Medifast Inc · NYSE:MED
Medifast — Investor Presentation (December 2015)
37 slides from Medifast's investor presentation, Dec 9, 2015
Slide 1: Investor Presentation December 2015
Investor Presentation December 2015 Exhibit 99.1
Slide 2: Safe Harbor Statement
2 2 Certain information included in this presentation may constitute forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended, Section 21 E of the Securities Exchange Act of 1934 , as amended, and the Private Securities Litigation Reform Act of 1995
Slide 3: Since 1980…
Since 1980… 3 FAST SAFE SIMPLE LONG TERM PORTABLE Over 20,000 Over Customers 1,000,000 Doctors have recommended Medifast products & programs
Slide 4: Medifast Today
Medifast Today Enriching lives through innovative choices for lasting health 4 • Weight Management & Healthy Living Products C ompany • Founded in 1980 • Industry - Leading Margins • Strong Balance Sheet • 12,000 Health C oach C hannel • Direct - to - Consumer E - Commerce P latform • Franchise Weig
Slide 5: Recent 2015 Accomplishments
Recent 2015 Accomplishments 5 • Each One Reach One Program attracts incremental Health Coaches to Take Shape For Life. • July Take Shape for Life National Convention attracted 2,700 Health Coaches & other attendees in Orlando, FL • Our new Optimal Health 3+3 Plan™ is launched highlighting the Optima
Slide 6: In 2015
In 2015 6 1 2 3 DELIVER ON PROFIT GOALS EXECUTE STRATEGIC PLAN HEALTHY LIVING Health Coach expansion, Weight Control Center Support, Technology integration and other efforts under way New product launches will address consumer demand and growth opportunities 6 Cost discipline coupled with new produc
Slide 7: Obesity & Diabetes – Linked Epidemics
Obesity & Diabetes – Linked Epidemics 7 2.62% 6.95% 2012 OBESITY as BMI% Diagnosed Diabetes Rate 1985 Sources: CDC Behavioral Risk Factor Surveillance System and Diabetes Surveillance System
Slide 8: Diet Industry Market Size
Diet Industry Market Size 8 Total Market Served Market 2% Medifast share of served market $ 18 Bn Served Market ‣ Diet Foods/Meals ‣ Weight Loss Centers ‣ Low Calories Programs ‣ Medical Plans & Surgery ‣ Books & Videos Unserved Market: ‣ Diet Soft Drinks ‣ Artificial Sweeteners ‣ Health Club Revenu
Slide 9: Wy Over Choices!
Wy Over 90 Choices! Borie AIS press ists * acl Sec oatmeal SOUPS bites soft bakes flavor of home™ chewy bars pe® brownies heart healths’* ipancake ~ ey cereal crunch oe Ps me YMeaisast. »
Slide 10: Proven Business Model to Deliver Shareholder Value
Proven Business Model to Deliver Shareholder Value 10 1 0
Slide 11: Key Strategies
Key Strategies 11 ‣ DELIVER profitability and enhance shareholder value long - term ‣ INNOVATE in products, programs & technology ‣ BUILD the network and reach of Take Shape For Life Health Coaches ‣ LEVERAGE our medical provider heritage & relationships ‣ GROW our online business thru best - in - c
Slide 12: Ways to Support Our Clients
4 Ways to Support Our Clients 12 1 2 12,000 Independent Health Coaches 62 Franchise locations Medical Provider Wholesale Channel Direct to Consumer E - commerce As of 9/30/2015 76% 17% 6% 1% TSFL Med Direct Franchise MWCC Medifast Wholesale Revenue by Segment *
Slide 13: Take Shape For Life: A Unique Model
Take Shape For Life: A Unique Model Our coaches are our success stories • Most coaches joined to achieve a healthy weight …and stayed for the business opportunity • Emphasize long term “Optimal Health” • Certification exams* Our processes are clear and transparent • 94% of orders go directly to clie
Slide 14: Take Shape For Life Strategy
Take Shape For Life Strategy 14 1 4 1 2 3 EXPAND HEALTH COACH NETWORK OPTIMIZE USE OF COMMISSION PLAN & INCENTIVES NEW PRODUCTS 12,000 Health Coaches • Renewed focus on coach growth in new demographics • New video messaging delivers consistent coaching experience • 5 Super - regionals in 1Q15 • Nati
Slide 15: Complete e-Commerce Business & Experience
Complete e - Commerce Business & Experience 15 ‣ Full Product Line & Programs ‣ Quick Start Guides & Video How - to’s ‣ Dashboard for Tracking the Weight Loss Journey ‣ The Science Behind Medifast ‣ Programs for Diabetes, Seniors, Teens, Gluten - free, more ‣ Success Stories & “Happy Afters” ‣ MyMed
Slide 16: Medifast Direct Strategy
Medifast Direct Strategy 16 1 2 3 ENHANCE WEB PLATFORM ADDRESS DIY TREND OPTIMIZE AD & PROMO SPEND Best in class capabilities to drive orders • Streamlined ordering experience to increase conversion • Flexibility to rapidly change and target promotions Innovate for rewarding online experience • Prom
Slide 17: Local, Personal, Accountable
Local, Personal, Accountable • 62 Franchise Centers* • Supervised Programs • 1:1 Personal Counseling • Dietitian Support • Body Composition Technology • Onsite Product Purchasing • Weekly Weigh - ins • Constant Contact “Care Calls” 17 * As of 9 /30/2015
Slide 18: MWCC – Current Status
MWCC – Current Status 18 0 10 20 30 40 50 60 70 80 2007 2008 2009 2010 2011 2012 2013 2014 3Q15 0 5 18 21 30 35 41 73 62 Franchised Units Successfully transitioned 17 corporate centers to Franchisees at 12/31/2014: • Dallas, TX – 9 Centers • Houston, TX – 4 centers • Baltimore, MD – 4 Centers • Fran
