UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2023~~March 31, 2024

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from________ to ________.

Commission File Number: 001-31573

Medifast, Inc.

(Exact name of registrant as specified in its charter)


Delaware						13-3714405
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

100 International Drive

Baltimore, Maryland 21202

Telephone Number: (410) 581-8042

(Address of Principal Executive Offices, Zip Code and Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.001 per share

MED

New York Stock Exchange

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The number of shares of the registrant’s common stock outstanding at ~~October 23, 2023~~April 22, 2024 was ~~10,892,602.~~10,937,245.

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Medifast, Inc. and Subsidiaries

Index


Part 1 – Financial Information



Item 1 – Financial Statements


Condensed Consolidated Statements of Income (unaudited) for the Three ~~and~~ ~~Nine~~Months Ended ~~September 30~~,March 31, 2024 and 2023 ~~and 2022~~			2

Condensed Consolidated Statements of Comprehensive Income (unaudited) for the Three ~~and~~ ~~Nine~~Months Ended ~~September 30~~,March 31, 2024 and 2023 ~~and 2022~~			3

Condensed Consolidated Balance Sheets (unaudited) as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023			4

Condensed Consolidated Statements of Cash Flows (unaudited) for the ~~Nine~~Three Months Ended ~~September~~ ~~30,~~March 31, 2024 and 2023 ~~and 2022~~			5

Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~			6

Notes to Condensed Consolidated Financial Statements (unaudited)			87

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations			15

Item 3 – Quantitative and Qualitative Disclosures about Market Risk			22

Item 4 – Controls and Procedures			2322

Part II – Other Information

Item 1 – Legal Proceedings			2423

Item 1A – Risk Factors			2423

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds			2423

Item 6 – Exhibits			2524

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MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(U.S. dollars in thousands, except per share amounts & dividend data)


	Three months ended March 31,										Three months ended March 31,
	2024									2024		2023
		Three months ended September 30,				Nine months ended September 30,
		2023		2022		2023		2022

Revenue
Revenue
Revenue	Revenue	$	235,869	$	390,398	$	881,039	$	1,261,332
Cost of sales	Cost of sales	58,492		107,549		246,558		354,515
Gross profit	Gross profit	177,377		282,849		634,481		906,817

Selling, general, and administrative	Selling, general, and administrative	151,868		234,693		516,755		754,610
Selling, general, and administrative
Selling, general, and administrative

Income from operations
Income from operations
Income from operations	Income from operations	25,509		48,156		117,726		152,207

Other income (expense)	Other income (expense)
Other income (expense)
Other income (expense)
Interest income (expense)
Interest income (expense)
Interest income (expense)	Interest income (expense)	1,033		(261)		1,314		(519)
Other income (expense)	Other income (expense)	7		(17)		(45)		(37)
	3,645
		1,040		(278)		1,269		(556)

Income from operations before income taxes
Income from operations before income taxes
Income from operations before income taxes	Income from operations before income taxes	26,549		47,878		118,995		151,651

Provision for income taxes	Provision for income taxes	3,418		11,723		25,615		34,601
Provision for income taxes
Provision for income taxes

Net income
Net income
Net income	Net income	$	23,131	$	36,155	$	93,380	$	117,050

Earnings per share - basic	Earnings per share - basic	$	2.12	$	3.30	$	8.58	$	10.37
Earnings per share - basic
Earnings per share - basic

Earnings per share - diluted
Earnings per share - diluted
Earnings per share - diluted	Earnings per share - diluted	$	2.12	$	3.27	$	8.55	$	10.30

Weighted average shares outstanding	Weighted average shares outstanding
Weighted average shares outstanding
Weighted average shares outstanding
Basic
Basic
Basic	Basic	10,892		10,964		10,881		11,290
Diluted	Diluted	10,933		11,042		10,925		11,369

Cash dividends declared per share	Cash dividends declared per share	$	1.65	$	1.64	$	4.95	$	4.92
Cash dividends declared per share
Cash dividends declared per share

The accompanying notes are an integral part of these condensed consolidated financial statements.

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MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(U.S. dollars in thousands)


	Three months ended March 31,										Three months ended March 31,
	2024									2024		2023
		Three months ended September 30,				Nine months ended September 30,
		2023		2022		2023		2022

Net income
Net income
Net income	Net income	$	23,131	$	36,155	$	93,380	$	117,050

Other comprehensive income, net of tax:	Other comprehensive income, net of tax:
Other comprehensive income, net of tax:
Other comprehensive income, net of tax:
Foreign currency translation
Foreign currency translation
Foreign currency translation	Foreign currency translation	27		123		125		300
Unrealized losses on investment securities	Unrealized losses on investment securities	(9)		—		(9)		(21)
		18		123		116		279
	(226)

Comprehensive income	Comprehensive income	$	23,149	$	36,278	$	93,496	$	117,329
Comprehensive income
Comprehensive income

The accompanying notes are an integral part of these condensed consolidated financial statements.

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MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(U.S. dollars in thousands, except par value)

September 30,
2023

December 31,
2022

March 31,
2024

December 31,
2023

ASSETS

Current Assets

Cash and cash equivalents

112,751

87,691

Investment securities

45,009

—

Cash and cash equivalents

Inventories

58,227

118,856

Investments

Income taxes, prepaid

Prepaid expenses and other current assets

8,289

16,237

Total current assets

224,276

222,784

Property, plant and equipment - net of accumulated depreciation

53,484

57,185

Right-of-use assets

15,681

18,460

Other assets

15,753

12,456

Deferred tax assets

10,825

5,328

TOTAL ASSETS

320,019

316,213

TOTAL ASSETS

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts payable and accrued expenses

103,223

134,690

Income taxes payable

1,417

428

Accounts payable and accrued expenses

Current lease obligations

5,472

5,776

Total current liabilities

110,112

140,894

Lease obligations, net of current lease obligations

16,872

20,275

Total liabilities

126,984

161,169

Total liabilities

Stockholders' Equity

Common stock, par value $0.001 per share: 20,000 shares authorized;

10,892 and 10,928 issued and 10,892 and 10,873 outstanding

at September 30, 2023 and December 31, 2022, respectively

Common stock, par value $0.001 per share: 20,000 shares authorized;

10,937 and 10,896 issued and outstanding

at March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

24,107

21,555

Accumulated other comprehensive income

141

Retained earnings

168,776

139,852

Less: treasury stock at cost, 0 and 54 shares at September 30, 2023 and December 31, 2022, respectively

—

(6,398)

Total stockholders' equity

193,035

155,044

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

320,019

316,213

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

The accompanying notes are an integral part of these condensed consolidated financial statements.

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MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(U.S. dollar in thousands)


		Nine months ended September 30,
		2023		2022
	Three months ended March 31,						Three months ended March 31,
	2024					2024		2023

Operating Activities	Operating Activities
Operating Activities
Operating Activities
Net income
Net income
Net income	Net income	$	93,380	$	117,050
Adjustments to reconcile net income to cash provided by operating activities	Adjustments to reconcile net income to cash provided by operating activities
Depreciation and amortization	Depreciation and amortization	9,754		8,026
Depreciation and amortization
Depreciation and amortization
Non-cash lease expense	Non-cash lease expense	3,532		4,740
Share-based compensation	Share-based compensation	5,795		8,103

Loss on sale or disposal of property, plant and equipment	Loss on sale or disposal of property, plant and equipment	622		—
Realized gain on sale of investment securities
Amortization of premium on investment securities	Amortization of premium on investment securities	—		14
Deferred income taxes	Deferred income taxes	(5,497)		(1,746)

Unrealized gain on equity investment securities
Change in operating assets and liabilities:	Change in operating assets and liabilities:
Inventories
Inventories
Inventories	Inventories	60,629		34,764

Prepaid expenses and other current assets	Prepaid expenses and other current assets	7,948		1,889
Prepaid expenses and other current assets
Prepaid expenses and other current assets
Other assets	Other assets	(4,674)		(8,545)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	(35,343)		(22,259)
Income taxes payable		989		795
Prepaid income taxes
Net cash flow provided by operating activities	Net cash flow provided by operating activities	137,135		142,831

Investing Activities	Investing Activities
Sale and maturities of investment securities		—		5,267
Investing Activities
Investing Activities
Purchase of investment securities	Purchase of investment securities	(44,779)		—
Purchase of investment securities
Purchase of investment securities
Proceeds from sale and maturities of investment securities
Purchase of property and equipment	Purchase of property and equipment	(5,537)		(7,617)
Net cash flow used in investing activities	Net cash flow used in investing activities	(50,316)		(2,350)

Financing Activities	Financing Activities

Financing Activities
Financing Activities

Options exercised by directors	Options exercised by directors	105		—
Net shares repurchased for employee taxes		(3,348)		(1,504)

Options exercised by directors

Options exercised by directors
Net shares repurchased for taxes
Cash dividends paid to stockholders	Cash dividends paid to stockholders	(55,039)		(53,698)
Stock repurchases	Stock repurchases	(3,602)		(120,048)

Net cash flow used in financing activities
Net cash flow used in financing activities
Net cash flow used in financing activities	Net cash flow used in financing activities	(61,884)		(175,250)

Foreign currency impact	Foreign currency impact	125		296
Foreign currency impact
Foreign currency impact

Increase (Decrease) in cash and cash equivalents		25,060		(34,473)
Increase in cash and cash equivalents
Increase in cash and cash equivalents
Increase in cash and cash equivalents
Cash and cash equivalents - beginning of the period	Cash and cash equivalents - beginning of the period	87,691		104,183
Cash and cash equivalents - end of period	Cash and cash equivalents - end of period	$	112,751	$	69,710

Supplemental disclosure of cash flow information:	Supplemental disclosure of cash flow information:
Income taxes paid		$	30,169	$	33,906
Dividends declared included in accounts payable		$	19,184	$	19,395
Supplemental disclosure of cash flow information:
Supplemental disclosure of cash flow information:
Income taxes refunded
Income taxes refunded
Income taxes refunded
Dividends included in accounts payable

The accompanying notes are an integral part of these condensed consolidated financial statements.

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MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

(U.S. dollars in thousands)

Nine months ended September 30, 2023
Number of
Shares Issued Common Stock Additional Paid-In
Capital Accumulated Other
Comprehensive Income Retained
Earnings Treasury Stock Total
Balance, December 31, 2022 10,928 $ 11 $ 21,555 $ 24 $ 139,852 $ (6,398) $ 155,044
Net income — — — — 39,968 — 39,968
Share-based compensation 69 — 606 — — — 606
Options exercised by directors 4 — 105 — — — 105
Net shares repurchased for employee taxes (30) — (3,236) — — — (3,236)
Treasury stock from stock repurchases — — — — — (3,602) (3,602)
Treasury stock retired from stock repurchases (84) — — — (10,000) 10,000 —
Other comprehensive income — — — 9 — — 9
Cash dividends declared to stockholders — — — — (17,994) — (17,994)
Balance, March 31, 2023 10,887 $ 11 $ 19,030 $ 33 $ 151,826 $ — $ 170,900
Net income — — — — 30,280 — 30,280
Share-based compensation 2 — 2,514 — — — 2,514
Net shares repurchased for employee taxes — — (2) — — — (2)
Other comprehensive income — — — 90 — — 90
Cash dividends declared to stockholders — — — — (18,221) — (18,221)
Balance, June 30, 2023 10,889 $ 11 $ 21,542 $ 123 $ 163,885 $ — $ 185,561
Net income — — — — 23,131 — 23,131
Share-based compensation 4 — 2,675 — — — 2,675
Net shares repurchased for employee taxes (1) — (110) — — — (110)
Other comprehensive income — — — 18 — — 18
Cash dividends declared to stockholders — — — — (18,240) — (18,240)
Balance, September 30, 2023 10,892 $ 11 $ 24,107 $ 141 $ 168,776 $ — $ 193,035

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~


	Three months ended March 31, 2024
	Number of Shares Issued	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings		Treasury Stock		Total

Balance, December 31, 2023	10,896	$	11	$	26,573	$	248	$	174,649	$	—	$	201,481
Net income	—	—		—		—		8,316		—		8,316
Share-based compensation	59	—		2,171		—		—		—		2,171
Options exercised by directors	1	—		36		—		—		—		36
Net shares repurchased for employee taxes	(19)	—		(817)		—		—		—		(817)


Other comprehensive income	—	—		—		(226)		—		—		(226)


Balance, March 31, 2024	10,937	$	11	$	27,963	$	22	$	182,965	$	—	$	210,961

~~Table of Contents~~


	Three months ended March 31, 2023																		Three months ended March 31, 2023
	Number of Shares Issued														Number of Shares Issued	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Retained Earnings	Treasury Stock	Total
		Nine months ended September 30, 2022
		Number of Shares Issued	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings		Treasury Stock		Total

Balance, December 31, 2021		11,594	$	12	$	12,018	$	111	$	190,333	$	—	$	202,474
Balance, December 31, 2022
Balance, December 31, 2022
Balance, December 31, 2022
Net income	Net income	—	—		—		—		41,781		—		41,781
Share-based compensation	Share-based compensation	18	—		2,275		—		—		—		2,275
Options exercised by directors
Net shares repurchased for employee taxes	Net shares repurchased for employee taxes	(8)	—		(1,459)		—		—		—		(1,459)
Treasury stock from stock repurchases	Treasury stock from stock repurchases	—	—		—		—		—		(10,000)		(10,000)
Treasury stock retired from stock repurchases	Treasury stock retired from stock repurchases	(51)	—		—		—		(10,000)		10,000		—
Other comprehensive income	Other comprehensive income	—	—		—		16		—		—		16
Cash dividends declared to stockholders	Cash dividends declared to stockholders	—	—		—		—		(19,063)		—		(19,063)

Balance, March 31, 2022		11,553	$	12	$	12,834	$	127	$	203,051	$	—	$	216,024
Net income		—	—		—		—		39,113		—		39,113
Share-based compensation		1	—		2,865		—		—		—		2,865
Net shares repurchased for employee taxes		—	—		(20)		—		—		—		(20)
Treasury stock from stock repurchases		—	—		—		—		—		(90,038)		(90,038)
Treasury stock retired from stock repurchases		(535)	(1)		—		—		(90,038)		90,038		(1)
Stock Repurchases, not yet settled		—	—		(15,679)		—		(4,331)		—		(20,010)
Other comprehensive income		—	—		—		141		—		—		141
Cash dividends declared to stockholders		—	—		—		—		(18,598)		—		(18,598)

Balance, June 30, 2022		11,019	$	11	$	—	$	268	$	129,197	$	—	$	129,476
Net income		—	—		—		—		36,155		—		36,155
Share-based compensation		1	—		2,963		—		—		—		2,963
Net shares repurchased for employee taxes		—	—		(25)		—		—		—		(25)
Treasury stock from stock repurchases		—	—		—		—		—		(20,010)		(20,010)
Treasury stock retired from stock repurchases		(91)	—		—		—		(20,010)		20,010		—
Settlement of accelerated share repurchase agreement		—	—		15,679		—		4,331		—		20,010
Other comprehensive income		—	—		—		123		—		—		123
Cash dividends declared to stockholders		—	—		—		—		(18,170)		—		(18,170)

Balance, September 30, 2022		10,929	$	11	$	18,617	$	391	$	131,503	$	—	$	150,522
Balance, March 31, 2023
Balance, March 31, 2023
Balance, March 31, 2023

The accompanying notes are an integral part of these condensed consolidated financial statements.

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MEDIFAST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation - The accompanying unaudited condensed consolidated financial statements of Medifast, Inc. and its wholly-owned subsidiaries (“Medifast,” the “Company,” “we,” “us,” or “our”) included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and notes that are normally required by GAAP have been condensed or omitted. However, in the opinion of management, all adjustments consisting of normal, recurring adjustments considered necessary for a fair presentation of the financial position and results of operations have been included and management believes the disclosures that are made are adequate to make the information presented not misleading. The condensed consolidated balance sheet at December 31, ~~2022~~2023 has been derived from the ~~2022~~2023 audited consolidated financial statements at that date included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022~~2023 (“~~2022~~2023 Form 10-K”).

The results of operations for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 are not necessarily indicative of results that may be expected for the fiscal year ending December 31, ~~2023.~~2024. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the ~~2022~~2023 Form 10-K.

Presentation of Financial Statements - The unaudited condensed consolidated financial statements included herein include the accounts of the Company. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.

Accounting Pronouncements - Adopted in 2024

In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2022-03—Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2023-03”) to (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. For public business entities, the amendments in ASU 2022-03 are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company adopted the standard during the quarter ended March 31, 2024. The adoption of the standard had no material impact on the Company’s financial statements.

Recently Issued Accounting Pronouncements - Pending Adoption

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) to enhance the transparency and decision usefulness of income tax disclosures, including jurisdictional information, by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disclosures. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024. Prospective application is required, though retrospective application is permitted. Entities are permitted to early adopt the standard. The Company ~~has~~did not ~~adopted any new accounting standards during~~early adopt for the ~~nine months ended September 30, 2023. There are no recently issued accounting pronouncements that are expected to have a material effect~~2024 reporting period. The Company is currently evaluating the impact of adopting ASU 2023-09 on ~~the Company’s~~its consolidated financial ~~position, results of operations, cash flows, or disclosures.~~statements.

2. INVENTORIES

Inventories consist principally of raw materials, ~~packaging,~~ non-food finished goods and ~~finished~~ packaged meal replacements held in the Company’s warehouses and outsourced distribution centers. Inventories are stated at the lower of cost or net realizable value, utilizing the first-in, first-out method. The cost of finished goods includes the cost of raw materials, packaging supplies, direct

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and indirect labor, and other indirect manufacturing costs. On a quarterly basis, management reviews inventories for unsalable or obsolete inventories.

Inventories consisted of the following (in thousands):


	March 31, 2024									March 31, 2024					December 31, 2023
		September 30, 2023		December 31, 2022

Raw materials
Raw materials
Raw materials	Raw materials	$	8,491	$	12,670	$	6,343				$	7,944
Packaging	Packaging	2,269		3,611		Packaging		1,673					1,962
Non-food finished goods	Non-food finished goods	4,426		8,738		Non-food finished goods		2,877					3,703
Finished goods	Finished goods	49,558		97,675		Finished goods		36,769					43,248
Reserve for obsolete inventory	Reserve for obsolete inventory	(6,517)		(3,838)
Total	Total	$	58,227	$	118,856	Total		$	46,273				$	54,591

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3. EARNINGS PER SHARE

Basic earnings per share (“EPS”) computations are calculated utilizing the weighted average number of shares of the Company’s common stock outstanding during the periods presented. Diluted EPS is calculated utilizing the weighted average number of shares of the Company’s common stock outstanding adjusted for the effect of dilutive common stock equivalents.

The following table sets forth the computation of basic and diluted EPS (in thousands, except per share data):


		Three months ended September 30,				Nine months ended September 30,
		2023		2022		2023		2022
	Three months ended March 31,										Three months ended March 31,
	2024									2024		2023

Numerator:	Numerator:
Numerator:
Numerator:
Net income
Net income
Net income	Net income	$	23,131	$	36,155	$	93,380	$	117,050

Denominator:	Denominator:
Denominator:
Denominator:
Weighted average shares of common stock outstanding
Weighted average shares of common stock outstanding
Weighted average shares of common stock outstanding	Weighted average shares of common stock outstanding	10,892		10,964		10,881		11,290
Effect of dilutive common stock equivalents	Effect of dilutive common stock equivalents	41		78		44		79
Weighted average shares of common stock outstanding	Weighted average shares of common stock outstanding	10,933		11,042		10,925		11,369

Earnings per share - basic	Earnings per share - basic	$	2.12	$	3.30	$	8.58	$	10.37
Earnings per share - basic
Earnings per share - basic

Earnings per share - diluted	Earnings per share - diluted	$	2.12	$	3.27	$	8.55	$	10.30
Earnings per share - diluted
Earnings per share - diluted

The calculation of diluted EPS excluded 1351 thousand and 1013 thousand antidilutive restricted stock awards for the three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022, respectively, and 15 thousand and 3 thousand antidilutive restricted stock awards for the nine months ended September 30, 2023 and 2022,~~ respectively. ~~EPS is computed independently for each of the periods presented above, and accordingly, the sum of the quarterly earnings per common share may not equal the year-to-date total computed.~~

4. SHARE-BASED COMPENSATION

Stock Options

The Company has issued non-qualified and incentive stock options to employees and non-employee directors. The fair value of these options ~~are~~was estimated on the date of grant using the Black-Scholes option pricing model, which ~~requires~~required estimates of the expected term of the option, the risk-free interest rate, the expected volatility of the price of the Company’s common stock, and dividend yield. Options outstanding as of ~~September 30, 2023~~March 31, 2024 generally vested over a period of 3 years and expire 10 years from the date of grant. The exercise price of these options ~~ranges from $26.52 to~~is $66.68. Due to the Company’s lack of option exercise history on the date of grant, the expected term iswas calculated using the simplified method defined as the midpoint between the vesting period and the contractual term of each option. The ~~risk free~~risk-free interest rate iswas based on the U.S. Treasury yield curve in effect on the date of grant that most closely corresponds to the expected term of the option. The expected volatility iswas based on the historical volatility of the Company’s common stock over the period of time equivalent to the expected term for each award. The

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dividend yield iswas computed as the annualized dividend rate at the grant date divided by the strike price of the stock option. For the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ the Company did not grant stock options.

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The following table is a summary of our stock option activity (in thousands, except per share data):


		Nine months ended September 30,
		2023			2022
		Awards	Weighted-Average Exercise Price		Awards	Weighted-Average Exercise Price
	Three months ended March 31,										Three months ended March 31,
	2024								2024			2023
	Awards							Awards		Weighted-Average Exercise Price	Awards		Weighted-Average Exercise Price

Outstanding at beginning of period	Outstanding at beginning of period	33	$	54.98	33	$	54.98
Outstanding at beginning of period
Outstanding at beginning of period
Exercised	Exercised	(4)	27.18		—	—
Forfeited
Outstanding at end of the period	Outstanding at end of the period	29	$	58.65	33	$	54.98
Exercisable at end of the period	Exercisable at end of the period	29	$	58.65	28	$	52.76

As of ~~September 30, 2023,~~March 31, 2024, the weighted-average remaining contractual life for both the outstanding stock options and exercisable stock options was ~~3.8~~3.9 years with an aggregate intrinsic value of ~~$0.5 million. The~~$0. There was no unrecognized compensation ~~expense calculated under~~on the ~~fair value method~~awards for the ~~nine~~period ended March 31, 2024. For the three months ended ~~September 30, 2023 was less than $0.1 million~~March 31, 2024 and ~~was fully recognized during the period. For the nine months ended September 30,~~ 2023, the Company received ~~$0.1 million~~$36 thousand and $105 thousand in cash proceeds from the exercise of stock ~~options.~~options, respectively. The total intrinsic value for stock options exercised during the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023 was ~~$0.3 million.~~$15 thousand and $328 thousand, respectively.

Restricted Stock

The Company has issued restricted stock to employees and non-employee directors generally with vesting terms up to 53 years after the date of grant. The fair value of the restricted stock is equal to the market price of the Company’s common stock on the date of grant. Expense for restricted stock is amortized ratably over the vesting period.

