Ladies and gentlemen, welcome to Weight Watchers International's Third Quarter 2012 Earnings Teleconference call. [Operator Instructions] As a reminder, this conference call is being recorded today, November 5, 2012. At this time, I'd like to turn the call over to Lori Scherwin of Weight Watchers International. Please go ahead.

Thank you, operator, and thank you to everyone for joining us today for Weight Watchers International's Third Quarter 2012 Conference Call. With us on the call is Dave Kirchhoff, President and CEO; and Nick Hotchkin, CFO. At about 4:00 p.m. Eastern Time today, the company issued a press release reporting its financial results for the third quarter of fiscal 2012. The purpose of this call is to provide investors with some further details regarding the company's financial results as well as to provide a general update on the company's progress. The press release is available on the company's corporate website located at www.weightwatchersinternational.com. Reconciliations of non-GAAP measures disclosed on this conference call to the most directly comparable GAAP financial measure are also available as part of the press release. Before we begin, let me remind everyone that this call will contain forward-looking statements. Investors should be aware that any forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those discussed here today. These risk factors are explained in detail in the company’s filings with the Securities and Exchange Commission. Please refer to these filings for a more detailed discussion of forward-looking statements and the risks and uncertainties of such statements. All forward-looking statements are made as of today and, except as required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. I would now like to turn the call over to David. Please go ahead.

Good afternoon, and thank you for joining us as we review Weight Watchers International's performance for the third quarter of fiscal 2012. Overall, 2012 is ramping up very much in line with our prior guidance, with Q3 coming in somewhat better than our expectations and Q4 expected to come in somewhat below on the bottom line because of factors we will discuss. On a constant currency basis, Q3 2012 total revenue was up 2.7% over the prior year period, with meeting fees down 2.4% and meeting product sales down 8.4% and Internet revenue growing 24%. Global combined paid weeks were up 9% in Q3 2012 versus the same period last year, global meetings paid weeks were down 4.2% in Q3, while global paid weeks for our online product were up 23%. For Q3 2012, our operating income margin was down 160 basis points versus the prior year period, up 30.7% -- to 30.7%. While gross margin was up 80 basis points versus prior to 59.4%, marketing as a percentage of revenue was up 90 basis points, primarily reflecting continued investment in driving awareness of our Weight Watchers Online product. G&A as a percentage of revenue was up 150 basis points versus prior, primarily reflecting investments in technology and staff to support our key strategic initiatives such as B2B. Q3 2012 EPS was $1.20 compared to $1.09 for the same period in 2011, benefiting from our share repurchases earlier this year. We experienced about $0.04 of unfavorable ForEx impact from the third quarter this year versus prior. Before Nick reviews our financial results in greater detail, I'd like to provide additional context on our Q3 performance. Our results on our meetings business remained under pressure in our North American and U.K. markets and were more bouyant in our Continental European market.…

Thanks, Dave, and good afternoon, everyone. I've had a great first 2 months at Weight Watchers. And I'm excited to be with an organization that has such an important mission as well as a terrific business model. Furthermore, my early days have confirmed my going-in belief that this company has a large portfolio of future growth opportunities. On to the numbers. Picking up where Dave left off, let me start with weightwatchers.com. Third quarter Internet revenues rose 22% versus the prior year period or 24% on a constant currency basis. Paid weeks grew 23% in Q3, with double-digit growth in the U.S. and even stronger growth in Continental Europe and Canada. As we expected, overall global recruitments in Q3 were slightly positive, driven by strength in Continental Europe and Canada, partially offset by softness elsewhere, particularly in the U.K. Among other factors, U.S. recruitments were impacted in Q3 from lapping last year's buy-one-get-one and other promotions that we did not repeat this year. This negatively impacted U.S. recruitment volume, but we benefited from higher price realization versus the same period in 2011. Looking forward, we remain comfortable with our prior guidance of 15% to 20% second-half growth in paid weeks, yielding full year growth of 25% to 30% for weightwatchers.com. On to the meetings business, starting with North America. Total NACO revenue in Q3 2012 was down 3.3% versus the same period in fiscal 2011. This represents moderation versus the 6.4% decline we saw in the second quarter versus prior and the 9% decline in the first quarter versus prior. NACO Q3 2012 paid weeks declined 3.6%, while attendance declined 9.4% versus the prior year period. And meeting product sales declined 6.6% versus Q3 2011 due to lower attendance versus the prior year quarter, partially offset by an increase in…

