Medifast Inc · NYSE:MED
Medifast — Investor Presentation (January 2017)
34 slides from Medifast's investor presentation, Jan 9, 2017
Slide 1: Investor Presentation January 2017
Investor Presentation January 2017
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 Reform
Slide 3: Today's Presenters & Agenda
Today’s Presenters & Agenda Presenters Agenda Daniel R. Chard 1 Company Highlights Chief Executive Officer Focus On Execution… Medifast Business 2 Evolution Weight Loss & Weight Maintenance Options 3 for Success Timothy Robinson Chief Financial Officer 4 Financial Highlights 5 Well Positioned for Fu
Slide 4: Company Highlights
COMPANY HIGHLIGHTS 4
Slide 5: Medifast Today
Medifast Today Over 35 years of Empowering people with the right opportunities to enjoy the healthy life they deserve Weight Management & Healthy Living Company Compelling Distribution Delivery Business Model Vertically Integrated Manufacturing In-house Innovation and Food Science Industry
Slide 6: Well Positioned for Future Growth
Well Positioned for Future Growth Large, addressable and growing market X Differentiated scientific approach to weight loss X Highly efficacious product portfolio validated by customer referrals X Network of Coach, Center and Physician distribution partners X Low cost vertically integrated b
Slide 7: Market Opportunity
Market Opportunity $65B Total Market Served Market Served Market ‣ Diet Foods/Meals ‣ Weight Loss Centers $18B ‣ Low Calories Programs ‣ Medical Plans & Surgery ‣ Books & Videos 1.5% Medifast share of Unserved Market served market ‣ Diet Soft Drinks $47B ‣ Artificial Sweeteners Sources: U.S. Census
Slide 8: America Striving to Be Healthy
America Striving to Be Healthy OBESITY as BMI% 2014 Diagnosed Diabetes Rate 6.2% 1985 2.9% 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sources: CDC Behavioral Risk Factor Surveillance System (19
Slide 9: Over 1,000,000 Customers; Over 20,000 Doctors Have Recommended
Proven Products and Programs Since 1980 Over 1,000,000 Customers Over 20,000 Doctors have recommended Medifast products & programs 9
Slide 10: Revenue Mix By Distribution Strategy
Revenue Mix By Distribution Strategy 6% Take Shape For Life 12,800 Independent Health Coaches 13% 13% Medifast Direct Direct Response and E-commerce Revenue Breakdown Medifast Business Franchise Weight Control Centers Partners Doctors Wholesale Accounts 81% TSFL Med Direct Medifast Business Partners
Slide 11: Focus on Execution… Medifast Business Evolution
FOCUS ON EXECUTION… MEDIFAST BUSINESS EVOLUTION 11
Slide 12: Areas of Execution in 2016
Areas of Execution in 2016 1 2 3 DELIVERED ON MAINTAINED CREATED STRATEGIC PLAN PROFIT FOCUS VALUE Initiated Channel differentiation Financial Discipline in all areas of Maintained strong balance sheet and exclusivity to enable new the company to drive overall and cash flows strategies perform
Slide 13: Strategic Business Evolution
Strategic Business Evolution 2011 2012 2013 2014 2015 2016 Beyond Focus on MWCC Growth MWCC Center Transition Complement of Products & Brands for – Corporate: + 48 Centers – Corporate: -87 Centers Effective Distribution Delivery – Franchise: + 14 Centers • Sold: 41 Centers – Redefined brand, p
Slide 14: Weight Loss & Weight Maintenance Options for Success
WEIGHT LOSS & WEIGHT MAINTENANCE OPTIONS FOR SUCCESS 14
Slide 15: Take Shape For Life
Take Shape For Life Unique Direct Selling Model 12,800 independent health coaches 81% of total revenue Healthy lifestyle focus 92% of orders go directly to clients, and 8% for coach’s own use Coaches do not purchase at a discount Coaches do not hold inventory All commissions based on product
Slide 16: Introducing OPTAVIA
“YMedifast. Introducing OPTAVIA™ Your Health Coach, Habits of Health, OPTAVIA™ Community, and Fuelings 0 98 © QG Your Health Coach Habits of Health OPTAVIA™ Community Fuelings 16
Slide 17: Introducing OPTAVIA
Introducing OPTAVIA™ Launch – Convention July 2016 Brand Introduction – July 2016 –> July 2017 Fully exclusive lifestyle brand and product offering that is only available to our Take Shape For Life family of Health Coaches and clients Well positioned for growth across the U.S. and opportunit
Slide 18: OPTAVIA Fuelings
