Medifast Inc (MED) 2017 Q4 法說會逐字稿

Good afternoon, and welcome to the Medifast Fourth Quarter 2017 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

下午好，歡迎參加 Medifast 2017 年第四季度收益電話會議。（操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to Katie Turner with ICR. Please go ahead.

我現在想將會議轉交給 ICR 的凱蒂·特納 (Katie Turner)。請繼續。

Good afternoon. Welcome to Medifast's Fourth Quarter and Full Year 2017 Earnings Conference Call. On the call with me today are Daniel Chard, Chief Executive Officer; and Timothy Robinson, Chief Financial Officer.

下午好。歡迎參加快驗保 2017 年第四季度和全年收益電話會議。今天與我通話的是首席執行官 Daniel Chard；和首席財務官蒂莫西羅賓遜。

By now, everyone should have access to the earnings release for the period ended December 31, 2017, that went out this afternoon at approximately 4:05 p.m. Eastern time. If you have not received the release, it is available on the Investor Relations portion of Medifast's website at www.medifastnow.com. This call is being webcast, and a replay will be available on the company's website.

到目前為止，每個人都應該可以查看截至 2017 年 12 月 31 日的財報，該財報於今天下午 4:05 左右發布。東部時間。如果您尚未收到該新聞稿，可以在 Medifast 網站 www.medifastnow.com 的投資者關係部分獲取。該電話會議正在網絡直播，並且將在公司網站上提供重播。

Before we begin, we'd like to remind everyone that the prepared remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. The words believe, expect, anticipate and other similar expressions generally identify forward-looking statements. These statements do not guarantee future performance and, therefore, undue reliance should not be placed on them. Actual results could differ materially from those projected in any forward-looking statement. Medifast assumes no obligation to update any forward looking projection that may be made in today's release or call. All of the forward-looking statements contained herein speak only as of the date of today's call.

在開始之前，我們想提醒大家，準備好的言論包含前瞻性陳述，管理層可能會針對您的問題做出額外的前瞻性陳述。相信、期望、預期和其他類似表達方式通常可識別前瞻性陳述。這些聲明並不保證未來的表現，因此，不應過度依賴它們。實際結果可能與任何前瞻性聲明中的預測存在重大差異。快驗保沒有義務更新今天的新聞稿或電話會議中可能做出的任何前瞻性預測。本文中包含的所有前瞻性陳述僅代表今天電話會議之日的情況。

And with that, I'd like to turn the call over to Medifast's CEO, Dan Chard.

說到這裡，我想將電話轉給快驗保 (Medifast) 的首席執行官丹·查德 (Dan Chard)。

Thank you, Katie. Good afternoon, everyone. We're pleased to share our fourth quarter and full year financial results with you today. I will provide a brief overview of our financial and operational business performance. Tim will then review our financial results in more detail and share our 2018 first quarter and annual guidance. Tim and I will then be available to answer your questions.

謝謝你，凱蒂。大家下午好。我們很高興今天與您分享我們第四季度和全年的財務業績。我將簡要概述我們的財務和運營業務績效。然後，蒂姆將更詳細地回顧我們的財務業績，並分享我們的 2018 年第一季度和年度指導。然後蒂姆和我將回答您的問題。

2017 proved to be a very good year for the company, our coach community and our shareholders. As anticipated, we started slow in the first quarter and subsequently saw sequential growth in every quarter during 2017. We remained very focused throughout the year on our OPTAVIA Coach model, which builds considerable momentum moving into 2018.

事實證明，2017 年對於公司、我們的教練社區和我們的股東來說是非常好的一年。正如預期的那樣，我們在第一季度開始緩慢，隨後 2017 年每個季度都出現環比增長。我們全年都非常關注 OPTAVIA Coach 模型，該模型為 2018 年帶來了巨大的動力。

I'm very proud of our corporate team and our field leaders, together we've created a powerful focused transformational message around Optimal Health and Wellbeing that has resonated across the OPTAVIA community. This has helped fuel excitement, energy and enthusiasm with tangible results demonstrated by the growth in our financial results. Both revenue and profitability exceeded our expectations in 2017. Revenue for the full year increased approximately 10% to $301.6 million, above our most recent revenue guidance of $295 million to $298 million for the year. Additionally, we were able to overcome what has historically been a seasonal slowdown that occurs in our business in the fourth quarter by posting a sequential quarter-over-quarter improvement. We also continued to see improved operational efficiencies across the organization as we have aligned our internal teams and focused our resources behind our key growth initiatives.

我為我們的企業團隊和領域領導者感到非常自豪，我們共同圍繞最佳健康和福祉創造了強大的、集中的變革信息，在整個 OPTAVIA 社區中引起了共鳴。這有助於激發興奮、活力和熱情，並取得我們財務業績增長所證明的切實成果。2017年的收入和盈利能力都超出了我們的預期。全年收入增長約 10% 至 3.016 億美元，高於我們最新的全年收入指導值 2.95 億美元至 2.98 億美元。此外，我們能夠通過公佈環比改善來克服第四季度業務中歷來出現的季節性放緩。我們還繼續看到整個組織的運營效率得到提高，因為我們調整了內部團隊並將資源集中支持我們的關鍵增長計劃。

Gross margin expanded 60 basis points to 75.5%, and we experienced a 270 basis point improvement in SG&A cost as a percent of revenue that drove annual diluted earnings per share of $2.29, ahead of our most recent guidance of $2.15 to $2.18 diluted earnings per share.

毛利率擴大了 60 個基點，達到 75.5%，SG&A 成本佔收入的百分比提高了 270 個基點，推動年度攤薄每股收益達到 2.29 美元，高於我們最新指導的 2.15 美元至 2.18 美元攤薄每股收益。

We are very pleased with our finish to 2017. We are experiencing solid business momentum and remain confident that we are very well positioned for future growth, as we continue to focus on our mission to offer the world life-long transformation, one healthy habit at a time.

