Ladies and gentlemen, welcome to Weight Watchers International fourth quarter and full year 2007 earnings teleconference call. (Operator Instructions). At this time, I would now like to turn the call over to Sarika Sahni of Weight Watchers International. Please go ahead.

Thank you, Tina, and thank you everyone for joining us today. With us on the call are David Kirchhoff, President and Chief Executive Officer of Weight Watchers International and Ann Sardini, Chief Financial Officer. At about 4 p.m. Eastern Time today, the company issued a press release containing financial results for the fourth quarter and full year 2007. The purpose of this call is to provide investors with some further details regarding these results and a general update on the company's progress. The press release is available at www.weightwatchersinternational.com. Before we begin, let me remind everyone that this call will contain forward-looking statements. Investors should be aware that any forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those discussed here today. These risk factors are explained in detail in the company's filings with the Securities and Exchange Commission. The company does not undertake any obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Now with that, I will turn the call over to Mr. Kirchhoff. Please go ahead, David.

Good afternoon and thank you for joining us as we review Weight Watchers International's performance for the fourth quarter and full year 2007. I will be organizing my remarks into three sections for today's call. First, a brief financial review of Q4 and full year 2007 results; second, a recap of major 2007 strategic initiatives, progress to-date and major priorities in 2008; and third, guidance for 2008. First, Q4 and full year 2007 results. Weight Watchers had a solid financial performance for Q4, driven, as has been the case all year, by contributions from our Monthly Pass commitment plans strength in our Weightwatchers.com business and continued growth in our licensing business. Total company Q4 revenues grew by 21%, driven by growth in all three lines of business, with meeting fees up 22%, Internet revenues up 24% and product and other sales up 15%. Without the benefit of favorable foreign currency adjustments, revenues were up 16%. Operating income grew 15% and our operating income margin was down 120 basis points to 26.2% in this year's quarter. Higher gross margins for Q4, 2007 were more than offset by higher G&A which was up on continued IT investments. As a percentage of revenue, marketing expenses were up 40 basis points on last year driven principally by production costs for the new January campaigns. On the bottom line, we reported EPS of $0.50 for the fourth quarter compared to $0.39 per fully diluted share, excluding one-time items in last year's fourth quarter, an increase of 28%. For the full year, consolidated revenues were up 19%, operating income was up 15% and EPS was $2.50, an increase of 21% excluding one-time items in both years. With respect to volumes in our meetings business, in the fourth quarter, total paid weeks worldwide were up 20% primarily…

Thanks, David. Good afternoon, everyone. Our 2007 financial success was driven by revenue growth and gross margin expansion resulting from Monthly Pass which ended the year having achieved 93% global growth in installed base over 800,000 members and by Weight Watchers Online which drive significant benefit from its first year of national television advertising growing end-of-year active to 27%. In meeting products, sales per attendee for the year also posted impressive results growing by 13.6%. Total consolidated company revenues were 19% higher in comparison to last year, reaching $1.47 billion. Gross margin topped 55%; a 70 basis point increase over last year and operating income grew by 14.6% to $435.6 million. Our net income for the year is $201.2 million compared to $209.8 million for the full year 2006. EPS grew 17.5% from the year-ago level to $2.48 and $2.11 on a GAAP basis. On the more comparable basis, EPS grew 21.4% in 2007 to $2.50 from $2.06 in 2006. This EPS excludes early extinguishment of debt charges taken in both years and it excludes from 2006 a $6.3 million reduction in tax reserves related to our adoption of FIN 48 Accounting for Uncertainties in Income Taxes. The decline in full year net income versus prior year resulted from $59.7 million of higher interest expense which was incurred in conjunction with the funding of our first quarter 2007 buyback of 19.1 million shares. Earnings per share in the year benefited from the now lower number of shares outstanding. Consolidated company fourth quarter operating results continued the growth pattern seen in earlier quarters. Revenues were up 20.5% versus prior in Q4 to $344 million. We gained 70 basis points in gross margin moving up to 52.4%, versus last year's 51.7% and operating income increased 15.1% to $90.1 million. As with the…

