of
     derivatives accounted for as
     hedges                                                                            (3,920)                    (3,920)
                                                                                                             -----------

Total Comprehensive Income                                                                                       140,135
                                                                                                             -----------

Preferred stock dividend                                                                            (1,500)       (1,500)
Purchase of treasury stock                                    6,719   $ (27,132)                         -       (27,132)
Stock options exercised                                         (93)        375                       (177)          198
Sale of common stock                                           (138)        561                        (36)          525
Cost of public equity offering                                                                      (2,965)        (2,965)
                                  ----------   ---------   --------   ---------   -----------   ----------   -----------

    Balance at December 29, 2001     111,988           -      6,488     (26,196)      (13,323)     (73,998)     (113,517)

Comprehensive Income:
    Net income                                                                                      78,504        78,504
    Translation adjustment                                                              7,514                      7,514
    Change in fair value of
     derivatives accounted for as
     hedges                                                                               270                        270
                                                                                                             -----------

Total Comprehensive Income                                                                                        86,288
                                                                                                             -----------

Preferred stock dividend                                                                              (254)         (254)
Stock options exercised                                        (478)      1,928                       (880)        1,048
Tax benefit of stock options
 exercised                                                                                           2,672         2,672
                                  ----------   ---------   --------   ---------  ------------   ----------   -----------

    Balance at June 29, 2002         111,988   $       -      6,010   $ (24,268) $     (5,539)  $    6,044   $   (23,763)
                                  ==========   =========   ========   =========  ============   ==========   ===========
</Table>

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

<Page>

                                                                               6

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


<Table>
<Caption>
                                                                        SIX MONTHS ENDED
                                                                  ----------------------------
                                                                    JUNE 29,         JUNE 30,
                                                                      2002             2001
                                                                  ------------    ------------
                                                                          (UNAUDITED)
<S>                                                               <C>             <C>
    Cash provided by operating activities                         $    113,030    $     92,869
                                                                  ------------    ------------

Investing activities:
  Capital expenditures                                                  (2,075)         (1,187)
  Advances and interest in equity investment                                 -          (7,844)
  Acquisitions                                                         (46,548)        (84,353)
  Other items, net                                                        (202)         (1,532)
                                                                  ------------    ------------
    Cash used for investing activities                                 (48,825)        (94,916)
                                                                  ------------    ------------

Financing activities:
  Net decrease in short-term borrowings                                   (570)           (257)
  Proceeds from borrowings                                              58,500          60,000
  Payment of dividends                                                  (1,249)              -
  Payments of long-term debt                                           (66,134)        (42,735)
  Redemption of redeemable preferred stock                             (25,000)              -
  Proceeds from stock options exercised                                  1,048               -
  Purchase of treasury stock                                                 -         (12,730)
  Proceeds from sale of common stock                                         -             430
                                                                  ------------    ------------
    Cash (used for) provided by financing activities                   (33,405)          4,708
                                                                  ------------    ------------

Effect of exchange rate changes on cash and cash equivalents             2,242          (1,542)
Net increase in cash and cash equivalents                               33,042           1,119
Cash and cash equivalents, beginning of period                          23,338          44,501
                                                                  ------------    ------------
Cash and cash equivalents, end of period                          $     56,380    $     45,620
                                                                  ============    ============
</Table>

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

<Page>

                                                                               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 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 Financial Accounting Standards Board 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 consolidated
     financial position or results of operations, nor does the Company expect
     the adoption of SFAS No. 143 to have any such material impact.

     RECLASSIFICATION:

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

<Page>

                                                                               8

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


2.   ACQUISITIONS

          On January 18, 2002, the Company completed the acquisition of one of
     its franchisees, 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., 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 and other intangible assets. 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 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 the
     Company's franchised territories and certain business assets of Weighco
     Enterprises, Inc., Weighco of Northwest, Inc., and Weighco of Southwest,
     Inc. ("Weighco"), for an aggregate purchase price of $83,800 plus
     acquisition costs of $577. Assets acquired include inventory ($1,884) and
     property and equipment ($1,801). The excess of 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 Credit Facility, and cash from operations.

          Subsequent to June 29, 2002, the Company acquired the assets of one of
     its franchisees, Weight Watchers of San Diego and The Inland Empire, Inc.
     See Note 12.

          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.

<Page>

                                                                               9

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


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 six months ended June 29, 2002,
     goodwill increased due to the acquisition of Weight Watchers of North
     Jersey, Inc. and due to the translation of the Company's foreign
     subsidiaries into U.S. Dollars of $46,309 and $1,473, respectively.

          Also, in accordance with SFAS No. 142, aggregate amortization expense
     for definite lived intangible assets was recorded in the amounts of $212
     and $464 for the three and six months ended June 29, 2002, respectively.
     Aggregate amortization expense of definite lived intangible assets for the
     three and six months ended June 30, 2001 was $238 and $365, respectively.

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

<Table>
<Caption>
                             JUNE 29, 2002               DECEMBER 29, 2001
                     --------------------------    -------------------------
                        GROSS                        GROSS
                       CARRYING    ACCUMULATED      CARRYING     ACCUMULATED      AMORTIZATION
                        AMOUNT     AMORTIZATION      AMOUNT      AMORTIZATION        PERIOD
                     ----------    ------------    ---------     ------------     -------------
     <S>               <C>           <C>           <C>           <C>              <C>
     Trademarks and
      other            $  21,645     $  19,163     $  21,238     $     18,659     3 - 5 years
</Table>

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

<Table>
                      <S>                   <C>
                      Remainder of 2002     $     478
                      2003                  $     690
                      2004                  $     621
                      2005                  $     474
                      2006                  $      79
</Table>

<Page>

                                                                              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 six months
     ended June 30, 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
     six months ended June 29, 2002 and June 30, 2001:

<Table>
<Caption>
                                                                 THREE MONTHS ENDED          SIX MONTHS ENDED
                                                             -------------------------   -------------------------
                                                               JUNE 29,      JUNE 30,      JUNE 29,      JUNE 30,
                                                                 2002          2001          2002          2001
                                                             -----------   -----------   -----------   -----------
<S>                                                          <C>           <C>           <C>           <C>
 Reported net income available to common shareholders        $    41,220   $    25,703   $    78,250   $    48,566
 Addback: goodwill amortization (net of tax)                           -   $     1,627             -   $     3,079
                                                             -----------   -----------   -----------   -----------
    Adjusted net income available to common shareholders     $    41,220   $    27,330   $    78,250   $    51,645
                                                             ===========   ===========   ===========   ===========

Basic earnings per share:
 Reported net income available to common shareholders        $      0.39   $      0.23   $      0.74   $      0.44
 Addback: goodwill amortization (net of tax)                           -          0.01             -          0.03
                                                             -----------   -----------   -----------   -----------
    Adjusted net income available to common shareholders     $      0.39   $      0.24   $      0.74   $      0.47
                                                             ===========   ===========   ===========   ===========

Diluted earnings per share:
 Reported net income available to common shareholders        $      0.38   $      0.23   $      0.72   $      0.43
 Addback: goodwill amortization (net of tax)                           -          0.01             -          0.03
                                                             -----------   -----------   -----------   -----------
    Adjusted net income available to common shareholders     $      0.38   $      0.24   $      0.72   $      0.46
                                                             ===========   ===========   ===========   ===========
</Table>

<Page>

                                                                              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 six months ended June
     29, 2002 from 3.72% to 5.5%.

          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") to qualified institutional
     buyers. At June 29, 2002, the 100,000 EUR notes translated into 99,140 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") with its former parent, H.J. Heinz Company ("Heinz"). The
     liquidation preference of the Series A Preferred Stock is $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 has been 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.

<Page>

                                                                              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.

<Table>
<Caption>
                                                                           THREE MONTHS ENDED          SIX MONTHS ENDED
                                                                        ------------------------   -------------------------
                                                                         JUNE 29,      JUNE 30,      JUNE 29,      JUNE 30,
                                                                           2002          2001          2002          2001
                                                                        ----------   -----------   -----------   -----------
<S>                                                                     <C>          <C>           <C>           <C>
Numerator:
 Net income                                                             $   41,220   $    26,078   $    78,504   $    49,316
 Preferred stock dividends                                                       -           375           254           750
                                                                        ----------   -----------   -----------   -----------
  Numerator for basic and diluted EPS-net income available to common
   shareholders                                                         $   41,220   $    25,703   $    78,250   $    48,566
                                                                        ----------   -----------   -----------   -----------
Denominator:
  Weighted-average shares                                                  105,883       109,943       105,761       110,965
  Effect of dilutive securities: stock options                               2,297         1,745         2,419         1,636
                                                                        ----------   -----------   -----------   -----------

  Denominator for diluted EPS - weighted-average shares                    108,180       111,688       108,180       112,601
                                                                        ==========   ===========   ===========   ===========

EPS:
  Basic EPS                                                             $     0.39   $      0.23   $      0.74   $      0.44
                                                                        ==========   ===========   ===========   ===========
  Diluted EPS                                                           $     0.38   $      0.23   $      0.72   $      0.43
                                                                        ==========   ===========   ===========   ===========
</Table>

7.   INCOME TAXES

          The effective tax rates for the three and six months ended June 29,
     2002 were 38.8%. The effective tax rates for the three and six months ended
     June 30, 2001 were 38.9% and 36.6%, respectively. For the three and six
     months ended June 29, 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 six months ended June 30, 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 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

<Page>

                                                                              13

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


     funding to WeightWatchers.com. Beginning on January 1, 2002, the note
     bears interest at 13% per 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 six months
     ended June 29, 2002, the Company recorded interest income of $1,118 and
     $2,218, respectively, on the note. As of June 29, 2002, the receivable
     balance was $1,118 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, 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 six months ended June 29, 2002, the Company recorded
     royalty income of $987 and $1,707, respectively, which was included in
     product sales and other, net. As of June 29, 2002, the receivable balance
     was $987 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 six months ended June
     29, 2002, of $479 and $754, respectively, and $240 for the three and six
     months ended June 30, 2001 which was included in marketing expenses. The
     accrued service payable at June 29, 2002 and June 30, 2001 was $758 and
     $554, 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.

<Page>

                                                                              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 June 29, 2002
     and June 30, 2001, the Company held currency and interest rate swap
     contracts to purchase certain foreign currencies totaling $211,955 and
     $201,309, respectively. The Company also held separate currency and
     interest rate swap contracts to sell foreign currencies of $218,736 and
     $204,276, respectively.

          As of June 29, 2002, gains of $2,873 ($1,810 net of taxes) for
     qualifying hedges were reported as a component of accumulated other
     comprehensive loss. For the three and six months ended June 29, 2002, the
     ineffective portion of changes in fair values of cash flow hedges were not
     material. Fair value adjustments for non-qualifying hedges resulted in an
     increase to [reduction of] net income of $60 ($95 before taxes) and $[607]
     ($[964] before taxes) for the three months ended June 29, 2002 and June 30,
     2001, respectively. Fair value adjustments for non-qualifying hedges
     resulted in an increase to net income of $339 ($539 before taxes) and $429
     ($681 before taxes) for the six months ended June 29, 2002 and June 30,
     2001, respectively. In addition, for the three months ended June 29, 2002,
     reclassification to earnings from accumulated other comprehensive loss
     resulted in an increase to net income of $1,682 ($2,669 before taxes). For
     the six months ended June 29, 2002, reclassification to earnings from
     accumulated other comprehensive loss resulted in an increase to net income
     of $1,540 ($2,444 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:

<Table>
<Caption>
                                                           THREE MONTHS ENDED       SIX MONTHS ENDED
                                                         ---------------------   ---------------------
                                                          JUNE 29,    JUNE 30,    JUNE 29,    JUNE 30,
                                                            2002        2001        2002        2001
                                                         ---------   ---------   ---------   ---------
<S>                                                      <C>         <C>         <C>         <C>
Net income                                               $  41,220   $  26,078   $  78,504   $  49,316
Foreign currency translation adjustment                      2,804          96       7,514      (3,854)
Change in fair value of derivatives
   Cumulative effect of the adoption of SFAS 133                             -                  (5,086)
   Current period changes in fair value of derivatives          77        (480)        270        (480)
                                                         ---------   ---------   ---------   ---------
Comprehensive income                                     $  44,101   $  25,694   $  86,288   $  39,896
                                                         =========   =========   =========   =========
</Table>

<Page>

                                                                              15

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


12.  SUBSEQUENT EVENT

          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 and The Inland Empire, Inc., the Company and
     Weight Watchers North America, Inc., a wholly-owned subsidiary of the
     Company. The acquisition has been accounted for by the purchase method of
     accounting. Substantially all of the purchase price in excess of the net
     assets acquired will be recorded as goodwill. The purchase price for the
     acquisition was $11,000 and was financed through cash from operations.

13.  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.

<Page>

                                                                              16

              WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
               SUPPLEMENTAL UNAUDITED CONSOLIDATING BALANCE SHEET
                               AS OF JUNE 29, 2002
                                 (IN THOUSANDS)


<Table>
<Caption>
                                                                                        NON-
                                                         PARENT       GUARANTOR       GUARANTOR
                                                         COMPANY     SUBSIDIARIES    SUBSIDIARIES   ELIMINATIONS    CONSOLIDATED
                                                        ---------    ------------    ------------   -------------   -------------
<S>                                                     <C>          <C>             <C>            <C>             <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                             $  21,403    $     22,306    $     12,671   $           -   $      56,380
  Receivables, net                                          2,128          11,085           2,593               -          15,806
  Inventories                                                   -          15,545           5,686               -          21,231
  Prepaid expenses, other                                   2,314          17,176           2,477               -          21,967
  Intercompany (payables) receivables                    (209,730)        196,443          13,287               -               -
                                                        ---------    ------------    ------------   -------------   -------------
    TOTAL CURRENT ASSETS                                 (183,885)        262,555          36,714               -         115,384

Investment in consolidated subsidiaries                   492,947               -               -        (492,947)              -
Property and equipment, net                                 1,170           8,713           1,544               -          11,427
Notes and other receivables, noncurrent                       243               -               -               -             243
Goodwill, trademarks and other intangibles, net            27,591         260,739             759               -         289,089
Deferred income taxes                                      38,788          93,516               -               -         132,304
Deferred financing costs, other                             8,970            (704)          1,691               -           9,957
                                                        ---------    ------------    ------------   -------------   -------------
    TOTAL ASSETS                                        $ 385,824    $    624,819    $     40,708   $    (492,947)  $     558,404
                                                        =========    ============    ============   =============   =============

LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES
  Portion of long-term debt due within one year         $  15,489    $        640    $          -   $           -   $      16,129
  Accounts payable                                            540          10,752           3,959               -          15,251
  Accrued liabilities                                      24,938          21,370           7,281               -          53,589
  Income taxes                                            (31,676)         42,452           1,427               -          12,203
  Deferred revenue                                              -          18,671           1,417               -          20,088
                                                        ---------    ------------    ------------   -------------   -------------
    TOTAL CURRENT LIABILITIES                               9,291          93,885          14,084               -         117,260

  Long-term debt                                          397,815          63,200               -               -         461,015
  Deferred income taxes                                     2,481             120             654               -           3,255
  Other                                                         -             474             163               -             637
                                                        ---------    ------------    ------------   -------------   -------------
    TOTAL LONG-TERM DEBT AND OTHER LIABILITIES            400,296          63,794             817               -         464,907

  Shareholders' (deficit) equity                          (23,763)        467,140          25,807        (492,947)        (23,763)
                                                        ---------    ------------    ------------   -------------   -------------
    TOTAL LIABILITIES AND
      SHAREHOLDERS' (DEFICIT) EQUITY                    $ 385,824    $    624,819    $     40,708   $    (492,947)  $     558,404
                                                        =========    ============    ============   =============   =============
</Table>

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

<Page>

                                                                              17

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


<Table>
<Caption>
                                                                                        NON-
                                                         PARENT       GUARANTOR      GUARANTOR
                                                         COMPANY     SUBSIDIARIES   SUBSIDIARIES    ELIMINATIONS    CONSOLIDATED
                                                        ---------   -------------   -------------   -------------   -------------
<S>                                                     <C>          <C>            <C>             <C>             <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                             $   6,230    $      8,804   $       8,304   $           -   $      23,338
  Receivables, net                                          2,638           9,229           1,752               -          13,619
  Inventories                                                   -          21,902           4,303               -          26,205
  Prepaid expenses, other                                   1,263          16,743           2,711               -          20,717
  Intercompany (payables) receivables                    (157,902)        147,317          10,585               -               -
                                                        ---------   -------------   -------------   -------------   -------------
    TOTAL CURRENT ASSETS                                 (147,771)        203,995          27,655               -          83,879

Investment in consolidated subsidiaries                   416,812               -               -        (416,812)              -
Property and equipment, net                                 1,221           8,132           1,372               -          10,725
Notes and other receivables, noncurrent                       325               -               -               -             325
Goodwill, trademarks and other intangibles, net            27,643         212,843             679               -         241,165
Deferred income taxes                                      35,253         101,028               -               -         136,281
Deferred financing costs, other                             9,626            (537)          1,384               -          10,473
                                                        ---------   -------------   -------------   -------------   -------------
    TOTAL ASSETS                                        $ 343,109    $    525,461   $      31,090   $    (416,812)  $     482,848
                                                        =========   =============   =============   =============   =============

