UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-31573

Medifast, Inc.

(Exact name of registrant as specified in its charter)


Delaware			13-3714405
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

100 International Drive

Baltimore, Maryland 21202

Telephone Number: (410) 581-8042

(Address of Principal Executive Offices, Zip Code and Telephone Number, Including Area Code)

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ⌧	Accelerated filer ◻	Non-accelerated filer ◻	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ⌧

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Trading Symbol

Name of each exchange on which registered:

Common Stock, par value $0.001 per share

MED

New York Stock Exchange

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The number of shares of the registrant’s common stock outstanding at April 26, 2021 was 11,761,104.

Table of Contents

Medifast, Inc. and subsidiaries

Index


Part 1 – Financial Information



Item 1 – Financial Statements


Condensed Consolidated Statements of Income (unaudited) for the Three Months Ended March 31, 2021 and 2020		2

Condensed Consolidated Statements of Comprehensive Income (unaudited) for the Three Months Ended March 31, 2021 and 2020		3

Condensed Consolidated Balance Sheets (unaudited) as of March 31, 2021 and December 31, 2020		4

Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2021 and 2020		5

Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the Three Months Ended March 31, 2021 and 2020		6

Notes to Condensed Consolidated Financial Statements (unaudited)		7

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations		14

Item 3 – Quantitative and Qualitative Disclosures about Market Risk		19

Item 4 – Controls and Procedures		19

Part II – Other Information

Item 1 – Legal Proceedings		20

Item 1A – Risk Factors		20

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		20

Item 6 – Exhibits		21

Table of Contents

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(U.S. dollars in thousands, except per share amounts & dividend data)


	Three months ended March 31,
	2021		2020

Revenue	$	340,669	$	178,461
Cost of sales		92,122		43,221
Gross profit		248,547		135,240

Selling, general, and administrative		195,748		111,707

Income from operations		52,799		23,533

Other income
Interest income, net		23		110
Other income (expense)		19		(19)
		42		91

Income from operations before income taxes		52,841		23,624

Provision for income taxes		11,778		5,147

Net income	$	41,063	$	18,477

Earnings per share - basic	$	3.49	$	1.57

Earnings per share - diluted	$	3.46	$	1.56

Weighted average shares outstanding
Basic		11,772		11,772
Diluted		11,881		11,824

Cash dividends declared per share	$	1.42	$	1.13

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(U.S. dollars in thousands)


	Three months ended March 31,
	2021		2020

Net income	$	41,063	$	18,477
Other comprehensive income, net of tax:
Foreign currency translation		78		(4)
Unrealized (losses) gains on investment securities		(16)		49

Other comprehensive income		62		45

Comprehensive income	$	41,125	$	18,522

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(U.S. dollars in thousands, except par value)


		March 31,		December 31,
		2021		2020

ASSETS
Current Assets
Cash and cash equivalents	$	206,031	$	163,723
Accounts receivable - net of doubtful accounts of $383 and $219 at
March 31, 2021 and December 31, 2020, respectively		88		584
Inventories		62,234		53,392
Investment securities		6,883		10,752
Prepaid expenses and other current assets		6,625		5,863
Total current assets		281,861		234,314

SEC Form 10-Q filed by MEDIFAST INC