Thank you, Ann. As I assumed the role of CEO in January of last year, we came together as a management team to establish our long-term strategy and our near-term foundation building initiatives. As we've shared many times our mission and our objectives are simple. One, more consistently helped the people to come to us achieve their goals, our strategic plank of retention and two, find more people to help our strategic plank of relevance. Retention, the most important way to help our members achieve weight loss success is to keep them engaged in the program longer. Therefore, retention has become the most successful measure we use to evaluate our member engagement with their program. Our four major initiatives for improving the retention are: One having a payment system that is better aligned with long-term member participation, i.e., Monthly Pass. Two, more consistently allocating our meetings to our stronger leaders. Three, developing and adopting best practices in the meeting room and member experience. And four, innovating our programs in a way that is truly helpful to member success. We made great progress in the first of these four initiatives with the successful implementation of the Monthly Pass in North America followed by its launch in the UK Germany and Australia last fall. The most important aspect of Monthly Pass is that it is simply a better way for members to engage with Weight Watchers. It gives them access to the best of what we offer in a convenient way that encourages longer-term participation. The following two facts best illustrate the beneficial impact of Monthly Pass for our members. First, our members are staying engaged longer. The average Monthly Pass member maintains its subscription for about eight months versus three to four months of elapse time with Weight Watchers for a…

(Operator Instructions). The first question is from Scott Mushkin from Banc of America Securities. Please go ahead.

Hey, David.

Hi, Scott.

So I am on a cell phone here driving, but hopefully you guys can hear me, okay. Just to clarify your NACO thoughts, I mean are you guys seeing those types of declines currently even though you launched that major new ad campaign. And are we not going to really see retention and the relevance issue come together in NACO until '09?

Well, let me answer those in order, I think. First of, when we said our guidance as we just share for attendance in NACO, it is based on the that we're seeing in the first six weeks of the year, reflecting everything that we think is going on. It is with the benefit of the new advertising campaign despite the fact that the first six weeks, we're not seeing positive attendance growth. I am still very optimistic and positive about the attendance campaign in particular, in addition to generally getting feedback on that. We've also been doing quite a bit of quantitative research on it post-launch. And everything we're seeing from the campaign is that on a number of dimensions it's going quite well. In particular on the dimension of persuasion, in other words giving people a new reason to consider and rethink the Weight Watchers brand, it's scoring better than any campaign we've launched in quite some time. And so, we are very positive about this campaign. The thing I would say about it is, this kind of brand shifting campaign is the kind of advertising that takes a period of time to really take hold. If we've done advertising for example with the completely new program and saying that Weight Watchers is this whole new thing, I would anticipate a more immediate reaction to the advertising. But because the advertising is primarily about sort of general brand perception shifting, my view is that it takes a longer to really sort of penetrate the public consciousness. In terms of retention and relevance, I think there's a couple of things. If you look at retention first of, there are certain things that we've already launched that we've already been getting benefit from. Monthly Pass was one of the retention initiatives…

Okay. So just a follow-up quickly and then I'll get off the line here. So did you see sequentially deceleration in attendance year-over-year as you move into the first quarter? So I want to be clear.

As we move through the first quarter?

As you move into the first quarter over the last six weeks?

It's always a little bit odd as we move into the first quarter because you have that period at the end of December where there is so little volume in the business given the holidays that it's kind of hard to get a gauge on how things look in December versus how things look in January. The trends we're seeing in January, I mean first you have this sort of this odd situation in the first week where New Year was on a later day and lot of people just took the whole week off. But putting that aside, the kind of attendance trends that we are currently seeing are sort of what were -- it has been fairly consistent. So it's not like we're seeking kind of an increase in deceleration as we move through the first quarter. It's been kind of a steady state.

And then the final thing is going to the relevance and retention issue. Am I wrong to say that until you and maybe I'm thinking of that wrong, the intersection there is where you will become, you will start getting new people. And in other words, word of mouth has always been really important for you guys. And if so you intersect the relevance and the retention issue. It's going to be hard to drive new membership growth and we can't, we really don't expect that until '09 is what you're saying?

