Medifast Inc · NYSE:MED
Medifast — Investor Presentation (May 2015)
40 slides from Medifast's investor presentation, May 27, 2015
Slide 1: Investor Relations Presentation May 2015
Investor Relations Presentation May 201 5 Exhibit 99.1
Slide 2: Safe Harbor Statement
2 2 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
Slide 3: Our Company
7) Our Company ‘YMed ifast. Changing lives. It’s what we do. Bs :. | 2 —Be. “YMedifast. 3
Slide 4: Since 1980
Since 1980… 4 FAST SAFE SIMPLE LONG TERM PORTABLE Over 20,000 Over Customers 1,000,000 Doctors have recommended Medifast products & programs since 1980
Slide 5: Medifast Today
Medifast Today Enriching lives through innovative choices for lasting health 5 • Weight Management and Healthy Living products company • Founded in 1980 • Industry - leading margins • Strong Balance Sheet • 12,000+ health coach channel • Direct - to - consumer E - commerce platform • Franchise Weigh
Slide 6: Recent 2015 Accomplishments
Recent 2015 Accomplishments 6 • Each One Reach One Program attracts incremental Health Coaches to Take Shape For Life. • April Go Global leadership event attracts 900 Health Coaches who aim to expand their businesses. • New Health Coach sign - up process streamlines the on - boarding experience to a
Slide 7: In 2015
In 2015 7 1 2 3 DELIVER ON PROFIT GOALS EXECUTE STRATEGIC PLAN HEALTHY LIVING Health Coach expansion, Weight Control Center Support, Technology integration and other efforts under way New product launches will address consumer demand and growth opportunities 7 Cost discipline coupled with new produc
Slide 8: Obesity & Diabetes – Linked Epidemics
Obesity & Diabetes – Linked Epidemics 8 2.62% 6.95% 2012 OBESITY as BMI% Diagnosed Diabetes Rate 1985 Sources: CDC Behavioral Risk Factor Surveillance System and Diabetes Surveillance System
Slide 9: Diet Industry Market Size
Diet Industry Market Size 9 Total Market Served Market 2% Medifast share of served market $65 Bn $18 Bn $47 Bn Served Market ‣ Diet Foods/Meals ‣ Weight Loss Centers ‣ Low Calories Programs ‣ Medical Plans & Surgery ‣ Books & Videos Unserved Market: ‣ Diet Soft Drinks ‣ Artificial Sweeteners ‣ Healt
Slide 10: Over 70 Choices
By Over 90 Choices! hakes A'S eset te ® Pudding °° ja drinks oatmeal SOUPS bites soft bakes flavor of home™ chewy bars #8 brownies heart healthsss* spancake ~ cereal crunch antioxidants sone nas See ee Ymedigast. 20
Slide 11: Proven Business Model to Deliver Shareholder Value
Proven Business Model to Deliver Shareholder Value 11 1 1
Slide 12: Key Strategies
Key Strategies 12 ‣ DELIVER profitability and enhance shareholder value long - term ‣ INNOVATE in products, programs & technology ‣ BUILD the network and reach of TSFL health coaches ‣ LEVERAGE our medical provider heritage & relationships ‣ GROW our online business thru best - in - class platform ‣
Slide 13: 4 Ways to Support Our Clients
3%4 Ways to Support Our Clients 13 1 3 12,000+ Independent Health Coaches 70 Franchise locations * Medical Provider Wholesale Channel Direct to Consumer E - commerce * As of 3/31/2015 Revenue by Segment *
Slide 14: TSFL: A Unique Model
TSFL: A Unique Model Our coaches are our success stories • Most coaches joined to achieve a healthy weight …and stayed for the business opportunity • Emphasize long term “Optimal Health” • Certification exams* Our processes are clear and transparent • 94% of orders go directly to clients, and 6% for
Slide 15: TSFL Strategy
TSFL Strategy 15 1 5 1 2 3 EXPAND COACH NETWORK OPTIMIZE USE OF COMMISSION PLAN & INCENTIVES NEW PRODUCTS 12,000+ Health Coaches • New BeSlim Program • Renewed focus on coach growth in new demographics • New video messaging delivers consistent coaching experience • 5 Super - regionals in 1Q15 • Nati
Slide 16: Complete e-Commerce Business & Experience
Complete e - Commerce Business & Experience 16 ‣ Full Product Line & Programs ‣ Quick Start Guides & Video How - to’s ‣ Dashboard for Tracking the Weight Loss Journey ‣ The Science Behind Medifast ‣ Programs for Diabetes, Seniors, Teens, Gluten - free, more ‣ Success Stories & “Happy Afters” ‣ MyMed
Slide 17: Medifast Direct Strategy
Medifast Direct Strategy 17 1 2 3 ENHANCE WEB PLATFORM ADDRESS DIY TREND OPTIMIZE AD & PROMO SPEND Best in class capabilities to drive orders • Streamlined ordering experience to increase conversion • Flexibility to rapidly change and target promotions Innovate for rewarding online experience • Prom
Slide 18: Local, Personal, Accountable
Local, Personal, Accountable • 70 Franchise Centers* • Supervised Programs • 1:1 Personal Counseling • Dietitian Support • Body Composition Technology • Onsite Product Purchasing • Weekly Weigh - ins • Constant Contact “Care Calls” 18 * As of 3/31/2015
Slide 19: MWCC – Current Status
MWCC – Current Status 19 Successfully transitioned 17 corporate centers to Franchisees at 12/31/2014: • Dallas, TX – 9 Centers • Houston, TX – 4 centers • Baltimore, MD – 4 Centers • Franchise Footprint (as of 3/31/2015) • 70 Franchise Locations • 8 Franchise Owners • 9 States • Profitable business
