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Medifast Inc. (NYSE:MED) delivered first quarter 2006 results with revenue growing an impressive 130% and income increasing an equally impressive 230% when compared to the same quarter last year.

Highlights from the first quarter 2006 conference call are given below:

* Revenue came in at $19.2 million vs $8.3 million for the first quarter of 2004, an increase of 130% year-over-year.

* Income for the first quarter came in at $1.69 million or 13 cents per share when compared to 4 cents per share last year, an increase of 230% year-over-year.

* Operating expenses increased to $11.35 million from $6 million last year. As a percentage of sales, operating expenses actually fell 5% to 59% this quarter when compared to 64% for the year-ago period. There could an increase in operating expenses in the third and the fourth quarter of this year as the company increases advertising and upgrades infrastructure.

* Medifast increased full year guidance for the third consecutive quarter. Revenue guidance was increased to a range of $66 to $68 million from the earlier guidance of $58 to $60 million. Income was also guided up to a range of 38 to 40 cents per share from the previous guidance of 29 to 32 cents.

* The company is improving infrastructure and utilized outsourced call centers and production facilities this quarter. Surprisingly, the conversion rate at the outsourced call centers was in fact greater. Medifast also plans to increase inventory levels to handle future growth.

* Subscriber acquisition costs remained stable at about $100 per customer in the "direct-to-consumer model" (sales through advertising). The lifetime value of customers through the direct-to-consumer model is $575 per customer. The lifetime value of customers through the "take shape for life" model (person to person sales) is about $700 per customer.

* Medifast added 25,000 new customers this quarter.

* Thanks to the effectiveness of advertising, the company plans to spend about $10 million on advertising in 2006, which is more than double what it spent last year.

* The breakup of advertising spending in the first quarter of 2006 was 55% print, 35% TV and 10% web.

At one point in after hours trading yesterday, the stock traded higher by almost 13% at $15 per share.

With the increased spending on advertising, I have been wondering why I have not seen any of their ads yet and someone on the conference call had a similar question. It appears that their advertising is mostly targeted towards women and hence their ads appear on TV channels like Oxygen and Lifetime.

If you are interested, you can check out highlights from last quarter's conference call here. Medifast is now up more than 145% since I added it to the SINLetter model portfolio in December and you can check out the reasons why I like Medifast here.