Press Releases
Every day, more lives are transformed all over the world – one healthy habit at a time. Read the latest about how Medifast and the OPTAVIA® movement is impacting people’s lives.
Medifast, Inc. announced today second quarter results for the period ended June 30, 2006. For quarter-ended June 30, 2006, Medifast reported revenue of $20 million, an 89% increase from $10.6 million in the second quarter of 2005. The Company reported net income of $1,475,000, or $0.12 per basic share ($0.11 per diluted share), versus $753,000 or $0.06 per basic share ($0.06 per diluted share) in 2005. The second quarter of 2006 represented the Company’s 27th consecutive quarter of profitability.
For the six months ended June 30, 2006, Medifast reported revenue of $39.1 million, an increase of 107% from $18.9 million for the six months ended June 30, 2005. The Company reported net income of $3.2 million, or $.25 per basic share ($.23 per diluted share), versus $1.3 million or $.10 per basis share ($.10 per diluted share) in 2005.
The Company had stockholders’ equity of $25.5 million and working capital of $12 million at June 30, 2006, compared to $20.6 million and $9 million at June 30, 2005, respectively.
“The menu of options available to Medifast customers through our multi- channel distribution model continues to grow revenues and we are very pleased with second quarter results. Our advertising and PR campaigns are effective, our direct sales network has experienced consistent growth and our doctors and clinical business is gaining momentum. In the second quarter, we launched MyMedifast, an online weight loss tool and community which is being used by thousands of customers every day and our new Medifast book, “The Secret is Out,” which further validates the clinical heritage and efficacy of our Medifast products. We also held the highest attended national convention in the history of our Take Shape for Life division. We feel the company, with its’ 25 years of industry knowledge and clinically proven products and programs, has a very strong position in a business sector that has tremendous upside potential. We continue to explore new venues to promote our products and services, and look forward to serving even more types of consumers as we continue to grow our business,” said Michael S. McDevitt, Medifast President and Chief Financial Officer.
“This is the Company’s 27th consecutive quarter of profit since our restructuring in 1999. Our management team has demonstrated again that we have the financial discipline to control our costs, improve operations and modernize our IT platform while experiencing phenomenal growth. In this growth mode, we continue to conduct our research and development with new clinical studies, and test our advertising strategies and tactics to ensure our success. Our mission to combat obesity and associated health conditions using Medifast clinically proven products and programs is being supported by our growing network of doctors, qualified medical practitioners, health coaches and satisfied customers,” stated Bradley T. MacDonald, Chairman of the Board and Chief Executive Officer.
2006 Revised Financial Guidance
Previously, the company expected to generate revenue of $66 – $68 million for the year with an after-tax profit of $.38 – $.40 per diluted share. The company now expects to generate revenue of $70 to $72 million for the year with after-tax earnings of $0.38 to $0.40 per diluted share.
Second Quarter Conference Call
The Company will hold a conference call and webcast at 5:00 PM EDT on August 14, 2006 to discuss second quarter results.
Interested participants should call (866) 362-4831 when calling within the United States or (617) 597-5347 when calling internationally. Please refer to pass code 85834615. There will be a playback available as well. To listen to the playback, please call (888) 286-8010 when calling within the United States or (617) 801-6888 when calling internationally. Please use pass code 55176089 for the replay. The replay will be available until November 14, 2006.
The webcast may be accessed via the Company’s web site at http://www.medifastdiet.com/. Interested parties should go to the section marked “Investor Relations” to listen to the call. The webcast can be accessed until November 14, 2006.
Medifast has been helping people lose weight and achieve better health for 25 years. Its meal replacement foods have been proven effective in multiple clinical studies, recommended by over 15,000 physicians and used by more than 1 million customers. Medifast offers its customers world-class customer service and nutrition support.
This release contains forward-looking statements which may involve known, and unknown risks, uncertainties and other factors that may cause Medifast’s actual results and performance in future periods to be materially different from any future results or performance suggested by these statements. Medifast cautions investors not to place undue reliance on forward-looking statements, which speak only to management’s expectation on this date.
