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Medifast Signs Asset Purchase Agreement to Build Distribution Infrastructure and Participate in Community Development Program in Maryland

Preparing itself for a future sales platform that will allow for distribution of up to $200 million of products per year, Medifast, Inc. announced today that it has reached an agreement with NewRoads, Inc. to purchase a 119,000 sq. foot distribution facility located in Ridgely, Maryland.

The new distribution facility will initially be responsible for the storage and distribution of Medifast and Woman's Wellbeing products to its vast network of medical practitioners, patients, health advisors and retail drug stores. The facility will also be responsible for the assembly and distribution of the newly acquired Woman's Wellbeing product line, to be distributed to 18,000 drug stores nationwide.

Medifast is currently working with the Economic Development officials in Caroline County, to achieve the maximum benefit for both Medifast, and the surrounding community. The Company intends to invest $3 million over the next 24 months, which includes the purchase price of the facility along with the initial start-up costs. The community intends to assist in this process by providing access to qualified employees, training grants and loans, as well as other economic incentives to ensure an efficient distribution facility that can support the Company's rapid growth.

"Over the past year revenues at Medifast have more than doubled," says Brad MacDonald, CEO of Medifast. "Acquiring the Ridgely distribution center allows us to build our infrastructure to accommodate our growth well into the future. Consolidation of existing resources will generate significant savings to the Company and provide employment opportunities to an area of Maryland hit hard with recent job cuts."

The Company currently owns a 49,000 sq. foot manufacturing facility in Owings Mills, Maryland, which will continue to be the main source of manufacturing and production for the Medifast line of products. Additionally, through 2003, the Company is the leaseholder of a warehouse facility in Owings Mills for storage and distribution purposes, but does not intend to re-sign the lease at year-end.

This release contains forward-looking statements, which may involve known, and unknown risks, uncertainties and other factors that may cause Medifast's actual results and performance in future periods to be materially different from any future results or performance suggested by these statements. Medifast cautions investors not to place undue reliance on forward-looking statements, which speak only to management's expectation on this date.

SOURCE: Medifast, Inc.

CONTACT: Casey Seward, Public & Investor Relations Specialist, Medifast,
+1-410-504-8154, or Ken Sgro, CEOcast, Inc. for Medifast, +1-212-732-4300