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Medifast Announces Second-Quarter 2007 Results

Medifast, Inc. announced today second quarter results for the period ended June 30, 2007. For quarter-ended June 30, 2007, Medifast reported revenue of $22 million, a 10% increase from $20 million in the second quarter of 2006. The Company reported net income of $909,000, or $0.07 per basic share ($0.07 per diluted share), versus $1,448,000 or $0.11 per basic share ($0.11 per diluted share) in 2006. The second quarter of 2007 represented the Company's 31st consecutive quarter of profitability.

For the six months ended June 30, 2007, Medifast reported revenue of $42.1 million, an increase of 8% from $39.1 million for the six months ended June 30, 2006. The Company reported net income of $2.3 million, or $.18 per basic share ($.17 per diluted share), versus $3.5 million or $.27 per basis share ($.25 per diluted share) in 2006.

"The second quarter of 2007 was one largely spent on setting the stage for the near future and long term growth of the Medifast Business. The Company made significant strategic investments in the business' revenue drivers, as well as its internal capabilities to best capitalize on future growth. We believe that the near future impact of these investments will drive a momentous shift by increasing Medifast brand awareness and revenue growth," said Michael S. McDevitt, Chief Executive Officer.

"The most prominent of these investments was the development of the future Medifast marketing campaign utilizing two new celebrity spokespeople. The campaign is scheduled for release in mid-August; however the public awareness of the campaign has already begun. Starting in July, we began to receive extensive media coverage of our new celebrity campaign which we believe will strongly assist in driving immediate revenues upon the campaign's release, as it has already successfully heightened the Medifast brand awareness, while reawakening loyal customers from the Company's 26 year medical history. We are very excited about the rollout of our comprehensive marketing strategy including television, print, and online advertising complimented by significant upcoming media coverage of Daytime Emmy® award winning actress Genie Francis and movie star and new mom, Kristy Swanson on the Medifast program. Both women are having great success on the program, having lost a combined total of 31 pounds in only a little more than a month," continued McDevitt.

"This campaign provides an umbrella of branded support to all of our other channels of distribution which are already experiencing organic growth. We believe that the new campaign, along with additional recent investments to enhance the campaign's effectiveness such as a newly built in-house call center and the launch of the consumer Auto ship program will be driving forces to propel Medifast into strong future growth patterns. In late July, Take Shape for Life exceeded direct sales industry benchmarks with its highest attended national convention in company history, and the Medifast Weight Control Centers business model, with its recently completed franchise documentation, is primed for expansion into new markets in the coming months. We believe the Medifast business has a tremendous future in a growing industry, as we establish our brand as the leader in fast, safe and convenient weight loss and long term health with clinically proven products and the most extensive offering of choices for customer support in our industry."

2007 Full-Year Guidance

The company believes that all of the preparation, research, consumer awareness building, and high quality of production will allow the new direct response advertising campaign, which launches on TV August 17th, and print in late September, to be significantly more effective than the current and past advertising campaigns. However to what extent this effectiveness will occur is unknown. It is because of this unknown, yet very close approaching launch date, that the company is currently maintaining its full year guidance of $85 to $88 million, with after-tax profit of $0.45 to $0.46 per diluted share. The company will closely monitor the early impact of the advertising campaign and will update the market on the 2007 full year guidance in mid September.

Second Quarter Conference Call

The Company will hold a conference call and webcast at 5:00 PM EDT on August 9, 2007 to discuss second quarter results.

Interested participants should call (800) 706-7748 when calling within the United States or (617) 614-3473 when calling internationally. Please refer to pass code 62898461. 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 39976345 for the replay. The replay will be available until November 8, 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 November 8, 2006.

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.

  For questions please contact:
  Investor relations

                       MEDIFAST, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS

                                             (Unaudited)        (Audited)
                                           June 30, 2007   December 31, 2006

  Current assets:
  Cash and cash equivalents                   $2,923,000        $1,085,000
  Accounts receivable-net of allowance
   for doubtful accounts of $100,000             416,000           448,000
  Inventory                                    8,483,000         8,255,000
  Investment securities                        1,571,000         1,540,000
  Deferred compensation                          837,000           673,000
  Prepaid expenses and other current
   assets                                      3,301,000         2,599,000
  Note receivable - current                      174,000           174,000
  Current portion of deferred tax asset          101,000            90,000
       Total current assets                   17,806,000        14,864,000

  Property, plant and equipment - net         14,862,000        14,020,000
  Trademarks and intangibles - net             5,516,000         5,874,000
  Deferred tax asset, net of current
   portion                                       681,000           517,000
  Note receivable, net of current
   assets                                      1,282,000         1,355,000
  Other assets                                    79,000            47,000

             TOTAL ASSETS                    $40,226,000       $36,677,000

  Current liabilities:
  Accounts payable and accrued expenses       $4,185,000        $2,913,000
  Income taxes payable                                 -           535,000
  Line of credit                                 407,000         1,256,000
  Current maturities of long-term debt           790,000           548,000
       Total current liabilities               5,382,000         5,252,000

  Other liabilities and deferred
  Long-term debt, net of current
   portion                                     4,452,000         3,509,000
  Deferred tax liability - non-current                 -                 -
       Total liabilities                       9,834,000         8,761,000

  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;
   13,669,098 and 12,782,791
   shares issued and outstanding                  14,000            14,000
  Additional paid-in capital                  26,728,000        26,629,000
  Accumulated other comprehensive
   income                                        386,000           334,000
  Retained earnings                            8,263,000         5,981,000
                                              35,391,000        32,958,000
  Less: cost of 249,184 and 210,902
   shares of common stock in treasury         (1,971,000)       (1,686,000)
  Less:  Unearned compensation                (3,028,000)       (3,356,000)
  Total stockholders' equity                  30,392,000        27,916,000

   EQUITY                                    $40,226,000       $36,677,000

                       MEDIFAST, INC. AND SUBSIDIARIES

                           Three Months Ended          Six Months Ended
                                 June 30,                  June 30,
                            2007         2006         2007         2006
                                      (Restated)                (Restated)

  Revenue                $22,041,000  $19,954,000  $42,130,000  $39,137,000
  Cost of sales            5,363,000    4,853,000   10,421,000    9,631,000
  Gross Profit            16,678,000   15,101,000   31,709,000   29,506,000

  Selling, general, and
   administration         15,233,000   12,751,000   28,350,000   24,196,000

  Income from operations   1,445,000    2,350,000    3,359,000    5,310,000

  Other income/(expense)
       Interest expense     (102,000)     (92,000)    (197,000)    (181,000)
       Interest income        39,000       56,000       72,000       89,000
       Other expense          37,000       18,000       88,000      161,000
                             (26,000)     (18,000)     (37,000)      69,000

  Net income before
   provision for income
   taxes                   1,419,000    2,332,000    3,322,000    5,379,000
  Provision for income
   tax (expense)            (510,000)    (884,000)  (1,040,000)  (1,921,000)

  Net income                 909,000    1,448,000    2,282,000    3,458,000

  Basic earnings per
   share                       $0.07        $0.11        $0.18        $0.27
  Diluted earnings per
   share                       $0.07        $0.11        $0.17        $0.25

  Weighted average
   shares outstanding -
       Basic              12,933,559   12,618,379   12,917,400   12,603,903
       Diluted            13,699,721   13,615,708   13,683,562   13,601,232

First Call Analyst:
FCMN Contact:

SOURCE: Medifast, Inc.

CONTACT: Brad Porterfield of Medifast, Inc., +1-410-504-8166,