Medifast(MED) - 2022 Q1 - Quarterly Report

Financial Performance - Revenue for the three months ended March 31, 2022, was $417.6 million, a 22.6% increase from $340.7 million in the same period of 2021[12] - Gross profit for Q1 2022 was $302.3 million, compared to $248.5 million in Q1 2021, reflecting a gross margin of 72.3%[12] - Net income for Q1 2022 was $41.8 million, slightly up from $41.1 million in Q1 2021, resulting in earnings per share of $3.62 (basic) and $3.59 (diluted)[12] - Comprehensive income for Q1 2022 was $41.8 million, compared to $41.1 million in Q1 2021[14] - Net income for the three months ended March 31, 2022, was $41,781,000, a 1.75% increase from $41,063,000 in the same period of 2021[18] - Basic earnings per share (EPS) for Q1 2022 was $3.62, up from $3.49 in Q1 2021, representing a 3.73% increase[30] Assets and Liabilities - Total assets as of March 31, 2022, increased to $421.4 million from $398.3 million as of December 31, 2021[17] - Total liabilities increased to $205.4 million as of March 31, 2022, from $195.9 million at the end of 2021[17] - The company reported total current liabilities of $181.0 million, an increase from $169.8 million at the end of 2021[17] - The company had no borrowings under its $125 million credit agreement as of March 31, 2022[57] Cash and Cash Equivalents - Cash and cash equivalents rose to $118.0 million at the end of Q1 2022, up from $104.2 million at the end of 2021[18] - Total cash and cash equivalents at the end of Q1 2022 were $118,003,000, down from $206,031,000 at the end of Q1 2021[18] - The company had cash and cash equivalents totaling $107.342 million as of March 31, 2022[50] Dividends and Stock Repurchase - The company declared cash dividends of $1.64 per share in Q1 2022, compared to $1.42 per share in Q1 2021[12] - Cash dividends paid to stockholders in Q1 2022 totaled $16,660,000, compared to $13,392,000 in Q1 2021, marking a 24.88% increase[18] - The company repurchased $10.0 million in stock during Q1 2022, compared to $7.5 million in Q1 2021[18] Inventory and Expenses - Total inventories as of March 31, 2022, amounted to $188.972 million, an increase from $180.043 million as of December 31, 2021, indicating a rise of 4.4%[28] - The operating lease expense for the three months ended March 31, 2022, was $1.8 million, compared to $1.0 million for the same period in 2021, showing an 80% increase[44] - The total share-based compensation expense for Q1 2022 was $2.275 million, compared to $2.198 million in Q1 2021, marking an increase of 3.5%[39] Credit Agreement and Financial Ratios - The company maintains a Total Net Leverage Ratio of no more than 3.00 to 1.00 and an Interest Coverage Ratio of at least 3.50 to 1.00 as per the credit agreement[56] - The Credit Agreement requires the Company to maintain a Total Net Leverage Ratio of no more than 3.00 to 1.00[56] - The Credit Agreement mandates an Interest Coverage Ratio of at least 3.50 to 1.00[56] - The Credit Agreement includes covenants that limit the ability to incur additional indebtedness and liens on assets[56] - The Credit Agreement contains customary events of default, including payment default and covenant default[56] - The Company is restricted from engaging in mergers or acquisitions without negotiated exceptions[56] - The Credit Agreement allows for certain exceptions regarding asset disposals and dividend payments[56] - The Company must adhere to thresholds and grace periods for events of default[56] - The Credit Agreement includes restrictions on transactions with affiliated persons and making investments[56] Other Financial Metrics - The total intrinsic value of outstanding stock options as of March 31, 2022, was $3.8 million, with 32 options outstanding at a weighted-average exercise price of $54.98[34] - The total fair value of restricted stock awards vested during Q1 2022 was $3.2 million, down from $3.9 million in Q1 2021, a decrease of 17.9%[36] - As of March 31, 2022, there was $8.8 million of total unrecognized compensation cost related to restricted stock awards, expected to be recognized over a weighted-average period of 2.4 years[40]