LIABILITIES, REDEEMABLE PREFERRED STOCK AND
 SHAREHOLDERS' (DEFICIT) EQUITY

CURRENT LIABILITIES
  Portion of long-term debt due within one year         $  15,219    $        480   $           -   $           -   $      15,699
  Accounts payable                                          1,287          14,077           2,334               -          17,698
  Accrued liabilities                                      28,537          16,490           7,427               -          52,454
  Income taxes                                            (11,694)         18,544           2,289               -           9,139
  Deferred revenue                                              -          11,121           1,899               -          13,020
                                                        ---------   -------------   -------------   -------------   -------------
    TOTAL CURRENT LIABILITIES                              33,349          60,712          13,949               -         108,010

  Long-term debt                                          394,800          63,520               -               -         458,320
  Deferred income taxes                                     2,481             109             579               -           3,169
  Other                                                         -             624             246               -             870
                                                        ---------   -------------   -------------   -------------   -------------
    TOTAL LONG-TERM DEBT AND OTHER LIABILITIES            397,281          64,253             825               -         462,359

  Redeemable preferred stock                               25,996               -               -               -          25,996
  Shareholders' (deficit) equity                         (113,517)        400,496          16,316        (416,812)       (113,517)
                                                        ---------   -------------   -------------   -------------   -------------
    TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK
      AND SHAREHOLDERS' (DEFICIT) EQUITY                $ 343,109    $    525,461   $      31,090   $    (416,812)  $     482,848
                                                        =========   =============   =============   =============   =============
</Table>

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

<Page>

                                                                              18

              WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
          SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 29, 2002
                                 (IN THOUSANDS)


<Table>
<Caption>
                                                                                        NON-
                                                        PARENT        GUARANTOR      GUARANTOR
                                                        COMPANY      SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                                      ------------   ------------   ------------   ------------   ------------
<S>                                                   <C>            <C>            <C>            <C>            <C>
Revenues, net                                         $      2,611   $    186,521   $     28,761   $          -   $    217,893
Cost of revenues                                                59         79,944         16,009              -         96,012
                                                      ------------   ------------   ------------   ------------   ------------
      Gross profit                                           2,552        106,577         12,752              -        121,881

Marketing expenses                                               -         13,304          3,831              -         17,135
Selling, general and administrative expenses                   301         11,216          2,708              -         14,225
                                                      ------------   ------------   ------------   ------------   ------------
      Operating income                                       2,251         82,057          6,213              -         90,521

Interest expense (income), net                               8,109          2,522           (226)             -         10,405
Other expenses (income), net                                13,291           (490)            (5)             -         12,796
Equity in income of consolidated subsidiaries               47,026              -              -        (47,026)             -
Franchise commission income (loss)                          17,424        (15,672)        (1,752)             -              -
                                                      ------------   ------------   ------------   ------------   ------------
      Income before income taxes
       and minority interest                                45,301         64,353          4,692        (47,026)        67,320

Provision for income taxes                                   4,081         20,386          1,650              -         26,117
                                                      ------------   ------------   ------------   ------------   ------------
      Income before minority interest                       41,220         43,967          3,042        (47,026)        41,203

Minority interest                                                -              -            (17)             -            (17)
                                                      ------------   ------------   ------------   ------------   ------------
      Net income                                      $     41,220   $     43,967   $      3,059   $    (47,026)  $     41,220
                                                      ============   ============   ============   ============   ============
</Table>

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

<Page>

                                                                              19

             WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
          SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30, 2001
                                 (IN THOUSANDS)


<Table>
<Caption>
                                                                                        NON-
                                                        PARENT        GUARANTOR      GUARANTOR
                                                        COMPANY      SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                                      ------------   ------------   ------------   ------------   ------------
<S>                                                   <C>            <C>            <C>            <C>            <C>
Revenues, net                                         $      1,949   $    135,780   $     24,596   $          -   $    162,325
Cost of revenues                                                61         58,524         13,116              -         71,701
                                                      ------------   ------------   ------------   ------------   ------------
      Gross profit                                           1,888         77,256         11,480              -         90,624

Marketing expenses                                               -         11,681          1,788              -         13,469
Selling, general and administrative expenses                 4,389         12,709          2,561              -         19,659
                                                      ------------   ------------   ------------   ------------   ------------
      Operating (loss) income                               (2,501)        52,866          7,131              -         57,496

Interest expense (income), net                               9,199          4,244           (195)             -         13,248
Other expenses, net                                          1,377            135              4              -          1,516
Equity in income of consolidated subsidiaries               27,838              -              -        (27,838)             -
Franchise commission income (loss)                          13,262        (11,451)        (1,811)             -              -
                                                      ------------   ------------   ------------   ------------   ------------
      Income before income taxes
         and minority interest                              28,023         37,036          5,511        (27,838)        42,732

Provision for income taxes                                   1,945         12,538          2,159              -         16,642
                                                      ------------   ------------   ------------   ------------   ------------
      Income before minority interest                       26,078         24,498          3,352        (27,838)        26,090

Minority interest                                                -              -             12              -             12
                                                      ------------   ------------   ------------   ------------   ------------
      Net income                                      $     26,078   $     24,498   $      3,340   $    (27,838)  $     26,078
                                                      ============   ============   ============   ============   ============
</Table>

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

<Page>

                                                                              20

              WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
          SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 29, 2002
                                 (IN THOUSANDS)


<Table>
<Caption>
                                                                                        NON-
                                                          PARENT      GUARANTOR      GUARANTOR
                                                         COMPANY     SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                                      ------------   ------------   ------------   ------------   ------------
<S>                                                   <C>            <C>            <C>            <C>            <C>
Revenues, net                                         $      4,121   $    368,003   $     58,272   $          -   $    430,396
Cost of revenues                                               119        160,066         31,844              -        192,029
                                                      ------------   ------------   ------------   ------------   ------------
      Gross profit                                           4,002        207,937         26,428              -        238,367

