On this page of StockholderLetter.com we present the latest annual shareholder letter from MEDIFAST INC — ticker symbol MED. Reading current and past MED letters to shareholders can bring important insights into the investment thesis.
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5/8/2024 Letter Continued (Full PDF)
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5/1/2023 MED Stockholder Letter
• More "Consumer Goods" Category Stockholder Letters
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MED Benford's Law Stock Score = 91
5/8/2024 Letter Continued (Full PDF)
•
5/1/2023 MED Stockholder Letter•
More "Consumer Goods" Category Stockholder Letters•
MED Benford's Law Stock Score = 91MED Shareholder/Stockholder Letter Transcript:
2 0 23 ANNUAL RE PORT Our strategy is to offer a holistic solution where our customers can get everything they need in one place, making it easier to change their lifestyles to support overall weight loss and health and wellness goals. Chairman & Chief Executive Officer Dear Fellow Stockholder: The start of the year is always busy, especially this year, as our team is driving important transformation work across the business. It s an exciting and demanding period for us, and I am looking forward to sharing the progress we are making against our goals. Medifast has always taken a comprehensive approach to health and wellness, having been founded by a physician, and further developed by experts in health and behavioral change. We have stood at the forefront of evidence-based wellness solutions over the last 40-plus years and have consistently recognized that all people looking to transform their health are different, and, that as a result, it takes a uniquely tailored approach to offer the best possible chance of success. In a world where health and wellbeing can be a difficult and solitary journey, our programs have provided personalized support to people who want to learn healthy habits, be part of a like-minded community, and embrace a healthier lifestyle. Over the course of our history, we ve learned some important things. We know that people achieve better outcomes when they have a coach, as well as when they are able to plug into a community of like-minded people. It s also clear that learning healthy habits is a powerful tool that can be leveraged into the creation of a healthier lifestyle. While health and wellness has been changed markedly over recent years, largely fueled by the broad accessibility of medical weight loss solutions, our insights remain central to our future success as we look to transform our business to respond. US expenditure on weight loss medications is projected to reach approximately $100 billion by 2030, and a fastgrowing market is emerging for supporting products and services to help customers utilizing GLP-1 medications as part of their health and wellness journeys. According to a BCG study, the market for supporting products and services for the GLP-1 US market is expected to be worth approximately $50 billion or more by 2030. This is a market that we believe Medifast is uniquely positioned to address. With that in mind, Medifast is embarking on its biggest and most important transformation to date, taking bold steps to forge a new future as a diversified health and wellness company with significantly increased growth opportunities. Achieving this will take significant focus on a series of important growth initiatives. We have already begun empowering our Coaches with enhanced programs and tools, particularly in digital environments, cultivating new markets through tailored products and nutrition kits, broadening our customer base, and making our lifestyle and habit-development approach to health and wellness complementary to the segment of the population who want to use medical intervention to achieve weight loss. These recent moves have significantly expanded our total addressable market. Research shows that about half of our prospective customers would consider using GLP-1 medications to aid in their weight loss. Lifestyle modification remains a crucial element for long-term weight loss success for those on medications. The medications themselves are often prescribed with instructions for the user to make lifestyle modifications. Therefore, personalized support is crucial in helping people to stay accountable and to achieve their health goals. At the end of 2023, we announced a strategic collaboration with leading telehealth provider, LifeMD, Inc., through which we are now able to deliver a unique, holistic offer for consumers using GLP-1 medications. Customers have access to both our personalized habitbased, coach-guided approach along with the medical expertise of board-certified affiliated LifeMD clinicians. With independent OPTAVIA Coaches and LifeMD Clinicians working together, we have the ability to provide all consumers in the United States with the nutrition, education, and support necessary to help make living a healthy lifestyle second nature. Our strategy is to offer a holistic solution where our customers can get everything they need in one place, making it easier to change their lifestyles to support overall weight loss and health and wellness goals. With a more complete offer inclusive of access to weight loss medications through a LifeMD clinician, our line of nutrition products, and support from a Coach and a community that is on a similar journey the value our Coaches can bring to their customers has never been more compelling. At Medifast, our vision is a world in which people are empowered and able to achieve Lifelong Transformation, by making a healthy lifestyle second nature. We have built a robust business with a powerful platform, and we are a leader in our space. We change lives for the better, and we do it in a unique and effective way whether we are working with Coaches and Customers, or helping the communities in which we live and work through our corporate social responsibility platform Healthy Habits For All. Certainly, we have seen some pressure on our business that is reflected in our results and future expectations. Like many companies in the public markets, we continue to battle with some significant headwinds with the changing macro environment. At the same time, we continue to demonstrate our financial and operational agility, adjusting our model and our market approach, and driving for even greater efficiency. We have an experienced team that has shown a consistent ability to pivot to take advantage of opportunities as they emerge, and a strategy in place working alongside world-class partners to help deliver on the exciting possibilities ahead. We also have a well-capitalized business with a strong financial foundation and a solid balance sheet with no debt, which helps to power our current transformation. While we expect the road ahead will remain bumpy, I believe our strategic direction puts us on a path to drive long-term success. We believe that Medifast is poised to shape the future of health and wellness, and that delivery against our goals should position us well for the long-term, helping form the foundation of the company s strategy to return to growth and in broadening and deepening our acquisition channels to drive forward our mission to empower individuals on their path to optimal health and wellbeing. Medifast has the financial strength and strategic flexibility to invest in our ongoing operational and marketing effectiveness, and the scientific and medical heritage that provides us with credibility to play in this rapidly-developing space. That is the kind of business we want to create, and the value we want to provide to our stockholders. Thank you for your ongoing support as an investor in this company. I am proud of all that we have achieved, and I look forward to updating you on our progress in the coming quarters and years. Sincerely, Dan Chard Chairman & Chief Executive Officer FORWARD-LOOKING STATEMENTS Certain information included in this Annual Report, such as descriptions of Medifast s objectives or goals constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give expectations of future events and are not guarantees of future performance and are subject to certain risks, uncertainties, and other factors, many of which are beyond the Company s control and are difficult to predict, such as: Medifast s inability to attract and retain independent OPTAVIA Coaches; Industry competition and new weight loss products, including weight loss medications or services; health or advertising related claims by our customers; Medifast s inability to continue to develop new products; effectiveness of Medifast s advertising and marketing programs, including use of social media by OPTAVIA Coaches; and other uncertainties and factors identified in Medifast s filings with the U.S. Securities and Exchange Commission. Although Medifast believes that these expectations, statements, and assumptions are reasonable, actual results could differ materially from those expressed or implied in the forward-looking statements; therefore, the reader should not place undue reliance upon these statements, which speak only as of the date of this Annual Report. Unless legally required, Medifast undertakes no obligation to update publicly any forward-looking statements, whether as a result of the new information, future events, or otherwise.