WW INTERNATIONAL INC

Previous wording

To supplement our consolidated results presented in accordance with accounting principles generally accepted in the United States (“GAAP”), we have disclosed non-GAAP financial measures of operating results that exclude or adjust certain items. Gross profit, gross margin, operating loss, operating loss margin and components thereof are discussed in this Quarterly Report on Form 10-Q both as reported (on a GAAP basis) and as adjusted (on a non-GAAP basis), as applicable, with respect to (i) the first quarter of fiscal 2024 to exclude (x) the impact of impairment charges for our franchise rights acquired related to our United States, Australia, New Zealand and United Kingdom units of account and (y) the net impact of charges associated with our previously disclosed 2023 restructuring plan (the “2023 plan”) and our previously disclosed 2022 restructuring plan (the “2022 plan”); and (ii) the first quarter of fiscal 2023 to exclude (x) the net impact of (a) charges associated with the 2023 plan, (b) charges associated with the 2022 plan or the reversal of certain of the charges associated with the 2022 plan, as applicable, (c) the reversal of certain of the charges associated with our previously disclosed 2021 organizational restructuring plan (the “2021 plan”), and (d) the reversal of certain of the charges associated with our previously disclosed 2020 organizational restructuring plan (the “2020 plan”); and (y) the impact of certain non-recurring transaction costs in connection with the acquisition of Sequence. We generally refer to such non-GAAP measures as excluding or adjusting for the impact of franchise rights acquired impairments, the net impact of restructuring charges, and the impact of acquisition transaction costs, as applicable. We also present within this Quarterly Report on Form 10-Q the non-GAAP financial measures: earnings before interest, taxes, depreciation, amortization and stock-based compensation (“EBITDAS”); earnings before interest, taxes, depreciation, amortization, stock-based compensation, franchise rights acquired and goodwill impairments, net restructuring charges, and certain non-recurring transaction costs in connection with the acquisition of Sequence (“Adjusted EBITDAS”); total debt less unamortized deferred financing costs, unamortized debt discount and cash on hand (i.e., net debt); and a net debt/Adjusted EBITDAS ratio. See “—Liquidity and Capital Resources—EBITDAS, Adjusted EBITDAS and Net Debt” for the reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure in each case. Our management believes these non-GAAP financial measures provide useful supplemental information to investors regarding the performance of our business and are useful for period-over-period comparisons of the performance of our business. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not…

Excerpt shortened here; the source contains the full paragraph.

Current wording

To supplement our consolidated results presented in accordance with accounting principles generally accepted in the United States (“GAAP”), we have disclosed non-GAAP financial measures of operating results that exclude or adjust certain items. Gross profit, gross margin, operating income (loss), operating income (loss) margin and components thereof are discussed in this Quarterly Report on Form 10-Q both as reported (on a GAAP basis) and as adjusted (on a non-GAAP basis), as applicable, with respect to (i) the second quarter of fiscal 2024 to exclude the impact or net impact, as applicable, of charges associated with our previously disclosed 2023 restructuring plan (the “2023 plan”) and our previously disclosed 2022 restructuring plan (the “2022 plan”); (ii) the first six months of fiscal 2024 to exclude (x) the impact of impairment charges for our franchise rights acquired related to our United States, Australia, New Zealand and United Kingdom units of account and (y) the net impact of charges associated with the 2023 plan and the 2022 plan; and (iii) the second quarter and first six months of fiscal 2023 to exclude (x) the net impact of (a) charges associated with the 2023 plan, (b) charges associated with the 2022 plan or the reversal of certain of the charges associated with the 2022 plan, as applicable, (c) charges associated with our previously disclosed 2021 organizational restructuring plan (the “2021 plan”) or the reversal of certain of the charges associated with the 2021 plan, as applicable, and (d) the reversal of certain of the charges associated with our previously disclosed 2020 organizational restructuring plan (the “2020 plan”) and (y) the impact of certain non-recurring transaction costs in connection with the acquisition of Sequence. We generally refer to such non-GAAP measures as excluding or adjusting for the impact of franchise rights acquired impairments, the impact or net impact, as applicable, of restructuring charges, and the impact of acquisition transaction costs, as applicable. We also present within this Quarterly Report on Form 10-Q the non-GAAP financial measures: earnings before interest, taxes, depreciation, amortization and stock-based compensation (“EBITDAS”); earnings before interest, taxes, depreciation, amortization, stock-based compensation, franchise rights acquired and goodwill impairments, net restructuring charges, and certain non-recurring transaction costs in connection with the acquisition of Sequence (“Adjusted EBITDAS”); total debt less unamortized deferred financing costs, unamortized debt discount and cash on hand (i.e., net debt); and a net debt/Adjusted EBITDAS ratio. See “—Liquidity and Capital Resources—EBITDAS, Adjusted EBITDAS and Net Debt” for the reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure in each case. Our management believes these non-GAAP financial measures provide useful supplemental information to investors regarding the perform…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

In performing the impairment analysis for goodwill, the fair value for our reporting units is estimated using a discounted cash flow approach. This approach involves projecting future cash flows attributable to the reporting unit and discounting those estimated cash flows using an appropriate discount rate. The estimated fair value is then compared to the carrying value of the reporting unit. We have determined the appropriate reporting units for purposes of assessing goodwill impairment to be the Behavioral and Clinical business lines. Our “Behavioral” business line consists of our Workshops + Digital business and Digital business. The net book values of goodwill in the Behavioral and Clinical reporting units as of the March 30, 2024 balance sheet date were $152.5 million and $89.7 million, respectively.

Current wording

In performing the impairment analysis for goodwill, the fair value for our reporting units is estimated using a discounted cash flow approach. This approach involves projecting future cash flows attributable to the reporting unit and discounting those estimated cash flows using an appropriate discount rate. The estimated fair value is then compared to the carrying value of the reporting unit. We have determined the appropriate reporting units for purposes of assessing goodwill impairment to be the Behavioral and Clinical business lines. Our “Behavioral” business line consists of our Workshops + Digital business and Digital business. The net book values of goodwill in the Behavioral and Clinical reporting units as of the June 29, 2024 balance sheet date were $152.1 million and $89.7 million, respectively.

Previous wording

We review indefinite-lived franchise rights acquired and goodwill for potential impairment on at least an annual basis or more often if events so require.

Current wording

We review indefinite-lived franchise rights acquired and goodwill for potential impairment on at least an annual basis or more often if events so require. We performed our annual fair value impairment testing as of May 5, 2024 and May 7, 2023, each the first day of fiscal May, on our indefinite-lived franchise rights acquired and goodwill. In addition, based on triggering events, we performed interim impairment tests as of March 30, 2024 on our indefinite-lived franchise rights acquired and goodwill for the first quarter of fiscal 2024.

