Good afternoon, and welcome to the Medifast first quarter 2023 earnings conference call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Steve Zenker, Medifast Vice President of Investor Relations. Please go ahead. Good afternoon, welcome to Medifast first quarter 2023 earnings conference call. On the call with me today are Dan Chard, Chairman and Chief Executive Officer, and Jim Maloney, Chief Financial Officer. By now, everyone should have access to the earnings release for the quarter ended March 31st, 2023 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 website at www.medifastinc.com. This call is being webcast, a replay will also be available on the company's website. Before we begin, we would like to remind everyone that today's prepared remarks contain forward-looking statements, 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 statements. All the forward-looking statements contained herein speak only as of the date of this call. Medifast assumes no obligation to update any forward-looking statements that may be made in today's release or call. With that, I would like to turn the call over to Medifast Chairman and Chief Executive Officer, Dan Chard. Thanks, Steve. For those of you who missed the announcement in March, Steve Zenker joined the company earlier in the year as our new Vice President of Investor Relations. Sharing the Medifast story with investors is a key priority for us, and we're very happy to have Steve on the team to help us elevate our investor relations efforts and investment community interactions. Let me start by thanking you for joining us on the call today. We appreciate your time and interest in Medifast. With me today is Jim Maloney, Medifast Chief Financial Officer. I'll start the call today with some color and context on the first quarter of 2023 and our continued progress against our mission and strategy. Following that, Jim will walk you through the financials. As a business, we continue to adjust to the challenging dynamics of the market caused by shifts in the global macroeconomic environment, changes in social media algorithms, the changing competitive landscape, and the resulting impact on consumer spending and behavior. Revenue was ahead of our expectations for the quarter as we continue to place significant operational focus on returning coach and customer metrics to historical levels. Revenue was positively impacted by a policy change around revenue recognition that Jim will discuss in detail. Even excluding the impact of this change, our results fared better than expected. Both EPS and operating income were well ahead of expectations. Our Q4 price increase, commission plan optimization measures, and cost control actions had a positive impact on our operating margin, helping offset inflationary pressures on our gross margin. The number of active earning OPTAVIA coaches in the quarter was down both sequentially and compared to the prior year period. Coach productivity was also down compared to the prior year, but up versus the prior quarter. We expect that the pressure on active earning OPTAVIA coaches and their productivity will continue in the short term as we transition our strategy and adapt our programs to reestablish our growth rhythm in this changed environment. Accelerating customer acquisition remains a major focus for the business right now, as we develop and test new ways to introduce the brand and program to new audiences, as well as further leverage our data infrastructure to support our coaches in reactivating former customers. This is the central part of our Fifteen by Twenty-Five initiative that we launched internally earlier this year. As the name indicates, the focus of Fifteen by Twenty-Five is to reestablish growth to our long-term sustainable target metric of 15% annualized revenue growth and a 15% sustainable operating margin by the year 2025. The business environment for our model changed significantly beginning in Q2 of last year. First, when customer retention was impacted, and then subsequently with increasing pressure on customer acquisition. While customer retention levels have returned to historical norms, customer acquisition in the current environment remains challenging, with coaches taking more time to engage new customers. We believe this is due to changes in customer spending, changes in the ways that social media algorithms make coaches' messages visible to prospective customers, and more recently, a changing competitive landscape that includes new technologies and medical interventions. To counter these environmental factors, we are particularly focused on further developing three areas of our business to allow us to be more competitive in the new environment. These areas are coach-led training, programming composition and cadence, and our unique offer and positioning. All are central to our success and differentiation. I'll take a few moments to outline our work in each of these spaces. Coach-led training is a critical element of our field partnership, and new training programs have been accelerated to support coach leaders. This is to ensure that new coaches have the tools to help them navigate the algorithmic shifts on social media platforms and in the wider competitive environment. By sharing best practices across our base of almost 60,000 active earning coaches, they are able to take advantage