Medifast Announces Second Quarter 2023 Financial Results
- Revenue of $296.2 million
- Net income of $30.3 million
- EPS of $2.77
- SG&A expenses decreased 36.9%
- Revenue decreased 34.7% YoY
- Gross profit decreased 34.5%
Second Quarter 2023
- Revenue of
, with revenue per active earning coach of$296.2 million $5,578 - Independent active earning OPTAVIA Coaches of 53,100
- Net income of
$30.3 million - Earnings per diluted share ("EPS) of
$2.77 - Cash and Cash Equivalents of
and no interest-bearing debt$147.4 million
"We are ahead of our Fuel for the Future plan with key initiatives aimed at driving efficiency and cost reduction, which helped to mitigate the impact of continued economic headwinds on our revenues during the quarter," said Dan Chard, Chairman & Chief Executive Officer of Medifast. "In addition, we have made significant progress advancing our broader health and wellness agenda with the recent launch of our new OPTAVIA ACTIVETM line of products, which marks an inflection point for Medifast as we target new areas of growth and more than triple our total addressable market. We also have pilot programs underway to assess potential growth opportunities related to medically-supported weight loss that leverage the strength of our business model. We believe our scientifically-designed solution, OPTAVIA, is a great complement to those seeking to improve their health and wellness regardless of the method they choose to utilize."
Chard concluded, "Industry dynamics have changed numerous times over the years and Medifast has proven adept at making the necessary adjustments in its business model to thrive in new environments. Even though the operating environment remains challenging, and we continue to expect that programming adjustments, compensation dynamics, and future growth initiatives will take time to deliver meaningful results, we are confident that the changes we are making to diversify our business into new areas will have similar success."
Second Quarter 2023 Results
Second quarter 2023 revenue decreased
Gross profit decreased
Selling, general, and administrative expenses ("SG&A") decreased
Income from operations decreased
The effective tax rate was
In the second quarter of 2023, net income was
Capital Allocation and Balance Sheet
The Company announced a quarterly cash dividend of
The Company's balance sheet remains strong with
Outlook
The Company expects third quarter 2023 revenue to be in the range of
Conference Call Information
The conference call is scheduled for today, Monday, August 7, 2023 at 4:30 p.m. ET. The call will be broadcast live over the Internet, hosted on the Investor Relations section of Medifast's website at www.MedifastInc.com or directly at https://app.webinar.net/vb1JL58Wrwo and will be archived online and available through November 7, 2023. In addition, listeners may dial (877) 344-7529 to join via telephone.
A telephonic playback will be available from 6:30 p.m. ET, August 7, 2023, through August 14, 2023. Participants can dial (877) 344-7529 and enter passcode 7120911 to hear the playback.
About Medifast®: Medifast (NYSE: MED) is the health and wellness company known for its habit-based and Coach-guided lifestyle solution OPTAVIA®, which provides people with a simple, yet comprehensive approach to help them achieve lasting optimal health and wellbeing. OPTAVIA offers clinically proven plans, scientifically developed products and a framework for habit creation reinforced by independent Coaches and Community support. As a physician-founded company with a 40+ year history, Medifast is a leader in the
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Forward Looking Statements
Please Note: This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally can be identified by use of phrases or terminology such as "intend," "anticipate," "expect" or other similar words or the negative of such terminology. Similarly, descriptions of Medifast's objectives, strategies, plans, goals, outlook or targets contained herein are also considered forward-looking statements. These statements are based on the current expectations of the management of Medifast and are subject to certain events, risks, uncertainties and other factors. Some of these factors include, among others, risks associated with Medifast's direct-to-consumer business model; the impact of rapid growth on Medifast's systems; disruptions in Medifast's supply chain; Medifast's inability to continue to develop new products; effectiveness of Medifast's advertising and marketing programs, including use of social media by independent OPTAVIA Coaches; Medifast's inability to maintain and grow the network of independent OPTAVIA Coaches; the departure of one or more key personnel; Medifast's inability to protect against online security risks and cyberattacks; to protect its brand and intellectual property, or to protect against product liability claims; Medifast's planned growth into domestic and international markets; adverse publicity associated with Medifast's products; Medifast's inability to continue declaring dividends; fluctuations of Medifast's common stock market price; the prolonged effects of COVID-19 on consumer spending and disruptions to our distribution network, supply chains and operations; increases in competition or litigation; the consequences of other geopolitical events, including natural disasters, global health crises, acts of war (including the war in
Investor Contact:
Medifast, Inc.
