BALTIMORE, Feb. 23, 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 fourth quarter and full year ended
December 31, 2021.
Fourth Quarter 2021 Highlights Compared to the Prior-Year
Period
- Revenue increased 42.6% to $377.8
million
- 35.3% growth in the number of active earning OPTAVIA
Coaches to 59,800
- Revenue per active earning OPTAVIA Coach increased 6.6%
to $6,321
- Net income increased 21.5% to $34.0
million
- Earnings per diluted share ("EPS") of $2.91, an increase of 23.3%
Full Year 2021 Highlights Compared to the Prior-Year
Period
- Revenue increased 63.2% to $1.526
billion
- Net income increased 59.5% to $164.0
million
- EPS of $13.89, an increase of
60.0%
- Cash, cash equivalents and investment securities of
$109.5 million and the company
remains free of interest-bearing debt as of December 31, 2021
"2021 was another outstanding year for Medifast, with record
revenue and earnings fueled by continued growth across our
independent OPTAVIA Coaches and Clients. We've now
established ourselves as the market leader by dollar share in the
U.S. weight management market, and are now building the foundations
of our approach to the broader health and wellness sector," said
Dan Chard, Chairman and Chief
Executive Officer of Medifast. "We have a highly differentiated
coach-centric model that is consistently helping consumers achieve
their health goals, and this gives us permission for deeper and
even more meaningful engagement across multiple platforms. Our
investment in innovation is enabling us to make our offer more
attractive to increasing numbers of independent OPTAVIA
Coaches and Clients, and will unlock opportunities for new service
and subscription offers. The transformation of our approach to both
technology and our supply chain delivers results in the short-term,
but also builds the solid foundations from which we will drive
rapid growth and long-term value for all stakeholders."
Fourth Quarter 2021 Results
Fourth quarter 2021 revenue increased 42.6% to $377.8 million from $264.9
million for the fourth quarter of 2020. The total number of
active earning OPTAVIA Coaches increased 35.3% to 59,800
compared to 44,200 for the fourth quarter of 2020. The average
revenue per active earning OPTAVIA Coach was $6,321 compared to $5,932 for the fourth quarter of 2020, an
increase of 6.6%. The year-over-year growth in revenue was
primarily driven by the continued growth in active earning
OPTAVIA Coach count and increase in the productivity per
active earning OPTAVIA Coach.
Gross profit increased 39.7% to $278.3
million from $199.2 million
for the fourth quarter of 2020. The increase in gross profit was
primarily attributable to higher revenue. The Company's gross
profit as a percentage of revenue was 73.7% compared to 75.2% in
the fourth quarter of 2020. The decrease in gross profit as a
percentage of revenue was due to the impact of inflation on product
and shipping costs.
Selling, general, and administrative expenses ("SG&A")
increased 43.5% to $231.4 million
compared to $161.3 million for the
fourth quarter of 2020, primarily due to higher OPTAVIA
Coach compensation expense, increased salaries and benefits related
expenses, incremental costs related to continued investment in
information technology and distribution, and increased credit card
fees resulting from higher sales. As a percentage of revenue,
SG&A increased 40 basis points year-over-year to 61.3% of
revenue, as compared to 60.9% for the fourth quarter of 2020.
Income from operations increased 23.4% to $46.8 million from $38.0
million in the prior-year period. As a percentage of
revenue, income from operations was 12.4% for the fourth quarter of
2021 compared to 14.3% in the prior-year period.
The effective tax rate was 27.2% for the fourth quarter of 2021
compared to 26.0% in the prior-year period. The increase in the
effective tax rate was primarily driven by an increase in the state
income tax rate and the limitation on executive compensation
partially offset by the tax benefit of stock compensation.
In the fourth quarter of 2021, net income was $34.0 million, or $2.91 per diluted share, based on approximately
11.7 million shares of common stock outstanding. In the fourth
quarter of 2020, net income was $28.0
million, or $2.36 per diluted
share, based on approximately 11.9 million shares of common stock
outstanding.
Full Year Fiscal 2021 Results
For the fiscal year ended December 31,
2021, revenue increased 63.2% to $1.526 billion compared to revenue of
$934.8 million in 2020.
Net income for 2021 was $164.0
million, or $13.89 per diluted
share, based on approximately 11.8 million shares outstanding. This
compares to 2020 net income of $102.9
million, or $8.68 per diluted
share, based on approximately 11.9 million shares outstanding.
Balance Sheet
The Company's balance sheet remains strong with cash, cash
equivalents and investment securities of $109.5 million as of December 31, 2021 compared to $174.5 million at December
31, 2020.
The company declared a quarterly cash dividend of $16.8 million, or $1.42 per share, that was paid on February 8, 2022. Also during the fourth quarter
of 2021, the Company used $10 million
to repurchase approximately 47,209 shares of common stock, bringing
the full year repurchase total for 2021 to $56.0 million. There were approximately 2.1
million shares remaining under the Company's stock repurchase
program as of December 31, 2021.
Outlook
The Company expects full-year 2022 revenue to be in the range of
$1.72 billion to $1.79 billion and full-year 2022 diluted EPS to
be in the range of $14.50 to
$16.00. The full-year 2022 earnings
guidance assumes a 24.25% to 25.25% effective tax rate.
Conference Call Information
The conference call is scheduled for today, Wednesday, February 23, 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://www.webcaster4.com/Webcast/Page/1029/44607, and will be
archived online and available through March
2, 2022. In addition, listeners may dial (855) 560-2579.
A telephonic playback will be available from 6:30 p.m. ET, February 23,
2022, through March 2, 2022.
Participants can dial (877) 344-7529 to hear the playback and enter
passcode 4751845.
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 Coaches and a Community to help Clients
achieve Lifelong Transformation, One Healthy Habit at a Time®.
Based on more than 40 years of experience, Medifast has redefined
direct selling by combining the best aspects of the model. Its
community of independent OPTAVIA Coaches has impacted
more than 2 million lives and teaches Clients how to develop
holistic healthy habits through the proprietary Habits of
Health® Transformational System. Medifast was recognized 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 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," "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,
2020, and Quarterly Reports on Form 10-Q, for the quarters
ended March 31, 2021, June 30,
2021 and September 30, 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
|
|
CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)
|
|
Quarters and Years
Ended December 31, 2021 and 2020
|
|
(U.S Dollars in
thousands, except per share amounts & dividend
data)
|
|
|
|
|
|
Three months ended
December 31,
|
|
Years ended
December 31,
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
377,834
|
|
$
|
264,912
|
|
$
|
1,526,087
|
|
$
|
934,842
|
|
Cost of
sales
|
|
|
99,548
|
|
|
65,673
|
|
|
398,490
|
|
|
237,027
|
|
Gross
profit
|
|
|
278,286
|
|
|
199,239
|
|
|
1,127,597
|
|
|
697,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative
|
|
|
231,449
|
|
|
161,271
|
|
|
911,356
|
|
|
563,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
46,837
|
|
|
37,968
|
|
|
216,241
|
|
|
134,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (expense)
income
|
|
|
(93)
|
|
|
33
|
|
|
(231)
|
|
|
246
|
|
Other income
(expense)
|
|
|
7
|
|
|
(151)
|
|
|
119
|
|
|
(140)
|
|
|
|
|
(86)
|
|
|
(118)
|
|
|
(112)
|
|
|
106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations before income
taxes
|
|
|
46,751
|
|
|
37,850
|
|
|
216,129
|
|
|
134,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
12,728
|
|
|
9,856
|
|
|
52,098
|
|
|
31,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
34,023
|
|
$
|
27,994
|
|
$
|
164,031
|
|
$
|
102,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
$
|
2.93
|
|
$
|
2.38
|
|
$
|
14.01
|
|
$
|
8.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
|
$
|
2.91
|
|
$
|
2.36
|
|
$
|
13.89
|
|
$
|
8.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
11,605
|
|
|
11,770
|
|
|
11,705
|
|
|
11,771
|
|
Diluted
|
|
|
11,699
|
|
|
11,871
|
|
|
11,813
|
|
|
11,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per share
|
|
$
|
1.42
|
|
$
|
1.13
|
|
$
|
5.68
|
|
$
|
4.52
|
|
MEDIFAST, INC. AND
SUBSIDIARIES
|
|
CONSOLIDATED
BALANCE SHEETS (UNAUDITED)
|
|
As of December 31,
2021 and 2020
|
|
(U.S. Dollars in
thousands, except par value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
104,183
|
|
$
|
163,723
|
|
|
Inventories
|
|
|
|
180,043
|
|
|
53,392
|
|
|
Investment
securities
|
|
|
|
5,361
|
|
|
10,752
|
|
|
Income taxes,
prepaid
|
|
|
|
945
|
|
|
-
|
|
|
Prepaid expenses and
other current assets
|
|
|
|
16,334
|
|
|
6,447
|
|
|
Total current
assets
|
|
|
|
306,866
|
|
|
234,314
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment - net of accumulated depreciation
|
|
|
|
56,131
|
|
|
27,633
|
|
|
Right-of-use
assets
|
|
|
|
24,457
|
|
|
10,508
|
|
|
Other
assets
|
|
|
|
6,468
|
|
|
2,937
|
|
|
Deferred tax
assets
|
|
|
|
4,404
|
|
|
692
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
$
|
398,326
|
|
$
|
276,084
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
|
$
|
163,309
|
|
$
|
107,677
|
|
|
Current lease
obligations
|
|
|
|
6,523
|
|
|
3,673
|
|
|
Total current
liabilities
|
|
|
|
169,832
|
|
|
111,350
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease obligations,
net of current lease obligations
|
|
|
|
26,020
|
|
|
7,488
|
|
|
Total
liabilities
|
|
|
|
195,852
|
|
|
118,838
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
Common stock, par
value $.001 per share: 20,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
11,594 and 11,822
issued and 11,593 and 11,772 outstanding
|
|
|
|
|
|
|
|
|
|
at December 31, 2021
and December 31, 2020, respectively
|
|
|
|
12
|
|
|
12
|
|
|
Additional paid-in
capital
|
|
|
|
12,018
|
|
|
7,842
|
|
|
Accumulated other
comprehensive income
|
|
|
|
111
|
|
|
41
|
|
|
Retained
earnings
|
|
|
|
190,333
|
|
|
154,351
|
|
|
Less: treasury stock
at cost, 0 and 46 shares at December 31, 2021
and
|
|
|
|
|
|
|
|
|
|
December 31, 2020, respectively
|
|
|
|
-
|
|
|
(5,000)
|
|
|
Total
stockholders' equity
|
|
|
|
202,474
|
|
|
157,246
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
$
|
398,326
|
|
$
|
276,084
|
|
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SOURCE Medifast, Inc.