Marketing expenses                                               -         38,047          8,413              -         46,460
Selling, general and administrative expenses                 4,566         20,735          5,029              -         30,330
                                                      ------------   ------------   ------------   ------------   ------------
      Operating (loss) income                                 (564)       149,155         12,986              -        161,577

Interest expense (income), net                              16,734          4,901           (416)             -         21,219
Other expenses (income), net                                11,881            314            (20)             -         12,175
Equity in income of consolidated subsidiaries               83,833              -              -        (83,833)             -
Franchise commission income (loss)                          33,893        (30,493)        (3,400)             -              -
                                                      ------------   ------------   ------------   ------------   ------------
      Income before income taxes
         and minority interest                              88,547        113,447         10,022        (83,833)       128,183

Provision for income taxes                                  10,043         36,070          3,557              -         49,670
                                                      ------------   ------------   ------------   ------------   ------------
      Income before minority interest                       78,504         77,377          6,465        (83,833)        78,513

Minority interest                                                -              -              9              -              9
                                                      ------------   ------------   ------------   ------------   ------------
      Net income                                      $     78,504   $     77,377   $      6,456   $    (83,833)  $     78,504
                                                      ============   ============   ============   ============   ============
</Table>

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

<Page>

                                                                              21

              WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
          SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2001
                                 (IN THOUSANDS)


<Table>
<Caption>
                                                                                       NON-
                                                         PARENT       GUARANTOR      GUARANTOR
                                                        COMPANY      SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                                      ------------   ------------   ------------   ------------   ------------
<S>                                                   <C>            <C>            <C>            <C>            <C>
Revenues, net                                         $      2,830   $    277,354   $     54,092   $          -   $    334,276
Cost of revenues                                               563        119,883         28,698              -        149,144
                                                      ------------   ------------   ------------   ------------   ------------
      Gross profit                                           2,267        157,471         25,394              -        185,132

Marketing expenses                                               -         33,769          6,800              -         40,569
Selling, general and administrative expenses                10,468         23,459          4,895              -         38,822
                                                      ------------   ------------   ------------   ------------   ------------
      Operating (loss) income                               (8,201)       100,243         13,699              -        105,741

Interest expense (income), net                              18,919          8,809           (360)             -         27,368
Other expenses, net                                            379            147              4              -            530
Equity in income of consolidated subsidiaries               53,193              -              -        (53,193)             -
Franchise commission income (loss)                          26,336        (22,957)        (3,379)             -              -
                                                      ------------   ------------   ------------   ------------   ------------
      Income before income taxes
         and minority interest                              52,030         68,330         10,676        (53,193)        77,843

Provision for income taxes                                   2,714         21,851          3,892              -         28,457
                                                      ------------   ------------   ------------   ------------   ------------
      Income before minority interest                       49,316         46,479          6,784        (53,193)        49,386

Minority interest                                                -              -             70              -             70
                                                      ------------   ------------   ------------   ------------   ------------
      Net income                                      $     49,316   $     46,479   $      6,714   $    (53,193)  $     49,316
                                                      ============   ============   ============   ============   ============
</Table>

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

<Page>

                                                                              22

              WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
          SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 29, 2002
                                 (IN THOUSANDS)


<Table>
<Caption>
                                                                                        NON-
                                                         PARENT        GUARANTOR     GUARANTOR
                                                        COMPANY      SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                                      ------------   ------------   ------------   ------------   ------------
<S>                                                   <C>            <C>            <C>            <C>            <C>
     Cash provided by operating activities            $    118,576   $     74,987   $      3,300   $    (83,833)  $    113,030
                                                      ------------   ------------   ------------   ------------   ------------
Investing activities:
     Capital expenditures                                     (105)        (1,668)          (302)             -         (2,075)
     Acquisition                                                 -        (46,548)             -              -        (46,548)
     Other items, net                                         (147)           (58)             3              -           (202)
                                                      ------------   ------------   ------------   ------------   ------------
     Cash used for investing activities                       (252)       (48,274)          (299)             -        (48,825)
                                                      ------------   ------------   ------------   ------------   ------------
Financing activities:
     Net (decrease) increase in short-term borrowings         (741)           171              -              -           (570)
     Parent company investment in subsidiaries             (76,135)             -              -         76,135              -
     Proceeds from borrowings                               58,500              -              -              -         58,500
     Payment of dividends                                   (1,249)       (14,417)             -         14,417         (1,249)
     Payments on long-term debt                            (65,975)          (159)             -              -        (66,134)
     Redemption of redeemable preferred stock              (25,000)             -              -              -        (25,000)
     Proceeds from stock options exercised                   1,048              -              -              -          1,048
                                                      ------------   ------------   ------------   ------------   ------------
     Cash used for financing activities                   (109,552)       (14,405)             -         90,552        (33,405)
                                                      ------------   ------------   ------------   ------------   ------------
Effect of exchange rate changes on cash and cash
  equivalents                                                6,401          1,194          1,366         (6,719)         2,242
Net increase in cash and cash equivalents                   15,173         13,502          4,367              -         33,042
Cash and cash equivalents, beginning of period               6,230          8,804          8,304              -         23,338
                                                      ------------   ------------   ------------   ------------   ------------
Cash and cash equivalents, end of period              $     21,403   $     22,306   $     12,671   $          -   $     56,380
                                                      ============   ============   ============   ============   ============
</Table>

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

<Page>

                                                                              23

              WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
          SUPPLEMENTAL UNAUDITED CONSOLIDATING STATEMENT OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2001
                                 (IN THOUSANDS)


