Medifast Inc · NYSE:MED
Medifast — Sidoti Conference March 2014
34 slides from Medifast's conference presentation, Mar 17, 2014
Slide 1: Sidoti Conference March 2014
Sidoti Conference March 2014
Slide 2: Safe Harbor Statement
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 . Th
Slide 3: Medifast
“‘YMedifast igen
Slide 4: Recommended by over 20,000 Doctors and Used by Over a Million Customers Since 1980
Medifast Products and Programs Have Been Recommended by over 20,000 Doctors and Used by Over a Million Customers Since 1980 FAST SAFE SIMPLE LONG TERM PORTABLE 4
Slide 5: Vision and Mission
Vision To create health, hope, and happiness through clinically proven weight - management products, programs, and support Mission To combat the obesity epidemic and improve health in two ways: • Through clinically proven weight - management products & programs • Through multiple, innovative support
Slide 6: U.S. Weight Loss Market is Estimated to be a $65B per Year Industry
Source: U.S. Census Data, CDC Data, IBIS World, MarketData Enterprises Unserved Weight Loss $47B - Diet Soft Drinks - Artificial Sweeteners - Health Club Revenues Served Weight Loss $18B Total Market – $65B Served Market – $18B U.S. Weight Loss Market is Estimated to be a $65B per Year Industry 6 Me
Slide 7: 2/3 of the U.S. Population is Overweight or Obese
Source: U.S. Census Data, CDC Data, IBIS World, MarketData Enterprises U.S. Population 314M 15 or Older 251M Overweight/ Obese 173M Dieting 93M 2/3 of the U.S. Population is Overweight or Obese The Obesity Market is “ Growing ” 7
Slide 8: Obesity on the Rise
8 Obesity officially recognized as a disease in 2013 Obesity on the Rise The CDC reports a significant increase in Obesity levels 8
Slide 9: Strong, Consistent Financial Performance: Revenue
Strong, Consistent Financial Performance Revenue 9
Slide 10: Strong, Consistent Financial Performance: EPS
Strong, Consistent Financial Performance EPS 10 * 2012 EPS excluding two non - recurring items, including a FTC settlement recorded in the second quarter and a sales tax accrual in the fourth quarter
Slide 11: Company-owned Manufacturing and Distribution Facilities
• Company - owned state - of - the - art manufacturing and distribution facilities • Help support industry leading gross margins • Capacity in place to drive aggressive growth Manufacturing Owings Mills, MD Distribution Ridgely, MD Manufacturing & Distribution Distribution Dallas, TX 11
Slide 12: Medifast 5&1 Plan, Transition, & Maintenance
12 Medifast 5&1 Plan, Transition, & Maintenance Typical Product
Slide 13: Clinically Proven & Scientifically Based
MacDonald Center for Obesity Prevention & Education Scientific Advisory Board 13 Clinically Proven & Scientifically Based
Slide 14: Strong Executive Leadership Team
Strong Executive Leadership Team Addition of Seasoned Executives to Board of Directors 2013 Forbes Magazine America’s Best Small Companies Baltimore Smart CEO Future 50 Companies Meg Sheetz - Daily Record Leading Women 2013 People Magazine – Half Their Size Issue TSFL Ranked one of DSA’s 20 Largest
Slide 15: Unique Multi-Channel Distribution
Unique Multi - Channel Distribution 2013 Revenue Mix 15
Slide 16: Direct Selling Healthy Living Coaching Division
16 Direct Selling Healthy Living Coaching Division A free personal Health Coach & Mentor to guide Clients through their weight loss and weight management journey.
Slide 17: Direct Selling Overview
• US direct selling accounts for $30B – 24% or $7B comes from weight - loss products • 15.6M people engaged in direct sales in the US • U.S. is the #1 direct selling market in the world • TSFL was recently recognized as one of the Top 20 Direct Selling Companies in the U.S. Direct Selling Overview 1
Slide 18: Key Attributes of our Direct Selling Model
Key attributes of our Direct Selling Model • Health Coaches are required to take competency exam now administered by the Center for Obesity Prevention and Education(COPE) at Villanova University. • Health Coaches do not need to purchase product themselves to receive commission. Sales to Health Coach
Slide 19: Coverage Expansion
Coverage Expansion • Over 10,000 Coaches in the Network and growing • Continued Expansion promoted through key events to motivate Coaches and attract new Coaches to join Take Shape for Life • 5 Super Regional events planned in Q1 with over 1,000 attendees registered at some locations • National Conv
Slide 20: New Integrated Compensation Plan
New Integrated Compensation Plan • New Integrated ranks were introduced to motivate Coaches and recognize those who grow their business. • Enhanced incentives reward the dual objectives - developing business structure depth and growing front line order volume. • Increased commission rate upon certif
Slide 21: Customer Value Proposition
Customer Value Proposition x Self - Guided Weight Management x Online Tools and Call Center Support x Ordering Convenience • On Demand • Auto Ship E - Commerce Model 21
Slide 22: 2013 Brand Awareness Campaign
2013 Brand Awareness Campaign 22
Slide 23: Marketing Mix and Value Proposition Comparison
• Consistent Mix of Print, Digital, Television, Radio Marketing Efforts • Closely monitoring 2014 Marketing Investments After Reduced Spend in 2013 • Focus on Demand Generation • Mobile Commerce Launched 12/2013 • Simplified Website Design • Tactics to Leverage New & Returning Visitors • Share Value
Slide 24: Member Value Proposition
24 Member Value Proposition x Individual Consultation x On - Site Dietician x On - Site Body Gem Technology x On - Site Grocery Store x Supervised, Structured Programs x Weekly Weigh - Ins x Constant Contact “ Care Calls ” Corporate Owned Franchise
Slide 25: Weight Loss Management Partnership with a Team of Professionals
Weight Loss Management Partnership with a Team of Professionals Dedicated to Member Success • Centers offering supervised & structured programs and support • Currently operating 75 company - owned & 49 franchise - owned centers in the U.S. including 8 new centers opened in Q1 2014. 25
Slide 26: Corporate & Franchise Owned Centers Recent Developments
Corporate & Franchise Owned Centers Recent Developments • 5 New Franchise locations opened in Q4 2013. • 8 locations have opened in Q1 2014 • 24 additional locations to open by existing Franchisees 2014 - 2016. • New Franchisees planned for further expansion to 200+ locations • Closed 8 poor perform
Slide 27: Current Center Locations
75 Corporate Centers 49 Franchise Centers 124 Total Centers Corporate Franchise Current Center Locations 27
Slide 28: Physician Directed Weight Loss Through Health Care Provider
28 Physician directed weight loss and weight management through a Health Care Provider or Non - Retail Medical Center
Slide 29: Potential Health Care Growth Opportunities
29 CUSTOMER Health Care Systems Ambulatory Care Centers Clinics & Medi Spas Individual Practices Potential Health Care Growth Opportunities Emerging
Slide 30: International Update
Mexico City International Update • Medix opens 4 clinics: • Mexico City, Mexico (2) • Guadalajara, Mexico • Bogota, Columbia • Obesity on the Rise in Mexico (#1) • Medifast Nutrition, Inc . established to begin business in Canada • Medifast product approval underway with Health Canada • Medifast ini
Slide 31: Product Expansion
Product Expansion In addition to ongoing improvements to our current product offerings, Medifast will introduce NEW product categories which will provide incremental revenue opportunities in 2014 and beyond: • Maintenance Products help clients maintain healthy weight and increase Customer Lifetime V
Slide 32: Shareholder Return
Shareholder Return ▪ Medifast is committed to further enhancing shareholder value ▪ November 2013 - repurchased 786,000 common shares under existing share repurchase authorization at an average price of $25.46. ▪ New 1,000,000 share authorization approved in December for a total current authorizatio
Slide 33: Summary
Summary x The Medifast Multi - Channel Model uniquely allows us to compete with a broad list of industry competitors x Clinically - proven, effective weight - loss plan x Expanding product categories, embracing technology x Accretive clinic franchising strategy underway x Favorable financial charact
Slide 34: Medifast: Proven, healthy weight loss
“Y Medifast. What will you do this You Year?s v Lose the weight. v Eat healthy. ~¥ ChooseMedifast. Proven, healthy weight loss from the brand recommended by over 20,000 doctors since 1980.