Fourth Quarter 2010 Highlights Include:
Fiscal Year 2010 Highlights Include:
Fourth Quarter 2010 Results
For the fourth quarter ended
Revenue in the direct sales channel, Take Shape for Life, increased 38% to
The Company's direct response channel revenue increased 27% to
In the fourth quarter, Medifast Weight Control Centers comparable store sales increased approximately 16% for clinics open greater than one year. The Company opened seven new centers in the fourth quarter and ended the year with a total of 39 corporate and 21 franchise clinics.
Operating income for the fourth quarter of 2011 increased 27% to
Net income for the fourth quarter of 2010 was
Fiscal Year 2010
For the fiscal year ended
Gross profit for the full year 2010 increased 55% to
Fiscal year 2010 operating income increased 71% to
Net income for the fiscal year 2010 was
The Company's balance sheet remains strong with stockholders' equity of
"We would like to apologize to our shareholders for the delay in reporting our financial statements. We experienced challenges and needed additional time to work with our audit team when reconciling previous year financials. The challenges spawned from errors in prior years in recording certain business expenses in the proper period, mainly in the area of certain freight and web advertising expenses, and the fact that the Company had a significantly large net operating loss carry forward in 1999 which reduced the Company's tax rate, and caused the Company to not have a normalized tax rate until 2009, while at the same time the Company experienced substantial financial growth," stated
This event, required the Company to request an automatic extension to file the Form 10-K to allow adequate time for the current year auditor to meet, discuss and review information with the Company's prior years' auditors who then concurred with the recommendation to restate financials for prior years following their joint review.
Despite the historical financial restatements, the Company continued to exhibit strong top and bottom line growth for those periods and in 2010 the Company was able to report revenue growth of 51.7% and earnings growth of 85% for the full year of 2010.
"The Board of Directors would like to thank the finance and account department for their diligent work in completing this complex and comprehensive audit," commented Colonel
Due to the extension in filing 2010 full year results, the Company has the ability to have a clear view of the top level activity for the first quarter of 2011, and therefore wanted to provide an unaudited estimate of what it has experienced thus far in 2011.
Mr. McDevitt continued, "We are extremely pleased with our initial 2011 financial performance. January started off strong and March was our strongest month in-line with our historical sales trend. In 2011, we will continue to focus on the balance of driving continued growth while building the infrastructure for scalability in Medifast Weight Control Centers, in our web platforms for Take Shape for Life and Medifast Direct, as well as adding the necessary resources both in personnel and operations to position the Company for long-term profitable growth."
The Company is proud to announce the successful launch of both the company's new e-commerce platform for its Medifast Direct and Take Shape for Life sales channels and the new in store operating system for its Medifast Weight Control Centers. The e-commerce platform and the operating system both went live in mid-March.
The e-commerce launch was the largest redesign and upgrade of e-commerce platforms in Company's history. The Company re-launched websites for Medifast Direct, its direct-to-consumer division, and Take Shape for Life, its personal coaching division. The overhaul reflects the Company's dedication to delivering high-quality websites along with state-of-the-art e-commerce platforms.
The newly designed co-branded Take Shape for Life websites provide health coaches the ability to customize an "About Me" section and create an integrated online presence, including personal blogs and links to their social media sites such as Facebook, Twitter and YouTube.
The new operating system for Medifast Weight Control Centers, complete with its customer data tracking tools, is designed to provide a consumer facing, as well as an employee facing system. It is created with analytic tools that communicate the client's progress during their weight loss and maintenance journey. The Company believes this system will provide comprehensive support and data tracking functions to assist the client in reaching their personalized weight loss goals, while providing efficiency and scalability for the business and in center employees.
First Quarter 2011
The company expects first quarter revenue to be between
The Company expects health coach growth of 42% to 10,100 active health coaches at the close of the first quarter 2011.
The Company estimates the first quarter and full year advertising spend to increase by 20 to 25%, as compared to 2010, while successfully maintaining a revenue-to-spend ratio of 2.8-to-1.
Gross profit margin improvement is expected to be in the range of 25 to 50 basis points as compared to the prior year, due to continued manufacturing efficiencies with full year expectations of a 50 basis point improvement versus the full year of 2010.
In the first quarter of 2011, the Company plans to open two new Medifast Weight Control Centers in new and existing markets with expectations to open 25 to 30 new corporate centers opening throughout the year. The Company expects the
Conference Call Information
The Company will host a conference call to discuss these results with additional comments and details.
The conference call is scheduled to begin at
A telephonic playback will be available from
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" or other similar words or the negative of such terminology. Similarly, descriptions of
MEDIFAST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31, 2010 and 2009
Cash and cash equivalents
Accounts receivable-net of allowance for sales returns and doubtful accounts
of $237,000 and $100,000
Income taxes, prepaid
Prepaid expenses and other current assets
Deferred tax assets
Total current assets
Property, plant and equipment - net
Trademarks and intangibles - net
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses
Current maturities of long-term debt
Total current liabilities
Long-term debt, net of current portion
Deferred tax liabilities
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;
15,431,101 and 15,398,941 issued and outstanding, respectively
Additional paid-in capital
Accumulated other comprehensive income
Less: cost of 368,908 and 367,838 shares of common stock in treasury
Total stockholders' equity
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
MEDIFAST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 2010, 2009, and 2008
(in thousands, except per share amounts)
Cost of sales
Selling, general, and administration
Income from operations
Other income (expense):
Income before income taxes
Provision for income taxes
Basic earnings per share
Diluted earnings per share
Weighted average shares outstanding -
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