Medifast, Inc. (MED) has reported a 44.25 percent jump in profit for the quarter ended Mar. 31, 2017. The company has earned $6.14 million, or $0.51 a share in the quarter, compared with $4.26 million, or $0.36 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $6.14 million, or $0.51 a share compared with $5.04 million or $0.42 a share, a year ago. Revenue during the quarter went down marginally by 2.38 percent to $70.62 million from $72.34 million in the previous year period. Gross margin for the quarter expanded 137 basis points over the previous year period to 74.89 percent. Total expenses were 87.81 percent of quarterly revenues, down from 91.34 percent for the same period last year. This has led to an improvement of 353 basis points in operating margin to 12.19 percent.
Operating income for the quarter was $8.61 million, compared with $6.27 million in the previous year period.
However, the adjusted operating income for the quarter stood at $8.61 million compared to $7.43 million in the prior year period. At the same time, adjusted operating margin improved 191 basis points in the quarter to 12.19 percent from 10.28 percent in the last year period.
"We are pleased with our start to 2017. Revenue was in-line with our expectations and when combined with our solid gross profit and expense management it fueled profitability above our guidance for the first quarter," said Daniel R. Chard, Medifast’s chief executive officer. "Going forward, our focus will continue to be on acceleration of our top-line growth with continued improvement in profitability. We believe we are well positioned with our significant cash generation and the strength of our balance sheet to continue to enhance stockholder value."
For financial year 2017, Medifast, Inc. expects revenue to be in the range of $290 million to $300 million. The company projects diluted earnings per share to be in the range of $2 to $2.10.
For the second-quarter 2017, Medifast, Inc. expects revenue from continuing operations to be in the range of $72 million to $75 million. The company projects diluted earnings per share from continuing operations to be in the range of $0.51 to $0.54.
Working capital increases
Medifast, Inc. has recorded an increase in the working capital over the last year. It stood at $80.49 million as at Mar. 31, 2017, up 19.50 percent or $13.13 million from $67.36 million on Mar. 31, 2016. Current ratio was at 4.48 as on Mar. 31, 2017, up from 3.72 on Mar. 31, 2016.
Days sales outstanding were almost stable at 2 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 50 days for the quarter compared with 63 days for the previous year period.
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