Medifast Inc · NYSE:MED
Medifast — Wedbush 15th Annual California Dreamin' Consumer Conference 'The New York Edition' (September 2014)
37 slides from Medifast's conference presentation, Sep 23, 2014
Slide 1: Wedbush 15th Annual California Dreamin' Consumer Conference
Wedbush 15 th Annual California Dreamin ’ Consumer Conference ‘The New York Edition’ September 23 , 2014 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
Our Company 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
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 • $357M Revenue in 2013 • Industry - leading margins • Strong Balance Sheet • 10,000+ health coach channel • Direct - to - consumer E - commerce pl
Slide 6: Recent Accomplishments
Recent Accomplishments 6 • Canada Launch • 12 U.S. centers sold to Medix • 12 U.S. centers sold to TransformU • Medix buys Slim Centers • Stop.Challenge.Choose. • E - commerce Promotions • New Products • Jimmy V Foundation • Share Repurchase
Slide 7: In 2014
In 2014 7 1 2 3 DELIVER ON PROFIT GOALS EXECUTE STRATEGIC PLAN HEALTHY LIVING Full - year 2014 earnings at our guidance represents 3 consecutive years of profit growth Health Coach expansion, Weight Control Center conversion, Technology integration and other efforts under way New product launches wi
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
Wy over 90 Choices! proses ' A'S ese is DUCCING °° Gries arent SOUPS bites mashed pota Soy Chips crackers soft bakes flavor of home™ chewy bars pe® DIOWNIES iii heart health" pancake Yee d cereal crunch antioxidants aacete aa a ee Medifast. 10
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 ‣ E
Slide 13: Ways to Support Our Clients
4 Ways to Support Our Clients 13 1 3 10,000+ Independent Health Coaches 124 Franchise and Corporate Centers Medical Provider Wholesale Channel Direct to Consumer E - commerce
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 IMPROVED COMMISSION PLAN NEW PRODUCTS 10,000+ Health Coaches • New BeSlim Program • New Video Messaging • Stop.Challenge.Choose • 5 Super - regionals in 1Q14 • National Convention July 2014 in Anaheim – 3,000 attendees Integrated Plan Focuses on Growth
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 • Laun
Slide 18: Local, Personal, Accountable
Local, Personal, Accountable • 51 Corporate Centers • 73 Franchise Centers • Supervised Programs • Dietitian Support • Body Composition Technology • Onsite Product Purchasing • Weekly Weigh - ins • Constant Contact “Care Calls” 18
Slide 19: MWCC Strategy
MWCC Strategy 19 1 2 3 CONVERT TO FRANCHISES GROW FOOTPRINT PROGRESS TO DATE Highly Accretive Shift to Wholesale • Food revenues will decline to wholesale price • Operating Profit will improve with SG&A reductions Responsibly Expand Franchise Footprint • Entrepreneurial management will invest to gro
Slide 20: 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 21: Medical Providers Strategy
Medical Providers Strategy 21 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 22: Strategic Growth Initiatives
CORPORATE WELLNESS Weight management a key element in growing industry Obesity epidemic is costing employers in premiums and lost productivity Affordable Care Act promotes proactive steps and insurance coverage for weight management Medifast exploring partnership models to enter market this ye
Slide 23: 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 24: 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 12 corporate - owned Medifast centers – Austin – 4 – San Antonio – 3 – Miami – 5 • Focus on H
Slide 25: Beyond Weight Loss
Beyond Weight Loss 25 2 5 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 26: 2014 Product Launches
2014 Product Launches 26 Meal Replacements • Garlic Mashed Potatoes (1Q) • Sour Cream & Chive Mashed Potatoes (1Q) • Gingerbread Soft Bake (4Q) Lean & Green ™ Meals • Turkey Meatball Marinara* (1Q) • Chicken Cacciatore* (1Q) • Chicken with Rice & Vegetables* (1Q) • Beef Stew* (2Q) • Cheddar & Sour C
Slide 27: Technology that Drives Change
Technology that Drives Change • Engage and motivate the client • Support Healthy Living beyond Weight Loss • Interface with the Apps and Trackers consumers are using • New desktop and mobile platform launching in 2014 27
Slide 28: Our Newest Campaign
Our Newest Campaign 28
Slide 29: Growing Brand Awareness
Growing Brand Awareness 29 Source: Medifast Brand Awareness based from proprietary research based on statistically representative samples of over 1,000 consumers
Slide 30: Innovation – from Concept to Consumer
Innovation – from Concept to Consumer 30 30
Slide 31: Leading Manufacturing & Distribution Infrastructure
Leading Manufacturing & Distribution Infrastructure 31 • Company - owned state - of - the - art facilities • Supports industry - leading gross margins • Capacity to drive aggressive growth • Partnerships with leading suppliers
Slide 32: Financial Overview
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Slide 33: 2008-2013 Revenue
2008 - 2013 Revenue 33 5 - Year 27% CAGR 2014 E $320 - $330M
Slide 34: 2008-2013 EPS
2008 - 2013 EPS 34 *2012 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 $1.16. 5 - Year 42% CAGR 2014 E $1.80 – 1.85
Slide 35: Strong Cash & Balance Sheet
Strong Cash & Balance Sheet 35 • $69M Cash & Investments • No Long Term Debt • Low Working Capital Levels • Minimal CapEx Requirements • Strong Free Cash Flows Note: As of June 30, 2014 • Purchased 451,000 thousand shares through our share repurchase plan through 6/30. • Management team and Board of
Slide 36: Why Medifast?
Why Medifast? TRUSTED HEALTH BRAND 4 CHANNELS TO REACH CONSUMERS PRODUCT & PROGRAM EXPERTISE “The people who know how to lose weight and keep it off, know how to keep you healthy in the first place” Each channel has strengths for reaching current and new clients with products that address needs for
Slide 37: Q&A
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