The ratings on New York City-based Weight Watchers International (WWI) reflect the company's narrow business focus, its participation in the highly competitive weight-loss industry, its highly leveraged financial profile, and its aggressive financial policy. These factors are somewhat mitigated by the company's leading market position, its well-recognized brand name, geographic diversity, predictable cash flows, and favorable demographic trends. WWI's overall operating performance was fairly solid in 2006. Sales and operating income increased by about 7.1% and 25.6%, respectively. WWI has been able to sustain revenue growth in the highly competitive and fragmented weight loss industry by increasing meeting fees with pricing actions and program innovations, by growing products sales, and by generating additional online revenues from its wholly owned subsidiary,