Well as I said, here is the way to think about collective interest in Weight Watchers and maybe this is sort of different frame to put on it. The one thing I would point out is that even if you look at 2007 and when you think this is going to continue into 2008, net interest in Weight Watchers in North America is increasing. If you look at the sheer number of customers, the 10 customers we have in 2007 versus 2006 they were categorically higher. Furthermore, if you look at and while we said there was an enrollment GAAP versus 2007 and 2006, it was more than made up for by the increased number of signups in Weight Watchers Online which is doing a good job of penetrating its respective market. We would expect that to be a comparable trend as we go into 2008, but as we go into 2009 we then have the benefit of the continuing growth of '09, but we also have the benefit with the new program innovation of bringing back the sort of the ideal target numbers from the ideal segments for the Weight Watchers meetings business back into the fall than the way that the whole sort of thing rises. The other point is we are making about that is that furthermore if you look at online subscriber versus a meetings member, a pay to go meetings member is comparable and value to us financially as the Weight Watchers Online subscriber. The Monthly Pass which was really kind of the best of both, if you will, is our highest value offering, both in terms of weight loss but also in term of financial return to the company. And so, all those things, I think, together are going to continue working as we go through 2008 and into 2009. I do believe that once we are doing some of the things we need to do, and specifically, consider that as we work on the new program and as we also spend time finding ways to innovate our service offering, that the whole intent behind that is it's going to drive better member success, which to your point results in better word of mouth. Our view was that we kind of needed to know where to focus on and we needed the right consumer insights to get there, and that's what a lot of 2007 was about. If that's the case, then 2008 is about basically creating and executing and implementing the designs that flow from that that begin to benefit us in 2009.

All right. That's interesting. And long call, but thanks for all the details. It was good, actually.

Okay.

Thank you. The next question is from Alvin Concepcion from Citigroup. Please go ahead.

Hi, everyone. Just wanted to know if some of the softness you've seen in the US, is that any impact from Alli?

No. That we don't think. We have no reason to believe that Alli is having any significant impact on our business, particularly if we look at the trends. I mean, as I understand it, Alli's best quarter of sales were in the second quarter, and as I understand it, its Q3 and Q4 was relatively less robust, if you will. And furthermore, I think what they're calling for is sort of flattish some growth from the US in 2008. As well, as I've stated before when asked that question, Alli, we believe, is a diet alternative, if you will, is more likely to impact other approaches, which are kind of more of a "do it for me" style of weight loss, such as prepared meals and things like that. Whereas if anything, what we would expect to see is that Weight Watcher's members could make the decision to also take Alli to further supplement their success. Honestly, I've asked the question a lot of times and I spend a lot of times kind of out in the field with leaders and territory mangers and members and everything else. And every time I pose the question, I kind of get blank stares back. I mean I really think that they're appealing and focusing on a different target market segments than we are.

Okay. Great. And do you think that some of that may be because you are mostly reactivation business, does that sort of isolate you from that impact?

Well, I'm not completely sure I know what you mean by that, but let me give it a try. If what you're asking is whether our rejoins are less susceptible to the message of Alli, I'd suppose I could say that, I could see that. But we also get a fairly high percentage of our people we call never members or people that haven't been with Weight Watcher's in ages. And I would argue that it's more the kind of people that are attracted to us. In other words, if you think about the people that are interested in adopting and having a sustainable weight loss through a healthy lifestyle, as I referenced before, earlier in 2007, we did this kind of fairly massive psychographic segmentation study, and clearly one of the things that comes out of that is the recognition that different people are wired in different ways. And what I would suggest is that the kind of segment that we appeal heavily to is not the kind of folks that would be focusing on pharmaceutical solutions, if you will.

Okay. Great. And final question regarding your franchisees. What's your strategy towards acquiring them? How aggressive will you be and what kind of multiples are you sort of willing to pay?

We're continuing along the same lines that we have been since we started our acquisition program. We talk to any franchisee that's interested potentially in selling. We are eager to acquire certain of our franchises. We do obviously valuations and due diligence and reviews before we take anything on and they are extremely accretive to us. In terms of aggressively seeking, that's really not how it's gone. It's been more of an opportunistic acquisition when somebody approaches us.

Okay. Thank you.

Thank you. The next question is from Chris Ferrara from Merrill Lynch. Please go ahead.

