MEDIFAST INC
For the period ended Mar 31, 2025. Filed Apr 28, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 28, 2025
MED$12.81+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-04.
0001628280-24-045040
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-28.
0001628280-25-020341
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 76 previous paragraphs and 73 current paragraphs.
10 unchanged; 28 reworded; 35 added; 37 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
Medifast is the health and wellness company known for its habit-based and coach-guided lifestyle solution, OPTAVIA®. The Company is currently executing a comprehensive business transformation that will enable it to succeed in an environment that has been fundamentally impacted by rapid acceptance of GLP-11 weight loss medications.
Current report
We believe that we are a well-capitalized business with strong and effective leadership that has grown its lifestyle brand, OPTAVIA, into a significant health and wellness brand. We have a powerful business model, building a network of approximately 25,400 active earning OPTAVIA coaches and impacting more than 3 million lives. Backed by more than 40 years of experience, clinically proven plans, innovative products, and a powerful integrated coach model, Medifast stands at the forefront of evidence-based wellness solutions. Our business model is differentiated and unique, a scalable coach-based approach that drives both program effectiveness and company growth. With access to clinicians through our collaboration with LifeMD, Inc. (Nasdaq: LFMD) (“LifeMD”), we provide our customers access to GLP-1 weight loss medications, when clinically appropriate.
Current report
Medifast offers a simple, yet comprehensive approach to achieving optimal health and wellbeing. Our lifestyle program, OPTAVIA, empowers people to make lasting changes. Through the support of our independent OPTAVIA coaches, about 90% of whom were customers first, our customers are guided through every step of their wellness journey.
Current report
OPTAVIA's lifestyle plans deliver proven health benefits as well as evidence-based tools, including scientifically developed products and a framework for habit creation reinforced by independent coaches and community support. We continue to innovate and build upon our scientific and clinical heritage to fulfill our mission of offering Lifelong Transformation, Making a Healthy Lifestyle Second Nature™.
Current report
To ensure that Medifast continues to thrive as a health and wellness business in the rapidly evolving weight-loss market, we have developed distinct coach-supported program offerings tailored to meet the unique needs of three specific customer categories on their health and wellness journeys:
Current report
Those who have never used medications and want to use coach-supported habit-based programs as the core of their weight loss journey;
Current report
People looking to manage weight loss and improved health when they come off GLP-1 medications for whatever reason, including cost, side effects, or any other cause.
Current report
For each of these customer categories, we are taking an intentional and methodical approach to building out our offerings to ensure that we can provide compelling products and services to new, former, and current coaches and clients, regardless of where they are on their personal health and wellness journeys.
Current report
Usage of GLP-1 medications continue to accelerate, with research commissioned by Medifast suggesting that the GLP-1 support market alone could be worth $50 billion or more by 2030.2 Additionally, recent research showed that about one-third of users qui
Current report
1 Medical advice, treatment, prescriptions, and the overall practice of medicine must be provided by a licensed healthcare professional. OPTAVIA and its coaches do not engage in or provide any medical services.
Current report
2 Based on research commissioned by Medifast utilizing publicly available expectations of the number of GLP-1 users and internal spend per customer.
Current report
t taking the medication after six months, and that this can rise to as much as 74% after a year.3 Furthermore, research also shows that two-thirds of weight lost on GLP-1 medications is typically regained within 12 months of stopping treatment, with cardiometabolic benefits often reversing as well.4
Current report
For audiences looking for a GLP-1 based solution, we have built a collaboration with national virtual primary care provider, LifeMD. Eligible OPTAVIA customers have access to board-certified affiliated clinicians and medications, where appropriate, such as GLP-1 medications, that support treatment plans for obesity. With the medications having been shown to be highly effective in conjunction with lifestyle changes, we believe there is strong compatibility with our experience of helping people achieve change through habit-based systems.
Current report
Finding new customers and reactivating former customers who do not wish to use medications remains an important area of focus for our business. Our OPTAVIA Fuelings and OPTAVIA ACTIVE® products address the needs of these customers. We also continue to work on enhancing our digital tools and improving the customer experience to help us achieve our goals. We believe our coach-based model is scalable and drives both customer success and growth, and we continue to work diligently to deliver growth and competitive advantage.
Current report
Regardless of need state, our integrated coach-supported, lifestyle-based approach helps customers achieve their health goals. OPTAVIA coaches, about 90% of whom were customers first, introduce customers to a set of healthy habits, in most cases starting with the habit of healthy eating, and offer exclusive OPTAVIA-branded products. OPTAVIA products and plans are one component that support the Company’s mission, and our portfolio of products help make it easier for customers to create healthy habits in their lives.
Current report
In December 2024, Medifast introduced two science-backed nutrition plans designed specifically for people on GLP-1 medications and people seeking weight management: the GLP-1 Nutrition Support Plan and the Optimization Plan. Both plans feature OPTAVIA ASCEND, a new product offering of high-protein, fiber-rich mini meals as well as a daily nutrient pack. The mini meals support muscle, digestive health and long-term wellness, filling a critical gap in the weight management market.
Current report
We believe the Company’s integrated approach that combines lifestyle coaching, community support, and access to medical solutions through LifeMD, positions the business to meet the needs of a broader spectrum of customers. By focusing on innovative products, enhanced customer experiences, and effective marketing strategies, Medifast has created and is continuing to enhance a differentiated and compelling offer. Its financial strength, operational flexibility, and customer-centric philosophy equip the Company to navigate the changing weight loss market and drive sustainable growth.
Current report
3 Grosicki et al. Diabetes Obes Metab. 2025; https://pubmed.ncbi.nlm.nih.gov/39743934/
Current report
4 Wilding, et al; STEP 1 Study Group. Diabetes Obes Metab. 2022; https://pubmed.ncbi.nlm.nih.gov/35441470/
Current report
Macroeconomic Conditions
Current report
In response to changing macroeconomic conditions, the Company may take further actions that alter its business operations as may be required by governmental authorities, or that are determined to be in the best interests of employees, OPTAVIA coaches and customers, and stockholders. Our ability to effectively navigate these developments is critical to maintaining operational resilience and achieving our long-term strategic objectives. These macroeconomic uncertainties make it challenging for our management to estimate our future business performance. However, we intend to continue to actively monitor the impact of these developments on our business and will update our practices accordingly.
Current report
Competition
Current report
We believe we have a competitive advantage over traditional diet companies. The OPTAVIA model:
Current report
•Offers a solution that focuses on holistic wellness; it views healthy weight as a catalyst to greater changes and has impacted more than 3 million lives.
Current report
•Provides personalized, empathetic support from coaches who have been in their customers’ shoes.
Current report
•Promotes lifelong habit development supported by a proprietary integrated approach to behavior change, the Habits of Health Transformational System.
Current report
•Encompasses a vibrant health and wellness community.
Current report
We also compete with other direct-selling organizations, some of which have a longer operating history and greater visibility, name recognition and financial resources than we do. We also believe we have advantages over traditional direct selling companies:
Current report
•OPTAVIA’s innovative model is customer-centric, with one sales price for both OPTAVIA coaches and customers. There is no tiered pricing.
Current report
•OPTAVIA boasts a health and wellness community, which promotes a holistic health and wellness program and is not focused solely on product sales.
Current report
•OPTAVIA offers a differentiated direct-to-consumer model, with 100% of products shipped directly to customers.
Current report
•The field promotes a unified Habits of Health training system that aligns its leaders around a common mission of Lifelong Transformation, Making a Healthy Lifestyle Second Nature.
Current report
Revenue: Revenue decreased $59.0 million, or 33.8%, to $115.7 million for the three months ended March 31, 2025 from $174.7 million for the three months ended March 31, 2024. The decline in revenue for the three months ended March 31, 2025 was primarily driven by a decrease in the number of active earning OPTAVIA coaches to 25,400 as of March 31, 2025 from 37,800 as of March 31, 2024. The decrease in active earning OPTAVIA coaches for the quarter, which has been trending downward year-over-year since the first quarter of 2023, has driven by continued challenges in customer acquisition. The average revenue per active earning OPTAVIA coach was $4,556 for the three months ended March 31, 2025 compared to $4,623 for the three months ended March 31, 2024. While the average revenue per active earning OPTAVIA coach has been declining year-over-year since the third quarter of 2022 due to lower sales volumes, we continue to see lower year-over-year declines in this key metric, driven in part by increased productivity of newer coach cohorts. The year-over-year declines reflect broader challenges in the operating environment, including continued acceptance of GLP-1 medications.
Current report
Gross profit: For the three months ended March 31, 2025, gross profit decreased $43.0 million, or 33.8%, to $84.2 million from $127.3 million for the three months ended March 31, 2024. The decrease in gross profit for the three months ended March 31, 2025 was primarily attributable to lower revenue. As a percentage of revenue, gross profit was 72.8% for the three months ended March 31, 2025 and 2024.
Current report
Other income: Other income for the three months ended March 31, 2025 was $1.8 million, a decrease of $1.9 million, or 50.9%, as compared to $3.6 million for the corresponding period in 2024. The decrease in other income for the three months ended March 31, 2025 was primarily due to higher unrealized gains on our investment in LifeMD common stock in the prior year period. The Company's unrealized gain on investment in LifeMD common stock for the first quarter of 2025 was $0.6 million, compared to $2.8 million for the corresponding period in 2024.
Removed paragraphs (37)
Previous report
Medifast is the health and wellness company known for its habit-based and coach-guided lifestyle solution OPTAVIA®. As a physician-founded company with more than 40 years of history, OPTAVIA's lifestyle plans deliver clinically proven health benefits, utilizing scientifically developed products and a framework for habit creation reinforced by independent coaches and community support. The development and widespread consumer adoption of GLP-1 medications has fundamentally shifted the way many individuals think about weight management and health. In response to these developments the Company initiated its business transformation to build a set of differentiated capabilities, reflecting its commitment to providing comprehensive health and wellness solutions to customers as both their needs and the industry evolve, that are expected to position Medifast to be a force in the dynamic and changing health and wellness space. As part of this transformation, the Company entered into a collaboration with LifeMD, Inc. (Nasdaq: LFMD) (“LifeMD”) in December of 2023, and launched a significant Company-led marketing effort in May of 2024. Medifast has created a well-capitalized business that has a powerful business model, building a network of approximately 30,000 independent active earning coaches providing consistent and effective support to customers on their weight loss journeys.
Previous report
In a rapidly changing health and wellness landscape, Medifast is committed to innovating and building upon its scientific and clinical heritage to deliver on its mission of offering the world Lifelong Transformation, Making a Healthy Lifestyle Second Nature™. With the growing interest in medically supported weight loss and GLP-1 medications powering the emergence of an important new market for products and services to support individuals on their health and wellness journey, Medifast is transforming its business to capitalize on this opportunity. We are developing distinct OPTAVIA coach supported program offerings tailored to meet the unique needs of three specific customer segments:
Previous report
•Individuals who are looking to maintain weight loss and improved health as they transition off GLP-1 medications; and
Previous report
•Individuals who have never used weight-loss medications and want to solely use healthy habits.
Previous report
Through the Company’s previously announced collaboration with LifeMD, OPTAVIA customers now have access to all-in-one holistic solutions, whether they are not utilizing medically supported weight loss, are currently using medical weight loss options, transitioning off medications, or looking for further support after stopping taking medications. This collaboration brings together OPTAVIA’s personalized habit-based, coach-guided approach with medical expertise from board-certified affiliated LifeMD clinicians, allowing access to weight loss medications, including GLP-1 medications, when clinically appropriate. With this collaboration, the Company and LifeMD have developed an integrated offering with the goal of creating a comprehensive and seamless solution for customers who desire to use medications and OPTAVIA’s lifestyle program, outlined in further detail below. In addition to lifestyle support and a simple roadmap for habit creation, the integrated offering includes scientifically developed nutritional support solutions including a GLP-1 Nutrition Support product kit designed to help mitigate certain GLP-1 medication side effects, such as muscle loss. Through LifeMD, customers also have access to a medical provider and blood work, as well as prescription and insurance support.
Previous report
As the medications for weight loss continue to evolve and grow, Medifast is dedicated to maintaining a relentless focus on the development of additional support products and supplements designed to meet customer needs and to make living a healthy lifestyle second nature.
Previous report
OPTAVIA's collaboration with LifeMD offers access to an additional resource for eligible customers:
Previous report
•Clinicians as Partners: Through the collaboration with LifeMD, OPTAVIA customers have access to LifeMD’s board-certified affiliated clinicians and medication, such as GLP-1 medications when clinically appropriate, that support treatment plans for obesity and other health conditions.
