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Medifast, Inc.
The Company had stockholders' equity of $29.6 million and working capital of $10.3 million at March 31, 2007, compared to $23.7 million and $9.9 million at March 31, 2006, respectively.
"In the first quarter, we were pleased to develop new marketing initiatives in our core business channels by bringing on additional industry expertise to grow our business platform. Our disciplined strategy towards advertising in the first quarter allowed us to build a proven program for continued expansion in 2007. In advertising, we concentrated on introducing new creative and buying strategies to develop the appropriate message and mix of media to drive business efficiently which resulted in improved month-to- month return on advertising spend in the first quarter. The advertising spend in the first quarter, although smaller than the spending in several quarters in 2006, has set what we believe is an opportunistic stage that should allow for an effective increased advertising spend throughout the second and third quarters of 2007.
During the first quarter, Take Shape for Life executed one of the most successful customer retention campaigns in company history and is the beginning stages of recruiting growth. We are excited by the current trends in our direct response division and the gaining momentum of our network of Take Shape for Life health coaches as we expand on these programs throughout the year," stated Michael S. McDevitt, Chief Executive Officer.
2007 Full-Year Guidance
The Company reiterates previous guidance and expects to report revenue of $85 to $88 million, representing a year over year increase of 15% to 19%, with after-tax profit of $0.45 to $0.46 per diluted share, an increase of 18% to 21% from 2006. On a quarterly basis, full-year 2007 guidance will be reviewed, reiterated or updated as necessary.
First Quarter Conference Call
Medifast will release full-year financial results for the period ended March 31, 2007 on Thursday May 10, 2007 after the market closes. The Company will hold a conference call and webcast at 5:00 PM EDT. Interested participants should call (800) 573-4754 when calling within the United States or (617) 224-4325 when calling internationally. Please refer to pass code 23712014. There will be a playback available as well. To listen to the playback, please call (888) 286-8010 when calling within the United States or (617) 801-6888 when calling internationally. Please use pass code 62761554 for the replay. The replay will be available until August 17, 2007.
The webcast may be accessed via the Company's web site at http://www.medifastdiet.com/. Interested parties should go to the section marked "Investor Relations" to listen to the call. The webcast can be accessed until August 17, 2007.
About Medifast: (http://www.medifastdiet.com/)
Medifast
MEDIFAST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2007 December 31, 2006
(Unaudited) (Audited)
ASSETS
Current assets:
Cash $1,857,000 $1,085,000
Accounts receivable-net of
allowance for doubtful accounts of
$100,000 525,000 448,000
Inventory 8,707,000 8,255,000
Investment securities 1,414,000 1,540,000
Deferred compensation 798,000 673,000
Prepaid expenses and other current
assets 3,483,000 2,599,000
Note receivable - current 174,000 174,000
Deferred tax asset 92,000 90,000
Total Current Assets 17,050,000 14,864,000
Property, plant and equipment - net 14,575,000 14,020,000
Trademarks and intangibles - net 6,301,000 6,274,000
Deferred tax asset, net of current
portion 418,000 367,000
Note receivable, net of current
portion 1,314,000 1,355,000
Other assets 53,000 47,000
TOTAL ASSETS $39,711,000 $36,927,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses $3,615,000 $2,913,000
Income taxes payable 689,000 535,000
Line of credit 1,906,000 1,256,000
Current maturities of long-term
debt 528,000 548,000
Total current liabilities 6,738,000 5,252,000
Long-term debt, net of current
portion 3,392,000 3,509,000
Total Liabilities 10,130,000 8,761,000
Stockholders' Equity:
Common stock; par value $.001 per
share; 20,000,000 authorized;
13,643,998 and 12,782,791 shares
issued and outstanding,
respectively 14,000 14,000
Additional paid-in capital 26,752,000 26,629,000
Accumulated other comprehensive
income 348,000 334,000
Retained Earnings 7,653,000 6,231,000
34,767,000 33,208,000
Less: cost of 274,184 and 210,902
shares of common stock in treasury (1,994,000) (1,686,000)
Less: unearned compensation (3,192,000) (3,356,000)
Total Stockholders' Equity 29,581,000 28,166,000
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $39,711,000 $36,927,000
MEDIFAST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31,
2007 2006
(Unaudited) (Unaudited)
Revenue $20,089,000 $19,183,000
Cost of sales 5,058,000 4,778,000
Gross Profit 15,031,000 14,405,000
Selling, general, and administration 12,792,000 11,318,000
Income from operations 2,239,000 3,087,000
Other income/(expense)
Interest expense (95,000) (89,000)
Loss on Sale of Consumers Choice
Systems - (323,000)
Stock compensation expense (241,000) (33,000)
Interest income 33,000 98,000
Other expense 51,000 79,000
(252,000) (268,000)
Net income before provision for
income taxes 1,987,000 2,819,000
Provision for income tax (expense) (565,000) (1,125,000)
Net income 1,422,000 1,694,000
Basic earnings per share $0.11 $0.13
Diluted earnings per share $0.10 $0.13
Weighted average shares outstanding -
Basic 12,899,543 12,965,518
Diluted 13,690,788 13,474,411
First Call Analyst:
FCMN Contact: bconnors@medifastdiet.com
SOURCE: Medifast, Inc.
CONTACT: Sara Huber of Warschawski, +1-410-367-2700, ext. 19,
sara.huber@warschawski, for Medifast, Inc.; or Investor Relations:
Web site: http://www.medifastdiet.com/