Hi, guys. Dave, did you expect attendance in North America to react better than it did in January so far?

Yeah, I would have hoped. I mean it's one of these things where I would have conversations and they're probably listening. So this is for their benefit too. I've had conversations with the marketing team saying it's ridiculous for you to think that being out with the new advertising campaign is going to suddenly turn trends around that for four weeks. But I'd be lying if I didn't see I was a little bit susceptible to the same sort of hope and expectation. That being said, I would suggest that, if I'm looking at it logically, the outcome we're seeing is not inconsistent. I think one thing I want to come back to which is kind of an important point which is then the enrollment trends we're seeing now are not inconsistent with the enrollment trends we were seeing last year. What the difference is that last year we had a full year affect of Monthly Pass, accreting attendances, above and beyond, per enrollment cycle, if you will. And so that has the benefit of sort of helping us kind of close the gap a little bit. But now that we've left it, we don't get the full benefit of that anymore. So we're sort of standing without, from an attendance point of view, some of that lift for Monthly Pass. Now the good thing is, is that we're still getting a bit of that lift from a revenue point of view. So that's why we're still looking for positive revenue growth for NACO this year.

Got it. Why will it be a year before we see a new product coming through or another innovation?

The best way I can describe it is that I'm pretty insisted that the program that we launch be a fantastic program. I want the kind of program that people walk out of it and say, "That was unbelievably great, I can't believe that, you guys have never done this before, it's fantastic." Those are my unreasonable expectations for the kind of response we're going to get. And first, to get that kind of response, we have to do this the right way. It was hard for us because we have things that we could have played with that were in the pipeline last year, but when we looked at it we asked ourselves the question are these things going to meaningfully impact member success or not? And the conclusion we came to is the things that we had to offer were not the types of innovations that we felt were going to have a meaningful impact on member success. And while we probably could have made hay with them with marketing, it's just didn't feel like the right thing to do. So while we were doing tons and tons of consumer work, it's hard for me to express how important that has been to our thinking into focusing and prioritizing our plans for program development, that brings us into this year. Now if you think about it, when you launch a new program, the best way I can describe -- this is why it takes long -- is first-off you need to iterate a bunch of times with the prototype you're developing and working on to make sure that you are working through all the second and third order effects that come with a significant innovation, and to make sure that we're constantly checking back with both never members and current members that we are not missing anything because it's tricky business in the behavior modification world. The other thing I would also point out is that we've got give or take 7200 leaders alone in NACO and getting 7200 leaders trained and comfortable and ready for action is something that it takes time and focus and it's a lot of hard work. And so our view, if you kind of look through the whole timeline, believe it or not, hitting January is going to require a consistent and steady effort and it's going to require milestones which we will hit. But nonetheless, the timing is about right if we're going to get the right program out.

And just one quick one, what are guys thinking about for SG&A, for marketing, as you head into 2008. And I think originally you said marketing would probably be flat as a percentage of sales year-over-year, but can you just give an update on that may be?

Well, I think it will be up a little bit as I am looking at it now, having gone through the whole process of planning 2008. I think G&A on the other hand will be flat as a percentage of revenue, a little bit perhaps run rate than fourth quarter of this year.

And I am sorry. Just one more, on the top-line guidance I think Dave you said revenues you think you will reach double-digit revenue growth, is that including or excluding currency?

It's excluding. We budgeted our currency at the rate that we have on average for this year, so there is no currency impact.

Thank you very much. I appreciate it.

Thanks.

Thank you. The next question is from Michael Binetti from UBS. Please go ahead.

Hi, guys. And congratulations on the nice quarter there. Just real quick tactical question for you on the Monthly Pass uptake, could you give us a rough idea what percent of attendees in this quarter were at your meetings in U.S. on Monthly Pass?

Yeah, we're seeing roughly a consistency in the trend of penetration, just a few things on Monthly Pass, thanks for brining that up. We are seeing fairly consistent trends in terms of overall penetration rates in NACO versus what we've being seeing from those last year. The other thing that I'll point out, which is that encouraging particularly given, maybe some early concerns we had about the economic climate is that the retention for Monthly Pass in January is held up very nicely, as has propensity to attain meetings. So Monthly Pass continues to be a good source of stability for us.

