Reports Record Quarterly Sales of over $27 million
Diluted EPS Increases by 57% for the Quarter
OWINGS MILLS, Md., Aug. 7 /PRNewswire-FirstCall/ -- Medifast, Inc.
(NYSE: MED) announced today second quarter financial results for the period
ended June 30, 2008.
Financial highlights included:
-- Second quarter revenues increased 25% compared to 2007;
-- Diluted EPS for the quarter increased 57% to $0.11 versus $0.07 year-
over-year;
-- Direct sales segment, Take Shape for Life, increased sales 79% year-
over-year;
-- Medifast Weight Control Centers quarterly revenues increased 61%
-- Continued strong gross margins for the quarter of 75.8%
For the second quarter Medifast reported revenue of $27.5 million, a 25%
increase from $22 million in the second quarter of 2007. The Company reported
net income of $1.5 million, or $0.12 per basic share and $0.11 per fully
diluted share, compared with $0.9 million, or $0.07 per basic and diluted
share in the second quarter of 2007.
For the six months ended June 30, 2008, Medifast reported revenue of $52.7
million, an increase of 25% from $42.1 million for the six months ended June
30, 2007. The Company reported net income of $2.9 million, or $0.22 per basic
share and $0.21 per fully diluted share, versus $2.3 million, or $0.18 per
basis share and $0.17 per fully diluted share, in 2007.
'We are pleased with the results of the quarter; particularly in the face
of the difficult economic environment,' commented Michael S. McDevitt, Chief
Executive Officer of Medifast, Inc. 'Our strategy of offering the clinically
proven Medifast program via multiple distribution channels continues to gain
significant traction. Revenue in our direct sales segment, Take Shape for
Life, grew 79% year-over-year; and represented 44% of overall second quarter
revenues. The growth in this segment correlates directly to the increase in
health coaches, which began to accelerate following our National Convention in
July 2007. The number of active health coaches in the second quarter of 2008
grew 87% to 2,800 compared to 1,500 for the same time period in 2007, and up
from 2,200 at the end of the first quarter of 2008. Having completed our 2008
National Convention in Orlando, FL on July 26th, we anticipate an expansion in
the number of health coaches, as well as an increase in segment revenues.'
Mr. McDevitt continued, 'Our Medifast Weight Control Centers experienced
revenue growth of 61% versus last year's comparable quarter. The growth in
clinic revenues were attributable to growth in revenue per clinic as well as
additional clinics opened during the past 12 months. Average monthly revenue
per clinic increased 5%, to $41,000 per clinic in the second quarter from
$39,000 in the second quarter last year and $39,000 in the first quarter of
2008. At the end of the quarter, we had 17 operational Medifast Weight Control
Centers versus nine at the end of the second quarter of 2007.
'We are especially pleased that the 7 clinics that have been operational
for more than one year, primarily in the Dallas market, have seen average same
store sales increase by 20%. Executing the strategy that successfully created
brand awareness in the Dallas market and expanded product sales in all of our
marketing channels, we expect to replicate those results in all of our clinic
markets, including our new franchise clinics, which are set to open in
Baltimore and Southern California in the next 45 days.'
'During the quarter,' Mr. McDevitt concluded, 'Medifast Direct Response
saw revenues decrease by 1%, however the advertising dollars spent to achieve
nearly the same amount of sales were 9% less than the second quarter of 2007.
As previously discussed, the goal for the year has been to focus on more
effective advertising. We retooled our advertising spend by medium at the
beginning of June, shifting more spend towards areas where we have obtained
better returns on investment. Those adjustments, while only in effect for the
final month of the quarter, helped to improve our revenue-to-spend ratio.
