Medifast Announces Second Quarter 2024 Financial Results
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
”Our holistic approach, encompassing nutrition, personalized coaching, a supportive community, and access to a clinician through our collaboration with telehealth provider,
Second Quarter 2024 Results
Second quarter 2024 revenue decreased 43.1% to
Gross profit decreased 41.4% to
Selling, general, and administrative expenses (“SG&A”) decreased 23.7% to
The company's loss from operations for the period was
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
In the second quarter of 2024, the company's net loss was
Capital Allocation and Balance Sheet
The company’s balance sheet remains strong with
Outlook
The company expects third quarter 2024 revenue to be in the range of
Conference Call Information
The conference call is scheduled for today,
A telephonic playback will be available from
About
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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(
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Three months ended |
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Six months ended |
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2024 |
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2023 |
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2024 |
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2023 |
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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 |
|
|
|
|
|
|
|
|
|
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Other income (expense) |
|
|
|
|
|
|
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Interest income |
|
1,296 |
|
|
|
462 |
|
|
|
2,519 |
|
|
|
281 |
|
Other expense |
|
(4,070 |
) |
|
|
(51 |
) |
|
|
(1,647 |
) |
|
|
(53 |
) |
|
|
(2,774 |
) |
|
|
411 |
|
|
|
872 |
|
|
|
228 |
|
|
|
|
|
|
|
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Income (loss) from operations before income taxes |
|
(10,650 |
) |
|
|
39,117 |
|
|
|
936 |
|
|
|
92,446 |
|
|
|
|
|
|
|
|
|
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Provision (benefit) for income taxes |
|
(2,496 |
) |
|
|
8,837 |
|
|
|
773 |
|
|
|
22,198 |
|
|
|
|
|
|
|
|
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Net income (loss) |
$ |
(8,154 |
) |
|
$ |
30,280 |
|
|
$ |
163 |
|
|
$ |
70,248 |
|
|
|
|
|
|
|
|
|
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Earnings (loss) per share - basic |
$ |
(0.75 |
) |
|
$ |
2.78 |
|
|
$ |
0.01 |
|
|
$ |
6.46 |
|
|
|
|
|
|
|
|
|
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Earnings (loss) per share - diluted |
$ |
(0.75 |
) |
|
$ |
2.77 |
|
|
$ |
0.01 |
|
|
$ |
6.43 |
|
|
|
|
|
|
|
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Weighted average shares outstanding |
|
|
|
|
|
|
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Basic |
|
10,937 |
|
|
|
10,888 |
|
|
|
10,923 |
|
|
|
10,876 |
|
Diluted |
|
10,937 |
|
|
|
10,917 |
|
|
|
10,967 |
|
|
|
10,923 |
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|
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Cash dividends declared per share |
$ |
— |
|
|
$ |
1.65 |
|
|
$ |
— |
|
|
$ |
3.30 |
|
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(
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ASSETS |
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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 |
|
|
|
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||||
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 |
|
|
|
|
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||||
TOTAL ASSETS |
$ |
293,531 |
|
|
$ |
309,908 |
|
|
|
|
|
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LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
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||||
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 |
|
|
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||||
Lease obligations, net of current lease obligations |
|
13,069 |
|
|
|
16,127 |
|
Total liabilities |
|
88,248 |
|
|
|
108,427 |
|
|
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Stockholders' Equity |
|
|
|
||||
Common stock, par value |
|
|
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||||
10,937 and 10,896 issued and outstanding |
|
|
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||||
at |
|
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 |
|
|
|
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|
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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:
CONDENSED CONSOLIDATED NON-GAAP (UNAUDITED)
(
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Three Months Ended |
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GAAP (1) |
|
Supply Chain Optimization and Restructuring of External Manufacturing Agreements (2) |
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OPTAVIA Convention Cancellation (2) |
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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 |
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|
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:
InvestorRelations@medifastinc.com
(443) 379-5256
Source: