Medifast Diversified Business Model Drives Strong Revenue and Earnings Growth for the Third Quart... (n which we operate due to increasedtarge...)

Medifast Diversified Business Model Drives Strong Revenue and Earnings Growth for the Third Quarter of 2008

Date:11/6/2008

n which we operate due to increased targeted advertising spend. At the end of the quarter, we had twenty operational Medifast Weight Control Centers versus ten at the end of the third quarter of 2007 with our first franchise center opening in the Baltimore market in the past few weeks."

"During the quarter," Mr. McDevitt concluded, "Medifast Direct Response experienced a 15% decrease in revenues on a planned 15% reduction in advertising dollars spent. We continue to adjust to the purchasing trends of the consumer to allocate our ad spend in areas where we believe we can achieve the greatest return on our investment."

"As we have commented, we believe that the strategic business decision to provide our customers the clinically proven Medifast weight loss program through our four unique support channels is creating the flexibility in our business to increase sales and capture market share in this difficult economic environment."

Gross margins increased to a record 76.1% from 74.7% for the third quarter of 2008 compared with a year ago. The gross margins improved due to efficiencies gained from new machinery purchases, changes in shipping rules, and a price increase during the month of July.

The Company's balance sheet remains strong with stockholders' equity of $37 million and working capital of $12.1 million as of September 30, 2008. The current ratio was 2.5 to 1.

2008 Full-Year Guidance

Management expects to be able to meet or exceed previously issued guidance for revenue growth for full-year 2008 in the range of 8-10%; and diluted earnings per share growth in the range of 30-35% for the year ended December 31, 2008.

Third Quarter 2008 Conference Call

The Company will hold a conference call and web cast to discuss the results on Thursday, November 6, at 11:00 a.m. ET. Interested parties can access the call by dialing (866) 524-3160 or (412) 317-6760 or can listen via a live Internet web cast, which can be foun
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