我們對 2017 年的結束感到非常滿意。我們正在經歷強勁的業務發展勢頭，並且對我們為未來的增長做好了充分的準備，因為我們將繼續專注於我們的使命，即為世界提供終身轉變，一次一種健康的習慣。

In the fourth quarter, revenue through our OPTAVIA Coach model posted the largest quarter in the company's history. We ended the fourth quarter with a record 15,000 active earning OPTAVIA Coaches. This outstanding accomplishment is a reflection of the strength of our OPTAVIA field leadership and the partnership we enjoy with our OPTAVIA Coach community. Together, we successfully introduced our powerful new brand narrative to align the company and coach community behind a shared vision. Our focused initiatives to deliver on that vision leveraged 2 key insights: first, people are more successful in their health transformation when they have support. We offer the support to personalize consultation from our OPTAVIA Coaches as well through the integration of each client into our OPTAVIA community. The second insight is equally powerful, which is that people are more successful in their health transformation when they learn and incorporate healthy habits into their lives. We offer this to each client through the Habits of Health system that is integral to our offering.

第四季度，我們的 OPTAVIA Coach 模型帶來的收入創下了公司歷史上最高的季度。第四季度結束時，我們有創紀錄的 15,000 名活躍收入 OPTAVIA 教練。這一傑出成就反映了我們 OPTAVIA 領域領導力的實力以及我們與 OPTAVIA Coach 社區的合作夥伴關係。我們共同成功推出了強大的新品牌敘事，使公司和教練社區在共同願景的支持下保持一致。我們為實現這一願景而採取的重點舉措利用了兩個關鍵見解：首先，當人們獲得支持時，他們的健康轉型會更加成功。我們還通過將每位客戶融入我們的 OPTAVIA 社區，為 OPTAVIA 教練提供個性化諮詢支持。第二個見解同樣有力，即當人們學習健康習慣並將其融入生活時，他們的健康轉型會更加成功。我們通過健康習慣系統向每位客戶提供這一服務，該系統是我們產品中不可或缺的一部分。

This year, we also completed the launch of our new OPTAVIA product line, and we successfully implemented a new technology platform with enhanced business tools to help coaches run their business and provide us with the capability to support the international expansion plans we announced last week.

今年，我們還完成了新 OPTAVIA 產品線的推出，並成功實施了一個具有增強業務工具的新技術平台，以幫助教練運營業務，並使我們有能力支持我們上周宣布的國際擴張計劃。

Focusing on our Q4 operating results in more detail. OPTAVIA reported its ninth consecutive quarter-over-quarter quarterly revenue growth, up 32%. Sequentially, this was a significant increase from the nearly 18% revenue growth we reported for OPTAVIA in the third quarter of 2017. Additionally, we continued to generate increased coach productivity in the fourth quarter, resulting from higher new client acquisition and higher average order value year-over-year.

更詳細地關注我們第四季度的運營業績。OPTAVIA 報告連續第九個季度收入環比增長，增長 32%。因此，這比我們報告的 2017 年第三季度 OPTAVIA 收入增長近 18% 有了顯著增長。此外，由於新客戶獲取量增加和平均訂單價值同比增加，我們在第四季度繼續提高教練生產力。

Just a couple of weeks ago, we had the pleasure of hosting our first OPTAVIA Coach event at our new corporate office in Downtown Baltimore, Maryland. This event brought together many of our most talented and successful new business coaches from our OPTAVIA community. These business coaches were with us for 3 days of meetings and training sessions to enable them to become stronger leaders and mentors for other new OPTAVIA Coaches and clients.

就在幾週前，我們有幸在馬里蘭州巴爾的摩市中心的新公司辦公室舉辦了首次 OPTAVIA Coach 活動。此次活動匯集了來自 OPTAVIA 社區的許多最有才華和最成功的新商業教練。這些商業教練與我們一起參加了為期 3 天的會議和培訓課程，使他們能夠成為其他新 OPTAVIA 教練和客戶的更強大的領導者和導師。

Last week, we also announced our plans to expand our business into the Asia-Pacific markets of Hong Kong and Singapore with our OPTAVIA brand. This announcement came after more than a year of testing our business model and products with the target demographics. Many people in Hong Kong and Singapore are facing similar health challenges to those we experience here in the United States, and we believe our approach to health and wellness will help a new community of people transform their lives.

上週，我們還宣布計劃通過 OPTAVIA 品牌將業務擴展到香港和新加坡等亞太市場。經過一年多的時間針對目標人群測試我們的業務模式和產品後，宣布了這一消息。香港和新加坡的許多人面臨著與美國相似的健康挑戰，我們相信我們的健康和保健方法將幫助新社區的人們改變他們的生活。

We plan to introduce the same clinically studied plans and similar fuelings to those offered in the United States, including the popular Optimal Weight 5&1 Plan. OPTAVIA products will be available to residents of Hong Kong and Singapore exclusively through the OPTAVIA Coach community, and over time, the product portfolio will expand to incorporate new fuelings that reflect local taste preferences. To support our 2019 international plan -- expansion plans, we plan to invest $3 million to $5 million in market preparation and development in 2018. We are funding our international expansion, in part, using a portion of our tax savings related to the recent U.S. tax reforms. Tim will touch on this in more detail in his comments.

我們計劃推出與美國提供的相同的臨床研究計劃和類似的補充方案，包括流行的最佳體重 5&1 計劃。OPTAVIA 產品將通過 OPTAVIA Coach 社區專門向香港和新加坡居民提供，隨著時間的推移，產品組合將不斷擴大，納入反映當地口味偏好的新燃料。為了支持我們 2019 年的國際計劃——擴張計劃，我們計劃在 2018 年投資 300 萬至 500 萬美元用於市場準備和開發。我們正在為我們的國際擴張提供資金，部分是利用與最近美國稅收改革相關的部分稅收節省。蒂姆將在他的評論中更詳細地談到這一點。

The successful international expansion requires talented leadership in the United States and abroad with necessary experience to execute our strategy. I'm very pleased to share that Nick Johnson joined Medifast at the beginning of 2018 as Market President of OPTAVIA in the United States. Nick relocated from Europe to join Medifast after holding several leadership positions at Nu Skin Enterprises, most recently, as Vice President of Sales and Marketing, with responsibilities for 26 markets in Europe, the Middle East and Africa.

