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Medifast Announces Record Third Quarter Results
24th Consecutive Quarter of Profitability
Revenues Increase 51% Company Increases Full Year Guidance

Medifast, Inc. announced today third quarter financial results for the period ended September 30, 2005. The company reported third quarter revenue of $11 million, a 51% increase versus $7.3 million in the year-earlier period. The company reported pre-tax income of $1,226,000, a 135% increase compared to $521,000 in the third quarter of 2004. The company reported net income of $607,000, or $0.05 per basic share ($0.05 per diluted share), versus $391,000 or $0.04 per basic share ($0.03 per diluted share) in the 2004 third quarter.

For the nine months ended September 30, 2005, Medifast had revenue of $29.9 million, representing a 39% increase compared to $21.4 million reported for the nine-month period ending September 30, 2004. Pre-tax income was $3,245,000, an increase of 39% compared to $2,340,000 for the 2004 nine-month period. The company reported net income of $1,587,000, or $0.13 per basic share ($0.13 per diluted share), versus $1,694,000 or $0.16 per basic share ($0.14 per diluted share). Earnings per share were effected by the interest associated with the conversion of the Series "B" preferred stock. This included a $260,000 stock dividend on Series "B" preferred stock and a $19,000 stock dividend on Series "C" preferred stock. The Series "B" and Series "C" dividends decreased basic and diluted earnings per share by $.02 for the first nine months of 2005. As of September 30, 2005 all Series "B" and Series "C" preferred stock have been converted to common stock and included in the weighted average diluted shares. There will be no additional stock dividend payments. In addition, tax expense as a percentage of profit increased for the first nine months of 2005 compared to 2004 as the Company no longer has a net operating loss carry forward in 2005.

The Company had stockholders' equity of $21.3 million and working capital of $9.6 million on September 30, 2005, compared with $18.8 million and $10.6 million at September 30, 2004, respectively. The third quarter marked the Company's 24th consecutive quarter of profitability.

"The third quarter results are exciting as our direct marketing campaign continues to drive new customers to our website and call center. During 2005, Medifast's TV, radio, print and direct mail marketing have dramatically increased Medifast's brand recognition in the marketplace. Consumers have responded favorably to Medifast's simple and clinically proven weight management plan, which fits well into today's busy lifestyles and which yields quick results. In addition, I am extremely excited with the growth in our Take Shape for Life division which continues to expand across the United States," said Bradley T. MacDonald, Medifast Executive Chairman.

"During the first nine months of 2005 Medifast focused on both attracting new customers and improving customer retention by making significant improvements to customer communication and support services. We are pleased with the results of our advertising campaigns and look forward to continued growth throughout 2006. The Take Shape for Life health advisor network had significant month-to-month increases in both revenue and recruitment which contributed to the positive third quarter results. Due to our current growth rate and our expected future growth rates, we made a strategic decision to implement a new Enterprise Resource Planning (ERP) solution to upgrade our technology infrastructure and improve manufacturing and business processes. We expect to see immediate impact on our operations and believe it will drive additional business growth and improve the efficiencies across our business platform. The implementation process is expected to be completed within 8-10 months," said Michael S. McDevitt, Medifast's President.

2005 Revised Financial Guidance

Previously, the company expected to generate revenue of $34.5 -- $36.5 million for the year with a pretax profit of $.26 -- .30 per diluted share. The company now expects to generate revenue of $36 million to $38 million for the year with a pretax profit of $0.30 to $0.32 per diluted share.

The company's executives will hold a conference call to discuss third quarter financial results. The call will take place at 5:00 pm, Eastern Time today. Interested participants should call (866) 825-3354 when calling within the United States or (617) 213-8063 when calling internationally. Please refer to pass code 95635868. There will be a playback available. To listen to the playback, please call 888-286-8010 when calling within the United States or 617-801-6888 when calling internationally. Please use pass code 97991858 for the replay. The replay will be available until February 9, 2006.

The webcast may be accessed via the Company's website at Interested parties should go to the section marked "Investor Relations" to listen to the call. The webcast can be accessed until February 9, 2006.

About Medifast: (

Medifast has been helping people lose weight and achieve better health for 25 years. Its meal replacement foods have been proven effective at Johns Hopkins University, recommended by over 15,000 physicians and used by more than 1 million customers. Medifast offers its customers world-class customer service, nutrition and medical support.

