Medifast (NYSE: MED), the health and wellness company known for
its habit-based and Coach-guided lifestyle solution,
OPTAVIA®, today reported results for the second quarter
ended June 30, 2024.
Second Quarter 2024
- Revenue of $168.6 million, with revenue per active earning
Coach of $4,972
- Independent active earning OPTAVIA Coaches of
33,900
- Net loss of $8.2 million (non-GAAP adjusted net income of $10.1
million)
- Loss per diluted share of $0.75 (non-GAAP adjusted earnings per
share ("EPS") of $0.92)
- Cash, Cash Equivalents, and Investment Securities of $163.5
million with zero debt
“We are acting decisively to transform our business to position
us for long-term growth, with a strong balance sheet free of debt,
a clear focus on new customer acquisition, and a broader health and
wellness offer to a significantly expanded target market,” said Dan
Chard, Chairman & CEO.
”Our holistic approach, encompassing nutrition, personalized
coaching, a supportive community, and access to a clinician through
our collaboration with telehealth provider, LifeMD, positions us
uniquely to support those who are interested in weight loss
medications as well as those who are transitioning off a medical
regimen, or those who choose to pursue more traditional weight loss
methods. Our mission today, much like it has been over the last 40
years, is to help our customers create lifestyle changes and
establish healthy habits, and we are developing new plans and
products to aid individuals in achieving healthier lifestyles. We
believe we are more relevant than ever in today’s environment and
are well positioned to shape the future of health and wellness,
impacting millions of lives.”
Second Quarter 2024 Results
Second quarter 2024 revenue decreased 43.1% to $168.6 million
from $296.2 million for the second quarter of 2023 primarily driven
by a decrease in the number of active earning OPTAVIA
Coaches and lower Coach productivity. The total number of active
earning OPTAVIA Coaches decreased 36.2% to 33,900 compared
to 53,100 for the second quarter of 2023. The average revenue per
active earning OPTAVIA Coach decreased 10.9% to $4,972
compared to $5,578 for the second quarter last year, primarily
driven by continued pressure on customer acquisition.
Gross profit decreased 41.4% to $123.4 million from $210.7
million for the second quarter of 2023. The decrease in gross
profit was primarily due to lower revenue. Gross profit margin was
73.2% compared to 71.1% in the second quarter of 2023, primarily
due to cost savings from the company’s Fuel for the Future
initiatives and efficiencies in inventory management. Non-GAAP
adjusted gross profit, which excludes expenses in connection with
the company's restructuring of external manufacturing agreements,
decreased 40.2% to $126.0 million and non-GAAP adjusted gross
profit margin increased 370 basis points year-over-year to
74.8%.
Selling, general, and administrative expenses (“SG&A”)
decreased 23.7% to $131.3 million compared to $172.0 million for
the second quarter of 2023. The decrease in SG&A was primarily
due to lower OPTAVIA Coach compensation on fewer active
earning Coaches and lower sales volumes, partially offset by the
loss of leverage on fixed costs due to lower sales volumes and
supply chain optimization costs. The Company also incurred market
research and investment costs related to medically supported weight
loss, costs to exit hotel commitments for the company’s annual
OPTAVIA convention in future years reflecting a change in
strategy, and costs for the company’s company-led customer
acquisition initiatives. As a percentage of revenue, SG&A
increased 1,980 basis points year-over-year to 77.9% of revenue, as
compared to 58.1% for the second quarter of 2023. The increase in
SG&A as a percentage of revenue was primarily due to the loss
of leverage on fixed costs due to lower sales volumes and supply
chain optimization costs. The Company also incurred market research
and investment costs related to medically supported weight loss,
costs to exit hotel commitments for the company’s annual
OPTAVIA convention in future years reflecting a change in
strategy, and costs for the company’s company-led customer
acquisition initiatives. Non-GAAP adjusted SG&A, which excludes
expenses related to the company’s supply chain optimization costs,
costs to exit hotel commitments for the company’s annual
OPTAVIA convention in future years, and costs for its
collaboration with LifeMD, decreased 33.8% to $113.8 million and
non-GAAP adjusted SG&A as a percentage of revenue increased 940
basis points year-over-year to 67.5%.
The company's loss from operations for the period was $7.9
million, a decrease of 120.3%, as compared to income from
operations of $38.7 million in the prior-year period. As a
percentage of revenue, loss from operations was 4.7% for the second
quarter of 2024 compared to income from operations as a percentage
of revenue of 13.1% in the prior-year period. Non-GAAP adjusted
income from operations decreased 68.4% to $12.2 million. Non-GAAP
adjusted income from operations as a percentage of revenue was
7.3%, a decrease of 580 basis points from the year-ago period.
The effective tax rate was 23.4% for the second quarter of 2024
compared to 22.6% in the prior-year period. The increase in the
effective tax rate for the three months ended June 30, 2024 was
primarily driven by the net loss position in 2024 and the
corresponding rate impact from research and development tax
credits, partially offset by the rate impact from the limitation
for executive compensation. The non-GAAP effective tax rate was
26.2% as compared to 22.6% in the prior-year period.