Previous wording

Further information regarding the results of our franchise rights acquired and goodwill interim impairment tests for the first quarter of fiscal 2024 can be found in Note 6 “Franchise Rights Acquired, Goodwill and Other Intangible Assets” in the notes to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Further information regarding the results of our franchise rights acquired and goodwill annual impairment tests and our franchise rights acquired and goodwill interim impairment tests for the first quarter of fiscal 2024 can be found in Note 6 “Franchise Rights Acquired, Goodwill and Other Intangible Assets” in the notes to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Incoming Subscribers—“Subscribers” refer to Digital subscribers, Workshops + Digital subscribers and Clinical subscribers who participate in recurring bill programs in Company-owned operations. The “Incoming Subscribers” metric reports Subscribers in Company-owned operations at a given period start as follows: (i) “Incoming Digital Subscribers” is the total number of Digital subscribers; (ii) “Incoming Workshops + Digital Subscribers” is the total number of subscribers that have access to combined workshops and Digital offerings; (iii) “Incoming Clinical Subscribers” is the total number of Clinical subscribers; and (iv) “Incoming Subscribers” is the sum of Incoming Digital Subscribers, Incoming Workshops + Digital Subscribers and Incoming Clinical Subscribers, as applicable. Given we completed our acquisition of Sequence in April 2023 after the beginning of the second quarter of fiscal 2023, we have incoming subscribers with respect to our Clinical business for the first quarter of fiscal 2024, but not for the first quarter of fiscal 2023. Recruitment and retention are key drivers for this metric.

Current wording

Incoming Subscribers—“Subscribers” refer to Digital subscribers, Workshops + Digital subscribers and Clinical subscribers who participate in recurring bill programs in Company-owned operations. The “Incoming Subscribers” metric reports Subscribers in Company-owned operations at a given period start as follows: (i) “Incoming Digital Subscribers” is the total number of Digital subscribers; (ii) “Incoming Workshops + Digital Subscribers” is the total number of subscribers that have access to combined workshops and Digital offerings; (iii) “Incoming Clinical Subscribers” is the total number of Clinical subscribers; and (iv) “Incoming Subscribers” is the sum of Incoming Digital Subscribers, Incoming Workshops + Digital Subscribers and Incoming Clinical Subscribers, as applicable. Given we completed our acquisition of Sequence in April 2023 after the beginning of the second quarter of fiscal 2023, we have incoming subscribers with respect to our Clinical business for the second quarter and first six months of fiscal 2024, but not for the second quarter and first six months of fiscal 2023. Recruitment and retention are key drivers for this metric.

Previous wording

The table below sets forth selected financial information for the first quarter of fiscal 2024 from our consolidated statements of operations for the three months ended March 30, 2024 versus selected financial information for the first quarter of fiscal 2023 from our consolidated statements of operations for the three months ended April 1, 2023.

Current wording

The table below sets forth selected financial information for the second quarter of fiscal 2024 from our consolidated statements of operations for the three months ended June 29, 2024 versus selected financial information for the second quarter of fiscal 2023 from our consolidated statements of operations for the three months ended July 1, 2023.

Previous wording

Certain results for the first quarter of fiscal 2024 are adjusted to exclude the impact of franchise rights acquired impairments and the net impact of restructuring charges. See “Non-GAAP Financial Measures” above. The table below sets forth a reconciliation of certain of those components of our selected financial data for the three months ended March 30, 2024 which have been adjusted.

Current wording

Certain results for the second quarter of fiscal 2024 are adjusted to exclude the net impact of restructuring charges. See “Non-GAAP Financial Measures” above. The table below sets forth a reconciliation of certain of those components of our selected financial data for the three months ended June 29, 2024 which have been adjusted.

Previous wording

Cost of revenues for the first quarter of fiscal 2024 decreased $53.6 million, or 43.8%, versus the first quarter of fiscal 2023. Excluding the impact of foreign currency, which increased cost of revenues in the first quarter of fiscal 2024 by $0.2 million, cost of revenues for the first quarter of fiscal 2024 would have decreased 44.0% versus the prior year period. Excluding the net impact of the $2.5 million of restructuring charges in the first quarter of fiscal 2024 and the net impact of the $18.6 million of restructuring charges in the first quarter of fiscal 2023, cost of revenues for the first quarter of fiscal 2024 would have decreased by 36.1%, or 36.3% on a constant currency basis, versus the prior year period.

Current wording

Cost of revenues for the second quarter of fiscal 2024 decreased $18.9 million, or 22.6%, versus the second quarter of fiscal 2023. Excluding the impact of foreign currency, which decreased cost of revenues in the second quarter of fiscal 2024 by $0.1 million, cost of revenues for the second quarter of fiscal 2024 would have decreased 22.4% versus the prior year period. Excluding the impact of the reversal of $0.1 million of restructuring charges in the second quarter of fiscal 2024 and the net impact of the $0.7 million of restructuring charges in the second quarter of fiscal 2023, cost of revenues for the second quarter of fiscal 2024 would have decreased by 21.8%, or 21.6% on a constant currency basis, versus the prior year period.

Previous wording

Marketing expenses for the first quarter of fiscal 2024 increased $1.9 million, or 2.2%, versus the first quarter of fiscal 2023. Excluding the impact of foreign currency, which increased marketing expenses in the first quarter of fiscal 2024 by $0.3 million, marketing expenses for the first quarter of fiscal 2024 would have increased 1.9% versus the prior year period. This increase in marketing expenses was primarily due to higher spend on Online advertising, including for our new Clinical business, partially offset by lower spend on TV advertising and production and agency fees. Marketing expenses as a percentage of revenue for the first quarter of fiscal 2024 increased to 43.7% from 36.5% for the first quarter of fiscal 2023.

Current wording

Marketing expenses for the second quarter of fiscal 2024 increased $2.6 million, or 5.0%, versus the second quarter of fiscal 2023. Excluding the impact of foreign currency, which decreased marketing expenses in the second quarter of fiscal 2024 by $0.2 million, marketing expenses for the second quarter of fiscal 2024 would have increased 5.3% versus the prior year period. This increase in marketing expenses was primarily due to higher spend on Online advertising, partially offset by lower spend on TV advertising and production fees and agency fees. Marketing expenses as a percentage of revenue for the second quarter of fiscal 2024 increased to 26.6% from 22.5% for the second quarter of fiscal 2023.

