NutriSystem, Inc. Reports Third Quarter 2008 Results; Announces Quarterly Dividend of $0.175

NutriSystem, Inc. (NASDAQ:NTRI), a leading provider of weight management products and services, today reported financial results for the third quarter ended September 30, 2008, including:

• Revenue of $162,681,000, compared to $188,103,000 in the third quarter of 2007;
• Income from continuing operations after tax of $13,695,000 compared to $22,250,000 in the third quarter of 2007;
• Adjusted EBITDA, defined as income from continuing operations excluding non-cash employee compensation, foreign currency transaction gains (losses), equity loss, interest, income taxes and depreciation and amortization expense of $26,652,000, compared to $36,963,000 in the third quarter 2007;
• Fully diluted earnings per share of $0.45, compared to $0.64 in the third quarter of 2007; and
• Cash and cash equivalents of $58,049,000 at September 30, 2008, and no debt outstanding under its $200 million credit facility.

"Even in turbulent economic conditions our flexible eCommerce, direct-to-consumer business model continues to generate solid levels of revenues, Adjusted EBITDA and cash while remaining debt free,” stated President and Chief Executive Officer Joe Redling. "With the sustained strength in our cash generation and balance sheet, we are announcing the continuation of our quarterly dividend to continue to return value to our shareholders,” added Redling.

"So far this year we have generated $97 million of cash provided by operating activities which allowed us to fully fund capital expenditures for growth while returning over $70 million to our shareholders through dividends and buybacks,” stated Chief Financial Officer David Clark.

The Board of Directors declared the Company's quarterly dividend of $0.175 per share, payable November 17, 2008 to shareholders of record as of November 7, 2008. While the Company intends to continue to pay regular quarterly dividends, the declaration and payment of future dividends are discretionary and will be subject to determination by the Board of Directors each quarter following its review of the Company's financial performance.

Full Year 2008 Outlook

The Company now expects full year 2008 revenues to be between $690 million and $700 million, and Adjusted EBITDA is expected to be between $105 million and $110 million. The Company defines Adjusted EBITDA as income from continuing operations excluding non-cash employee compensation, foreign currency transaction gains (losses), equity loss, interest, income taxes and depreciation and amortization expense. "Our third quarter performance was impacted by weaker than anticipated demand in September which we expect to continue through October and the balance of 2008 given the difficult macroeconomic conditions. With an expanded product offering for 2009, our revised guidance provides us with flexibility to assess and react to the market going into first quarter of 2009,” commented Mr. Redling.

Conference Call and Webcast

Management will host a conference call at 4:30 PM Eastern Time Wednesday, October 22, 2008. The conference call will include remarks about the quarter and the Company's outlook from President and Chief Executive Officer Joe Redling, and Chief Financial Officer David Clark. Live audio of the conference call will be simultaneously webcast over the Internet on the Company's website, www.nutrisystem.com. Please click through to the Investor Relations page at the bottom of the home page to locate the microphone icon.

About NutriSystem, Inc.

Founded in 1972, NutriSystem (NASDAQ:NTRI) is a leading provider of weight management products and services. The Company offers a weight loss program based on portion-controlled, lower Glycemic Index prepared meals. The program has no membership fees and provides free online and telephone counseling.

Forward-Looking Statement Disclaimer

This press release may contain forward-looking statements that are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding NutriSystem's outlook and guidance for the fourth quarter and full year 2008, its expectations regarding the effect of economic and competitive pressures, and other statements that are not statements of historical fact constitute forward-looking statements. These forward-looking statements involve a number of risks and uncertainties, which are described in NutriSystem, Inc.'s Annual Report on Form 10-K and its other filings with the Securities and Exchange Commission. The actual results may differ materially from any forward-looking statements due to such risks and uncertainties. NutriSystem, Inc. undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.