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WW International, formerly Weight Watchers, has been a powerhouse in the wellness industry for decades. The business has changed over its 56 years; for two-thirds of its members, digital tools have replaced the in-person meetings the company was built around. Still, the business’s primary revenue driver remains subscriptions to its flagship weight-loss and wellness program.

In 2017, WW was starting to gear up for the launch of a major program innovation, but first the company needed to re-evaluate its debt situation. Its earnings before interest, tax, depreciation, amortization, and stock-based compensation (EBITDAS) totaled $258.7 million for 2016, and it owed $2.021 billion on an institutionally held term loan. The loan had an attractive interest rate, but it would come due in April 2020, which meant that in two years it would be a short-term liability. WW also had a $50 million revolving credit facility.

The WW team saw that having a leverage ratio above 7x was clouding perceptions of the company’s potential. “We wanted to invest in the future of the business,” says Jarod Greenblatt, vice president of financial planning and analysis (FP&A) and assistant treasurer. “We had plans for important innovations, and we didn’t want the debt overhang to get in the way of that.”

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Meg Waters

Meg Waters is the editor in chief of Treasury & Risk. She is the former editor in chief of BPM Magazine and the former managing editor of Business Finance.

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