Previous wording

Interest expense for the first quarter of fiscal 2024 increased $1.9 million, or 8.2%, versus the first quarter of fiscal 2023. The increase in interest expense was driven primarily by an increase in the base rate of our Term Loan Facility (as defined below). The effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during the first quarter of fiscal 2024 and the first quarter of fiscal 2023 and excluding the impact of our interest rate swaps then in effect, increased to 7.78% per annum at the end of the first quarter of fiscal 2024 from 7.20% per annum at the end of the first quarter of fiscal 2023. Including the impact of our interest rate swaps then in effect, the effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during the first quarter of fiscal 2024 and the first quarter of fiscal 2023, increased to 6.80% per annum at the end of the first quarter of fiscal 2024 from 6.48% per annum at the end of the first quarter of fiscal 2023. See “—Liquidity and Capital Resources—Long-Term Debt” for additional details regarding our debt, including interest rates and payments thereon. Further information regarding our interest rate swaps can be found in Note 11 “Derivative Instruments and Hedging” in the notes to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Interest expense for the second quarter of fiscal 2024 increased $4.5 million, or 18.7%, versus the second quarter of fiscal 2023. The increase in interest expense was driven primarily by an increase in the base rate of our Term Loan Facility (as defined below). The effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during the second quarter of fiscal 2024 and the second quarter of fiscal 2023 and excluding the impact of any applicable interest rate swaps, increased to 7.76% per annum for the second quarter of fiscal 2024 from 7.51% per annum for the second quarter of fiscal 2023. Interest expense was impacted by the termination of our interest rate swaps on March 31, 2024. Including the impact of any applicable interest rate swaps, the effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during the second quarter of fiscal 2024 and the second quarter of fiscal 2023, increased to 7.76% per annum for the second quarter of fiscal 2024 from 6.63% per annum for the second quarter of fiscal 2023. See “—Liquidity and Capital Resources—Long-Term Debt” for additional details regarding our debt, including interest rates and payments thereon. Further information regarding our use of interest rate swaps can be found in Note 11 “Derivative Instruments and Hedging” in the notes to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Our effective tax rate for the first quarter of fiscal 2024 was (19.0%) compared to (132.3%) for the first quarter of fiscal 2023. The effective tax rate for interim periods is determined using an annual effective tax rate, adjusted for discrete items. The forecasted full-year tax expense, which included an increase in valuation allowance against U.S. deferred tax assets, in relation to our forecasted full-year pretax loss (albeit minimal), drove an unusually high negative annual effective tax rate. Applying this negative annual effective tax rate to the pretax loss for the first quarter of fiscal 2024 resulted in an income tax expense of $55.4 million, which is mostly reflected in income taxes payable on our consolidated balance sheet and consolidated statement of cash flows. Given the seasonal nature of our business, this income tax expense is expected to largely reverse in the third and fourth quarters of fiscal 2024, when we expect to earn pretax income.

Current wording

Our effective tax rate for the second quarter of fiscal 2024 was (213.0%) compared to (1,740.0%) for the second quarter of fiscal 2023. The effective tax rate for interim periods is determined using an annual effective tax rate, adjusted for discrete items. The forecasted full-year tax expense, which included an increase in valuation allowance against U.S. deferred tax assets, in relation to our forecasted full-year pretax loss (albeit minimal), drove the unusually high negative annual effective tax rate. Applying this negative annual effective tax rate to pretax income for the second quarter of fiscal 2024 resulted in an income tax benefit. In addition, the effective tax rate was impacted by tax expense recorded for an out-of-period income tax adjustment and tax expense from a valuation allowance established to offset certain non-U.S. deferred tax assets due to the uncertainty of realizing future tax benefits. The adoption of the Organization for Economic Cooperation and Development’s global tax reform initiative, which introduces a global minimum tax of 15% applicable to large multinational corporations, did not have an impact on our effective tax rate for the second quarter of fiscal 2024.

Previous wording

The following tables set forth key metrics for the first quarter of fiscal 2024 and the percentage change in those metrics versus the prior year period, as applicable:

Current wording

The following tables set forth key metrics for the second quarter of fiscal 2024 and the percentage change in those metrics versus the prior year period, as applicable:

Previous wording

The “As adjusted” measure is a non-GAAP financial measure that adjusts the consolidated statements of operations for the first quarter of fiscal 2024 to exclude the impact of the $258.0 million ($241.5 million after tax) of franchise rights acquired impairments, and the net impact of the $5.5 million ($4.1 million after tax)of 2023 plan restructuring charges andthe $0.2 million ($0.2 million after tax)of 2022 plan restructuring charges. See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures.

Current wording

The “As adjusted” measure is a non-GAAP financial measure that adjusts the consolidated statements of operations for the first six months of fiscal 2024 to exclude the impact of the $258.0 million ($241.5 million after tax) of franchise rights acquired impairments, and the net impact of the $7.4 million ($5.6 million after tax)of 2023 plan restructuring charges andthe $0.3 million ($0.2 million after tax)of 2022 plan restructuring charges. See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures.

Previous wording

Revenues for the first quarter of fiscal 2024 were $206.5 million, a decrease of $35.3 million, or 14.6%, versus the first quarter of fiscal 2023. Excluding the impact of foreign currency, which positively impacted our revenues in the first quarter of fiscal 2024 by $0.8 million, revenues for the first quarter of fiscal 2024 would have decreased 14.9% versus the prior year period. This decrease was driven primarily by the decline in Other Revenues from the discontinuation of our consumer products business at the end of fiscal 2023. Lower Subscription Revenues primarily due to a higher mix of subscribers within their initial, lower-priced, commitment periods and the continued mix shift from our Workshops + Digital business to our Digital business also contributed to the decrease in revenues in the quarter. Additionally, Subscription Revenues were negatively impacted by non-Clinical recruitment declines during the first quarter of fiscal 2024 versus the prior year period. Subscription Revenues included $18.8 million of Clinical Subscription Revenues for the first quarter of fiscal 2024. See “—Operating Results” for additional details on revenues.

Current wording

Revenues for the first six months of fiscal 2024 were $408.6 million, a decrease of $60.1 million, or 12.8%, versus the first six months of fiscal 2023. Excluding the impact of foreign currency, which positively impacted our revenues in the first six months of fiscal 2024 by $0.1 million, revenues for the first six months of fiscal 2024 would have decreased 12.9% versus the prior year period. This decrease was driven primarily by the decline in Other Revenues from the discontinuation of our consumer products business at the end of fiscal 2023. Lower Subscription Revenues, primarily due to a higher mix of subscribers within their initial, lower-priced, commitment periods and the continued mix shift from our Workshops + Digital business to our Digital business, also contributed to the decrease in revenues in the period. Additionally, Subscription Revenues were negatively impacted by non-Clinical recruitment declines during the first six months of fiscal 2024 versus the prior year period. Subscription Revenues included $38.5 million of Clinical Subscription Revenues for the first six months of fiscal 2024 versus $7.6 million of Clinical Subscription Revenues for the first six months of fiscal 2023 as a result of our acquisition of Sequence closing during the second quarter of fiscal 2023. See “—Operating Results” for additional details on revenues.

Previous wording

Gross profit for the first quarter of fiscal 2024 increased $18.3 million, or 15.3%, versus the first quarter of fiscal 2023. Excluding the impact of foreign currency, which positively impacted gross profit in the first quarter of fiscal 2024 by $0.6 million, gross profit for the first quarter of fiscal 2024 would have increased 14.8% versus the prior year period. Excluding the net impact of the $2.5 million of restructuring charges in the first quarter of fiscal 2024 and the net impact of the $18.6 million of restructuring charges in the first quarter of fiscal 2023, gross profit for the first quarter of fiscal 2024 would have increased by 1.5%, or 1.1% on a constant currency basis, versus the prior year period. Gross margin for the first quarter of fiscal 2024 increased to 66.7%, both as reported and on a constant currency basis, versus 49.4% for the first quarter of fiscal 2023. Excluding the net impact of restructuring charges in the first quarter of fiscal 2024 and the net impact of restructuring charges in the first quarter of fiscal 2023, gross margin for the first quarter of fiscal 2024 would have increased 10.8% to 67.9%, both as adjusted and as adjusted on a constant currency basis, versus the prior year period. This gross margin increase was driven primarily by actions to reduce the fixed cost base and mix shift within our business. The first quarter of fiscal 2023 included the impact of accounting for subscription and consumer product promotional bundles.