And I think last talk about; you said it's over 50% it is still hovering around that area?

That' right

Okay. I appreciate that. And then I guess just one other tactical question. I have a follow-up is, I guess, how can you compare that the Monthly Pass have taken the UK and Germany in its early days to what you saw maybe in the U.S. a year ago?

It's lower and we expected that it would be lower, that's due to a number of reasons. First of, it has to do with the way the credit cards are used by a given market. It also has a little bit to do with growth of penetration of e-commerce scenario and penetration of few other things. But nonetheless, I would say that while it's lower, it is ahead of our expectations that we originally had and it's not a million miles away.

Got it. And then I just guess one last question. How do you separate competition from the economic sluggishness you're seeing in the NACO outlook? And I guess, maybe an add-on to that question, what extent do you feel you are sensitive to trade down in the diet category, perhaps to some of the lower cost online options that people may look at?

Well, the good news is that we have an online business and it's holding up well. The good news also from a trade down point of view particularly if we were seeing sensitivity around the economies, I mentioned before we might have expected to see some of that in cancellation rates which we have not seen. So that is also good. I would actually point out that if you look at, Weight Watchers versus large commercial competitors, we are actually less expensive. So if you compare us to particularly the prepared meal businesses, we are a lower cost option. In terms of the online business, coming back to that again, there really isn't a significant online competitor out there other than the ones who are, I don't know the one-fourth or one-fifth our size. We are the by far leading player in the online weight loss space in the U.S.

Thank you.

(Operator Instructions). The next question is from Jerry Herman from Stifel Nicolaus. Please go ahead.

Good Afternoon, everybody.

Hi Jerry.

Let me start with a really big picture question. Could you guys update us on sort of the demographic of the typical user namely, age, income levels, so on and so forth?

Yes, sure. For the meetings business, age is fairly reflective of the overweight population in general, call it 45, 47, Weight Watchers, skews above average on income, and it skews above average on education. If you look at Weight Watchers Online, it is going to run a little bit younger. It has been a little while since I have recently looked at that number, but it is going to run typically about 5 years below what we see in the meeting business or more in some cases, I would have say closer to 40. And then in the case of Weight Watchers Online, it's may be even higher education or may be as a result of the age, comparable income and then typically another difference between online meetings is that people to do online have a little bit less weight to lose and people who go to meetings because they are appealing to different markets.

Great. And then just a couple of questions about Monthly Pass, you noted David that the retention was actually pretty good in January, haven't seen a lot of cancellations increased. Just to be clear those cancellations of paid weeks, i.e., credit card usage, I mean does that actually hold true also for attendance in meetings in the early part of the year?

Yes, I am sorry, that's the metric that we refer to internally as propensity to attend.

Okay, great.

And what we are seeing is that propensity to attend trends, that's a mouthful is comparable this year to what we saw last year which is positive?

Okay, good. And it looks like the longevity of the Monthly Pass is about the same as what you shared in the past?

Yeah, that's right.

Is it too early to tell the amount of time, if you have it at all, it takes them to reengage if they disengage?

It's a great question. One of the tricky things and this is based a little bit on my experience kind of growing up on the dot-com side of the business where we've already had a nine-month product in Weight Watchers Online is that it takes a lot more time has to elapse before you really start getting a good deal on that, because you just need enough distance between when people start canceling versus when they return because everything is kind of elongated if you will. And so it's still a little bit early for us to speculate on that.

Okay, great. And a just a couple of sort of strategic flash numbers questions. The IT spending is pretty high, it's making an impact. When does it start to tail-off and how does that show up in CapEx?

We have, at least, another year, probably a little bit more than that. And the tail-off will not be back to the original levels that we were prior. Right, David?

Right.

Just because we wanted to upgrade our meeting rooms to try to do some automation there and to keep current with all of our systems and processes. So this year, I think, we're about $30 million in IT spending, about $19 million higher in depreciation. I think the depreciation will go up for about another year and a half, two years, and then you'll start to see it come down because more and more is going to be hitting expense directly.

