Hot Growth Special Report 2006 >



NutriSystem (NTRI)

This weight-loss operator has slimmed down?and prospered. NutriSystem used to operate a nationwide network of weight-loss centers. The company began shuttering those in the 1990s completed the overhaul in 2003, after a new management team took over. Under that team, led by chairman and CEO Michael J. Hagan, NutriSystem began emulating insurance operator Geico and computer maker Dell by creating a low-cost weight-loss business. NutriSystem has no membership fees and no stores. Instead, customers pay about $289 per month for prepackaged meals, plus phone or Web counseling. That means most customers can do the NutriSystem program for about $10 a day, well below the $15-or-more-per-day cost of rivals. Average annual sales and profits over the past three years have jumped 94.4% and 101%, respectively. And the only people getting fat are investors: The stock was trading under $1 a share when Hagan's team came on board in 2002, and it's now at about $48.

Company Info

2005 Rank


Market Value*
($ Millions)


($ Millions)


Sales Growth
(3-yr. avg. annual)

94.4 %

($ Millions)


Profit Growth
(3-yr. avg. annual)

101.0 %

Return on Inv. Capital (3-yr.)

14.5 %

Share Price
12-Mo. Hi/Lo


Share Price
As of 4/28/06


Return on Equity

38.9 %

P/E Ratio


No. of Employees


Industry Internet Retail


Location Horsham, Pa.
Phone 215 706-5300
*Trailing 12 months
Stock price data as of 4/28/06
DATA: Standard & Poor's Compustat

Related Articles

How NutriSystem Got Fat and Happy

My Dinner With NutriSystem

Company Snapshot

NutriSystem provides weight management system and fitness products and services in the U.S. Its weight management program primarily includes a prepackaged food program and counseling. The company's prepackaged food consists of approximately 130 food items with carbohydrates, proteins, and fats under the brand name NutriSystem. The company also offers online and telephone counseling and support to customers using its diet counselors. It sells its prepackaged foods to weight loss program participants through the direct channel, QVC, field sales channel, and the case distributor channel. NutriSystem was founded in 1972. The company was formerly known as Nutrisystem and changed its name to Nutri/System in 2000. Further, it changed its name to NutriSystem in 2003. NutriSystem is headquartered in Horsham, Pa.

Data provided by Capital IQ
Michael J. Hagan

Michael J. Hagan, 43

Chairman and Chief Executive Officer

Total Compensation*

$ 405,050

Total Options Value*

$ 12,380,396

* Fiscal Year 2005

Executive Bio

Michael Hagan has been chairman and chief executive officer of Nutri System since December, 2002. Hagan served as president and CEO of Verticalnet from January, 2001, to February, 2002, executive vice-president and chief operating officer from January, 2000, to January, 2001, and senior vice-president prior to that time. Prior to joining Nutri System, Hagan was the co-founder of Verticalnet, a business-to-business internet and software company and held a number of executive positions at Verticalnet since its inception in 1995. Prior to founding Verticalnet, Hagan served as vice-president and senior manager at Merrill Lynch Asset Management from 1990 to 1995 and worked for Bristol Meyers Squibb from 1988 to 1990. He served as chairman of Verticalnet from February, 2002, to May, 2005. He has been a director of Verticalnet since 1995. He has been a director of Nutri System since December, 2002, and is a member of nominating committee. Hagan has been a trustee of American Financial Reality Trust since April, 2003. He serves as a member of the board of trustees of Saint Joseph's University. Hagan received a BS from St. Joseph's University and was formerly a Certified Public Accountant.

Management Team

Key Executives

Michael J. Hagan; Thomas F. Connerty; Bruce Blair; Djordje Jankovic; James D. Brown

Board Directors

Djordje Jankovic; Warren V. Musser; Ian J. Berg; Brian P. Tierney; Stephen T. Zarrilli; Michael J. Hagan; Michael A. DiPiano; Robert F. Bernstock; Warren V.Musser

Executive Data provided by Capital IQ