Weight Watchers Announces First Quarter 2013 Results And Narrows Its Fiscal 2013 Guidance

 Weight Watchers Announces First Quarter 2013 Results And Narrows Its Fiscal
                                2013 Guidance

PR Newswire

NEW YORK, May 2, 2013

NEW YORK, May 2, 2013 /PRNewswire/ --Weight Watchers International, Inc.
(NYSE: WTW) today announced its results for the first quarter of fiscal 2013
and narrowed its fiscal 2013 earnings guidance. First quarter 2013 highlights
include:

  oGlobal engagement as measured by paid weeks up 1.4% versus the prior year
    period
  oInternet revenues of $140.8 million, up 10.9% versus the prior year
    period, with Online paid weeks up 10.3% and end of period active Online
    subscribers up 6.2% versus the prior year period
  oEarly progress with our cost savings program
  oFollowing the quarter end on April 2, 2013, successfully refinanced and
    extended the maturity of our long-term debt to take advantage of favorable
    market conditions

"As we previously indicated, the winter diet season proved to be challenging
for recruitment across our businesses given a weak consumer backdrop and an
intensely competitive environment. In response, we have made several
adjustments to improve our position in the market with consumers, including
new advertising campaigns. Further, we are gaining early traction with our
cost savings program while continuing to work to innovate our core product
offerings to better enable us to increasingly address the ever growing obesity
epidemic," commented David Kirchhoff, Chief Executive Officer of the Company.

Kirchhoff added, "We are narrowing our fiscal 2013 earnings guidance to
incorporate our business trends to date, our current cost savings program and
the effect of higher interest expense related to our recent debt refinancing.
Our full year earnings guidance range is now between $3.60 and $3.90 per
fully diluted share excluding a one-time charge associated with our
refinancing which we will record in the second quarter."

Q1 2013 Consolidated Summary

                 Net Income (in millions)        Fully Diluted EPS
                 Three Months Ended              Three Months Ended
                 March 30,  March 31,  %        March 30,  March 31,  %
                 2013       2012        Change   2013       2012        Change
Net Income /     $48.8      $54.6       (10.7)%  $0.87      $0.74       17.7%
EPS



First quarter 2013 net income was $48.8 million versus $54.6 million in the
prior year period. Earnings per fully diluted share (EPS) for Q1 2013 were
$0.87 versus $0.74 in the prior year period.

EPS in Q1 2013 continued to benefit from the completion of the Company's
previously disclosed tender offer and related stock repurchase transaction
that took place in March and April 2012, respectively. Foreign currency did
not have a significant impact on EPS in Q1 2013.

Q1 2013 Global Results

                           Three Months Ended                       % Change
(in millions except                                                 Adjusted
percentages)               March 30,      March 31,    % Change    for
                           2013           2012                      Constant
                                                                    Currency
Revenues                   $486.9         $503.5        (3.3)%      (3.2)%
Operating Income           $103.1         $102.8        0.3%        1.0%
Total Paid Weeks           55.2           54.5          1.4%        N/A
Meeting Paid Weeks         24.3           26.5          (8.1)%      N/A
Online Paid Weeks          30.9           28.0          10.3%       N/A
Attendance                 13.0           15.8          (17.4)%     N/A
__________________________________

Note: Totals may not sum due to rounding.

See "Reconciliation of Non-GAAP Financial Measures" attached to this release
for further detail on adjustments to GAAP financial measures.



First quarter 2013 revenues decreased 3.2% on a constant currency basis versus
the prior year period, resulting from lower sales in the meetings business as
the Company experienced weaker volumes globally, but most notably in North
America and the UK. This decline was only partially offset from continued
growth in the WeightWatchers.com business across all geographies.

Q1 2013 total paid weeks were up 1.4% as compared to the prior year period.
Online paid weeks increased 10.3% versus the prior year period, while meeting
paid weeks declined 8.1% versus the prior year period.

Q1 2013 operating income increased 1.0% on a constant currency basis versus
the prior year period. The increase in operating income was driven by lower
marketing expense, primarily in the United States, a combination of a
strategic decision made by the Company in fiscal 2012 not to repeat a men's
campaign in the first quarter of fiscal 2013 and more efficient digital
advertising.

