Company Reports All-Time Record Revenues and Profits
OWINGS MILLS, Md., May 15 /PRNewswire-FirstCall/ -- Medifast, Inc. (AMEX:MED) announced today first quarter results for the period ended March 31, 2006. For the quarter ended March 31, 2006, Medifast reported revenue of $19.2 million, a 130% increase from $8.3 million in the first quarter of 2005. The Company reported pre-tax income of $2,819,000, a 230% increase compared to $854,000 for the quarter ended March 31, 2005. The company reported net income of $1,694,000, or $0.13 per basic share ($0.13 per diluted share), versus $507,000 or $0.04 per basic share ($0.04 per diluted share) in 2005. The first quarter of 2006 represented the Company's 26th consecutive quarter of profitability.
The Company had stockholders' equity of $23.7 million and working capital of $11.2 million at March 31, 2006, compared to $19.7 million and $8 million at March 31, 2005.
"We are extremely pleased with the first-quarter results. We continue to expand our successful multi-media advertising program as the low cost to acquire new customers remains encouraging. We are placing emphasis on improved service standards and customer-focused support in both our direct-to- consumer marketing and direct sales health network. We are building the necessary infrastructure throughout 2006 to support sales growth and to better serve our expanding customer base that relies on us for our clinically proven products and programs," said Michael S. McDevitt, Medifast President and Chief Financial Officer.
Bradley T. MacDonald, Medifast Executive Chairman of the Board, stated, "I must give praise to the exceptional leadership of the Executive Management Team. These key executives have done a tremendous job of dramatically increasing revenues while maintaining operational and financial discipline." 2006 Revised Financial Guidance Previously, the company expected to generate revenue of $58 to $60 million for the year with an after-tax profit of $0.29 - $0.32 per diluted share. The company now expects to generate revenue of $66 to $68 million for the year with after-tax earnings of $0.38 to $0.40 per diluted share.
First Quarter Conference Call The Company will hold a conference call and webcast at 5:00 PM EDT on May 15, 2006 to discuss first quarter results.
Interested participants should call (800) 261-3417 when calling within the United States or (617) 614-3673 when calling internationally. Please refer to pass code 45199429. 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 81365139 for the replay. The replay will be available until August 15, 2006.
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.
Medifast has been helping people lose weight and achieve better health for 25 years. Its meal replacement foods have been proven effective in multiple clinical studies, recommended by over 15,000 physicians and used by more than 1 million customers. Medifast offers its customers world-class customer service and nutrition support.
This release contains forward-looking statements which may involve known, and unknown risks, uncertainties and other factors that may cause Medifast's actual results and performance in future periods to be materially different from any future results or performance suggested by these statements. Medifast cautions investors not to place undue reliance on forward-looking statements, which speak only to management's expectation on this date.
MEDIFAST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS March 31, 2006 December 31, 2005
(Unaudited) (Audited)
ASSETS
Current assets:
Cash $3,793,000 $1,484,000
Accounts receivable-net of allowance
for doubtful accounts of $100,000 775,000 985,000
Inventory 5,072,000 5,475,000
Investment securities 2,764,000 2,700,000
Deferred compensation 627,000 525,000
Prepaid expenses and other current
assets 2,438,000 3,273,000
Note receivable - current 183,000 -
Deferred tax asset 90,000 -
Total Current Assets 15,742,000 14,442,000 Property, plant and equipment - net 10,076,000 9,535,000
Trademarks and intangibles - net 4,785,000 6,508,000
Deferred tax asset, net of current portion 172,000 - Note receivable, net of current portion 1,320,000 - Other assets 61,000 60,000 TOTAL ASSETS $32,156,000 $30,545,000 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $2,918,000 $2,263,000
Income taxes payable 483,000 899,000
Line of credit 624,000 633,000
Current maturities of long-term debt 542,000 561,000
Deferred tax liability - current - 90,000
Total current liabilities 4,567,000 4,446,000 Long-term debt, net of current portion 3,851,000 3,977,000
Deferred tax liability - non-current - 101,000
Total Liabilities 8,418,000 8,524,000 Stockholders' Equity: Common stock; par value $.001 per share;
20,000,000 authorized; 13,363,624 and
12,782,791 shares issued and
outstanding, respectively 13,000 13,000
Additional paid-in capital 25,579,000 21,759,000
Accumulated other comprehensive income 227,000 282,000
Retained Earnings 2,843,000 1,149,000
28,662,000 23,203,000 Less cost of 210,902 shares of
common stock in treasury (1,075,000) (1,075,000)
Less Unearned compensation (3,849,000) (107,000)
Total Stockholders' Equity 23,738,000 22,021,000 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $32,156,000 $30,545,000 MEDIFAST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three months Ended March 31,
2006 2005
(Unaudited) (Unaudited) Revenue $19,183,000 $8,326,000
Cost of sales 4,778,000 2,073,000
Gross Profit 14,405,000 6,253,000
Selling, general, and administration 11,351,000 5,341,000 Income from operations 3,054,000 912,000 Other income/(expense)
Interest expense (89,000) (65,000)
Loss on sale of Consumer Choice Systems (323,000) -
Interest income 98,000 28,000
Other income (expense) 79,000 (21,000) Income before provision for income taxes 2,819,000 854,000
Provision for income tax (expense) (1,125,000) (347,000) Net income 1,694,000 507,000 Less: Preferred stock dividend requirement - - Net income $1,694,000 $507,000
Basic earnings per share $0.13 $0.04
Diluted earnings per share $0.13 $0.04 Weighted average shares outstanding -
Basic 12,965,518 11,916,241
Diluted 13,474,411 12,729,459
DATASOURCE: Medifast, Inc.
CONTACT: Kellie Pizzico, Investor Relations, Medifast, Inc., +1-410-504-8162, Web site: http://www.medifastdiet.com/
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