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Michael MacDonald

Medifast Q2 Revenues Down 3% to 72.2 Million

 

Medifast, Inc. a leading United States manufacturer and provider of clinically proven weight-loss and healthy living products and programs, today reported financial results for the second quarter ended June 30, 2015.

We are pleased with our solid results in the second quarter which were in-line with our revenue and earnings expectations, said Michael C. MacDonald, Medifast Chairman and Chief Executive Officer.

We continued to make progress on our strategic initiatives within each of our key areas of focus, while also maintaining a strong financial discipline across our business. We believe that these efforts will help grow and improve Take Shape for Life, optimize Medifast Direct, and further our product and program innovation to position Medifast for success in 2015 and beyond.

For the second quarter, Medifast net revenue from continuing operations decreased 3% to $72.2 million from net revenue of $74.7 million in the second quarter of 2014.

Revenue in the direct sales channel, Take Shape for Life, decreased 3% to $52.3 million in the second quarter of 2015 compared to $54.0 million in the same period last year, a sequential improvement in the quarterly rate of decline compared to the same period last year.  

The total number of active earning Health Coaches in the second quarter was 11,800 as compared to 12,400 in the second quarter of 2014.  The average revenue per active earning Health Coach for the quarter was $4,423 as compared to $4,347 in second quarter of 2014.  

The Company's Medifast Direct channel revenue decreased 10% to $13.7 million, compared to $15.2 million in the second quarter of 2014. This marks the fourth consecutive quarterly improvement in the rate of decline and results were in-line with the Company's expectations as it continued to focus on efficiently managing marketing investments.

Revenue in the Franchise Medifast Weight Control Centers channel increased 22% to $4.7 million from $3.8 million in the second quarter of last year. The increase in revenue was driven by the conversion of corporate centers to franchise centers, partially offset by franchise center closures as well as a decrease in sales of franchise centers open greater than one year. There were 62 franchise centers in operation at the end of second quarter 2015 compared to 73 centers at the end of the same period last year.

Gross profit for the second quarter of 2015 was $53.2 million, compared to $55.6 million in the second quarter of 2014.

The Company expects third quarter 2015 net revenue from continuing operations to be in the range of approximately $65.0 to $68.0 million. For fiscal year 2015, the Company updated guidance of revenue from continuing operations to be in the range of $270.0 to $280.0 million. 

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