Thanks, Nick. We're now in the process of wrapping 2012, a year that has been difficult from a financial and operating perspective but also a year that has been very important in making critical progress against our long-term strategic plan. We expect to enter 2013 with a much stronger game plan than was the case in 2012, which includes the following 5 key highlights. One, a new global program innovation. Our global and regional program development teams have been working intensely throughout the year to ready our next new major program innovation. We will be able to provide greater details and context when we begin introducing the program innovation to our current meetings members and online subscribers in early December. Our focus when we launched PointsPlus and ProPoints 2 years ago was to create a much stronger and more future-facing nutritional platform for our members that reflected many of the advancements in nutritional science that had occurred over the previous 12 years. Given the core role that POINTS and tracking play in the day to day of our members' lives, it was not surprising that this program news had particularly significant effect on both media and member buzz. Our new innovation launch for 2013 continues our efforts to fully revamp and expand our program platform, now with a much larger focus on behavior change techniques. While we do not expect this new innovation to have the same kind of enrollment impact as the 2011 PointsPlus launch, we do see it as a far more significant enhancement than what we did in January 2012. And we view it as a critical step in the ongoing evolution of how we help our members, not only to lose the weight but also to create a real path to keep the weight off. Two,…

[Operator Instructions] The first question is from Glen Santangelo from Credit Suisse. Glen J. Santangelo - Crédit Suisse AG, Research Division: David, I just wanted to talk you about the situation in the U.K. I mean, clearly, it continues to be a challenge for the company. And I guess I'm kind of curious to get your perspective. What do you think you can do to sort of correct the situation there? Obviously, you've had a less than effective marketing campaign. But when you look at Continental Europe, it continues to do well, particularly on a growth perspective. And I'm -- as I think about those economic climates as being relatively similar, which could be a false assumption, I'm just kind of curious as to why the problems are so centric in the U.K

Yes. We would actually have the same point of view in terms of comparability of macroeconomic context between the U.K. and CE. Really, the difference you're seeing is that in the case of CE, they're executing much more consistently against the marketing playbook. And the gap is pretty significant right now versus what we have currently in the U.K. And furthermore, they did a better job, I think, of pushing out program news. And the program news was relatively more significant for them. Whereas the U.K. did not have as nearly a significant program news in 2012. And I think the significance for that is something that we've seen pretty consistently during this difficult economic climate, is that across our markets, when we have compelling advertising and news, program and service news, we're able to kind of break free of the macroeconomic context, consumer confidence, trends, et cetera and drive results that sort of -- that separate. Whereas when we're relatively more quiet in terms of the impact that our marketing programs are happening as well as the lack of program news, we find that we end up getting pulled down by the economy almost at disproportionate rate. I think the implication for that is a few fold. First off, for me, what it suggests is that from here on out, our operating assumption needs to be that every single year across our major markets, we need meaningful program news or meaningful news in either program, technology and/or service. The second thing it means is that we have to execute very consistently against our marketing playbook in each one of our major countries. And whatever we have out there has to feel fresh and sharp to drive people's imagination, inspiration, everything else. We didn't have that in the U.K. You see the impact on the business. We did have it in CE. You see the impact on that business. Glen J. Santangelo - Crédit Suisse AG, Research Division: If I can just ask one follow-up. I did want to talk to you about the investment costs in Q4. It sounds like you're spending $0.05 in Q4. And I think if I heard you just correctly in your closing remarks, there's going to be a new call center and the decision to run some new TV ads, I guess, in December. And so you're pulling some costs forward. Were is that call center? Is it in the U.S. and -- or is it in Europe? And then secondly, as you think about sort of these new sort of marketing campaigns and product rollouts for Jan 1, should we expect to see those over the next couple of weeks? And any elaboration on what we should expect would be helpful.