MEDIFAST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2006 December 31, 2005
(Unaudited) (Audited)
ASSETS
Current assets:
Cash $2,491,000 $1,484,000
Accounts receivable-net of allowance
for doubtful accounts of $100,000 717,000 985,000
Inventory 6,698,000 5,475,000
Investment securities 2,773,000 2,700,000
Deferred compensation 567,000 525,000
Prepaid expenses and other
current assets 2,776,000 3,273,000
Prepaid taxes 311,000 -
Note receivable - current 230,000 -
Deferred tax asset 90,000 -
Total Current Assets 16,653,000 14,442,000
Property, plant and equipment - net 10,822,000 9,535,000
Trademarks and intangibles - net 4,768,000 6,508,000
Deferred tax asset, net of current portion 256,000 -
Note receivable, net of current portion 1,351,000 -
Other assets 37,000 60,000
TOTAL ASSETS $33,887,000 $30,545,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $3,480,000 $2,263,000
Income taxes payable - 899,000
Line of credit 615,000 633,000
Current maturities of long-term debt 533,000 561,000
Deferred tax liability - current - 90,000
Total current liabilities 4,628,000 4,446,000
Long-term debt, net of current portion 3,729,000 3,977,000
Deferred tax liability - non-current - 101,000
Total Liabilities 8,357,000 8,524,000
Stockholders' Equity:
Common stock; par value $.001 per share;
20,000,000 authorized; 13,422,914 and
12,782,791 shares issued and outstanding,
respectively 14,000 13,000
Additional paid-in capital 25,897,000 21,759,000
Accumulated other comprehensive income 139,000 282,000
Retained Earnings 4,300,000 1,149,000
30,350,000 23,203,000
Less: cost of 215,061 and 210,902 shares
of common stock in treasury (1,135,000) (1,075,000)
Less: unearned compensation (3,685,000) (107,000)
Total Stockholders' Equity 25,530,000 22,021,000
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $33,887,000 $30,545,000
MEDIFAST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended June 30, Three Months Ended June 30,
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue $39,137,000 $18,881,000 $19,954,000 $10,555,000
Cost of sales 9,629,000 4,696,000 4,853,000 2,623,000
Gross Profit 29,508,000 14,185,000 15,101,000 7,932,000
Selling, general,
and administration 23,913,000 12,119,000 12,560,000 6,778,000
Income from
operations 5,595,000 2,066,000 2,541,000 1,154,000
Other income/(expense)
Interest expense (181,000) (148,000) (92,000) (83,000)
Loss on sale of
Consumer Choice
Systems (323,000)
Stock compensation
expense (181,000) - (164,000)
Interest income 89,000 97,000 56,000 69,000
Other income
(expense) 161,000 3,000 18,000 24,000
Income before provision
for income taxes 5,160,000 2,018,000 2,359,000 1,164,000
Provision for income
tax (expense) (2,009,000) (758,000) (884,000) (411,000)
Net income 3,151,000 1,260,000 1,475,000 753,000
Less: Preferred
stock dividend
requirement - - - -
Net income $3,151,000 $1,260,000 $1,475,000 $753,000
Basic earnings
per share $0.25 $0.10 $0.12 $0.06
Diluted earnings
per share $0.23 $0.10 $0.11 $0.06
Weighted average
shares outstanding -
Basic 12,603,903 12,173,456 12,618,379 12,173,456
Diluted 13,601,232 12,858,777 13,615,708 12,994,764
SOURCE: Medifast, Inc.
CONTACT: Investor Relations, Kellie Pizzico of Medifast, Inc.,
+1-410-504-8162, or ir@medifastdiet.com; or Media Contact, Erin Grecu of
Warschawski, +1-410-367-2700, or erin.grecu@warschawski.com, for Medifast
Web site: http://www.medifastdiet.com/
