Nutri/System, Inc. Reports Increased Operating Income for the Third Quarter.

Business Editors

HORSHAM, Pa.--(BUSINESS WIRE)--Nov. 7, 2002

Nutri/System, Inc. (OTCBB:THIN), the leading online weight loss company, today reported operating income from continuing operations of $457,000 for the third quarter ended September 30, 2002 as compared to operating

In the third quarter of 2002, Nutri/System generated net income of $365,000 and earnings per diluted share of $0.01, as compared to the third quarter of 2001 when Nutri/System generated net income of $370,000 and earnings per diluted share of $0.01.

For the first nine months of 2002, Nutri/System generated operating income from continuing operations of $3,627,000, net income of $3,446,000 and earnings per diluted share of $0.13. For the first nine months of 2001, Nutri/System generated operating income from continuing operations of $219,000, net income of $1,196,000 and earnings per diluted share of $0.04.

"We are pleased with the operating results and with our financial position," said James D. Brown, Nutri/System's chief financial officer. "We ended the quarter with $3.5 million in cash and cash equivalents, an increase of $2.4 million from the beginning of the year, and in 2002 through the end of the third quarter we have repurchased a total of 829,357 shares of common stock for an aggregate purchase price of $671,000."

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 of future goals and similar statements reflecting other than historical facts constitute forward-looking statements.

These forward-looking statements involve a number of risks and uncertainties, which are described in Nutri/System, Inc.'s filings with the Securities and Exchange Commission. The actual results may differ materially from any forward-looking statements due to such risks and uncertainties.

Nutri/System, 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.

                  NUTRI/SYSTEM, INC. AND SUBSIDIARIES
                  -----------------------------------

                     CONSOLIDATED EARNINGS SUMMARY
                     -----------------------------

      (unaudited, dollars in thousands, except per share amounts)

                           Three Months Ended      Nine Months Ended
                               September 30           September 30
                           --------------------   --------------------
                             2002        2001       2002        2001
                           --------    --------   --------    --------

REVENUES                   $  5,458    $  6,329   $ 23,459    $ 19,531

COSTS AND EXPENSES:
    Cost of revenues          3,061       3,589     13,242      10,828
    Advertising and
     marketing                  184         730      1,087       3,244
    General and
     administrative           1,669       1,620      5,220       4,904
    Depreciation and
     amortization                82         106        255         311
    Non-cash compensation
     expense                      5           8         28          25
                           --------    --------   --------    --------

                              5,001       6,053     19,832      19,312
                           --------    --------   --------    --------

   Operating income from
    continuing operations       457         276      3,627         219

OTHER INCOME                     --          77         --          77

EQUITY IN LOSSES OF
 INVESTEE                       (61)         --        (61)         --

INTEREST INCOME, net             13          17         29          87
                           --------    --------   --------    --------
   Income before income
    taxes and
    discontinued operation      409         370      3,595         383

INCOME TAXES                     44          --        149          --
                           --------    --------   --------    --------

        Income before
         discontinued
         operation              365         370      3,446         383

INCOME FROM DISCONTINUED
 OPERATION                       --          --         --         813
                           --------    --------   --------    --------

        Net income         $    365    $    370   $  3,446    $  1,196
                           ========    ========   ========    ========

BASIC AND DILUTED INCOME
 PER SHARE:

   Continuing operations   $   0.01    $   0.01   $   0.13    $   0.01

   Discontinued operation        --          --         --        0.03
                           --------    --------   --------    --------

                           $   0.01    $   0.01   $   0.13    $   0.04
                           ========    ========   ========    ========

WEIGHTED AVERAGE SHARES
 OUTSTANDING:

  Basic                      26,297      27,831     26,561      28,345

  Diluted                    26,845      27,831     27,151      28,345