Yeah. I'll add just a little bit of flavor on top of Ann's comments. A good example is what Ann referred to as meeting automation. Said differently and said by someone who is now working as a receptionist, some of our meetings have point of sale terminals and some have what we refer to as paper tallies. We’re trying to get more and more of our centers, about half right now, with point of sale terminals. It gives us a bunch of advantages. First-off, we can process members more quickly. It makes life a lot easier for the service provider that open and close the meeting. In some ways, most importantly, it allows us to the future potential of more directly connecting what's happening with the member in the meeting versus with our databases, which ultimately can connect back with the website as we integrate all those systems. And so, we think that the investments we're making on that side are going to be important parts of how we drive service delivery in the coming years. And then, there have been investments that were a long time coming, going back to Y2K when we pulled out all the cash registers, we're sort of getting back to kind of the modern day, if you will.

And then, just one final quarter, if I might. The JV in China, could you maybe give us a read on the expected ramp rate there and the initial investment and any potential, at least, initial dilution?

What I would say is this, it's still early days. And we're in the process of sort of working with the management team of the JV, as well as with our partner to timeout what expenses are going to be happening when, what's going to be in 2008 versus 2009? What I would say right this red hot second is that first-off, I'll point out that the good news with a joint venture like this is that we'll be sharing expenses 51/49 with our partner. And given that and given everything I'm seeing, I cannot imagine that we'd be spending anything more and probably less than $5 million in 2008. But it's still early days and we'll probably get back to more specifics on future calls.

Okay. Great. Thanks, guys.

Thank you. The question is from Chris Ferrara from Merrill Lynch. Please go ahead.

Hi, thanks for taking a follow-up. Is the Monthly Pass cash accretive to gross margin yet as a concept that like across the company?

I think you saw that our Monthly gross margin is up about 70 basis points on the quarter and the year, and it's largely coming from North America from Monthly Pass.

Yeah, it is.

Got it. Thanks. And then just on the penetration levels, I think you said in the prepared comments that you wanted to improve the penetration levels of Monthly Pass in NACO. But again, I apologize if you said this, but what was the penetration level in the quarter? And can you drive the penetration level higher in the backup of declining attendances of that or those are not really related in that way?

Yeah, I'd say they are not connected. I do think we can drive. I mean what I've said before is that the attendance thing that you're referring to is more a function of bringing new noses into the door, if you will, which doesn't have, is not necessarily or is not related to our ability to get the people who do come into the door, directed toward our best and lowest price plan, which is Monthly Pass. There's lots of different techniques and maybe graded things that we're going to be doing to make sure that we continue driving members to Monthly Pass, again, because we think if we can get them on Monthly Pass and we can get them using the meetings and e-tools and everything else, we have a real shot at significantly increasing with our success.

Got it. Thanks a lot.

Yes.

Thank you. The next question is from Michael Binetti from UBS. Please go ahead.

Hi, guys. Thanks for taking the follow-up. Just a quick question on China, and I had one other tactical question. The China business, could you give us a little hint as to what that business is going to look like? Is it going to be a meeting business like you see here in the US or is it going to be licensing to known products or some mix of the two? I am just curious on that.

Well, I'll first-off make the statement that particularly with a market like China, my sensitivity over competitive issues is heightened, if you will. And so, from that point of view, I don't want to go on into too much specifics, but I would say that the concept that we're focusing on in China would more closely resemble the primary business we're in, which is helping people lose weight as opposed to having a primary focus on licensed products.

Okay, thank you. And then I guess, maybe you can help us understand directionally if you see, I'm curious about kind of the regional transitioning in the U.S. Some of the consumers in retail companies have been affording a pocket of sluggishness and in some of the areas that had been in the headlines as far as the consumer slowdown, perhaps California, Florida. Have you seen I guess trends on a regional basis that have stood out to in those types of areas?

It's an interesting question, normally we don't talk about regional trends within the NACO business, but noting in particular comes to mind in terms of any individual states being or regions being weak or soft.

Okay. And do you feel that you benefited maybe at all from some of the L.A. weight loss centers that we saw have been closing down lately in the quarter?

I don't know. I mean I think that again it kind of goes back to who is your target market and I think our view is that I'm thinking you are referring to weight loss overall business if I understand that right.

Correct.