Previous report
Across these offerings, customers are aided in achieving their health goals through a network of OPTAVIA coaches, about 90% of whom were customers first. OPTAVIA coaches introduce customers to a set of healthy habits, in most cases starting with the habit of healthy eating, and offer exclusive OPTAVIA-branded products, including Fuelings as well as OPTAVIA ACTIVE®, a line of essential amino acid supplements and protein powders. Fuelings are nutrient-dense, portion-controlled, nutritionally interchangeable, and simple to use. They are formulated with high-quality ingredients and contain BC30™ probiotic cultures, which help support digestive health as part of a balanced diet and healthy lifestyle, vitamins and minerals, as well as other nutrients essential for good health. Our products are used as tools and support the process of integrating healthy habits into our customers' daily lives.
Previous report
With the expansion of our business to include GLP-1 support tools, we are leveraging multiple channels to enhance customer acquisition and spur meaningful growth. Although the number of OPTAVIA coaches has recently declined, they remain a fundamental component of our business, and their outreach around our integrated wellness offering is one channel to drive customer acquisition. Additionally, we are collaborating with LifeMD to activate their patient base as another channel for us to acquire customers. Further, in May 2024, we launched a national marketing campaign designed to drive customer acquisition and elevate brand awareness. Additional information surrounding the marketing campaign can be found in the section below titled, “Recent Initiatives.” These new acquisition channels and investments are intended to evolve the Company’s previous single-channel coach-focused business model to be one that pairs company advertising with relationship-based coaching and the ability to access weight loss medications through our collaboration with LifeMD. Collectively, we believe these initiatives will significantly broaden OPTAVIA’s reach, advancing its mission to empower individuals on their own health journeys, and fuel positive outcomes and revenue streams.
Previous report
Our operations are conducted through our wholly owned subsidiaries, Jason Pharmaceuticals, Inc., OPTAVIA, LLC, Jason Enterprises, Inc., Jason Properties, LLC, Seven Crondall Associates, LLC, Corporate Events, Inc., OPTAVIA (Hong Kong) Limited, OPTAVIA (Singapore) PTE. LTD, and OPTAVIA Health Consultation (Shanghai) Co., Ltd.
Previous report
Macroeconomic Conditions and Competition
Previous report
In response to worsening macroeconomic conditions, the Company may take further actions that alter its business operations that Management determines to be in the best interests of the Company’s employees, OPTAVIA coaches, and customers, such as evaluating our operational footprint or taking incremental pricing actions to offset supply chain costs and inflationary pressures.
Previous report
Beginning in Q3 2022, we began to see a downward trend in the number of active earning OPTAVIA coaches, driven by a decline in customers and attributable to changing social media algorithms and inflationary pressures on consumer spending. Additionally, the trend’s downward decline became sharper beginning in Q2 2023 due to the increased prevalence and adoption of GLP-1 medications and increased pressures on customer acquisition. We believe that, with continued pressures on customer acquisition, this downward trend in the number of active earning coaches will continue in the short-term.
Previous report
Our research shows that most of those who are interested in weight loss medications are also looking for support beyond a prescription, including clarity on how to incorporate healthy eating and exercise into their lifestyles while using these medical solutions. While medically supported weight loss can be effective, long-term success is dependent on nutrition and lifestyle changes.
Previous report
Recent Initiatives
Previous report
In response to the current competitive landscape, in which acquiring customers has become more difficult due to competitive pressures from GLP-1 medications being sought after by our potential customers, the Company is focusing on a number of initiatives to aid in increasing revenue and profit growth in the years ahead. At the core of the Company’s transformation is its desire to grow its business by broadening its customer base through increased brand visibility and recognition, and by significantly expanding its total addressable market.
Previous report
Areas of investment include executing our new marketing campaign as well as cultivating new customers through the Company’s collaboration with LifeMD. Through an expected investment of approximately $20 to $25 million in Company-led marketing efforts in 2024, we are committed to driving growth and enhancing brand visibility while highlighting our holistic offer. We are trialing and adjusting our activities to maximize breakthrough, and are optimizing spending dependent on whether we expect to see a positive return on incremental expenditures. This high-profile national campaign aims to elevate OPTAVIA brand awareness, foster engagement and drive customer conversion. With a multi-phase, omnichannel approach, the campaign is introducing new consumer and coach-facing branding and visuals, and elevate the website, social and digital experience. The Company incurred approximately $16.4 million in advertising expenses for the nine months ended September 30, 2024.
Previous report
We plan to continue our investment through the remainder of 2024 and into 2025, and form the foundation of the Company’s strategy to return to growth, broadening and deepening our acquisition channels. This aligns with our three strategic growth pillars – robust marketing initiatives, coaching network expansion and strategic collaboration with LifeMD – to empower individuals on their journey to optimal health and wellbeing.
Previous report
We believe by significantly broadening our customer acquisition activities, through launching our new marketing campaign, upgrading customers' digital experience, and leaning into the medically supported weight loss market through our collaboration with LifeMD, we will be positioned for future success.
Previous report
Revenue: Revenue decreased $95.7 million, or 40.6%, to $140.2 million for the three months ended September 30, 2024 from $235.9 million for the three months ended September 30, 2023. The decline in revenue for the three months ended September 30, 2024 was primarily driven by a decrease in the number of active earning OPTAVIA coaches to 30,000 as of September 30, 2024, a 36.3% decrease from 47,100 as of September 30, 2023 and the decline in the productivity per active earning OPTAVIA coach. Revenue decreased $397.6 million, or 45.1%, to $483.5 million for the nine months ended September 30, 2024 from $881.0 million for the nine months ended September 30, 2023. The decline in revenue for the nine months ended September 30, 2024 was driven by a decrease in the number of active earning OPTAVIA coaches, the decline in productivity per active earnings OPTAVIA coach, and a $9.1 million impact from a timing difference related to changes in the Company’s sales order terms and conditions with its customers realized in the first quarter of 2023. The average revenue per active earning OPTAVIA coach was $4,672 for the three months ended September 30, 2024, a 6.7% decrease compared to $5,008 for the three months ended September 30, 2023. The quarterly average revenue per active earning OPTAVIA coach was $4,754 for the nine months ended September 30, 2024, a 14.3% decrease compared to $5,545 for thenine months ended September 30, 2023. The decrease in productivity per active earning OPTAVIA coach for the three months ended September 30, 2024 and nine months ended September 30, 2024 was driven by continued pressure on customer acquisition.
Previous report
Non-GAAP adjusted cost of sales were $34.5 million for the three months ended September 30, 2024, a decrease of $24.0 million, or 41.0%, as compared to $58.5 million from the corresponding period in 2023. Non-GAAP adjusted cost of sales were $124.5 million for the nine months ended September 30, 2024, a decrease of $122.1 million, or 49.5%, as compared to $246.6 million for the corresponding period in 2023. Non-GAAP adjusted cost of sales excludes expenses in connection with the
Previous report
Company’s restructuring of external manufacturing agreements. Refer to the “Non-GAAP Financial Measures” section below for a reconciliation of each of non-GAAP financial measure to its most comparable GAAP financial measure.
Previous report
Gross profit: Gross profit decreased $71.7 million, or 40.4%, to $105.7 million from $177.4 million for the three months ended September 30, 2024 from the corresponding period in 2023. The decrease in gross profit for the three months ended September 30, 2024 was due to lower revenue. As a percentage of revenue, gross profit increased 20 basis points to 75.4% for the three months ended September 30, 2024 from 75.2% for the corresponding period in 2023. For the nine months ended September 30, 2024, gross profit decreased $278.1 million, or 43.8%, to $356.4 million from $634.5 million for the nine months ended September 30, 2023. The decrease in gross profit for the nine months ended September 30, 2024 was due to lower revenue. As a percentage of revenue, gross profit increased 170 basis points to 73.7% for the nine months ended September 30, 2024 from 72.0% for the corresponding period in 2023. Gross profit as a percentage of revenue was positively impacted by efficiencies in inventory management.
Previous report
Non-GAAP adjusted gross profit was equal to GAAP gross profit for the three months ended September 30, 2024 and the three months ended September 30, 2023. Non-GAAP adjusted gross profit was $359.0 million for the nine months ended September 30, 2024, a decrease of $275.5 million, or 43.4%, as compared to $634.5 million for the corresponding period in 2023. Non-GAAP adjusted gross profit margin increased 220 basis points to 74.3% for the nine months ended September 30, 2024 from 72.0% for the corresponding period in 2023. Refer to the “Non-GAAP Financial Measures” section below for a reconciliation of each non-GAAP financial measure to its most comparable GAAP financial measure.
Previous report
Non-GAAP adjusted SG&A expenses were $101.9 million for the three months ended September 30, 2024, a decrease of $50.0 million, or 32.9%, as compared to $151.9 million from the corresponding period in 2023. Non-GAAP adjusted SG&A expenses were $333.7 million for the nine months ended September 30, 2024, a decrease of $183.0 million, or 35.4%, as compared to $516.8 million from the corresponding period in 2023. Non-GAAP adjusted SG&A excludes expenses related to the Company’s supply chain optimization costs, costs to exit hotel commitments for the Company’s annual OPTAVIA convention in future years, reflecting a change in strategy, and costs for the collaboration with LifeMD. Refer to “Non-GAAP Financial Measures” section below for a reconciliation of each non-GAAP financial measure to its most comparable GAAP financial measure.
Previous report
2024, income from operations decreased $115.6 million to less than $2.2 million from $117.7 million for the corresponding period in 2023 primarily as a result of the factors described above impacting SG&A expenses, partially offset by the factors impacting gross profit. Income from operations as a percentage of revenue decreased to less than 0.4% for the nine months ended September 30, 2024 from 13.4% for the corresponding period in 2023 due to the factors above impacting SG&A expenses, partially offset by the factors impacting gross profit.
Previous report
Non-GAAP adjusted income from operations was $3.8 million for the three months ended September 30, 2024, a decrease of $21.8 million, or 85.3%, as compared to $25.5 million from the corresponding period in 2023. Non-GAAP adjusted income from operations as a percentage of revenue was 2.7% for the three months ended September 30, 2024, a decrease of 810 basis points from 10.8% for the corresponding period in the prior year Non-GAAP adjusted income from operations was $25.3 million for the nine months ended September 30, 2024, a decrease of $92.5 million, or 78.6%, as compared to $117.7 million from the corresponding period in 2023. Non-GAAP adjusted income from operations as a percentage of revenue was 5.2% for the nine months ended September 30, 2024, a decrease of 810 basis points from 13.4% for the corresponding period in the prior year. Refer to “Non-GAAP Financial Measures” section below for a reconciliation of each non-GAAP financial measure to its most comparable GAAP financial measure.
Previous report
Non-GAAP adjusted income tax provision was $1.4 million for the three months ended September 30, 2024, an effective tax rate of 26.0% as compared to 12.9% for the corresponding period in 2023. Non-GAAP adjusted income tax provision was $7.9 million for the nine months ended September 30, 2024, an effective tax rate of 27.0%, as compared to 21.5% for the corresponding period in 2023. Refer to “Non-GAAP Financial Measures” section below for a reconciliation of each non-GAAP financial measure to its most comparable GAAP financial measure.
Previous report
Non-GAAP adjusted net income was $3.9 million or $0.35 per diluted share for the three months ended September 30, 2024 as compared to $2.12 per diluted share for the corresponding period in 2023. Non-GAAP adjusted net income was $21.4 million or $1.95 per diluted share for the nine months ended September 30, 2024 as compared to $8.55 per diluted share for the corresponding period in 2023. Refer to “Non-GAAP Financial Measures” section below for a reconciliation of each non-GAAP financial measure to its most comparable GAAP financial measure.
Previous report
Non-GAAP Financial Measures
Previous report
In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in this quarterly report, our quarterly earnings press release, and other public disclosures. The following GAAP financial measures have been presented on an as-adjusted basis: Cost of sales, Gross profit, SG&A expenses, income from operations, other income (expense), provision for income taxes, net income, and diluted earnings per share. Each of these as-adjusted financial measures excludes the impact of certain amounts related to supply chain optimization and restructuring of external manufacturing agreements, costs to exit hotel commitments for our OPTAVIA convention in future years, unrealized gains or losses on our investment in LifeMD common stock, and the LifeMD collaboration as further identified below and have not been calculated in accordance with GAAP. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is included below. These non-GAAP financial measures are not intended to replace GAAP financial measures.
Previous report
We use these non-GAAP financial measures internally to evaluate and manage the Company’s operations because we believe they provide useful supplemental information regarding the Company’s on-going economic performance. We have chosen to provide this information to investors to enable them to perform more meaningful comparisons of operating results and as a means to emphasize the results of on-going operations.
Previous report
The following tables reconcile the non-GAAP financial measures included in this report (in thousands, except per share amounts):
Previous report
(1) The weighted-average diluted shares outstanding used in the calculation of these non-GAAP financial measures are the same as the weighted-average shares outstanding used in the calculation of the reported per share amounts.
Previous report
The Company is currently investing in new growth initiatives which have the potential to impact liquidity in future periods. The Company’s current growth initiatives, which are primarily comprised of Company-led customer acquisition, new product development and the Company’s Medically Support Weight Loss collaboration with LifeMD, do not require any material contractual commitments or capital expenditures in future periods. Since the future costs of these endeavors are variable in nature and will be scaled at the discretion of management, we do not believe there is any significant impact on our liquidity or capital resources.
Previous report
On April 13, 2021, the Company and certain of its subsidiaries (collectively, the “Guarantors”) entered into a credit agreement among the Company, the Guarantors, the lenders party thereto and Citibank, N.A., in its capacity as administrative agent. On May 31, 2022, the Credit Agreement was amended to increase the borrowing capacity and convert the interest rate to be based on SOFR, from LIBOR (the “Amended Credit Agreement”). The Amended Credit Agreement provides for a $225.0 million senior secured revolving credit facility with a $20.0 million letter of credit sublimit. The Amended Credit Agreement also provides for an uncommitted incremental facility that permits the Company, subject to certain conditions, to increase the senior secured revolving credit facility by up to $100.0 million. The Amended Credit Agreement contains affirmative and negative covenants customarily applicable to credit facilities. As of September 30, 2024, the Company had no borrowings under the credit facility and was in compliance with all of its debt covenants.
Reworded paragraphs (28)
Previous wording
Certain information in this report contains “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 (the “Act”). Forward-looking statements generally can be identified by use of phrases or terminology such as “intend,” “anticipate,” “expect,” or other similar words or the negative of such terminology. Similarly, descriptions of Medifast's objectives, strategies, plans, goals, or targets contained herein are also considered forward-looking statements. These statements are based on the current expectations of our management of Medifast and are subject to certain events, risks, uncertainties, and other factors. These risks and uncertainties include, but are not limited to, those described in our 2023 Form 10-K and those described from time to time in our future reports filed with the SEC. Although Medifast believes that the expectations, statements, and assumptions reflected in these forward-looking statements are reasonable, it cautions readers to always consider all of the risk factors and any other cautionary statements carefully in evaluating each forward-looking statement in this report. All of the forward-looking statements contained herein speak only as of the date of this report. We undertake no obligation to update any information contained in this report or to publicly release the results of any revisions to forward-looking statements to reflect events or circumstances of which we may become aware after the date of this report.
Current wording
Certain information in this report contains “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 (the “Act”). Forward-looking statements generally can be identified by use of phrases or terminology such as “intend,” “anticipate,” “expect” or other similar words or the negative of such terminology. Similarly, descriptions of Medifast's objectives, strategies, plans, goals, or targets contained herein are also considered forward-looking statements. These statements are based on the current expectations of our management and are subject to certain events, risks, uncertainties, and other factors. These risks and uncertainties include, but are not limited to, those described in our 2024 Form 10-K and those described from time to time in our future reports filed with the SEC. Although Medifast believes that the expectations, statements, and assumptions reflected in these forward-looking statements are reasonable, it cautions readers to always consider all of the risk factors and any other cautionary statements carefully in evaluating each forward-looking statement in this report. All of the forward-looking statements contained herein speak only as of the date of this report. We undertake no obligation to update any information contained in this report or to publicly release the results of any revisions to forward-looking statements to reflect events or circumstances of which we may become aware after the date of this report.
Previous wording
OPTAVIA’s holistic lifestyle solution is built around four key components:
Current wording
OPTAVIA coaches are people who are navigating weight loss at different moments in life, providing unparalleled coaching support along with community, nutrition, and healthy habits. In a world where health and wellbeing are often a difficult and solitary journey, OPTAVIA provides intensely personalized support to people who want to transform their health. We believe this holistic approach empowers people to master their weight loss journey through each stage of life and gives them the freedom to do it on their terms. The lifestyle solution is designed for real life and built around four key components:
Previous wording
•Independent OPTAVIA Coaches: Independent OPTAVIA coaches provide individualized support and guidance to customers on the path to optimal health and wellbeing. The coaches have impacted more than 3 million lives to date.
Current wording
•Independent OPTAVIA Coaches: Independent OPTAVIA coaches provide individualized support and guidance to customers on the path to optimal health and wellbeing.
Previous wording
•Products & Plans: Lifestyle plans with clinically proven health benefits and scientifically developed products, backed by dietitians, scientists, and physicians.
Current wording
•Products & Plans: Clinically proven plans and scientifically developed products, backed by dietitians, scientists, and physicians.
Previous wording
•Individuals using GLP-1 medications as a core element of their weight-loss program;
Current wording
Individuals using GLP-1 medications as a core element of their weight loss program; and
Previous wording
The OPTAVIA coaching model is customer-centric and boasts an energized health and wellness community. It promotes holistic health and wellness and positions healthy weight as a catalyst to greater lifestyle changes. OPTAVIA coaches provide personalized support to customers and motivate them by sharing their passion for healthy living and lifestyle transformation.
Current wording
In all cases, the OPTAVIA coaching model is heavily focused on the needs of the customer and helps put each customer into supportive and energized health and wellness communities that share their challenges and goals. OPTAVIA coaches provide highly tailored and personalized support to customers and motivate them by sharing their passion for healthy living and lifestyle transformation.
Previous wording
The entrepreneurial spirit of our OPTAVIA coaches is another key to our success, as they activate new customers, many of whom go on to become OPTAVIA coaches. We offer economic incentives designed to support each OPTAVIA coach’s long-term success, which we believe plays an important role in their financial wellness, providing the opportunity to improve their finances while changing the health trajectory of families, communities, and generations.1
Current wording
OPTAVIA coaches are central to everything that we do, helping to foster a continuous cycle of growth, and attracting and activating new customers, many of whom go on to become OPTAVIA coaches. We offer economic incentives designed to support each OPTAVIA coach’s long-term success, which we believe plays an important role in their financial wellness, providing the opportunity to improve their finances while changing the health trajectory of families, communities and generations.5
Previous wording
OPTAVIA coaches are independent contractors, not employees, who support customers and market our products and services primarily through word of mouth, email, and social media channels such as Facebook, Instagram, X (formerly known as Twitter), and video conferencing platforms. As entrepreneurs, OPTAVIA coaches market our products to friends, family, and other acquaintances. OPTAVIA products are shipped directly to customers who are working with an OPTAVIA coach. OPTAVIA coaches do not handle inventory or deliver merchandise to customers. This arrangement frees our OPTAVIA coaches from having to manage inventory and allows them to maintain an arms-length transactional relationship while focusing their attention on support and encouragement.
Current wording
OPTAVIA coaches are independent contractors, not employees, who support customers and market our products and services primarily through word of mouth, email, and via social media channels such as Facebook, Instagram, X (formerly known as Twitter), and video conferencing platforms. As independent contractors, OPTAVIA coaches market our products to friends, family, and other people in their communities. OPTAVIA products are shipped directly to OPTAVIA customers. OPTAVIA coaches do not handle or deliver merchandise to customers. This arrangement frees our OPTAVIA coaches from having to manage inventory and allows them to maintain an arms-length transactional relationship while focusing their attention on support and encouragement.
Previous wording
1 OPTAVIA makes no guarantee of financial success. Success with OPTAVIA results from successful sales efforts, which require hard work, diligence, skill, persistence, competence, and leadership. Please see the OPTAVIA Income Disclosure Statement (http://bit.ly/ids OPTAVIA) for statistics on actual earnings of coaches.
Current wording
5 OPTAVIA makes no guarantee of financial success. Success with OPTAVIA results from successful sales efforts, which require hard work, diligence, skill, persistence, competence and leadership. Please see the OPTAVIA Income Disclosure Statement (http://bit.ly/ids OPTAVIA) for statistics on actual earnings of coaches.
Previous wording
Geo-political concerns and certain economic challenges including the impact of inflationary pressures have caused macroeconomic uncertainty and volatility in markets where we, our suppliers and our OPTAVIA coaches operate.
Current wording
Certain global economic challenges, including the impact of inflation or tariffs, have caused macroeconomic uncertainty and volatility in markets where we, our suppliers, and our OPTAVIA coaches operate.
Previous wording
We are exposed to market risks from changes in commodity or other raw material prices. Inflation could impact our cost structure and put pressure on consumer spending. Increases in commodity prices or food costs, including as a result of inflationary pressures, could affect the global and U.S. economies and could also adversely impact our business, financial
Current wording
Like many product-focused companies, we are exposed to market risks from changes in commodity or other raw material prices. An inflationary economy could impact our cost structure and put pressure on consumer spending. Increases in commodity prices or food costs, including as a result of inflation or tariffs, could affect the global and U.S. economies and could also adversely impact our business, financial condition, or results of operations. Additionally, changes in tariff regulations, particularly those involving trade between the United States and key global markets, may affect the cost and availability of certain raw materials. While the full impact of potential tariff policy changes remains uncertain, we remain attentive to policy developments, and we may reassess our supply chain and investment strategies in response to further volatility in the trade environment.
Previous wording
condition, or results of operations. Our variable cost structure can be utilized to adapt to changing market conditions with potential actions including adjustments to our manufacturing, distribution, and customer support infrastructure.
Current wording
Our variable cost structure can be utilized to adapt to changing market conditions with potential actions including adjustments to our manufacturing, distribution, and customer support infrastructure. As a response, we may periodically take incremental pricing actions to offset supply chain costs, increases in tariff related costs, and inflationary pressures. In addition, prolonged tariff uncertainty may influence consumer sentiment and purchasing behavior, particularly in discretionary spending categories. Fluctuations in consumer confidence, driven by economic concerns or anticipated price increases, could reduce demand for our products.
Previous wording
Medical weight loss solutions, such as GLP-1 medications, have become an increasingly key component of the overall health and wellness ecosystem, and the recent surging awareness and popularity of these weight loss medications serves as another major competing factor, as these products have prompted a huge change in the way that consumers think about weight loss and lifestyle modification solutions in general. We recognize that these weight loss medications have attracted significant attention from the market and pose a threat to our interactions with our customer base. Importantly, the efficacy claims of GLP-1 medications for weight loss are based specifically on their incorporation with lifestyle changes, such as through a structured program like OPTAVIA, that include a reduced calorie diet and increased physical activity. As a result, under Medifast’s offering, access to weight loss medications becomes one important element in an overall tailored lifestyle plan that also includes coaching, community support, nutritionally balanced meals, and exercise.
Current wording
The weight loss industry is very competitive and encompasses a multitude of weight loss products and programs. These include a wide variety of commercial weight loss programs, pharmaceutical products, surgical interventions, books, self-help diets, dietary meal replacements, and appetite suppressants as well as digital tools, app-based health and wellness monitoring solutions, and wearable trackers. The weight loss market is served by a diverse array of competitors. Potential customers seeking to manage their weight can turn to traditional center-based competitors, online diet-oriented sites, self-directed dieting and self-administered products such as prescription medications, over-the-counter medications and supplements, as well as medically supervised programs. Recently, it became clear that medical weight loss solutions, such as GLP-1 medications, have become an increasingly key component of the overall health and wellness ecosystem, and the recent surging awareness and popularity of these weight loss medications serve as another major competitor, as these products have prompted a huge change in the way that consumers think about weight loss and lifestyle modification solutions in general. We recognize that these weight loss medications have attracted significant attention from the market and pose a threat to our interactions with our traditional customer base. Importantly, the efficacy claims of GLP-1 medications for weight loss are based specifically on their incorporation of lifestyle changes that include a reduced calorie diet and increased physical activity. As a result, under Medifast’s OPTAVIA offering, weight loss medications are another important element in overall tailored lifestyle plans that also include coaching, community support, nutritionally balanced meals, and exercise.
Previous wording
We believe our scientific and clinical heritage combined with our commitment to evaluating programs, plans and products through clinical research are primary differentiators that allow us to compete in these markets. Our scientifically designed products were originally developed by a physician, and we have continued the development of nutrition and weight-management products since our founding.
Current wording
We believe our scientific and clinical heritage combined with our commitment to evaluating programs, plans, and products through clinical research are primary differentiators that allow us to compete in these markets. Our scientifically designed products were originally developed by a physician, and we have been on the cutting edge in the development of nutrition and weight-management products since our founding.
Previous wording
These macroeconomic uncertainties and increasing adoption of medical weight loss solutions make it challenging for our management to estimate our future business performance. However, we intend to continue to actively monitor the impact of these developments on our business and will update our practices accordingly. Medifast has perfected our model over the last 40 plus years, with habits, coaches, and community at the core, and we will continue to innovate as the industry evolves.
Current wording
Medifast has perfected our model over the last 40+ years, with habits, coaches, and community at the core, and we will continue to innovate as the industry evolves.
Previous wording
The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Management develops, and changes periodically, these estimates and assumptions based on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. Our significant accounting policies are described in Note 2 to the audited consolidated financial statements included in the 2023 Form 10-K. There were no significant changes in our critical estimates or policies during the first nine months of 2024.
Current wording
The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Management develops, and changes periodically, these estimates and assumptions based on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. Our significant accounting policies are described in Note 2 to the audited consolidated financial statements included in the 2024 Form 10-K. There were no significant changes in our critical estimates or policies during the first three months of 2025.
Previous wording
Our product sales accounted for approximately 97% and 98% of our revenues for the three months ended September 30, 2024 and 2023, respectively, and approximately 97% for each of the nine months ended September 30, 2024 and 2023.
Current wording
Our product sales accounted for approximately 98% of our revenues for each of the three months ended March 31, 2025 and 2024.
Previous wording
Cost of sales: Cost of sales decreased $24.0 million, or 41.0%, to $34.5 million from $58.5 million for the three months ended September 30, 2024 from the corresponding period in 2023. The decrease in cost of sales for the three months ended September 30, 2024 was primarily driven by decreased volumes. Cost of sales decreased $119.5 million, or 48.5%, to $127.1 million from $246.6 million for the nine months ended September 30, 2024. The decrease in cost of sales for the nine months ended September 30, 2024 was primarily driven by approximately $105.8 million attributable to decreased volumes and $10.6 million in efficiencies in inventory management.
Current wording
Cost of sales: Cost of sales decreased $16.0 million, or 33.6%, to $31.5 million from $47.4 million for the three months ended March 31, 2025 from the corresponding period in 2024. The decrease in cost of sales for the three months ended March 31, 2025 was primarily due to lower sales volumes.
Previous wording
Selling, general, and administrative (“SG&A”): SG&A expenses were $103.6 million for the three months ended September 30, 2024, a decrease of $48.3 million, or 31.8%, as compared to $151.9 million from the corresponding period in 2023. SG&A expenses decreased for the three months ended September 30, 2024 primarily due to a $38.2 million decrease in OPTAVIA coach compensation on fewer active earning coaches and lower volumes and $5.0 million of reduced costs for coach-related events, including the annual OPTAVIA convention. As a percentage of revenue, SG&A expenses were 73.9% for the three months ended September 30, 2024 as compared to 64.4% for the corresponding period in 2023. SG&A expenses as a percentage of revenue increased for the three months ended September 30, 2024 primarily reflecting approximately 590 basis points of costs for our Company-led customer acquisition initiative and 340 basis points attributable to the loss of leverage on fixed costs due to lower sales volumes. Customer-led customer acquisition initiatives are included within the Advertising Expense caption of Footnote 1 to the Condensed Consolidated Financial Statements. SG&A expenses included research and development costs of $1.1 million and $1.3 million for the three months ended September 30, 2024 and 2023, respectively, in connection with the development of new products and plans, and clinical research activities. SG&A expenses were $354.2 million for the nine months ended September 30, 2024, a decrease of $162.5 million, or 31.5%, as compared to $516.8 million from the corresponding period in 2023. SG&A expenses decreased for the nine months ended September 30, 2024 primarily due to an approximately $161.2 million decrease in OPTAVIA coach compensation on fewer active earning coaches and lower volumes and an $8.2 million decrease in credit card fees, partially offset by $16.4 million of Company-led customer acquisition initiatives and $12.5 million of supply chain optimization costs. As a percentage of revenue, SG&A expenses were 73.3% for the nine months ended September 30, 2024 as compared to 58.7% for the corresponding period in 2023 primarily reflecting approximately 340 basis points of loss of leverage on fixed costs due to lower sales volumes, 340 basis points of costs incurred for our Company-led customer acquisition initiatives, and 260 basis points for supply chain optimization costs. SG&A expenses included research and development costs of $3.3 million and $3.4 million for the nine months ended September 30, 2024 and 2023, respectively, in connection with the development of new products and plans, and clinical research activities.
Current wording
Selling, general, and administrative (“SG&A”): SG&A expenses were $85.5 million for the three months ended March 31, 2025, a decrease of $33.8 million, or 28.4%, as compared to $119.4 million from the corresponding period in 2024. The decrease in SG&A expenses for the three months ended March 31, 2025 was primarily due to a $22.4 million decrease in OPTAVIA coach compensation on lower volume, $3.0 million of market research and investment costs related to medically supported weight loss which were incurred during the first quarter of 2024 that did not recur in the current quarter, a $2.5 million decrease in employee compensation, and a $1.3 million decrease in credit card fees. As a percentage of revenue, SG&A expenses were 73.9% for the three months ended March 31, 2025 as compared to 68.3% for the corresponding period in 2024. The increase in SG&A expenses as a percentage of revenue for the three months ended March 31, 2025 was primarily due to approximately 440 basis points of loss of leverage on fixed costs due to lower sales volume and 200 basis points of company-led marketing efforts primarily due to lower sales volumes, partially offset by 170 basis points of market research and investment costs related to medically supported weight loss which were incurred during the first quarter of 2024 that did not recur in the current quarter. SG&A expenses included research and development costs of $1.0 million for both the three months ended March 31, 2025 and 2024, in connection with the development of new products, programs and clinical research activities.
Previous wording
Income from operations: For the three months ended September 30, 2024, the Company’s income from operations was $2.1 million, a $23.4 million decrease from the $25.5 million income from operations for the corresponding period in 2023 primarily as a result of decreased gross profit partially offset by decreased SG&A expenses. For the three months ended September 30, 2024 the Company’s income from operations as a percentage of revenue was 1.5% as compared to the Company’s income from operations as a percentage of revenue of 10.8% for the corresponding period in 2023, due to the factors described above impacting SG&A expenses, partially offset by the factors impacting gross profit. For the nine months ended September 30,
Current wording
(Loss) income from operations: The Company’s loss from operations for the three months ended March 31, 2025 was $1.3 million, a decrease of $9.2 million as compared to income from operations of $7.9 million for the corresponding period in 2024, primarily as a result of decreased gross profit partially offset by decreased SG&A expenses. Loss from operations as a percentage of revenue for the three months ended March 31, 2025 was 1.1% as compared to income from operations as a percentage of revenue of 4.5% for the corresponding period in 2024 due to the factors described above impacting revenue and SG&A expenses.
Previous wording
Provision for income taxes: For the three months ended September 30, 2024, the Company recorded $0.4 million in income tax expense, an effective tax rate of 28.5%, as compared to $3.4 million, an effective tax rate of 12.9%, for the three months ended September 30, 2023. The change in the effective tax rate for the three months ended September 30, 2024 was primarily driven by a decrease in the tax benefit for donations of inventory compared to 2023. For the nine months ended September 30, 2024, the Company recorded $1.2 million in income tax expense, an effective tax rate of 48.6%, as compared to $25.6 million, an effective tax rate of 21.5%, for the nine months ended September 30, 2023. The increase in the effective tax rate for the nine months ended September 30, 2024 was primarily driven by the impact of the tax shortfall for stock compensation, which was magnified by the near break-even pre-tax income position in the current year.
Current wording
Provision for income taxes: For the three months ended March 31, 2025, the Company recorded $1.3 million in income tax expense, an effective tax rate of 246.8%, as compared to $3.3 million in income tax expense, an effective tax rate of 28.2%, for the three months ended March 31, 2024. The increase in the effective tax rate for the three months ended March 31, 2025 was primarily driven by the tax rate implication of a change in unrecognized tax benefits due to finalization of a state tax examination, which represented 110.8% of the change, and a tax shortfall for stock compensation, which represented 113.9% of the change. These changes were magnified by the near break-even pre-tax position in the current year.
Previous wording
Net income: Net income was $1.1 million, or $0.10 per diluted share for the three months ended September 30, 2024 as compared $23.1 million, or $2.12 per diluted share, for the three months ended September 30, 2023. Net income was $1.3 million, or $0.12 per diluted share for the nine months ended September 30, 2024, as compared to $93.4 million, or $8.55 per diluted share for the nine months ended September 30, 2023. The period-over-period changes were driven by the factors described above.
Current wording
Net (loss) income: Net loss was $0.8 million, or $0.07 per share for the three months ended March 31, 2025 as compared to net income of $8.3 million, or $0.76 per diluted share, for the three months ended March 31, 2024. The period-over-period changes were driven by the factors described above in the section titled “(Loss) income from operations.”
Previous wording
The Company had stockholders’ equity of $207.3 million and working capital of $152.6 million at September 30, 2024 as compared with $201.5 million and $131.7 million at December 31, 2023, respectively. The $5.9 million net increase in stockholders’ equity was primarily driven by a $5.2 million increase in share-based compensation and $1.1 million of net income for the period, partially offset by $0.8 million in net shares repurchased for employee taxes. The Company’s cash, cash equivalents and investment securities increased from $150.0 million at December 31, 2023 to $170.0 million at September 30, 2024.
Current wording
The Company had stockholders’ equity of $211.0 million and working capital of $152.9 million at March 31, 2025 as compared with $210.1 million and $150.2 million at December 31, 2024, respectively. The $0.9 million net increase in stockholders’ equity was primarily driven by $1.9 million for share-based compensation partially offset by a net loss of $0.8 million for the three months ended March 31, 2025. The Company’s cash, cash equivalents, and investments increased from $162.3 million at December 31, 2024 to $164.6 million at March 31, 2025.
Previous wording
Net cash provided by operating activities decreased by $107.7 million to $29.4 million for the nine months ended September 30, 2024 from $137.1 million for the nine months ended September 30, 2023. This was primarily driven by a $73.3 million decrease in net income excluding non-cash charges, a $46.1 million decrease related to a smaller inventory reduction in the period ending September 30, 2024 to align with sales demand, and a $4.0 million decrease resulting from lower prepaid expenses and other current assets, partially offset by a $11.6 million increase resulting from a smaller reduction in accounts payable and accrued expenses during the period, and a $4.6 million increase resulting from lower other assets.
Current wording
Net cash provided by operating activities decreased by $3.9 million to $3.4 million for the three months ended March 31, 2025 from $7.3 million for the three months ended March 31, 2024 primarily driven by a $9.1 million decrease in net income, a $5.3 million decrease related to changes in inventory balances partially offset by a $9.9 million decrease in accounts payable and accrued expenses. We decreased our inventory purchases during the period ended March 31, 2025 to align with sales demand.
Previous wording
Net cash used in investing activities was $7.1 million for the nine months ended September 30, 2024 as compared to $50.3 million for the nine months ended September 30, 2023. The decrease was primarily driven by investments purchased during the nine months ended September 30, 2023 resulting in a $42.9 million decrease of net purchases of investment securities during the nine months ended September 30, 2024.
Current wording
Net cash used in investing activities was $2.1 million for the three months ended March 31, 2025 as compared to $2.8 million for the three months ended March 31, 2024.
Previous wording
Net cash used in financing activities decreased by $60.4 million to $1.5 million for the nine months ended September 30, 2024 from $61.9 million for the nine months ended September 30, 2023. This decrease was primarily due to a $54.3 million decrease in cash dividends paid to stockholders, a $3.6 million decrease in stock repurchases, and a $2.5 million decrease in net shares repurchased for employee taxes.
Current wording
Net cash used in financing activities decreased by $0.9 million to $0.6 million for the three months ended March 31, 2025 from $1.5 million for the three months ended March 31, 2024. This decrease was primarily due to a $0.5 million decrease in cash dividends paid to stockholders and a $0.4 million decrease in net shares repurchased for employee taxes.
Previous wording
In pursuing its business strategy, the Company may require additional cash for operating and investing activities. The Company expects future cash requirements in both the short term and the long term, if any, to be funded from operating cash flow and financing activities.
Current wording
In pursuing its business strategy, the Company may require additional cash for operating and investing activities. The Company expects future cash requirements, if any, to be funded from operating cash flow and financing activities.
Previous wording
On October 30, 2024, the Company terminated its Amended Credit Agreement with Citibank, N.A. The Company had no borrowings under the Amended Credit Agreement, inclusive of the credit facility and letter of credit sublimit, between September 30, 2024, and the termination date.
Current wording
On October 30, 2024, the Company terminated its Amended Credit Agreement with Citibank, N.A. The Company had no borrowings under the Amended Credit Agreement, inclusive of the credit facility and letter of credit sublimit as of the termination date.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The weight loss industry is very competitive and encompasses a diverse array of weight loss products and programs. These include a wide variety of commercial weight loss programs, medical weight-loss solutions, other pharmaceutical products, surgical interventions, books, self-help diets, dietary meal replacements, and appetite suppressants as well as digital tools, app-based health and wellness monitoring solutions, and wearable trackers. Potential customers seeking to manage their weight have many options and can turn to online diet-oriented sites, self-directed dieting, traditional center-based competitors, and self-administered products such as prescription medications, over-the-counter medications, and supplements as well as medically supervised programs.