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

                                       September 30, 2005  December 31, 2004
                                           (Unaudited)        (Audited)
    Current assets:
      Cash                                  $2,641,000          $612,000
      Accounts receivable-net
       of allowance for doubtful
       accounts of $100,00                   1,517,000         1,063,000
      Inventory                              4,858,000         4,251,000
      Investment securities                  2,762,000         2,626,000
      Deferred compensation                    506,000           321,000
      Prepaid expenses and other current
       assets                                2,004,000         1,079,000
      Deferred tax asset                        24,000            19,000
           Total Current Assets             14,312,000         9,971,000

    Property, plant and equipment - net      8,984,000         8,698,000
    Trademarks and intangibles, net          6,519,000         7,138,000
    Deferred tax asset, net of current
     position                                  190,000            91,000
    Other assets                                58,000            70,000

           TOTAL ASSETS                    $30,063,000       $25,968,000

    Current liabilities:
      Accounts payable and accrued
       expenses                             $2,091,000        $1,005,000
      Income taxes payable                   1,396,000           674,000
      Line of credit                           642,000           369,000
      Current maturities of long-term
       debt                                    556,000           458,000
           Total current liabilities         4,685,000         2,506,000

      Long-term debt, net of current
       portion                               4,120,000         4,256,000
           Total Liabilities                 8,805,000         6,762,000

    Stockholders' Equity:

    Series B Convertible Preferred
     Stock; par value $1.00;
      600,000 shares authorized; 0 and
       300,614 shares issued and
       outstanding                                   -           301,000
    Series C Convertible Preferred
     Stock; stated value $1.00;
     1,015,000 shares authorized;
     200,000 shares issued and
     outstanding, respectively                       -           200,000
    Common stock; par value $.001 per
     share; 20,000,000 authorized;
     12,771,791 and 11,001,070 shares
     issued and outstanding
     respectively                               13,000            11,000
    Additional paid-in capital              21,750,000        20,556,000
    Accumulated comprehensive loss             (22,000)          (39,000)
    Accumulated deficit                        300,000        (1,287,000)
                                            22,041,000        19,742,000
    Less cost of common stock treasury;
     111,902 and 78,160
     shares, respectively                     (661,000)         (536,000)
    Less:  Unearned compensation              (122,000)                 -

    Total Stockholders' Equity              21,258,000        19,206,000

     EQUITY                                $30,063,000       $25,968,000

                        MEDIFAST, INC. AND SUBSIDIARIES

                               Nine months Ended       Three months Ended
                                 September 30,           September 30,
                                2005        2004        2005        2004
                            (Unaudited) (Unaudited) (Unaudited) (Unaudited)

    Revenue                  29,865,000  21,442,000  10,985,000   7,268,000
    Cost of sales             7,370,000   5,182,000   2,675,000   1,886,000
    Gross Profit             22,495,000  16,260,000   8,310,000   5,382,000
    Selling, general, and
     administration          19,163,000  13,832,000   7,044,000   4,855,000

    Income from operations    3,332,000   2,428,000   1,266,000     527,000

    Other income/(expense)
         Interest expense       (97,000)    (79,000)    (47,000)     (4,000)
         Other income
          (expense)              10,000      (9,000)      7,000      (2,000)

    Income before provision
     for income taxes         3,245,000   2,340,000   1,226,000     521,000
    Provision for income tax
     benefit (expense)       (1,367,000)   (628,000)   (609,000)   (130,000)

    Net income                1,878,000   1,712,000     617,000     391,000

    Less:  Stock dividend on
     preferred stock            291,000      18,000      10,000           -

    Net income attributable
     to common shareholders  $1,587,000  $1,694,000    $607,000    $391,000

    Basic earnings per share      $0.13       $0.16       $0.05       $0.04
    Diluted earnings per
     share                        $0.13       $0.14       $0.05       $0.03

    Weighted average shares
     outstanding -
         Basic               12,235,475  10,774,663  12,595,175  10,982,578
         Diluted             12,438,531  12,118,790  12,989,147  12,412,265

SOURCE: Medifast, Inc.

CONTACT: Investor Relations, Medifast, Inc., +1-410-504-8196,