Current wording

Gross profit for the first six months of fiscal 2024 increased $12.4 million, or 4.7%, versus the first six months of fiscal 2023. Excluding the impact of foreign currency, which positively impacted gross profit in the first six months of fiscal 2024 by $0.1 million, gross profit for the first six months of fiscal 2024 would have increased 4.7% versus the prior year period. Excluding the net impact of the $2.4 million of restructuring charges in the first six months of fiscal 2024 and the net impact of the $19.3 million of restructuring charges in the first six months of fiscal 2023, gross profit for the first six months of fiscal 2024 would have decreased by 1.6%, both as adjusted and as adjusted on a constant currency basis, versus the prior year period. Gross margin for the first six months of fiscal 2024 increased to 67.3%, both as reported and on a constant currency basis, versus 56.0% for the first six months of fiscal 2023. Excluding the net impact of restructuring charges in the first six months of fiscal 2024 and the net impact of restructuring charges in the first six months of fiscal 2023, gross margin for the first six months of fiscal 2024 would have increased 7.7% to 67.9%, both as adjusted and as adjusted on a constant currency basis, versus the prior year period. This gross margin increase was driven primarily by the discontinuation of our lower margin consumer products business at the end of fiscal 2023.

Previous wording

Selling, general and administrative expenses for the first quarter of fiscal 2024 decreased $0.9 million, or 1.5%, versus the first quarter of fiscal 2023. Excluding the impact of foreign currency, which increased selling, general and administrative expenses in the first quarter of fiscal 2024 by $0.1 million, selling, general and administrative expenses for the first quarter of fiscal 2024 would have decreased 1.7% versus the prior year period. Excluding the net impact of the $3.3 million of restructuring charges in the first quarter of fiscal 2024, the net impact of the $4.0 million of restructuring charges in the first quarter of fiscal 2023 and the impact of the $3.7 million of acquisition transaction costs in the first quarter of fiscal 2023, selling, general and administrative expenses for the first quarter of fiscal 2024 would have increased by 6.9%, or 6.7% on a constant currency basis, versus the prior year period. This increase in selling, general and administrative expenses was primarily due to the costs associated with our new Clinical business that we acquired in the second quarter of fiscal 2023. Selling, general and administrative expenses as a percentage of revenue for the first quarter of fiscal 2024 increased to 28.6% from 24.7% for the first quarter of fiscal 2023. Excluding the net impact of restructuring charges in the first quarter of fiscal 2024, the net impact of restructuring charges in the first quarter of fiscal 2023 and the impact of acquisition transaction costs in the first quarter of fiscal 2023, selling, general and administrative expenses as a percentage of revenue for the first quarter of fiscal 2024 would have increased by 5.4%, or 5.5% on a constant currency basis, versus the prior year period.

Current wording

Selling, general and administrative expenses for the first six months of fiscal 2024 decreased $19.0 million, or 15.1%, versus the first six months of fiscal 2023. Excluding the impact of foreign currency, which increased selling, general and administrative expenses in the first six months of fiscal 2024 by $0.1 million, selling, general and administrative expenses for the first six months of fiscal 2024 would have decreased 15.1% versus the prior year period. Excluding the net impact of the $5.4 million of restructuring charges in the first six months of fiscal 2024, the net impact of the $6.0 million of restructuring charges in the first six months of fiscal 2023 and the impact of the $8.6 million of acquisition transaction costs in the first six months of fiscal 2023, selling, general and administrative expenses for the first six months of fiscal 2024 would have decreased by 8.7%, or 8.8% on a constant currency basis, versus the prior year period. This decrease in selling, general and administrative expenses was primarily due to a decline in employee compensation and related costs. Selling, general and administrative expenses as a percentage of revenue for the first six months of fiscal 2024 decreased to 26.1% from 26.8% for the first six months of fiscal 2023. Excluding the net impact of restructuring charges in the first six months of fiscal 2024, the net impact of restructuring charges in the first six months of fiscal 2023 and the impact of acquisition transaction costs in the first six months of fiscal 2023, selling, general and administrative expenses as a percentage of revenue for the first six months of fiscal 2024 would have increased by 1.1%, both as adjusted and as adjusted on a constant currency basis, versus the prior year period.

Previous wording

Operating loss for the first quarter of fiscal 2024 was $269.3 million compared to operating loss for the first quarter of fiscal 2023 of $28.6 million. Operating loss for the first quarter of fiscal 2024 was positively impacted by $0.3 million of foreign currency. Excluding the impact of the $258.0 million of franchise rights acquired impairments in the first quarter of fiscal 2024, the net impact of the $5.7 million of restructuring charges in the first quarter of fiscal 2024, the net impact of the $22.7 million of restructuring charges in the first quarter of fiscal 2023 and the impact of the $3.7 million of acquisition transaction costs in the first quarter of fiscal 2023, operating loss for the first quarter of fiscal 2024 would have increased to $5.6 million from $2.2 million of operating loss in the prior year period. Operating loss margin for the first quarter of fiscal 2024 was 130.4% compared to operating loss margin for the first quarter of fiscal 2023 of 11.8%. Excluding the impact of franchise rights acquired impairments in the first quarter of fiscal 2024, the net impact of restructuring charges in the first quarter of fiscal 2024, the net impact of restructuring charges in the first quarter of fiscal 2023 and the impact of acquisition transaction costs in the first quarter of fiscal 2023, operating loss margin for the first quarter of fiscal 2024 would have increased to 2.7% from 0.9% of operating loss margin in the prior year period. This increase in operating loss margin for the first quarter of fiscal 2024 versus the operating loss margin for the first quarter of fiscal 2023 was driven by an increase in marketing expenses as a percentage of revenue and an increase in selling, general and administrative expenses as a percentage of revenue, partially offset by an increase in gross margin.

Current wording

Operating loss for the first six months of fiscal 2024 was $233.4 million compared to operating loss for the first six months of fiscal 2023 of $2.3 million. Foreign currency had a de minimis impact on operating loss for the first six months of fiscal 2024. Excluding the impact of the $258.0 million of franchise rights acquired impairments in the first six months of fiscal 2024, the net impact of the $7.7 million of restructuring charges in the first six months of fiscal 2024, the net impact of the $25.3 million of restructuring charges in the first six months of fiscal 2023 and the impact of the $8.6 million of acquisition transaction costs in the first six months of fiscal 2023, operating income would have been $32.3 million for the first six months of fiscal 2024 versus operating income of $31.6 million for the first six months of fiscal 2023, an increase of 2.1%, or 2.5% on a constant currency basis. Operating loss margin for the first six months of fiscal 2024 was 57.1% compared to operating loss margin for the first six months of fiscal 2023 of 0.5%. Excluding the impact of franchise rights acquired impairments in the first six months of fiscal 2024, the net impact of restructuring charges in the first six months of fiscal 2024, the net impact of restructuring charges in the first six months of fiscal 2023 and the impact of acquisition transaction costs in the first six months of fiscal 2023, operating income margin would have been 7.9% for the first six months of fiscal 2024, both as adjusted and as adjusted on a constant currency basis, versus operating income margin of 6.8% for the first six months of fiscal 2023. This increase in operating income margin was driven primarily by an increase in gross margin, partially offset by an increase in marketing expenses as a percentage of revenue and an increase in selling, general and administrative expenses as a percentage of revenue, versus the prior year period.

Previous wording

Other income, net, which consists primarily of the impact of foreign currency on intercompany transactions, increased by $1.3 million for the first quarter of fiscal 2024 to $1.6 million of income as compared to $0.3 million of income for the first quarter of fiscal 2023.

Current wording

Other income, net, which consists primarily of the impact of foreign currency on intercompany transactions, increased by $0.8 million for the first six months of fiscal 2024 to $1.7 million of income as compared to $0.9 million of income for the first six months of fiscal 2023.

Previous wording

For the first quarter of fiscal 2024, the difference between the U.S. federal statutory tax rate and our consolidated effective tax rate was primarily due to the valuation allowance noted above. In addition, the effective tax rate was impacted by a tax benefit related to foreign-derived intangible income (“FDII”). The adoption of the Organization for Economic Cooperation and Development’s global tax reform initiative, which introduces a global minimum tax of 15% applicable to large multinational corporations, did not have an impact on the first quarter of 2024. For the first quarter of fiscal 2023, the difference between the U.S. federal statutory tax rate and our consolidated effective tax rate was primarily due to the valuation allowance noted above. In addition, the effective tax rate was impacted by tax expense from income earned in foreign jurisdictions, partially offset by tax benefits related to state income tax and FDII.

Current wording

Our effective tax rate for the first six months of fiscal 2024 was (13.9%) compared to (40.4%) for the first six months of fiscal 2023. The effective tax rate for interim periods is determined using an annual effective tax rate, adjusted for discrete items. The forecasted full-year tax expense, which included an increase in valuation allowance against U.S. deferred tax assets, in relation to our forecasted full-year pretax loss (albeit minimal), drove the unusually high negative annual effective tax rate. Applying this negative annual effective tax rate to the pretax loss for the first six months of fiscal 2024 resulted in an income tax expense. In addition, the effective tax rate was impacted by tax expense recorded for an out-of-period income tax adjustment and tax expense from a valuation allowance established to offset certain non-U.S. deferred tax assets due to the uncertainty of realizing future tax benefits. The adoption of the Organization for Economic Cooperation and Development’s global tax reform initiative, which introduces a global minimum tax of 15% applicable to large multinational corporations, did not have an impact on our effective tax rate for the first six months of fiscal 2024.

Previous wording

Net loss for the first quarter of fiscal 2024 was $347.9 million compared to net loss for the first quarter of fiscal 2023 of $118.7 million. Net loss for the first quarter of fiscal 2024 was positively impacted by $0.2 million of foreign currency. Net loss for the first quarter of fiscal 2024 included a $241.5 million impact from franchise rights acquired impairments and a $4.3 million net impact from restructuring charges. Net loss for the first quarter of fiscal 2023 included a $17.0 million net impact from restructuring charges and a $3.3 million impact from acquisition transaction costs.

Current wording

Net loss for the first six months of fiscal 2024 was $324.6 million compared to the net loss for the first six months of fiscal 2023 of $67.9 million. Foreign currency had a de minimis impact on net loss for the first six months of fiscal 2024. Net loss for the first six months of fiscal 2024 included a $241.5 million impact from franchise rights acquired impairments and a $5.8 million net impact from restructuring charges. Net loss for the first six months of fiscal 2023 included a $19.0 million net impact from restructuring charges and a $7.5 million impact from acquisition transaction costs.

Previous wording

Diluted net loss per share for the first quarter of fiscal 2024 was $4.39 compared to diluted net loss per share for the first quarter of fiscal 2023 of $1.68. Diluted net loss per share for the first quarter of fiscal 2024 included a $3.05 impact from franchise rights acquired impairments and a $0.05 net impact from restructuring charges. Diluted net loss per share for the first quarter of fiscal 2023 included a $0.24 net impact from restructuring charges and a $0.05 impact from acquisition transaction costs.

Current wording

Diluted net loss per share for the first six months of fiscal 2024 was $4.09 compared to diluted net loss per share for the first six months of fiscal 2023 of $0.91. Diluted net loss per share for the first six months of fiscal 2024 included a $3.04 impact from franchise rights acquired impairments and a $0.07 net impact from restructuring charges. Diluted net loss per share for the first six months of fiscal 2023 included a $0.26 net impact from restructuring charges and a $0.10 impact from acquisition transaction costs.

Previous wording

The decrease in revenues for the first quarter of fiscal 2024 versus the prior year period was driven by a decrease in Other Revenues and, to a lesser extent, a decrease in Subscription Revenues. The decrease in Other Revenues for the first quarter of fiscal 2024 versus the prior year period was driven primarily by the discontinuation of our consumer products business at the end of fiscal 2023.

Current wording

The decrease in revenues for the first six months of fiscal 2024 versus the prior year period was driven by a decrease in Other Revenues and, to a lesser extent, a decrease in Subscription Revenues. The decrease in Other Revenues for the first six months of fiscal 2024 versus the prior year period was driven primarily by the discontinuation of our consumer products business at the end of fiscal 2023.

Previous wording

The decrease in Subscription Revenues for the first quarter of fiscal 2024 versus the prior year period was driven primarily by both a decrease in Workshops + Digital Subscription Revenues and a decrease in Digital Subscription Revenues due to a higher mix of subscribers within their initial, lower-priced, commitment periods and the continued mix shift from our Workshops + Digital business to our Digital business. Workshops + Digital Subscription Revenues and Digital Subscription Revenues were also negatively impacted by the recruitment decline during the first quarter of fiscal 2024 as compared to the prior year period. In addition, the lower number of Incoming Workshops + Digital Subscribers at the beginning of the first quarter of fiscal 2024 versus the beginning of the first quarter of fiscal 2023 contributed to the decrease in Workshops + Digital Subscription Revenues in the quarter. Subscription Revenues for the first quarter of fiscal 2024 benefited from Clinical Subscription Revenues following our acquisition of Sequence during the second quarter of fiscal 2023.

Current wording

The decrease in Subscription Revenues for the first six months of fiscal 2024 versus the prior year period was driven primarily by both a decrease in Workshops + Digital Subscription Revenues and a decrease in Digital Subscription Revenues primarily due to a higher mix of subscribers within their initial, lower-priced, commitment periods and the continued mix shift from our Workshops + Digital business to our Digital business. Workshops + Digital Subscription Revenues and Digital Subscription Revenues were also negatively impacted by recruitment declines during the first six months of fiscal 2024 as compared to the prior year period. In addition, the lower number of Incoming Workshops + Digital Subscribers at the beginning of fiscal 2024 versus the beginning of fiscal 2023 contributed to the decrease in Workshops + Digital Subscription Revenues in the period. Subscription Revenues for the first six months of fiscal 2024 benefited from Clinical Subscription Revenues following our acquisition of Sequence during the second quarter of fiscal 2023, despite the recruitment challenges in the second quarter of fiscal 2024 arising from the increasingly competitive environment.

Previous wording

The increase in Total Paid Weeks for the first quarter of fiscal 2024 versus the prior year period was driven primarily by our new Clinical business that we acquired in the second quarter of fiscal 2023.

Current wording

The decrease in Total Paid Weeks for the first six months of fiscal 2024 versus the prior year period was driven primarily by non-Clinical recruitment declines during the first six months of fiscal 2024 as compared to the prior year period.

Previous wording

Cash flows provided by operating activities have historically supplied us with our primary source of liquidity. We have used these cash flows, supplemented with long-term debt and short-term borrowings, to fund our operations and global strategic initiatives, pay down debt and engage in selective acquisitions. Upon the completion of our acquisition of Sequence (the “Acquisition”), in the second quarter of fiscal 2023, we had a net cash outlay of $40.3 millionon April 10, 2023 with respect to the payment of the purchase price and certain transaction costs. For additional details on the purchase price consideration for the Acquisition and related terms, including with respect to the first anniversary payment, see Note 5 “Acquisitions” in the notes to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q. These cash outlays have reduced the liquidity available to us in the future. See “Risk Factors—Risks Related to Our Acquisition of Weekend Health, Inc.(d/b/a Sequence)—The Acquisition may not achieve its intended results.” and“Risk Factors—Risks Related to Our Liquidity—We may not be able to generate sufficient cash to service all of our debt and satisfy our other liquidity requirements.” contained inour Annual Report on Form 10-K for fiscal 2023 for additional details. We currently believe that cash generated by operations, our cash on hand of approximately $66.6 million at March 30, 2024, our availability under our Revolving Credit Facility (as definedand described below) at March 30, 2024 and our continued cost focus will provide us with sufficient liquidity to meet our obligations for the short- and long-term. In addition, if necessary, we have the flexibility to delay investments or reduce marketing spend.

Current wording

Cash flows provided by operating activities have historically supplied us with our primary source of liquidity. We have used these cash flows, supplemented with long-term debt and short-term borrowings, to fund our operations and global strategic initiatives, pay down debt and engage in selective acquisitions. Upon the completion of our acquisition of Sequence (the “Acquisition”), in the second quarter of fiscal 2023, we had a net cash outlay of $40.3 millionon April 10, 2023 with respect to the payment of the purchase price and certain transaction costs. For additional details on the purchase price consideration for the Acquisition and related terms, including with respect to the first anniversary payment, see Note 5 “Acquisitions” in the notes to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q. These cash outlays have reduced the liquidity available to us in the future. See “Risk Factors—Risks Related to Our Acquisition of Weekend Health, Inc.(d/b/a Sequence)—The Acquisition may not achieve its intended results.” and“Risk Factors—Risks Related to Our Liquidity—We may not be able to generate sufficient cash to service all of our debt and satisfy our other liquidity requirements.” contained inour Annual Report on Form 10-K for fiscal 2023 for additional details. We currently believe that cash generated by operations, our cash on hand of approximately $42.7 million at June 29, 2024, our availability under our Revolving Credit Facility (as definedand described below) at June 29, 2024 and our continued cost focus will provide us with sufficient liquidity to meet our obligations for the short- and long-term. In addition, if necessary, we have the flexibility to delay investments or reduce marketing spend.

Previous wording

We continue to proactively manage our liquidity so we can maintain flexibility to fund investments in our business, honor our long-term debt obligations, and respond to evolving business and consumer conditions. To increase our flexibility and reduce our cash interest payments, we refinanced our then-existing credit facilities and then-existing senior notes in April 2021. Additionally, we instituted a number of measures throughout our operations to mitigate expenses and reduce costs as well as ensure liquidity. For example, we instituted restructuring plans in recent fiscal years which have resulted in aggregate cash outlays of approximately $8.8 million in the first quarter of fiscal 2024 and are expected to result in an additional $12.9 million for the remainder of fiscal 2024. For additional details, see Note 15 “Restructuring” in the notes to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q. The evolving nature, and uncertain economic impact, of the current demand environment may impact our liquidity going forward. To the extent that we do not successfully manage our costs, our liquidity and financial results, as well as our ability to fully access our Revolving Credit Facility, may be adversely affected. Pursuant to their respective terms, our interest rate swaps in effect as of the end of the first quarter of fiscal 2024 terminated on March 31, 2024. Given then-current market conditions, management determined to not enter into any new swap arrangement during such quarter. Management continues to evaluate its exposure to interest rates and, from time to time, may opportunistically hedge any interest rate exposure by entering into new swap arrangements.

Current wording

We continue to proactively manage our liquidity so we can maintain flexibility to fund investments in our business, honor our long-term debt obligations, and respond to evolving business and consumer conditions. To increase our flexibility and reduce our cash interest payments, we refinanced our then-existing credit facilities and then-existing senior notes in April 2021. Additionally, we instituted a number of measures throughout our operations to mitigate expenses and reduce costs as well as ensure liquidity. For example, restructuring plans instituted in recent fiscal years, and most recently in July 2024, have resulted in aggregate cash outlays of approximately $13.5 million in the first six months of fiscal 2024 and are expected to result in an additional $13.9 million for the remainder of fiscal 2024. For additional details, see Note 15 “Restructuring” and Note 16 “Subsequent Event” in the notes to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q. The evolving nature, and uncertain economic impact, of the current demand environment may impact our liquidity going forward. To the extent that we do not successfully manage our costs, our liquidity and financial results, as well as our ability to fully access our Revolving Credit Facility, may be adversely affected. Pursuant to their respective terms, our interest rate swaps were terminated on March 31, 2024. Given subsequent market conditions, management determined to not enter into any new swap arrangement during the second quarter of fiscal 2024. Management continues to evaluate its exposure to interest rates and, from time to time, may opportunistically hedge any interest rate exposure by entering into new swap arrangements.

Previous wording

The following table sets forth a summary of the primary factors contributing to the $63.3 million increase in our working capital deficit, excluding cash and cash equivalents:

Current wording

The following table sets forth a summary of the primary factors contributing to the $19.6 million increase in our working capital deficit, excluding cash and cash equivalents:

Previous wording

The decrease in operational liabilities and other, net of assets, which includes accrued salaries and wages, was driven primarily by a decrease in accrued liabilities due to the timing of our annual bonus payments. The increase in accrued interest was primarily due to the timing of payments. The decrease in prepaid income taxes and the increase in income taxes payable was primarily due to the outsized impact of a significant, largely non-cash, income tax expense resulting from the valuation allowance recorded to reflect the uncertainty of the realization of U.S. deferred tax assets. A decrease in income taxes payable is expected to largely reverse this impact in the third and fourth quarters of fiscal 2024.