OPTAVIA™ Fuelings 13 new innovative OPTAVIA™ Fuelings Each product contains: No colors, flavors, sweeteners, or preservatives from artificial sources No genetically engineered ingredients A minimum of 250 million CFU of GanedenBC30® probiotic cultures per Fueling to help support your digestiv
Slide 19: Re-energized Coach Network
Re-energized Coach Network Convention 2016 largest event in the company's history - with more than 3,400 registered attendees, >20% growth y/y 19
Slide 20: Take Shape For Life – Strengthening Network For Growth
Take Shape For Life – Strengthening Network For Growth Seventh consecutive quarter of improvement in revenue trend y/y Net Sales Y/Y% 20% 20% Executed on key Initiatives – Focus on New Coach Sponsorship - 13% Each One Reach One 12% 13% 12% – Unified & Simplified Training and Tools 10% 10% – Leader
Slide 21: Direct Response Business Model
Direct Response Business Model 13% of Revenue E-commerce Platform Self-Directed Program Driven by Advertising/Promotion Continuity Options for the Customer and Incentives to Stay on Plan 21
Slide 22: Local Centers for 1-to-1 Counseling
Local Centers for 1-to-1 Counseling Supervised Medifast Programs Onsite Product Purchasing 55 Franchise Centers in the U.S. 6% of Total Revenue As of 9/30/2016 22
Slide 23: 2017 - Increased Focus
2017 - Increased Focus Align the organization around top priorities tied to revenue and profit generation objectives Leverage the knowledge gained from previous efforts in Mexico with Medix and in Sports Nutrition in the Collegiate markets to enable future growth in new markets. 23
Slide 24: 2017 Take Shape For Life Strategy to Accelerate Growth
2017 Take Shape For Life Strategy to Accelerate Growth Deliver sustained value through our brand experience Enable digital as a growth driver Develop existing markets and prepare for expansion Explore new growth initiatives and exploiting proven ‘winners’ 24
Slide 25: 2017 Medifast Direct Strategy to Stabilize
2017 Medifast Direct Strategy to Stabilize Focus on proven, efficient methods of acquiring customers Maintain strong average order value and retention metrics Capitalize on the launch of new programs – Medifast Flex and Medifast Go Launch new e-commerce platform to improve the customer experienc
Slide 26: Experienced Management Team
Experienced Management Team Name Title Years of Experience Previous Experience Michael C. MacDonald Executive Chairman of the 40+ Board of Directors Daniel R. Chard Chief Executive Officer 25+ Timothy G. Robinson Chief Financial Officer 25+ Brian Kagen Executive Vice President & 20+ Chief Marketing
Slide 27: Financial Overview
; FINANCIAL OVERVIEW 27
Slide 28: Financial Highlights: Positive Momentum in 2016
Financial Highlights Positive Momentum in 2016 3Q16 Financial Highlights Revenue of $68.6 million exceeding prior guidance of $64 million to $67 million Earnings per diluted share from continuing operations was $0.51 which was above expectations of $0.43 to $0.46 2016 annual guidance: narrowed
Slide 29: 2011-2015 Revenue
2011-2015 Revenue $ in millions $350 $319 $324 $300 $285 $275 to $278 $273 $273 $250 $200 $150 $100 $50 $0 2011 2012 2013 2014 2015 FY16 Guidance - Revenue from continuing operations. 29
Slide 30: 2011-2015 EPS
2011-2015 EPS $1.96 $1.60 $1.65 $1.62 $1.45 to $1.48 $1.34 2011 2012 2013 2014 2015 FY16 Guidance - EPS from continuing operations. 30
Slide 31: 2011-2015 Adjusted EPS
2011-2015 Adjusted EPS $1.96 $1.89 $1.86 to $1.89 $1.75 $1.73 $1.60 2011 2012 2013 2014 2015 FY16 Guidance - EPS from continuing operations. - 2012 Non-GAAP EPS excludes two non-recurring items, including a FTC settlement recorded in the second quarter and a sales tax accrual in the fourth quarter.
Slide 32: Strong Cash & Balance Sheet
Strong Cash & Balance Sheet $82.1M Cash & Investments No Long-Term Debt Low Working Capital Levels Minimal CAPEX Requirements Strong Free Cash Flows Existing Stock Repurchase Program Increased Quarterly Cash Dividend 28% to $0.32 per share Note: Cash and Investments as well as debt position a
Slide 33: Well Positioned for Future Growth
Well Positioned for Future Growth 33
Slide 34: Q&A
“YMedifast. Q&A our Optimal Health” Journey begins here.