WW International and advisors to its lenders have reportedly taken a step in talking about potentially restructuring the company’s debt.
The Wall Street Journal reported, citing unnamed sources, that WeightWatchers, which became WW International several years ago, and the lender advisors recently entered into a confidentiality agreement.
The company’s financial forecasts and strategy have been at the center of initial restructuring talks between the lender advisors and WeightWatchers, according to the outlet.
The advisers are reportedly working to parse out what courses of action could be available to lenders with the information.
FOX Business reached out to the company for comment on The Journal’s report.
WeightWatchers’ total liabilities amount to $1.69 billion, including $1.4 billion in net long-term debt, according to its most recent quarterly report.
In early November, then-CFO Heather Stark told analysts and investors the company had “sufficient liquidity for our working capital needs” and “attractive debt terms with no maturities for our term loan or senior notes until 2028 and 2029.”
“However, we acknowledge that our debt burden is significant with our net debt to adjusted EBITDA slivered ratio at 10.4x at the end of the third quarter,” she said. “As such, we have recently appointed advisors to assist us in the evaluation of options related to our overall capital structure.”
The company recently disclosed in a Securities and Exchange Commission filing it had borrowed about $121.3 million “under the senior secured revolving credit facility” that it has had since 2021 to “provide financial flexibility.”
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“We continue to actively evaluate our capital structure and intend to explore transactions to strengthen our balance sheet and increase our financial flexibility,” WeightWatchers said in the filing. “We look forward to engaging with our lenders and bondholders in the coming months.”
The purpose of borrowing those funds was “not to address near term liquidity requirements,” it also said.
The company has been around since 1963. It has long offered weight-loss and weight-management programs and, more recently, has delved into access to weight-loss medications amid a surge in popularity of people using those drugs to slim down.
WeightWatchers generated $601.5 million in net revenues over the first three quarters of 2024, including $192.9 million in the third quarter. It has seen a net loss of $370.8 million over the same nine-month period.
“While our results in the third quarter were broadly on track with expectations, it’s clear we have significant work ahead to change the trajectory of the business,” interim CEO Tara Comonte said during the company’s earnings call in November. “This is an industry undergoing massive transition and as a result, WeightWatchers has experienced meaningful disruption over recent years. However, I am optimistic about our ability to lay a path to future growth.”
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