of the positive variances seen by their peers and apply it to their businesses. This includes a return to some tried and true pre-pandemic practices, including more face-to-face meetings with potential customers. For our program composition and cadence, we are leveraging analytics to help us design more effective customer acquisition initiatives through programs that incentivize coaches to achieve further success. Our Commit to Health business program in January helped create deep alignment of our coach network around customer acquisition through the creation of incentives around not just the first customer order, but the second one too, in order to support strong retention. The program is part of our ongoing work to optimize coach and customer tenure and produced some encouraging learnings for all of us to build on in the future. We've been encouraged by the initial impact of the program and have gained a number of key insights that will be useful as we develop programs for the future. While there is still more work to be done to solve the continued pressure on customer acquisition, we believe the actions we are taking will improve customer acquisition as we move through the year. Our latest program focused on supporting new and reactivated customers, which launched in March and will remain active through May. It is funded in large part by our cost-saving efforts and a recent product price increase. In this cycle, we are incentivizing coaches to bring in three new customers with a higher bonus for those who sign up five. It's still too soon to determine the effectiveness of this current active initiative, but we expect to be able to share more details on our Q2 earnings call in August. Customer incentives and an optimized compensation structure for our coaches are important elements of our effort to drive growth, retention, engagement, and reach. We take a data-driven view of each of these additions to the customer acquisition mix to help us further adapt the programs and determine whether they will become part of our acquisition efforts on a longer-term basis. In terms of our unique offer and positioning, personalized coaching remains at the center of our value proposition. Our coaches consider the unique nature of each individual to guide them on their health transformation journey rather than offering a one-size-fits-all approach. This personalized service keeps customer engagement for longer and helps ensure that OPTAVIA is an important part of their health and wellness journey. We have worked hard over recent years to optimize our technology as part of this effort, and OPTAVIA's app plays an important role by providing a direct path to current and future customers. The team in our Utah-based Digital Innovation Center has been working hard to enhance the customer app functionality, and we are currently testing new features and functions to support lifestyle changes, particularly with habit trackers such as meal tracking and hydration tracking. Usage and engagement of these apps continues to grow. We've now exceeded more than three-quarters of a million downloads of our customer app since we went live in 2021. OPTAVIA coaches also have a dedicated app with its own roadmap to help coaches better manage and optimize their businesses. New CRM features are continually being tested, including a recent tool that allows coaches to assess the performance of their customers across their health journey. We believe that the investment in growth initiatives, such as our digital technology, is a critical component in our long-term success. We are fortunate that our financial strength, with no debt and a highly variable cost structure, gives us the flexibility to invest in key projects that can help us both reestablish our repeatable core business rhythm and also fund new initiatives that can expand our addressable market and diversify our revenue streams. With that in mind, we recently launched our Fuel for the Future program, which optimizes our spending across the business, freeing up the capital necessary to invest in growth initiatives while also raising our margins. As part of that important work, we're providing our procurement organization with the tools to net-negotiate important savings, as well as looking for ways in which deeper automation can help processes that involve support operations such as call centers and customer service. At the same time, we also see important value engineering opportunities that can improve customer experience while also reducing costs and our environmental impact. Packaging is one example. Through a recent change that was positively received by customer testing, we were able to re-utilize smaller cartons for some of our products, which we estimate can save more than 900,000 pounds of paper per year. We also anticipate that this result will result in a projected annualized cost savings of $5 million beginning next year. Overall, we're targeting 200-300 basis points of sustainable gross margin savings by 2025, enabling us to utilize these savings to fuel the actions we are taking to grow in the years ahead. We believe that funding our growth this way can help mitigate negative impacts on our margins and will allow us to make future progress towards our Fifteen by Twenty-Five goals. I'd like to talk a little bit more about the growth initiatives that we are currently