MED Medifast Inc

Medifast (NYSE: MED), the health and wellness company known for its habit-based and coach-guided lifestyle solution, OPTAVIA®, today reported results for the fourth quarter and full year ended December 31, 2024.

Fourth Quarter 2024

• Revenue of $119.0 million, with revenue per active earning coach of $4,391
• Independent active earning OPTAVIA coaches of 27,100
• Net income of $0.8 million (non-GAAP adjusted net income of $1.1 million)
• Earnings per diluted share ("EPS") of $0.07 (non-GAAP adjusted EPS of $0.10)
• Cash, Cash Equivalents, and Investment Securities of $162.3 million and no debt

Full Year 2024

• Revenue of $602.5 million
• Net income of $2.1 million (non-GAAP adjusted net income of $20.2 million)
• EPS of $0.19 (non-GAAP adjusted EPS of $1.84)

“This past year was a pivotal year for Medifast, as we continued to transform our business to meet the changing nature of a health and wellness market that has been revolutionized by the rising acceptance of GLP-1 medications,” said Dan Chard, Chairman & CEO.

“Throughout the year, our team has shown resilience and adaptability as we navigated evolving market dynamics, enabling Medifast to remain positioned to be a leader in health and wellness in a GLP-1 world. We're committed to offering solutions that meet the diverse needs of our customers, whether they are focusing solely on our habit-based approach to weight loss, using GLP-1 medications, or transitioning off them.”

Chard continued, “As we look ahead, our top priorities center on reestablishing growth across all of our key metrics, including driving coach productivity through accelerated customer acquisition, and expanding the number of active earning coaches. These efforts should allow us to broaden our reach, restore revenue and profitability growth and deliver long-term value to all our stakeholders.”

Fourth Quarter 2024 Results

Fourth quarter 2024 revenue decreased 37.7% to $119.0 million from $191.0 million for the fourth quarter of 2023 primarily driven by a decrease in the number of active earning OPTAVIA coaches and lower coach productivity. The total number of active earning OPTAVIA coaches decreased 34.1% to 27,100 compared to 41,100 for the fourth quarter of 2023. The average revenue per active earning OPTAVIA coach was $4,391, compared to $4,648 for the fourth quarter last year, a decline of 5.5% primarily driven by continued pressure on customer acquisition.

Gross profit decreased 37.6% to $88.2 million from $141.4 million for the fourth quarter of 2023. The decrease in gross profit was due to lower sales volumes. The company’s gross profit as a percentage of revenue was 74.1% compared to 74.0% in the fourth quarter of 2023.

Selling, general, and administrative expenses (“SG&A”) decreased 34.1% to $87.5 million compared to $132.7 million for the fourth quarter of 2023. The decrease in SG&A was primarily due to a $27.4 million decrease in OPTAVIA coach compensation, a $7.1 million decrease in employee compensation, a $5.8 million decrease due to non-recurring costs incurred in the fourth quarter of 2023 to establish the company's medically supported weight loss initiative, which includes collaboration costs with LifeMD, and a $3.0 million decrease in costs for coach-related events, partially offset by $6.5 million of costs for company led marketing efforts. As a percentage of revenue, SG&A increased 400 basis points year-over-year to 73.5% of revenue, as compared to 69.5% for the fourth quarter of 2023. The increase in SG&A as a percentage of revenue was primarily due to 550 basis points of company led marketing spend and 210 basis points of loss of leverage on fixed costs, partially offset by a 300 basis point decrease due to non-recurring costs incurred in the fourth quarter of 2023 to establish the company's medically supported weight loss initiative, as well as a 100 basis point decrease for costs related to coach-related events. On a non-GAAP adjusted basis, which excludes non-GAAP adjustments in the prior comparable period for IT and supply chain optimization and the LifeMD collaboration costs, SG&A decreased 30.1% to $87.5 million and non-GAAP adjusted SG&A moved 800 basis points higher as a percentage of revenue to 73.5%.

Income from operations decreased 91.8% to $0.7 million from $8.7 million in the prior year period. As a percentage of revenue, income from operations was 0.6% for the fourth quarter of 2024 compared to 4.5% in the prior-year period due to the factors described above impacting revenue and SG&A expenses. Non-GAAP adjusted income from operations as a percentage of revenue was 0.6%, a decrease of 790 basis points from the year-ago period.

Other income decreased 49.7% to $0.6 million from $1.1 million for the fourth quarter of 2023. The decrease in other income was primarily due to unrealized losses on the investment in LifeMD common stock. Non-GAAP other income, which excludes the quarter's unrealized losses on LifeMD common stock investment, decreased 18.2% to $0.9 million primarily due to the write-off of unamortized debt issuance costs.

The effective tax rate was 37.3% for the fourth quarter of 2024 compared to 38.4% in the prior-year period. The non-GAAP effective tax rate was 34.6% as compared to 31.6% in the prior year period.

In the fourth quarter of 2024, net income was $0.8 million, or $0.07 per diluted share, based on approximately 11.0 million shares of common stock outstanding. In the fourth quarter of 2023, net income was $6.0 million, or $0.55 per diluted share, based on approximately 10.9 million shares of common stock outstanding. In the fourth quarter of 2024, non-GAAP adjusted net income was $1.1 million, or $0.10 per diluted share, compared to non-GAAP adjusted net income of $11.9 million, or $1.09 per diluted share, in the year-ago period.

Full Year Fiscal 2024 Results

For the fiscal year ended December 31, 2024, revenue decreased 43.8% to $602.5 million compared to revenue of $1.1 billion in 2023. Net income for 2024 was $2.1 million, or $0.19 per diluted share, based on approximately 11.0 million shares outstanding. This compares to 2023 net income of $99.4 million, or $9.10 per diluted share, based on approximately 10.9 million shares outstanding. On a non-GAAP adjusted basis, net income decreased 80.8% to $20.2 million and EPS decreased 80.9% to $1.84 per diluted share, compared to the prior year period’s adjusted EPS of $9.64 per diluted share.

Capital Allocation and Balance Sheet

The company’s balance sheet remains strong with cash, cash equivalents, and investment securities of $162.3 million and no interest-bearing debt as of December 31, 2024, compared to $150.0 million in cash and cash equivalents and no debt at December 31, 2023.

Outlook

The company expects first quarter 2025 revenue to be in the range of $100 million to $120 million and first quarter 2025 EPS to range from a loss of $0.50 per diluted share to $0.00 per diluted share. The EPS range excludes any gains or losses from changes in market price of the company's LifeMD common stock investment.

Conference Call Information

The conference call is scheduled for today, Tuesday, February 18, 2025 at 4:30 PM ET. The call will be broadcast live over the Internet, hosted on the Investor Relations section of Medifast’s website at www.MedifastInc.com or directly at https://viavid.webcasts.com/starthere.jsp?ei=1705513&tp_key=7b87c842ba and will be archived online and available through May 18, 2025. In addition, listeners may dial (201) 389-0879 to join via telephone. A telephonic playback will be available from February 18, 2025 at 8:30 PM ET through Tuesday, February 25, 2025 at 11:59 PM ET. Participants can dial (412) 317-6671 and enter passcode 13751326 to hear the playback.

About Medifast®:

Medifast (NYSE: MED) is the 40+ year old health and wellness company known for its habit-based and coach-guided lifestyle solution OPTAVIA®, which provides people with a simple yet comprehensive approach to address obesity and support a healthy lifestyle. OPTAVIA provides unparalleled coaching support along with community, tailored nutrition and healthy habits, and empowers people to master their weight loss journey through each stage of life. Through the company's collaboration with national virtual primary care provider LifeMD® (Nasdaq: LFMD) and its affiliated medical group, customers now have access to GLP-1 medications where clinically appropriate. Medifast remains committed to its mission of offering Lifelong Transformation, Making a Healthy Lifestyle Second Nature™. Visit MedifastInc.com and OPTAVIA.com for more information and follow @Medifast on X and LinkedIn.

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 Medifast’s objectives, strategies, plans, goals, outlook 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, Medifast's inability to maintain and grow the network of independent OPTAVIA coaches; industry competition and new weight loss products, including weight loss medications such as GLP-1s, or services; Medifast’s health or advertising related claims by OPTAVIA customers; Medifast's inability to continue to develop new products; effectiveness of Medifast's advertising and marketing programs, including use of social media by OPTAVIA coaches; the departure of one or more key personnel; Medifast's inability to protect against online security risks and cyberattacks; risks associated with Medifast's direct-to-consumer business model; disruptions in Medifast's supply chain; product liability claims; Medifast's planned growth into domestic markets including through its collaboration with LifeMD, Inc.; adverse publicity associated with Medifast's products; the impact of existing and future laws and regulations on Medifast’s business; fluctuations of Medifast's common stock market price; increases in litigation; actions of activist investors; the consequences of other geopolitical events, overall economic and market conditions and the resulting impact on consumer sentiment and spending patterns; and Medifast's ability to prevent or detect 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, 2024, and other filings filed with the United States Securities and Exchange Commission, including its quarterly reports on Form 10-Q and 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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(U.S. dollars in thousands, except per share amounts & dividend data)

 

 

Three months ended December 31,

 

Year ended December 31,

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

Revenue

$

119,003

 

 

$

191,015

 

 

$

602,463

 

 

$

1,072,054

 

Cost of sales

 

30,784

 

 

 

49,646

 

 

 

157,840

 

 

 

296,204

 

Gross profit

 

88,219

 

 

 

141,369

 

 

 

444,623

 

 

 

775,850

 

 

 

 

 

 

 

 

 

Selling, general, and administrative

 

87,510

 

 

 

132,693

 

 

 

441,745

 

 

 

649,448

 

 

 

 

 

 

 

 

 

Income from operations

 

709

 

 

 

8,676

 

 

 

2,878

 

 

 

126,402

 

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

 

 

Interest income

 

953

 

 

 

1,176

 

 

 

4,804

 

 

 

2,490

 

Other expense

 

(387

)

 

 

(50

)

 

 

(3,895

)

 

 

(95

)

 

 

566

 

 

 

1,126

 

 

 

909

 

 

 

2,395

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

1,275

 

 

 

9,802

 

 

 

3,787

 

 

 

128,797

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

475

 

 

 

3,766

 

 

 

1,696

 

 

 

29,382

 

 

 

 

 

 

 

 

 

Net income

$

800

 

 

$

6,036

 

 

$

2,091

 

 

$

99,415

 

 

 

 

 

 

 

 

 

Earnings per share - basic

$

0.07

 

 

$

0.55

 

 

$

0.19

 

 

$

9.13

 

 

 

 

 

 

 

 

 

Earnings per share - diluted

$

0.07

 

 

$

0.55

 

 

$

0.19

 

 

$

9.10

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

Basic

 

10,938

 

 

 

10,893

 

 

 

10,930

 

 

 

10,884

 

Diluted

 

10,983

 

 

 

10,935

 

 

 

10,963

 

 

 

10,921

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

$

—

 

 

$

—

 

 

$

—

 

 

$

4.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(U.S. dollars in thousands, except par value)

 

 

 

 

 

December 31, 2024

 

December 31, 2023

ASSETS

 

 

 

Current Assets

 

 

 

Cash and cash equivalents

$

90,928

 

$

94,440

Inventories, net

 

42,421

 

 

54,591

Investments

 

71,416

 

 

55,601

Income taxes, prepaid

 

—

 

 

8,727

Prepaid expenses and other current assets

 

9,639

 

 

10,670

Total current assets

 

214,404

 

 

224,029

 

 

 

 

Property, plant and equipment - net of accumulated depreciation

 

37,527

 

 

51,467

Right-of-use assets

 

11,155

 

 

15,645

Other assets

 

9,667

 

 

14,650

Deferred tax assets, net

 

11,460

 

 

4,117

 

 

 

 

TOTAL ASSETS

$

284,213

 

$

309,908

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Current Liabilities

 

 

 

Accounts payable and accrued expenses

$

56,494

 

$

86,415

Income taxes payable

 

1,485

 

 

—

Current lease obligations

 

6,182

 

 

5,885

Total current liabilities

 

64,161

 

 

92,300

 

 

 

 

Lease obligations, net of current lease obligations

 

9,943

 

 

16,127

Total liabilities

 

74,104

 

 

108,427

 

 

 

 

Commitments

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

Common stock, par value 0.001 per share: 20,000 shares authorized;

 

 

 

10,938 and 10,896 issued and outstanding

 

 

 

at December 31, 2024 and December 31, 2023

 

11

 

 

11

Additional paid-in capital

 

33,136

 

 

26,573

Accumulated other comprehensive income

 

180

 

 

248

Retained earnings

 

176,782

 

 

174,649

Total stockholders' equity

 

210,109

 

 

201,481

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

284,213

 

$

309,908

 

Non-GAAP Financial Measures

In an effort to provide investors with additional information regarding results, the company discloses various non-GAAP financial measures in the quarterly earnings press release 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, provision for income taxes, net income, effective tax rate, and diluted earnings per share. Each of these non-GAAP financial measures excludes the impact of certain amounts as further identified below that the company believes are not indicative of its core ongoing operational performance. 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.

These non-GAAP financial measures are used internally to evaluate and manage the company's operations because the company believes they provide useful supplemental information regarding the company's on-going economic performance. The company has 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:

 

Three months ended December 31, 2024

 

GAAP

 

Unrealized Loss on Investment in LifeMD Common Stock

 

Non-GAAP

Cost of sales

$

30,784

 

$

—

 

$

30,784

Gross profit

 

88,219

 

 

—

 

 

88,219

Selling, general, and administrative

 

87,510

 

 

—

 

 

87,510

Income from operations

 

709

 

 

—

 

 

709

Other income

 

566

 

 

355

 

 

921

Provision for income taxes

 

475

 

 

89

 

 

564

Net income

 

800

 

 

266

 

 

1,066

Diluted earnings per share (1)

 

0.07

 

 

0.02

 

 

0.10

 

Three months ended December 31, 2023

 

GAAP

 

IT and Supply Chain Optimization

 

LifeMD Collaboration Costs

 

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

 

Year ended December 31, 2024

 

GAAP

 

Supply Chain Optimization and Restructuring of External Manufacturing Agreements

 

Unrealized Loss on Investment in LifeMD Common Stock

 

LifeMD Collaboration Costs

 

Non-GAAP

Cost of sales

$

157,840

 

$

(2,579

)

 

$

—

 

$

—

 

 

$

155,261

Gross profit

 

444,623

 

 

2,579

 

 

 

—

 

 

—

 

 

 

447,202

Selling, general, and administrative

 

441,745

 

 

(12,502

)

 

 

—

 

 

(5,000

)

 

 

424,243

Income from operations

 

2,878

 

 

15,081

 

 

 

—

 

 

5,000

 

 

 

22,959

Other income

 

909

 

 

—

 

 

 

4,089

 

 

—

 

 

 

4,998

Provision for income taxes

 

1,696

 

 

3,770

 

 

 

1,022

 

 

1,250

 

 

 

7,738

Net income

 

2,091

 

 

11,311

 

 

 

3,067

 

 

3,750

 

 

 

20,219

Diluted earnings per share (1)

 

0.19

 

 

1.03

 

 

 

0.28

 

 

0.34

 

 

 

1.84

 

Year ended December 31, 2023

 

GAAP

 

IT and Supply Chain Optimization

 

LifeMD Collaboration Costs

 

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

(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.

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Investor Contact: Medifast, Inc. Steven Zenker InvestorRelations@medifastinc.com (443) 379-5256