成功的國際擴張需要美國和海外的優秀領導層以及執行我們戰略所需的經驗。我很高興地告訴大家，Nick Johnson 於 2018 年初加入快驗保，擔任美國 OPTAVIA 市場總裁。Nick 在如新企業 (Nu Skin Enterprises) 擔任過多個領導職位後，從歐洲調到加入快驗保 (Medifast)，最近擔任的職務是銷售和營銷副總裁，負責歐洲、中東和非洲的 26 個市場。

Additionally, we also welcomed [Clovis Lowe] at the beginning of 2018 who will serve as the Market Vice President of Business Development for Asia Pacific. [Clovis] is temporarily residing with us in Baltimore, focused on premarket preparations. He will eventually return to Asia to lead our local business development efforts in Hong Kong and Singapore. Clovis has considerable management experience with several U.S. and Chinese-based direct-selling companies, including those in the areas -- focused in the areas of e-commerce. And we are very fortunate to have him join our team.

此外，我們還在 2018 年初迎來了 [Clovis Lowe]，他將擔任亞太區業務開發市場副總裁。[克洛維斯]暫時住在巴爾的摩，專注於上市前的準備工作。他最終將返回亞洲，領導我們在香港和新加坡的本地業務發展工作。克洛維斯在多家美國和中國的直銷公司（包括專注於電子商務領域的公司）中擁有豐富的管理經驗。我們非常幸運他能加入我們的團隊。

Now let me move to Medifast Direct. We are pleased to see that this business unit stabilized over 2017, allowing the significant growth in OPTAVIA to flow through. We believe we can ultimately leverage this platform to support the growth of our Coach business. Our testing in 2017 supports our thesis that digitally acquired clients, aligned with an OPTAVIA Coach, have similar long-term benefits as clients acquired directly by a coach. This supports our recent emphasis to move our direct response and OPTAVIA units to an integrated business model for the benefit of our coach community and clients. We believe that this alignment will help to enhance our long-term success and will facilitate the expansion into new markets over time.

現在讓我轉到快保直接 (Medifast Direct)。我們很高興看到該業務部門在 2017 年穩定下來，使 OPTAVIA 得以實現顯著增長。我們相信我們最終可以利用這個平台來支持我們教練業務的增長。我們在 2017 年的測試支持了我們的論點，即通過數字方式獲取的客戶與 OPTAVIA 教練保持一致，與通過教練直接獲取的客戶具有類似的長期利益。這支持了我們最近強調將我們的直接響應和 OPTAVIA 部門轉變為綜合業務模式，以造福我們的教練社區和客戶。我們相信，這種調整將有助於增強我們的長期成功，並隨著時間的推移促進新市場的擴張。

Before I turn the time over to Tim, I want to take a moment to thank our management team, our employees and our coaches for their dedication and hard work throughout 2017. We made significant strides during the year towards aligning our long-term strategies and goals and established a solid foundation to grow from in the future. We are very pleased with our 2017 operational and financial achievements and very excited about the future opportunities ahead of us.

在將時間交給蒂姆之前，我想花點時間感謝我們的管理團隊、員工和教練在 2017 年的奉獻和辛勤工作。這一年，我們在調整長期戰略和目標方面取得了重大進展，並為未來的發展奠定了堅實的基礎。我們對 2017 年的運營和財務成就感到非常滿意，並對未來的機遇感到非常興奮。

With that, I would like to turn the call over to our CFO, Tim Robinson.

說到這裡，我想將電話轉給我們的首席財務官蒂姆羅賓遜。

Thank you, Dan, and good afternoon, everyone. In the fourth quarter, revenue of $78 million exceeded our expectations. OPTAVIA accounted for approximately 88% of revenue; Medifast Direct accounted for 8.4%; Franchise Medifast Weight Control Centers accounted for 3.3%; and Medifast Wholesale accounted for 0.3% of net revenue. Revenue in OPTAVIA increased 32.4% to $68.6 million from $51.8 million in the fourth quarter of the prior year. As Dan mentioned, we ended the quarter with a record 15,000 active-earning OPTAVIA Coaches compared to 12,500 in the same period last year and 14,200 in the third quarter of 2017.

謝謝丹，大家下午好。第四季度的收入為 7800 萬美元，超出了我們的預期。OPTAVIA 約佔收入的 88%；快驗保直接佔比8.4%；連鎖快保體重控制中心佔3.3%；快驗保批發占淨收入的0.3%。OPTAVIA 的收入從去年第四季度的 5180 萬美元增長 32.4% 至 6860 萬美元。正如 Dan 提到的，本季度結束時，我們有創紀錄的 15,000 名活躍收入 OPTAVIA 教練，而去年同期為 12,500 名，2017 年第三季度為 14,200 名。

Average revenue per active-earning coach for the quarter increased 9.7% to $4,562 as compared to $4,158 in the fourth quarter of last year. OPTAVIA-branded products represented 62% of OPTAVIA revenues and 54% of our total company revenues in the quarter.

本季度每名主動收入教練的平均收入增長 9.7%，達到 4,562 美元，而去年第四季度為 4,158 美元。本季度 OPTAVIA 品牌產品佔 OPTAVIA 收入的 62%，占公司總收入的 54%。

Our Medifast Direct revenue decreased just 2.9% to $6.6 million as compared to $6.8 million in the fourth quarter of 2016. The revenue trajectory in this business unit has stabilized substantially compared to the 28% decline in the fourth quarter of 2016. Total Medifast Direct advertising in the quarter decreased $0.1 million from $1.6 million in the fourth quarter of 2016.

