BALTIMORE, May 2, 2022
/PRNewswire/ -- Medifast, Inc. (NYSE: MED), the global company
behind one of the fastest-growing health and wellness
communities, OPTAVIA®, today reported results for the
first quarter ended March 31,
2022.
First Quarter 2022 Highlights Compared to the Prior-Year
Period
- Revenue increased 22.6% to $417.6
million
- 21.7% growth in the number of active earning OPTAVIA
Coaches to 63,900
- Revenue per active earning OPTAVIA Coach increased 1.3%
to $6,536
- Net income increased 1.7% to $41.8
million
- Earnings per diluted share ("EPS") of $3.59, an increase of 3.8%
- Annual revenue guidance raised to $1.78
billion to $1.84 billion and
full-year EPS to $14.60 to
$16.05
"Record quarterly revenues, sharp acceleration in coach metrics
and an increase in our annual financial guidance are powerful
indications of the underlying strength of our business. We have
record numbers of independent active earning OPTAVIA
Coaches, helping us drive robust product demand and rapidly
increasing digital engagement, and bolstering OPTAVIA to the
#1 revenue share position among publicly traded companies in the
weight management industry in the United
States," said Dan Chard,
Chairman and Chief Executive Officer of Medifast. "We continue to
take advantage of significant opportunities to further leverage our
technological innovation and infrastructure. Through deeper
integration of key technologies and data analytics, we are
enhancing the OPTAVIA customer experience and enabling
significant productivity gains for OPTAVIA Coaches. All of
this creates strong potential for further expansion into the
broader health and wellness sector. We have a clear growth vision,
and a solid platform to drive additional long-term value for our
stockholders."
First Quarter 2022 Results
First quarter 2022 revenue increased 22.6% to $417.6 million from $340.7
million for the first quarter of 2021. The total number of
active earning OPTAVIA Coaches increased 21.7% to 63,900
compared to 52,500 for the first quarter of 2021. The average
revenue per active earning OPTAVIA Coach was $6,536 compared to $6,454 for the first quarter of 2021, an increase
of 1.3%. The year-over-year growth in revenue was primarily driven
by the increase in the number of active earning OPTAVIA
Coaches and in the productivity per active earning OPTAVIA
Coach.
Gross profit increased 21.6% to $302.3
million from $248.5 million
for the first quarter of 2021. The increase in gross profit was
primarily attributable to higher revenue. The Company's gross
profit as a percentage of revenue was 72.4% compared to 73.0% in
the first quarter of 2021. The decrease in gross profit as a
percentage of revenue was primarily due to a customer acquisition
program and higher product and shipping costs resulting from
inflation in raw ingredient costs, and freight and labor
costs.
Selling, general, and administrative expenses ("SG&A")
increased 26.3% to $247.2 million
compared to $195.7 million for the
first quarter of 2021. As a percentage of revenue, SG&A
increased 170 basis points year-over-year to 59.2% of revenue, as
compared to 57.5% for the first quarter of 2021. The increase in
SG&A was primarily due to higher OPTAVIA Coach
compensation expense, increased salaries and benefits-related
expenses for employees, incremental costs related to continued
investment in information technology and distribution
infrastructure, and increased credit card fees resulting from
higher sales.
Income from operations increased 4.3% to $55.1 million from $52.8
million in the prior-year period. As a percentage of
revenue, income from operations was 13.2% for the first quarter of
2022 compared to 15.5% in the prior-year period.
The effective tax rate was 24.0% for the first quarter of 2022
compared to 22.3% in the prior-year period. The increase in the
effective tax rate was primarily driven by a decrease in the tax
benefit of stock compensation and other items as well as an
increase in the state income tax rate.
In the first quarter of 2022, net income was $41.8 million, or $3.59 per diluted share, based on approximately
11.6 million shares of common stock outstanding. In the first
quarter of 2021, net income was $41.1
million, or $3.46 per diluted
share, based on approximately 11.9 million shares of common stock
outstanding.
Balance Sheet
The Company's balance sheet remains strong with cash, cash
equivalents and investment securities of $122.1 million as of March
31, 2022 compared to $109.5
million at December 31, 2021.
As of March 31, 2022, the Company
remained free of interest-bearing debt.
The company paid a quarterly cash dividend of $16.7 million, or $1.42 per share, on February 8, 2022, to stockholders of record as of
the close of business on December 21, 2021. On
March 17, 2022, the Company declared
a quarterly dividend of $1.64 per
share payable on May 9, 2022, a 15.5%
increase per share over the dividend paid in the first quarter of
2021. Also during the first quarter of 2022, the Company used
$10.0 million to repurchase 50,464
shares of common stock. There were approximately 2.0 million shares
remaining under the Company's stock repurchase program as of
March 31, 2022.
Outlook
The Company increased annual guidance and now expects full-year
2022 revenue to be in the range of $1.78
billion to $1.84 billion, up
from the previously announced range of $1.72
billion to $1.79 billion. The
Company expects full-year 2022 EPS to be in the range of
$14.60 to $16.05, up from the previously announced range of
$14.50 to $16.00. The revised full-year 2022 earnings
guidance assumes a 24.25% to 25.25% effective tax rate. The
earnings guidance excludes a one-time second quarter 2022 donation
to the Ukrainian refugees.
Conference Call Information
The conference call is scheduled for today, Monday, May 2, 2022 at 4:30 p.m. ET. The call will be broadcast live
over the Internet, hosted at the Investor Relations section of
Medifast's website at www.MedifastInc.com or directly at
https://app.webinar.net/7Bryj5YjlMv and will be archived online and
available through May 9, 2022. In
addition, listeners may dial (855) 560-2579.