Absolutely. The call center that I referenced is specifically in the U.S. And it represents a change of -- we outsource our call center and we're changing over call center vendors to someone with a capability set that we think is going to be much more robust for us going forward across both our B2C and B2B businesses. So it was an important step for us to take, but it had a series of onetime costs associated with the transition to the tune of about $3 million in which -- we made the decision to try to pull that into 2012 so that we'd be up and running with it as we entered the January weight-loss season. So that's really a cost that otherwise would have been borne in 2013. We made the decision to pull it into 2012. On the advertising, what you typically see with us -- well, first off, the program launches as you might have -- as you heard me reference, we're going to be entering what we referred to as a soft-launch phase in the beginning of December in most of our major markets. And that's where we have a chance to share it with the people that are still attending our meetings during the relatively slow holiday season. It gives our service providers a chance to get more comfortable delivering the new program in a live context, if you will, so that they can get their sea legs as we enter into the January campaign where things tend to get a little bit crazy. So that's going to be happening in the beginning of December. In terms of the advertising, most of those spots or virtually all those spots will be happening after Christmas. However, depending on the lineup of spots we choose to use, the second we make a decision to air it for even just one day in 2012, we have to pick up all of that production cost. So what that really does is it's pulling forward advertising production costs that we had thought was going to end up in 2013, and it's pulling it into 2012. And so, really, in terms of the overall economics of the business, it's -- none of these things are meaningful. It's really timing shifts between Q1 '13 versus Q4 '12.

The next question is from Chris Ferrara of Bank of America.

I just wanted to talk about the 10% enrollment growth that you need to go positive in meetings, right? I guess, in a year that -- like understanding, I guess, enrollments this year in January were better than they were every year but '11. That said -- when you have Jessica Simpson lined up and new product news that you're saying is fundamentally different, maybe not the buzz, why is 10% enrollment growth such a difficult bogey to match?

Well, here's the context I would put it in, is that we did much better than that for the vast majority of 2011 versus '10. So to your point, it's not as though we've never seen it before. However, I mean, I think that if we're just trying to provide context, it's coming across a year that's relatively softer. I'm not in a position right now, obviously, to speculate on exactly where we think our volume is going to be as we go into next year, other than to just try to temper and at least give some context for people to think about, as they think about trying to model our business for next year, what would be required for us to hit different milestones from a volume perspective.

Yes. I guess I'm trying to figure out -- though, so you're saying there's no message in that. You're just providing context, like you really have no idea whether you can do that 10% or not.

Yes, no. To your point, we're not actually -- there's no sort of hidden message where we're trying to guide people toward any sort of volume growth assumptions next year. What we thought would be helpful is that for those folks that were modeling is to just give them a sense of what would be effectively to break even, if you will, for -- that we would have to achieve, in other words, to hit flat paid weeks of 2013 versus '12, given that we're going to be starting the year at 10% lower. And then from that, you can do your own extrapolation in terms of what you think is reasonable and use that to basically then drive into the amount of paid weeks for volume growth you might expect to see for us next year.

Okay. And I guess in putting context around this product launch, right? I mean, so you're -- I guess, if I hear what you're saying, you don't expect it to have the buzz, obviously, that a PointsPlus did. But you're saying it's a fundamental modification. I know you're not in a position to talk details around it. But I guess, why -- can you talk a little bit about the nature of why it wouldn't generate buzz like a PointsPlus would have?

Well, I think the thing about PointsPlus is that, it was really a -- in kind of the world of Weight Watchers and Weight Watchers' members, changing the formula is a really big deal. And it tends to create a lot of commotion, mostly positive, some frustration, because people get frustrated about having to change programs. But in general, it's creating an enormous amount of conversation to the extent that it was apparently worthy of Page 1 coverage in The New York Times. I love, love, love this new program that we're going to be launching. I think it's hugely important to us. I think it's a really critical step for us to take as an organization. But I don't expect it to have that sort of same buzz-worthiness that a "once every 10- to 12-year change" in the POINTS formula will have. That's based mostly on intuition. But I think that -- what I would point out is that when we launched PointsPlus, we didn't launch it because we thought it was going to blow the doors off in terms of buzz and January enrollments and all these types of things. We did it because we felt that it was the right thing to do, because it was a better nutritional platform for us going forward. Our new program that we're going to launch, we're doing it not because we think it's going to generate huge buzz or enrollments in January but rather because we feel that it is a better platform for helping people not just lose weight but keep it off. Therefore, it's the right thing to do. Now it's up to us to try to find ways of making as much noise around that as possible. The messaging for it, I think, is just -- it's inherently more nuanced than the messaging of, "Oh my gosh, they changed their POINTS formula." So that's why I would temper a little bit. But what I would say is, to me, it is a much more significant change versus what we did in 2012.

