Medifast(US:MED)2025-11-03 21:51Financial Performance - Revenue for Q3 2025 decreased to $89.4 million, down 36.2% from $140.2 million in Q3 2024[12] - Gross profit for Q3 2025 was $62.2 million, a decline of 41.2% compared to $105.7 million in Q3 2024[12] - Net loss for Q3 2025 was $2.3 million, compared to a net income of $1.1 million in Q3 2024[12] - For the three months ended September 30, 2025, the company reported a net loss of $2.261 million, resulting in a basic and diluted earnings per share (EPS) of $(0.21) compared to a net income of $1.129 million and an EPS of $0.10 for the same period in 2024[40] - For the nine months ended September 30, 2025, the Company reported revenue of $310,692,000, a decrease of 35.7% from $483,460,000 in 2024[74] - The segment net income for the nine months ended September 30, 2025, was a loss of $553,000, compared to a net income of $1,290,000 in 2024[74] Assets and Liabilities - Total current assets as of September 30, 2025, were $207.8 million, a decrease from $214.4 million at the end of 2024[17] - Cash and cash equivalents increased to $99.5 million as of September 30, 2025, from $90.9 million at the end of 2024[17] - Total liabilities decreased to $53.5 million as of September 30, 2025, down from $74.1 million at the end of 2024[17] - Total assets decreased from $284,213 million on December 31, 2024, to $268,209 million on September 30, 2025, a decline of approximately 5.6%[17] - The company’s retained earnings as of September 30, 2025, were $176.2 million, slightly down from $176.8 million at the end of 2024[17] Cash Flow - Operating cash flow for the nine months ended September 30, 2025, was $12.1 million, down from $29.4 million in the same period of 2024[18] - Operating activities generated a net cash flow of $12,141 million for the nine months ended September 30, 2025, down from $29,423 million in 2024, a decrease of 58.8%[18] - Cash and cash equivalents increased from $90,928 million at the beginning of the period to $99,526 million at the end of the period, representing an increase of 9.1%[18] Expenses - Selling, general, and administrative expenses for the three months ended September 30, 2025, were $66,240,000, down 36.1% from $103,568,000 in 2024[12] - Advertising expenses for the three months ended September 30, 2025, were $0.7 million, a significant decrease of 84.9% from $4.6 million in the same period of 2024[28] - Advertising expenses for the nine months ended September 30, 2025, were $6.8 million, down from $9.9 million in 2024, a decrease of 31.3%[28] - The company reported a loss on disposal of property, plant, and equipment amounting to $1,001 million for the nine months ended September 30, 2025, compared to $51 million in 2024[18] Taxation - The effective tax rate for the three months ended September 30, 2025, was 14.9%, a decrease from 28.5% in the same period of 2024, primarily due to a reduction in research and development tax credits[29] - The effective tax rate for the nine months ended September 30, 2025, was 174.4%, compared to 48.6% for the same period in 2024, indicating a significant increase in tax burden[29] - The company recorded an income tax expense of $1.3 million for the nine months ended September 30, 2025, with an effective tax rate of 174.4%, up from $1.2 million and 48.6% in the same period of 2024[29] Inventory and Stock - The total inventory as of September 30, 2025, was $23.205 million, down 45.0% from $42.421 million as of December 31, 2024[38] - The allowance for obsolete inventory increased to $3.993 million as of September 30, 2025, compared to $1.445 million as of December 31, 2024[38] - The company’s inventories decreased from $42,421 million on December 31, 2024, to $23,205 million on September 30, 2025, a decline of approximately 45.4%[17] - The total fair value of restricted stock awards vested during the nine months ended September 30, 2025, was $1.1 million, compared to $1.3 million for the same period in 2024[46] - The total share-based compensation expense for the three months ended September 30, 2025, was $1.219 million, an increase from $910 thousand in 2024[50] - The company did not grant any stock options for the nine months ended September 30, 2025, and 2024, maintaining 22 outstanding stock options with a weighted-average exercise price of $66.68[44] Segment Performance - Total revenue for the OPTAVIA segment was $89.4 million for the three months ended September 30, 2025, down from $140.2 million in the same period of 2024, representing a decrease of approximately 36.2%[72] - OPTAVIA segment revenue for the nine months ended September 30, 2025, was $310.7 million, a decrease of 35.7% compared to $483.5 million in the same period of 2024[74] - Cost of sales for the OPTAVIA segment decreased to $87.6 million in 2025 from $127.1 million in 2024, representing a reduction of 30.9%[74] - Distribution expenses for the OPTAVIA segment decreased to $13.6 million in 2025 from $32.2 million in 2024, a reduction of 57.8%[74] - Selling, marketing, and after sales support expenses decreased to $151.9 million in 2025 from $242.6 million in 2024, a decline of 37.4%[74] Lease and Office Space - The Company entered into a lease agreement for new office space with a term of 8 years and 7 months, expected to commence in March 2026[58] - The total lease payments due as of September 30, 2025, amounted to $12.671 million, with a total liability of $12.261 million after accounting for imputed interest[58] - The weighted average remaining lease term was 3.10 years with a weighted average discount rate of 2.30% as of September 30, 2025[57] - The operating lease expense was $1.2 million for both the three months ended September 30, 2025, and 2024, and $3.7 million for both the nine months ended September 30, 2025, and 2024[56]