Medifast Announces Fourth Quarter and Full Year 2023 Financial Results
Fourth Quarter 2023
-
Revenue of
$191.0 million , with revenue per active earning Coach of$4,648 - Independent active earning OPTAVIA Coaches of 41,100
-
Net income of
$6.0 million (non-GAAP adjusted net income of$11.9 million ) -
Earnings per diluted share ("EPS") of
$0.55 (non-GAAP adjusted EPS of$1.09 )
Full Year 2023
-
Revenue of
$1.1 billion -
Net income of
$99.4 million (non-GAAP adjusted net income of$105.2 million ) -
EPS of
$9.10 (non-GAAP adjusted EPS of$9.64 ) -
Cash, Cash Equivalents, and Investments of
$150.0 million and no interest-bearing debt
“We are realigning our business to respond to the evolving dynamics of the weight loss industry and to aggressively execute on bold initiatives to transform our business model,” said
Fourth Quarter 2023 Results
Fourth quarter 2023 revenue decreased 43.4% to
Gross profit decreased 39.5% to
Selling, general, and administrative expenses (“SG&A”) decreased 34.0% to
Income from operations decreased 73.4% to
The effective tax rate for the fourth quarter of 2023 was 38.4%, which was higher than expected and higher than the 18.2% recorded in the prior year’s fourth quarter, due to inventory overhead adjustments for tax reporting purposes, which reduced the expected tax benefit for charitable donations of inventory in the current period. On a non-GAAP adjusted basis, the effective tax rate in the fourth quarter of 2023 was 31.6%.
In the fourth quarter of 2023, net income was
Full Year Fiscal 2023 Results
For the fiscal year ended
Net income for 2023 was
Capital Allocation and Balance Sheet
The company’s balance sheet remains strong with cash, cash equivalents, and investments of
Outlook
The company expects first quarter 2024 revenue to be in the range of
Conference Call Information
The conference call is scheduled for today,
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
CONSOLIDATED STATEMENTS OF INCOME (THREE MONTHS ENDED - UNAUDITED)
( |
|||||||||||||||
|
Three months ended |
|
Year ended |
||||||||||||
|
2023 |
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2022 |
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2023 |
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2022 |
||||||||
|
|
|
|
|
|
|
|
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Revenue |
$ |
191,015 |
|
|
$ |
337,245 |
|
|
$ |
1,072,054 |
|
|
$ |
1,598,577 |
|
Cost of sales |
|
49,646 |
|
|
|
103,649 |
|
|
|
296,204 |
|
|
|
458,163 |
|
Gross profit |
|
141,369 |
|
|
|
233,596 |
|
|
|
775,850 |
|
|
|
1,140,414 |
|
|
|
|
|
|
|
|
|
||||||||
Selling, general, and administrative |
|
132,693 |
|
|
|
200,998 |
|
|
|
649,448 |
|
|
|
955,608 |
|
|
|
|
|
|
|
|
|
||||||||
Income from operations |
|
8,676 |
|
|
|
32,598 |
|
|
|
126,402 |
|
|
|
184,806 |
|
|
|
|
|
|
|
|
|
||||||||
Other income (expense) |
|
|
|
|
|
|
|
||||||||
Interest income (expense) |
|
1,176 |
|
|
|
(181 |
) |
|
|
2,490 |
|
|
|
(701 |
) |
Other expense |
|
(50 |
) |
|
|
(9 |
) |
|
|
(95 |
) |
|
|
(46 |
) |
|
|
1,126 |
|
|
|
(190 |
) |
|
|
2,395 |
|
|
|
(747 |
) |
|
|
|
|
|
|
|
|
||||||||
Income from operations before income taxes |
|
9,802 |
|
|
|
32,408 |
|
|
|
128,797 |
|
|
|
184,059 |
|
|
|
|
|
|
|
|
|
||||||||
Provision for income taxes |
