Medifast Inc · NYSE:MED
Medifast — Investor Presentation (September 2013)
36 slides from Medifast's investor presentation, Sep 19, 2013
Slide 1: Investor Presentation
Investor Presentation Timothy Robinson, Chief Financial Officer September, 2013
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: 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 3
Slide 4: 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 5: 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 5
Slide 6: 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 ” 6
Slide 7: Obesity is now recognized as a Disease
Obesity is now recognized as a Disease Obesity on the rise …
Slide 8: Strong, Consistent Financial Performance: Revenue
Strong, Consistent Financial Performance 2007 2008 2009 2010 2011 2012 First Half 2012 First Half 2013 $85.0 $110.1 $169.7 $257.6 $298.2 $356.7 $182.5 $193.1 Revenue 8
Slide 9: Strong, Consistent Financial Performance: EPS
Strong, Consistent Financial Performance EPS 9 * 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 10: 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 Manufacturing Owings Mills, MD Distribution Ridgely, MD MANUFACTURING AND DISTRIBUTION Distribution Dallas, TX 10
Slide 11: Current Medifast National Market Coverage
Current Medifast National Market Coverage 18 3 Significant Growth Opportunity to Cover “ White Space ” 11
Slide 12: International Coverage Opportunity
International Coverage Opportunity Australia India Europe Asia Canada Latin America Through Medix Brazil Mexico (Medix) 1.6B Overweight Globally and Expected to Grow 40% in Next 10 Years 12 Expansion efforts underway
Slide 13: Medifast 5&1 Plan, Transition, & Maintenance
13 Medifast 5&1 Plan, Transition, & Maintenance
Slide 14: Clinically Proven and Scientifically Based
MacDonald Center for Obesity Prevention & Education Scientific Advisory Board 14 Clinically Proven and Scientifically Based
Slide 15: Medifast Sales Channels
‘YMedifast. lm)> Tooeere MEDICAL PROVIDERS rue: ey VMedifast. 1 AME | “‘YMedifast (Gam YMedifast. WEIGHT CONTROL CENTERS DIRECT Proven, healthy weight loss from the brand recommended by over 20,000 doctors since 1980. “e
Slide 16: Direct Selling Coaching Division
16 Direct Selling 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 Direct Selling Overview 17
Slide 18: Take Shape for Life Health Coaches
TSFL clients are provided a free Personal Health Coach & Mentor to guide them through t heir w eight l oss journey and to help clients stay healthy for life. • Health Coaches are required to take competency exam now administered by the Center for Obesity Prevention and Education(COPE) at Villanova U
Slide 19: Direct Sales Revenues
19 Direct Sales Revenues (in $ millions)
Slide 20: Coverage Expansion
Coverage Expansion • Expand coverage to new markets to cover “white space” • Leverage Success from Home magazine & Dr A ’ s latest book tour 20
Slide 21: Improve Field Effectiveness
Improve Field Effectiveness • Create development plan with simplified standards & processes • Enhance field communications & coach tools • Expand mobile “ on - the - go ” business 21
Slide 22: Self Guided Weight Loss with Online Ordering (Direct Response)
22 Self Guided Weight Loss & Weight Management with the Convenience of Online Ordering, Support, & Tools
Slide 23: Direct Response Revenues
• 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 volume *September 2011 – August 2012 volume DMA = Designated Market Area 23 Direct Response Revenues (in $ millions)
Slide 24: Optimize Marketing & Promotional Spends to Improve Profit
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 24
Slide 25: 2013 Brand Awareness Campaign
2013 Brand Awareness Campaign
Slide 26: Website Performance Critical Success Factors
Website Performance Critical Success Factors • Mobile Commerce - November • Site load speed improved • Simplified design • Improved navigation • SEO benefits • Optimized content • Multiple versions for new & returning visitors 26
Slide 27: Weight Control Centers
27 A weight loss and weight management partnership with a team of center professionals dedicated to Member success
Slide 28: Weight Loss Management Partnership with a Team of Professionals
Weight Loss Management Partnership with a Team of Professionals Dedicated to Member Success • Brick - and - mortar centers offering supervised & structured programs and support • Currently operating 86 company - owned & 36 franchise - owned centers in the U.S. 28
Slide 29: Clinic Revenues
29 Clinic Revenues (in $ millions)
Slide 30: Strengthening Corporate Center Operations
Focus on Strengthening Overall Corporate Center Operational, Member Acquisition, and Member Counseling Practices • Rapid expansion of corporate owned centers was stopped in the first half 2012. 19 centers were opened in 2012. • Significant employee restructuring was completed in first half of 2012 t
Slide 31: Expand Franchise Footprint
Expand Franchise Footprint • Existing Franchise partners to expand into new markets • New focus on expansion opportunities with incremental Franchise partners • International clinic expansion is underway through our Medix strategic partnership in Mexico and Latin America • Medifast is providing focu
Slide 32: Current Center Count
• 86 Corporate Centers • 36 Franchise Centers • 122 Total Centers across 14 States Current Center Count Corporate Centers Franchise Centers
Slide 33: Medical Providers
33 Physician directed weight loss and weight management through a Health Care Provider or Non - Retail Medical Center
Slide 34: Medical Provider Customers
CUSTOMER Health Care Systems Ambulatory Care Centers Clinics & Medi Spas Individual Practices 34
Slide 35: Execution of Strategic Planks Will Drive Growth
• Execution of strategic planks and driving forces for change will drive aggressive growth • Infrastructure & process discipline will lead to continued margin expansion opportunities • New talent and employee development will help us manage through change as we continue to grow • Healthy earnings an
Slide 36: Thank You
YMedifast. Thank You Proven, healthy weight loss from the brand recommended by over 20,000 doctors since 1980. 6