Medifast Inc · NYSE:MED
Medifast — Investor Presentation (January 2020)
31 slides from Medifast's investor presentation, Jan 13, 2020
Slide 1: January 2020 Investor Presentation
January 2020 INVESTOR PRESENTATION
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain information included in this presentation may constitute “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 Ref
Slide 3: Agenda
3 AGENDA OPTA VIA Transition And Performance Highlights 2 Our Plan For Growth 3 Medifast At A Glance 1
Slide 4: Medifast at a Glance
MEDIFAST AT A GLANCE “YMEDIFAST. 5)€ OPTAVIA
Slide 5: Medifast at a Glance: Who We Are
• The company behind one of the fastest - growing health and wellness communities, OPTA VIA • Differentiated direct - to - consumer sales model: – Network of 32,200 Coaches , most of whom initially started as clients – 100% of products are directly shipped to clients for consumption, never for re -
Slide 6: Medifast at a Glance (Cont'd): What We Do
• We empower passionate and engaged communities of people committed to healthier lifestyles • Our network of talented and committed Coaches provide clients with the encouragement and inspiration they need to drive change • Everything we do is aimed at helping the world achieve Lifelong Transformatio
Slide 7: A New and Unique Direct-To-Consumer Model
7 OPTA VIA DIRECT - TO - CONSUMER MODEL TRADITIONAL DIRECT SELLER Health and wellness community Selling network Clients and certified Coaches Distributors/sales agents and wholesale buyers Client s ervice and community building Recruiting and transactions Long - term sustainable growth Short - term
Slide 8: Key Investment Highlights
Health & wellness innovator with differentiated, science - based programs and products Large and growing market opportunity addressing a global need Scalable coach - based direct - to - consumer selling model Attractive, highly predictable business model Significant free cash flow supports attractiv
Slide 9: Key Financial Metrics
9 Key Financial Metrics LTM Q3 2019 Operating Income $ 92 mm LTM Q3 2019 Revenue $ 689 mm 2017 – LTM Q3 2019 Operating Income CAGR 62 % 2017 – LTM Q3 2019 Revenue CAGR 60 %
Slide 10: Attractive Variable Cost Model
10 Attractive Variable Cost Model LTM Q3 2019 CapEx as % of Revenue ~2 % SG&A is Variable ~ 70 % LTM Q3 2019 FCF Conversion 2 93 % LTM Q3 2019 Free Cash Flow 1 $ 75 mm 1 Free Cash Flow defined as c ash f low from operations – cash f low from i nvesting 2 Free Cash Flow conversion calculated as (cash
Slide 11: Strong Free Cash Flow Facilitates Attractive Return of Capital to Shareholders
2014 – Q3 2019 $ 108 $ 77 $ 5 $ 29 Stock Repurchase Dividend Other Financing Activities Cash & Investments Retained 11 ($ in mm) Strong Free Cash Flow Facilitates Attractive Return of Capital to Shareholders Share Repurchase + Dividend: $185mm (84% of Cumulative Cash Flow) QUARTERLY DIVIDEND $ 1.13
Slide 12: Strong Management Team
Strong Management Team TIM ROBINSON NICHOLAS JOHNSON Tony Mate! Present, OPTAVIA (Chief Mrieting Oticer DAN CHARD Chiat ecutive Officer Chit Hnenciol Oticer BLYTH Brealn seven @ ‘ CLAUDIA GRENINGER EVP, Homon Resourcer BILL BAKER EVP, Technology ‘VP, Suppy Cho Brysgist sion erry “FP mevieast. OPTA
Slide 13: OPTAVIA Transition and Performance Highlights
OPTA VIA TRANSITION AND PERFORMANCE HIGHLIGHTS 13
Slide 14: The OPTAVIA Model
14 The OPTA VIA Model People are More Successful in their Transformation Journey when they... • Have a Support System (Coach and Community) • Learn and incorporate Healthy Habits into Their Lives (Habits of Health System ) 1 2 PROVEN NUTRITION g ets you where you want to go. OPTA VIA COACHES TM Cons
Slide 15: Our Strategy
15 Our Strategy WHERE TO PLAY GROWTH AREAS Technology Our scalable business model to offer the world optimal health by combining clinically proven plans with scientifically developed products and the encouragement, inspiration and support of Coaches Program Innovation Enhanced Experience Operational
Slide 16: Strong and Sustainable Customer Loyalty