Q1 2013 NACO Performance

                                      Three Months Ended            % Change
                                                                     Adjusted
(in millions except percentages)      March     March31,   %        for
                                      30,       2012        Change   Constant
                                      2013                           Currency
Meeting Revenues                      $208.7    $225.4      (7.4)%   (7.3)%
Meeting Paid Weeks                    16.2      17.3        (6.5)%   N/A
Attendance                            8.2       9.8         (15.9)%  N/A
_____________________________
See "Reconciliation of Non-GAAP Financial Measures" attached to this release
for further detail on adjustments to GAAP financial measures.



First quarter 2013 meeting revenues for the North American meetings business
(NACO) were down 7.3% on a constant currency basis versus the prior year
period, as a result of lower enrollment volumes. Q1 2013 meeting paid weeks
and attendance decreased 6.5% and 15.9%, respectively, versus the prior year
period.

The Company completed three franchise acquisitions in the second half of
fiscal 2012 (September through December 2012) as well as a fourth franchise
acquisition in March 2013. Franchise acquisitions benefitted NACO revenue by
approximately 1.0% in the first quarter of 2013.

Q1 2013 International Performance

                                      Three Months Ended             % Change
                                                            %        Adjusted
(in millions except percentages)      March 30,    March    Change   for
                                      2013         31,               Constant
                                                   2012              Currency
International Meeting Revenues        $101.5       $114.2   (11.1)%  (10.8)%
UK Meeting Revenues                   $35.6        $44.3    (19.7)%  (18.6)%
CE Meeting Revenues                   $53.2        $54.0    (1.4)%   (1.9)%
International Meeting Paid Weeks      8.1          9.1      (11.3)%  N/A
UK Meeting Paid Weeks                 3.9          4.7      (17.8)%  N/A
CE Meeting Paid Weeks                 3.5          3.6      (1.0)%   N/A
International Attendance              4.8          5.9      (19.9)%  N/A
UK Attendance                         2.3          3.1      (25.8)%  N/A
CE Attendance                         2.1          2.3      (10.9)%  N/A
_____________________________
See "Reconciliation of Non-GAAP Financial Measures" attached to this release
for further detail on adjustments to GAAP financial measures.



First quarter 2013 International meeting revenues were down 10.8% on a
constant currency basis versus the prior year period, primarily driven by
lower sales in the UK.

  oUK: First quarter 2013 UK meeting revenues decreased 18.6% on a constant
    currency basis versus the prior year period. The results in this market
    were negatively impacted by a difficult macroeconomic and competitive
    climate. Paid weeks declined 17.8% versus the prior year period.
  oCE: First quarter 2013 Continental Europe (CE) meeting revenues decreased
    1.9% on a constant currency basis versus the prior year period, while paid
    weeks declined 1.0% versus the prior year period. Declines in volume
    trends in CE were driven by cycling against the successful launch of the
    new program and new advertising campaigns in the prior year period.

Q1 2013 WeightWatchers.com Performance

                                    Three Months Ended               % Change
(in millions except percentages and                          %       Adjusted
as noted)                           March      March31,     Change  for
                                    30,        2012                  Constant
                                    2013                             Currency
Internet Revenues                   $140.8     $126.9        10.9%   10.9%
Online Paid Weeks                   30.9       28.0          10.3%   N/A
End of Period Active Online         2,545.7    2,398.1       6.2%    N/A
Subscribers (in thousands)
_____________________________
See "Reconciliation of Non-GAAP Financial Measures" attached to this release
for further detail on adjustments to GAAP financial measures.



The WeightWatchers.com business continued to deliver double-digit growth in
the first quarter of fiscal 2013, with Internet revenues up 10.9% on a
constant currency basis versus the prior year period. Internet revenues were
up in all markets. Online paid weeks were up 10.3%, and end of period active
Online subscribers were up 6.2%, versus Q1 2012. Sign-up performance in the
US was weak, as the difficult macroeconomic environment and the heightened
competitive backdrop reduced consumer trial of our program. Sign-up
performance in International was strong.

Recent Developments

On April 2, 2013, after the end of first quarter of fiscal 2013, the Company
completed the successful refinancing of its long-term debt, which represents a
multi-year extension on the maturity dates from the Company's previous term
loan facilities and includes a new revolving credit facility with a maturity
date of April 2018. The Company used the proceeds from its new term loans to
pay off the outstanding borrowings under its previous term loans and revolving
credit facilities.

Full Year Fiscal 2013 Earnings Guidance

The Company has narrowed its full year 2013 earnings guidance to a range of
between $3.60 and $3.90 per fully diluted share, which includes the impact of
approximately $0.15 related to higher interest expense from the Company's
recent debt refinancing. This earnings guidance range excludes an expected
one-time charge to be taken in the second quarter related to the write-off of
fees associated with the debt refinancing.The new earnings guidance range
compares with the Company's previously provided earnings guidance range of
between $3.50 and $4.00 per fully diluted share.

First Quarter 2013 Conference Call

The Company has scheduled a conference call today at 5:00 p.m. ET. During the
conference call, David Kirchhoff, Chief Executive Officer of the Company, and
Nicholas Hotchkin, Chief Financial Officer of the Company, will discuss first
quarter 2013 results and answer questions from the investment community. Live
audio of the conference call will be simultaneously webcast over the Internet
on the Company's corporate website, www.weightwatchersinternational.com. A
replay of the webcast will be available on this site for approximately 90
days.

Statement regarding Non-GAAP Financial Measures

The following provides information regarding non-GAAP financial measures used
in this earnings release:

To supplement the Company's consolidated results presented in accordance with
accounting principles generally accepted in the United States (GAAP), the
Company has disclosed non-GAAP financial measures of operating results that
exclude or adjust certain items. Earnings before interest, taxes,
depreciation, amortization and stock-based compensation (EBITDAS) is presented
in the attachments to this release. In addition, the Company presents certain
of its financial results on a constant currency basis in addition to GAAP
results. Constant currency information compares results between periods as if
exchange rates had remained constant period-over-period. In this release and
any attachments, the Company calculates constant currency by calculating
current-year results using prior-year foreign currency exchange rates.

Management believes these non-GAAP financial measures provide useful
supplemental information for its and investors' evaluation of the Company's
business performance and are useful for period-over-period comparisons of the
performance of the Company's business. While management believes that these
financial measures are useful in evaluating the Company's business, this
information should be considered as supplemental in nature and should not be
considered in isolation or as a substitute for the related financial
information prepared in accordance with GAAP. In addition, these non-GAAP
financial measures may not be the same as similarly entitled measures reported
by other companies. See "Reconciliation of Non-GAAP Financial Measures"
attached to this release and reconciliations, if any, included elsewhere in
this release for a reconciliation of the non-GAAP financial measures to the
most directly comparable GAAP measures.

About Weight Watchers International, Inc.

Weight Watchers International, Inc. is the world's leading provider of weight
management services, operating globally through a network of Company-owned and
franchise operations. Weight Watchers holds over 40,000 meetings each week
where members receive group support and learn about healthy eating patterns,
behavior modification and physical activity. WeightWatchers.com provides
innovative, subscription weight management products over the Internet and is
the leading Internet-based provider of these products in the world. In
addition, Weight Watchers offers a wide range of products, publications and
programs for those interested in weight loss and weight control.

This news release and any attachments include "forward-looking statements,"
within the meaning of Section27A of the Securities Act of 1933, as amended,
and Section21E of the Securities Exchange Act of 1934, as amended, including,
in particular, earnings guidance and any statements about the Company's plans,
strategies and prospects. The Company generally uses the words "may," "will,"
"could," "expect," "anticipate," "believe," "estimate," "plan," "intend" and
similar expressions in this news release and any attachments to identify
forward-looking statements. The Company bases these forward-looking statements
on its current views with respect to future events and financial performance.
Actual results could differ materially from those projected in the
forward-looking statements. These forward-looking statements are subject to
risks, uncertainties and assumptions, including, among other things:
competition from other weight management industry participants or the
development of more effective or more favorably perceived weight management
methods; the Company's ability to continue to develop innovative new services
and products and enhance its existing services and products, or the failure of
its services and products to continue to appeal to the market; the
effectiveness of the Company's marketing and advertising programs; the impact
on the Weight Watchers brand of actions taken by the Company's franchisees,
licensees and suppliers; risks and uncertainties associated with the Company's
international operations, including economic, political and social risks and
foreign currency risks; the Company's ability to successfully make
acquisitions or enter into joint ventures, including its ability to
successfully integrate, operate or realize the projected benefits of such
businesses; uncertainties related to a downturn in general economic conditions
or consumer confidence; the seasonal nature of the Company's business; the
impact of events that discourage or impede people from gathering with others
or accessing resources; the Company's ability to enforce its intellectual
property rights both domestically and internationally, as well as the impact
of its involvement in any claims related to intellectual property rights;
uncertainties regarding the satisfactory operation of the Company's
information technology or systems; the impact of security breaches or privacy
concerns; the impact of disputes with the Company's franchise operators; the
impact of existing and future laws and regulations; the impact of the
Company's debt service obligations and restrictive debt covenants; the
possibility that the interests of the Company's majority owner will conflict
with the other holders of the Company's common stock; and other risks and
uncertainties, including those detailed from time to time in the Company's
periodic reports filed with the Securities and Exchange Commission. You should
not put undue reliance on any forward-looking statements. You should
understand that many important factors, including those discussed herein,
could cause the Company's results to differ materially from those expressed or
suggested in any forward-looking statement. Except as required by law, the
Company does not undertake any obligation to update or revise these
forward-looking statements to reflect new information or events or
circumstances that occur after the date of this news release or to reflect the
occurrence of unanticipated events or otherwise. Readers are advised to review
the Company's filings with the Securities and Exchange Commission (which are
available from the SEC's EDGAR database at www.sec.gov, at various SEC
reference facilities in the United States and via the Company's website at
www.weightwatchersinternational.com).



Contact Information:
Investors:
Weight Watchers International, Inc. Brainerd Communicators, Inc.
Lori Scherwin                       Corey Kinger
Investor Relations                  (212) 986-6667
(212) 589-2713





WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
UNAUDITED
                                        March 30,           December 29,
                                        2013                2012
ASSETS
Current assets                          $      273.8  $      218.0
Property and equipment, net             82.0                71.8
Goodwill, franchise rights and other    930.8               898.9
intangible assets, net
Deferred financing costs, other         28.1                29.9
 TOTAL ASSETS                       $     1,314.7   $     1,218.6
LIABILITIES AND TOTAL DEFICIT
Current liabilities                     $      586.3  $      447.9
Long-term debt                          2,195.8             2,291.7
Deferred income taxes                   137.1               129.4
Other                                   16.2                15.1
 TOTAL LIABILITIES                 2,935.4             2,884.1
Shareholders' deficit                   (1,620.7)           (1,665.5)
 TOTAL LIABILITIES AND TOTAL        $     1,314.7   $     1,218.6
DEFICIT





WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
UNAUDITED
                                        Three Months Ended
                                        March 30,           March 31,
                                        2013                2012
Meeting fees, net                       $             $      
                                        236.0              252.5
Product sales and other, net            110.2               124.1
Internet revenues                       140.8               126.9
           Revenues, net                486.9               503.5
Cost of meetings, products and other    188.0               199.4
Cost of Internet revenues               18.8                15.7
           Cost of revenues             206.8               215.2
           Gross profit                 280.2               288.4
Marketing expenses                      118.9               130.3
Selling, general and administrative     58.1                55.3
expenses
           Operating income             103.1               102.8
Interest expense                        22.6                13.2
Other expense (income), net             1.3                 (0.5)
Early extinguishment of debt            -                   1.3
           Income before income taxes   79.3                88.8
Provision for income taxes              30.5                34.2
           Net income                   $            $       
                                        48.8               54.6
Earnings Per Share
           Basic                        $            $       
                                        0.87               0.74
           Diluted                      $            $       
                                        0.87               0.74
Weighted average common shares
outstanding:
           Basic                        55.8                73.3
           Diluted                      56.2                74.2
Dividends declared per common share     $            $       
                                        0.18               0.18
Note: Totals may not sum due to
rounding.





WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
OPERATIONAL STATISTICS
UNAUDITED
                                           Three Months Ended
                                           March 30,  March 31,
                                           2013       2012
Total Revenues (in $ millions)
Meeting Fees                             236.0      252.5
In-Meeting Product Sales                 74.2       87.1
Internet Revenues                        140.8      126.9
All Other                                36.0       37.0
Total Revenues                           486.9      503.5
North America (in $ millions)
Meeting Fees                             166.0      175.1
In-Meeting Product Sales                 42.7       50.3
Total                                    208.7      225.4
International (in $ millions)
Meeting Fees                             70.0       77.4
In-Meeting Product Sales                 31.5       36.9
Total                                    101.5      114.2
Paid Weeks (in millions) (1)
North America Meeting Paid Weeks         16.2       17.3
UK Meeting Paid Weeks                    3.9        4.7
CE Meeting Paid Weeks                    3.5        3.6
Other Meeting Paid Weeks                 0.7        0.8
Sub-total Meeting Paid Weeks             24.3       26.5
Online Paid Weeks                        30.9       28.0
Total Paid Weeks                         55.2       54.5
Attendance (in millions)
North America                            8.2        9.8
UK                                       2.3        3.1
CE                                       2.1        2.3
Other                                    0.4        0.5
Total Attendance                         13.0       15.8
WeightWatchers.com (in thousands)
End of Period Active Online Subscribers  2,545.7    2,398.1
Note: Totals may not sum due to rounding.

    The Paid Week metric reports total paid weeks by Weight Watchers customers
(1) in Company-owned operations for a given period. For meetings, Paid Weeks
    is the sum of total paid commitment plan weeks and total pay-as-you-go
   weeks for a given period. For Online, Paid Weeks is the total paid Weight
    Watchers Online subscriber weeks for a given period.





WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN MILLIONS, EXCEPT PERCENTAGES)
UNAUDITED
                                                             Q1 2013 Variance
                                                                      2013
                       Q1 2013                        Q1     2013     Constant
                                                      2012            Currency
                              Currency     Constant          vs       vs
                       GAAP   Adjustment   Currency   GAAP   2012     2012
Selected Financial
Data
Consolidated Company   $    $       $      $  
Revenues                     0.6        487.6           -3.3%    -3.2%
                       486.9                          503.5
Consolidated Meeting   $    $       $      $  
Fees ^(1)                    0.4        236.4           -6.5%    -6.4%
                       236.0                          252.5
Consolidated           $    $       $      $  
In-Meeting Product          0.1         74.3         -14.8%   -14.7%
Sales ^(2)             74.2                           87.1
NACO
                       $    $       $      $  
 Meeting Fees ^(1)          0.1        166.1           -5.2%    -5.2%
                       166.0                          175.1
 In-Meeting Product   $    $       $      $  
Sales ^(2)                  0.0         42.8         -15.0%   -14.9%
                       42.7                           50.3
 Meeting Revenues     $    $       $      $  
^(3)                         0.1        208.8           -7.4%    -7.3%
                       208.7                          225.4
 Total                $    $       $      $  
Revenues-Meetings            0.1        223.2           -6.6%    -6.5%
Business ^(4)          223.0                          238.7
International
                       $    $       $      $  
 Meeting Fees ^(1)         0.3         70.3         -9.5%    -9.1%
                       70.0                           77.4
 In-Meeting Product   $    $       $      $  
Sales ^(2)                  0.1         31.5         -14.6%   -14.5%
                       31.5                           36.9
                       $    $       $      $  
 Meeting Revenues^(3)       0.4        101.9           -11.1%   -10.8%
                       101.5                          114.2
 Total                $    $       $      $  
Revenues-Meetings            0.4        116.5           -9.9%    -9.6%
Business ^(4)          116.0                          128.8
UK
                       $    $       $      $  
 Meeting Fees ^(1)         0.3         23.9         -17.6%   -16.4%
                       23.6                           28.6
 In-Meeting Product   $    $       $      $  
Sales^(2)                   0.1         12.1         -23.5%   -22.7%
                       12.0                           15.7
                       $    $       $      $  
 Meeting Revenues^(3)      0.5         36.1         -19.7%   -18.6%
                       35.6                           44.3
 Total                $    $       $      $  
Revenues-Meetings           0.5         40.9         -18.4%   -17.4%
Business^(4)           40.4                           49.5
CE
                       $    $       $      $  
 Meeting Fees ^(1)        (0.2)        36.5         0.0%     -0.4%
                       36.7                           36.7
 In-Meeting Product   $    $       $      $  
Sales^(2)                  (0.1)        16.4         -4.5%    -5.0%
                       16.5                           17.3
 Meeting Revenues     $    $       $      $  
^(3)                       (0.2)        52.9         -1.4%    -1.9%
                       53.2                           54.0
 Total                $    $       $      $  
Revenues-Meetings          (0.3)        59.8         -1.4%    -1.8%
Business^(4)           60.0                           60.9
                       $    $       $      $  
Internet Revenues^(5)        0.1        140.8           10.9%    10.9%
                       140.8                          126.9
                       $    $       $      $  
Other Revenues ^(6)         0.1         36.0         -2.7%    -2.5%
                       36.0                           37.0
                       $    $       $      $  
Gross Profit                 0.4        280.5           -2.8%    -2.7%
                       280.2                          288.4
Gross Margin           57.5%               57.5%      57.3%
                       $    $       $      $  
Marketing Expenses          (0.4)       118.5           -8.8%    -9.1%
                       118.9                          130.3
Selling, General and   $    $       $      $  
Administrative              0.1         58.2         5.1%     5.3%
Expenses               58.1                           55.3
                       $    $       $      $  
Operating Income             0.7        103.8           0.3%     1.0%
                       103.1                          102.8
Operating Income       21.2%               21.3%      20.4%
Margin
                       $    $       $      $  
Interest expense              -       22.6         71.3%    71.3%
                       22.6                           13.2
                       $    $       $      $  
Net Income                  0.4         49.2         -10.7%   -9.9%
                       48.8                           54.6

Note: Totals may not sum due to rounding.
(1)  "Meeting Fees" are fees that members pay to attend weekly meetings.
(2)  "In-Meeting Product Sales" are sales of products to members in meetings.
(3)  "Meeting Revenues" equal "Meeting Fees" plus "In-Meeting Product Sales".
     "Total Revenues-Meetings Business" equal "Meetings Revenues" plus
(4)  revenues from licensing, payments from franchisees, magazine
     subscriptions, third-party advertising in publications and By Mail.
(5)  "Internet Revenues" are revenues from Internet subscription products and
     from the sale of third-party Internet advertising.
     "Other Revenues" are revenues from licensing, payments from franchisees,
(6)  magazine subscriptions, third-party advertising in publications and By
     Mail.
Note: Amount in the "Other Revenues" category represents the total of "Other
Revenues" for the consolidated Company. Portions of this amount are also
included in "Total Revenues-Meetings Business" for the geographies listed
above, therefore the detailed revenues shown will not sum to "Consolidated
Company Revenues".





WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN MILLIONS, EXCEPT RATIO)
UNAUDITED
                                                                  Trailing
                                                                  Twelve
                       Q2 2012    Q3 2012    Q4 2012    Q1 2013   Months
Net Debt to EBITDAS
Net Income             $      $      $      $      $     
                        77.5      67.4      58.0       48.8   251.6
Interest               23.8       23.2       30.4       22.6      99.9
Taxes                  48.5       42.2       34.7       30.5      155.9
Depreciation and       9.0        9.1        10.0       10.5      38.5
Amortization
Stock-based            1.6        2.3        2.9        2.0       8.9
Compensation
     EBITDAS           $      $      $      $      $     
                       160.3      144.1      136.0       114.3    554.7
Total Debt                                                        $     
                                                                  2,400.0
Add: Letters of Credit                                            1.2
Less: Cash                                                        121.4
     Net Debt                                                     $     
                                                                  2,279.8
     Net Debt to                                                  4.1 X
     EBITDAS
Note: Totals may not sum due to
rounding.

SOURCE Weight Watchers International, Inc.

Website: http://www.weightwatchers.com
 
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