與 2016 年第四季度的 680 萬美元相比，我們的 Medifast Direct 收入僅下降 2.9% 至 660 萬美元。與 2016 年第四季度 28% 的下降相比，該業務部門的收入軌跡已大幅穩定。本季度 Medifast Direct 廣告總額比 2016 年第四季度的 160 萬美元減少了 10 萬美元。

Revenue in the Franchise Medifast Weight Control Centers decreased to $2.6 million from $3.6 million in the same period last year. Decrease in revenue was a result of fewer franchise centers in operation during the period combined with the decline in activity within the centers and a decrease in resellers.

連鎖快保體重控制中心的收入從去年同期的 360 萬美元降至 260 萬美元。收入下降的原因是期內運營的特許經營中心減少，加上中心內活動的減少和經銷商的減少。

We ended the quarter with 16 franchise centers and 18 reseller locations in operation compared to 37 franchise centers and 19 reseller locations at the end of the same period last year.

截至本季度末，我們有 16 個特許經營中心和 18 個經銷商網點投入運營，而去年同期末我們有 37 個特許經營中心和 19 個經銷商網點。

We were pleased to work closely with one of our largest franchisees during 2017 to begin integrating his franchise business with the OPTAVIA Coach model in 2018. This transition represents a very positive change for all parties, allowing existing and future clients to access the exclusive OPTAVIA products and coaching experience going forward.

我們很高興在 2017 年與我們最大的特許經營商之一密切合作，並於 2018 年開始將他的特許經營業務與 OPTAVIA Coach 模式整合。這一轉變對各方來說都是一個非常積極的變化，讓現有和未來的客戶能夠獲得獨家的 OPTAVIA 產品和未來的輔導體驗。

Medifast Wholesale revenue, which is mostly comprised of revenue from health care providers, was consistent with the prior period at $200,000. As discussed on the last call, this business model was integrated into the OPTAVIA Coach model at the end of the year.

快驗保批發收入主要由來自醫療保健提供商的收入組成，與上期持平，為 200,000 美元。正如上次電話會議中所討論的那樣，該業務模型已於年底集成到 OPTAVIA Coach 模型中。

Gross profit for the fourth quarter of 2017 increased 25.6% to $59.1 million compared to $47.1 million in the prior year period. Gross profit margin as a percentage of net revenue increased 40 basis points to 75.8% versus 75.4% in the fourth quarter of 2016. The increase in gross margin percentage was a result of continuous favorability in shipping cost and more active product forecasting in the quarter.

2017 年第四季度的毛利潤增長 25.6%，達到 5910 萬美元，而上年同期為 4710 萬美元。毛利率占淨收入的百分比增長了 40 個基點，達到 75.8%，而 2016 年第四季度為 75.4%。毛利率的增長是由於運輸成本持續有利以及本季度更積極的產品預測。

Selling, general and administrative expenses in the fourth quarter of 2017 were $49.6 million or 63.6% of revenues versus $40.5 million or 64.8% of revenues in the fourth quarter last year. The increase in SG&A was primarily a result of higher OPTAVIA commission expenses resulting from the growth and success of our OPTAVIA Coaches.

2017 年第四季度的銷售、一般和管理費用為 4,960 萬美元，佔收入的 63.6%，而去年第四季度為 4,050 萬美元，佔收入的 64.8%。SG&A 的增加主要是由於我們的 OPTAVIA 教練的增長和成功導致 OPTAVIA 佣金費用增加。

Net income in the fourth quarter of 2017 was $7.3 million or $0.60 per diluted share based on approximately 12.1 million shares outstanding. Fourth quarter 2016 net income was $4.1 million or $0.34 per diluted share based on approximately 12 million shares outstanding.

2017 年第四季度的淨利潤為 730 萬美元，或基於約 1,210 萬股流通股計算，稀釋後每股收益為 0.60 美元。2016 年第四季度淨利潤為 410 萬美元，或基於約 1200 萬股流通股計算，稀釋後每股收益 0.34 美元。

Our effective tax rate was 25.4% compared to 38.2% in the fourth quarter of 2016. This decrease in the rate reflects a discrete change in accounting for taxes associated with share-based compensation which vested in the fourth quarter, along with the impact of the Tax Cuts and Jobs Act.

我們的有效稅率為 25.4%，而 2016 年第四季度為 38.2%。稅率的下降反映了與第四季度歸屬的股權激勵相關的稅收會計處理的離散變化，以及《減稅和就業法案》的影響。

Our balance sheet remains very strong, with stockholders' equity of $108.6 million and working capital of $88.1 million as of December 31, 2017.

我們的資產負債表仍然非常強勁，截至 2017 年 12 月 31 日，股東權益為 1.086 億美元，營運資本為 8810 萬美元。

Cash, cash equivalents and investment securities as of December 31, 2017, increased $22 million to $98.8 million compared to $76.8 million at December 31, 2016.

截至2017年12月31日，現金、現金等價物和投資證券增加2200萬美元，達到9880萬美元，而2016年12月31日為7680萬美元。

During the December 2017 board meeting, our Board of Directors declared a 50% increase in our cash dividend over the previous quarter's dividend. The quarterly cash dividend of $0.48 per share was payable on February 8. Our managed team and Board of Directors remained committed to enhancing value for all the shareholders.

在 2017 年 12 月的董事會會議上，我們的董事會宣布現金股息比上一季度的股息增加 50%。每股 0.48 美元的季度現金股息將於 2 月 8 日支付。我們的管理團隊和董事會仍然致力於提高所有股東的價值。

Now turning to our guidance. We expect first quarter revenue to be in the range of $88.5 million to $91.5 million and earnings per diluted share to be in the range of $0.84 to $0.87 per diluted share.

現在轉向我們的指導。我們預計第一季度收入將在 8850 萬美元至 9150 萬美元之間，稀釋後每股收益將在 0.84 美元至 0.87 美元之間。

For the full year 2018, we expect revenue in the range of $350 million to $360 million and earnings per diluted share in the range of $3.15 to $3.25 per diluted share.

對於 2018 年全年，我們預計收入將在 3.5 億至 3.6 億美元之間，稀釋後每股收益將在 3.15 至 3.25 美元之間。

Our fiscal year 2018 guidance assumes a 22% to 23% effective tax rate.

我們的 2018 財年指導假設有效稅率為 22% 至 23%。

In regards to uses of tax savings, we expect to reinvest a majority of our $6 million estimated savings to support the acceleration of our international growth. As Dan referenced earlier, we are expanding into the Asia-Pacific markets of Hong Kong and Singapore in the first half of 2019, and we plan to spend $3 million to $5 million during 2018 in preparation, development of this expansion in 2019.

在節稅用途方面，我們預計將估計節省的 600 萬美元中的大部分進行再投資，以支持我們國際增長的加速。正如 Dan 之前提到的，我們將於 2019 年上半年向香港和新加坡等亞太市場擴張，我們計劃在 2018 年花費 300 萬至 500 萬美元來準備和開發 2019 年的擴張。

I'd also like to comment briefly on our reportable business units. The vast majority of our revenues are now generated by our OPTAVIA business, and our future growth primarily depends on the growth of our OPTAVIA Coaches worldwide. Internally, we've restructured our personnel to eliminate any business segment distinction, and we've begun to shift clients from our Medifast Direct business over to the OPTAVIA Coaches to experience the support of the OPTAVIA Coach throughout their health journey. As a result, beginning in the first quarter of 2018, the company will no longer report separate financial information for the 4 business segments that existed historically. This change in our financial reporting structure is a testament to our success in transforming and restructuring the business and a reflection of how the business is managed today.

我還想簡要評論一下我們的可報告業務部門。目前，我們的絕大多數收入來自 OPTAVIA 業務，我們未來的增長主要取決於 OPTAVIA Coaches 在全球範圍內的增長。在內部，我們重組了我們的人員，以消除任何業務部門的區別，並且我們已經開始將客戶從 Medifast Direct 業務轉移到 OPTAVIA Coaches，以便在整個健康之旅中體驗 OPTAVIA Coach 的支持。因此，從2018年第一季度開始，公司將不再報告歷史上存在的4個業務部門的單獨財務信息。我們財務報告結構的這一變化證明了我們在業務轉型和重組方面的成功，也反映了當今業務的管理方式。

Well, that concludes our operational and financial overview. We appreciate your interest in Medifast, and Dan and I are now available to take your questions.

好了，我們的運營和財務概覽就到此結束了。我們感謝您對快驗保的興趣，丹和我現在可以回答您的問題。

Operator?

操作員？

(Operator Instructions) And our first question will come from Linda Bolton-Weiser of D.A. Davidson.

（操作員說明）我們的第一個問題將來自 D.A. 的 Linda Bolton-Weiser。戴維森。

I guess, one question I have is, I guess, if I have my numbers right, you're guiding to sales growth of 16% to 19% for the full year 2018, and yet 25% to 30% in the first quarter. So are you just kind of trying to be conservative for the year? Or is there something specific that you see in the trajectory that would make the growth decelerate as -- later in 2018?

我想，我有一個問題是，如果我的數字正確的話，你們預計 2018 年全年的銷售增長為 16% 至 19%，而第一季度的銷售增長為 25% 至 30%。那麼今年你是否只是想保持保守？或者您認為在 2018 年晚些時候的發展軌跡中是否有一些特定的因素會導致增長減速？

Yes. Linda, it's Tim. I think that -- first of all, the first quarter is right in front of us, right? So we have little clear insight into what the quarter looks like. Truthfully, it's a bit of an easy compare to last year. I think last year's first quarter was a bit soft. So -- but I think we see the full year is very, very strong but an easy compare against the first quarter of last year.

是的。琳達，是蒂姆。我認為——首先，第一季度就在我們面前，對吧？因此，我們對該季度的情況知之甚少。說實話，與去年相比，這有點容易。我認為去年第一季度有點疲軟。所以，但我認為我們看到全年非常非常強勁，但與去年第一季度相比很容易。

I think the other thing I'd say, Linda, is if you think about 2017, our big focus was overcoming third and fourth quarter back-half seasonality, particularly the fourth quarter. And as you can now see from the announcements, we are successful in doing that. 2018 is a -- an important year for us, obviously, because we've just announced our international expansion plan. So we'll be focused on building energy around the international premarket. And because this is the first time we've done this with our OPTAVIA community, we want to make sure that we are effective in doing that. And as we move through the quarters, we'll have our first training here coming up in April. We'll have a better idea of how that's moving along. But that's really going to be the focus, and it's, kind of, little bit of the focus in our plan, so we anticipate everything will go well there. But that's really the focus of this 2018 year.

琳達，我想我要說的另一件事是，如果你想想 2017 年，我們的重點是克服第三和第四季度後半段的季節性，特別是第四季度。正如您現在從公告中看到的那樣，我們成功地做到了這一點。顯然，2018 年對我們來說是重要的一年，因為我們剛剛宣布了我們的國際擴張計劃。因此，我們將專注於圍繞國際上市前建設能源。因為這是我們第一次在 OPTAVIA 社區中這樣做，所以我們希望確保我們能夠有效地做到這一點。當我們進入各個季度時，我們將在四月份在這裡進行第一次培訓。我們將對進展情況有更好的了解。但這確實將成為焦點，而且它只是我們計劃中的一點焦點，因此我們預計一切都會順利進行。但這確實是 2018 年的焦點。

Okay. And then with regard to the international, as you continue to expand globally in the future years, can we expect that there would be an incremental investment amount each year as you roll out more markets? Or now that this $3 million to $5 million is embedded in the cost structure, the -- it's sort of embedded, and there wouldn't necessarily be big increases going forward. Is there any way you can just give some color, maybe when bigger markets are entered, would that mean a little bit more upfront cost? And can you also describe exactly what this cost is? Is this like IT cost? Or is this just other types of marketing? Or what is the cost related to?

