Medifast Inc · NYSE:MED
Medifast — 2021 ICR Conference
29 slides from Medifast's conference presentation, January 2021
Slide 1: Investor Presentation January 2021
INVESTOR PRESENTATION JANUARY 2021 1
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 Refor
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures We disclose adjusted EBITDA, a non-GAAP financial measure in this investor relations presentation and other public disclosures. This non-GAAP financial measure excludes the impact of certain non-recurring items and items that, in the judgment of management, are not indica
Slide 4: Agenda
AGENDA 1 Medifast At A Glance OPTAVIA Transition And 2 Performance Highlights 3 Summary 4 Appendix 4
Slide 5: Medifast at a Glance
MEDIFAST AT A GLANCE “FMEDIFAST. 36 OPTAVIA.
Slide 6: Medifast at a glance: key facts
Leaders Company behind one of the fastest- in offering personal growing wellness communities1 Coaching service to people for whom diets 100% Products shipped have failed directly to clients Differentiated 42.1K direct-to-consumer sales model Coaches 90% of Coaches started as Clients Nearly 40 Years
Slide 7: Our Competitive Advantage vs. Direct Selling Model
OUR COMPETITIVE ADVANTAGE VS. DIRECT SELLING MODEL OPTAVIA COACH MODEL DIRECT SELLING MODEL Client-centric Distributor-centric one price direct-to-consumer model; tiered price wholesale/retail model; 90% of revenue from clients revenue mix leans to distributor entities Coaches Coach Distributors Sel
Slide 8: Our Competitive Advantage vs. Diet Industry
OUR COMPETITIVE ADVANTAGE VS. DIET INDUSTRY OPTAVIA COACH MODEL DIET COMPANIES MODEL Holistic Wellness Weight Loss Heathy Weight Is A Catalyst To Greater Change Short-term Unsustainable Results Personalized Coach Support Limited Support Empathetic Coaching - The Coached Becomes The Coach Books, Bots
Slide 9: Large Addressable Market
Large Addressable Market Key audiences Total US addressable client pool 70% US pop. overweight or People looking to lose weight and willing to ~175M obese, growing 2% p.a. consider dieting People looking to lose ~155M 75% the most weight US adults who want to lose weight, open to People looking to l
Slide 10: Health & Wellness Is In Sharp Focus
Health & Wellness Is In Sharp Focus 63 % 96 % 74 % Of all U.S. adults have Of people making positive Of Americans who adopted new, positive health changes during the report that they health habits since the start pandemic report they plan need support to of the COVID-19 to continue embracing maintai
Slide 11: Key Investment Highlights
Key Investment Highlights One of the fastest growing health and wellness companies in the United States, with differentiated, clinically-proven programs and scientifically-developed products Large and growing market opportunity addressing a global need Scalable coach-based approach that drives both
Slide 12: Key Financial Metrics
Key Financial Metrics $841M $115M $129M 27% 32% LTM Q3 2020 LTM Q3 2020 LTM Q3 2020 2016–2019 2016–2019 Revenue Income from Adjusted EBITDA1 Revenue CAGR EBITDA CAGR Operations 1 Refer to Appendix below for a reconciliation of Income from operations to Adjusted EBITDA. 12
Slide 13: Attractive Financial Model
Attractive Financial Model 74 % ~0.6 % $ 145 M $ 54 M LTM SG&A is LTM Q3 2020 LTM Q3 2020 LTM Q3 2020 Variable CapEx as % of Operating Cash Flow Return to Revenue Shareholders1 1Represents sum of share repurchased and dividend paid over the last twelve months 13
Slide 14: Strong Free Cash Flow Facilitates Attractive Return of Capital to Shareholders
Strong Free Cash Flow Facilitates Attractive Return of Capital to Shareholders CASH & INVESTMENTS 2016 – Q3 2020 $170M ($0) $1 DEBT-FREE Dividends QUARTERLY DIVIDEND $103 $126 Stock Repurchases $1.13 Other Financing Activities • Financial capacity to handle any CapEx Cash & Investment Retained requi