Slide 19: Current Franchise Locations
Current Franchise Locations 19 • 62 Franchise Locations • 8 Franchise Owners • 8 States
Slide 20: MWCC Strategy
MWCC Strategy 20 1 2 3 CONVERT TO FRANCHISE SUPPORT INNOVATE Highly Accretive Shift to Wholesale is completed • Food revenues will decline to wholesale price. • Counseling revenues shift to Franchisees. • Operating Profit improves with SG&A reductions Provide Support for Franchise Growth • Training
Slide 21: Leveraging Our Medical Heritage
Leveraging Our Medical Heritage • Obese patients spend 50% more on healthcare costs — over $7,100 more per year • Obesity screening and nutritional counseling now an “essential benefit” under Affordable Care Act • Providers seeking new revenue streams to offset increasing financial pressures 21 Mark
Slide 22: Medical Providers Strategy
Medical Providers Strategy 22 1 2 3 EXPAND COVERAGE & TERRITORY CURRENT CLIENT REVENUE GROWTH BUSINESS MODEL ENHANCEMENTS Expand US & Establish business in Canada • Drive account acquisition with multi - touch campaigns and trade events • Streamline on - boarding process and enhance client support D
Slide 23: Strategic Growth Initiatives
Strategic Growth Initiatives 23 MEXICO & LATIN AMERICA Medix investment to expand partnership Acquisition of 13 Slim Centers in prime locations across Mexico City Progressing multiple new revenue opportunities to drive business expansion Executing in Colombia and planning expansion in further
Slide 24: Medix - Medifast Partnership
Medix - Medifast Partnership • Launched June 2012 • Medifast enables Medix to offer robust preventative products & programs in addition to existing nutraceutical & pharmaceutical options • Multi - channel market strategy: – Leveraging 6,000+ physician network – Medifast - branded clinics: 3 in Mexic
Slide 25: Beyond Weight Loss
Beyond Weight Loss 25 2 5 Addressable Weight Loss Market Healthy Living Market: Foods, Programs, Products Sources: U.S. Weight Loss Market Update, Marketdata, February 2014. Health and Wellness in the US, Euromonitor, August 2013 Gym, Health & Fitness Clubs in the U.S., IBISWorld, February 2014. Vit
Slide 26: Recent Product Launches
Recent Product Launches 26 Meal Replacements • Garlic Mashed Potatoes • Sour Cream & Chive Mashed Potatoes • Gingerbread Soft Bake Flavors of Home® lean and green Meals • Turkey Meatball Marinara* • Chicken Cacciatore* • Chicken with Rice & Vegetables* • Beef Stew* • Cheddar & Sour Cream Popcorn • S
Slide 27: Digital Dashboards & Apps
27 Digital Dashboards & Apps Customized for Take Shape For Life & Medifast - Track Meals, Nutrition, Water, Weight, Exercise & More - Unique Console Allows Coaches & Center staff to work closely with Clients on Progress Trackers and Dashboards
Slide 28: Results vary. Clients may lose - lbs per week for the first two weeks
28 Results vary. Clients may lose 2 - 5 lbs per week for the first two weeks and 1 - 2 lbs per week, thereafter.
Slide 29: Brand Awareness Study
29 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 Medifast Weight Watchers Jenny Craig Nutrisystem Jun-14 Brand Awareness Study
Slide 30: Innovation – from Concept to Consumer
Innovation – from Concept to Consumer 30 30
Slide 31: Leading Manufacturing & Distribution Infrastructure
Leading Manufacturing & Distribution Infrastructure 31 • Company - owned state - of - the - art facilities • Supports industry - leading gross margins • Capacity to drive aggressive growth • Partnerships with leading suppliers
Slide 32: Financial Overview
“Y Medifast. Financial Overview oe Ps me YMeaifast
Slide 33: 2010 - 2015 Revenue
2010 - 2015 Revenue 33 $239 $273 $319 $324 $285 $272 to $275 $223 $211 2010 2011 2012 2013 2014 FY 2015 Guidance First Nine Months 2014 First Nine Months 2015 Revenue from continuing operations 2010 - 2014 5% CAGR
Slide 34: 2010 - 2015 EPS
2010 - 2015 EPS $1.23 $1.60 $1.75 $1.96 $1.89 $1.72 to $1.76 $1.50 $1.41 2010 2011 2012 2013 2014 2015 FY Guidance First Nine Months 2014 First Nine Months 2015 34 - EPS from continuing operations . - 2012 Non - GAAP EPS excludes two non - recurring items, including a FTC settlement recorded in the
Slide 35: Strong Cash & Balance Sheet
Strong Cash & Balance Sheet 35 • $ 66.5M Cash & Investments • No Long Term Debt • Low Working Capital Levels • Minimal CapEx Requirements • Strong Free Cash Flows Note: As of 9 /30/2015
Slide 36: 2015 Priority “Return to Growth”
2015 Priority “Return to Growth” 36 1 2 3 Re - Ignite growth in Health Coach Network for Take Shape For Life Invigorate and support new franchisees to grow in 2015 Focused advertising spend on the back of sophisticated data to drive growth in Medifast Direct Continue to investigate International exp
Slide 37: Key Investment Highlights
Key Investment Highlights 37 Large , addressable and growing market Differentiated scientific approach to weight loss Highly efficacious product portfolio validated by customer referrals Strong, stable cash flows Unique Multi - Channel Model State - of - the - art production capabilities and low cos