好的。那麼在國際方面，隨著你們在未來幾年繼續在全球範圍內擴張，我們是否可以期望隨著你們開拓更多市場，每年都會有增量投資額？或者現在這 300 萬到 500 萬美元已經嵌入到成本結構中，它有點嵌入了，而且未來不一定會有大幅增加。有什麼辦法可以給一些顏色，也許當進入更大的市場時，這是否意味著更多的前期成本？您能具體描述一下​​這個成本是多少嗎？這類似於 IT 成本嗎？或者這只是其他類型的營銷？或者說費用與什麼有關？

Yes. I mean, I think as we've said before that the -- a lot of the cost and some of the investment has been taking place over the last several years, partly through putting our -- the right IT infrastructure together. Also, some of the testing that's been done over the last 1.5 years, what -- the investment that we're talking about now is starting to put in place the personnel, infrastructure. And so -- and also, starting to spend to get ready to create the support for that team there. So it's going to be a little bit different depending on which market we go into and which one we announce. We think that these are -- we're announcing 2 markets at the same time. So I think we're -- we'll see how -- what the cadence looks likes going forward. But I think that it's probably reflective of, probably, the annual investments. But we'll be giving you regular updates on what that investment looks like for other markets as we move forward.

是的。我的意思是，我認為正如我們之前所說，過去幾年中已經發生了很多成本和一些投資，部分是通過將我們正確的 IT 基礎設施整合在一起而進行的。此外，過去 1.5 年進行的一些測試，我們現在談論的投資正在開始落實人員和基礎設施。因此，並且開始花錢準備為那裡的團隊提供支持。因此，根據我們進入哪個市場以及我們宣布哪個市場，情況會略有不同。我們認為，我們同時宣布了兩個市場。所以我認為我們——我們會看看——未來的節奏是什麼樣的。但我認為這可能反映了年度投資。但隨著我們的進展，我們將定期向您提供有關其他市場投資情況的最新信息。

Okay. And just going back to just the domestic business, I know that you've made some changes to the business just to, kind of, spur growth and OPTAVIA, the full launch has been very important, of course. But what is accounting for just the acceleration just in the U.S. business? Can you name, maybe, 3 things that you've done? I know you made it easier to onboard new Health Coaches. Is -- are there other things that you can point to that is resulting in this acceleration of growth?

好的。回到國內業務，我知道你們對業務做了一些改變，只是為了刺激增長，當然，OPTAVIA 的全面推出非常重要。但美國業務加速增長的原因是什麼？您能說出您做過的三件事嗎？我知道您讓新健康教練的加入變得更加容易。您是否可以指出其他因素導致了這種加速增長？

Sure. I think at that point, the business strategy that we've talked about over the last 18 months. First was to establish a regular business rhythm to make sure that we have the right kinds of activity in every quarter to help support our business and have it be very predictable, so that -- in the case of our OPTAVIA Coaches, they know what to do and how to do it because they've done it before. The second is, we've really started to focus on our Coach model by, for example, using our technology to support them in new ways, we have reduced some of the distractions of our Med Direct model by advertising less. So I think that's created fewer distractions and have allowed our coaches to move forward with more confidence. Certainly, launching the new brand of OPTAVIA with a very clear positioning and communication and having the brand be very much on-trend related to having the absence of anything artificial has also been to our benefit. So I think it's really those 4 things.

當然。我認為在這一點上，我們在過去 18 個月裡討論過的業務戰略。首先是建立定期的業務節奏，以確保我們每個季度都有正確的活動類型來幫助支持我們的業務並使其非常可預測，這樣——就我們的 OPTAVIA 教練而言，他們知道該做什麼做什麼以及如何做，因為他們以前做過。第二個是，我們確實開始關注我們的 Coach 模式，例如，使用我們的技術以新的方式支持他們，我們通過減少廣告減少了 Med Direct 模式的一些干擾。所以我認為這減少了乾擾，讓我們的教練更加自信地前進。當然，以非常清晰的定位和溝通方式推出 OPTAVIA 新品牌，讓該品牌緊跟潮流，不含任何人工成分，也對我們有利。所以我認為這確實是這四件事。

Okay. And then can I just ask you, it's interesting the way that you have said that you would be shifting your Medifast Direct customers into the Coach network. My understanding was that, that required quite a bit of testing and experimenting to figure out how you would assign somebody who comes in through e-commerce to a health coach. So have you figured that all out? And is that kind of working smoothly? And how much do you expect to get in terms of growth just from that channel?

好的。然後我可以問你嗎，你所說的將把你的 Medifast Direct 客戶轉移到 Coach 網絡的方式很有趣。我的理解是，這需要大量的測試和實驗才能弄清楚如何將通過電子商務進入的人分配給健康教練。那麼你都想通了嗎？這樣的工作順利嗎？您預計僅從該渠道就能獲得多少增長？

I think what we've done at this point is qualify that it will be an important part of our future strategy. We have, for the most part, done this within our current technology platform. There are still a few pieces that are coming together to allow us to do that seamlessly. We anticipate largely because of the importance of e-commerce and particular mobile platforms in Asia that, that will become a more important part of our business going forward. But very much a complementary part of our coach model. Not at all a separate channel, but really more using technology to help enhance what our coaches already do so well.

我認為我們目前所做的一切足以證明它將成為我們未來戰略的重要組成部分。在很大程度上，我們已經在當前的技術平台內完成了這項工作。仍有一些部分正在組合在一起，使我們能夠無縫地做到這一點。我們預計，很大程度上由於電子商務和特定移動平台在亞洲的重要性，這將成為我們未來業務中更重要的一部分。但這是我們教練模式的一個補充部分。根本不是一個單獨的渠道，而是更多地利用技術來幫助增強我們教練已經做得很好的事情。

And the next question comes from Frank Camma of Sidoti.

下一個問題來自 Sidoti 的 Frank Camma。

Just wanted -- have you seen a difference in the productivity of newer coaches? And if I define those as coaches less than a year versus coaches that have been in this system because you're a little unusual on the fact that you have a lot of coaches that have been there for quite a long time. I'm just wondering if there's a divergence. Have you seen that, that would be interesting to look at? That's my first question.

只是想——你看到新教練的生產力有什麼不同嗎？如果我將這些教練定義為任職時間不到一年的教練，而不是在這個系統中任職的教練，因為你們有很多已經在這個系統工作了很長時間的教練，這有點不尋常。我只是想知道是否有分歧。你見過嗎，看看會很有趣嗎？這是我的第一個問題。

Yes. I mean, it's a good question. I think over time, what we've seen this goes back a couple of years now where we made a total change to the coach sign-up process. We also made a change in training. We've seen coaches ramp up their productivity much quicker than they have in the past. And I think that is kind of a mentor coach helping their new coach acquire their first 2 clients. We used to see people come in, and if I go back to 2013, '14, '15, you'd see people come in, not have much activity in the first month or 2. So what we are seeing is that the new coaches are having productivity pretty early on. And that is helping our overall productivity, especially in times when you have high level of growth. At one point, that would've been a headwind, and now it seems to be more of a tailwind.

是的。我的意思是，這是一個好問題。我認為隨著時間的推移，我們所看到的情況可以追溯到幾年前，當時我們對教練註冊流程進行了徹底的改變。我們在訓練方面也做出了改變。我們已經看到教練們比過去更快地提高了工作效率。我認為這是一位導師教練幫助他們的新教練獲得他們的前兩個客戶。我們過去常常看到人們進來，如果我回到 2013 年、14 年、15 年，你會看到人們進來，但在第一個月或第二個月沒有太多活動。所以我們看到的是，新的教練很早就有了生產力。這有助於我們的整體生產力，尤其是在高速增長的時期。曾幾何時，這可能是一種逆風，但現在看來更像是一種順風。

All right. And is -- has there been any significant changes in your commission policy that may have helped that? I was just curious, like, since last year -- over the last year or so, have you changed any of that?

好的。你們的佣金政策是否有任何重大變化可能對此有所幫助？我只是很好奇，從去年開始——在過去一年左右的時間裡，你有改變嗎？

No, the commission structure has really remained unchanged since, I want to say, 2014. I think Dan mentioned, kind of, getting into repeatable business rhythm. I think it has a lot more to do with that. It's timing, communications, and how we talk about the business, that kind of -- we're in a rhythm now. We're seeing that happening on a regular basis. And I think it's, kind of -- overall, kind of making it easier to become a coach. So as I mentioned, for the changes we made in the on-boarding process a couple of years ago seem to have really had a measurable impact.

不，我想說，自 2014 年以來，佣金結構確實沒有變化。我認為 Dan 提到過，進入可重複的業務節奏。我認為這與此有更多關係。關鍵在於時機、溝通以及我們如何談論業務，諸如此類——我們現在處於節奏之中。我們經常看到這種情況發生。我認為，總的來說，這讓成為一名教練變得更容易。正如我所提到的，幾年前我們在入職流程中所做的改變似乎確實產生了可衡量的影響。

How about geographically? Like, in the summer time, you showed how you have strength. I think it was on the West Coast, but you didn't really have much strength in the Northeast. I might be -- might have that wrong, but have you seen any changes in geography at all?

從地理上來說怎麼樣？就像，在夏天，你展示了你的力量。我認為是在西海岸，但在東北你確實沒有多大實力。我可能是——可能錯了，但是你有看到地理上的任何變化嗎？

No, I think geography is largely a function of where our new coach leaders choose to focus. So we continue to have consistent strength in the -- on the Upper West Coast in California, but also in the Midwest and then on the East Coast. So I'd say, we're spread out. I mean, we do have a few really hot pockets. But I think, overall, we're starting to see our message expand in parts of the country where it hasn't yet been seen. So I think we're pleased as we continue to see more activity more broadly across the country.

不，我認為地理位置很大程度上取決於我們新任教練領導者選擇關注的地區。因此，我們在加利福尼亞州上西海岸、中西部和東海岸繼續保持穩定的實力。所以我想說，我們分散了。我的意思是，我們確實有一些非常熱門的資金。但我認為，總體而言，我們開始看到我們的信息在該國尚未出現的部分地區擴展。因此，我認為我們很高興看到全國范圍內繼續開展更多活動。

Okay. My last question is just on the inventory. Did you have -- because in the past, when you've seen -- obviously, you had a pretty nice spike here in sales, did you have any issues with delivering popular items or items stock-outs with that? Could you talk about that?

好的。我的最後一個問題是關於庫存的。你是否——因為在過去，當你看到——顯然，你的銷售量出現了相當大的增長，你在交付流行商品或缺貨商品時是否遇到過任何問題？你能談談這個嗎？

Fortunately, really, no. We had the issue in the fourth quarter of 2016, we recovered from in the first quarter, and we had a very good -- I think a very good year in 2017 from planning perspective. You can see our inventory year-end is back up a bit. And that was intentional. We saw the growth happening in the fourth quarter. We had to move some things forward in preparation for 2018, but we're very comfortable with that inventory balance. So we're in pretty good shape there.

幸運的是，真的沒有。我們在 2016 年第四季度遇到了這個問題，我們從第一季度恢復過來，我們度過了非常好的——我認為從規劃的角度來看，2017 年是非常好的一年。您可以看到我們的庫存年底有所回升。這是故意的。我們看到第四季度出現了增長。我們必須推進一些工作，為 2018 年做準備，但我們對庫存平衡感到非常滿意。所以我們在那裡的狀況非常好。

The next question comes from Doug Lane of Lane Research.

下一個問題來自 Lane Research 的 Doug Lane。

Dan, can you talk a little bit about, I know it's your way, but how are you mechanically looking to open Hong Kong and Singapore? Is that going to be through your leadership, your leading Health Coaches in the U.S? Are you going to start with people on the ground in that market? I mean, how should we look at that transpiring over the next 12 months?

丹，你能談談，我知道這是你的方式，但你如何機械地尋求開放香港和新加坡？這將通過您的領導、您在美國的主要健康教練來實現嗎？您打算從該市場的實地人員開始嗎？我的意思是，我們應該如何看待未來 12 個月發生的事情？

Yes. I think the first important point is that we plan to create a compensation structure that will work across markets, which means that there is the ability for our current leadership inside the United States to participate by building their organizations beyond the U.S. borders. I think, mechanically, typically the way this works is that they'll focus on populations in the United States who have stronger connections into the target markets. In this case, Hong Kong and Singapore. And as those connections build in the U.S., that will be the preparation for the actual physical openings of those markets in Southeast Asia and Greater China next year.

是的。我認為第一個重要的一點是，我們計劃創建一個跨市場的薪酬結構，這意味著我們目前在美國境內的領導層有能力通過在美國境外建立組織來參與其中。我認為，從機械角度來看，通常的運作方式是，他們將重點關注與目標市場有更緊密聯繫的美國人口。在這種情況下，香港和新加坡。隨著這些聯繫在美國的建立，這將為明年東南亞和大中華區這些市場的實際開放做好準備。

So is this going to be another driver of growth in the U.S., the carried, if you will, of being able to go to the head -- the top of the pack here and that will give you a leading opportunity to do business in Hong Kong and Singapore. So that -- could that be an additional driver of growth as we go into the back half of the year?

那麼，這是否會成為美國增長的另一個驅動力，如果你願意的話，能夠成為這裡的佼佼者，這將為你提供在香港開展業務的領先機會香港和新加坡。那麼，當我們進入今年下半年時，這會成為增長的額外驅動力嗎？

Yes. Could be. As I mentioned earlier, because these are our first experiences of our current coach community moving internationally. That's part of what we're working through, kind of, the trainings, incentives and programs to make it all, not only not disruptive to our current build, but as you're pointing out, accretive and kind of energy building as we move in -- closer to the next year.

是的。可能。正如我之前提到的，因為這是我們當前教練社區國際化的第一次經歷。這是我們正在開展的工作的一部分，培訓、激勵措施和計劃，以實現這一切，不僅不會破壞我們當前的建設，而且正如你所指出的，隨著我們的發展，會產生增值和能量建設接近明年。

Right, right. Okay. And just, shifting gears here. Tim, on the SG&A line, which was down sharply as a percent of sales. Obviously, the large chunk of that is the OPTAVIA commissions, which I would guess, moved pretty much in line with OPTAVIA revenues. So the non-OPTAVIA SG&A is just -- really hasn't moved much in the last couple of years on a quarterly basis. You guys start at $20 million. So I mean, I guess, what -- what's the insight on what's going into the non-OPTAVIA commission SG&A? Is it because advertising is coming down with less direct advertising? Maybe just a little bit of color over the moving pieces there so I can look into 2018 and try to figure out, is that going to be steady state or are we going to start to see some infrastructure build in that line item?

是的是的。好的。只是，在這裡換檔。蒂姆，SG&A 線，佔銷售額的百分比急劇下降。顯然，其中很大一部分是 OPTAVIA 佣金，我猜這與 OPTAVIA 收入幾乎一致。因此，非 OPTAVIA SG&A 在過去幾年中按季度確實沒有太大變化。你們的起步價是 2000 萬美元。所以我的意思是，我想，對於非 OPTAVIA 委員會 SG&A 的見解是什麼？是因為直接廣告減少而導致廣告數量下降嗎？也許只是在移動的部分上加一點顏色，這樣我就可以回顧 2018 年並嘗試弄清楚，這將是穩定狀態還是我們將開始看到該行項目中的一些基礎設施建設？

Sure. Well, the OPTAVIA commissions are half of our SG&A. So you're right about that. That is very, very variable expense. I think as we've focused the business on our coaching model, we've become more efficient internally as well. So we're no longer organizing internally based on channels, and we actually have fewer employees at this stage. So that's been helping us as far as overall costs go. From a technology perspective, even though we've been investing in new technologies and it's not been very much in the way of CapEx, most of these are cloud-based solutions. They're displacing systems that actually cost more to operate. Some may actually become more efficient in our IT spent at this stage. We'll still have to invest in additional things going forward. But largely what we've done so far is replace prior systems, and we're still going to add more functionality in future. So to date, it's been somewhat helpful. So when you look at the breakdown of our overall SG&A, our large items are relatively flat, whether that be rent expense and insurance expense and things like that, the big variable is the commissions and the advertising expense.

當然。嗯，OPTAVIA 佣金是我們 SG&A 的一半。所以你是對的。這是非常非常可變的費用。我認為，隨著我們將業務重點放在教練模式上，我們的內部效率也變得更高。所以我們內部不再按照渠道來組織，而且現階段我們的員工實際上也比較少。因此，就總體成本而言，這對我們有所幫助。從技術角度來看，儘管我們一直在投資新技術，並且對資本支出影響不大，但其中大多數都是基於雲的解決方案。他們正在取代實際上運營成本更高的系統。在此階段，有些 IT 支出實際上可能會變得更加高效。未來我們仍然需要對其他事情進行投資。但到目前為止我們所做的主要是替換以前的系統，並且我們將來仍將添加更多功能。所以到目前為止，它還是有一定幫助的。因此，當你查看我們整體SG&A的細目時，我們的大項目相對持平，無論是租金費用和保險費用等，最大的變量是佣金和廣告費用。

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

我們的問答環節到此結束。我想將會議轉交管理層發表閉幕詞。

Thank you very much. And thank you for your interest in Medifast and participation in today's call. Look forward to speaking with you again when we report our first quarter 2018 financial guidance. Have a nice evening.

非常感謝。感謝您對快驗保的興趣並參加今天的電話會議。期待在我們報告 2018 年第一季度財務指引時再次與您交談。祝你今晚愉快。

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。