Steven Zenker
InvestorRelations@medifastinc.com
(443) 379-5256
MEDIFAST, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) ( | |||||||
Three months ended June 30, | Six months ended June 30, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Revenue | $ 296,188 | $ 453,333 | $ 645,170 | $ 870,933 | |||
Cost of sales | 85,473 | 131,651 | 188,065 | 246,965 | |||
Gross profit | 210,715 | 321,682 | 457,105 | 623,968 | |||
Selling, general, and administrative | 172,009 | 272,718 | 364,887 | 519,917 | |||
Income from operations | 38,706 | 48,964 | 92,218 | 104,051 | |||
Other income (expense) | |||||||
Interest income (expense) | 462 | (164) | 281 | (259) | |||
Other expense | (51) | (4) | (53) | (20) | |||
411 | (168) | 228 | (279) | ||||
Income from operations before income taxes | 39,117 | 48,796 | 92,446 | 103,772 | |||
Provision for income taxes | 8,837 | 9,683 | 22,198 | 22,878 | |||
Net income | $ 30,280 | $ 39,113 | $ 70,248 | $ 80,894 | |||
Earnings per share - basic | $ 2.78 | $ 3.44 | $ 6.46 | $ 7.06 | |||
Earnings per share - diluted | $ 2.77 | $ 3.42 | $ 6.43 | $ 7.01 | |||
Weighted average shares outstanding | |||||||
Basic | 10,888 | 11,354 | 10,876 | 11,455 | |||
Diluted | 10,917 | 11,435 | 10,923 | 11,534 | |||
Cash dividends declared per share | $ 1.65 | $ 1.64 | $ 3.30 | $ 3.28 |
MEDIFAST, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) ( | |||
June 30, | December 31, | ||
ASSETS | |||
Current Assets | |||
Cash and cash equivalents | $ 147,405 | $ 87,691 | |
Inventories | 68,896 | 118,856 | |
Prepaid expenses and other current assets | 12,516 | 16,237 | |
Total current assets | 228,817 | 222,784 | |
Property, plant and equipment - net of accumulated depreciation | 54,412 | 57,185 | |
Right-of-use assets | 16,699 | 18,460 | |
Other assets | 14,269 | 12,456 | |
Deferred tax assets | 4,528 | 5,328 | |
TOTAL ASSETS | $ 318,725 | $ 316,213 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current Liabilities | |||
Accounts payable and accrued expenses | $ 105,188 | $ 134,690 | |
Income taxes payable | 4,302 | 428 | |
Current lease obligations | 5,405 | 5,776 | |
Total current liabilities | 114,895 | 140,894 | |
Lease obligations, net of current lease obligations | 18,269 | 20,275 | |
Total liabilities | 133,164 | 161,169 | |
Stockholders' Equity | |||
Common stock, par value | |||
10,889 and 10,928 issued and 10,889 and 10,873 outstanding | |||
at June 30, 2023 and December 31, 2022, respectively | 11 | 11 | |
Additional paid-in capital | 21,542 | 21,555 | |
Accumulated other comprehensive income | 123 | 24 | |
Retained earnings | 163,885 | 139,852 | |
Less: treasury stock at cost, 0 and 54 shares at June 30, 2023 and December 31, 2022, respectively | — | (6,398) | |
Total stockholders' equity | 185,561 | 155,044 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 318,725 | $ 316,213 |
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SOURCE Medifast, Inc.