A telephonic playback will be available from 6:30 p.m. ET, May 2,
2022, through May 9, 2022.
Participants can dial (877) 344-7529 to hear the playback and enter
passcode 3464242.
About Medifast®:
Medifast (NYSE: MED) is the global company behind one of
the fastest-growing health and wellness
communities, OPTAVIA®, which offers
scientifically developed products, clinically proven plans and the
support of independent OPTAVIA Coaches and a Community to
help Customers achieve Lifelong Transformation, One Healthy Habit
at a Time®. As the publicly traded market leader by revenue in the
U.S. $7 billion weight management
industry, the company has impacted more than 2 million lives
through its Community of OPTAVIA Coaches, who teach
Customers how to develop holistic healthy habits through the
proprietary Habits of Health® Transformational System. Medifast was
recognized in 2022 as one of America's Best Mid-Sized
Companies by Forbes, in 2020 and 2021 as one of FORTUNE's 100
Fastest-Growing Companies and was named to Forbes' 100
Most Trustworthy Companies in America list in 2017. For more
information,
visit MedifastInc.com or OPTAVIA.com and
follow @Medifast on Twitter.
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," "expects"
or other similar words or the negative of such terminology.
Similarly, descriptions of Medifast's objectives, strategies,
plans, goals 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, to protect its brand, 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 impact of
the COVID-19 pandemic on Medifast's results, the severity, length
and ultimate impact of the COVID-19 pandemic on people and
economies, increases in competition, litigation, consequences of
other geopolitical events, natural disasters, acts of war, or
climate change, activist investors, regulatory changes, inflation,
labor shortages, market conditions and resulting impact on consumer
spending, and 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,
2021, and other filings filed with the United States
Securities and Exchange Commission, including its 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 INCOME (UNAUDITED)
|
(U.S. dollars in
thousands, except per share amounts & dividend
data)
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
417,600
|
|
$
|
340,669
|
|
Cost of
sales
|
|
|
115,314
|
|
|
92,122
|
|
Gross
profit
|
|
|
302,286
|
|
|
248,547
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative
|
|
|
247,199
|
|
|
195,748
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
55,087
|
|
|
52,799
|
|
|
|
|
|
|
|
|
|
Other (expense)
income
|
|
|
|
|
|
|
|
Interest (expense)
income
|
|
|
(95)
|
|
|
23
|
|
Other (expense)
income
|
|
|
(16)
|
|
|
19
|
|
|
|
|
(111)
|
|
|
42
|
|
|
|
|
|
|
|
|
|
Income from
operations before income taxes
|
|
|
54,976
|
|
|
52,841
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
13,195
|
|
|
11,778
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
41,781
|
|
$
|
41,063
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
$
|
3.62
|
|
$
|
3.49
|
|
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
|
$
|
3.59
|
|
$
|
3.46
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
Basic
|
|
|
11,557
|
|
|
11,772
|
|
Diluted
|
|
|
11,638
|
|
|
11,881
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
per share
|
|
$
|
1.64
|
|
$
|
1.42
|
|
MEDIFAST, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
(U.S. dollars in
thousands, except par value)
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
ASSETS
|
Current
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
118,003
|
|
$
|
104,183
|
Inventories
|
|
|
|
188,972
|
|
|
180,043
|
Investment
securities
|
|
|
|
4,057
|
|
|
5,361
|
Income taxes,
prepaid
|
|
|
|
-
|
|
|
945
|
Prepaid expenses and
other current assets
|
|
|
|
13,227
|
|
|
16,334
|
Total current
assets
|
|
|
|
324,259
|
|
|
306,866
|
|
|
|
|
|
|
|
|
Property, plant and
equipment - net of accumulated depreciation
|
|
|
|
57,804
|
|
|
56,131
|
Right-of-use
assets
|
|
|
|
22,942
|
|
|
24,457
|
Other assets
|
|
|
|
12,026
|
|
|
6,468
|
Deferred tax
assets
|
|
|
|
4,404
|
|
|
4,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
$
|
421,435
|
|
$
|
398,326
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities
|
|
|
|
|
|
|
|
Accounts payable
and accrued expenses
|
|
|
$
|
174,369
|
|
$
|
163,309
|
Current lease
obligations
|
|
|
|
6,663
|
|
|
6,523
|
Total current
liabilities
|
|
|
|
181,032
|
|
|
169,832
|
|
|
|
|
|
|
|
|
Lease obligations, net
of current lease obligations
|
|
|
|
24,379
|
|
|
26,020
|
Total
liabilities
|
|
|
|
205,411
|
|
|
195,852
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
Common stock, par value
$.001 per share: 20,000 shares authorized;
|
|
|
|
|
|
|
11,553 and 11,594
issued and 11,552 and 11,593 outstanding
|
|
|
|
|
|
|
|
at March 31, 2022 and
December 31, 2021, respectively
|
|
|
|
12
|
|
|
12
|
Additional paid-in
capital
|
|
|
|
12,834
|
|
|
12,018
|
Accumulated other
comprehensive income
|
|
|
|
127
|
|
|
111
|
Retained
earnings
|
|
|
|
203,051
|
|
|
190,333
|
Total stockholders'
equity
|
|
|
|
216,024
|
|
|
202,474
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
$
|
421,435
|
|
$
|
398,326
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/medifast-inc-announces-first-quarter-2022-financial-results-301537638.html
SOURCE Medifast, Inc.