Current wording

The decrease in operational liabilities and other, net of assets, which includes accrued salaries and wages, was driven primarily by a decrease in accrued liabilities due to a decline in employee compensation and related costs. The decrease in prepaid income taxes and the increase in income taxes payable was primarily due to the outsized impact of a significant, largely non-cash, income tax expense resulting from the valuation allowance recorded to reflect the uncertainty of the realization of U.S. deferred tax assets. A decrease in income taxes payable is expected to largely reverse this impact in the third and fourth quarters of fiscal 2024.

Previous wording

The following table sets forth a summary of our cash flows for the three months ended:

Current wording

The following table sets forth a summary of our cash flows for the six months ended:

Previous wording

Cash flows used for operating activities of $36.0 million for the first three months of fiscal 2024 reflected an increase of $9.3 million from $26.7 million of cash flows used for operating activities for the first three months of fiscal 2023. This increase in cash flows used for operating activities was primarily attributable to an increase in net loss and a decrease in cash provided by operating assets and liabilities, partially offset by an increase in non-cash add-back adjustments driven by the franchise rights acquired impairments, in the first three months of fiscal 2024 as compared to the prior year period.

Current wording

Cash flows used for operating activities of $38.0 million for the first six months of fiscal 2024 reflected an increase of $10.9 million from $27.1 million of cash flows used for operating activities for the first six months of fiscal 2023. This increase in cash flows used for operating activities was primarily attributable to an increase in net loss, partially offset by an increase in non-cash add-back adjustments driven by the franchise rights acquired impairments, in the first six months of fiscal 2024 as compared to the prior year period.

Previous wording

Net cash used for investing activities totaled $4.8 million for the first three months of fiscal 2024, a decrease of $5.5 million as compared to the first three months of fiscal 2023. This decrease was primarily attributable to a decrease in capitalized software and website development expenditures in the first three months of fiscal 2024 as compared to the prior year period.

Current wording

Net cash used for investing activities totaled $10.1 million for the first six months of fiscal 2024, a decrease of $47.9 million as compared to the first six months of fiscal 2023. This decrease was primarily attributable to a decrease in cash paid for acquisitions, net of cash acquired, and a decrease in capitalized software and website development expenditures in the first six months of fiscal 2024 as compared to the prior year period.

Previous wording

Net cash used for financing activities totaled $0.6 million for the first three months of fiscal 2024, a decrease of $0.1 million as compared to the first three months of fiscal 2023. This decrease was primarily attributable to a decrease in taxes paid related to the net share settlement of equity awards in the first three months of fiscal 2024 as compared to the prior year period.

Current wording

Net cash used for financing activities totaled $17.1 million for the first six months of fiscal 2024, an increase of $14.8 million as compared to the first six months of fiscal 2023. This increase was primarily attributable to an increase in cash paid for acquisitions in the first six months of fiscal 2024 as compared to the prior year period.

Previous wording

The availability of certain baskets and the ability to enter into certain transactions are also subject to compliance with certain financial ratios. In addition, if the aggregate principal amount of extensions of credit outstanding under the Revolving Credit Facility as of any fiscal quarter end exceeds 35% of the amount of the aggregate commitments under the Revolving Credit Facility in effect on such date, we must be in compliance with a Consolidated First Lien Leverage Ratio of 5.50:1.00 for the period ending after the first fiscal quarter of 2023 through and including the first fiscal quarter of 2024, with a step down to 5.25:1.00 for the period ending after the first fiscal quarter of 2024 through and including the first fiscal quarter of 2025, and an additional step down to 5.00:1.00, for the period following the first fiscal quarter of 2025. As of March 30, 2024, our actual Consolidated First Lien Leverage Ratio was 8.87:1.00 and there were no borrowings under our Revolving Credit Facility and total letters of credit issued were $1.2 million. We were not in compliance with the Consolidated First Lien Leverage Ratio as of March 30, 2024, and as a result, we are limited to borrowing no more than 35%, or $61.3 million, of the amount of the aggregate commitments under the Revolving Credit Facility as of each fiscal quarter end until we comply with the applicable ratio.

Current wording

The availability of certain baskets and the ability to enter into certain transactions are also subject to compliance with certain financial ratios. In addition, if the aggregate principal amount of extensions of credit outstanding under the Revolving Credit Facility as of any fiscal quarter end exceeds 35% of the amount of the aggregate commitments under the Revolving Credit Facility in effect on such date, we must be in compliance with a Consolidated First Lien Leverage Ratio of 5.25:1.00 for the period ending after the first fiscal quarter of 2024 through and including the first fiscal quarter of 2025, with a step down to 5.00:1.00, for the period following the first fiscal quarter of 2025. As of June 29, 2024, our actual Consolidated First Lien Leverage Ratio was 8.74:1.00 and there were no borrowings under our Revolving Credit Facility and total letters of credit issued were $1.2 million. We were not in compliance with the Consolidated First Lien Leverage Ratio as of June 29, 2024, and as a result, we are limited to borrowing no more than 35%, or $61.3 million, of the amount of the aggregate commitments under the Revolving Credit Facility as of each fiscal quarter end until we comply with the applicable ratio.

Previous wording

The Senior Secured Notes accrue interest at a rate per annum equal to 4.500% and will mature on April 15, 2029. Interest on the Senior Secured Notes is payable semi-annually on April 15 and October 15 of each year. On or after April 15, 2024, we may on any one or more occasions redeem some or all of the Senior Secured Notes at a purchase price equal to 102.250% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date, such optional redemption price decreasing to 101.125% on or after April 15, 2025 and to 100.000% on or after April 15, 2026. If a change of control occurs, we must offer to purchase for cash the Senior Secured Notes at a purchase price equal to 101% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the purchase date. Following the sale of certain assets and subject to certain conditions, we must offer to purchase for cash the Senior Secured Notes at a purchase price equal to 100% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the purchase date.

Current wording

The Senior Secured Notes accrue interest at a rate per annum equal to 4.500% and will mature on April 15, 2029. Interest on the Senior Secured Notes is payable semi-annually on April 15 and October 15 of each year. Commencing April 15, 2024, we may on any one or more occasions redeem some or all of the Senior Secured Notes at a purchase price equal to 102.250% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date, such optional redemption price decreasing to 101.125% on or after April 15, 2025 and to 100.000% on or after April 15, 2026. If a change of control occurs, we must offer to purchase for cash the Senior Secured Notes at a purchase price equal to 101% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the purchase date. Following the sale of certain assets and subject to certain conditions, we must offer to purchase for cash the Senior Secured Notes at a purchase price equal to 100% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the purchase date.

Previous wording

At March 30, 2024 and December 30, 2023, our debt consisted of both fixed and variable-rate instruments. Interest rate swaps were entered into to hedge a portion of the cash flow exposure associated with our variable-rate borrowings. Further information regarding our interest rate swaps can be found in Note 11 “Derivative Instruments and Hedging” in the notes to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on our outstanding debt, exclusive of the impact of the swaps then in effect, was approximately 7.78% and 7.64% per annum at March 30, 2024 and December 30, 2023, respectively, based on interest rates on these dates. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on our outstanding debt, including the impact of the swaps then in effect, was approximately 6.59% and 6.53% per annum at March 30, 2024 and December 30, 2023, respectively, based on interest rates on these dates.

Current wording

At June 29, 2024 and December 30, 2023, our debt consisted of both fixed and variable-rate instruments. We have historically entered into interest rate swaps to hedge a portion of the cash flow exposure associated with our variable-rate borrowings. At June 29, 2024, the Company did not have any interest rate swaps in effect. Further information regarding our use of interest rate swaps can be found in Note 11 “Derivative Instruments and Hedging” in the notes to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on our outstanding debt, exclusive of the impact of any applicable interest rate swaps, was approximately 7.77% and 7.64% per annum at June 29, 2024 and December 30, 2023, respectively, based on interest rates on these dates. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on our outstanding debt, including the impact of any applicable interest rate swaps, was approximately 7.20% and 6.53% per annum at June 29, 2024 and December 30, 2023, respectively, based on interest rates on these dates.

Previous wording

Our accumulated other comprehensive loss includes changes in the fair value of derivative instruments and the effects of foreign currency translations. At March 30, 2024 and April 1, 2023, the cumulative balance of changes in the fair value of derivative instruments, net of taxes, was $0.0 million and a gain of $8.4 million, respectively. At March 30, 2024 and April 1, 2023, the cumulative balance of the effects of foreign currency translations, net of taxes, was a loss of $16.9 million and a loss of $16.1 million, respectively.

Current wording

Our accumulated other comprehensive loss includes changes in the effects of foreign currency translations and the fair value of derivative instruments. At June 29, 2024 and July 1, 2023, the cumulative balance of the effects of foreign currency translations, net of taxes, was a loss of $17.4 million and a loss of $15.5 million, respectively. At June 29, 2024 and July 1, 2023, the cumulative balance of changes in the fair value of derivative instruments, net of taxes, was $0.0 million and a gain of $8.0 million, respectively.

Previous wording

On October 9, 2003, our Board of Directors authorized, and we announced, a program to repurchase up to $250.0 million of our outstanding common stock. On each of June 13, 2005, May 25, 2006 and October 21, 2010, our Board of Directors authorized, and we announced, the addition of $250.0 million to this program. The repurchase program allows for shares to be purchased from time to time in the open market or through privately negotiated transactions. The repurchase program currently has no expiration date. During the three months ended March 30, 2024 and April 1, 2023, we did not repurchase any shares of our common stock under this program.

Current wording

On October 9, 2003, our Board of Directors authorized, and we announced, a program to repurchase up to $250.0 million of our outstanding common stock. On each of June 13, 2005, May 25, 2006 and October 21, 2010, our Board of Directors authorized, and we announced, the addition of $250.0 million to this program. The repurchase program allows for shares to be purchased from time to time in the open market or through privately negotiated transactions. The repurchase program currently has no expiration date. During the six months ended June 29, 2024 and July 1, 2023, we did not repurchase any shares of our common stock under this program.

Previous wording

We define EBITDAS, a non-GAAP financial measure, as earnings before interest, taxes, depreciation, amortization and stock-based compensation and Adjusted EBITDAS, a non-GAAP financial measure, as earnings before interest, taxes, depreciation, amortization, stock-based compensation, net restructuring charges, certain non-recurring transaction costs in connection with the Acquisition, and franchise rights acquired and goodwill impairments.

Current wording

We define EBITDAS, a non-GAAP financial measure, as earnings before interest, taxes, depreciation, amortization and stock-based compensation and Adjusted EBITDAS, a non-GAAP financial measure, as earnings before interest, taxes, depreciation, amortization, stock-based compensation, franchise rights acquired and goodwill impairments, net restructuring charges, and certain non-recurring transaction costs in connection with the Acquisition.

Previous wording

The table below sets forth the reconciliations for EBITDAS and Adjusted EBITDAS, each a non-GAAP financial measure, to net loss, the most comparable GAAP financial measure, for the three months ended March 30, 2024 and April 1, 2023, and EBITDAS and Adjusted EBITDAS to net loss for the trailing twelve months ended March 30, 2024:

Current wording

The table below sets forth the reconciliations for EBITDAS and Adjusted EBITDAS, each a non-GAAP financial measure, to net income (loss), the most comparable GAAP financial measure, for the three and six months ended June 29, 2024 and July 1, 2023, and EBITDAS and Adjusted EBITDAS to net loss for the trailing twelve months ended June 29, 2024:

Previous wording

The “Adjusted EBITDAS” measure is a non-GAAP financial measure that (i) adjusts the consolidated statements of operations for the three months ended March 30, 2024 to exclude the impact of the $258.0 million of franchise rights acquired impairments, and the net impact of the $5.5 millionof 2023 plan restructuring charges andthe $0.2 millionof 2022 plan restructuring charges; (ii) adjusts the consolidated statements of operations for the three months ended April 1, 2023 to exclude the net impact of the $22.6 millionof 2023 plan restructuring charges, the$40 thousandof 2022 plan restructuring charges, the reversal of $7 thousand of 2021 plan restructuring chargesand the reversal of $5 thousand of 2020 plan restructuring charges, and the impact of $3.7 million of acquisition transaction costs; and (iii) adjusts EBITDAS for the trailing twelve months ended March 30, 2024 to exclude the impact of the $261.6 million of franchise rights acquired and goodwill impairments, the net impact of the $36.6 millionof 2023 plan restructuring charges, the$1.3 millionof 2022 plan restructuring charges, the $0.1 millionof 2021 plan restructuring charges and the reversal of $16 thousand of 2020 plan restructuring charges, and the impact of $4.9 million of acquisition transaction costs. See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures.

Current wording

The “Adjusted EBITDAS” measure is a non-GAAP financial measure that (i) adjusts the consolidated statements of operations for the three months ended June 29, 2024 to exclude the net impact of the $1.9 millionof 2023 plan restructuring charges andthe $0.1 millionof 2022 plan restructuring charges; (ii) adjusts the consolidated statements of operations for the three months ended July 1, 2023 to exclude the net impact of the $1.8 millionof 2023 plan restructuring charges, the$0.8 millionof 2022 plan restructuring charges, the $0.1 million of 2021 plan restructuring chargesand the reversal of $16 thousand of 2020 plan restructuring charges, and the impact of $4.9 million of acquisition transaction costs; (iii) adjusts the consolidated statements of operations for the six months ended June 29, 2024 to exclude the impact of the $258.0 million of franchise rights acquired impairments, and the net impact of the $7.4 millionof 2023 plan restructuring charges andthe $0.3 millionof 2022 plan restructuring charges; (iv) adjusts the consolidated statements of operations for the six months ended July 1, 2023 to exclude the net impact of the $24.4 millionof 2023 plan restructuring charges, the$0.9 millionof 2022 plan restructuring charges, the $0.1 million of 2021 plan restructuring chargesand the reversal of $22 thousand of 2020 plan restructuring charges, and the impact of $8.6 million of acquisition transaction costs; and (v) adjusts EBITDAS for the trailing twelve months ended June 29, 2024 to exclude the impact of the $261.6 million of franchise rights acquired and goodwill impairments, and the net impact of the $36.7 millionof 2023 plan restructuring charges and the$0.6 millionof 2022 plan restructuring charges. See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures.