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Medifast Reports Fourth Quarter and Year-End Results
Company Completes Second Most Profitable Year In Its History; Fourth Quarter Marks 21st Consecutive Quarter of Profitability

Medifast, Inc. announced today fourth quarter and year-end results for the period ended December 31, 2004. The Company reported fourth quarter revenue of $5,898,000, compared to revenue of $5,840,000 for the same period in 2003. Medifast reported income from operations of $576,000 compared to $482,000 for the same period in 2003. The Company reported pre-tax net income of $566,000, or $0.05 per share (0.04 per diluted share), compared to $511,000, or $0.05 per share ($0.04 per diluted share) for the fiscal 2003 fourth quarter. Medifast generated net income attributable to common shareholders of $35,000, or $0.00 per share ($0.00 per diluted share), compared to $416,000 or $0.05 per share ($0.04 per diluted share). The decrease in net income was due to the elimination of the deferred tax asset and the net operating loss for income tax purposes. The Company did not have a comparable expense in the 2003 fourth quarter. The fourth quarter marked the Company's 21st consecutive quarter of profitability.

For the full-year ended December 31, 2004, Medifast reported revenue of $27,340,000, compared to 2003 revenue of $25,379,000. The Company generated income from operations for the 2004 fiscal year of $3,004,000 compared to fiscal year 2003 income from operations of $3,598,000. Medifast generated net income attributable to common stockholders of $1,729,000 in 2004, or $0.16 per basic share ($0.14 per diluted share) compared to net income attributable to common stockholders of $2,352,000, or $0.25 per basic share ($0.22 per diluted share) for the 2003 fiscal year. Fiscal 2004 was the Company's second most profitable year in its history.

"Although we were not able to match the record results we generated in 2003, Medifast implemented many key initiatives that have positioned the Company for growth in 2005," said Brad MacDonald, Medifast's Chairman and Chief Executive Officer. "We continue to successfully grow our Take Shape for Life division, having enhanced a replicating website option for Health Advisors and an Internet distribution program for their customers. Our Tasting Party Program has been a rousing success, helping us recruit new Health Advisors and expanding our Network significantly. After making numerous adjustments, we have now refined our advertising campaigns, and believe we have reached the right combination of print, TV, radio, and web marketing. The Company has seen increased success with its web marketing throughout 2004. The Company will continue to ramp up its advertising initiatives while monitoring the effectiveness to help determine the most effective campaign strategy. Finally, the acquisition of Hi-Energy Weight Control Centers has provided us with an important distribution vehicle in many important demographic markets."

  Some of the highlights of fiscal 2004 included:

  --  Development of Internet marketing programs.  The Company launched a
      revamped website at, which has
      contributed to increased sales and improved margins.
  --  Increased operating efficiencies.  Gross margins increased to 75% in
      2004 from 73% in 2003 due to the acquisition of a 119,000-square-foot
      distribution facility in Ridgley, Maryland, which reduced production
      and distribution costs.
  --  Johns Hopkins Study.  The Company initiated a clinical study with
      Johns Hopkins Bloomberg School of Public Health to test the efficacy
      of Medifast meal replacements versus a standard reference diet.  The
      18-month study will consist of 80 overweight or obese boys and girls
      between the ages of 8 and 15 along with 40 of their parents.  The
      clinical study will examine whether a joint parent-child approach
      using Medifast's engineered foods will result in greater weight loss
      than children dieting alone.
  --  New Product development.  The Company launched the new "Maintain by
      Medifast" product line, a low-calorie, soy-based, low glycemic
      formula patented by Medifast that is incorporated into a low
      carbohydrate diet that has provided significant weight loss results
      and overall health improvements in clinical studies.  "Maintain by
      Medifast" offers consumers a special 28-day program that will provide
      immediate results on the journey to long-term health improvement.

"Our year has begun in a solid manner," said Michael McDevitt, Medifast's President. "Our Web Marketing and Advertising programs continue to gain traction. We continue to track improvement with our Hi-Energy corporately owned clinics after the initial weather-related set backs. Recently, we signed an agreement with a regional drug chain to place four full service Hi-Energy Weight Control Centers in their stores as part of a pilot program. Three of the Hi-Energy Weight Control Centers will be fully operational with the clinical pharmacy program by mid-April 2005. These activities, along with a more effective advertising program and awareness for our products created by the Johns Hopkins Bloomberg School of Public Health clinical study, should position Medifast well for growth in 2005."

2005 Financial Guidance

For 2005, the Company expects to report revenue of $32 to $34 million with a pre-tax profit of $0.24 to $0.29 per diluted share. For the first quarter ended March 31, 2005, Medifast expects to report revenue of $7.4 million to $8 million, compared to $6.8 million for the same period in 2004. For the first quarter, the Company expects to generate pre-tax profit of between $0.06 and $0.07, per diluted share, compared to $0.07 in the fiscal 2004 first quarter.

The Company's executives will host a conference call today to discuss these results. The conference call will begin at 4:30 p.m. eastern time. Interested participants should call (877) 740-8078 when calling within the United States or (706) 679-8404 when calling internationally. Please refer to conference code 4619783. There will be a playback available as well. To listen to the playback, please call (800) 642-1687 when calling within the United States or (706) 645-9291 when calling internationally. The replay will be available until April 14, 2005.

The webcast may be accessed via the Company's web site at Interested parties should go to the section marked "Investor Relations" to listen to the call. The webcast can be accessed until April 14, 2005.

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.

                       MEDIFAST, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS

                                      December 31, 2004   December 31, 2003

  Current assets:
    Cash                                       $612,000          $2,524,000
    Accounts receivable-net of allowance
     for doubtful accounts of $87,000
     and $55,000                              1,063,000             641,000
    Inventory                                 4,251,000           2,988,000
    Investment securities                     2,626,000           3,983,000
    Deferred compensation                       321,000             321,000
    Prepaid expenses and other current
     assets                                   1,079,000             936,000
    Current portion of deferred tax asset        19,000             596,000
         Total Current Assets                 9,971,000          11,989,000

  Property, plant and equipment - net         8,698,000           7,449,000
  Trademarks and intangibles - net            7,138,000           4,419,000
  Deferred tax asset, net of current portion     91,000                 -
  Other assets                                   70,000             375,000

         TOTAL ASSETS                       $25,968,000         $24,232,000

  Current liabilities:
    Accounts payable and accrued expenses      $940,000          $1,714,000
    Income taxes payable                        674,000                 -
    Dividends payable                            65,000              58,000
    Line of credit                              369,000              55,000
    Current maturities of long-term debt        458,000             764,000
         Total current liabilities            2,506,000           2,591,000

    Long-term debt, net of current portion    4,256,000           4,564,000
         Total Liabilities                    6,762,000           7,155,000

  Stockholders' Equity:

  Series B Convertible Preferred Stock;
   par value $1.00; 600,000 shares
   authorized; 300,614 and 403,734 shares
   issued and outstanding                       301,000             404,000
  Series C Convertible Preferred Stock;
   stated value $1.00; 1,015,000 shares
   authorized; 200,000 and 267,000 shares
   issued and outstanding                       200,000             267,000
  Common stock; par value $.001 per
   share; 15,000,000 shares authorized;
   11,001,070 and 10,482,609 shares
   issued and outstanding                        11,000              10,000
  Additional paid-in capital                 20,556,000          20,120,000
  Accumulated comprehensive loss                (39,000)            (25,000)
  Accumulated deficit                        (1,287,000)         (3,016,000)
                                             19,742,000          17,760,000
  Less: cost of 78,160 and 83,863
   shares of common stock in treasury          (536,000)           (683,000)
  Total Stockholders' Equity                 19,206,000          17,077,000

   EQUITY                                   $25,968,000         $24,232,000

                     MEDIFAST, INC. AND SUBSIDIARIES

                                               YEARS ENDED DECEMBER 31,
                                                2004             2003

  Revenue                                   $27,340,000      $25,379,000
  Cost of sales                              (6,746,000)      (6,825,000)
  Gross profit                               20,594,000       18,554,000

  Selling, general, and administration      (17,590,000)     (14,956,000)

  Income from operations                      3,004,000        3,598,000

  Other income (expense):
    Interest expense                           (245,000)        (150,000)
    Interest income                             154,000          110,000
    Other expense                                (7,000)             -

                                                (98,000)         (40,000)

  Net income before provision for
   income taxes                               2,906,000        3,558,000
  Provision for income taxes                 (1,159,000)      (1,148,000)

  Net income                                  1,747,000        2,410,000

  Less: Preferred stock dividend requirement    (18,000)         (58,000)

  Net income attributable to
   common shareholders                       $1,729,000       $2,352,000

  Basic earnings per share                        $0.16            $0.25
  Diluted earnings per share                      $0.14            $0.22

  Weighted average shares outstanding -
    Basic                                    10,832,360        9,305,731
    Diluted                                  12,413,424       10,952,367

SOURCE: Medifast, Inc.

CONTACT: Jeremy Hunt of Medifast, +1-410-504-8196