Again I think that that's appealing to kind of a different market segment than what we typically see has been our experience with L.A. weight loss; I mean they tend to be more a peripheral competitor to us because I think that they are going after a slightly different person. And so I don't think that we've seen anything in particular. Now certainly we've working with them, as per weight loss have been working with a number of different companies to make sure that if there are people who are attending pure weight loss, if you go to the website Weight Watchers is visibly present. So that those people do have a place to go to, but I haven't seen any evidence that is driving any kind of meaningful volume to us.

Thanks again.

Thank you. The next question is from Scott Mushkin from Banc of America Securities. Please go ahead.

Thanks for taking a follow-up. So listen David I am sitting here, listening to this call, and kind of I guess I am a little depressed in the sense that you guys had great financial performance and the outlook for the next year looks pretty strong financially. But we are sitting here with, I think what everyone is probably thinking is a nickel business where attendance is, I guess you said, you are expecting down, mid-to-high single digits on attendance. I guess on just -- but at the same time you said that, total usage of Weight Watchers is actually up if you put dotcom in there. And so I am starting to wonder is it time that we did a, soul search on this meeting business and may be took a different approach.

It is not a crazy question but I don’t look at it that way at all, and for the following reason. It is very simply the case that, having the meeting business without the benefit of any kind of significant news going into the fourth year is going to take a toll. We saw last year in Continental Europe and we are seeing what happens in Continental Europe when we did introduce a program, at least in the first two weeks of the year. And so I really do have confidence that we can continue driving interest back in that part for the business. The other point out there, that I want to point out, and it is hard for me to express it enough, is that when you take Monthly Pass and you have both the benefits of the meeting and the benefit of the internet tools that really is a different proposition. So I think that, I definitely wouldn't put meetings in kind of that, it is going away, box in any way, shape or form. It is just that online happens to be doing really well because it is allowing us to penetrate into a brand new target market for us. And so, and I spend -- and Scott as you know, I spend a lot of time, out at meetings, out on the field, a lot of time with members, and the things that I am consistently seeing is we are having great success and I am seeing, younger people and older people, and I am seeing all sorts of different folks. And so what I see is basically a business that just needs the right catalyst and it needs the right efforts, to bring it to a new place that is going to give us much more meaningful news that’s going result in more people coming in having better success and then the engine starts running again in terms of getting more new people on the door. And in the mean time its just happens to be that we are also keeping the brand vital because we do have folks, the online business and the meetings business which collectively we continue to grow kind of overall net consumer interest and Weight Watchers year-over-year.

Yeah I mean, I guess I have taken this, may be, less with more or more with less, more less meetings, may be more formalized meetings, more centers, I mean that type of stuff. We talking for about how, a lot of ways these meetings are throwbacks of the 70s and 80s in the way they are structured and kind of the flip charts and all that kind of stuff and I guess that was the genesis of my question?

I don’t agree with the characterization and now granted I have the benefit of the consumer research, that I can’t point to what you referencing as any particular issue with meetings at all. Now let me finish, I am sorry, what I do think is absolutely what, I haven't talked about because I don’t have anything specific to share but clearly as you do all these consumer work and you get all these insights. I mean what I say after the graphic we literally we are following 45 members, month-in and month-out they went to the process. When I say segmentation, it was a just massive and exhaustive study. The things we know now about what works really well and the things we know about what’s going to make the work it even better is very important to us and its what its going to allow us to do when the first thing that I am talking about is the fact that we are going to put out program innovation that we think is going to have a significant impact. The other thing I'd point out is that it also opens the door for us to evaluate, what is the optimal service offering? How can and should our meetings evolve? How do we make it more effective and more efficacious for the members that are coming to it? I don't think that has anything to do with meetings being irrelevant per se because I don't agree with that. But I do think that we have no shortage of ideas now in terms of some of the things we need to do to make things stronger.

Alright, thanks. Thanks for considering my questions, I appreciate it.

Yes.

Thank you there are no further questions registered at this time. I would now like to turn the meeting back over to Mr. Kirchhoff.

Thank you for joining us today and I look forward to speaking with you at our next earnings call.

Thank you. The conference has now ended. Please disconnect your lines at this time. Thank you for your participation.