Slide 15: Effective and Diverse Management Team
Effective and Diverse Management Team DAN CHARD JAMES MALONEY NICHOLAS JOHNSON TONY TYREE Chairman and Chief Executive Officer Chief Financial Officer President, Coach & Client Experience Chief Marketing Officer • 25+ years of marketing and • 25+ years of diverse management • 10+ years of sales, mar
Slide 16: OPTAVIA Transition and Performance Highlights
OPTAVIA TRANSITION AND PERFORMANCE HIGHLIGHTS 16
Slide 17: The OPTAVIA Model
The OPTAVIA Model Virtuous Circle for Growth People are More Successful in their Transformation Journey when they... Active Earning Coach BECOMES ACTIVATES 1• Have a Support System (Coach and Community) PROVEN Minimal NUTRITION marketing costs OPTAVIA COACHES TM gets you where you want to go.Enables
Slide 18: Key Strategic Focuses For Sustainable Long-Term Growth
Key Strategic Focuses For Sustainable Long-Term Growth Drive Product & Program Enhance Coach & Client Optimize Operational Innovation Experience Effectiveness Expand lifetime value through Develop culture that drives Drive scale through enhanced new and compelling products attraction, engagement and
Slide 19: Strong and Sustainable Customer Loyalty
Strong and Sustainable Customer Loyalty 2.5x 30x 75.7 46.6 % % OPTAVIA repeat Client spend on Customer Repurchase OPTAVIA customers rates vs industry OPTAVIA Rates** who have bought benchmark* products vs CPG products four or benchmarks* more times** *Nielsen panel data analysis benchmarking OPTAVIA
Slide 20: Growing Active Earning Coach Community
Growing Active Earning Coach Community Active Earning Coaches Fiscal Q4 2016 Fiscal Q3 2020 Alaska Hawaii Alaska Hawaii Hong Kong Singapore 20
Slide 21: A Resilient Business Model
• Efficient direct-to-consumer business • Consistent patterns create strong forward visibility • High percentage of clients on continuity shipments (≈92% of revenue) • High lifetime value A Resilient • Variable cost model Business Model 21
Slide 22: OPTAVIA Driving Long-Term Sustainable Growth
OPTAVIA Driving Long-Term Sustainable Growth ($ Millions, Except Per Share Data) New Business Model 15% $714 Revenue Growth $501 $302 +43% Revenue $285 $273 $275 $272 15% +66% +10% +32% $190 +43% +73% +48% +25% Operating $30 $29 $27 $40 $69 $91 $20 $45 Operating Margin Income Long-term 2014* 2015* 2
Slide 23: Active Earning Coaches and Productivity Will Support Sustained Growth
Active Earning Coaches and Productivity Will Support Sustained Growth +32% 42,100 19 – Q3 20 New Business Model 36,500 31,800 32,600 24,100 15,000 Number of 12,500 Coaches 5,756 5,851 6,329 Revenue 5,229 5,333 4,158 4,562 Per Coach 2016 2017 2018 2019 Q1 2020 Q2 2020 Q3 2020 23
Slide 24: Attractive Financial Model
Attractive Financial Model Variable Cost 1 1 YTD Q3 FISCAL 2016 FISCAL 2017 FISCAL 2018 FISCAL 2019 2 2020 % of Revenue Variable Operating 58.8% 60.1% 64.0% 66.1% 67.6% Expenses Fixed Operating 31.4% 26.8% 22.2% 21.2% 18.1% Expenses $1.2M $3.0M $26.9M $91.0M Revenue Per Fixed Headcount 2016 (1) Reve
Slide 25: Summary
SUMMARY “¥ MEDIFAST 3\< OPTAVIA. Cie
Slide 26: Key Investment Highlights
Key Investment Highlights One of the fastest growing health and wellness companies in the United States, with differentiated, clinically-proven programs and scientifically-developed products Large and growing market opportunity addressing a global need Scalable coach-based approach that drives both
Slide 27: Appendix
APPENDIX “¥ MEDIFAST 3\< OPTAVIA. Cie
Slide 28: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Medifast defines adjusted EBITDA as income from operations calculated in accordance with GAAP, adjusted to exclude depreciation and amortization expenses, expenses in connection with the Schedule 13D Filing, and severance related costs resulting from the departure o
Slide 29: Thank You
Thank You -F MEDIFAST 3+ opTA