Medifast, Inc. (MED) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Welcome to the 2020 Annual Stockholder Meeting of Medifast. Thank you all for joining. Now I'm going to turn the meeting over to the Board Chair, Michael C. MacDonald. Michael?

Good afternoon, fellow stockholders, and thank you for joining us today. I am Michael C. MacDonald, the Chairman of the company, and I want to welcome you all to the 2020 Annual Meeting of the Stockholders of Medifast, Inc. Before we begin, I'd like to make a statement on behalf of the Board of Directors. As you all know, the world has definitely changed since we had our last stockholder meeting. We are in the midst of a global pandemic that has caused more than 400,000 deaths worldwide, cost almost 40 million Americans their jobs, severely impacted our economy and changed the way we all live our lives. Additionally, our country is facing increasingly troubled times, and we are deeply saddened by the senseless loss of far too many black lives. We condemn injustice, racism and hatred of any kind. We stand with the black community. Expressing solidarity in the fight for quality is not enough. We must also show up and take action. As a Board, we support the action management is taking by pledging $100,000 to 3 nonprofit organizations working to address inequality and racism. Diversity is one of the company's core values, and this financial commitment is a key part of living those values. Even though the world looks very different than it did when we rang in the year 2020, Medifast remains steadfast in its mission of lifelong transformation and being a community that welcomes and supports all people regardless of race, gender, orientation or religion. As a result of the new dynamic brought about by COVID-19, we find ourselves in unusual circumstances, unable to meet in person and you are participating in this meeting virtually. We are hosting our first virtual meeting to support the health and well-being of our stockholders, employees and their families and help stop the spread of the virus. Much like previous annual meetings, we will answer questions at the end of the meeting. [Operator Instructions] We may not be able to answer every single one, but we will do our best to provide a response. No one is permitted to use any audio recording device. The meeting will now come to order. I will serve as chairperson of this meeting. Also present today are our nominees for elections of the Board of Directors who will be introduced later, officers of the company and guests. [ Rob Castillo ], a representative from RSM US LLP, is also present today. During the question-and-answer period at the end of the meeting, he will be available to answer questions concerning the company's financial statements. Mr. Jason Groves, Executive Vice President, General Counsel and Corporate Secretary of the company, will act as the secretary of this meeting. The American Stock Transfer & Trust Company acts as the transfer agent for the company's common stock, and Broadridge Financial Solutions acts as its investor communications service. And as of today, a distribution has been prepared and delivered by American Stock Transfer and Broadridge to the effect that notice of Internet availability, a notice of meeting and other proxy materials was duly made available on May 6, 2020, to stockholders of record as of April 16, 2020. Accordingly, I declare that proper notice of this meeting has been given and then is duly convened. The Board of Directors has designated Joseph P. Kelleman, Interim Chief Financial Officer of the company, as the inspector of elections for this meeting. He has executed an oath of office, which he affirms that he will fully and faithfully execute his duties with strict impartiality and to the best of his ability. American Stock Transfer has previously filed and certified a list of the stockholders of the company as of April 16, 2020, the record date for this meeting, which is available for stockholder review. The inspector of elections will now report whether, based on the information available to him, a quorum is present at this meeting.

Pursuant to our preliminary results, there are represented in person or by proxy approximately 88% of all shares entitled to vote at this meeting. I am pleased to report that a quorum is present at this meeting for the transaction of business.

On the basis of the inspector's report, I declare this meeting to be duly convened for purposes of transacting such business as may properly come before it. I now call upon Mr. Groves as the secretary of the meeting to read the notice of this meeting stating the purpose of the meeting and then to introduce those members and nominees for election to the company's Board of Directors.