<Table>
<Caption>
                                                                                        NON-
                                                          PARENT      GUARANTOR      GUARANTOR
                                                         COMPANY     SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                                      ------------   ------------   ------------   ------------   ------------
<S>                                                   <C>            <C>            <C>            <C>            <C>
     Cash provided by operating activities            $     27,388   $    110,293   $      8,381   $    (53,193)  $     92,869
                                                      ------------   ------------   ------------   ------------   ------------
Investing activities:
   Capital expenditures                                        (51)          (867)          (269)             -         (1,187)
   Advances to equity investment                            (7,844)             -              -              -         (7,844)
   Acquisition                                                   -        (84,353)             -              -        (84,353)
   Other items, net                                           (406)        (1,041)           (85)             -         (1,532)
                                                      ------------   ------------   ------------   ------------   ------------
     Cash used for investing activities                     (8,301)       (86,261)          (354)             -        (94,916)
                                                      ------------   ------------   ------------   ------------   ------------
Financing activities:
   Net (decrease) increase in short-term borrowings           (566)           309              -              -           (257)
   Parent company investment in subsidiaries               (38,047)             -              -         38,047              -
   Proceeds from borrowings                                 60,000              -              -              -         60,000
   Payment of dividends                                          -        (11,585)             -         11,585              -
   Payments on long-term debt                              (38,913)        (3,822)             -              -        (42,735)
   Net parent settlements                                        -              -            330           (330)             -
   Purchase of treasury stock                              (12,730)             -              -              -        (12,730)
   Proceeds from sale of common stock                          430              -              -              -            430
                                                      ------------   ------------   ------------   ------------   ------------
     Cash (used for) provided by financing activities      (29,826)       (15,098)           330         49,302          4,708
                                                      ------------   ------------   ------------   ------------   ------------
Effect of exchange rate changes on cash and cash
  equivalents                                               (3,654)          (604)        (1,175)         3,891         (1,542)
Net (decrease) increase in cash and cash equivalents       (14,393)         8,330          7,182              -          1,119
Cash and cash equivalents, beginning of year                26,699         11,191          6,611              -         44,501
                                                      ------------   ------------   ------------   ------------   ------------
Cash and cash equivalents, end of period              $     12,306   $     19,521   $     13,793   $          -   $     45,620
                                                      ============   ============   ============   ============   ============
</Table>

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

<Page>

                                                                              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 10Q and the documents incorporated by reference
in this Quarterly Report on Form 10Q 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.

<Page>

                                                                              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.

COMPARISON OF THE THREE MONTHS ENDED JUNE 29, 2002 TO THE THREE MONTHS ENDED
JUNE 30, 2001

     Net revenues were $217.9 million for the three months ended June 29, 2002,
an increase of $55.6 million or 34.3%, from $162.3 million for the three months
ended June 30, 2001. Of the $55.6 million increase in net revenues, $32.8
million was attributable to classroom meeting fees, $20.2 million to total
company product sales, $1.0 million to franchise commissions and $1.6 million to
publications, licensing and other royalties. On a geographical basis, net
revenue from classroom meeting fees and product sales were up 44.4% in North
America and 19.1% internationally. The positive impact of foreign currency
exchange rates on net revenues was $2.8 million in the three months ended June
29, 2002.

     Classroom meeting fees were $141.4 million for the three months ended June
29, 2002 as compared to $108.6 million for the three months ended June 30, 2001.
North American Company Owned ("NACO") classroom meeting fees were $98.2 million
for the three months ended June 29, 2002, an increase of $28.2 million or 40.3%,
from $70.0 million for the three months ended June 30, 2001. The increase in
NACO classroom meeting fees was the result of a 36.7% increase in member
attendance. International company-owned classroom meeting fees were $43.2
million for the three months ended June 29, 2002, an increase of $4.6 million or
11.9%, from $38.6 million for the three months ended June 30, 2001. The increase
in international company-owned classroom meeting fees was the result of a 3.4%
increase in member attendance, driven by a strong performance in the Australasia
operations, and the result of positive exchange rate variances.

     Product sales were $63.1 million for the three months ended June 29, 2002,
an increase of $20.2 million or 47.1%, from $42.9 million for the three months
ended June 30, 2001. Product sales increased 56.0% to $39.0 million domestically
and 34.6% to $24.1 million internationally as a result of increased attendance
and the Company's strategy to focus product sales efforts on core classroom
products. Average product sales per attendance have increased in all regions.

     Franchise royalties were $7.0 million domestically and $1.5 million
internationally for the three months ended June 29, 2002. In total, franchise
royalties increased $1.0 million or 13.3%, from $7.5 million for the three
months ended June 30, 2001, despite the reduction of franchise royalties
revenue from two franchises which were acquired by the Company subsequent to
June 30, 2001. At the franchise level revenue growth was the direct result of
the increased member attendance.

     Revenues generated from publications, licensing and other royalties were
$4.9 million for the three months ended June 29, 2002, an increase of $1.6
million or 48.5%, from $3.3 million for the three months ended June 30, 2001.
This increase was primarily the result of royalty income from WeightWatchers.com
and higher revenues from advertising arrangements.

     Cost of revenues was $96.1 million for the three months ended June 29,
2002, an increase of $24.4 million or 34.0%, from $71.7 million for the three
months ended June 30, 2001. Gross profit margin was 55.9% for the three months
ended June 29, 2002, slightly higher than the 55.8% level of the three months
ended June 30, 2001.

     Marketing expenses were $17.1 million for the three months ended June 29,
2002, an increase of $3.6 million or 26.7%, as compared to $13.5 million for the
three months ended June 30, 2001. Marketing expenses increased primarily to
drive and support continued enrollment growth of the business. As a

<Page>

                                                                              26

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


percentage of net revenues, marketing expenses decreased from 8.3% for the
three months ended June 30, 2001 to 7.8% for the three months ended June 29,
2002, as the Company continues to leverage its marketing efforts across the
growing revenue base.