The following table summarizes our restricted stock activity (in thousands, except per share data):


	Three months ended March 31,										Three months ended March 31,
	2024								2024			2023
	Shares							Shares		Weighted-Average Grant Date Fair Value	Shares		Weighted-Average Grant Date Fair Value
		Nine months ended September 30,
		2023			2022
		Shares	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value

Outstanding at beginning of period
Outstanding at beginning of period
Outstanding at beginning of period	Outstanding at beginning of period	60	$	188.11	44	$	183.51
Granted	Granted	86	97.96		38	176.60
Vested	Vested	(25)	169.46		(19)	156.16
Forfeited	Forfeited	(5)	142.11		(1)	186.53
Outstanding at end of the period	Outstanding at end of the period	116	$	127.57	62	$	187.83

The Company withheld approximately 1011 thousand shares and 89 thousand shares of the Company’s common stock to cover minimum tax liability withholding obligations upon the vesting of shares of restricted stock for the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively. The total fair value of restricted stock awards vested during the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~ was ~~$2.6~~$1.3 million and ~~$3.4~~$2.4 million, respectively.

Market and Performance-based Share Awards

The Company has issued market and performance-based share awards in 2022 and 2023 and performance-based share awards in 2020, 2021, and 2024 to certain key executives who were granted deferred shares and may earn between 0% and 250% of the target number depending upon both the Company’s total stockholder return (“TSR”), for those with market conditions, and the Company’s performance against predetermined performance goals over a three-year performance ~~period.~~period after the date of grant. Market and performance-based share awards that are tied to the Company’s TSR are valued using the Monte Carlo method and are recognized ratably as expense over the award’s performance period. The fair value of the performance-based share awards

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is equal to the market price of the Company’s common stock on the date of grant adjusted by expected level of achievement over the performance period. Expense for performance-based share awards is amortized ratably over the performance period. In the event that management determines that the Company will not reach the lower threshold of the predetermined performance goals established in the grant agreement, any previously recognized expense is reversed in the period in which such a determination is made. Management determined that the market and performance-based share awards granted in 2022 would

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not reach the lower threshold of the predetermined performance goal resulting in a $1.4 million decrease in the Company’s share-based compensation expense for the ~~nine~~three months ended ~~September 30,~~March 31, 2023.

The Company withheld ~~approximately 22~~approximately 8 thousand sh~~ares~~shares and 21 thousand shares of the Company’s common stock to cover minimum tax liability withholding obligations upon the ~~issuance~~vesting of shares of market and performance-based share awards for the ~~nine months~~years ended ~~September 30, 2023.~~ No ~~market~~March 31, 2024 and 2023, respectively. The total fair value of performance-based share awards ~~vested and~~ no ~~shares were withheld to cover minimum tax liability withholding obligations for~~issued during the ~~nine~~three months ended ~~September 30, 2022. The~~March 31, 2024 was $1.3 million and the total fair value of market and performance-based share awards issued during the ~~nine~~three months ended ~~September 30,~~March 31, 2023 ~~and 2022~~ was ~~$5.7 million~~ ~~and~~ ~~$0,~~ ~~respectively.~~$5.3 million.

Share-based compensation expense ~~for all types of awards granted~~ is recorded in selling, general, and administrative expense in the accompanying Condensed Consolidated Statements of Income. The total expense during the three months ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~are as follows (in thousands):


		Three months ended September 30,
		2023			2022
		Shares	Share-Based Compensation Expense		Shares	Share-Based Compensation Expense
	Three months ended March 31,										Three months ended March 31,
	2024								2024			2023
	Shares							Shares		Share-Based Compensation Expense	Shares		Share-Based Compensation Expense
Options and restricted stock	Options and restricted stock	145	$	1,558	90	$	1,392
Performance-based share awards granted in 2024
Market and performance-based share awards granted in 2023	Market and performance-based share awards granted in 2023	47	487		—	—
Market and performance-based share awards granted in 2022	Market and performance-based share awards granted in 2022	24	—		25	438
Performance-based share awards granted in 2021	Performance-based share awards granted in 2021	14	620		15	654
Performance-based share awards granted in 2020	Performance-based share awards granted in 2020	28	10		26	479
Total share-based compensation	Total share-based compensation	258	$	2,675	156	$	2,963

~~The total expense during the nine months ended September 30, 2023 and 2022 as follows (in thousands):~~

Nine months ended September 30,
2023 2022
Shares Share-Based Compensation Expense Shares Share-Based Compensation Expense
Options and restricted stock 145 $ 4,426 90 $ 3,789
Market and performance-based share awards granted in 2023 47 1,048 — —
Market and performance-based share awards granted in 2022 24 (1,388) 25 950
Performance-based share awards granted in 2021 14 1,600 15 1,941
Performance-based share awards granted in 2020 28 109 26 1,423
Total share-based compensation 258 $ 5,795 156 $ 8,103

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The total income tax ~~benefit~~expense recognized in the accompanying Condensed Consolidated Statements of Income for restricted stock awards was ~~$0.3 million and~~ $0.4 million for the three months ended ~~September 30, 2023~~March 31, 2024 and ~~2022, respectively, and $0.4 million and $1.2~~a benefit of $0.1 million for the ~~nine~~three months ended ~~September 30, 2023 and 2022, respectively.~~

March 31, 2023.

There was ~~$9.3~~$8.8 million of total unrecognized compensation cost related to restricted stock awards as of ~~September 30, 2023,~~March 31, 2024, which is expected to be recognized over a weighted-average period of ~~1.9~~2.3 years. There was ~~$5.1~~$7.5 million of unrecognized compensation costs related to the ~~113~~131 thousand performance-based shares and 71 thousand market and performance-based shares presented in the table above as of ~~September 30, 2023,~~March 31, 2024, which is expected to be recognized over a weighted-average period of ~~1.8~~2.1 years.

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5. LEASES

Operating Leases

The Company has operating leases for office and warehouse space and certain equipment. In certain of the Company’s lease agreements, the rental payments are adjusted periodically based on defined terms within the lease. The Company did not have any finance leases as of ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively, or ~~during~~for the ~~nine-month~~three-month periods then ended, respectively.

~~The Company’s~~Our leases relating to office and warehouse space have lease terms ~~ranging from 19~~of 65 months to ~~122~~102 months. ~~The Company’s~~Our leases relating to equipment have lease terms ~~ranging from 24 months to 203~~of 36 months, with certain of them having automatic renewal clauses.

The Company’s warehouse agreements also contain non-lease components, in the form of payments towards variable logistics services and labor charges, which the Company is obligated to pay based on the services consumed by it. Such amounts are not included in the measurement of the lease liability but are recognized as expenses when they are incurred.

The operating lease expense was ~~$1.1~~$1.2 million and ~~$1.7~~$1.5 million for the three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022, respectively, and $3.9 million and $5.2 million for the nine months ended September 30, 2023 and 2022,~~ respectively.

Supplemental cash flow information related to the Company’s operating leases was as follows (in thousands):


		Nine months ended September 30,
		2023		2022
	Three months ended March 31,						Three months ended March 31,
	2024					2024		2023

Cash paid for amounts included in the measurements of lease liabilities	Cash paid for amounts included in the measurements of lease liabilities
Cash paid for amounts included in the measurements of lease liabilities
Cash paid for amounts included in the measurements of lease liabilities
Operating cash flow used in operating leases
Operating cash flow used in operating leases
Operating cash flow used in operating leases	Operating cash flow used in operating leases	$	4,838	$	5,413

Right-of-use assets obtained in exchange for lease obligations	Right-of-use assets obtained in exchange for lease obligations
Right-of-use assets obtained in exchange for lease obligations
Right-of-use assets obtained in exchange for lease obligations
Operating leases	Operating leases	$	753	$	103
Operating leases
Operating leases

As of ~~September 30, 2023,~~March 31, 2024, the weighted average remaining lease term was 43 years, 27 months and the weighted average discount rate was ~~2.00%~~2.30%.

The following table presents the maturity of the Company’s operating lease liabilities as of ~~September 30, 2023~~March 31, 2024 (in thousands):


2023 (excluding the nine months ended September 30, 2023)		$	1,435
2024		5,955
2024 (excluding the three months ended March 31, 2024)
2025	2025	6,095
2026	2026	4,438
2027	2027	2,553
2028
Thereafter	Thereafter	2,858
Total lease payments	Total lease payments	$	23,334
Less: imputed interest	Less: imputed interest	(990)
Total	Total	$	22,344

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6. ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table sets forth the components of accumulated other comprehensive income, net of tax where applicable (in thousands):

September 30, 2023 December 31, 2022
Foreign currency translation $ 150 $ 24
Unrealized net losses on investment securities (9) —
Accumulated other comprehensive (loss)/income $ 141 $ 24


	March 31, 2024		December 31, 2023

Foreign currency translation	$	(33)	$	(48)
Unrealized gains on investments	55		296
Accumulated other comprehensive income	$	22	$	248

7. ~~FINANCIAL INSTRUMENTS~~INVESTMENTS

Certain financial assets and liabilities are accounted for at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy prioritizes the inputs used to measure fair value:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ~~ongoing~~on-going basis.

Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value from the perspective of a market participant.

The following tables present the Company’s cash and financial assets that are measured at fair value on a recurring basis for each of the hierarchy levels (in thousands):

September 30, 2023
Cost Unrealized Gains (Losses) Accrued Interest Estimated Fair
Value Cash & Cash
Equivalents Investment
Securities
Cash $ 107,656 $ — $ — $ 107,656 $ 107,656 $ —
Level 1:
Money market accounts 5,033 — 62 5,095 5,095 —
Government & agency securities 15,200 17 28 15,245 — 15,245
20,233 17 90 20,340 5,095 15,245
Level 2:
Corporate bonds 29,579 (26) 211 29,764 — 29,764
Total $ 157,468 $ (9) $ 301 $ 157,760 $ 112,751 $ 45,009

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	March 31, 2024
	Cost		Unrealized Gains (Losses)		Accrued Interest		Estimated Fair Value		Cash & Cash Equivalents		Investment Securities

Cash and cash equivalents, excluding money market accounts	$	92,291	$	—	$	—	$	92,291	$	92,291	$	—

Level 1:
Money market accounts	5,180		—		—		5,180		5,180		—
Government & agency securities	15,454		(14)		64		15,504		—		15,504
Equity securities	10,000		2,587		—		12,587		—		12,587
	30,634		2,573		64		33,271		5,180		28,091

Level 2:
Corporate bonds	30,412		182		272		30,866		—		30,866

Total	$	153,337	$	2,755	$	336	$	156,428	$	97,471	$	58,957


	December 31, 2023
	Cost		Unrealized Gains		Accrued Interest		Estimated Fair Value		Cash & Cash Equivalents		Investment Securities

Cash and cash equivalents, excluding money market accounts	$	88,778	$	—	$	—	$	88,778	$	88,778	$	—

Level 1:
Money market accounts	5,662		—		—		5,662		5,662		—
Government & agency securities	15,282		126		40		15,448		—		15,448
Equity securities	10,000		150		—		10,150		—		10,150
	30,944		276		40		31,260		5,662		25,598

Level 2:
Corporate bonds	29,440		293		270		30,003		—		30,003

Total	$	149,162	$	569	$	310	$	150,041	$	94,440	$	55,601

The Company had $9 thousand of realized gains for the three months ended March 31, 2024 and no realized gains or losses for the three months ended March 31, 2023.

During the fourth quarter of 2023, the Company entered into an agreement to purchase common stock of LifeMD, Inc (Nasdaq: LFMD), a leading provider of virtual primary care, and made a $10 million payment to LifeMD for the purchase of the shares. The securities are subject to a registration rights agreement which stipulates that the registration of the securities is to be made as soon as practicable, but not later than 90 days, following written demand by the Company. Written demand has been made, and the securities registration remained in process as of March 31, 2024. In addition, the shares are subject to a 180-day lock-up period from the closing date of the agreement, December 11, 2023. The fair value of the investment is recorded within the

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December 31, 2022
Cost Unrealized Gains (Losses) Accrued Interest Estimated Fair
Value Cash & Cash
Equivalents Investment
Securities
Cash $ 87,691 $ — $ — $ 87,691 $ 87,691 $ —
Level 1:
Money market accounts — — — — — —
Government & agency securities — — — — — —
— — — — — —
Total $ 87,691 $ — $ — $ 87,691 $ 87,691 $ —
investment securities of the consolidated balance sheet. The gains related to the Company’s LifeMD investment for the three months ended March 31, 2024 and 2023 are summarized in the table below (in thousands):


	March 31, 2024		March 31, 2023

Net gains recognized during the period on equity securities	$	2,437	$	—
Less: Net gains recognized on equity securities sold	—		—
Unrealized gains recognized during the reporting period on equity securities still held at the reporting date	$	2,437	$	—

The Company ~~had no realized gain or loss~~concurrently entered into an agreement in which LifeMD would provide services to stand-up the collaboration between LifeMD and the Company. The agreement stipulated an initial milestone payment of $5 million due upon execution of the agreement for these services. The services under the initial milestone were completed prior to December 31, 2023, and this amount was included in the Company’s selling, general, and administrative expenses on the consolidated statement of income for the ~~three~~quarter ended December 31, 2023. The Company made a second milestone payment under the agreement of $2.5 million on March 18, 2024. Of the total $2.5 million second milestone payment, $1.3 million was recognized within selling, general, and ~~nine months~~administrative expenses for services performed by LifeMD for the quarter ended ~~September 30, 2023 and 2022.~~March 31, 2024, with the remaining $1.2 million expected to be recognized in the second quarter. The final milestone payment of $2.5 million is expected to be made in the second quarter of 2024, with the expense being recognized in the consolidated statement of income as the services are rendered.

8. DEBT

Credit Agreement

On April 13, 2021, the Company and certain of its subsidiaries (collectively, the “Guarantors”) entered into a credit agreement (the “Credit Agreement”) among the Company, the Guarantors, the lenders party thereto and Citibank, N.A., in its capacity as administrative agent. On May 31, 2022, the Credit Agreement was amended to increase the borrowing capacity and convert the interest rate to be based on Secured Overnight Financing Rate (“SOFR”), from London Inter-Bank Offered Rate (LIBOR) (the “Amended Credit Agreement”). The Amended Credit Agreement provides for a $225.0 million senior secured revolving credit facility with a $20.0 million letter of credit sublimit. The Amended Credit Agreement also provides for an uncommitted incremental facility that permits the Company, subject to certain conditions, to increase the senior secured revolving credit facility by up to $100.0 million. The Amended Credit Agreement matures on April 13, 2026.

The Company’s obligations under the Amended Credit Agreement are guaranteed by the Guarantors. The obligations of the Company and the Guarantors are secured by first-priority liens on substantially all of the assets of the Company and the Guarantors, subject to certain exceptions.

Under the Amended Credit Agreement, the Company will pay to the administrative agent for the account of each revolving lender a commitment fee on a quarterly basis based on amounts committed but unused under the revolving facility from 0.20% to 0.40% per annum depending on the Company’s Total Net Leverage Ratio (as defined in the Amended Credit Agreement). The Company is also obligated to pay the administrative agent customary fees for credit facilities of this size and type.

Revolving borrowings under the Amended Credit Agreement bear interest at a rate per annum equal to (i) the Term SOFR Rate for the interest period plus the Applicable Rate (as defined in the Amended Credit Agreement) based on the Company’s Total Net Leverage Ratio or (ii) the Alternate Base Rate (as defined in the Amended Credit Agreement) as in effect from time to time plus the Applicable Rate based on the Company’s Total Net Leverage Ratio. As of ~~September 30, 2023,~~March 31, 2024, the Applicable Rate for Term SOFR Loans is 1.25% per annum and the Applicable Rate for ABR Loans is 0.25% per annum. SOFR based loans also include a Credit Spread Adjustment based on the duration of the borrowing.

The Amended Credit Agreement contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries, subject to negotiated exceptions, to incur additional indebtedness and additional liens on their assets, engage in mergers or acquisitions or dispose of assets, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments and change the nature of their businesses. The Amended Credit Agreement also contains customary events of default, subject to thresholds and grace periods, including, among others, payment default, covenant default, cross default to other material indebtedness and judgment default. In addition, the Amended Credit

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Agreement requires the Company to maintain a Total Net Leverage Ratio of no more than 2.75 to 1.00 and an Interest Coverage Ratio of at least 3.50 to 1.00.

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~~As of September 30, 2023 and December 31, 2022, the~~The Company had no borrowings outstanding under the Amended Credit Agreement, inclusive of the credit facility and letter of credit sublimit, as of March 31, 2024 and was in compliance with all covenants.

~~9. ACCELERATED SHARE REPURCHASE (“ASR”) PROGRAM~~

In the second quarter of fiscal 2022, the Company entered into an ASR agreement with JPMorgan Chase, National Association ("JPMorgan Chase") to purchase shares of its common stock from JPMorgan Chase for an aggregate purchase price of $100.0 million. Pursuant to the ASR program, the Company received an initial delivery of approximately 480 thousand shares of common stock based on the closing price of the common stock on May 31, 2022. Approximately 91 thousand additional shares of the Company's common stock were delivered upon termination of the agreement on August 8, 2022. The final number of shares delivered to the Company under the ASR agreement was based on the average of the daily volume-weighted average trading prices of the Company’s common stock during the term of the ASR program, less a discount.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note Regarding Forward-Looking Statements

Certain information in this report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Act”). ~~These forward-looking~~Forward-looking statements generally can be identified by use of phrases or terminology such as “intend,” “anticipate,” “expect” or other similar words or the negative of such terminology. Similarly, descriptions of Medifast's objectives, strategies, plans, goals, or targets contained herein are also considered forward-looking statements. These statements are based on the current expectations of our management and are subject to certain events, risks, uncertainties, and other factors. These risks and uncertainties include, but are not limited to, those described in our ~~2022~~2023 Form 10-K and those described from time to time in our future reports filed with the SEC. Although Medifast believes that the expectations, statements, and assumptions reflected in these forward-looking statements are reasonable, it cautions readers to always consider all of the risk factors and any other cautionary statements carefully in evaluating each forward-looking statement in this report. All of the forward-looking statements contained herein speak only as of the date of this report. We undertake no obligation to update any information contained in this report or to publicly release the results of any revisions to forward-looking statements to reflect events or circumstances of which we may become aware after the date of this report.

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes appearing elsewhere herein.

Overview

Medifast is the health and wellness company known for its habit-based and Coach-guided lifestyle solution OPTAVIA®. The Company has initiated its business transformation to build a set of differentiated capabilities, reflecting its commitment to providing comprehensive health and wellness solutions to customers as both their needs and the industry evolve, that are expected to position Medifast to be leader in the dynamic and changing health and wellness space. As part of this transformation the Company is expanding its product offerings to include sports nutrition products and targeting individuals in the medically supported weight loss market.

Medifast has created a well-capitalized business that has a powerful business model, building a network of approximately 37,800 independent active earning Coaches providing consistent and effective support to people on their weight loss journey and impacting more than 3 million lives to date. Medifast was recognized in 2023 by Financial Times as one of The Americas' Fastest Growing Companies and in 2022 as one of America's Best Mid-Sized Companies by Forbes.

As a physician-founded company with more than 40 years of history, Medifast is a leader in the U.S. weight management industry. OPTA~~VIA®, which provides people with a simple, yet comprehensive approach to help them achieve lasting optimal health and wellbeing.~~ ~~OPTAVIA offers~~VIA's lifestyle plans deliver clinically proven ~~plans,~~health benefits as well as evidence-based tools, including scientifically developed products and a framework for habit creation reinforced by independent Coaches and ~~Community~~community support. As

In a ~~physician-founded company with a 40+ year history,~~rapidly changing health and wellness landscape, Medifast is ~~a leader in the U.S. weight management industry,~~committed to innovating and ~~has impacted more than 3 million lives to date. The company continues to innovate and build~~building upon its scientific and clinical heritage to deliver on its mission of offering the world Lifelong Transformation, One Healthy Habit at a Time®. With the growing interest in medically supported weight loss and GLP-1 medications powering the emergence of an important new market for products and services to support patients on their health and wellness journey, Medifast is transforming its business to capitalize on this opportunity. Through a collaboration with LifeMD, Inc. (Nasdaq: LFMD) (“LifeMD”), a national virtual primary care provider, our customers now can access all-in-one holistic solutions that help make a healthy lifestyle second nature, whether individuals are currently using medical weight loss options, are looking for further support after they stop taking medication, or as they transition off medications. In addition to lifestyle support and a simple roadmap for habit creation, the integrated offering includes scientifically developed nutritional support solutions such as product kits designed to help mitigate GLP-1 medication side effects, including muscle loss. As the medications for weight loss continue to evolve and grow,

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~~Our~~ Medifast is dedicated to maintaining a relentless focus on the development of additional products and supplements designed to meet customer needs.

OPTA~~VIA brand offers a highly competitive and effective~~VIA’s holistic lifestyle solution ~~centered on developing new healthy habits through smaller, foundational changes called microHabits.~~ ~~OPTAVIA~~ is built around four key components:

•Independent OPTAVIA Coaches:Independent OPTAVIA Coaches ~~about 90% of whom first started as Customers,~~ provide individualized support and guidance to ~~their Clients along their journeys~~customers on the path to optimal health and wellbeing.

•OPTAVIA Community: A Community of like-hearted people ~~provide~~providing each other with real-time connection and support.

•TheThe Habits of ~~Health®~~Health® Transformational System: A proprietary ~~evidence-based and holistic approach~~system that offers easy steps to ~~lifestyle transformation which offers guidance on simple ways to create~~a sustainable healthy ~~habits in every area of life.~~lifestyle.

•Products & Plans: ~~Lifestyle~~Clinically proven plans ~~with clinically proven health benefits~~ and scientifically developed products, backed by dietitians, scientists, and physicians.

OPTAVIA's collaboration with LifeMD offers access to an additional resource for eligible customers:

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Clinicians as Partners: Through the collaboration with LifeMD, OPTAVIA customers have access to board-certified affiliated clinicians and medication, such as GLP-1 medications, that support treatment plans for obesity and other health conditions.

WeAcross our offerings, we help customers achieve their health goals through a network of ~~approximately 47,100 independent active earning~~ OPTAVIA ~~Coaches.~~Coaches, about 90% of whom were customers first. OPTAVIA Coaches introduce customers to a set of healthy habits, in most cases starting with the habit of healthy eating, and offer exclusive OPTAVIA-branded ~~“Fuelings.”~~products, including Fuelings as well as OPTAVIA ACTIVE®, a new line of essential amino acid supplements and protein powders. Fuelings are nutrient-dense, portion-controlled, nutritionally interchangeable, and simple to use. They are formulated with high-quality ingredients and ~~are fortified with~~contain probiotic ~~BC30™~~BC30™ cultures, which help support digestive health, as part of a balanced diet and healthy lifestyle, vitamins and minerals, as well as other nutrients essential for good health. ~~In the third quarter of 2023, the company announced~~ ~~OPTAVIA ACTIVE, a new line of premium exercise supplements and protein powders,~~ ~~OPTAVIA ACTIVE Essential Amino Acid (EAA) Blend and Whey Protein, designed to address age-related muscle mass decline and support muscle health. The new products work within existing~~ ~~OPTAVIA plans for those looking to achieve or maintain their optimal weight but also are a great solution for people wanting to enhance their health and wellbeing through movement.~~ Our products are used as tools and support the process of integrating healthy habits into our ~~customers’ day-to-day lives.~~customers' daily life.

