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BUSINESS SEGMENTS
 12 Months Ended
Dec. 31, 2011
BUSINESS SEGMENTS

13. BUSINESS SEGMENTS

 

The Company has two reportable operating segments: Medifast, and MWCC and Wholesale. The Medifast reporting segment consists of the Medifast Direct and Take Shape for Life distribution channels. The MWCC and Wholesale segment consists of Medifast Corporately-owned and Franchised Weight Control Centers, as well as the Medifast Wholesale Physicians channel.

 

Total assets and operating expenses not identified with a specific segment are listed as “Other” and include items such as auditors’ fees, attorney’s fees, stock compensation expense and corporate governance related to NYSE, Sarbanes-Oxley, and SEC regulations. Evaluation of the performance of operating segments is based on their respective income from operations before taxes. The accounting policies of the segments are the same as those of the Company. The presentation and allocation of assets, liabilities and results of operations may not reflect the actual economic costs of the segments as stand-alone businesses. If a different basis of allocation were utilized, the relative contributions of the segments might differ, but management believes that the relative trends in segments would likely not be impacted.

 

We previously included Medifast Weight Control Centers in “Other” segment, however, in 2010 due to the Weight Control Centers growth we separated this segment along with the Medifast Wholesale Physicians. In addition, we reclassified segment amounts for the prior periods.

  

The following tables present segment information for the years ended December 31, 2011, 2010, and 2009:

  

    Year Ended December 31, 2011  
    Medifast     MWCC &
Wholesale		     Other     Consolidated  
                         
Revenues   $ 259,191,000     $ 38,998,000     $ -     $ 298,189,000  
Cost of Sales     63,888,000       9,805,000       -       73,693,000  
Selling, General and Adminstrative Expenses     152,647,000       30,335,000       5,788,000       188,770,000  
Depreciation and Amortization     6,416,000       1,596,000       332,000       8,344,000  
Interest (net) and other     30,000       -       (328,000 )     (298,000 )
Income before income taxes   $ 36,210,000     $ (2,738,000 )   $ (5,792,000 )   $ 27,680,000  
                                 
Segment Assets   $ 64,388,000     $ 12,658,000     $ 28,619,000     $ 105,665,000  

 

    Year Ended December 31, 2010  
    Medifast     MWCC &
Wholesale		     Other     Consolidated  
                         
Revenues   $ 229,879,000     $ 27,673,000     $ -     $ 257,552,000  
Cost of Sales     58,795,000       6,288,000       -       65,083,000  
Selling, General and Adminstrative Expenses     135,441,000       13,837,000       5,693,000       154,971,000  
Depreciation and Amortization     4,765,000       786,000       307,000       5,858,000  
Interest (net) and other     105,000       -       (157,000 )     (52,000 )
Income before income taxes   $ 30,773,000     $ 6,762,000     $ (5,843,000 )   $ 31,692,000  
                                 
Segment Assets   $ 55,858,000     $ 9,301,000     $ 28,900,000     $ 94,059,000  

 

    Year Ended December 31, 2009  
    Medifast     MWCC &
Wholesale		     Other     Consolidated  
                         
Revenues   $ 152,077,000     $ 17,666,000     $ -     $ 169,743,000  
Cost of Sales     41,466,000       3,889,000       -       45,355,000  
Selling, General and Adminstrative Expenses     88,042,000       9,137,000       3,445,000       100,624,000  
Depreciation and Amortization     4,264,000       691,000       312,000       5,267,000  
Interest (net) and other     17,000       0       56,000       73,000  
Income before income taxes   $ 18,288,000     $ 3,949,000     $ (3,813,000 )   $ 18,424,000  
                                 
Segment Assets   $ 43,580,000     $ 5,138,000     $ 14,242,000     $ 62,960,000