Medifast(US:MED)2024-11-04 21:50Financial Performance - Revenue for Q3 2024 was $140,163,000, a decrease of 40.5% compared to $235,869,000 in Q3 2023[6] - Gross profit for Q3 2024 was $105,674,000, down 40.5% from $177,377,000 in Q3 2023[6] - Net income for Q3 2024 was $1,129,000, a significant decline of 95.1% from $23,131,000 in Q3 2023[6] - Earnings per share (EPS) for Q3 2024 was $0.10, compared to $2.12 in Q3 2023, reflecting a decrease of 95.3%[6] - Net income for the nine months ended September 30, 2024, was $1,290,000, a significant decrease from $93,380,000 in the same period of 2023, reflecting a decline of approximately 98.6%[11] - The company reported a net income of $1.1 million for the three months ended September 30, 2024, compared to $23.1 million for the same period in 2023, indicating a decrease of approximately 95.2%[33] Assets and Liabilities - Total assets as of September 30, 2024, were $291,237,000, down from $309,908,000 as of December 31, 2023[9] - Total liabilities decreased to $83,895,000 as of September 30, 2024, from $108,427,000 at the end of 2023[9] - As of September 30, 2024, the total equity balance is $207,342,000, with retained earnings of $175,977,000[13] Cash Flow and Dividends - The company reported a net cash flow provided by operating activities of $29,423,000 for the nine months ended September 30, 2024, down from $137,135,000 in the same period of 2023[11] - Cash dividends declared per share were $0.00 in Q3 2024, compared to $1.65 in Q3 2023[6] - Cash dividends paid to stockholders decreased significantly to $715,000 from $55,039,000, a reduction of about 98.7%[11] Expenses - Selling, general, and administrative expenses for the nine months ended September 30, 2024, were $354,235 thousand, down from $516,755 thousand in the same period of 2023, reflecting a reduction of 31.4%[6] - Advertising expenses for the nine months ended September 30, 2024, totaled approximately $16.4 million, a significant increase from $3.0 million for the same period in 2023[23] - The total share-based compensation expense for the nine months ended September 30, 2024, was $5.2 million, compared to $5.8 million for the same period in 2023, reflecting a decrease of approximately 9.8%[43] Inventory - As of September 30, 2024, total inventories decreased to $40.1 million from $54.6 million as of December 31, 2023, representing a decline of approximately 26.6%[30] - The company reported a decrease in inventories to $14,496,000 from $60,629,000, indicating a reduction of about 76%[11] Shareholder Information - The number of shares issued increased from 10,896,000 on December 31, 2023, to 10,937,000 on March 31, 2024[13] - The weighted average shares outstanding for basic earnings per share were 10,937 thousand for the three months ended September 30, 2024, compared to 10,892 thousand for the same period in 2023[6] Credit and Financing - The Company entered into a credit agreement providing for a $225 million senior secured revolving credit facility, maturing on April 13, 2026, with no borrowings outstanding as of September 30, 2024[59][64] - The applicable rate for Term SOFR Loans as of September 30, 2024, was 1.25% per annum, with a commitment fee ranging from 0.20% to 0.40% based on the Company's Total Net Leverage Ratio[62][61] Supply Chain Optimization - The Company completed a supply chain optimization initiative, closing its Maryland Distribution Center, with no associated impairment on the asset group[65] - For the nine months ended September 30, 2024, the total supply chain optimization charges amounted to $12,502 thousand, which includes accelerated depreciation charges of $9,190 thousand and a loss on impairment of equipment held for sale of $2,499 thousand[67] Accounting and Compliance - The company is currently evaluating the impact of adopting ASU 2023-09 on its consolidated financial statements, which is effective for annual periods beginning after December 15, 2024[27] - The company is currently evaluating the impact of adopting ASU 2023-07 on its consolidated financial statements, which will require additional segment disclosures starting after December 15, 2023[28]