That's great. I appreciate the color. And I guess just on marketing, it sounds like -- I mean, you're using the word efficiency for '13. I mean, does that mean -- I mean, is marketing going to come down in 2013 on a preliminary basis?

Yes. That's pretty much what we said. So you weren't imagining that. But here -- let me put a little bit more context around that. I think the thing is that if you look at where we spend money, it is primarily in television and digital. And within digital, you have banner campaigns, you've got search, you've got affiliate programs, you've got eCRM, you've got social media, you have all these things. And effectively, what -- the trick is in thinking about direct-response marketing and optimizing costs per acquisition, effectively, what the marketers have to try to do is come up with an attribution model, if you will, where they give credit to different placements for driving customer acquisitions, enrollments, online subscriptions, those types of things. We've been in the market in a very big way and in -- and particularly over the past 2 years, what we have now been able to do with the data set that we've accumulated, we're able to look backwards, do a lot of statistical and other types of analysis to come to some judgments on which aspects of those overall programs, digital and television, that we think are delivering the best bang for the buck and which do we think are going to be less efficient and basically rejigger the mix, if you will, so that we can drive toward more efficient CPAs, which would allow us to continue driving volume in the business but doing it at a lower-level of spend.

And our next question is from Brian Wang of Barclays.

Just a quick follow-up on some of the last points that were made. Just on the 10% enrollment growth necessary next year that you discussed. Can you just talk a little bit about -- obviously, the small accounts business was down a lot, especially in the beginning of the year last year. Wouldn't that, at least, partially make up for -- if you could get -- obviously, under the assumption you get a lot of that back, wouldn't that make up for a lot of the -- that 10% growth necessary?

Well, I mean, I think Brian, what you're obviously going to spend some time going through at the benefit of this call and this transcript is you'll be going through some of your own modeling efforts in trying to piece together some of those data pieces. Certainly, as you heard me reference, having the -- a lot of the execution issues from the small accounts business behind us gives us an opportunity to start off 2013 in a much better place. I think when you model out and look at sort of the entirety of what 10% means across the entire NACO business, you would probably come to the conclusion that fixing what we did in the At Work business just on its own would not be nearly enough to make up for what you'd have to do to get to that 10% enrollment growth. Given that, historically -- one way to maybe dimensionalize it is that historically, the At Work business has been about 12% of our North American attendances this year. Because the issue is it's down to closer to, say, 10%. So sort of reverting that back, you can imagine how that doesn't get you nearly all the way there.

Okay, that's fair. And then just on the new call center, obviously, you said you pulled it forward into 4Q. Do you have just the timing, I guess, on the potential opening for that, just to -- I'm assuming you built in a cushion -- a little bit of a cushion to make sure that it's up and running and fully functional before, obviously, you hit the most important time of the year.

Yes. I mean, there's a really robust plan in place. Don't make me go through all the details of it. But there's a really robust plan in place in the transition across the 2 vendors to make sure that we handle that in a seamless way. But we're very tuned into the fact that whatever happens, we need to be bulletproof as we go into January 1.

Right. And then just one final one on the -- obviously, you made -- there's a couple of small franchise acquisitions this, I guess, this quarter and even since the last quarter. Does that mean -- I mean, I think it's been a few years since you made one prior to that. Is that -- is it something that you find more attractive? I know a lot of the international franchise licenses are still out there. Have you looked at using some of the cash flow for that?

Hey, look. Thanks, Brian. It's Nick. Great question. Look -- we found franchise acquisitions consistently attractive from a strategic and a financial standpoint. The field infrastructure, our synergies, for example, the back-office synergies and G&A savings, too, all make them accretive in the first full year of operations. So it's an opportunistic play for us. And in terms of other opportunities going forward, of course, it depends more on franchisee's willingness to sell than anything else. And that tends to be impacted as much by family -- financial planning than anything else. So our folks potentially more interested in selling in a year like '12 versus a banner year at '11 maybe. But bottom line, we like them. We'll continue to pursue them opportunistically.

The next question is from Bob Craig, Stifel, Nicolaus. Robert L. Craig - Stifel, Nicolaus & Co., Inc., Research Division: David, are you at all concerned that the early launch using Jessica Simpson stole any thunder from early next year's marketing campaigns?

No. I mean, one of the things when you work with the Jessica, who by the way is doing great, is that whether we put her on advertising or not, she's in the public eye. So -- and I think the good news for us is that she's having good success. And so, right now, the public eye is sort of favorable. But it's -- she is -- given how high profile she is, I think there's only so much we can do on that front. But she's been doing great on the program. We're so thrilled with the success that she's having. We think that there's a great partnership to be had that we're going to be actively pursuing and building with her, as well as continuing to work with other folks such as Jennifer Hudson, Charles Barkley, et cetera. So I think from our point of view, we're really happy with the amount of material that we have to work going into our 2013 campaigns. Robert L. Craig - Stifel, Nicolaus & Co., Inc., Research Division: Okay. David, I think in the past, you've mentioned some internal gating or limiting factors in building the large corporate business, things like the data mining capability, et cetera. Where do you stand in that regard now?

We're continuing to make great progress against it. In understanding and appreciating the importance of that question, this was one of the reasons why we felt that it would be helpful and useful for us to have a good solid Investor Day in the first half of next year. Because that would really allow us the chance to kind of lay out the B2B and healthcare strategy, by way of example, in kind of all of its glory, including all the key milestones and everything else in terms of what needs to be in place, when, how much investment do we think it's going to need to get there and what does success ultimately look like, as well as providing something that I think the investment community has been looking for, for a long time, which is a long-term perspective on what to look for from this company from a top and bottom line growth perspective. So let me defer most of the specifics of it to that. And above and beyond that, what I would say is that we've been making great progress this year in terms of developing the underlying customer database infrastructure, putting on the CRM tools, business intelligence, everything else. Really, kind of the next frontier for us in terms of data mining is going to be pushing out data capture into our At Work meetings and into what we call our traveler meetings which would be Weight Watchers meetings that are happening in, say, church, synagogue, community center and things like that. We're already getting real-time data pulled in from our Weight Watchers centers. Once we have enough critical mass and data being brought in across, it really does significantly enhance our ability of then providing real-time reporting back to our corporate clients. So we're making good progress against that, and it's work that's obviously going to be taking us well into 2013. Robert L. Craig - Stifel, Nicolaus & Co., Inc., Research Division: Okay, great. Last one for me. And any early read on investment spending levels in 2013? What I'm really try to get to is the -- there's the swing factor. I think in the last call, you mentioned $39 million in 2012 versus $20 million in '11. Any gauge on 2013 at this point?

I think, and then Nick could give me a backup on this, just to provide context, which is a lot -- we've been doing a lot of CapEx this year with the retail rollout. So that's a been a fair bit of capital that we've been deploying, going from 20% to, probably by the end of this year, 80% complete with the North American retail network. Therefore, going from 80% to 100% would presumably be less. The flip side is that we're going to be ramping up a little bit investment behind technology, so that's the data capture and all that kind of stuff. And so there's going to be some puts and takes. But I think what you're seeing is that we had a slug of CapEx that was associated with putting in ERP, doing a corporate-wide Oracle initiative over a series of years that's largely now behind us. 2011 and '12 became significantly driven by -- capital requirement became driven by our efforts around the retail rollout, then that starts to wind down. And then going forward, the capital expenditure becomes much more focused around technology and data capture.