undertaking. We have already established share leadership in the weight loss market, but with more than 200 million people in the United States alone looking at weight management as part of their broader effort to achieve their health and wellness goals, it's clear that we have only just scratched the surface of what is possible. While our business growth rhythm has been disrupted, our core business remains strong, we continue to be highly confident in our coaches' ability to expand their reach and engagement with our current offerings. At the same time, our model gives us the ability to explore other revenue-generating opportunities as we continue to nurture that core business. In particular, we see potential to cultivate new markets and new demographics through product adjacencies, new geographies, and partnerships. We have seen encouraging growth in the Hispanic market already, with new Hispanic coach enrollments up 30% year-over-year. To build on this growth, we recently launched a beta version of our U.S. Spanish website. In addition, most of our foundational marketing and support materials have now been translated into Spanish. We anticipate that by tapping into that demographic segment, we'll further open up the Latin American market opportunity for our business. We continue to believe there is a significant potential for OPTAVIA outside the United States, and we'll leverage our work in the domestic market to further our international expansion efforts in the years ahead. We're also looking at ways to utilize our coach network to add products adjacent to our current offerings, which help customers with their health and wellness journeys. We have products under development that we plan to announce at our annual convention at the State Farm Arena in Atlanta later this year and to the investment community during our Q2 earnings call. We are always looking for ways and emerging trends in our space to ensure that our lifestyle and habit development approach to health and wellness remains relevant and complementary. The new generation of weight loss drugs are receiving a lot of press attention right now. While weight loss drugs have certainly been around for a long time, there's been heightened recent demand for the class of drugs known as GLP-1s, which have been shown to contribute to significant weight loss, and in some cases, have now been approved by the FDA for the treatment of patients with specific BMIs and risk factors. As a result, there has been a rapid expansion in how these drugs are prescribed and in the provision of related healthcare providers to support patients using these drugs to aid weight loss. The market is surely interesting, and as a company, we're continuing to assess the role that this new class of drugs can play in lifelong health transformation. What is very clear to us, though, is that sole reliance on weight loss drugs does not address the fundamental lifestyle factors or behaviors we believe are needed to achieve optimal health. We understand that long-term efficacy in weight management is reliant on people either staying on these drugs for a lifetime or learning and incorporating nutritional and behavioral lifestyle habits in order to maintain health and wellness goals. Our clinically proven plans, scientifically designed products, and coaching model help provide that, making OPTAVIA a powerful solution alone or as a complement to medications. Coaching remains our secret sauce. Our success in helping customers achieve their transformational goals obviously encourages competitors to mirror our approach. While many of our peers now offer some level of coaching support, they do not offer the holistic proposition that OPTAVIA coaches provide. In short, coaches are central to all that we do rather than an optional add-on to a one-size-fits-all app or model. Our programs resonate with people across the United States and beyond because they work. We remain confident that our clear differentiation can make OPTAVIA increasingly central to the health journeys of many more people around the world. Our mission to transform lives one healthy habit at a time is not limited to our OPTAVIA coaches and customers. Our corporate social responsibility initiative, Healthy Habits For All, advances our mission by providing children in under-resourced communities with the education and access necessary to build healthy habits. Our Healthy Habits For All curriculum has now impacted nearly 80,000 students, more than double since our last earnings call. 98% of teachers who use the lesson plans said they believe students will feel empowered to make good decisions and build healthy habits as a result. Research shows that kids who have access to healthy food boost their academic performance, increase concentration, improve classroom behavior, and reduce absenteeism. We also continue our relationship with nonprofit partners such as No Kid Hungry and Living Classrooms Foundation, as well as with the community gardens in Atlanta, Baltimore, and Utah, to help ensure children have resources to implement healthy eating habits. We have a strong and effective team and a strategy in place to help deliver long-term growth. We already have made substantial progress in making the current landscape an environment in which we can deliver sustainable growth, and we have exciting initiatives in place