Medifast Inc · NYSE:MED
Medifast — Investor Presentation (March 2013)
33 slides from Medifast's investor presentation, Mar 20, 2013
Slide 1: Investor Presentation
“*Y Medifast. Proven, Healthy Weight Loss.. Investor Presentation Timothy Robinson, Chief Financial Officer Brian Kagen, Executive Vice President & Chief Marketing Officer March, 2013
Slide 2: Safe Harbor Statement
YMedifast. gate 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 Litigat
Slide 3: Recommended by over 20,000 Doctors Since 1980
“YMedifast. Medifast Products and Programs Have Been Recommended by over 20,000 Doctors Since 1980 and Used by Over a Million Customers Since 1980 ©0609 FAST SAFE SIMPLE LONG TERM PORTABLE Proven, healthy weight loss from the brand r wmended by over 20,000 doctors since 1980.
Slide 4: Mission: health, hope, and happiness through clinically proven weight management
Y¥Medifast. To create health, hope, and happiness through clinically proven weight-management products, programs, and support To combat the obesity epidemic and improve health in two ways: * Through clinically proven weight-management products & programs * Through multiple, innovative support channe
Slide 5: Investment highlights
Y¥Medifast. Over 79 Unique Food Items + Rapidly growing addressable market and — significant market penetration opportunities + Vertically integrated model producing industry leading gross margins + Strong historical track record of growth in sales, profits and cash flows Forbes |2012 * Consistent p
Slide 6: Medifast 5&1 Plan, Transition, & Maintenance
Y¥Medifast. Medifast 5&1 Plan, Transition, & Maintenance O =] @ Weight Loss Phase Transition Phase Maintenance Phase Our § & 4 Plon features Medifas’s When you ave near ar at your goal weight ‘When youve completed the iansition phase, nutitionally balanced, fortited moa well help you increase your d
Slide 7: Clinically Proven and Scientifically Based
Y¥Medifast. Clinically Proven and Scientifically Based \ at \ ) We're different. Here's why. 4 H I . =. ‘You can choose from among hundreds of weight-loss > 4 plans, diets, programs, pills, and gadgets—all claiming to be different, though many are remarkably similar. I's the " scence and suppon that
Slide 8: Take Shape for Life and Medical Providers channels
¥ Medif: ast. Take Shape MEDICAL PROVIDERS For ute ure ev ifast. | -QNE J “YMedifi ast (mm ‘Y Medifast. Proven, healthy weight loss from the brand recommended by over 20,000 doctors since 1980.
Slide 9: Manufacturing and Distribution
Y¥Medifast. MANUFACTURING AND DISTRIBUTION Company-owned state-of-the-art manufacturing and distribution facilities Help support industry leading gross margins Capacity in place to drive aggressive growth Ridgely, MD Dallas, 1X Proven, healthy weight loss from the brand recommended by over 20,000 do
Slide 10: Strong, Consistent Financial Performance: Revenue
YMedifast. Strong, Consistent Financial Performance Revenue Proven, healthy weight loss from the brand recommended by over 20,000 doctors since 1980. 10
Slide 11: Strong, Consistent Financial Performance: EPS
Y¥Medifast. Strong, Consistent Financial Performance $1.57 2007 2008 2009 2010 2011 EPS Proven, healthy weight loss from the brand recommended by over 20,000 doctors since 1980. 2012 2012" 2012 EFS excusing wo en-ecuring lems, cluding STC setlement recorded the second cuarer and 3 sles tx soe. inthe
Slide 12: Total and served weight loss market
Y¥Medifast. asap Yarns Total Market — $65B Served Market — $18B _« 7 Unserved Weight Loss df Served \ f $47B Weight Loss < $18B -Diet Soft Drinks —— -Artificial Sweeteners -Health Club Revenues ‘Source: US. Census Data, CDC Data, IIS World, MacketDsta Enterorices Proven, healthy weight loss from the
Slide 13: The Obesity Market is Growing
“¥ Medifast. U.S. Population 314M 15 or Older 251M Overweight/ Obese 173M Dieting 93M Source: US. Census Data, CDC Dats, IS World, MarketDats Enterprises The Obesity Market is “Growing” B Proven, healthy weight loss from the brand recommended by over 20,000 doctors since 1980.
Slide 14: Current Medifast National Market Coverage
Y¥Medifast. Current Medifast National Market Coverage Significant Growth Opportunity to Cover “White Space” Macitast Sales Proven, healthy weight loss from the brand recommended by over 20,000 doctors since 1980. ®
Slide 15: International Coverage Opportunity
“YMedifast. International Coverage Opportunity 1.6B Overweight Globally and Expected to Grow 40% ii in Next 10 Years Latin America Through Medix Proven, healthy weight loss rom the brand recommended by over 20,000 doctors since 1980. ©
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Slide 17: Direct Selling Overview
“¥ Medifast. Take Shape rucueo sy ¥ Medifast. 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 a
Slide 18: Free Personal Health Coach & Mentor
For Life. rue ay Y Medifast. YMeaifast. O Take Shape Free Personal Health Coach & Mentor to Guide Clients Through Their Weight Loss and Weight Management Journey + Health Coaches are required to take competency exam. + Health Coaches do not need to purchase product themselves to receive commission.
Slide 19: Direct Sales Revenues
Y¥Medifast. Take Shape For Liter rusueo sy Y Medifast. Direct Sales Revenues {in milions) $0 $55.7 $55.6 sao $518 $493 $50 $46.8 $46.4 520 437 gar $433 $40 $376 $29.6 $30 $20 s10 4Q09 1010 2Q10 3Q10 4Q10 1011 2Q11 3Q11 4Qi1 1Q12 2012 3Q12 4q12 Proven, healthy weight loss from the brand recommended b
Slide 20: Coverage Expansion
Y¥Medifast. Take Shape For Liter rucuso sy ¥ Medifast. Coverage Expansion + Expand coverage to new markets to cover “white space” + Leverage Success from Home magazine & Dr A’s book tour SUICCESSicnd EE DISCOVER of Ht ALTH 20 Proven, healthy weight loss from the brand recommended by over 20,000 doct
Slide 21: Improve Field Effectiveness
For Life. rues sy ¥ Medifast. YMeaifast. O Take Shape Improve Field Effectiveness * Create development plan with simplified standards & processes + Enhance field communications & coach tools * Expand mobile “on-the-go” business a Proven, healthy weight loss rom the brand recommended by over 20,000 d
Slide 22: Direct
Y¥Medifast. Yeates DIRECT
Slide 23: Direct Response Revenues
“Pitesti. “Y Medifast. DIRECT sn, _ Ditect Response Revenues {in'$ millions) $20} 473 193 a 19 18.2 zaio’ s0i0 "quo aii “zar13011 4air 1012" 2ax2 "sai2aa2 * Only 10% of 210 DMAs* over $1M in annual sales * 66% of total volume is done by just 10% of DMA’s * 50% of 210 DMA’s under $100k in annual volu
Slide 24: Optimize Marketing & Promotional Spends to Improve Profit
YMedifast. “¥ Medi fast. DIRECT Optimize Marketing & Promotional Spends to Improve Profit + Drive multi-media customer acquisition strategy (website/call center) + Continue to evaluate discounts & promotional offers + Ensure effective execution of capital & high resource projects Shopping is simple
Slide 25: Website Performance
“‘Y Medifast. DIRECT Website Performance Critical Success Factors + Mobile friendly + Site load speed improved + Simplified design + Improved navigation + SEO benefits + Optimized content + Multiple versions for new & returning visitors Proven, healthy weight loss from the brand recommended by over
Slide 26: Weight Control Centers
Y¥Medifast. ‘Y Medifast WEIGHT CONTROL CENTERS Proven, healthy weight loss from the brand recommended by over 20,000 doctors since 1980. 26
Slide 27: Weight Loss Management Partnership with a Team of Professionals
YMedifast. “YMed ifast Weight Loss Management Partnership with a Team of Professionals Dedicated to Member Success + Brick-and-mortar centers offering supervised & structured programs + Currently operating 87 company-owned & 35 franchise-owned centers difast 'WEIGHT CONTROL CENTERS supported weightl
Slide 28: Clinic Revenues
YMedifast. ‘Y Medifast WEIGHT CONTROL CENTERS sae Clinic Revenues sa (in $ millions) aa 106 $10 fn 32 $8 6.7 67 68 6 se 2 $0 2010 3010 4010 1Q11 2011 3Q11 1Q12 2Q12 3Q12_4qi2z Proven, healthy weight loss from the brand recommended by over 20,000 doctors since 1980. 3B
Slide 29: Strengthening Corporate Center Operations and Member Practices
“YMedifast. “Y Medifast WEIGHT CONTROL CENTERS Focus on Strengthening Overall Corporate Center Operational, Member Acquisition, and Member Counseling Practices + Q1 loss led to significant employee restructure in April, 2012 + Removed many program & food discounts + Heightened focus on operational e
Slide 30: Expand Franchise Footprint
Y¥Medifast. YM ed i fa st WEIGHT CONTROL CENTERS Expand Franchise Footprint + Focus on current franchisee expansion + International presence through Medix strategic partnership + Medifast to provide focused resources and support Proven, healthy weight loss rom the brand recommended by over 20,000 do
Slide 31: Medical Providers
“YMedifast. YY Medifast. MEDICAL PROVIDERS
Slide 32: Medical Providers customer types
"eae a ¥ Medifast. CUSTOMER MEDICAL PROVIDERS Systems Clinics & Medi Spas Individual Practices Proven, healthy weight loss from the brand recommended by over 20,000 doctors since 1980.
Slide 33: Execution of strategic plan will drive aggressive growth
“YMiediyast. « Execution of strategic planks and driving forces for change will drive aggressive growth «Infrastructure & process discipline lead to margin expansion opportunities « New talent and employee development = increased earnings and cash flow generation Proven, healthy weight loss rom the