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Business Segments
 6 Months Ended
Jun. 30, 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 and six months ended June 30, 2012 and 2011:

 

    Three Months Ended June 30, 2012  
    Medifast     MWCC &
Wholesales		     Other     Consolidated  
                                 
Revenues   $ 78,220,000     $ 15,351,000     $ -     $ 93,571,000  
Cost of Sales     19,782,000       3,649,000       -       23,431,000  
Selling, General and Administrative Expense     47,173,000       10,279,000       5,282,000       62,734,000  
Depreciation and Amortization     2,030,000       720,000       58,000       2,808,000  
Interest(net) and other     14,000       4,000       (922,000 )     (904,000 )
Income before income taxes   $ 9,221,000     $ 699,000     $ (4,418,000 )   $ 5,502,000  
                                 
Segment Assets   $ 76,898,000     $ 15,853,000     $ 28,207,000     $ 120,958,000  

 

    Three Months Ended June 30, 2011  
    Medifast     MWCC &
Wholesales		     Other     Consolidated  
                                 
Revenues   $ 68,603,000     $ 9,652,000     $ -     $ 78,255,000  
Cost of Sales     16,920,000       2,294,000       -       19,214,000  
Selling, General and Administrative Expense     39,735,000       6,664,000       1,570,000       47,969,000  
Depreciation and Amortization     1,648,000       283,000       84,000       2,015,000  
Interest(net) and other     3,000       -       (88,000 )     (85,000 )
Income before income taxes   $ 10,297,000     $ 411,000     $ (1,566,000 )   $ 9,142,000  
                                 
Segment Assets   $ 51,687,000     $ 10,849,000     $ 39,370,000     $ 101,906,000  

 

    Six Months Ended June 30, 2012  
    Medifast     MWCC &
Wholesales		     Other     Consolidated  
                                 
Revenues   $ 153,773,000     $ 28,723,000     $ -     $ 182,496,000  
Cost of Sales     38,709,000       6,891,000       -       45,600,000  
Selling, General and Administrative Expense     92,084,000       22,115,000       6,771,000       120,970,000  
Depreciation and Amortization     3,825,000       1,230,000       135,000       5,190,000  
Interest(net) and other     47,000       8,000       (1,155,000 )     (1,100,000 )
Income before income taxes   $ 19,108,000     $ (1,521,000 )   $ (5,751,000 )   $ 11,836,000  
                                 
Segment Assets   $ 76,898,000     $ 15,853,000     $ 28,207,000     $ 120,958,000  

  

    Six Months Ended June 30, 2011  
    Medifast     MWCC &
Wholesales		     Other     Consolidated  
                                 
Revenues   $ 134,700,000     $ 17,850,000     $ -     $ 152,550,000  
Cost of Sales     32,650,000       4,179,000       -       36,829,000  
Selling, General and Administrative Expense     78,129,000       11,820,000       2,951,000       92,900,000  
Depreciation and Amortization     2,965,000       532,000       165,000       3,662,000  
Interest(net) and other     10,000       -       (274,000 )     (264,000 )
Income before income taxes   $ 20,946,000     $ 1,319,000     $ (2,842,000 )   $ 19,423,000  
                                 
Segment Assets   $ 51,687,000     $ 10,849,000     $ 39,370,000     $ 101,906,000