16 Strong and Sustainable Customer Loyalty Client spend on OPTA VIA products vs CPG benchmarks * ≈ 20 x OPTA VIA repeat rates vs industry benchmark * 2 x Customer retention rates 86 % ^Nielsen panel data analysis benchmarking OPTAvia against leading H&W brands OPTA VIA customers who have bought prod
Slide 17: Growing Active Earning Coach Community
Growing Active Earning Coach Community 17 Fiscal 2016 Fiscal 2019 Note: Represents active earning Coaches in Q4 of respective years Hong Kong Singapore Alaska Hawaii Alaska Hawaii <25 25 - 250 251 - 500 501 - 750 751 - 1,000 1,001+
Slide 18: Revenue Per Coach
Revenue Per Coach 12,600 12,800 12,800 12,500 13,000 13,500 14,200 15,000 16,700 19,700 22,600 24,100 27,200 30,600 32,200 ~50,000 $4,490 $4,479 $4,421 $4,158 $4,463 $4,713 $4,693 $4,562 $5,278 $5,474 $5,781 $5,756 $5,817 $5,863 $5,715 Active Earning Coaches Number of Coaches 18 +42% Q3 18 – Q3 19 2
Slide 19: OPTAVIA Driving Transformational Growth
$30 $29 $27 $40 $69 $285 $273 $275 $302 $501 $700 - $710 $1,000 2014* 2015* 2016 2017 2018 2019 Guidance 2021 Target Launch of New Business Strategy 19 ($ in mm, Except Per Share Data) OPTA VIA Driving Transformational Growth Revenue Operating Income $ 1.65 $ 1.62 $1.49 $2.29 $4.62 $5.80 - $5.90 +10
Slide 20: Our Plan for Growth
OUR PLAN FOR GROWTH “YMEDIFAST. 5)€ OPTAVIA
Slide 21: Vision: Double the Size of the Business
Vision: Double the Size of the Business Every 3 - 4 Years 21 DRAMATICALLY GROW OPTAVIA COACH COMMUNITY Enhance Coach & Client Experience 2 Expand Segments & Geographies 5 Drive Program Development & Innovation 4 Utilize Technology to Maximize Performance 3 OPTIMIZE OPERATIONAL EFFECTIVENESS 1
Slide 22: Optimize Operational Effectiveness
Optimize Operational Effectiveness 1 • Creating an organization that can power long - term sustained growth • Maximize efficiency and growth, while minimizing impact of any short - term air pockets • Scalable systems and processes • Replicable across multiple geographies, products and services 22
Slide 23: All Key Metrics Trending Positively
Credit Card Bad Debt Normalized Product Returns as a % of Sales Call Center Metrics Consumer Net Promoter Score Monthly Client Retention Rate 23 All Key Metrics Trending Positively
Slide 24: Enhance Coach & Client Experience
Enhance Coach & Client Experience 2 • Call center and CRM • Supply chain and support enhancements • Improved user technology experience • Enhanced product sensory experience 24
Slide 25: Utilize Technology to Maximize Performance
Utilize Technology to Maximize Performance 3 25 • New Coach Business Suite Improves Coach productivity – Deep visibility into Coach team activities – Work flow enabled – Real time updates • New e - commerce platform Improves Client experience and payment security • New social tools Makes sharing the
Slide 26: Drive Program Development & Innovation
Support Additional Healthy Habits Through Products , Education and Community 26 Drive Program Development & Innovation 4 Movement Sleep Hydration Nutrition Aging
Slide 27: Expand Segments & Geographies
27 Expand Segments & Geographies 5 Market Opportunities Diversity Outreach to important communities Generational Target younger demographics Regional Underrepresented markets Lifestyle Serve clients in different stages of optimal wellbeing International Establish a global footprint
Slide 28: Summary
SUMMARY “YMEDIFAST. 5)€ OPTAVIA
Slide 29: Key Investment Highlights
Health & wellness innovator with differentiated, science - based programs and products Large and growing market opportunity addressing a global need Scalable coach - based direct - to - consumer selling model Attractive, highly predictable business model Significant free cash flow supports attractiv
Slide 30: Thank You
Thank You “Fmeoiast. ty PTA
Slide 31: Non-GAAP Reconciliation
31 Non - GAAP Reconciliation ($ in mm) Reconciliation of free cash flow and free cash flow conversion to Net cash provided by operating activities, the most directly comparable GAAP financial measure, for the last twelve months ended September 30, 2019. Non - GAAP measures should be evaluated with,