Business
For 30 years, the NutriSystem name has been recognized as a leader in the weight loss industry.We are a leading marketer and provider of a weight management system based on a portion-controlled, prepared meal program. Typically, our customers purchase monthly food packages containing a 28-day supply of breakfasts, lunches, dinners and desserts, which they supplement with fresh milk, fruit and vegetables. Most of our customers order on an auto-delivery basis, (“Auto-delivery”) in which we send a month’s food supply on an ongoing basis until notified by the customer to stop our shipments. Our Auto-delivery program is currently priced at $294 per shipment, or about $10 per day for a full day’s supply of three entree meals and one snack. Our food is shelf stable at room temperature and will last for up to two years, making it relatively inexpensive to ship and store.

Industry
The 2003-2004 National Health and Nutrition Examination Study estimated that 66% of the adult population is overweight and 33% is obese, an increase from 47% and 15%, respectively, in 1976.
Approximately 62 million people in the United States were on a diet during 2006. Approximately 6 million participated in commercial weight loss programs and 49 million conducted some form of self-directed diet.

Customers
Based on our surveys and market research, our typical customer is female (over 76%), approximately 44 years of age and weighs 210 lbs. In January 2006 we initiated advertising programs directed toward men. As a result, men comprised approximately 24% of our new customers in 2006 compared to 13% in 2005. In early 2007 we also began to market to seniors in television advertising. We believe that, on average, our customers want to lose approximately 60 lbs. over a period of time. We believe our typical customers stay on our program for ten to eleven weeks (including the one free week most customers obtain with their initial order), lose 1.5 to 2.0 pounds per week and have tried other popular diet programs.

Product Efficacy
A customer survey conducted by the National Business Research Institute in December 2005 found that clients lost an average of 19.4 pounds in just under 12 weeks on the NutriSystem weight loss program and 92% of those surveyed would refer our program to others.

Seasonality
Typically in the weight loss industry, revenue is strongest in the first quarter and lowest in the fourth calendar quarter.

Revenues
Our revenues were $568.209 million, $212.506 million and $37.996 million in 2006, 2005 and 2004, respectively.

Marketing expenditures
Our marketing expenditures were $118.5 million, $47.8 million and $7.5 million in 2006, 2005 and 2004, respectively. Our future growth and profitability will depend in large part upon the effectiveness and efficiency of our marketing expenditures.

Stockholder's equity
Our stockholder's equity was $145.302 million, $78.996 million and $12.175 million in 2006, 2005 and 2004

Shares outstanding
Our diluted shares outstanding were 37.122 million, 35.618 million and 31.842 million in 2006, 2005 and 2004.

Crucial point
Program new customers- 791.004, 338.040, 48.377  in 2006,2005,2004
New customer revenue/new customer- Program $574,$516,$482 in 2006,2005,2004

So, total revenues from new program customers in 2006,2005,2004 are:
$454.034 mil., $174.408mil., $23.317mil.

Total revenues in 2006,2005,2004  were:
$568.209 million, $212.506 million and $37.996 million

% revenues from new program customers/total revenues was in 2006,2005,2004: 80%,82%,62% 

This means that NTRI has to be able to catch new and new customers otherwise their income could fall about 70% down.Now the business model is: get new customers or die.

That's the reason why I'm not able to say what is instric value of NTRI.