To the stockholders of Medifast, Inc., notice is hereby given that the 2020 Annual Meeting of Stockholders of Medifast, Inc. will be held on Monday, June 15, 2020, at 4:30 p.m. Eastern Standard Time for the purpose -- for the following purposes: one, to elect 10 nominees to the Board of Directors; two, to ratify the appointment of RSM as the independent registered public accounting firm of the company for the fiscal year ending December 31, 2020; three, to approve, on an advisory basis, the compensation of the company's named executive officers; four, to transact such other business as may properly come before the annual meeting. And now the introduction of the 10 nominees for Board of Directors, Jeffrey J. Brown, Kevin G. Byrnes, Daniel R. Chard, Constance J. Hallquist, Michael A. Hoer, Michael C. MacDonald, Carl E. Sassano, Scott Schlackman, Andrea B. Thomas and Ming Xian.

We will now proceed with conducting the formal business of the meeting. The first item of business to come before the annual meeting is to elect 10 directors for 1-year term ending at the 2021 Annual Meeting of Stockholders and until their successors have been duly elected and qualified. The nominees are Jeffrey J. Brown, Kevin G. Byrnes, Daniel R. Chard, Constance J. Hallquist, Michael A. Hoer, Michael C. MacDonald, Carl E. Sassano, Scott Schlackman, Andrew B. Thomas and Ming Xian. Information about each nominee is included in the proxy statement. No other nominations were received prior to the deadline established in the company's bylaws. Therefore, no additional nominees may be made at this meeting, and the floor is now closed to nomination for the election of directors. Voting will commence after all proposals have been presented. We will now move to the next proposal. The next matter to come before the meeting is the ratification of the appointment by the Audit Committee of the company's Board of Directors of RSM US LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020, as described under the heading of proposal 2 in the proxy statement for this meeting. The Board of Directors recommends the ratification of the appointment of RSM US LLP as the company's independent registered public accounting firm. The proposal to ratify auditors, which is proposal 2 in the proxy statement, is now properly before the meeting. Proposal 3 asks stockholders to approve, on an advisory basis, the compensation of the named executive officers as disclosed in the proxy statement for this meeting. The proposal is advisory. Although nonbinding, the vote will provide information to our Compensation Committee and our Board of Directors regarding investor sentiment about our executive compensation philosophy, policies and practices, which our Compensation Committee and our Board of Directors will be able to consider when making future executive compensation decisions. Proposal 3 in the proxy statement is now properly before the meeting. Is there any other business that may properly come before the meeting or any adjournment thereof? As there is no further business to come before the meeting, we will now move on to voting. I now declare the polls open. We will now proceed to a vote on the 3 proposals in the proxy statement for this meeting. Only those stockholders of record as of April 16, 2020, are entitled to vote. If you are voting at the meeting, please complete the online ballot. If you already submitted your proxy, you do not need to vote on the online ballot unless you wish to change your vote. I now declare the polls closed. The inspector of election will tabulate the votes. We will now have the final report of the inspector of election.

Having conducted the vote at the annual meeting of the stockholders of Medifast, Inc. held on June 15, 2020, I hereby certify the preliminary results as follows: first, stockholders have elected each of the director nominees to hold office for a 1-year term ending at the 2021 Annual Meeting of Stockholders; second, the stockholders have ratified the appointment by the Audit Committee of the company's Board of Directors of RSM US LLP as the company's independent auditors for the fiscal year ending December 31, 2020; third, the stockholders have approved, on an advisory basis, the compensation of the named executive officers as disclosed in the company's proxy statement.

Thank you, Mr. Kelleman. The inspector of elections is requested to make a written report after the meeting on the exact results of the voting and to submit the report to the secretary of the company for attachment to the minutes of this meeting. The final voting results of today's meeting will be reported on a Form 8-K within 4 business days of this meeting. Thank you, ladies and gentlemen. This completes our agenda for the meeting. This concludes the business for the meeting. The meeting is now adjourned. I now invite you to ask any questions you may have regarding the company and its business. [Operator Instructions] Thank you for your time, and please stay safe and well. Okay. Questions?

Right. Mr. Chairman, seeing that there are no questions, this will conclude the annual meeting. I'd like to thank everyone for attending. That's it.

Thank you very much.

Ladies and gentlemen, this concludes the conference. You may now disconnect.