UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 3, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-16769 WW 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.) 675 Avenue of the Americas, 6th Floor, New York, New York 10010 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (212) 589-2700 (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, no par value WW The Nasdaq Stock Market LLC 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 ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The number of shares of common stock outstanding as of April 28, 2021 was 69,520,571. WW INTERNATIONAL, INC. TABLE OF CONTENTS Page No. PART I—FINANCIAL INFORMATION Item 1. Financial Statements 2 Unaudited Consolidated Balance Sheets at April 3, 2021 and January 2, 2021 2 Unaudited Consolidated Statements of Net Income for the three months ended April 3, 2021 and March 28, 2020 3 Unaudited Consolidated Statements of Comprehensive Income for the three months ended April 3, 2021 and March 28, 2020 4 Unaudited Consolidated Statements of Changes in Total Deficit for the three months ended April 3, 2021 and March 28, 2020 5 Unaudited Consolidated Statements of Cash Flows for the three months ended April 3, 2021 and March 28, 2020 6 Notes to Unaudited Consolidated Financial Statements 7 Cautionary Notice Regarding Forward-Looking Statements 23 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 25 Item 3. Quantitative and Qualitative Disclosures About Market Risk 43 Item 4. Controls and Procedures 43 PART II—OTHER INFORMATION Item 1. Legal Proceedings 44 Item 1A. Risk Factors 44 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 44 Item 3. Defaults Upon Senior Securities 44 Item 4. Mine Safety Disclosures 44 Item 5. Other Information 44 Item 6. Exhibits 45 Signatures 46 PART I—FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS WW INTERNATIONAL, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS AT (IN THOUSANDS) April 3, January 2, 2021 2021 ASSETS CURRENT ASSETS Cash and cash equivalents $ 113,313 $ 165,887 Receivables (net of allowances: April 3, 2021 - $2,211 and January 2, 2021 - $2,298) 39,889 34,555 Inventories 34,369 39,456 Prepaid income taxes 31,079 20,028 Prepaid marketing and advertising 6,344 15,656 Prepaid expenses and other current assets 26,182 23,610 TOTAL CURRENT ASSETS 251,176 299,192 Property and equipment, net 46,893 51,935 Operating lease assets 108,138 119,102 Franchise rights acquired 786,371 765,850 Goodwill 155,781 155,617 Other intangible assets, net 59,468 59,709 Deferred income taxes 13,045 13,625 Other noncurrent assets 15,502 16,144 TOTAL ASSETS $ 1,436,374 $ 1,481,174 LIABILITIES AND TOTAL DEFICIT CURRENT LIABILITIES Portion of long-term debt due within one year $ 77,000 $ 77,000 Portion of operating lease liabilities due within one year 24,045 28,551 Accounts payable 21,030 23,052 Salaries and wages payable 60,483 58,047 Accrued marketing and advertising 10,070 15,556 Accrued interest 9,352 2,710 Other accrued liabilities 48,145 48,615 Derivative payable 23,053 28,283 Income taxes payable 4,132 7,810 Deferred revenue 50,016 50,475 TOTAL CURRENT LIABILITIES 327,326 340,099 Long-term debt, net 1,391,019 1,408,800 Long-term operating lease liabilities 93,552 101,561 Deferred income taxes 172,765 173,713 Other 7,490 5,212 TOTAL LIABILITIES 1,992,152 2,029,385 TOTAL DEFICIT Common stock, $0 par value; 1,000,000 shares authorized; 121,801 shares issued at April 3, 2021 and 121,470 shares issued at January 2, 2021 0 0 Treasury stock, at cost, 52,471 shares at April 3, 2021 and 52,497 shares at January 2, 2021 (3,139,855) (3,140,903) Retained earnings 2,606,171 2,617,841 Accumulated other comprehensive loss (22,094) (25,149) TOTAL DEFICIT (555,778) (548,211) TOTAL LIABILITIES AND TOTAL DEFICIT $ 1,436,374 $ 1,481,174 The accompanying notes are an integral part of the consolidated financial statements. 2 WW INTERNATIONAL, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF NET INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended April 3, March 28, 2021 2020 Subscription revenues, net $ 279,820 $ 324,657 Product sales and other, net 51,976 75,704 Revenues, net 331,796 400,361 Cost of subscription revenues 99,103 135,566 Cost of product sales and other 39,258 53,804 Cost of revenues 138,361 189,370 Gross profit 193,435 210,991 Marketing expenses 116,933 117,933 Selling, general and administrative expenses 73,671 64,526 Goodwill impairment — 3,665 Operating income 2,831 24,867 Interest expense 29,123 31,551 Other (income) expense, net (237) 24 Loss before income taxes (26,055) (6,708) Benefit from income taxes (7,828) (651) Net loss (18,227) (6,057) Net income attributable to the noncontrolling interest — (6) Net loss attributable to WW International, Inc. $ (18,227) $ (6,063) Net loss per share attributable to WW International, Inc. Basic $ (0.26) $ (0.09) Diluted $ (0.26) $ (0.09) Weighted average common shares outstanding Basic 69,084 67,436 Diluted 69,084 67,436 The accompanying notes are an integral part of the consolidated financial statements. 3 WW INTERNATIONAL, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (IN THOUSANDS) Three Months Ended April 3, March 28, 2021 2020 Net loss $ (18,227) $ (6,057) Other comprehensive gain (loss): Foreign currency translation loss (1,120) (9,820) Income tax benefit on foreign currency translation loss 282 2,499 Foreign currency translation loss, net of taxes (838) (7,321) Gain (loss) on derivatives 5,204 (12,956) Income tax (expense) benefit on gain (loss) on derivatives (1,311) 3,305 Gain (loss) on derivatives, net of taxes 3,893 (9,651) Total other comprehensive gain (loss) 3,055 (16,972) Comprehensive loss (15,172) (23,029) Net income attributable to the noncontrolling interest — (6) Foreign currency translation loss, net of taxes attributable to the noncontrolling interest — 98 Comprehensive loss attributable to the noncontrolling interest — 92 Comprehensive loss attributable to WW International, Inc. $ (15,172) $ (22,937) The accompanying notes are an integral part of the consolidated financial statements. 4 WW INTERNATIONAL, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL DEFICIT (IN THOUSANDS) WW International, Inc. Accumulated Redeemable Other Three Months Ended April 3, 2021 Noncontrolling Common Stock Treasury Stock Comprehensive Retained Interest Shares Amount Shares Amount Loss Earnings Total Balance at January 2, 2021 $ — 121,470 $ 0 52,497 $ (3,140,903) $ (25,149) $ 2,617,841 $ (548,211) Comprehensive income (loss) — 3,055 (18,227) (15,172) Issuance of treasury stock under stock plans (26) 1,048 (1,083) (35) Compensation expense on share- based awards 5,340 5,340 Issuance of common stock 331 2,300 2,300 Balance at April 3, 2021 $ — 121,801 $ 0 52,471 $ (3,139,855) $ (22,094) $ 2,606,171 $ (555,778) WW International, Inc. Accumulated Redeemable Other Three Months Ended March 28, 2020 Noncontrolling Common Stock Treasury Stock Comprehensive Retained Interest Shares Amount Shares Amount Loss Earnings Total Balance at December 28, 2019 $ 3,722 120,352 $ 0 52,933 $ (3,158,274) $ (27,352) $ 2,500,083 $ (685,543) Comprehensive loss (92) (16,874) (6,063) (22,937) Issuance of treasury stock under stock plans (34) 1,367 (1,325) 42 Compensation expense on share- based awards 3,965 3,965 Balance at March 28, 2020 $ 3,630 120,352 $ 0 52,899 $ (3,156,907) $ (44,226) $ 2,496,660 $ (704,473) The accompanying notes are an integral part of the consolidated financial statements.