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Medifast Announces 2005 Year-End Results; 25th Consecutive Quarter of Profitability
Revenues Increase 47%; Company Increases 2006 Full-Year Guidance

Medifast, Inc. announced today fourth quarter and year-end financial results for the period ended December 31, 2005. For the full-year ended December 31, 2005, Medifast reported revenue of $40.1 million, a 47% increase from $27.3 million in 2004. The Company reported pre-tax income of $3,930,000, a 35% increase compared to $2,906,000 for the year ended December 31, 2004. The company reported net income of $2,436,000, or $0.20 per basic share ($0.19 per diluted share), versus $1,729,000 or $0.16 per basic share ($0.14 per diluted share) in 2004. In 2005, earnings per share were affected 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 year ended December 31, 2005. As of December 31, 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 preferred stock dividend payments.

The company reported fourth quarter revenue of $10.2 million, compared to revenue of $5.8 million for the same period in 2004, an increase of 76%. The company reported pre-tax income of $685,000, or $.06 per basic share ($.05 per diluted share), compared to $566,000, or $.05 per basic share ($.04 per diluted share) for the fourth quarter of 2004. The fourth quarter of 2005 represented the Company's 25th consecutive quarter of profitability.

The Company had stockholders' equity of $23.2 million and working capital of $10 million at December 31, 2005, compared to $19.7 million and $7.5 million at December 31, 2004, respectively.

"We are pleased with the year-end results, which were driven by our multi- channel customer acquisition strategies in the Medifast direct business and the growth of our dynamic direct sales network, Take Shape for Life. Our increased advertising is driving brand recognition and we are uniquely positioned in the marketplace by providing customers a menu of options for program support. In 2006, we will place even more emphasis on attracting and retaining customers with improved service standards and support services," said Michael S. McDevitt, Medifast President and Chief Financial Officer.

2006 Revised Financial Guidance

Previously, the company expected to generate revenue of $48 to $50 million for the year with an after-tax profit of $0.22 - $0.24 per diluted share. The company now expects to generate revenue of $58 to $60 million for the year with after-tax earnings of $0.29 to $0.32 per diluted share.

Fourth Quarter and Year-End Conference Call

The company's executives will hold a conference call to discuss 2005 year- end financial results. The Company will hold a conference call and webcast at 5:00 PM EST on March 15, 2006.

Interested participants should call (866) 383-7989 when calling within the United States or (617) 597-5328 when calling internationally. Please refer to pass code 11897049. There will be a playback available as well. 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 64509096 for the replay. The replay will be available until June 15, 2006.

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 June 15, 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 in multiple clinical studies, recommended by over 15,000 physicians and used by more than 1 million customers. Medifast offers its customers world-class customer service and nutrition 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.

  Tables to follow:

                     MEDIFAST, INC. AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                     As of December 31, 2005 and 2004

                                                   2005           2004

  Current assets:
    Cash                                        $1,484,000       $612,000
    Accounts receivable-net of allowance
     for doubtful accounts of $100,000
     and $87,000                                   985,000      1,063,000
    Inventory                                    5,475,000      4,251,000
    Investment securities                        2,700,000      2,626,000
    Deferred compensation                          525,000        321,000
    Prepaid expenses and other current assets    3,273,000      1,079,000
    Current portion of deferred tax asset                -         19,000
      Total current assets                      14,442,000      9,971,000

  Property, plant and equipment - net            9,535,000      8,698,000
  Trademarks and intangibles - net               6,508,000      7,138,000
  Deferred tax asset, net of current portion             -         91,000
  Other assets                                      60,000         70,000

      TOTAL ASSETS                             $30,545,000    $25,968,000

  Current liabilities:
    Accounts payable and accrued expenses       $2,263,000       $940,000
    Income taxes payable                           899,000        674,000
    Dividends payable                                    -         65,000
    Line of credit                                 633,000        369,000
    Current maturities of long-term debt           561,000        458,000
    Deferred tax liability - current                90,000              -
      Total current liabilities                  4,446,000      2,506,000

  Other liabilities and deferred credits
    Long-term debt, net of current portion       3,977,000      4,256,000
    Deferred tax liability - non-current           101,000              -
      Total liabilities                          8,524,000      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; 0 and 200,000 shares issued
   and outstanding                                       -        200,000
  Common stock; par value $.001 per share;
   20,000,000 shares authorized; 12,782,791
   and 11,001,070 shares issued and outstanding     13,000         11,000
  Additional paid-in capital                    21,759,000     20,556,000
  Accumulated other comprehensive income (loss)    282,000        (39,000)
  Retained earnings (deficit)                    1,149,000     (1,287,000)
                                                23,203,000     19,742,000
  Less: cost of 210,902 and 78,160 shares
   of common stock in treasury                  (1,075,000)      (536,000)
  Less: Unearned compensation                     (107,000)             -
  Total stockholders' equity                    22,021,000     19,206,000


The accompanying notes are an integral part of these consolidated financial


                     MEDIFAST, INC. AND SUBSIDIARIES
                         Years Ended December 31,

                                   2005           2004          2003

  Revenue                      $40,129,000   $27,340,000   $25,379,000
  Cost of sales                (10,161,000)   (6,746,000)   (6,825,000)
  Gross profit                  29,968,000    20,594,000    18,554,000

  Selling, general, and
   administration              (25,894,000)  (17,590,000)  (14,956,000)

  Income from operations         4,074,000     3,004,000     3,598,000

  Other income (expense):
    Interest expense              (317,000)     (245,000)     (150,000)
    Interest income                158,000       154,000       110,000
    Other income (expense)          15,000        (7,000)            -
                                  (144,000)      (98,000)      (40,000)

  Net income before provision
   for income taxes              3,930,000     2,906,000     3,558,000
  Provision for income taxes    (1,203,000)   (1,159,000)   (1,148,000)

  Net income                     2,727,000     1,747,000     2,410,000

  Less: Preferred stock
   dividend requirement           (291,000)      (18,000)      (58,000)

  Net income attributable
   to common shareholders       $2,436,000    $1,729,000    $2,352,000

  Basic earnings per share           $0.20         $0.16         $0.25
  Diluted earnings per share         $0.19         $0.14         $0.22

  Weighted average shares
   outstanding -
    Basic                       12,258,734    10,832,360     9,305,731
    Diluted                     12,780,959    12,413,424    10,952,367

The accompanying notes are an integral part of these consolidated financial


SOURCE: Medifast, Inc.

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