     Selling, general and administrative expenses were $14.2 million for the
three months ended June 29, 2002, a decrease of $5.4 million or 27.6%, from
$19.6 million for the three months ended June 30, 2001. The decrease in selling,
general and administrative expenses was primarily the result of two
non-recurring items in the three months ended June 30, 2001: a one-time charge
of $2.1 million for the write-off of a receivable from a licensing agreement and
$2.5 million of goodwill amortization. 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 to these items, professional fees
decreased $1.2 million from the prior year level.

     As a result of the above, operating income was $90.5 million for the three
months ended June 29, 2002, an increase of $33.0 million or 57.4%, from $57.5
million for the three months ended June 30, 2001. The positive impact of foreign
exchange rates on operating income was $0.9 million in the three months ended
June 29, 2002. The operating income margin rose to 41.5% for the three months
ended 2002 from 35.4% for the same period of 2001 as a result of lower selling,
general and administrative expenses and the decrease in marketing expenses as a
percentage of net sales.

     Other expenses, net were $12.8 million for the three months ended June 29,
2002 as compared to $1.5 million for the three months ended June 30, 2001. For
the three months ended June 29, 2002, the Company recorded unrealized currency
losses on its foreign currency denominated debt and other obligations of $11.5
million, net of hedges, as compared to a $2.4 million gain in the three months
ended June 30, 2001.

COMPARISON OF THE SIX MONTHS ENDED JUNE 29, 2002 TO THE SIX MONTHS ENDED JUNE
30, 2001

     Net revenues were $430.4 million for the six months ended June 29, 2002, an
increase of $96.1 million or 28.7%, from $334.3 million for the six months ended
June 30, 2001. Of the $96.1 million increase in net revenues, $55.7 million was
attributable to classroom meeting fees, $35.8 million to total company product
sales, $2.4 million to franchise commissions and $2.2 million to publications,
licensing and other royalties. On a geographical basis, meeting fees and product
sales were up 43.6% in North America and 7.9% internationally. The Company's
business is seasonal, with revenues generally highest in the first half of the
fiscal year.

     Classroom meeting fees were $275.8 million for the six months ended June
29, 2002 as compared to $220.1 million for the six months ended June 30, 2001.
North American Company Owned ("NACO") classroom meeting fees were $188.5 million
for the six months ended June 29, 2002, an increase of $54.3 million or 40.5%,
from $134.2 million for the six months ended June 30, 2001. The increase in NACO
classroom meeting fees was the result of a 36.3% increase in member attendance.

     International company-owned classroom meeting fees were $87.3 million
for the six months ended June 29, 2002, an increase of $1.4 million or 1.6%,
from $85.9 million for the six months ended June 30, 2001. On a year to date
basis, the impact of foreign currency exchange rates was negligible.
International member attendances increased 0.4% overall with attendances in
the United Kingdom down 2.3%, while attendances in Continental Europe and
Australasia posted gains of 2.3% and 5.7%, respectively.

<Page>

                                                                              27

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


     Product sales were $128.6 million for the six months ended June 29,
2002, an increase of $35.8 million or 38.6%, from $92.8 million for the six
months ended June 30, 2001. Product sales increased 51.7% to $80.1 million
domestically and 21.6% to $48.5 million internationally, reflecting
attendance growth in NACO as well as the Company's strategy to focus product
sales efforts on core classroom products. Average product sales per
attendance have increased in all regions.

     Franchise royalties were $14.9 million domestically and $3.1 million
internationally for the six months ended June 29, 2002. In total, franchise
royalties increased $2.4 million or 15.4%, from $15.6 million for the six months
ended June 30, 2001, on the strength of increased member attendance and product
sales offset by the loss of franchise royalties revenue from two franchises
which were acquired by the Company subsequent to June 30, 2001.

     Revenues from publications, licensing and other royalties were $8.0 million
for the six months ended June 29, 2002, an increase of $2.2 million or 37.9%,
from $5.8 million for the six months ended June 30, 2001. This increase was in
large part the result of licensing royalty income from WeightWatchers.com which
began in the first quarter of 2002.

     Cost of revenues was $192.0 million for the six months ended June 29, 2002,
an increase of $42.8 million or 28.7%, from $149.2 million for the six months
ended June 30, 2001. Gross profit margin was 55.4% for the six months ended June
29, 2002, unchanged as compared to the level of the six months ended June 30,
2001.

     Marketing expenses were $46.5 million for the six months ended June 29,
2002, an increase of $5.9 million or 14.5%, as compared to $40.6 million for the
six months ended June 30, 2001. Marketing expenses increased to support the
continuing growth of the business. As a percentage of net revenues, marketing
expenses decreased from 12.1% for the six months ended June 30, 2001 to 10.8%
for the six months ended June 29, 2002, as the Company continues to leverage
its marketing efforts across the growing revenue base.

     Selling, general and administrative expenses were $30.3 million for the
six months ended June 29, 2002, a decrease of $8.5 million or 21.9%, from
$38.8 million for the six months ended June 30, 2001. The decrease in
selling, general and administrative expenses was partially the result of two
non-recurring items in the six months ended June 30, 2001: a one-time charge
of $6.1 million for the write-off of a receivable from a licensing agreement
and $4.7 million of goodwill amortization, resulting from the adoption of
SFAS Nos. 141 and 142. In addition, professional fees decreased $0.9 million
from the prior year level. Excluding non-recurring items selling, general and
administrative expenses, which were down as a percentage of revenues, rose
13% in absolute dollars mainly as a result of the Company's investment in
additional personnel to support the growth of the Company.

     As a result of the above, operating income was $161.6 million for the six
months ended June 29, 2002, an increase of $55.9 million or 52.9%, from $105.7
million for the six months ended June 30, 2001. The operating income margin for
the six months ended June 29, 2002 was 37.5%.

     Other expenses, net were $12.2 million for the six months ended June 29,
2002 as compared to $0.5 million for the six months ended June 30, 2001. For
the six months ended June 29, 2002, the Company recorded unrealized currency
losses on its foreign currency denominated debt and other obligations of
$10.0 million, net of hedge, as compared to a $9.5 million gain in the six
months ended June 30, 2001. Reserves recorded against the loan to
WeightWatchers.com in 2001 offset the impact of the unrealized currency gains.