that can help us continue that work. We are determined to build further momentum as we move through this year and into 2024, and I'm excited by what we can achieve as a company. With that, I'll hand the call over to Medifast's Chief Financial Officer, Jim Maloney. Thank you, Dan. Good afternoon, everyone. First quarter 2023 results were ahead of our guidance as we continue to make progress on key initiatives to drive growth, efficiency and profitability. Revenue decreased 16.4% versus year-earlier period to $349 million, primarily reflecting a lower number of active earning OPTAVIA coaches, lower average revenue per active earning OPTAVIA coach. A change in revenue recognition timing provided somewhat of an offset to these factors by including a few days' worth of sales, approximately $9.1 million, that would otherwise have been deferred until the second quarter. Starting in the first quarter, we began recognizing sales and resulting coach compensation when the products are shipped as opposed to when delivered due to changes in the sales order terms and conditions with our customers. We ended the quarter with approximately 58,700 active earning OPTAVIA coaches, a decrease of 8.1% from the first quarter of 2022. Average revenue per active earning OPTAVIA coach for the first quarter was $5,945, a year-over-year decline of 9%, up from the prior two quarters as ongoing headwinds to customer acquisition more than offset the price increase we implemented in November last year. Gross profit decreased 18.5% year-over-year to $246.4 million, driven by lower revenue along with cost inflation from raw ingredients, shipping and labor. Gross profit margin declined 180 basis points to 70.6%, reflecting deleverage of fixed costs due to lower volumes, the impact of programming changes in January aimed at driving customer acquisition, and higher product cost stemming from inflationary factors. SG&A expense was down 22% year-over-year to $192.9 million and decreased 390 basis points as a percent of revenue, primarily reflecting progress on several cost reduction and optimization initiatives, as well as decreased coach compensation due to lower sales volume and fewer active earning coaches. Additionally, we are using automation to help improve our cost structure. For example, we added an online customer self-service feature to handle customers' questions and concerns. This automation improved customer satisfaction and has reduced cost in our field operations within the call centers. Income from operations was $53.5 million in the first quarter of 2023, down 2.9% or $1.6 million versus the year earlier period as a decline in gross profit was largely offset by lower SG&A. As a percentage of revenue, income from operations was 15.3% in the first quarter, 210 basis points above the year earlier level, underscoring strength in our flexible model and variable cost structure. Due to the accelerated investment in growth initiatives, timing of compensation cost, and deleverage of fixed costs due to lower volumes, we would expect the operating margin for the next quarter and the second half of the year to be below 2022 levels. The effective tax rate of 25.1% for the first quarter of 2023 was higher than 24% recorded in the prior year's first quarter. The increase in the effective tax rate was primarily driven by an increase in the limitation of executive compensation and meals and entertainment cost, partially offset by an increase in a tax benefit for research and development. Net income in the first quarter of 2023 was $40 million or $3.67 per diluted share, compared to $41.8 million or $3.59 per diluted share in the year earlier period, aided by a 6.3% decrease in diluted shares outstanding. On March 16th, the company's board of directors declared a quarterly cash dividend of $18 million or $1.65 per share, which is payable on May 9th, 2023, to the stockholders of record as of March 28th, 2023. This represents a 0.6% per share increase compared to the first quarter of the prior year. As a point of reference, our current dividend yield, well above 6%, puts us in the top 5% of the S&P's 1500 Super Composite Index. Turning to our balance sheet and cash flows, our financial position remains strong with $123.7 million in cash and cash equivalents and no interest-bearing debt as of March 31st, 2023. Cash flows from operations was $64.1 million during the first quarter, an increase of 46.7% from the year ago period. Turning to our guidance, while we are pleased with first quarter results, that are ahead of our guidance. The operating environment remains challenging, and we continue to expect that programming changes, compensation dynamics, and future growth initiatives will take time to gain traction and deliver meaningful results. It is too early to assess how our recent initiatives to drive customer acquisition will do over the coming quarters. For the second quarter of 2023, we are estimating revenue in the range of $250 million-$270 million and diluted EPS to be in the range of $1.32-$1.44. Our guidance assumes a 24.5%-26.25% effective tax rate. While we are not yet providing full year guidance for revenue and EPS, I want to remind everyone that we are continuing to use cost savings and efficiencies to fund strategic growth initiatives. The near term cost savings action from the Fifteen by Twenty-Five objectives will