Slide 20: Current Franchise Locations
Current Franchise Locations 20 • 70 Franchise Locations • 8 Franchise Owners • 9 States
Slide 21: MWCC Strategy
MWCC Strategy 21 1 2 3 CONVERT TO FRANCHISE SUPPORT INNOVATE Highly Accretive Shift to Wholesale is completed • Food revenues will decline to wholesale price. • Counseling revenues shift to Franchisees. • Operating Profit improves with SG&A reductions Provide Support for Franchise Growth • Training
Slide 22: Leveraging Our Medical Heritage
Leveraging Our Medical Heritage • Obese patients spend 50% more on healthcare costs — over $7,100 more per year • Obesity screening and nutritional counseling now an “essential benefit” under Affordable Care Act • Providers seeking new revenue streams to offset increasing financial pressures • Sales
Slide 23: Medical Providers Strategy
Medical Providers Strategy 23 1 2 3 EXPAND COVERAGE & TERRITORY CURRENT CLIENT REVENUE GROWTH BUSINESS MODEL ENHANCEMENTS Expand US & Establish business in Canada • Drive account acquisition with multi - touch campaigns and trade events • Streamline on - boarding process and enhance client support D
Slide 24: Strategic Growth Initiatives
Strategic Growth Initiatives 24 CANADIAN EXPANSION Medifast launched in Canada 1Q14 Initial launch of Medifast Direct & Medical Provider Wholesale channels MEXICO & LATIN AMERICA Medix investment to expand partnership Acquisition of 13 Slim Centers in prime locations across Mexico City Progres
Slide 25: Medix-Medifast Partnership
Medix - Medifast Partnership • Launched June 2012 • Medifast enables Medix to offer robust preventative products & programs in addition to existing nutraceutical & pharmaceutical options • Multi - channel market strategy: – Leveraging 6,000+ physician network – Medifast - branded clinics: 3 in Mexic
Slide 26: Medix Weight Loss Center Expansion
Medix Weight Loss Center Expansion Slim Centers Acquisition • Immediate coverage for 21M+ Greater Mexico City • Incorporate Medifast brand U.S. Medifast Centers • Advance partnership in U.S. through sale of corporate - owned Medifast centers • Focus on Hispanic demographic and leverage Medix marketi
Slide 27: Beyond Weight Loss
Beyond Weight Loss 27 2 7 Addressable Weight Loss Market Healthy Living Market: Foods, Programs, Products Sources: U.S. Weight Loss Market Update, Marketdata, February 2014. Health and Wellness in the US, Euromonitor, August 2013 Gym, Health & Fitness Clubs in the U.S., IBISWorld, February 2014. Vit
Slide 28: Recent Product Launches
Recent Product Launches 28 Meal Replacements • Garlic Mashed Potatoes • Sour Cream & Chive Mashed Potatoes • Gingerbread Soft Bake Lean & Green Meals • Turkey Meatball Marinara* • Chicken Cacciatore* • Chicken with Rice & Vegetables* • Beef Stew* • Cheddar & Sour Cream Popcorn • Sea Salt Popcorn • S
Slide 29: Digital Dashboards & Apps
29 Digital Dashboards & Apps Customized for Take Shape For Life & Medifast - Track Meals, Nutrition, Water, Weight, Exercise & More - Unique Console Allows Coaches & Center staff to work closely with Clients on Progress Trackers and Dashboards
Slide 30: Results vary
30 Results vary. Clients may lose 2 - 5 lbs per week for the first two weeks and 1 - 2 lbs per week, thereafter.
Slide 31: Brand Awareness Study
31 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 Medifast Weight Watchers Jenny Craig Nutrisystem Jun-14 Brand Awareness Study
Slide 32: Innovation – from Concept to Consumer
Innovation – from Concept to Consumer 32 32
Slide 33: Leading Manufacturing & Distribution Infrastructure
Leading Manufacturing & Distribution Infrastructure 33 • Company - owned state - of - the - art facilities • Supports industry - leading gross margins • Capacity to drive aggressive growth • Partnerships with leading suppliers
Slide 34: Financial Overview
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Slide 35: 2010 - 2015 Revenue
2010 - 2015 Revenue 35 Revenue from continuing operations 2010 - 2014 5% CAGR
Slide 36: 2010 - 2015 EPS
2010 - 2015 EPS 36 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 . Reported EPS $ 1 . 34 . ** 2014 Non - GAAP EPS excludes the net of tax items of $ 1
Slide 37: Strong Cash & Balance Sheet
Strong Cash & Balance Sheet 37 • $61M Cash & Investments • No Long Term Debt • Low Working Capital Levels • Minimal CapEx Requirements • Strong Free Cash Flows Note: As of 3/31/2015
Slide 38: 2015 Priority: Return to Growth
2015 Priority “Return to Growth” 38 1 2 3 Re - Ignite growth in coach network for TSFL Invigorate and support new franchisees to grow in 2015 Focused advertising spend on the back of sophisticated data to drive growth in Med Direct Continue to investigate International expansion opportunities Contin
Slide 39: Key Investment Highlights
Key Investment Highlights 39 Large , addressable and growing market Differentiated scientific approach to weight loss Highly efficacious product portfolio validated by customer referrals Strong, stable cash flows Unique Multi - Channel Model State - of - the - art production capabilities and low cos
Slide 40: Q&A
“‘Y Medifast. Q&A See ee Ymecifast