In the second quarter of 2024, the company's net loss was $8.2
million, or $0.75 per diluted share, based on approximately 10.9
million shares of common stock outstanding. In the second quarter
of 2023, net income was $30.3 million, or $2.77 per diluted share,
based on approximately 10.9 million shares of common stock
outstanding. In the second quarter 2024, non-GAAP adjusted net
income was $10.1 million, or $0.92 per diluted share.
Capital Allocation and Balance Sheet
The company’s balance sheet remains strong with $163.5 million
in cash, cash equivalents and investment securities and no
interest-bearing debt as of June 30, 2024 compared to $150.0
million in cash, cash equivalents and investment securities and no
debt at December 31, 2023.
Outlook
The company expects third quarter 2024 revenue to be in the
range of $125 million to $145 million and third quarter 2024
diluted loss per share in the range of $0.05 to $0.70. The EPS
range excludes the costs related to the initiation of the LifeMD
collaboration and any gains or losses from changes in the market
price of the company’s LifeMD common stock investment, which the
company is unable to estimate.
Conference Call Information
The conference call is scheduled for today, Monday, August 5,
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://viavid.webcasts.com/starthere.jsp?ei=1678505&tp_key=f8865fb1bd
and will be archived online and available through November 5, 2024.
In addition, listeners may dial (201) 389-0879 to join via
telephone.
A telephonic playback will be available from 8:30 p.m. ET,
August 5, 2024, through August 12, 2024. Participants can dial
(412) 317-6671 and enter passcode 13747501 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 address obesity and support a healthy
lifestyle. OPTAVIA's holistic solution includes lifestyle
plans with clinically proven health benefits, scientifically
developed products, and a framework for habit creation – all
reinforced by independent coach support for customers on their
weight loss journeys. Through its collaboration with national
virtual primary care provider LifeMD® (Nasdaq: LFMD) and its
affiliated medical group, the holistic solution now includes access
to GLP-1 medications where clinically appropriate. Medifast remains
committed to its mission of offering Lifelong Transformation,
Making a Healthy Lifestyle Second Nature™. Visit the OPTAVIA
and Medifast websites for more information and follow @Medifast on
X and LinkedIn.
MED-F
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, Medifast's inability
to maintain and grow the network of independent OPTAVIA
Coaches; Industry competition and new weight loss products,
including weight loss medications, or services; Medifast’s health
or advertising related claims by OPTAVIA customers;
Medifast's inability to continue to develop new products;
effectiveness of Medifast's advertising and marketing programs,
including use of social media by OPTAVIA Coaches; the
departure of one or more key personnel; Medifast's inability to
protect against online security risks and cyberattacks; risks
associated with Medifast's direct-to-consumer business model;
disruptions in Medifast's supply chain; product liability claims;
Medifast's planned growth into domestic markets including through
its collaboration with LifeMD, Inc.; adverse publicity associated
with Medifast's products; the impact of existing and future laws
and regulations on Medifast’s business; fluctuations of Medifast's
common stock market price; increases in litigation; actions of
activist investors; the consequences of other geopolitical events,
overall economic and market conditions and the resulting impact on
consumer sentiment and spending patterns; and Medifast's ability to
prevent or detect a failure of internal control over financial
reporting. Although Medifast believes that the expectations,
statements and assumptions reflected in these forward-looking
statements are reasonable, it cautions readers to always consider
all of the risk factors and any other cautionary statements
carefully in evaluating each forward-looking statement in this
release, as well as those set forth in its Annual Report on Form
10-K for the fiscal year ended December 31, 2023, and other filings
filed with the United States Securities and Exchange Commission,
including its quarterly reports on Form 10-Q and current reports on
Form 8-K. All of the forward-looking statements contained herein
speak only as of the date of this release.
MEDIFAST, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
(U.S. dollars in thousands,
except per share amounts & dividend data)
Three months ended June
30,
Six months ended June
30,
2024
2023
2024
2023
Revenue
$
168,558
$
296,188
$
343,297
$
645,170
Cost of sales
45,120
85,473
92,567
188,065
Gross profit
123,438
210,715
250,730
457,105
Selling, general, and administrative
131,314
172,009
250,666
364,887
Income (loss) from operations
(7,876
)
38,706
64
92,218
Other income (expense)
Interest income
1,296
462
2,519
281
Other expense
(4,070
)
(51
)
(1,647
)
(53
)
(2,774
)
411
872
228
Income (loss) from operations before
income taxes
(10,650
)
39,117
936
92,446
Provision (benefit) for income taxes
(2,496
)
8,837
773
22,198
Net income (loss)
$
(8,154
)
$
30,280
$
163
$
70,248
Earnings (loss) per share - basic
$
(0.75
)
$
2.78
$
0.01
$
6.46
Earnings (loss) per share - diluted
$
(0.75
)
$
2.77
$
0.01
$
6.43
Weighted average shares
outstanding
Basic
10,937
10,888
10,923
10,876
Diluted
10,937
10,917
10,967
10,923
Cash dividends declared per share
$
—
$
1.65
$
—
$
3.30
MEDIFAST, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(U.S. dollars in thousands,
except par value)
June 30, 2024
December 31,
2023
ASSETS
Current Assets
Cash and cash equivalents
$
108,016
$
94,440
Inventories
39,603
54,591
Investments
55,489
55,601
Income taxes, prepaid
8,728
8,727
Prepaid expenses and other current
assets
12,479
10,670
Total current assets
224,315
224,029
Property, plant and equipment - net of
accumulated depreciation
39,921
51,467
Right-of-use assets
13,417
15,645
Other assets
11,770
14,650
Deferred tax assets
4,108
4,117
TOTAL ASSETS
$
293,531
$
309,908
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities
Accounts payable and accrued expenses
$
69,148
$
86,415
Current lease obligations
6,031
5,885
Total current liabilities
75,179
92,300
Lease obligations, net of current lease
obligations
13,069
16,127
Total liabilities
88,248
108,427
Stockholders' Equity
Common stock, par value $0.001 per share:
20,000 shares authorized;
10,937 and 10,896 issued and
outstanding
at June 30, 2024 and December 31, 2023,
respectively
11
11
Additional paid-in capital
30,401
26,573
Accumulated other comprehensive income
26
248
Retained earnings
174,845
174,649
Total stockholders' equity
205,283
201,481
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
293,531
$
309,908
Non-GAAP Financial Measures
In an effort to provide investors with additional information
regarding Medifast’s results, we disclose various non-GAAP
financial measures in the company’s quarterly earnings press
release and other public disclosures. The following GAAP financial
measures have been presented on an as adjusted basis: gross profit,
SG&A expenses, income (loss) from operations, other income
(expense), provision (benefit) for income taxes, net income (loss),
effective tax rate, and diluted earnings (loss) per share. Each of
these non-GAAP financial measures excludes the impact of certain
amounts as further identified below that the company believes are
not indicative of its core ongoing operational performance. A
reconciliation of each of these non-GAAP financial measures to its
most comparable GAAP financial measure is included below. These
non-GAAP financial measures are not intended to replace GAAP
financial measures.
We use these non-GAAP financial measures internally to evaluate
and manage the company's operations because we believe they provide
useful supplemental information regarding the company's on-going
economic performance. We have chosen to provide this information to
investors to enable them to perform more meaningful comparisons of
operating results and as a means to emphasize the results of
on-going operations.
The following tables reconcile the non-GAAP financial measures
included in this release:
MEDIFAST, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
NON-GAAP (UNAUDITED)
(U.S. dollars in thousands,
except per share amounts)
Three Months Ended June 30,
2024
GAAP (1)
Supply Chain Optimization and
Restructuring of External Manufacturing Agreements (2)
OPTAVIA Convention
Cancellation (2)
Unrealized Loss on Investment
in LifeMD Common Stock (2)
LifeMD Prepaid Services
Amortization (2)
Non-GAAP (2)
Gross profit
$
123,438
$
2,579
$
—
$
—
$
—
$
126,017
Selling, general, and administrative
131,314
(12,502
)
(3,000
)
—
(2,021
)
113,791
Income (loss) from operations
(7,876
)
15,081
3,000
—
2,021
12,226
Other income (expense)
(2,774
)
—
—
4,188
—
1,414
Provision (benefit) for income taxes
(2,496
)
3,770
750
1,047
505
3,576
Net income (loss)
(8,154
)
11,311
2,250
3,141
1,516
10,064
Diluted earnings (loss) per share
(0.75
)
1.03
0.21
0.29
0.14
0.92
(1) The weighted-average diluted shares
outstanding used in the calculation of these non-GAAP financial
measures are the same as the weighted-average shares outstanding
used in the calculation of the reported per share amounts.
(2) The weighted-average diluted shares
outstanding used in the calculation of these non-GAAP financial
measures uses 10,962 thousand shares under the treasury stock
method.
Three Months Ended June 30,
2023
GAAP
Supply Chain Optimization and
Restructuring of External Manufacturing Agreements
OPTAVIA Convention
Cancellation
Unrealized Loss on Investment
in LifeMD Common Stock
LifeMD Prepaid Services
Amortization
Non-GAAP
Gross profit
$
210,715
$
—
$
—
$
—
$
—
$
210,715
Selling, general, and administrative
172,009
—
—
—
—
172,009
Income from operations
38,706
—
—
—
—
38,706
Other income
411
—
—
—
—
411
Provision for income taxes
8,837
—
—
—
—
8,837
Net income
30,280
—
—
—
—
30,280
Diluted earnings per share (1)
2.77
—
—
—
—
2.77
(1) The weighted-average diluted shares
outstanding used in the calculation of these non-GAAP financial
measures are the same as the weighted-average shares outstanding
used in the calculation of the reported per share amounts.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240805843384/en/
Investor Contact: Medifast, Inc. Steven Zenker
InvestorRelations@medifastinc.com (443) 379-5256
Medifast (NYSE:MED)
過去 株価チャート
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