|
3,766 |
|
|
|
5,890 |
|
|
|
29,382 |
|
|
|
40,491 |
|
|
|
|
|
|
|
|
|
||||||||
Net income |
$ |
6,036 |
|
|
$ |
26,518 |
|
|
$ |
99,415 |
|
|
$ |
143,568 |
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share - basic |
$ |
0.55 |
|
|
$ |
2.43 |
|
|
$ |
9.13 |
|
|
$ |
12.82 |
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share - diluted |
$ |
0.55 |
|
|
$ |
2.41 |
|
|
$ |
9.10 |
|
|
$ |
12.73 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding |
|
|
|
|
|
|
|
||||||||
Basic |
|
10,893 |
|
|
|
10,913 |
|
|
|
10,884 |
|
|
|
11,195 |
|
Diluted |
|
10,935 |
|
|
|
10,993 |
|
|
|
10,921 |
|
|
|
11,276 |
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per share |
$ |
— |
|
|
$ |
1.64 |
|
|
$ |
4.95 |
|
|
$ |
6.56 |
|
CONSOLIDATED BALANCE SHEETS
( |
||||||
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|
|
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|||
|
|
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|||
ASSETS |
|
|
|
|||
Current Assets |
|
|
|
|||
Cash and cash equivalents |
$ |
94,440 |
|
$ |
87,691 |
|
Inventories |
|
54,591 |
|
|
118,856 |
|
Investments |
|
55,601 |
|
|
— |
|
Income taxes, prepaid |
|
8,727 |
|
|
— |
|
Prepaid expenses and other current assets |
|
10,670 |
|
|
16,237 |
|
Total current assets |
|
224,029 |
|
|
222,784 |
|
|
|
|
|
|||
Property, plant and equipment - net of accumulated depreciation |
|
51,467 |
|
|
57,185 |
|
Right-of-use assets |
|
15,645 |
|
|
18,460 |
|
Other assets |
|
14,650 |
|
|
12,456 |
|
Deferred tax assets |
|
4,117 |
|
|
5,328 |
|
|
|
|
|
|||
TOTAL ASSETS |
$ |
309,908 |
|
$ |
316,213 |
|
|
|
|
|
|||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|||
Current Liabilities |
|
|
|
|||
Accounts payable and accrued expenses |
$ |
86,415 |
|
$ |
134,690 |
|
Income taxes payable |
|
— |
|
|
428 |
|
Current lease obligations |
|
5,885 |
|
|
5,776 |
|
Total current liabilities |
|
92,300 |
|
|
140,894 |
|
|
|
|
|
|||
Lease obligations, net of current lease obligations |
|
16,127 |
|
|
20,275 |
|
Total liabilities |
|
108,427 |
|
|
161,169 |
|
|
|
|
|
|||
Stockholders' Equity |
|
|
|
|||
Common stock, par value 0.001 per share: 20,000 shares authorized; |
|
|
|
|||
10,896 and 10,928 issued and 10,896 and 10,873 outstanding |
|
|
|
|||
at |
|
11 |
|
|
11 |
|
Additional paid-in capital |
|
26,573 |
|
|
21,555 |
|
Accumulated other comprehensive income |
|
248 |
|
|
24 |
|
Retained earnings |
|
174,649 |
|
|
139,852 |
|
Less: treasury stock at cost, 0 and 54 shares at |
|
— |
|
|
(6,398 |
) |
Total stockholders' equity |
|
201,481 |
|
|
155,044 |
|
|
|
|
|
|||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
309,908 |
|
$ |
316,213 |
|
Non-GAAP Financial Measures
In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in this quarterly earnings press release, our annual report, and other public disclosures. The following GAAP financial measures have been presented on an as adjusted basis: cost of sales, gross profit, SG&A expenses, income from operations, other income (expense), provision for income taxes, net income, and diluted earnings per share. Each of these as adjusted financial measures excludes the impact of certain amounts identified below and have not been calculated in accordance with GAAP. 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:
