Mr. MacDonald: Medifast is a major medical meal replacement manufacturing company in Baltimore, Maryland. We have been in business since 1980. We have distributed products over the years to over 15,000 physicians and over 1 million patients have used our product. It is a medical food so it is basically a food product. Today Medifast is on the cutting edge of not only weight management but also nutritional therapy in terms of disease management solutions. Part of the technologies we have developed over the years involves not only Medifast for Women and Medifast for Men, but also Medifast Plus for Diabetics, which is a diabetic formula; Medifast for Women's Health, which is for menopausal women; and Joint Health for arthritics. We also have a coronary heart product that has extra vitamins and minerals including CoQ10, argenine, carotene and those kinds of things for people's coronary health. So we provide a whole potpourri of nutritional solutions for disease management. We are on the cutting edge of nutritional therapy because we believe that if people use Medifast early on, they won't be involved in the catastrophic stages of these disease states. Nutritional therapy is the proper therapy early on and the drug therapy should only be used as a last resort. Our clinical studies at Johns Hopkins and other major medical institutions like the National Institutes of Health provide us with enough evidence to know that we are on the cutting edge of nutritional therapy in solving disease and weight management solutions in the US.
TWST: Who is your average customer?
Mr. MacDonald: The average customer for us has usually been women
between 45 and 65. I would say that seems to be the average. It is
usually people who tend to have a problem with medical weight loss,
which means they go to a physician and find out they are usually
probably 35 to 45 pounds overweight. That has traditionally been our
profile. Today, we are getting more males than most of our industry. For
example, most weight loss companies have about 95% women. We are about
65%. So we have 35% men in our mix in the same age profile because most
people don't usually go to medical weight loss until they get a little
bit older. If they are younger, they are not as concerned about it. But
nowadays, that profile is changing and also you are seeing demographics
change. The average order we receive on a two-week basis is between
$150 and $200 because we are basically a meal replacement. So most of
our patients eat one good meal per day and use six supplements per day.
There are seven supplements per box and we average around $2 for a meal
replacement. The cost of the program for us is very simple. If you skip
the lunch, for example, you just have something very mild for breakfast
with a meal replacement. You end up spending probably about $12 per day
but then you are saving about $7 to $8 by not eating meals. So as a
result of that, the net cost is somewhere around $3 to $4 per day for
the Medifast program which is very favorable and very cost effective.
Tickers included in this excerpt: MED
For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.