Medifast Inc (MED) has reported a 10.15 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $6.06 million, or $0.51 a share in the quarter, compared with $5.51 million, or $0.46 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $6.06 million, or $0.51 a share compared with $5.49 million or $0.46 a share, a year ago.
Revenue during the quarter grew 4.01 percent to $68.58 million from $65.94 million in the previous year period. Gross margin for the quarter expanded 151 basis points over the previous year period to 76.06 percent. Total expenses were 86.94 percent of quarterly revenues, down from 87.90 percent for the same period last year. This has led to an improvement of 96 basis points in operating margin to 13.06 percent.
Operating income for the quarter was $8.95 million, compared with $7.98 million in the previous year period.
However, the adjusted operating income for the quarter stood at $8.95 million compared to $7.95 million in the prior year period. At the same time, adjusted operating margin improved 100 basis points in the quarter to 13.06 percent from 12.05 percent in the last year period.
“It has been an exciting first month with Medifast and I have experienced the incredible energy and enthusiasm behind the team’s strategic growth initiatives,” said Daniel R. Chard, Medifast’s chief executive officer. “The third quarter operational and financial success reflects the ongoing efforts to build upon our strong foundation. Looking ahead, we will continue to accelerate the activities required as we create sustainable and long-term revenue and profitability growth.”
For the fourth-quarter, Medifast expects revenue to be in the range of $63 million to $66 million. Medifast expects revenue to be in the range of $275 million to $278 million for financial year 2016. The company projects diluted earnings per share to be in the range of $0.30 to $0.33 for the fourth-quarter. For financial year 2016, the company projects diluted earnings per share to be in the range of $1.45 to $1.48. For financial year 2016, the company projects diluted earnings per share to be in the range of $1.86 to $1.89 on adjusted basis.
Working capital increases
Medifast Inc has recorded an increase in the working capital over the last year. It stood at $77.16 million as at Sep. 30, 2016, up 21.97 percent or $13.90 million from $63.26 million on Sep. 30, 2015. Current ratio was at 3.97 as on Sep. 30, 2016, up from 3.95 on Sep. 30, 2015.
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 42 days for the quarter compared with 66 days for the previous year period.
Debt comes down significantly
Medifast Inc has recorded a decline in total debt over the last one year. It stood at $0.06 million as on Sep. 30, 2016, down 81.40 percent or $0.24 million from $0.30 million on Sep. 30, 2015. Total debt was 0.05 percent of total assets as on Sep. 30, 2016, compared with 0.26 percent on Sep. 30, 2015.
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