be offset by approximately 240 basis points of customer acquisition investment in 2023 to get back on track with our growth initiatives. In summary, we have a solid foundation and powerful business model that generates significant excess cash flows and strong returns on capital, giving us a high degree of confidence in our long-term algorithm for growth and profitability. With that, let me turn the call back to the operator for questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Linda Bolton-Weiser with D.A. Davidson. Please go ahead. Hi. Just first, I had a small question just to clarify your margin statements, your guidance statements regarding operating margin. When you said in the second quarter, in the second half, it would be below 2022 level, do you mean the level for the full year last year, which was 13.5%? Or do you mean each of the periods would be down year-over-year in operating margin? Yeah, Linda, this is Jim. You know, we're expecting, as we mentioned in the prepared remarks, that, you know, due to the accelerated investment in growth initiatives this year, that a lot of the spending in those growth initiatives will occur in the back half of 2023. Due to timing of coach compensation that we're expecting that it would be below each quarter in 2022, to be clear. Hopefully that's helpful. Each quarter would be below the prior year quarter? Yes, correct. Okay, gotcha. You know, I know you kinda gave some of the elements of the March through May promotion, or I don't know if it was a promotion or a program. Can you give a little more color on the specifics of that and how it's either similar or different from some of the other programs recently? Sure, Linda. This is Dan. I mean, you heard what our quarter was. We surpassed expectations on top and bottom line, but the pressure on customer acquisition can still be seen in our year-over-year declines, both in revenue, active earning coaches, and coach productivity, which was down year-over-year, but up sequentially for the last two quarters. We're really focused right now on taking what we have solved for, which is customer retention, so that remains at historical levels, despite the significant disruption from last year, and then building in the programs needed to help us reestablish our growth rhythm. Our Q2 guidance reflects the continued pressure on the coach productivity, and that's really what we're focused on. The Q2 program that we mentioned is really putting into the front end of our compensation structure, a bonus that compensates each coach for bringing in three new customers or five new customers. If it's three new customers, it's an additional 3% on frontline qualifying volume. If it's five new customers, it's 5%. This is optimizing our compensation structure to allow us to focus the behaviors from our coaches or their efforts in the right place. That's why that's being put in place. Additionally, we, you know, because we have the ability now to understand a little bit more about what the environment has in store for us, we're actually, as Jim mentioned, making some very specific strategic investments in the business to transition us to a more competitive position. Specifically, the investments are gonna be continued in both refinement of training programs and our offer. We're also very specifically announcing a new product line that will be shared with our coaches at the July convention. We anticipate that this is gonna more than triple the size of our addressable market and is designed to take advantage of the way our coaches work with their customers. We anticipate bringing in new customers, expanding it, expanding the addressable market and making it, making our coaches more productive in bringing them in. Lastly, we've been making continued progress on something you've heard us talk about over the last couple of years, which is focus in our Hispanic segment. Domestically, we've continued to see strong increases, and that's gonna be paving the way for expansion to Latin America. We're not ready to announce that yet, but we're also making investments in, as we said in the prepared remarks, in translating our materials. Our core materials are more than 50% translated. Same thing is true of our app, and we've also started the process of translating our Internet site. All those things are the investments that are taking place, beginning now through the back half of the year to focus and help reestablish, just in the same way that we have our retention levels, reestablish our coach productivity metrics, which is around client acquisition to historical norms. Okay. You know, I've had some questions from investors, and I guess it's highlighted even more here about your dividend because it's $1.65 per quarter, and yet your EPS guidance for the second quarter is $1.32-$1.44. It's below the dividend level. You know, just kinda wondering if this situation persists, clearly, you have cash on the balance sheet, and you have a untapped revolver. How long would you tap into the revolver and/or use cash on the balance sheet to pay your dividend if necessary? Yeah. You know, we, you know, our capital allocation strategy or principles, Linda, have really not changed that significantly. You know, first, we are gonna continue to invest in organic growth opportunities, and we're also evaluating inorganic opportunities all to achieve getting back to 15% or better growth. We do believe we have sufficient funds for the foreseeable future regarding our cash flows for the dividend. We believe that we have significant funds that should cover the dividend. As we invest in this growth and get back to growth, we believe that the dividend is not at risk at all. Excess cash flows, from organic growth opportunities and the dividend, we still will continue to look at opportunities of stock repurchases. Okay. Then, with regard to the drugs, the GLP-1 drugs, I would assume, but correct me if I'm wrong, that it wouldn't make a lot of sense for you to acquire a telehealth platform or something like that, like WeightWatchers did. Correct me if I'm wrong on that. If that's the case, then do you plan to modify your program such that it, kind of is complementary in some way to usage of the drug? Yeah. We're obviously spending a lot of time thinking about this. You know, our heritage, our history, and actually our founding was all in the medical side, originated with a doctor who was trying to help physicians help their patients in their health and wellness journey. That remains at the core of who we are and what we do. That, you know, as a result, that's why we have a lot of healthcare professionals who are among our coach ranks. That's why we invest in clinical studies. That's why we invest in the science, all tied to that background. You know, as we see the drugs, which means this set of drugs are new, but drugs and other medical interventions are not new, we evaluate those changes individually and try to understand how we can help use those with one singular goal, which is to help the customers of our coaches get healthy. You know, what we're seeing right now is that it's generating a lot of noise. I think we're all seeing it. GLP-1 drugs are in the news. There's a lot of advertising going on. It's throughout social media. There's a lot of noise right now. We're starting to get more questions coming up through clients to our coaches about how they should be looking at GLP-1 drugs. We do, as you're aware, fairly frequent national surveys to understand what the sentiment is around health and wellness, what people are doing. Our most recent national survey show that customers prefer 3: 1 a lifestyle and behavioral change solution to their weight management versus a drug therapy. Now, having said that, those numbers have probably changed, you know, since the beginning. We're continuing to watch that and track those numbers closely. What we also are looking at is that these drugs focus on a very specific group of people, primarily, and largely those with a BMI above 30 that have a specific risk, or slightly below that also have a risk factor. That really is on top of our target. Well, I guess to answer your specific question, we believe that our 60,000 OPTAVIA coaches nationwide nutritional support and our Habits of Health lifestyle program are all part of the solution for those who want health intervention. We also want to learn, you know, they also want to learn how to generate solutions for how they change their own lifestyle and their habits. We plan and are looking at ways to ensure that we're relevant for customers who want to be on the GLP-1 drugs and also those who want to do it without. again, we're not ready to announce anything on the call today, but we have some specific initiatives to help us ensure that we're relevant to our clients who are looking to start their journey to better health and to transform their lives, you know, through better health. Okay. Just one last question. Do you have an operating cash flow and a CapEx number for the quarter? Yeah. The operating cash flow for the quarter, Linda, was we were actually better by 47%. The net cash flow provided by operating activities was $64 million, and CapEx was $2 million for the quarter. CapEx was, I'm sorry, $2 million? $2 million, correct. Yep. Okay. Thank you very much. This concludes our question and answer session. I would like to turn the conference back over to Dan Chard for any closing remarks. Like to conclude by thanking everyone for your time on the call today and for the questions. We appreciate your interest in Medifast and the work we do to deliver lifelong transformation, one healthy habit at a time. As you've listened to our message, I think it's clear that as a business, we're continuing to take proactive steps to adjust to the changing dynamics of the market. We've galvanized our team to adjust our existing work in customer acquisition, enhancing our efforts in coach-led training, programming, and positioning to activate new and former clients. At the same time, we're intensely focused on a series of growth initiatives, such as development of the U.S. Hispanic market and expansion into adjacent product categories. We have the investment firepower to grow and the deep management experience to take advantage of opportunities that lie ahead. Most importantly, we have a uniquely differentiated model that provides us with a powerful platform to achieve our long-term sustainable growth goals. We're as dedicated to our mission as we have been ever, and I'm excited by the journey that lies ahead. Thank you as always for your interest in Medifast, and we look forward to speaking with you again next quarter. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.