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Business Segments
 3 Months Ended
Mar. 31, 2012
Business Segments
11. Business Segments

 

Operating segments are components of an enterprise about which separate financial information is available that is regularly reviewed by the chief operating decision maker about how to allocate resources and in assessing performance. The Company has two reportable operating segments: Medifast, and MWCC and Wholesale. The Medifast reporting segment consists of the following distribution channels: Medifast Direct and Take Shape for Life. The MWCC and Wholesale segment consists of Medifast Corporate and Franchise Weight Control Centers as well as Medifast Wholesale Physicians.

 

Total assets and operating expense 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.

  

The following tables present segment information for the three months ended March 31, 2012 and 2011:

 

    Three Months Ended March 31, 2012  
          MWCC &              
    Medifast     Wholesales     Other     Consolidated  
                         
Revenues   $ 75,552,000     $ 13,372,000     $ -     $ 88,924,000  
Cost of Sales     18,925,000       3,244,000       -       22,169,000  
Selling, General and Administrative Expense     44,910,000       11,837,000       1,489,000       58,236,000  
Depreciation and Amortization     1,805,000       500,000       77,000       2,382,000  
Interest(net) and other     33,000       4,000       (233,000 )     (196,000 )
Income before income taxes   $ 9,879,000     $ (2,213,000 )   $ (1,333,000 )   $ 6,333,000  
                                 
Segment Assets   $ 72,802,000     $ 14,755,000     $ 29,705,000     $ 117,262,000  

 

    Three Months Ended March 31, 2011  
          MWCC &              
    Medifast     Wholesales     Other     Consolidated  
                         
Revenues   $ 66,097,000     $ 8,198,000     $ -     $ 74,295,000  
Cost of Sales     15,755,000       1,859,000       -       17,614,000  
Selling, General and Administrative Expense     38,603,000       4,948,000       1,379,000       44,930,000  
Depreciation and Amortization     1,318,000       248,000       82,000       1,648,000  
Interest(net) and other     7,000       -       (185,000 )     (178,000 )
Income before income taxes   $ 10,414,000     $ 1,143,000     $ (1,276,000 )   $ 10,281,000  
                                 
Segment Assets   $ 69,430,000     $ 9,831,000     $ 26,255,000     $ 105,516,000