<Page>

                                                                              28

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


LIQUIDITY AND CAPITAL RESOURCES

     For the six months ended June 29, 2002, the Company's primary source of
funds to meet working capital needs was cash from operations. Cash and cash
equivalents increased $33.0 million during the six month period ended June 29,
2002, to $56.4 million.

     Cash flows of $113.0 million were provided by operating activities in the
six months ended June 29, 2002. During the first quarter, borrowings under the
Company's Revolving Credit Facility totaled $58.5 million and were subsequently
repaid. Funds were used primarily for investing and financing activities.

     Investing activities totaled $48.8 million in the six months ended June 29,
2002 and were primarily attributable to $46.5 million paid in connection with
the acquisition of the Company's North Jersey franchise, acquired on January 18,
2002, and $2.1 invested in capital expenditures. The North Jersey franchise
acquisition was financed through borrowings under the Company's Revolving Credit
Facility. Capital spending consisted primarily of leasehold improvements,
furniture and equipment for meeting locations and information system
expenditures.

     Cash used for financing activities totaled $33.4 million. Included were
repayments of $66.1 million in principal on the Company's Credit Facility, the
repurchase of one million shares of the Company's 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 preferred stock.

     The Company's total debt was $477.1 million and $474.0 million at June 29,
2002 and December 29, 2001, respectively. As of June 29, 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
June 29, 2002, fixed-rate debt constituted approximately 52.2% of the Company's
total debt. The following schedule sets forth the Company's long-term debt
obligations as of June 29, 2002.

<Page>

                                                                              29

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


                                 LONG-TERM DEBT
                               AS OF JUNE 29, 2002
                                  (IN MILLIONS)

<Table>
<Caption>
                                           BALANCE    INTEREST RATE
                                         ----------   -------------
<S>                                      <C>                  <C>
EURO $100.0 million 13% Senior
      Subordinated Notes Due 2009        $     99.1           13.00%
                                         ----------   -------------
US $150.0 million 13% Senior
      Subordinated Notes Due 2009             150.0           13.00%
Term A Loan due 2005                           56.4            3.72%
Term B Loan due 2007                          107.7            4.37%
Transferable Loan Certificate due 2007         63.9            4.45%
Revolving Credit Facility                         -               -
                                         ----------
          Total Debt                          477.1
      Less Current Portion                    (16.1)
                                         ----------
          Total Long-Term Debt           $    461.0
                                         ==========
</Table>

     The term loan A facility, the term loan B facility, the transferable loan
certificate 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 transferable loan certificate 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. These tests and financial ratios become more
restrictive over the life of the Credit Facility.

     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.

<Page>

                                                                              30

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


     The Company's credit ratings by Moody's at June 29, 2002 for the Credit
Facility and the Notes were "Ba1" and "Ba3", respectively. The Company's credit
ratings by Standard & Poor's at June 29, 2002 for the Credit Facility and the
Notes were "BB - " and "B", respectively.

     The following schedule sets forth the Company's year by year long-term debt
obligations as of June 29, 2002.

                           LONG-TERM DEBT OBLIGATIONS
                           (INCLUDING CURRENT PORTION)
                               AS OF JUNE 29, 2002
                                  (in millions)

<Table>
<Caption>
     Payments Due by Fiscal Year
     ---------------------------
            <S>                             <C>
            Remainder of Year 2002          $      8.1
            2003                                  20.2
            2004                                  17.6
            2005                                  17.0
            2006                                   1.7
            Thereafter                           412.5
                                            ----------
                 Total                      $    477.1
                                            ==========
</Table>

     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.

     On July 2, 2002, the Company completed the acquisition of Weight Watchers
of San Diego and The Inland Empire, Inc. for a purchase price of $11.0 million.
The acquisition was financed through cash from operations. 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 and 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.

<Page>

                                                                              31

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

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, the related party
transactions affecting the Company have not changed since December 29, 2001. 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, the Financial Accounting Standards Board 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 Financial Accounting Standards Board issued Statement
of Financial Accounting Standards, or 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 consolidated financial position or
results of operations nor does the Company expect the adoption of SFAS No. 143
to have any material impact.

<Page>

                                                                              32

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


     Based on the overall interest rate exposure on the Company's fixed rate
borrowings at June 29, 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 June 29, 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 June 29, 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.

<Page>

                                                                              33

              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 June
         29, 2002.

<Page>

                                                                              34

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


     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: August 13, 2002
                                 By: /s/ LINDA HUETT
                                 -----------------------------------------------
                                 Linda Huett
                                 President, Chief Executive Officer and Director
                                 (Principal Executive Officer)

Date: August 13, 2002
                                 By: /s/ ANN M. SARDINI
                                 -----------------------------------------------
                                 Ann M. Sardini
                                 Vice President and Chief Financial Officer
                                 (Principal Financial and Accounting Officer)

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>a2086723zex-99_1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<Page>

                                                                    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


     In connection with the Quarterly Report of Weight Watchers
International, Inc. (the "Company") on Form 10Q for the period ending June
29, 2002 as filed with the Securities and Exchange Commission on the date
hereof (the "Report"), I, Linda Huett, Chief Executive Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended; and

     (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.


/s/ Linda Huett


Linda Huett
Chief Executive Officer
August 13, 2002

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>4
<FILENAME>a2086723zex-99_2.txt
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
<Page>

                                                                    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


     In connection with the Quarterly Report of Weight Watchers
International, Inc. (the "Company") on Form 10Q for the period ending June
29, 2002 as filed with the Securities and Exchange Commission on the date
hereof (the "Report"), I, Ann M. Sardini, Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended; and

     (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.


/s/ Ann M. Sardini


Ann M. Sardini
Chief Financial Officer
August 13, 2002

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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