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Medifast Announces 2006 Year-End Results Earnings per share increase 100% Company Reiterates Guidance Showing Strong Growth in 2007

Medifast, Inc. announced today fourth quarter and year-end financial results for the period ended December 31, 2006. For the full year-ended December 31, 2006, Medifast reported revenue of $74.1 million, an 85% increase from $40.1 million in 2005. The company reported net income of $5,082,000, or $0.40 per basic share ($0.38 per diluted share), versus $2,436,000 or $0.20 per basic share ($0.19 per diluted share) in 2005. This represented a 100% increase in both basic and diluted earnings per share.

The company reported fourth quarter revenue of $15.3 million, compared to revenue of $10.2 million for the same period in 2005, an increase of 50%. The company reported net income of $443,000, or $.03 per basic share ($.03 per diluted share), compared to $849,000, or $.05 per basic share ($.04 per diluted share) for the fourth quarter of 2005. The fourth quarter of 2006 represented the Company's 29th consecutive quarter of profitability.

In the fourth quarter SG&A expense was largely affected by expenses associated with becoming Sarbanes Oxley compliant. In order to meet this requirement, the Company had to increase resources and expenses in the areas of consulting and personnel. These expenses occurred mainly in the 4th quarter and decreased diluted EPS by approximately $.02. The Company expects the expense to be immaterial next year and into the future.

The Company had stockholders' equity of $28.2 million and working capital of $9.6 million at December 31, 2006, compared to $22 million and $10 million at December 31, 2005, respectively.

"We are extremely pleased with 2006 year-end results, which were driven by our innovative business model that allows the clinically proven Medifast brand to serve many different target customers through unique programs for support and education. We have multiple platforms for growth and a strong brand that is trusted by the medical community and our growing customer base. 2006 was a fantastic year for our company as we were recognized by Forbes Magazine, listing Medifast 28th of the top 200 small companies in the United States. While we grew significantly in 2006, we also concentrated on building infrastructure to support future growth and we are excited about the potential of Medifast to enrich millions of lives by providing innovative choices for lasting health," said Michael S. McDevitt, Chief Executive Officer.

2007 Full-Year Guidance

For 2007, the Company expects to report revenue of $85 to $88 million, representing a year over year increase of 15% to 19%, with after-tax profit of $0.45 to $0.46 per diluted share, an increase of 18% to 21% from 2006. On a quarterly basis, full-year 2007 guidance will be reviewed, reiterated or updated as necessary.

Fourth Quarter and Year-End Conference Call

Medifast will release full-year financial results for the period ended December 31, 2006 on Friday, March 16 after the market closes. The Company will hold a conference call and webcast at 5:00 PM EDT.

Interested participants should call (800) 901-5259 when calling within the United States or (617) 786-4514 when calling internationally. Please refer to pass code 83279785. 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 89127658 for the replay. The replay will be available until June 23, 2007.

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 23, 2007.

About Medifast: (

Medifast is the leading easy-to-use, clinically proven portion-controlled weight loss program. Medifast has been recommended by 15,000 physicians and used by over one million customers. It is committed to enriching lives by providing innovative choices for lasting health. Medifast programs have been proven effective through studies by major university teaching hospitals. The company sells its products and programs via four unique distribution channels: 1) the web and national call centers, 2) national network of physicians, 3) medically supervised Medifast Weight Control Centers, and 4) Take Shape For Life program. Medifast was founded in 1980 and is located in Owings Mills, Maryland.

  Tables to follow:

                     MEDIFAST, INC. AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                     As of December 31, 2006 and 2005

                                                    2006              2005

  Current assets:
  Cash and cash equivalents                   $1,085,000        $1,484,000
  Accounts receivable-net of allowance
   for doubtful accounts of $100,000             448,000           985,000
  Inventory                                    8,255,000         5,475,000
  Investment securities                        1,540,000         2,700,000
  Deferred compensation                          673,000           525,000
  Prepaid expenses and other current
   assets                                      2,599,000         3,273,000
  Note receivable - current                      174,000                 -
  Current portion of deferred tax asset           90,000                 -
       Total current assets                   14,864,000        14,442,000

  Property, plant and equipment - net         14,020,000         9,535,000
  Trademarks and intangibles - net             6,274,000         6,508,000
  Deferred tax asset, net of current
   portion                                       367,000                 -
  Note receivable, net of current assets       1,355,000                 -
  Other assets                                    47,000            60,000

             TOTAL ASSETS                    $36,927,000       $30,545,000

  Current liabilities:
  Accounts payable and accrued expenses       $2,913,000        $2,263,000
  Income taxes payable                           535,000           899,000
  Dividends payable                                    -                 -
  Line of credit                               1,256,000           633,000
  Current maturities of long-term debt           548,000           561,000
  Deferred tax liability - current                     -            90,000
       Total current liabilities               5,252,000         4,446,000

  Other liabilities and deferred credits
  Long-term debt, net of current portion       3,509,000         3,977,000
  Deferred tax liability - non-current                 -           101,000
       Total liabilities                       8,761,000         8,524,000

  Stockholders' Equity:
  Preferred stock, $.001 par value
   (1,500,000 authorized, no shares
   issued and outstanding)                             -                 -
  Common stock; par value $.001 per
   share; 20,000,000 shares authorized;
   13,631,898 and 12,782,791 shares
   issued and outstanding                         14,000            13,000
  Additional paid-in capital                  26,629,000        21,759,000
  Accumulated other comprehensive income         334,000           282,000
  Retained earnings                            6,231,000         1,149,000
                                              33,208,000        23,203,000
  Less: cost of 249,184 and 210,902
   shares of common stock in treasury         (1,686,000)       (1,075,000)
  Less:  Unearned compensation                (3,356,000)         (107,000)
  Total stockholders' equity                  28,166,000        22,021,000

   EQUITY                                    $36,927,000       $30,545,000

   The accompanying notes are an integral part of these consolidated
   financial statements

                     MEDIFAST, INC. AND SUBSIDIARIES

                                        Years Ended December 31,

                                         2006           2005           2004

  Revenue                         $74,086,000    $40,129,000    $27,340,000
  Cost of sales                   (18,237,000)   (10,161,000)    (6,746,000)
  Gross profit                     55,849,000     29,968,000     20,594,000

  Selling, general, and
   administration                 (47,737,000)   (25,894,000)   (17,590,000)

  Income from operations            8,112,000      4,074,000      3,004,000

  Other income (expense):
       Interest expense              (369,000)      (317,000)      (245,000)
       Interest income                175,000        158,000        154,000
       Stock compensation exp        (533,000)             -              -
       Loss on sale of CCS           (323,000)             -              -
       Other income (expense)         276,000         15,000         (7,000)
                                     (774,000)      (144,000)       (98,000)

  Income before provision for
   income taxes                     7,338,000      3,930,000      2,906,000
  Provision for income taxes       (2,256,000)    (1,203,000)    (1,159,000)

  Net income                        5,082,000      2,727,000      1,747,000

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

  Net income attributable to
   common shareholders             $5,082,000     $2,436,000     $1,729,000

  Basic earnings per share              $0.40          $0.20          $0.16
  Diluted earnings per share            $0.38          $0.19          $0.14

  Weighted average shares
   outstanding -
       Basic                       12,699,066     12,258,734     10,832,360
       Diluted                     13,482,894     12,780,959     12,413,424

  The accompanying notes are an integral part of these consolidated
  financial statements

First Call Analyst:
FCMN Contact:

SOURCE: Medifast, Inc.

CONTACT: Media, Kerry O'Neill, Warschawski of Medifast, Inc.,
+1-410-367-2700, or Investor Relations,