Yes. Look, Dave, I think that's very, very fair in terms of CapEx, the uptick this year driven by the items Dave mentioned. Going forward, assumption right now, obviously, pending the finalization of our plan, I wouldn't expect CapEx to be markedly different next year. Less spend on retail transformation but of course, we've got the buildout of our new headquarters coming into CapEx too. In terms of the initiative spend, yes, look, we've previously talked about $39 million and $20 million incremental for this year. Given the call center expenditure, that's more like $42 million total and $23 million incremental versus '11 for this year. And we'll be finalizing the 2013 plan in the next couple of months.

The next question is from Peter Wahlstrom of Morningstar Investment Research.

Now that you've cycled through last September's price increase for online in the U.S. and roughly about 60% of people are on the new pricing strategy, have you identified any pushback from former subscribers who were looking to rejoin? And then maybe taking a step back, assuming that, that message isn't overly received as a negative, is there a case against doing that, raising prices again in 2013, particularly as you're adding new features to online?

So just a couple of points of clarification. First off, Monthly Pass is at about 60%. And that price increase went in at the beginning of December last year. The Weight Watchers Online price increase went in closer to, say, September of last year, if memory serves. So Weight Watchers Online is now close to 70% of the customer base in the U.S, which is at the higher price point versus, say, 60% for Monthly Pass. So that's just more housekeeping, if you will. I think the important thing from our point of view is that despite the price increases, we haven't seen any negative impact on retention at all, which is where we would've expected to see some of the blowback, if there was going to be blowback. So that leads us to believe that it's not likely an issue. And then particularly with Weight Watchers Online, going from $17.95 to $18.95, I'm not sure that the psychology around that would be that compelling. In some respects, I think it was kind of a bigger deal for us to go from $39.95 to $42.95 on the meetings side, even though it's still less than $10 a week and we still advertise it that way. But I think what happens when you do -- and in the case of Monthly Pass, we hadn't touched pricing since 2006. So it's almost 6 years, so it was time. In the case of Weight Watchers Online, we've added great functionality and everything else. We've been able to raise price successfully a number of times over the past. But right now, we certainly haven't announced any plans or any indications of touching pricing in 2013.

Okay. And then as a quick follow-up, obviously, you've done quite well in the online space. Have you also continued to see momentum in signing up men. I know that, from what I recall, roughly 15% of your new sign-ups were from men. You're seeing still continued improvement in this population?

What's been encouraging for us this year is that -- to your point, historically, men, for example, in Weight Watchers Online were about 8% to 9% of total mix. This year, it has been in the low mid-teens throughout the majority of this year. What's been encouraging is that, even when we've gone off air and some time after being off air with the men's campaign, is that we've seen that percentage of mix hold up pretty nicely. And so I don't have any doubt that we've made great progress this year in terms of materially shifting the male consumers' perception that Weight Watchers has a viable option for them. And so from our point of view that the efforts that we've placed around advertising to men over the past 18 months I would qualify as being highly successful in terms of shifting the brand.

The next question is from John Faucher of JPMorgan. John A. Faucher - JP Morgan Chase & Co, Research Division: Two questions here. The first is, it seems as though there was a slight change in tone in terms of your discussion of the free app issue. Is this something where you've seen something going on in the market where you've got a heightened level of concern here? And then the second is, as we look at the marketing spending discussion, I'm assuming -- it sounds like marketing is going to be down on a dollar basis, which would obviously put it down as a percentage of sales, so obviously a pretty nice benefit from an operating leverage standpoint. Is there anything that you can see now that's going to work in the other direction, something that's going to put a little bit of negative pressure in terms of your operating leverage for next year?

So on the first question on apps -- I mean, part of the reason I wanted to proactively bring it up was just because it's been kind of a constant part of conversation and dialogue with the investment community. And I wanted to basically be responsive to it. I mean, here's my take on apps is that they have obviously been out there for some period of time. Lots of people are downloading free apps. They're kind of all over the place. There's lots of companies developing free apps. It's like 10 guys and a box of pizza, and you have a free app. What I've seen and I've spent a lot of time sort of like looking closely at them, going out to technology conferences, where I've met the people that are running these companies, nice guys, hard workers. I think there's a couple of issues. First off, there's really not a business model to be found among any of these companies, which I think begs the question of sustainability over the long term. Secondly, frankly, the bigger issue that I see with free apps is an issue that has been kind of vexing across the apps space within the broader healthcare area, was that you'll hear a lot of people in healthcare kind of complaining about sort of underneath their breath sometimes and sometimes not underneath their breath, which is people download an app and use it for 2 weeks and then put it away. And what -- the problem that I see with apps is that they are effectively calorie counters and they're applications that make counting calories a little bit easier. But they're not based on an actual program. They're not based on a lot of behavior mod science. There's really not that much there. And…

[Operator Instructions] We have a follow-up from Chris Ferrara of Bank of America.

Just wanted to ask about the -- so the paid weeks per attendee continue to climb, like they're running up at a descent clip, kind of mid-high single digits, I guess. Does that suggest that, I mean, are you seeing increased penetration of Monthly Pass? And why would the paid weeks per attendee continue to be climbing right now in North America and in most places, actually?

Particularly, if you look at the last quarter in Q3, I think there's just a couple of things I'd call out. I mean, yes, Monthly Pass penetration is doing well. The second thing I'd call out is that due to some vagaries of the shift in the At Work business from series to Monthly Pass, that has changed some of the mathematical dynamics between attendance and paid weeks levels in a way that doesn't suggest any kind of significant underlying business dynamics. But it's more just a function of the math of how attendances work versus paid weeks depending on the product that you're deploying. And then secondly, I think that you can reasonably infer, if you had a relatively softer enrollment period, so for example when we chose not to run the BOGO promotion and a couple of other things to the extent that, that created any kind of downward pressure on enrollments for NACO during that campaign period, what that means is that effectively, your membership base at that point in time is relatively "older", i.e., people further into the tenure of their membership. And those types of vagaries can result in your periodic separations between attendances and paid weeks. But I think most importantly, if you look at the propensity of someone to attend a meeting at a comparable tenure, so say, for example, someone who's in their second month of Monthly Pass, are they more or less likely to attend a meeting today than was the case a year ago? What you find is that the likelihood of attending a meeting is very similar to what it was a year ago. That has more to do with some of the transitional things you sometimes see that can cause periodic disconnects between attendances and paid weeks, which is why we focus on paid weeks as the critical measure of volume.

Got it. And just one last one, I promise. The rate of growth in a dot-com business in the U.S. versus elsewhere -- I mean, I know you -- I think you quoted double-digit growth in both. But how wide is that gap? And will the U.S. be up double digits in 2013, do you think?

Well, let me not speculate on 2013 explicitly. But let me talk a little bit about the dynamics that affected sign-ups for Weight Watchers Online in the U.S. in 2011 and 2012. And I think what you have is kind of a confluence of a couple of events. On one hand, you have kind of a structural shift, which is increasing awareness of Weight Watchers Online in the U.S. context, that's been driven by continued successful efforts around marketing to drive awareness that, in fact, there is a way of doing Weight Watchers that is purely online. And that, I think, is much at stake -- it's much in play right now and it's as successful as it's ever been right now as was the case in 2011. In 2011, what you also had is on top of that, you had the benefit of a huge program launch and a relatively, at the time, fresher advertising campaign that gave kind of that added benefit in the 2011. So the fact that sign-up growth rates in 2012 have been comparable to those in 2011, I actually view it as very good news, given the size of the comp. And then when I look forward to 2013, and I think about what we're going to have going for us, is that we will have program news. We will have new advertising campaigns for Weight Watchers Online. So those things should be net plusses for us, as we think about that business next year.

Mr. Kirchhoff, you have no further questions. Please go ahead, sir.

Thanks. In closing, I'd like to thank the entire Weight Watchers team, many of whom are listening on the call, for a solid Q3 performance. I'm excited about the impact of our global program innovation and our marketing strategies we'll have in 2013. Thanks for joining us today, and I look forward to speaking with you again at our next quarterly earnings release.

Thank you. The conference call has now ended. Please disconnect your lines at this time. Thank you for your participation.