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Three months ended |
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GAAP |
|
IT and Supply Chain
|
|
LifeMD
|
|
Non-GAAP |
||||||||
Cost of sales |
$ |
49,646 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
49,646 |
||
Gross profit |
|
141,369 |
|
|
— |
|
|
|
— |
|
|
|
141,369 |
||
Selling, general, and administrative |
|
132,693 |
|
|
(2,555 |
) |
|
|
(5,000 |
) |
|
|
125,138 |
||
Income from operations |
|
8,676 |
|
|
2,555 |
|
|
|
5,000 |
|
|
|
16,231 |
||
Other income |
|
1,126 |
|
|
— |
|
|
|
— |
|
|
|
1,126 |
||
Provision for income taxes |
|
3,766 |
|
|
583 |
|
|
|
1,141 |
|
|
|
5,490 |
||
Net income |
|
6,036 |
|
|
1,972 |
|
|
|
3,859 |
|
|
|
11,867 |
||
Diluted earnings per share (1) |
|
0.55 |
|
|
0.18 |
|
|
|
0.35 |
|
|
|
1.09 |
|
Three months ended |
||||||||||||||
|
GAAP |
|
Donation
|
|
Restructuring of
|
|
Non-GAAP |
||||||||
Cost of sales |
$ |
103,649 |
|
|
$ |
— |
|
|
$ |
(12,195 |
) |
|
$ |
91,454 |
|
Gross profit |
|
233,596 |
|
|
|
— |
|
|
|
12,195 |
|
|
|
245,791 |
|
Selling, general, and administrative |
|
200,998 |
|
|
|
(8,473 |
) |
|
|
— |
|
|
|
192,525 |
|
Income from operations |
|
32,598 |
|
|
|
8,473 |
|
|
|
12,195 |
|
|
|
53,266 |
|
Other expense |
|
(190 |
) |
|
|
— |
|
|
|
— |
|
|
|
(190 |
) |
Provision for income taxes |
|
5,890 |
|
|
|
3,813 |
|
|
|
2,744 |
|
|
|
12,447 |
|
Net income |
|
26,518 |
|
|
|
4,660 |
|
|
|
9,451 |
|
|
|
40,629 |
|
Diluted earnings per share (1) |
|
2.41 |
|
|
|
0.42 |
|
|
|
0.86 |
|
|
|
3.70 |
|
|
Year ended |
||||||||||||||
|
GAAP |
|
IT and Supply Chain
|
|
LifeMD
|
|
Non-GAAP |
||||||||
Cost of sales |
$ |
296,204 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
296,204 |
||
Gross profit |
|
775,850 |
|
|
— |
|
|
|
— |
|
|
|
775,850 |
||
Selling, general, and administrative |
|
649,448 |
|
|
(2,555 |
) |
|
|
(5,000 |
) |
|
|
641,893 |
||
Income from operations |
|
126,402 |
|
|
2,555 |
|
|
|
5,000 |
|
|
|
133,957 |
||
Other income |
|
2,395 |
|
|
— |
|
|
|
— |
|
|
|
2,395 |
||
Provision for income taxes |
|
29,382 |
|
|
583 |
|
|
|
1,141 |
|
|
|
31,106 |
||
Net income |
|
99,415 |
|
|
1,972 |
|
|
|
3,859 |
|
|
|
105,246 |
||
Diluted earnings per share (1) |
|
9.10 |
|
|
0.18 |
|
|
|
0.35 |
|
|
|
9.64 |
|
Year ended |
||||||||||||||
|
GAAP |
|
Donation
|
|
Restructuring of
|
|
Non-GAAP |
||||||||
Cost of sales |
$ |
458,163 |
|
|
$ |
— |
|
|
$ |
(12,195 |
) |
|
$ |
445,968 |
|
Gross profit |
|
1,140,414 |
|
|
|
— |
|
|
|
12,195 |
|
|
|
1,152,609 |
|
Selling, general, and administrative |
|
955,608 |
|
|
|
(18,986 |
) |
|
|
— |
|
|
|
936,622 |
|
Income from operations |
|
184,806 |
|
|
|
18,986 |
|
|
|
12,195 |
|
|
|
215,987 |
|
Other expense |
|
(747 |
) |
|
|
— |
|
|
|
— |
|
|
|
(747 |
) |
Provision for income taxes |
|
40,491 |
|
|
|
8,544 |
|
|
|
2,744 |
|
|
|
51,779 |
|
Net income |
|
143,568 |
|
|
|
10,442 |
|
|
|
9,451 |
|
|
|
163,461 |
|
Diluted earnings per share (1) |
|
12.73 |
|
|
|
0.93 |
|
|
|
0.84 |
|
|
|
14.50 |
|
(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) It is expected that the remaining |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240220965429/en/
Investor Contact:
InvestorRelations@medifastinc.com
(443) 379-5256
Source: