Positive Trending Reported across all Distribution Channels
OWINGS MILLS, Md., Nov. 8 /PRNewswire-FirstCall/ -- Medifast, Inc. (NYSE: MED) announced today third quarter results for the period ended September 30, 2007. For quarter-ended September 30, 2007, Medifast reported revenue of $21.8 million, an 11% increase from $19.6 million in the third quarter of 2006. The Company reported net income of $954,000, or $0.07 per basic share ($0.07 per diluted share), versus $1,455,000 or $0.11 per basic share ($0.11 per diluted share) in 2006. The third quarter of 2007 represented the Company's 32nd consecutive quarter of profitability.
For the nine months ended September 30, 2007, Medifast reported revenue of $64 million, an increase of 9% from $58.8 million for the nine months ended September 30, 2006. The Company reported net income of $3.2 million, or $.25 per basic share ($.24 per diluted share), versus $4.9 million or $.39 per basis share ($.36 per diluted share) in 2006.
The Company's balance sheet remains strong with stockholders' equity of $31.7 million and working capital of $12.4 million at September 30, 2007, compared to $27.2 million and $12.9 million at September 30, 2006, respectively. At September 30, 2007 the current ratio was an impressive 3.8 to 1.
"In the third quarter of 2007, the Company continued to focus on and invest in building the platform for the near future and long term growth of the Medifast business. We are confident that our strategic investments including improved internal capabilities, new technologies as well as significant communications upgrades, and a seasoned executive team with extensive experience will provide continued positive improvements to our business. We are excited that we are experiencing positive trends in our overall business including increases in revenues over 2006 in all aspects of our business. The true effect of these investments will be in the near future as the company continues its long term growth plan," said Michael S. McDevitt, Chief Executive Officer.
"We are pleased with Take Shape for Life, the Company's direct selling channel which is experiencing both significant growth in revenue and the recruiting of new health coaches. The momentum in Take Shape for Life has been fueled by our strategic investments in field training as well as a highly successful National Convention. The Medifast Weight Control Centers model is in high demand in targeted markets and is at a very exciting stage in its development. The Company plans to expand this highly successful model in 2008 and we are confident that the investments made in this business in the second and third quarters of 2007 will allow this business to be a driver of revenues and profits in the upcoming year," continued McDevitt.
"The Company is also very pleased with the positive trends we are seeing with our new celebrity endorsed advertising campaign that includes television, print, and online media. Testing of this advertising campaign featuring Emmy(R) award winning actress Genie Francis and movie star Kristy Swanson began late in the third quarter as well as a continued public relations effort which included Genie and Kristy representing the Medifast brand on national television shows and in print publications. The advertising testing which started late in the third quarter highlighted the celebrities at the beginning stages of their program. Because of its proven effectiveness, the company has invested in a new campaign for the first quarter of 2008, which will showcase two times the weight loss by both women on the Medifast program since the third quarter campaign. The company anticipates continued major media coverage throughout the remainder of 2007 and into 2008 building brand awareness leading up to a full scale roll out of advertising in the first quarter of 2008."
"Medifast continues to build lasting relationships in the medical community with a growing network of physician and hospital partners and our long-term commitment to conduct scientific research to test and validate the effectiveness and further develop our products and programs. We are very excited to see the highly anticipated Diabetes study conducted by researchers at the Johns Hopkins University Bloomberg School of Public Health has been accepted for publication in a peer-reviewed journal that is scheduled for release in an early 2008 issue. The Company is committed to building our brand through marketing and advertising strategies that showcase the power of the Medifast program, the importance of our medical heritage as well as endorsements from celebrities who love our program. We believe this powerful combination will propel the Medifast business to new heights in the near future."
"The most exciting part of our strategy is the diversified opportunity our extensive business platform presents. We are experiencing growth in all aspects of our business and our marketing efforts impact all channels of our business. Our platform is a sustainable model that is less impacted by the many fads of the weight loss industry as our products and programs continue to yield more effective results with doctor recommended weight loss of 2-5 pounds per week. Medifast is a safe and simple solution that is growing in popularity for both weight loss as well as long term maintenance as customer retention continues to improve with the success of our autoship program and My Medifast on-line support network. Our extensive choices in customer support and highly effective programs set Medifast apart from our competition."
2007 Full-Year Guidance
The company is maintaining its full year guidance of $81 to $83 million in sales, with after-tax profit of $0.31 to $0.33 per diluted share.
Third Quarter Conference Call
The Company will hold a conference call and webcast at 5:00 PM EDT on November 8, 2007 to discuss second quarter results.
Interested participants should call (877) 407-0782 when calling within the United States or (201) 689-8567 when calling internationally. There will be a playback available as well. To listen to the playback, please call (877) 660- 6853 when calling within the United States or (201) 612-7415 when calling internationally. Please use account # 286 and conference id #261385 for the replay. The phone replay will be available until December 8, 2007.
The webcast may be accessed via the Company's web site at http://www.choosemedifast.com. Interested parties should go to the section marked "Investor Relations" to listen to the call. The webcast can be accessed until February 9, 2008.
About Medifast: (http://www.choosemedifast.com)
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.
Please Note: This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by use of phrases or terminology such as "intend" 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. Medifast believes this release should be read in conjunction with all of its filings with the United States Securities and Exchange Commission and cautions its readers that these forward-looking statements are subject to certain events, risks, uncertainties, and other factors. Some of these factors include, among others, Medifast's inability to attract and retain independent Associates and Members, stability in the pricing of print, TV and Direct Mail marketing initiatives affecting the cost to acquire customers, increases in competition, litigation, regulatory changes, and its planned growth into new domestic and international markets and new channels of distribution. Although Medifast's 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 latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q, 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.
For questions please contact:
MEDIFAST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2007 December 31, 2006
Cash and cash equivalents $2,102,000 $1,085,000
Accounts receivable-net of allowance for
doubtful accounts of $100,000 425,000 448,000
Inventory 8,471,000 8,255,000
Investment securities 1,477,000 1,540,000
Deferred compensation 830,000 673,000
Prepaid expenses and other current
assets 3,208,000 2,599,000
Note receivable - current 174,000 174,000
Current portion of deferred tax asset 91,000 90,000
Total current assets 16,778,000 14,864,000
Property, plant and equipment - net 16,005,000 14,020,000
Trademarks and intangibles - net 5,749,000 5,874,000
Deferred tax asset, net of current
portion 807,000 517,000
Note receivable, net of current
assets 1,250,000 1,355,000
Other assets 84,000 47,000
TOTAL ASSETS $40,673,000 $36,677,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $2,805,000 $2,913,000
Income taxes payable 101,000 535,000
Line of credit - 1,256,000
Current maturities of long-term debt 1,460,000 548,000
Total current liabilities 4,366,000 5,252,000
Other liabilities and deferred credits
Long-term debt, net of current
portion 4,615,000 3,509,000
Total liabilities 8,981,000 8,761,000
Preferred stock, $.001 par value
(1,500,000 authorized, no shares
issued and outstanding) - -
Common stock; par value $.001 per
share; 20,000,000 shares authorized;
13,709,098 and 13,631,898 shares
issued and outstanding 14,000 14,000
Additional paid-in capital 26,930,000 26,629,000
Accumulated other comprehensive
income 367,000 334,000
Retained earnings 9,216,000 5,981,000
Less: cost of 270,534 and 249,184
shares of common stock in treasury (1,971,000) (1,686,000)
Less: Unearned compensation (2,864,000) (3,356,000)
Total stockholders' equity 31,692,000 27,916,000
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $40,673,000 $36,677,000
MEDIFAST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Revenue $21,846,000 $19,642,000 $63,975,000 $58,779,000
Cost of sales 5,523,000 4,705,000 15,944,000 14,334,000
Gross Profit 16,323,000 14,937,000 48,031,000 44,445,000
Selling, general, and
administration 14,766,000 13,166,000 43,116,000 37,362,000
Income from operations 1,557,000 1,771,000 4,915,000 7,083,000
net (159,000) (42,000) (284,000) (134,000)
Other income 2,000 24,000 90,000 184,000
(157,000) (18,000) (194,000) 50,000
provision for income
taxes 1,400,000 1,753,000 4,721,000 7,133,000
Provision for income
tax (expense) (446,000) (298,000) (1,486,000) (2,219,000)
Net income $954,000 $1,455,000 $3,235,000 $4,914,000
Basic earnings per
share $0.07 $0.11 $0.25 $0.39
Diluted earnings per
share $0.07 $0.11 $0.24 $0.36
shares outstanding -
Basic 12,982,730 12,767,629 12,939,562 12,657,842
Diluted 13,683,809 13,603,208 13,640,641 13,493,421
|SOURCE Medifast, Inc.|
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