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NEW YORK - WW International, Inc. (WeightWatchers) is expected to complete its court-supervised financial reorganization process as early as next week following approval of its Plan of Reorganization, the company announced Tuesday. According to InvestingPro data, the company maintains impressive gross profit margins of 69% despite recent challenges, though its current market capitalization stands at just $20.07 million.
The plan will reduce WeightWatchers’ debt by approximately $1.15 billion, representing more than 70% of its total debt, and strengthen its capital structure. Under the approved plan, the company’s lenders and noteholders will receive their pro rata share of $465 million in new senior secured term loans due 2030 and 91% of new common equity. Existing shareholders will receive 9% of new common equity. Financial metrics from InvestingPro show the company’s current ratio at 0.15, indicating significant liquidity challenges that this restructuring aims to address.
"We’ve taken decisive action to significantly strengthen our financial foundation and will emerge with the flexibility to execute and grow," said Tara Comonte, Chief Executive Officer of WeightWatchers.
The company has continued operating as a publicly traded company throughout the reorganization process without interruption to services for its members worldwide.
WeightWatchers filed for Chapter 11 bankruptcy protection earlier this year as part of a strategic financial restructuring. The company aims to focus on scaling its weight management model by integrating lifestyle changes with clinical care and GLP-1 medications where appropriate.
The reorganization comes as WeightWatchers navigates challenges in the weight management industry, which has seen significant changes with the introduction of new pharmaceutical options for weight loss. The company’s transformation efforts come amid a challenging period, with InvestingPro data indicating a net loss of $70.38 million in the last twelve months.
This article is based on information from a company press release statement.
In other recent news, WW International, Inc. has filed for Chapter 11 bankruptcy protection, which has led to significant developments for the company. The company reported first-quarter adjusted earnings per share of -$0.47, missing analyst estimates of -$0.29, while revenue was $186.6 million, exceeding expectations of $180.06 million but reflecting a 9.7% year-over-year decline. As part of its bankruptcy proceedings, WW International has entered a restructuring support agreement to reduce its total outstanding debt from $1.6 billion to $465 million. The company plans to issue new senior secured debt and common equity as part of the reorganization. Both Moody’s and S&P Global Ratings have downgraded WW International’s credit ratings, citing governance concerns and the company’s high financial leverage. Moody’s downgraded the corporate family rating to Ca, while S&P Global Ratings lowered its issuer credit rating to ’D’. The company is also set to be delisted from Nasdaq, with trading expected to shift to the Pink Current Market operated by OTC Markets Group. Despite these challenges, WW International aims to emerge from bankruptcy within 45 days, maintaining full operations during the reorganization.
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