The OPTAVIA coaching model is customer-centric and boasts an energized health and wellness community. It promotes holistic health and wellness and positions healthy weight as a catalyst to greater lifestyle changes. OPTAVIA Coaches provide personalized support to customers and motivate them by sharing their passion for healthy living and lifestyle transformation.

The entrepreneurial spirit of our OPTAVIA Coaches ~~are~~is another key to our success, as they ~~share their own health and wellness experience and attract~~create a continuous cycle of growth, activating new customers, ~~a portion~~many of whom go on to become OPTAVIA Coaches. We offer economic incentives designed to support each OPTAVIA Coach’s long-term success, which we believe plays an important role in their financial wellness, providing the opportunity to improve their finances while ~~supporting~~changing the ~~healthy lifestyles in their~~health trajectory of families, communities, and ~~communities they interact with.~~generations.1

OPTAVIA Coaches are independent contractors, not employees, who support customers and market our products and services ~~to friends, family and other acquaintances,~~ primarily through word of mouth, email, and social media channels such as Facebook, Instagram, X, ~~(formerly known as Twitter)~~ and video conferencing platforms. ~~Products~~As entrepreneurs, OPTAVIA Coaches market our products to friends, family, and other acquaintances. OPTAVIA products are shipped directly to customers who are working with an OPTAVIA ~~customers.~~Coach. OPTAVIA Coaches do not handle inventory or deliver merchandise to customers. This arrangement frees our OPTAVIA Coaches from having to manage inventory and allows them to maintain an arms-length transactional relationship while focusing their attention on support and encouragement.

~~We measure~~With the expansion of our ~~success by the results our customers~~business to include GLP-1 support tools, we are ~~able~~leveraging multiple channels to ~~achieve. The more~~enhance customer acquisition and spur meaningful growth. OPTAVIA Coaches ~~we have, the more customers we can serve. We believe~~remain a fundamental component of our ~~Coach-based model is scalable~~business, and ~~drives both customer success and growth. We expect our continued investment in fostering a robust community~~their outreach around our ~~OPTAVIA brand and Coaching model will continue~~integrated wellness offering is one channel to drive ~~a sustainable, repeatable business rhythm focused on our mission of offering the world Lifelong Transformation, One Healthy Habit at a Time.~~

~~Our operations~~customer acquisition. Additionally, we are ~~conducted through our wholly owned subsidiaries, Jason Pharmaceuticals, Inc.,~~ ~~OPTAVIA, LLC, Jason Enterprises, Inc., Jason Properties, LLC, Seven Crondall Associates, LLC, Corporate Events, Inc.,~~ ~~OPTAVIA (Hong Kong) Limited,~~ ~~OPTAVIA (Singapore) PTE. LTD and~~ ~~OPTAVIA Health Consultation (Shanghai) Co., Ltd.~~

~~Recent Initiatives~~

~~The Company’s Fuel for the Future program is intended~~collaborating with LifeMD to ~~optimize spending through value engineering, operational efficiency and improved procurement, and is expected~~activate their patient base as another channel to free up capital to invest in growth initiatives and raise margins. As a part of these efforts and due to economic changes in the Asia-Pacific region following the COVID-19 pandemic, Medifast exited its operations in Hong Kong and Singapore as of July 1, 2023. This departure was executed with the intention to help better prioritize resources that were previously dedicated to these markets in order to support initiatives that the Company anticipates will have a greater impact on revenues and profitability. This includesacquire customers. Further, we are investing in ~~technology and digital capabilities as well as rolling out product offerings that are complementary to its existing program, bringing~~ ~~OPTAVIA to new demographics and expanding the Company's total addressable market.~~

~~Additionally, on July 27, 2023, the Company announced~~ a ~~new product line, which was launched to customers in September 2023,~~ ~~OPTAVIA ACTIVE, which includes premium amino acid supplements and protein powders,~~ ~~OPTAVIA ACTIVE Essential Amino Acid (EAAs) Blend and~~ ~~OPTAVIA ACTIVE Whey Protein, with other products expected to be rolled out in 2024. Both the EAA Blend and the Whey Protein are~~high-impact national marketing campaign designed to ~~help new~~drive customer acquisition, elevate brand awareness, and existing customers of all fitness levels. With the announcement of the new product line, the Company targets new customer demographic segments and triples its total addressable market by entering the sports nutrition category, a $30 billion market. Further, the new product line is expected to extend the lifetime value of customers by extending their time with their ~~OPTAVIA Coach as customers learn to live the habit of healthy motion. Finally, the new products also extend our offerings by adding exercise, making~~ ~~OPTAVIA a strong choice for those interested in using lifestyle modification along with the support of medically supported weight loss. Formulated to~~foster deep

1 OPTAVIA makes no guarantee of financial success. Success with OPTAVIA results from successful sales efforts, which require hard work, diligence, skill, persistence, competence, and leadership. Please see the OPTAVIA Income Disclosure Statement (http://bit.ly/idsOPTAVIA) for statistics on actual earnings of Coaches.

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~~work~~engagement. With these efforts, we are actively evolving the Company’s historic single channel Coach-focused business model to pair Company advertising with ~~or without~~relationship-based Coaching, exponentially broadening our reach and contributing to our business transformation focused on sustainable growth.

Our operations are conducted through our wholly owned subsidiaries, Jason Pharmaceuticals, Inc., OPTAVIA, ~~nutrition plans and guided by Coach support,~~LLC, Jason Enterprises, Inc., Jason Properties, LLC, Seven Crondall Associates, LLC, Corporate Events, Inc., OPTAVIA ACTIVE, similar to the Company’s other lines of products, is backed by science, made with no colors, flavors or sweeteners from artificial sources and is Informed Sport certified, which is a global standard in sports nutrition quality control that ensures its certified products contain no banned substances.

~~Through a small pilot launched in June 2023, in partnership with a network of several telehealth providers, the Company began exploring a combination of its habit-based, Coach-guided solution,~~(Hong Kong) Limited, OPTAVIA ~~together with innovations in medically supported weight loss, including GLP-1 medications. These pilots have provided valuable insight around potential future positioning~~(Singapore) PTE. LTD, and ~~approach. The compelling three-way partnership between customer, clinician and Coach appears to resonate with the customer base who is interested in medically supported weight loss.~~

Medifast plans to continue investing in its offer to support all areas of its proprietary Habits of Health Transformational System, which includes weight loss, motion, hydration, sleep, and other macro-habits. The Company is committed to innovating as the industry evolves to continue delivering evidence-based solutions that are effective in helping customers create healthy habits and reach their wellness goals.

The Company is also pursuing expanding the customer base with a focus on Hispanic demographic groups in the US, where Medifast is underrepresented. To better connect with this group, we have translated approximately 70% of our main materials and website into Spanish, and expect to translate the remaining 30% by the end of the year. In October, in conjunction with National Hispanic Heritage month, the Company executed its first ever Spanish-language social and digital pilot, intended to build brand awareness and to learn how to best market OPTAVIA’s clinically proven health benefits and scientifically developed products, plans, Coaches and community to this growing demographic. The goal is to leverage the learnings from the social and digital pilot, with an anticipated larger, more comprehensive media effort to the US Hispanic market in 2024. We believe that advancing our business in the US Hispanic demographic will help us set the stage for future expansion into Latin America.VIA Health Consultation (Shanghai) Co., Ltd.

Competition and Macroeconomic Conditions

~~An overall decline~~Certain global economic challenges including the impact of inflation have caused macroeconomic uncertainty and volatility in ~~the health of the economy~~markets where we, our suppliers and other factors impacting consumer spending, such as natural disasters, pandemics, geopolitical conflicts, inflation and potential worsening in economic conditions may affect consumer purchases and reduce demand for our ~~products. These uncertainties make it challenging for our management to estimate our future business performance.~~OPTAVIA Coaches operate.

We are exposed to market risks from changes in commodity or other raw material prices. Rising inflation could impact our cost structure and has put pressure on consumer spending. Increases in commodity prices or food costs, including as a result of inflation, could affect the global and U.S. economies and could also adversely impact our business, financial condition, or results of operations. Our variable cost structure can be utilized to adapt to changing market conditions with potential actions including adjustments to our manufacturing, distribution, and customer support infrastructure. ~~In addition, adverse labor market conditions could constrain our ability to manufacture and deliver products or increase the associated costs.~~ As a response, we may periodically take incremental pricing actions to offset supply chain costs and inflationary ~~pressures, and adverse labor market conditions.~~

In addition, beginning in February 2022, the war in Ukraine and corresponding events have had, and could continue to have, adverse effects on regional and global markets. Further, as the Israeli/Palestinian conflict in Gaza develops, it could have a similarly adverse impact on consumer sentiment and regional and global markets. While our operations are not directly impacted by these events, the duration of hostilities and the vast array of sanctions and related events (including cyberattacks) cannot be predicted. As a result, those events present uncertainty and risk. To date, the war in Ukraine and conflict in Gaza has had no material impact on our business.pressures.

In response to changing macroeconomic conditions, the Company may take further actions that alter its business operations as may be required by governmental authorities, or that are determined to be in the best interests of its employees, stockholders, OPTAVIA Coaches and customers.

These macroeconomic uncertainties make it challenging for our management to estimate our future business performance. However, we intend to continue to actively monitor the impact of these developments on our business and will update our practices accordingly.

The weight loss industry is very competitive and encompasses a diverse array of weight loss products and programs. These include a wide variety of commercial weight loss programs, pharmaceutical products, surgical interventions, books, self-help diets, dietary meal replacements, and appetite suppressants as well as digital tools, app-based health and wellness monitoring solutions, and wearable trackers. The weight loss market is served by a diverse array of competitors. Potential customers seeking to manage their weight can turn to traditional center-based competitors, online diet-oriented sites, self-directed dieting, and self-administered products such as prescription medications, over-the-counter medications, and supplements as well as medically supervised programs.

Medical weight loss solutions, such as GLP-1 medications, have become an increasingly key component of the overall health and wellness ecosystem, and the recent surging awareness and popularity of these weight loss medications serve as another major competitor, as these products have prompted a huge change in the way that consumers think about weight loss and lifestyle modification solutions in general. We recognize that these weight loss medications have attracted significant attention from the market and pose a threat to our interactions with our customer base. Importantly, the efficacy claims of GLP-1 medications for weight loss are based specifically on their incorporation of lifestyle changes that include a reduced calorie diet and increased physical activity. As a result, under Medifast’s offering, weight loss medications become one important element in an overall tailored lifestyle plan that also includes Coaching, community support, nutritionally balanced meals, and exercise.

We believe our scientific and clinical heritage combined with our commitment to evaluating programs, plans and products through clinical research are primary differentiators that allow us to compete in these markets. Our scientifically designed products were originally developed by a physician, and we have been on the cutting edge in the development of nutrition and weight-management products since our founding.

Medifast has perfected our model over the last 40 plus years, with habits, Coaches, and community at the core, and we will continue to innovate as the industry evolves.

Recent Initiatives

In response to the current competitive landscape, in which acquiring customers has become more difficult due to competitive pressures from GLP-1 medications being sought after by our potential customers, the Company is focusing on a number of initiatives to aid in increasing revenue and profit growth in the years ahead. At the core of the Company’s initiatives is its desire

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to grow its business by broadening its customer base through increased brand visibility and recognition, and by significantly expanding its total addressable market.

Areas of investment anticipated for the year include instituting a new marketing campaign and upgrading customers’ digital experience to increase brand awareness and drive customer adoption, as well as cultivating new customers through the Company’s collaboration with LifeMD.

In December of 2023, the Company entered into a collaboration agreement with LifeMD, a leading provider of virtual primary care. This collaboration brings together OPTAVIA’s personalized habit-based, coach-guided approach with medical expertise from board-certified affiliated LifeMD clinicians and access to weight loss medications, including GLP-1s. With this collaboration, the Company and LifeMD intent to develop an integrated offering with the goal of creating a comprehensive and seamless solution for customers who desire to use medications and OPTAVIA’s lifestyle enhancement program. In the second quarter of 2024, we expect to take a key interim step, as we begin offering a lifestyle program with a dedicated OPTAVIA coach, balanced nutrition options with our GLP-1 Nutrition Support Kit, and, through LifeMD, access to a medical provider and blood work, as well as prescription and insurance support.

GLP-1 medications that meet the FDA weight loss mandate are prescribed along with the recommendation to make lifestyle modifications, such as through a structured program like OPTAVIA, that encourages a reduced-calorie diet and increased physical activity. Our research shows that most of those who are interested in weight loss medication are also looking for support beyond a prescription, including clarity on how to incorporate healthy eating and exercise into their lifestyles while using these medical solutions. While medically supported weight loss can be effective, long-term success is dependent on the nutrition and lifestyle changes individuals make in combination with taking medication.

We believe by significantly broadening our customer acquisition activities, through launching our new marketing campaign, upgrading customers' digital experience, and leaning into the medically supported weight loss market through our collaboration with LifeMD, we will be positioned for future success.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Management develops, and changes periodically, these estimates and assumptions based on historical experience and on various other factors that are believed to be reasonable under

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the circumstances. Actual results may differ from these estimates under different assumptions or conditions. There were no significant changes in our critical estimates during the first ~~nine~~three months of ~~2023.~~2024.

Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. Our significant accounting policies are described in Note 2 to the audited consolidated financial statements included in the ~~2022~~2023 Form 10-K. We consider all of our significant accounting policies and estimates to be critical. During Q1 2023 we made a change to our customer terms and conditions (“Customer T&Cs”) that resulted in a change to our revenue recognition policy which is described below. There were no other significant changes in our critical accounting policies during the first nine months of 2023.

Revenue Recognition: Our revenue is derived primarily from point of sale transactions executed over an e-commerce platform for weight loss, weight management, and other healthy living products. Prior to a change in our Customer T&Cs in the first quarter of 2023, revenue was recognized upon receipt by the customer and net of discounts, rebates, promotional adjustments, price adjustments, allocated consideration to loyalty programs, and estimated returns. Upon the change of our Customer T&Cs, revenue is now recognized upon delivery to the shipping carrier and net of discounts, rebates, promotional adjustments, price adjustments, allocated consideration to loyalty programs, and estimated returns. The impact of this change to the quarter ended March 31, 2023 was an increase of approximately $9.1 million in revenue and $2.8 million of income from operations.

Revenue is recognized when control of the promised products is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for transferring those products. When determining whether the customer has obtained control of the products, we consider any future performance obligations.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied. Our contracts have performance obligations to fulfill and deliver products from the point of sale transaction along with the related customer reward programs.

Our performance obligations are satisfied at a point in time. Revenue from products transferred to customers at a point in time accounted for substantially all of our revenue for the nine months ended September 30, 2023 and 2022. Revenue on these contracts is recognized when the obligations under the terms of the contract with our customer are satisfied.

Our return policy allows for customer returns of consumable products within 30 days of purchase and upon our authorization. We adjust revenues for the products expected to be returned and a liability is recognized for expected refunds to customers. We estimate expected returns based on historical levels and project this experience into the future.

Our sales contracts may give customers the option to purchase additional products priced at a discount. Options to acquire additional products at a discount can come in many forms, such as customer reward programs and incentive offerings including pricing arrangements, and promotions.

We reduce the transaction price for customer reward programs and certain incentive offerings including pricing arrangements, promotions, and incentives that represent variable consideration and separate performance obligations. The Company accounts for sales rewards that provide the customer with a material right as a separate performance obligation of the transactions, and therefore allocates consideration between the initial sale of products and the customer reward program and incentive offering.

Amounts billed to customers for shipping and handling activities are treated as a promised service performance obligation and are recorded as revenue in our Consolidated Statements of Income upon fulfillment of the performance obligation. Shipping and handling costs incurred by the Company for the delivery of products to customers are considered a cost to fulfill the contract and are included in cost of sales in our Consolidated Statements of Income.

~~We expense~~ ~~OPTA~~VIA Coach compensation and credit card fees during the period in which the corresponding revenue is earned. These costs are recorded in selling, general and administrative expense in our Consolidated Statements of Income.

Overview of Results of Operations

Our product sales accounted for approximately 98% of our revenues for each of the three months ended ~~September 30, 2023~~March 31, 2024 and ~~2022.~~2023.

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The following tables reflect our income statements (in thousands, except percentages):

Three months ended September 30,
2023 2022 $ Change % Change
Revenue $ 235,869 $ 390,398 $ (154,529) (39.6) %
Cost of sales 58,492 107,549 (49,057) (45.6) %
Gross profit 177,377 282,849 (105,472) (37.3) %
Selling, general, and administrative 151,868 234,693 (82,825) (35.3) %
Income from operations 25,509 48,156 (22,647) (47.0) %
Other income (expense)
Interest income (expense) 1,033 (261) 1,294 495.8 %
Other income (expense) 7 (17) 24 141.2 %
1,040 (278) 1,318 474.1 %
Income from operations before income taxes 26,549 47,878 (21,329) (44.5) %
Provision for income taxes 3,418 11,723 (8,305) (70.8) %
Net income $ 23,131 $ 36,155 $ (13,024) (36.0) %
% of revenue
Gross profit 75.2 % 72.5 %
Selling, general, and administrative costs 64.4 % 60.1 %
Income from operations 10.8 % 12.3 %

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	Three months ended March 31,
		2024
		2024
		2024																2023				$ Change					% Change
		Nine months ended September 30,
		2023			2022			$ Change		% Change

Revenue
Revenue
Revenue	Revenue	$	881,039		$	1,261,332		(380,293)		(30.2)	%	$	174,739			$	348,983			$	(174,244)		(49.9)			(49.9)		%
Cost of sales	Cost of sales	246,558			354,515			(107,957)		(30.5)	%	Cost of sales		47,447				102,593				(55,146)		(53.8)				(53.8)		%
Gross profit	Gross profit	634,481			906,817			(272,336)		(30.0)	%	Gross profit		127,292				246,390				(119,098)		(48.3)				(48.3)		%

Selling, general, and administrative	Selling, general, and administrative	516,755			754,610			(237,855)		(31.5)	%
Selling, general, and administrative
Selling, general, and administrative														119,352				192,879				(73,527)					(38.1)		%

Income from operations
Income from operations
Income from operations	Income from operations	117,726			152,207			(34,481)		(22.7)	%	7,940				53,511				(45,571)			(85.2)			(85.2)		%

Other income (expense)	Other income (expense)
Other income (expense)
Other income (expense)
Interest income (expense)	Interest income (expense)	1,314			(519)			1,833		353.2	%
Other expense		(45)			(37)			(8)		(21.6)	%
Interest income (expense)
Interest income (expense)														1,223				(181)				1,404					775.7		%
Other income (expense)												Other income (expense)		2,422				(1)				2,423					(242,300.0)		%
	3,645														3,645				(182)						3,827						2,108.5	%
		1,269			(556)			1,825		328.2	%

Income from operations before income taxes
Income from operations before income taxes
Income from operations before income taxes	Income from operations before income taxes	118,995			151,651			(32,656)		(21.5)	%	11,585				53,329				(41,744)			(78.3)			(78.3)		%

Provision for income taxes	Provision for income taxes	25,615			34,601			(8,986)		(26.0)	%
Provision for income taxes
Provision for income taxes														3,269				13,361				(10,092)					(75.5)		%

Net income
Net income
Net income	Net income	$	93,380		$	117,050		$	(23,670)	(20.2)	%	$	8,316			$	39,968			$	(31,652)		(79.2)			(79.2)		%

% of revenue	% of revenue
% of revenue
% of revenue
Gross profit
Gross profit
Gross profit	Gross profit	72.0		%	71.9		%
Selling, general, and administrative costs	Selling, general, and administrative costs	58.7		%	59.8		%
Selling, general, and administrative costs
Selling, general, and administrative costs
Income from operations
Income from operations
Income from operations	Income from operations	13.4		%	12.1		%

Revenue: Revenue decreased ~~$154.5~~$174.2 million, or ~~39.6%~~49.9%, to ~~$235.9~~$174.7 million for the three months ended ~~September 30, 2023~~March 31, 2024 from ~~$390.4~~$349.0 million for the three months ended ~~September 30, 2022.~~March 31, 2023. The average revenue per active earning OPTAVIA Coach was $4,623 for the three months ended March 31, 2024 compared to $5,945 for the three months ended March 31, 2023. The decline in revenue for the three months ended ~~September 30, 2023~~March 31, 2024 was primarily driven by a decrease in the number of active earning OPTAVIA Coaches to ~~47,100~~37,800 as of ~~September 30, 2023~~March 31, 2024 from ~~66,200~~58,700 as of ~~September 30, 2022 and~~March 31, 2023, the decline in the productivity per active earning OPTAVIA ~~Coach. The average revenue per active earning~~ ~~OPTAVIA~~ Coach, was $5,008 for the three months ended September 30, 2023 compared to $5,897 for the three months ended September 30, 2022. Revenue decreased $380.3 million, or 30.2%, to $881.0 million for the nine months ended September 30, 2023 from $1,261.3 million for the nine months ended September 30, 2023. The decline in revenue for the nine months ended September 30, 2023 was driven by a decrease in the number of active earning ~~OPTAVIA Coaches~~ and ~~the decline in productivity per active earnings~~ ~~OPTAVIA Coach, partially offset by~~ a $9.1 million impact from a timing difference related to changes in the Company’s sales order terms and conditions with its customers realized in the first ~~quarter. The average revenue per active earning~~ ~~OPTAVIA Coach was $5,545 for the nine months ended September 30, 2023 compared to $6,367 for the~~ ~~nine months ended September 30, 2022~~.quarter of 2023. The decrease in productivity per active earning OPTAVIA Coach for the ~~three months ended September 30, 2023 and nine months ended September 30, 2023~~quarter was driven by continued pressure on customer ~~acquisition, partially offset by a price increase implemented in November 2022.~~acquisition.

Cost of sales: Cost of sales decreased ~~$49.1~~$55.1 million, or ~~45.6%~~53.8%, to ~~$58.5~~$47.4 million from ~~$107.5~~$102.6 million for the three months ended ~~September 30, 2023~~March 31, 2024 from the corresponding period in ~~2022.~~2023. The decrease in cost of sales for the three months ended ~~September 30, 2023~~March 31, 2024 was primarily driven by decreased volumes, efficiencies in inventory management, and ~~lower supply chain costs including benefits~~cost savings from ~~the optimization of~~ our distribution center footprint. These decreases are partially offset by higher product costs resulting from inflationary pressures on raw ingredient costs, shipping costs, and labor costs. Cost of sales decreased $108.0 million, or 30.5%, to $246.6 million from $354.5 millionFuel for the nine months ended September 30, 2023. The decrease in cost of sales for the nine months ended September 30, 2023 was primarily driven by decreased volumes, partially offset by higher product costs resulting from inflationary pressures on raw ingredient costs, shipping costs, and labor costs.Future initiatives.

Gross profit: ~~Gross~~For the three months ended March 31, 2024, gross profit decreased ~~$105.5~~$119.1 million, or ~~37.3%~~48.3%, to ~~$177.4~~$127.3 million from ~~$282.8~~$246.4 million for the three months ended ~~September 30, 2023 from the corresponding period in 2022.~~March 31, 2023. The decrease in gross profit for the three months ended

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~~September 30, 2023~~ March 31, 2024 was due to lower ~~revenue.~~revenue, partially offset by efficiencies in inventory management and cost savings from our Fuel for the Future initiatives. As a percentage of revenue, gross profit increased ~~270~~220 basis points to ~~75.2%~~72.8% for the three months ended ~~September 30, 2023~~March 31, 2024 from ~~72.5%~~70.6% for the corresponding period in ~~2022. Gross profit as a~~2023. The increase in gross margin percentage ~~of revenue~~ was ~~positively impacted by~~primarily due to efficiencies in inventory management and ~~lower supply chain costs including benefits~~cost savings from ~~the optimization of our distribution center footprint. For the nine months ended September 30, 2023, gross profit decreased $272.3 million, or 30.0%, to $634.5 million from $906.8 million~~Fuel for the ~~nine months ended September 30, 2023. The decrease in gross profit for the nine months ended September 30, 2023 was due to lower revenue as well as cost inflation from raw ingredient costs,~~Future initiatives, partially offset by increased shipping ~~costs, and labor~~ costs. ~~As a percentage of revenue, gross profit increased 10 basis points to 72.0% for the nine months ended September 30, 2023 from 71.9% for the corresponding period in 2022.~~

Selling, general, and administrative: SG&A expenses were ~~$151.9~~$119.4 million for the three months ended ~~September 30, 2023,~~March 31, 2024, a decrease of ~~$82.8~~$73.5 million, or ~~35.3%~~38.1%, as compared to ~~$234.7~~$192.9 million from the corresponding period in ~~2022.~~ 2023. The decrease in

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SG&A expenses ~~decreased~~ for the three months ended ~~September 30, 2023~~March 31, 2024 was primarily due to decreased Coach compensation ondue to lower volumes and fewer active earning Coaches, as well as progress on several cost reduction and optimization initiatives, and charitable donations in 2022. As a percentage of revenue, SG&A expenses were 64.4% for the three months ended September 30, 2023 as compared to 60.1% for the corresponding period in 2022. SG&A expenses as a percentage of revenue increased for the three months ended September 30, 2023 primarily reflecting the loss of leverage on fixed costs due to lower sales volumes compared to 2022 as well aspartially offset by market research and investment costs related to medically supported weight loss ~~activities.~~and costs for our Company-led acquisition initiatives. As a percentage of revenue, SG&A expenses were 68.3% for the three months ended March 31, 2024 as compared to 55.3% for the corresponding period in 2023. SG&A expenses included research and development costs of ~~$1.3~~$1.0 million ~~and $1.1 million~~ for both the three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022, respectively,~~ in connection with the development of new products, programs and clinical research activities. The increase in SG&A expenses ~~were $516.8 million for the nine months ended September 30, 2023, a decrease of $237.9 million, or 31.5%,~~ as ~~compared to $754.6 million from the corresponding period in 2022. As~~ a percentage of revenue ~~SG&A expenses were 58.7%~~ for the ~~nine~~three months ended ~~September 30, 2023 as compared~~March 31, 2024 was primarily due to ~~59.8% for the corresponding period in 2022 primarily reflecting progress on several cost reduction~~market research and ~~optimization initiatives and charitable donations in 2022, partially offset by~~investment costs related to medically supported weight loss activities, the loss of leverage on fixed costs due to lower sales volumes when compared to ~~2022.~~the first quarter of 2023, and costs for our company led acquisition initiatives.

Non-GAAP adjusted SG&A expenses ~~included research and development costs of $3.4 million and $3.3~~were $118.0 million for the ~~nine~~three months ended ~~September 30, 2023 and 2022, respectively,~~March 31, 2024, a decrease of $74.9 million, or 38.8%, as compared to $192.9 million from the corresponding period in ~~connection with the development of new products and programs and clinical research activities.~~2023. Non-GAAP adjusted SG&A ~~expenses decreased~~excludes costs for the ~~nine~~collaboration with LifeMD of $1.3 million for the three months ended ~~September 30, 2023 primarily due~~March 31, 2024. Refer to ~~decreased Coach compensation on lower volumes and fewer active earning Coaches, as well as progress on several cost reduction and optimization initiatives, and charitable donations in 2022.~~the section titled “Non-GAAP Financial Measures” below for a reconciliation of each of non-GAAP financial measures to its most comparable GAAP financial measure.

Income from operations: For the three months ended ~~September 30, 2023,~~March 31, 2024, income from operations decreased ~~$22.6~~$45.6 million to ~~$25.5~~$7.9 million from ~~$48.2~~$53.5 million for the corresponding period in ~~2022~~2023 primarily as a result of decreased gross profit partially offset by decreased SG&A expenses. Income from operations as a percentage of revenue decreased to ~~10.8%~~4.5% for the three months ended ~~September 30, 2023~~March 31, 2024 from ~~12.3%~~15.3% for the corresponding period in ~~2022~~2023 due to the factors described above impacting revenue and SG&A ~~expenses, partially offset by the factors impacting gross profit. For the nine months ended September 30, 2023,~~expenses.

Non-GAAP adjusted income from operations ~~decreased $34.5~~was $9.3 million for the three months ended March 31, 2024, a decrease of $44.2 million, or 82.7%, as compared to ~~$117.7~~$53.5 million from ~~$152.2 million for~~ the corresponding period in 2022 primarily as a result of decreased gross profit partially offset by decreased SG&A expenses. Income from operations as a percentage of revenue increased to 13.4% for the nine months ended September 30, 2023 from 12.1% for the corresponding period in 2022 due2023. Refer to the ~~factors above impacting gross profit and SG&A expenses.~~section titled “Non-GAAP Financial Measures” below for a reconciliation of each of non-GAAP financial measures to its most comparable GAAP financial measure.

Provision for income taxes: For the three months ended ~~September 30, 2023,~~March 31, 2024, the Company recorded ~~$3.4~~$3.3 million in income tax expense, an effective tax rate of ~~12.9%~~28.2%, as compared to ~~$11.7~~$13.4 million in income tax expense, an effective tax rate of ~~24.5%~~25.1%, for the three months ended ~~September 30, 2022.~~March 31, 2023. The ~~decrease~~increase in the effective tax rate for the three months ended ~~September 30, 2023~~March 31, 2024 was primarily driven by ~~the~~an increase in the tax ~~benefit~~shortfall for ~~charitable donations~~stock compensation and the rate impact of ~~inventory, an increase in~~ research and development tax credits, ~~and a~~partially offset by the decrease in ~~state income taxes. During~~ the ~~quarter ended September 30, 2023, the Company completed its 2022 Federal~~limitation for executive compensation and various other miscellaneous items.

Non-GAAP adjusted income tax ~~return, which included an update to~~provision was $2.9 million for the ~~estimated tax-basis cost of charitable donations of inventory and the estimated research and development tax credits. For the nine~~three months ended ~~September 30, 2023, the Company recorded $25.6 million in income tax expense,~~March 31, 2024, an effective tax rate of ~~21.5%,~~28.7% as compared to ~~$34.6 million in income tax expense, an effective tax rate of 22.8%,~~25.1% for the ~~nine months ended September 30, 2022. The decrease~~corresponding period in ~~the effective tax rate~~2023. “Non-GAAP Financial Measures” below for ~~the nine months ended September 30, 2022 was primarily driven by the increase in the tax benefit for charitable donations~~a reconciliation of ~~inventory.~~each of non-GAAP financial measures to its most comparable GAAP financial measure.

Net income: Net income was ~~$23.1 million and $93.4~~$8.3 million, or ~~$2.12 and $8.55~~$0.76 per diluted share for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 as compared to ~~$36.2 million and $117.1~~$40.0 million, or ~~$3.27 and $10.30~~$3.67 per diluted share, for the three ~~and nine~~ months ended ~~September 30, 2022.~~March 31, 2023. The period-over-period changes were driven by the factors described ~~above.~~above in the section titled “Income from operations.”

Non-GAAP adjusted net income was $7.2 million or $0.66 per diluted share for the three months ended March 31, 2024 as compared to $40.0 million, or $3.67 per diluted share, for the corresponding period in 2023. Refer to the section titled “Non-GAAP Financial Measures” below for a reconciliation of each of non-GAAP financial measures to its most comparable GAAP financial measure.

Non-GAAP Financial Measures

In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in this quarterly report, our quarterly earnings press release, and other public disclosures. The following GAAP financial measures have been presented on an as-adjusted basis: SG&A expenses, income from operations, other income (expense), provision for income taxes, net income, and diluted earnings per share. Each of these as-adjusted financial measures excludes the impact of certain amounts related to the LifeMD collaboration and unrealized gains on our investment in LifeMD common stock as further identified below and have not been calculated in accordance with GAAP. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is included below. These non-GAAP financial measures are not intended to replace GAAP financial measures.

We use these non-GAAP financial measures internally to evaluate and manage the Company’s operations because we believe they provide useful supplemental information regarding the Company’s on-going economic performance. We have chosen to

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provide this information to investors to enable them to perform more meaningful comparisons of operating results and as a means to emphasize the results of on-going operations.

The following tables reconcile the non-GAAP financial measures included in this report (in thousands, except per share amounts):


	Three Months Ended March 31, 2024
	GAAP		Unrealized Gain on Investment in LifeMD Common Stock		LifeMD Prepaid Services Amortization		Non-GAAP
Selling, general, and administrative	$	119,352	$	—	$	(1,327)	$	118,025
Income from operations	7,940		—		1,327		9,267
Other income (expense)	3,645		(2,841)		—		804
Provision for income taxes	3,269		(710)		332		2,891
Net income	8,316		(2,130)		995		7,181
Diluted earnings per share (1)	0.76		(0.19)		0.09		0.66


	Three Months Ended March 31, 2023
	GAAP		Unrealized Gain on Investment in LifeMD Common Stock		LifeMD Prepaid Services Amortization		Non-GAAP
Selling, general, and administrative	$	192,879	$	—	$	—	$	192,879
Income from operations	53,511		—		—		53,511
Other income (expense)	(182)		—		—		(182)
Provision for income taxes	13,361		—		—		13,361
Net income	39,968		—		—		39,968
Diluted earnings per share (1)	3.67		—		—		3.67

(1) The weighted-average diluted shares outstanding used in the calculation of these non-GAAP financial measures are the same as the weighted-average shares outstanding used in the calculation of the reported per share amounts.

Liquidity and Capital Resources

The Company had stockholders’ equity of ~~$193.0~~$211.0 million and working capital of ~~$114.2~~$142.4 million at ~~September 30, 2023~~March 31, 2024 as compared with ~~$155.0~~$201.5 million and ~~$81.9~~$131.7 million at December 31, ~~2022,~~2023, respectively. The ~~$38.0~~$9.5 million net increase in stockholders’ equity was primarily driven by net income for the three months ended March 31, 2024 of $8.3 million. The Company’s cash, cash equivalents, and investments increased from $150.0 million at December 31, 2023 to $156.4 million at March 31, 2024.

