The ratings on New York, N.Y.-based Weight Watchers International Inc. (WWI) reflect the company's narrow business focus, its participation in the highly competitive weight-loss industry, leveraged financial profile, and aggressive financial policy. The company's leading market position, its well-recognized brand name, geographic diversity, predictable cash flows, and favorable demographic trends somewhat mitigate these factors. In January 2008, an adverse Value Added Tax (VAT) ruling in the U.K. rendered service fees charged by WWI subject to the full 17.5% VAT; meetings fees had previously been partially subject to the VAT. If upheld, the VAT ruling will negatively affect net sales, but is not expected to materially affect financial performance. In second-quarter 2008, WWI recorded a $32.5 million charge as an offset