Net cash provided by operating activities decreased by $56.8 million to $7.3 million for the three months ended March 31, 2024 from $64.1 million for the three months ended March 31, 2023 primarily driven by a $31.7 million decrease in net income, a $13.6 million decrease related to changes in inventory balances, a $9.3 million decrease in income taxes, a $7.3 million decrease in prepaid expenses and other current assets, partially offset by a $6.0 million increase in accounts payable and accrued expenses We decreased our inventory purchases during the period ended March 31, 2024 to align with sales demand.

Net cash used in investing activities was $2.8 million for the three months ended March 31, 2024 as compared to $2.1 million for the three months ended March 31, 2023.

Net cash used in financing activities decreased by $24.4 million to $1.5 million for the three months ended March 31, 2024 from $25.9 million for the three months ended March 31, 2023. This decrease was primarily due to an $18.5 million decrease in cash dividends paid to stockholders, a $3.6 million decrease in repurchases of the Company's common stock, and a $2.4 million decrease in net shares repurchased for employee taxes.

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stockholders’ equity reflects $93.4 million in net income for the nine months ended September 30, 2023 offset by $3.6 million used for repurchases of the Company’s common stock and $54.5 million for dividends paid to holders of the Company’s common stock as well as the other equity transactions described in the “Condensed Consolidated Statements of Changes in Stockholders’ Equity” included in this report. On September 7, 2023, the Company declared a quarterly dividend of $1.65 per share payable on November 7, 2023, to stockholders of record as of September 19, 2023. Future share repurchases and the payment of any future dividends are subject to the business judgment of our Board of Directors, taking into consideration our historical and projected results of operations, financial condition, cash flows, capital requirements, industry conditions, covenant compliance, changes in laws and regulations, current economic environment and other factors considered relevant. The Company’s cash, cash equivalents and investment securities increased from $87.7 million at December 31, 2022 to $157.8 million at September 30, 2023.

Net cash provided by operating activities decreased by $5.7 million to $137.1 million for the nine months ended September 30, 2023 from $142.8 million for the nine months ended September 30, 2022 primarily driven by a $25.9 million increase related to changes in inventory balances, a $6.1 million increase in prepaid expenses and other current assets, a $3.9 million increase in other assets, an increase of $1.7 million in depreciation and amortization expenses, offset by a $23.7 million decrease in net income, a $2.3 million reduction in share-based compensation, a $3.8 million reduction in deferred income taxes, a $1.2 million reduction in non-cash lease expense, and a $13.1 million reduction in accounts payable and accrued expenses. We decreased our inventory purchases during the period ended September 30, 2023 to align with sales demand. Accounts payable and accrued expenses decreased due to the timing of payments.

Net cash used in investing activities was $50.3 million for the nine months ended September 30, 2023 as compared to $2.4 million for the nine months ended September 30, 2022. The increase was primarily due to the purchase of investment securities during the nine months ended September 30, 2023. Net cash used in financing activities decreased by $113.4 million to $61.9 million for the nine months ended September 30, 2023 from $175.3 million for the nine months ended September 30, 2022. This decrease was primarily due to the $100.0 million accelerated share repurchase (“ASR”) program as of June 30, 2022 that did not recur in 2023, a $16.4 million decrease in other repurchases of the Company’s common stock, partially offset by a $1.8 million increase in net shares repurchased for taxes and an increase of $1.3 million of cash dividends paid to stockholders.

In pursuing its business strategy, the Company may require additional cash for operating and investing activities. The Company expects future cash requirements, ~~in both the short term and the long term,~~ if any, to be funded from operating cash flow and financing activities.

From time to time the Company evaluates potential acquisitions that complement our business. If consummated, any such transactions may use a portion of our working capital or require the issuance of equity or debt. We have no present understandings, commitments, or agreements with respect to any material acquisitions.

On April 13, 2021, the Company and certain of its subsidiaries (collectively, the “Guarantors”) entered into a credit agreement among the Company, the Guarantors, the lenders party thereto and Citibank, N.A., in its capacity as administrative agent. On May 31, 2022, the Credit Agreement was amended to increase the borrowing capacity and convert the interest rate to be based on SOFR, from LIBOR (the “Amended Credit Agreement”). The Amended Credit Agreement provides for a $225.0 million senior secured revolving credit facility with a $20.0 million letter of credit sublimit. The Amended Credit Agreement also provides for an uncommitted incremental facility that permits the Company, subject to certain conditions, to increase the senior secured revolving credit facility by up to $100.0 million. The Amended Credit Agreement contains affirmative and negative covenants customarily applicable to credit facilities. As of ~~September 30, 2023,~~March 31, 2024, the Company had no borrowings under the credit facility or letter of credit sublimit, and was in compliance with all of its debt covenants.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates and a decline in the stock market. The Company does not enter into derivatives, foreign exchange transactions or other financial instruments for trading or speculative ~~purposes.~~purposes other than strategic investments.

The Company is exposed to market risk related to changes in interest rates and market pricing impacting our credit facility and investment ~~portfolio. Its~~in money market securities, government and agency securities, and corporate bonds. Other than for strategic investments, its current investment policy is to maintain an investment portfolio consisting of corporate bonds and U.S. money market securities directly or through managed funds. Its cash is deposited in and invested through highly rated financial institutions in North America. Its marketable securities, purchased during 2023, are subject to interest rate risk and market pricing risk and will fall in value if market interest rates increase or if market pricing decreases. If market interest rates were to increase and market pricing were to decrease immediately and uniformly by 10% from levels at ~~September 30, 2023,~~March 31, 2024, the Company estimates that the fair value of its investment portfolio would decline by an immaterial amount and therefore it would not expect its operating results or cash flows to be affected to any significant degree by the effect of a change in market conditions on our investments. As

The Company is exposed to market risk related to price fluctuations in equity markets related to its investment in LifeMD common stock, purchased in December of ~~September 30, 2023~~2023. If equity prices were to decrease immediately and uniformly by 10% from levels at March 31, 2024, the Company ~~also did~~estimates that the fair value of the Company investment would decline by an immaterial amount and therefore it would not ~~have~~expect its operating results or cash flows to be affected by any ~~outstanding borrowings.~~

~~Table~~significant degree by the effect of ~~Contents~~

a change in market conditions on our investment.

There have been no material changes to our market risk exposure since December 31, ~~2022.~~2023.

Item 4. Controls and Procedures

Management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Act, as ~~amended, as~~ of ~~September 30, 2023.~~March 31, 2024. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Act is recorded, processed, summarized, and reported accurately and on a timely basis. Based on this evaluation performed in accordance with the criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, our management concluded that the Company’s disclosure controls and procedures are effective at the reasonable assurance level as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There have been no material changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Act) during the fiscal quarter ended ~~September 30, 2023~~March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II Other Information

Item 1. Legal Proceedings

The Company is, from time to time, subject to a variety of litigation and similar proceedings that arise out of the ordinary course of its business. Based upon the Company’s experience, current information, and applicable law, it does not believe that these proceedings and claims will have a material adverse effect on its results of operations, financial position, or liquidity. However, the results of legal actions cannot be predicted with certainty. Therefore, it is possible that the Company’s results of operations, financial condition or cash flows could be materially adversely affected in any particular period by the unfavorable resolution of one or more legal actions.

Item 1A. Risk Factors

There have been no material changes to the risk factors set forth in Part I, Item 1A of the ~~2022~~2023 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

2023
Total Number of Shares Purchased (1)
Average Price Paid per Share Total Number of Shares Purchased
as Part of a Publicly Announced
Plan or Program
Maximum Number of Shares that May
Yet Be Purchased Under the Plans or Programs (2)
July 1 - July 31 1,146 94.54 — 1,323,568
August 1 - August 31 17 84.40 — 1,323,568
September 1 - September 30 23 77.56 — 1,323,568


2024	Total Number of Shares Purchased (1)	Average Price Paid per Share	Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2)
January 1 - January 31	—	—	—	1,323,568
February 1 - February 29	107	48.62	—	1,323,568
March 1 - March 31	10,986	36.64	—	1,323,568

(1)~~All of the~~Also included are shares of the Company’s common stock ~~reflected in this column were~~ surrendered by employees and directors to the Company to cover minimum tax liability withholding obligations upon the exercise of stock options or the vesting of shares of restricted stock and performance-based share awards previously granted to such employees and directors.

(2)At the outset of the quarter ended ~~September 30, 2023,~~March 31, 2024, there were 1,323,568 shares of the Company’s common stock eligible for repurchase under the stock repurchase authorization dated September 16, 2014 (the "Stock Repurchase Plan").

As of ~~September 30, 2023,~~March 31, 2024, there were 1,323,568 shares of the Company’s common stock eligible for repurchase under the Stock Repurchase Plan. There can be no assurances as to the amount, timing, or prices of repurchases, which may vary based on market conditions and other factors. The Stock Repurchase Plan does not have an expiration date and can be modified or terminated by the Board of Directors at any time.

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Item 6. Exhibits


Exhibit Number						Description of Exhibit

3.1						Restated and Amended Certificate of Incorporation of Medifast, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 001-31573) filed February 27, 2015).

3.2						Amended and Restated Bylaws of Medifast, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Amendment No. 1 Current Report on Form 8-K (File No. 001-31573) filed on December 4, 2019).

31.1						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.1						Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).



101						The following financial statements from Medifast, Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2023~~March 31, 2024 filed ~~November 6, 2023,~~April 29, 2024, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Income, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Cash Flows, (v) Condensed Consolidated Statements of Changes in Stockholders’ Equity, and (vi) Notes to the Condensed Consolidated Financial Statements (filed herewith).

104						Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

In accordance with SEC Release No. 33-8238, Exhibit 32.1 is being furnished and not filed.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Medifast, Inc.


By:			/s/ DANIEL R. CHARD
			Daniel R. Chard
			Chief Executive Officer
			(Principal Executive Officer)

Dated:			~~November 6, 2023~~April 29, 2024


			/s/ JAMES P. MALONEY
			James P. Maloney
			Chief Financial Officer
			(Principal Financial Officer)

Dated:			~~November 6, 2023~~April 29, 2024

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	Nine months ended September 30, 2023
	Number of Shares Issued	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings		Treasury Stock		Total

Balance, December 31, 2022	10,928	$	11	$	21,555	$	24	$	139,852	$	(6,398)	$	155,044
Net income	—	—		—		—		39,968		—		39,968
Share-based compensation	69	—		606		—		—		—		606
Options exercised by directors	4	—		105		—		—		—		105
Net shares repurchased for employee taxes	(30)	—		(3,236)		—		—		—		(3,236)
Treasury stock from stock repurchases	—	—		—		—		—		(3,602)		(3,602)
Treasury stock retired from stock repurchases	(84)	—		—		—		(10,000)		10,000		—
Other comprehensive income	—	—		—		9		—		—		9
Cash dividends declared to stockholders	—	—		—		—		(17,994)		—		(17,994)

Balance, March 31, 2023	10,887	$	11	$	19,030	$	33	$	151,826	$	—	$	170,900
Net income	—	—		—		—		30,280		—		30,280
Share-based compensation	2	—		2,514		—		—		—		2,514
Net shares repurchased for employee taxes	—	—		(2)		—		—		—		(2)
Other comprehensive income	—	—		—		90		—		—		90
Cash dividends declared to stockholders	—	—		—		—		(18,221)		—		(18,221)

Balance, June 30, 2023	10,889	$	11	$	21,542	$	123	$	163,885	$	—	$	185,561
Net income	—	—		—		—		23,131		—		23,131
Share-based compensation	4	—		2,675		—		—		—		2,675
Net shares repurchased for employee taxes	(1)	—		(110)		—		—		—		(110)
Other comprehensive income	—	—		—		18		—		—		18
Cash dividends declared to stockholders	—	—		—		—		(18,240)		—		(18,240)

Balance, September 30, 2023	10,892	$	11	$	24,107	$	141	$	168,776	$	—	$	193,035