UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-Q




x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
quarterly period ended March 31, 2009




OR




 ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
transition period from 
to




Commission
file number 0-23016




MEDIFAST,
INC.


(Exact
name of registrant as specified in its charter)




Delaware
              
              13-3714405(State
      or other jurisdiction
                of
      organization)
              
              (I.R.S.
      employer
                Identification
      no.)





11445
Cronhill Drive


Owings
Mills, MD 21117


Telephone
Number (410) 581-8042




Indicate
by checkmark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.




Yes  x   No   ̈




Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
one):




Large
accelerated filer   ̈          Accelerated
filer  x            Non-accelerated
filer   ̈




Indicate
by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act).




Yes   ̈    No  x




Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.





Class
                
                Outstanding at May 8,2009Common
      stock, $.001 par value per share
                
                14,689,960
      shares





Index




Item
      I - Financial Information:Condensed
      Consolidated Financial Statements (unaudited)Condensed
      Consolidated Balance Sheets –March
      31, 2009 and December 31, 2008
                      3Condensed
      Consolidated Statements of Income –Three
      Months Ended March 31, 2009 and 2008
                      4Condensed
      Consolidated Statements of Cash Flows –Three
      Months Ended March 31, 2009 and 2008
                      5Notes
      to Condensed Consolidated Financial Statements
                      6Management
      Discussion and Analysis of Financial ConditionAnd
      Results of Operations
                      12Item
      IIExhibits
                      17EX
      31.1EX
      31.2EX
      32.1


2


MEDIFAST,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)





March 31, 2009
                                                    
                                                    
                                                    December 31, 2008ASSETSCurrent
      assets:Cash
      and cash equivalents
                                                    
                                                    $
                                                    6,297,000
                                                    
                                                    
                                                    $
                                                    1,841,000Accounts
      receivable-net of allowance for doubtful accounts of
    $100,000
                                                    
                                                    
                                                    574,000
                                                    
                                                    
                                                    
                                                    448,000Inventory
                                                    
                                                    
                                                    12,363,000
                                                    
                                                    
                                                    
                                                    13,856,000Investment
      securities
                                                    
                                                    
                                                    1,129,000
                                                    
                                                    
                                                    
                                                    1,099,000Deferred
      compensation
                                                    
                                                    
                                                    451,000
                                                    
                                                    
                                                    
                                                    531,000Prepaid
      expenses and other current assets
                                                    
                                                    
                                                    1,925,000
                                                    
                                                    
                                                    
                                                    2,034,000Prepaid
      income tax
                                                    
                                                    
                                                    1,091,000
                                                    
                                                    
                                                    
                                                    1,131,000Note
      receivable - current
                                                    
                                                    
                                                    180,000
                                                    
                                                    
                                                    
                                                    180,000Deferred
      tax asset
                                                    
                                                    
                                                    100,000
                                                    
                                                    
                                                    
                                                    100,000Total
      Current Assets
                                                    
                                                    
                                                    24,110,000
                                                    
                                                    
                                                    
                                                    21,220,000Property,
      plant and equipment - net
                                                    
                                                    
                                                    21,626,000
                                                    
                                                    
                                                    
                                                    21,709,000Trademarks
      and intangibles - net
                                                    
                                                    
                                                    5,122,000
                                                    
                                                    
                                                    
                                                    5,547,000Deferred
      tax asset, net of current portion
                                                    
                                                    
                                                    1,241,000
                                                    
                                                    
                                                    
                                                    1,131,000Note
      receivable, net of current portion
                                                    
                                                    
                                                    1,046,000
                                                    
                                                    
                                                    
                                                    1,080,000Other
      assets
                                                    
                                                    
                                                    352,000
                                                    
                                                    
                                                    
                                                    350,000TOTAL
      ASSETS
                                                    
                                                    $
                                                    53,497,000
                                                    
                                                    
                                                    $
                                                    51,037,000LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilitiesAccounts
      payable and accrued expenses
                                                    
                                                    $
                                                    4,832,000
                                                    
                                                    
                                                    $
                                                    5,130,000Line
      of credit
                                                    
                                                    
                                                    3,179,000
                                                    
                                                    
                                                    
                                                    3,164,000Current
      maturities of long-term debt
                                                    
                                                    
                                                    257,000
                                                    
                                                    
                                                    
                                                    257,000Total
      Current liabilities
                                                    
                                                    
                                                    8,268,000
                                                    
                                                    
                                                    
                                                    8,551,000Long-term
      debt, net of current liabilities
                                                    
                                                    
                                                    4,249,000
                                                    
                                                    
                                                    
                                                    4,313,000Total
      liabilities
                                                    
                                                    
                                                    12,517,000
                                                    
                                                    
                                                    
                                                    12,864,000Stockholders'
      equity:Common
      stock; par value $.001 per share; 20,000,000 authorized;14,689,960
      and 14,585,960 shares issued and outstanding, respectively
                                                    
                                                    
                                                    15,000
                                                    
                                                    
                                                    
                                                    15,000Additional
      paid-in capital
                                                    
                                                    
                                                    31,227,000
                                                    
                                                    
                                                    
                                                    30,787,000Accumulated
      other comprehensive (loss)
                                                    
                                                    
                                                    (447,000
                                                    )
                                                    
                                                    
                                                    (389,000
                                                    )Retained
      earnings
                                                    
                                                    
                                                    17,738,000
                                                    
                                                    
                                                    
                                                    15,253,00048,533,000
                                                    
                                                    
                                                    
                                                    45,666,000Less:  cost
      of 301,092 and 272,192 shares of common stockin
      treasury, respectively
                                                    
                                                    
                                                    (2,058,000
                                                    )
                                                    
                                                    
                                                    (1,956,000
                                                    )Less:
      unearned compensation
                                                    
                                                    
                                                    (5,495,000
                                                    )
                                                    
                                                    
                                                    (5,537,000
                                                    )Total
      Stockholders' Equity
                                                    
                                                    
                                                    40,980,000
                                                    
                                                    
                                                    
                                                    38,173,000TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                                                    
                                                    $
                                                    53,497,000
                                                    
                                                    
                                                    $
                                                    51,037,000





See
accompanying notes to condensed consolidated financial
statements.


3


MEDIFAST,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)





Three
      Months Ended March 31,2009
                
                
                2008Revenue
                
                $
                33,680,000
                
                
                $
                25,169,000Cost
      of sales
                
                
                8,054,000
                
                
                
                6,100,000Gross
      Profit
                
                
                25,626,000
                
                
                
                19,069,000Selling,
      general, and administration
                
                
                21,610,000
                
                
                
                17,007,000Income
      from operations
                
                
                4,016,000
                
                
                
                2,062,000Other
      income/(expense)Interest
      expense, net
                
                
                (5,000
                )
                
                
                (65,000
                )Other
      income/(expense)
                
                
                (35,000
                )
                
                
                36,000(40,000
                )
                
                
                (29,000
                )Income
      before provision for income taxes
                
                
                3,976,000
                
                
                
                2,033,000Provision
      for income tax (expense)
                
                
                (1,491,000
                )
                
                
                (668,000
                )Net
      income
                
                $
                2,485,000
                
                
                $
                1,365,000Basic
      earnings per share
                
                $
                0.19
                
                
                $
                0.10Diluted
      earnings per share
                
                $
                0.17
                
                
                $
                0.10Weighted
      average shares outstanding -Basic
                
                
                13,284,431
                
                
                
                13,101,157Diluted
                
                
                14,494,898
                
                
                
                13,799,293





See
accompanying notes to condensed consolidated financial
statements.


4


MEDIFAST,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)





Three
      Months Ended March 31,2009
                      
                      
                      2008Cash flows from operating
      activities:Net income
                      
                      $
                      2,485,000
                      
                      
                      $
                      1,365,000Adjustments to reconcile net
      income to net cashprovided by operating activities
      fromcontinuing
      operations:Depreciation and
      amortization
                      
                      
                      1,229,000
                      
                      
                      
                      1,079,000Realized (gain) loss on investment
      securities
                      
                      
                      (21,000
                      )
                      
                      
                      36,000Common stock issued for
      services
                      
                      
                      52,000
                      
                      
                      
                      35,000Stock options cancelled during
      period
                      
                      
                      -
                      
                      
                      
                      (77,000
                      )Vesting of unearned
      compensation
                      
                      
                      429,000
                      
                      
                      
                      148,000Net change in other comprehensive
      (loss)
                      
                      
                      (58,000
                      )
                      
                      
                      (167,000
                      )Deferred income
      taxes
                      
                      
                      (110,000
                      )
                      
                      
                      18,000Changes in assets and
      liabilities:Decrease (Increase) in accounts
      receivable
                      
                      
                      (126,000
                      )
                      
                      
                      18,000Decrease (Increase) in
      inventory
                      
                      
                      1,493,000
                      
                      
                      
                      (792,000
                      )Decrease (Increase) in prepaid
      expenses & other current assets
                      
                      
                      110,000
                      
                      
                      
                      (518,000
                      )Decrease in deferred
      compensation
                      
                      
                      80,000
                      
                      
                      
                      91,000Decrease (Increase) in prepaid
      taxes
                      
                      
                      40,000
                      
                      
                      
                      (143,000
                      )(Increase)  in other
      assets
                      
                      
                      (2,000
                      )
                      
                      
                      (202,000
                      )(Decrease) Increase in accounts
      payable and accrued expenses
                      
                      
                      (297,000
                      )
                      
                      
                      1,103,000(Decrease) in income taxes
      payable
                      
                      
                      -
                      
                      
                      
                      (592,000
                      )Net cash provided by operating
      activities
                      
                      
                      5,304,000
                      
                      
                      
                      1,402,000Cash Flow from Investing
      Activities:(Purchase) of investment
      securities, net
                      
                      
                      (9,000
                      )
                      
                      
                      (4,000
                      )(Purchase) of property and
      equipment
                      
                      
                      (722,000
                      )
                      
                      
                      (2,735,000
                      )(Purchase) of intangible
      assets
                      
                      
                      -
                      
                      
                      
                      (2,000
                      )Net cash (used in) investing
      activities
                      
                      
                      (731,000
                      )
                      
                      
                      (2,741,000
                      )Cash Flow from Financing
      Activities:Issuance of common stock, options
      and warrants
                      
                      
                      -
                      
                      
                      
                      12,000(Repayment) of long-term debt,
      net
                      
                      
                      (64,000
                      )
                      
                      
                      (71,000
                      )Increase in line of
      credit
                      
                      
                      15,000
                      
                      
                      
                      577,000Decrease in note
      receivable
                      
                      
                      34,000
                      
                      
                      
                      33,000(Purchase) of treasury
      stock
                      
                      
                      (102,000
                      )
                      
                      
                      -Net cash provided by (used in)
      financing activities
                      
                      
                      (117,000
                      )
                      
                      
                      551,000NET INCREASE (DECREASE) IN CASH
      ANDCASH
      EQUIVALENTS
                      
                      
                      4,456,000
                      
                      
                      
                      (788,000
                      )Cash and cash equivalents -
      beginning of the period
                      
                      
                      1,841,000
                      
                      
                      
                      2,195,000Cash and cash equivalents - end of
      period
                      
                      $
                      6,297,000
                      
                      
                      $
                      1,407,000Supplemental disclosure of cash
      flow information:Interest
    paid
                      
                      $
                      37,000
                      
                      
                      $
                      103,000Income
taxes
                      
                      $
                      985,000
                      
                      
                      $
                      1,489,000Supplemental disclosure of non
      cash activity:Common stock issued to
      Executives  and Directors over 2-6 year vesting
      periods
                      
                      $
                      429,000
                      
                      
                      $
                      195,000Options
      cancelled during period
                      
                      $
                      -
                      
                      
                      $
                      (77,000
                      )Common
      stock issued for services
                      
                      $
                      52,000
                      
                      
                      $
                      35,000





See
accompanying notes to condensed consolidated financial
statements.


5


Notes
to Condensed Consolidated Financial Statements




General





1.
            Basis
      of Presentation





The
condensed unaudited interim consolidated financial statements included herein
have been prepared, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. The condensed consolidated financial
statements and notes are presented as permitted on Form 10-Q and do not
contain information included in the Company’s annual statements and notes.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted pursuant to such
rules and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. It is suggested that
these condensed consolidated financial statements be read in conjunction with
the December 31, 2008 audited consolidated financial statements and the
accompanying notes thereto. While management believes the procedures followed in
preparing these condensed consolidated financial statements are reasonable, the
accuracy of the amounts are in some respects dependent upon the facts that will
exist, and procedures that will be accomplished by the Company later in the
year.





These
condensed unaudited consolidated financial statements reflect all adjustments,
including normal recurring adjustments, which, in the opinion of management, are
necessary to present fairly the operations and cash flows for the period
presented.





2.
            Presentation
      of Financial Statements





The Company’s condensed consolidated
financial statements include the accounts of Medifast, Inc. and its wholly-owned
subsidiaries.  All significant intercompany accounts and transactions
have been eliminated.





3.            
Recent Accounting Pronouncements




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business
Combinations" ("SFAS No. 141(R)"). SFAS No. 141(R) changes how an
entity accounts for the acquisition of a business. While it retains the
requirement to account for all business combinations using the acquisition
method, the new rule will apply to a wider range of transactions or events and
requires, in general, acquisition-date fair value measurement of identifiable
assets acquired, liabilities assumed and non-controlling ownership interests
held in the acquire, among other items. The Company is beginning to review the
provisions of SFAS No. 141(R), which applies prospectively to business
combinations with an acquisition date on or after the beginning of its 2009
fiscal year.  The adoption of this standard did not have any material
impact on condensed consolidated financial statements.




In
December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in
Consolidated Financial Statements: an amendment of ARB No. 51" ("SFAS
No. 160"). SFAS No. 160 replaces the term minority interests with the
newly-defined term of non-controlling interests and establishes this line item
as an element of stockholders' equity, separate from the parent's equity. SFAS
No. 160 also includes expanded disclosure requirements regarding the
interests of the parent and its non-controlling interest.  The
adoption of this standard did not have any material impact on condensed
consolidated financial statements.




In
June 2008, the FASB issued FASB Staff Position (“FSP”) Emerging Issues
Task Force (“EITF”) No. 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities.” Under
the FSP, unvested share-based payment awards that contain rights to receive non
forfeitable dividends (whether paid or unpaid) are participating securities, and
should be included in the two-class method of computing EPS. The FSP is
effective for fiscal years beginning after December 15, 2008 and for
interim periods within those years.  The adoption of this standard did
not have any material impact on condensed consolidated financial
statements.




In
November 2008, the FASB ratified EITF No. 08-6 “Equity Method Investment
Accounting Considerations” which clarifies how to account for certain
transactions involving equity method investments. The initial measurement,
decreases in value and changes in the level of ownership of the equity method
investment are addressed. EITF No. 08-6 is effective for the Company
beginning on January 1, 2009, consistent with the effective dates of
Statement 141R and Statement 160. EITF No. 08-6 will be applied
prospectively. The adoption of EITF No. 08-6 did not have a material impact
on the Company’s condensed consolidated financial position and results of
operations.


6




4.           Revenue
Recognition




Revenue
is recognized net of discounts, rebates, promotional adjustments, price
adjustments, returns and other potential adjustments upon shipment and passing
of risk to the customer and when estimates of are reasonably determinable,
collection is reasonably assured and the Company has no further performance
obligations.





5.
            Inventories





Inventories consist principally of
finished packaged foods, packaging and raw materials held in either the
Company’s manufacturing facility or distribution
warehouse.  Inventories are valued at cost determined using the
first-in, first-out (FIFO) method.





6.           Goodwill
and Other Intangible Assets





In June
2001, the Financial Accounting Standards Board (“FASB”) issued Statement No. 142
“Goodwill and Other Intangible Assets”. This statement addresses financial
accounting and reporting for acquired goodwill and other intangible assets and
supersedes APB Opinion No. 17, “Intangible Assets”. It addresses how intangible
assets that are acquired individually or with a group of other assets (but not
those acquired in a business combination) should be accounted for in financial
statements upon their acquisition. This Statement also addresses how goodwill
and other intangible assets should be accounted for after they have been
initially recognized in the financial statements.





In
addition, the Company has acquired other intangible assets, which include:
customer lists, trademarks, patents, and copyrights.  The customer
lists are being amortized over a period ranging between 5 and 7 years based on
management’s best estimate of the expected benefits to be consumed or otherwise
used up.  The costs of patents and copyrights are amortized over 5 and
7 years based on their estimated useful life, while trademarks representing
brands with an infinite life, and are carried at cost and tested annually for
impairment as outlined below.  Goodwill and other intangible assets
are tested annually for impairment in the fourth quarter, and are tested for
impairment more frequently if events and circumstances indicate that the asset
might be impaired. An impairment loss is recognized to the extent that the
carrying amount exceeds the asset’s fair value.  The Company assesses
the recoverability of its goodwill and other intangible assets by comparing the
projected undiscounted net cash flows associated with the related asset, over
their remaining lives, in comparison to their respective carrying
amounts.  Impairment, if any, is based on the excess of the carrying
amount over the fair value of those assets.


7





As
      of March 31, 2009
                  
                  
                  As
      of December 31, 2008Gross
      Carrying
                  
                  
                  Accumulated
                  
                  
                  Gross
      Carrying
                  
                  
                  AccumulatedAmount
                  
                  
                  Amortization
                  
                  
                  Amount
                  
                  
                  AmortizationCustomer
      lists
                  
                  $
                  8,332,000
                  
                  
                  $
                  5,014,000
                  
                  
                  $
                  8,332,000
                  
                  
                  $
                  4,649,000Trademarks,
      patents, and copyrightsfinite
      life
                  
                  
                  1,640,000
                  
                  
                  
                  745,000
                  
                  
                  
                  1,640,000
                  
                  
                  
                  685,000infinite
      life
                  
                  
                  909,000
                  
                  
                  
                  -
                  
                  
                  
                  909,000
                  
                  
                  
                  -Total
                  
                  $
                  10,881,000
                  
                  
                  $
                  5,759,000
                  
                  
                  $
                  10,881,000
                  
                  
                  $
                  5,334,000





Amortization
expense for the three months ended March 31, 2009 and 2008 was as
follows:





2009
                
                
                2008Customer
      lists
                
                $
                365,000
                
                
                $
                402,000Trademarks
      and patents
                
                
                60,000
                
                
                
                59,000Total
      Trademarks and Intangibles
                
                $
                425,000
                
                
                $
                461,000





Amortization
expense is included in selling, general and administrative
expenses.





7.             Fixed
Assets





Fixed
assets are stated at cost.  Depreciation is provided using the
straight-line method over the estimated useful lives of the related assets,
which are generally three to seven years.  Leasehold improvements and
equipment under capital leases are amortized on a straight-line basis over the
lesser of the estimated useful life of the asset or the related lease
terms.  Expenditures for repairs and maintenance are charged to
expense as incurred, while major renewals and improvements are
capitalized.





8.
            Note Receivable





Medifast
realized a $1,503,000 note receivable as a result of the sale of Consumer Choice
Systems on January 17, 2006 to a former board member.  The note has a
10-year term with imputed interest of 4% collateralized by 50,000 shares of
Medifast stock and all the assets of Consumer Choice Systems.  The
amount of principal to be collected over each of the next 5 years is $183,000
per year with the remaining amount collectible thereafter of
$495,000.





9.
            Income Per Common
Share





Basic
income per share is calculated by dividing net income by the weighted average
number of outstanding common shares during the year.  Basic income per
share excludes any dilutive effects of options, warrants and other stock-based
compensation.





10. Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods.  Actual results could differ from those
estimates.


8


11. Deferred Compensation Plans





We maintain a non-qualified deferred
compensation planfor Senior Executive
management.  Currently, Bradley MacDonald is the only participant in
the plan.  Under the deferred compensation plan that became effective
in 2003, executive officers
of the Company may defer a portion of their salary and bonus(performance-based compensation)
annually. A participant may elect to receive distributions of the accrued
deferred compensation in a lump sum or in installments upon
retirement





Each participating officer may request
that the deferred amounts be allocated among several available investment
options established and
offered by the Company.
These investment options provide market rates of return and are not subsidized
by the Company. The benefit payable under the plan at any time to a participant
following termination of employment is equal to the applicable deferred amounts,
plus or minus any earnings or losses attributable to the investment of such
deferred amounts. The Company has established a trust for the benefit of
participants in the deferred compensation plan. Pursuant to the terms of the
trust, as soon as possible after any deferred amounts have been withheld from a
plan participant, the Company will contribute such deferred amounts to the trust
to be held for the benefit of the participant in accordance with the terms of
the plan and the trust.





Retirement payouts under the plan upon
an executive officer’s retirement from the Company are payable either in a
lump-sum payment or in annual installments over a period of up to ten years.
Upon death, disability or termination of employment, all amounts shall be paid
in a lump-sum payment as soon as administratively feasible.





12. Fair Value Measurements




On January 1, 2008, the Company
adopted SFAS No. 157 “Fair Value Measurements” (“SFAS 157”). SFAS 157
defines fair value, provides a consistent framework for measuring fair value
under Generally Accepted Accounting Principles and expands fair value financial
statement disclosure requirements. SFAS 157’s valuation techniques are based on
observable and unobservable inputs. Observable inputs reflect readily obtainable
data from independent sources, while unobservable inputs reflect our market
assumptions. SFAS 157 classifies these inputs into the following
hierarchy:




Level 1 Inputs– Quoted prices for
identical instruments in active markets.




Level 2 Inputs– Quoted prices for
similar instruments in active markets; quoted prices for identical or similar
instrumentsin markets that are not active; and
model-derived valuations whose inputs are observable or whose significant value
drivers are observable.




Level 3 Inputs– Instruments with
primarily unobservable value drivers.




The following table represents the fair
value hierarchy for those financial assets and liabilities measured at fair
value ona recurring basis
as of March 31, 2009.




Fair Value Measurements on a Recurring
Basis as ofMarch 31,
2009




Assets
            
            Level
      I
            
            
            Level II
            
            
            Level III
            
            
            TotalInvestment
      securities
            
            $
            1,129,000
            
            
            
            -
            
            
            
            -
            
            
            $
            1,129,000Cash
      equivalents
            
            
            6,300,000
            
            
            
            -
            
            
            
            -
            
            
            
            6,300,000Total
      Assets
            
            $
            7,429,000
            
            
            $
            -
            
            
            $
            -
            
            
            $
            7,429,000Liabilities
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Total
      Liabilities
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -




Effective
this quarter, we implemented Statement of Financial Accounting Standards No.
157, Fair Value Measurements, or SFAS 157, for our nonfinancial assets and
liabilities that are remeasured at fair value on a non-recurring basis. The
adoption of SFAS 157 for our nonfinancial assets and liabilities that are
remeasured at fair value on a non-recurring basis did not impact our financial
position or results of operations; however, could have an impact in future
periods. In addition, we may have additional disclosure requirements in the
event we complete an acquisition or incur impairment of our assets in future
periods.


9


13. Share
Based Payments





Stock-Based Compensation





Effective
December 31, 2005, the Company adopted the provisions of Financial Accounting
Standards Board Statement of Financial Accounting Standard (“SFAS”) No. 123(R),
“Share-Based Payments,” which establishes the accounting for employee
stock-based awards. Under the provisions of SFAS No.123(R), stock-based
compensation is measured at the grant date, based on the calculated fair value
of the award, and is recognized as an expense over the requisite employee
service period (generally the vesting period of the grant). The Company adopted
SFAS No. 123(R) using the modified prospective method and, as a result, periods
prior to December 31, 2005 have not been restated. The Company recognized
stock-based compensation for awards issued under the Company’s stock option
plans in other income/expenses included in the Condensed Consolidated Statement
of Operations. Additionally, no modifications were made to outstanding stock
options prior to the adoption of SFAS No. 123(R), and no cumulative adjustments
were recorded in the Company’s financial statements.





Unearned
compensation represents shares issued to executives and Board members that will
be vested over a 2-6 year period.  These shares will be amortized over
the vesting period in accordance with FASB 123(R).  The expense
related to the vesting of unearned compensation was $429,000 and $148,000 at
March 31, 2009 and March 31, 2008, respectively.   There was no
expense related to vesting of options under FASB 123R at March 31, 2009 and
2008.





The
following summarizes the stock option activity for the Three Months ended March
31, 2009:




Shares
                    
                    
                    Weighted
                      Average
                      ExercisePrice
                    
                    
                    Weighted
                      Average
                      Contractual
                      Term(Years)Outstanding,
      December 31, 2008
                    
                    
                    143,334
                    
                    
                    
                    3.00Options
      grantedOptions
      reinstatedOptions
      exercisedOptions
      forfeited or expiredOutstanding
      March 31, 2009
                    
                    
                    143,334
                    
                    
                    
                    3.00
                    
                    
                    
                    1.08Options
      exercisable, March 31, 2009
                    
                    
                    143,334
                    
                    
                    
                    3.00
                    
                    
                    
                    1.08Options
      available for grant at March 31, 2009
                    
                    
                    1,079,166


14.         
 Reclassifications





Certain
amounts for the quarter ended March 31, 2008 have been reclassified to conform
to the presentation of the March 31, 2009 amounts.  The
reclassifications have no effect on net income for the quarters ended March 31,
2009 and 2008.





15.         
 Business Segments





Operating
segments are components of an enterprise about which separate financial
information is available that is regularly reviewed by the chief operating
decision maker about how to allocate resources and in assessing
performance.  The Company has two reportable operating
segments:  Medifast and All Other.  The Medifast reporting
segment consists of the following distribution
channels:   Medifast Direct, Take Shape for Life, and
Doctors.  The All Other reporting segments consist of
Hi-Energy,  Medifast Weight Control Centers Corporate and Franchise,
and the Company’s parent company operations.




The accounting policies of the segments
are the same as those of the Company.  The presentation and allocation
of assets, liabilities and results of operations may not reflect the actual
economic costs of the segments as stand-alone businesses. If a different basis
of allocation were utilized, the relative contributions of the segments might
differ, but management believes that the relative trends in segments would
likely not be impacted.


10




The
following tables present segment information for the three months ended March
31, 2009 and 2008:





Three
      Months Ended March 31, 2009Medifast
                
                
                All
      Other
                
                
                Eliminations
                
                
                ConsolidatedRevenues,
      net
                
                $
                30,734,000
                
                
                $
                2,946,000
                
                
                
                
                
                
                $
                33,680,000Cost
      of Sales
                
                
                7,369,000
                
                
                
                685,000
                
                
                
                
                
                
                
                8,054,000Other
      Selling, General and Adminstrative Expenses
                
                
                17,745,000
                
                
                
                2,671,000
                
                
                
                
                
                
                
                20,416,000Depreciation
      and Amortization
                
                
                990,000
                
                
                
                239,000
                
                
                
                
                
                
                
                1,229,000Interest
      (net)
                
                
                -
                
                
                
                5,000
                
                
                
                
                
                
                
                5,000Provision
      for income taxes
                
                
                1,491,000
                
                
                
                -
                
                
                
                
                
                
                
                1,491,000Net
      income (loss)
                
                $
                3,139,000
                
                
                $
                (654,000
                )
                
                
                
                
                
                $
                2,485,000Segment
      Assets
                
                $
                35,575,000
                
                
                $
                17,922,000
                
                
                
                
                
                
                $
                53,497,000





Three
      Months Ended March 31, 2008Medifast
                
                
                All
      Other
                
                
                Eliminations
                
                
                ConsolidatedRevenues,
      net
                
                $
                23,480,000
                
                
                $
                1,689,000
                
                
                
                
                
                
                $
                25,169,000Cost
      of Sales
                
                
                5,727,000
                
                
                
                373,000
                
                
                
                
                
                
                
                6,100,000Other
      Selling, General and Adminstrative Expenses
                
                
                14,246,000
                
                
                
                1,646,000
                
                
                
                
                
                
                
                15,892,000Depreciation
      and Amortization
                
                
                842,000
                
                
                
                237,000
                
                
                
                
                
                
                
                1,079,000Interest
      (net)
                
                
                10,000
                
                
                
                55,000
                
                
                
                
                
                
                
                65,000Provision
      for income taxes
                
                
                668,000
                
                
                
                -
                
                
                
                
                
                
                
                668,000Net
      income (loss)
                
                $
                1,987,000
                
                
                $
                (622,000
                )
                
                
                
                
                
                $
                1,365,000Segment
      Assets
                
                $
                27,083,000
                
                
                $
                18,973,000
                
                
                
                
                
                
                $
                46,056,000


11


Management
Discussion and Analysis of


Financial
Condition and Results of Operations





Except
for the historical information contained herein, this Report on Form 10-Q
contains certain forward-looking statements that involve substantial risks and
uncertainties. When used in this Report, the words “anticipate,” “believe,”
“estimate,” “expect” and similar expressions, as they relate to Medifast, Inc.
or its management, are intended to identify such forward-looking statements. The
Company’s actual results, performance or achievements could differ materially
from the results expressed in, or implied by, these forward-looking statements.
Accordingly, there is no assurance that the results in the forward-looking
statements will be achieved.





Critical Accounting Policies and
Estimates





Our
consolidated financial statements are prepared in accordance with U.S. generally
accepted accounting principles. Our significant accounting policies are
described in Note 2 of the consolidated audited financial statements of our
annual 10-K as of December 31, 2008.





The
preparation of these financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenue and expenses during the
reporting period. Management develops, and changes periodically, these estimates
and assumptions based on historical experience and on various other factors that
are believed to be reasonable under the circumstances. Actual results may differ
from these estimates under different assumptions or conditions. Management
considers the following accounting estimates to be the most critical in
preparing our consolidated financial statements. These critical accounting
estimates have been discussed with our audit committee.





Revenue
Recognition.  Revenue is recognized net of discounts, rebates,
promotional adjustments, price adjustments, returns and other potential
adjustments upon shipment and passing of risk to the customer and when estimates
of are reasonably determinable, collection is reasonably assured and the Company
has no further performance obligations.





Impairment of Fixed Assets and
Intangible Assets.    We continually assess the
impairment of long-lived assets whenever events or changes in circumstances
indicate that the carrying value of the assets may not be recoverable. Judgments
regarding the existence of impairment indicators are based on legal factors,
market conditions and our operating performance. Future events could cause us to
conclude that impairment indicators exist and the carrying values of fixed and
intangible assets may be impaired. Any resulting impairment loss would be
limited to the value of net fixed and intangible assets.




Income Taxes.
In the preparation of consolidated financial statements, the Company estimates
income taxes based on diverse legislative and regulatory structures that exist
in jurisdictions where the company conducts business. Deferred income tax assets
and liabilities represent tax benefits or obligations that arise from temporary
differences due to differing treatment of certain items for accounting and
income tax purposes. The Company evaluates deferred tax assets each period to
ensure that estimated future taxable income will be sufficient in character
amount and timing to result in their recovery. A valuation allowance is
established when management determines that it is more likely than not that a
deferred tax asset will not be realized to reduce the assets to their realizable
value. Considerable judgments are required in establishing deferred tax
valuation allowances and in assessing probable exposures related to tax matters.
The Company’s tax returns are subject to audit and local taxing authorities that
could challenge the company’s tax positions. The Company believes it records
and/or discloses such potential tax liabilities as appropriate and has
reasonably estimated its income tax liabilities and recoverable tax
assets.




Allowance for doubtful
accounts.  In determining the adequacy of the allowance for
doubtful accounts, we consider a number of factors including the aging of the
receivable portfolio, customer payment trends, and financial condition of the
customer, industry conditions and overall credibility of the
customer.  Actual amounts could differ significantly from our
estimates.


12


General





Three
Months Ended March 31, 2009 and March 31, 2008





Revenue:  Revenue
increased to $33.7 million in the first quarter of 2009 compared to $25.2
million in the first quarter of 2008, an increase of $8.5 million or 34%. The
Take Shape for Life sales channel accounted for 56% of total revenue, direct
marketing channel accounted for 33%, brick and mortar clinics 9%, and doctors
2%.  Take Shape for Life sales, which are fueled byincreased customer product
sales as a result of an increase in active health coaches increased by 92%
compared to the first quarter of 2008. As compared to the first quarter of 2008,
the direct marketing sales channel, which is fueled primarily by consumer
advertising, decreased revenues by approximately 13% year-over year, however,
the advertising dollars spent were 17% less than the first quarter of 2008 as
the Company continues to focus on more effective advertising
spend.  The Medifast Weight Control Centers increased sales by 72% due
to the opening of new corporate and franchise locations.





Take
Shape for Life revenue increased 92% to $18.9 million compared with $9.8 million
in the comparable quarter of 2008.   Growth in revenues for the
segment were driven by increased customer product sales as a result of an
increase in active health coaches.   The number of active health
coaches during the first quarter increased to approximately 4,000 compared with
2,200 during the period a year ago, an increase of 82% and up from 3,400 at the
close of 2008.  We continue to see the benefits of a physician-lead
network of coaches that are able to support their clients in their weight-loss
efforts.   In today’s environment where trust and personal
recommendations are becoming a more important component in consumer purchasing
decisions, the Take Shape for Life model of one-on-one communication continues
to excel. Take Shape for Life customers who have utilized the Medifast products
and programs and successfully have addressed their body weight and health issues
are increasingly choosing to become active health
coaches.   Becoming a health coach is a business opportunity that
has a low cost of start-up and requires no holding of inventory as all orders
are shipped to the end consumer.  In the current economic environment,
many people are looking for supplemental income to assist in paying the car
payment or mortgage, and becoming a health coach allows for supplemental income
in the form of a commission compensation on product sales and supporting the
customer needs by providing education on the program and support to customers
ordering through Take Shape for Life, and more importantly the ability to help
others regain their health through the use of clinically proven Medifast
products.





The
Medifast Weight Control Centers, which represent approximately 9% of the
Company’s overall revenues, are currently operating in twenty one locations in
Dallas, Houston, and Orlando.  In the first quarter of 2009, the
Company experienced revenue growth of 72% versus the same time period last
year.  The average monthly sales per clinic increased to $40,000 in
the first quarter of 2009 compared to $39,000 a year ago.  In the
expanding Dallas, TX market, the average monthly revenue per clinic is
approximately $50,000.  In the second and third quarter of 2009, the
Company plans on opening four to five additional corporately owned clinics in
the Austin, TX market.  The Company’s Medifast Weight Control Center
Franchise model has been expanding and now has ten centers in
operation.





Overall,
selling, general and administrative expenses increased by $4.6 million as
compared to the first quarter of 2008.  As a percentage of sales,
selling, general and administrative expenses decreased to 64.2% versus 67.6% in
the first quarter of 2008, which lead to a 70% increase in diluted earnings per
share in the first quarter of 2009 versus prior year.   Take
Shape for Life commission expense, which is completely variable based upon
revenue, increased by approximately $3,800,000 as the Company showed sales
growth of 92% as compared to the first quarter of 2008.  Salaries and
benefits increased by approximately $700,000 in the first quarter of 2009 as
compared to last year.  The increase includes the hiring of additional
expertise in critical areas such as Take Shape for Life and the Medifast Weight
Control Centers in the second half of 2008 which have greatly impacted revenue
growth in 2009.   In addition, the opening of eight new
corporately owned clinics in the Houston, TX market and two in the Dallas, TX
market also required the hiring of additional center managers and support
staff.  Advertising expense for the first quarter of 2009 was
approximately $4.3 million compared to approximately $5.2 million for the same
period last year, a decrease of $900,000 or 17%.  Communication
expense, decreased by $100,000 as the outsourced Take Shape for Life call center
was brought in-house early in the second quarter of 2008.   Other
expenses increased by $500,000 which included items such as depreciation,
amortization, credit card processing fees, charitable contributions, and
property taxes.  Operating expenses increased by $250,000 which
primarily resulted from additional printing expense for our direct to consumer
postcard mailings as well as maintenance, repairs, and supplies for our
manufacturing and distribution facilities.  Office expense increased
by $100,000 and stock compensation expense increased by $282,000 as additional
restricted shares were issued to key executives and Board members in the third
andfourth
quarters of 2008 that will be vesting over a five year term.





Costs and
Expenses:  Cost of revenue increased $2 million to $8.1 million in the
first quarter of 2009 from $6.1 million in the first quarter of
2008.  As a percentage of sales, gross margin increased to 76.1% from
75.8% in the first quarter of 2008.  The margin improved slightly due
to the addition of efficient new machinery and process improvements achieved in
our vertically integrated business model.





Income
taxes:In the first quarter of
2009, the Company recorded $1,491,000 in income tax expense, which represents an
annual effective rate of 37.5%.  The tax rate increased due to an
increase in the Maryland state income tax rate as well as timing differences on
amortization expense on our intangible assets between book and tax financials
that increased our tax expense in 2009.    In the first
quarter of 2008, we recorded income tax expense of $668,000 which reflected an
estimated annual effective tax rate of 32.9%.  The Company anticipates
a tax rate of approximately 36-38% in 2009.


13


Net
income: Net income was approximately $2.5 million in the first quarter of 2009
as compared to approximately $1.4 million in the first quarter of 2008, an
increase of 82%.  Pre-tax profit as a percent of sales increased to
11.8% in the first quarter of 2009 as compared to 8.1% in 2008. The improved
profitability in the first quarter of 2009 is due to sales growth in the Take
Shape for Life division and Medifast Weight Control Centers as well as improved
advertising effectiveness in the Medifast Direct Marketing sales channel, gross
margin improvement as well as leveraging the fixed costs associated with our
vertically-integrated support structure.





SEGMENT
RESULTS OF OPERATIONS


Net Sales by Segment as of March 31,2009
                      
                      
                      2008Segments
                      
                      Sales
                      
                      
                      %
      of Total
                      
                      
                      Sales
                      
                      
                      %
      of TotalMedifast
                      
                      
                      30,734,000
                      
                      
                      
                      91
                      %
                      
                      
                      23,480,000
                      
                      
                      
                      93
                      %All
      Other
                      
                      
                      2,946,000
                      
                      
                      
                      9
                      %
                      
                      
                      1,689,000
                      
                      
                      
                      7
                      %Total
      Sales
                      
                      
                      33,680,000
                      
                      
                      
                      100
                      %
                      
                      
                      25,169,000
                      
                      
                      
                      100
                      %





Three
Months Ended March 31, 2009 and March 31, 2008





Medifast
Segment:  The Medifast reporting segment consists of the sales of
Medifast Direct, Take Shape for Life, and Doctors.  As this represents
the majority of our business this is referenced to the “Condensed Consolidated
Results of Operations” management discussion for the three months ended March
31, 2009 and 2008 above.





All Other
Segment:  The All Other reporting segment consists of the sales of
Hi-Energy, Medifast Weight Control Centers and Medifast Weight Control Franchise
Centers.  Sales increased by $1,257,000 year-over year for the three
month period ended March 31, 2009. Sales increased in the Hi-Energy, Medifast
Weight Control Centers, and Franchise Centers due to the opening of ten new
corporate centers in 2008 and new franchise centers at the end of 2008 and first
quarter of 2009.  In addition, the Dallas market continues to mature
with the average clinic generating $50,000 per month in
sales.   The Company is continuing to focus on improved
advertising effectiveness, improved closing rates on walk-in sales, as well as
the hiring of more experienced clinic operators to manage the clinics, and
improved efficiencies in operation of the clinics. The Company now has twenty
one corporately owned clinics, compared to ten clinics in operation at the end
of the first quarter of 2008.  The Company also has ten franchisee
centers in operation.





Net Profit by Segment for the Three Months Ended March 31,2009
                          
                          
                          2008Segments
                          
                          Profit
                          
                          
                          % of Total
                          
                          
                          Profit
                          
                          
                          % of TotalMedifast
                          
                          $
                          3,139,000
                          
                          
                          
                          126
                          %
                          
                          $
                          1,987,000
                          
                          
                          
                          146
                          %All
      Other
                          
                          
                          (654,000
                          )
                          
                          
                          -26
                          %
                          
                          
                          (622,000
                          )
                          
                          
                          -46
                          %Total
      Net Profit
                          
                          $
                          2,485,000
                          
                          
                          
                          100
                          %
                          
                          $
                          1,365,000
                          
                          
                          
                          100
                          %





Three
Months Ended March 31, 2009 and March 31, 2008





Medifast
Segment:  The Medifast reporting segment consists of the profits of
Medifast Direct, Take Shape for Life, and Doctors.  As this represents
the majority of our business this is referenced to the “Condensed Consolidated
Results of Operations” management discussion for the three months ended March
31, 2009 and 2008 above.  See footnote 15, “Business Segments” for a
detailed breakout of expenses.


14


All Other
Segment:  The All Other reporting segment consists of the profit or
loss of Hi-Energy and Medifast Weight Control Centers, Medifast Weight Control
Franchise Centers, and corporate expenses related to the parent company
operations.  Year-over-year, the loss in the All Other segment
increased by $32,000.  The Hi-Energy, Medifast Weight Control Centers,
and Franchise Centers showed an increase in net profitability year-over-year of
$219,000.   The increase in profitability was due to opening of
ten new corporately owned centers in 2008 and new franchise centers at the end
of 2008 and early 2009. The increase in the total number of corporate clinics to
twenty one and ten operating franchise centers led to additional sales and
profitability.  Medifast Corporate expenses increased by $251,000
year-over-year.  Corporate expenses include items such as auditors’
fees, attorney’s fees and corporate governance related to NYSE, Sarbanes Oxley,
and SEC regulations.  See footnote 15, “Business Segments” for a
detailed breakout of expenses.





Seasonality





The
Company's weight management products and programs have historically been subject
to seasonality.  Traditionally the holiday season in November/December
of each year is considered poor for diet control products and
services.  January and February generally show increases in sales, as
these months are considered the commencement of the “diet season.”  In
2009, seasonality has not been a significant factor.  This is largely
due to the increase in the consumer’s awareness of the overall health and
nutritional benefits accompanied with the use of the Company’s product
line.  As consumers continue to increase their association of
nutritional weight loss programs with overall health, seasonality will continue
to decrease.





Inflation





Inflation
generally affects us by increasing the costs of labor, overhead, and raw
material and packaging costs. The impact of inflation on our financial position
and results of operations was minimal during the first quarter of
2009.





Item 5.  Other
Information





Litigation:





There is
no pending or threatened litigation.





Other
Matters:


An Independent Committee of the Board of
Directors of Medifast was constituted to review the public allegations of a
third party "Convicted Felon" on his website pertaining to alleged illegal
activities of Take Shape for Life, a Direct Selling Subsidiary of Medifast
Inc.  Other public Direct Selling Companies have been attacked by this
individual and his network of associates using the same blueprint of
allegations. These public
allegations were made in mid-February and were immediately followed
by significant short selling and short selling option puts that shaved over$30 millionfrom the Market Capitalization of
Medifast. The company has demanded that this third party take down its
website information containing false information or be subject to appropriate
legal action.




Medifast, in a press release on February 17th, 2009,responded to the False Claims in SEC File # 001-31573;
Film #09617581. The
IndependentCommittee
appointed ChairmanMr.Barry B. Bondroff, CPA, an officer and
director with Gorfine, Schiller & Gardyn, PA.  Members
are: Mr. GeorgeJ. Lavin Esq, founding Partner of the law firm, Lavin,O’Neil, Ricci, Ceprone
& Dispicio, who is an
expert in Product Liability Law, Lt. Gen. DennisM.McCarthy USMC (Ret.), Executive Director
of the Reserve Officers Association of the United States and a licensed
attorney, Capt. JosephD.Calderone USNR (Ret.),
chaplainand
counselorof the Villanova
University Law School, and
Mr. Charles P.Connolly,
formerPresident
andCEOof First Union Corp of PA and DE.




After an investigation of the facts and
information developed to date the committee unanimously agreed that the
allegations were false, misleading and or without merit.





Counsel
forwarded 3 cease and desist demands by letter to Barry Minkow , a convicted
felon, and FDI, of which Minkow/FDI confirmed receiving two. In addition, the
Company has filed formal   complaints with the NYSE, SEC,
and ATTORNEY GENERAL OF MARYLAND to this time. Management as directed
by the Board continues to monitor the situation and will continue to take
appropriate action as it deems necessary.





Earnings per
Share:  The Company follows the provisions of Statement of
Financial Accounting Standards No. 128, “Earnings per Share.”  The
calculation of basic and diluted earnings per share (“EPS”) is reflected on the
accompanying Condensed Consolidated Statement of Income.





Code of
Ethics:   In
August of 2006, the Company updated its Code of Ethics by which directors,
officers and employees commit and undertake to personal and corporate growth,
dedicate themselves to excellence, integrity and responsiveness to the
marketplace, and work together to enhance the value of the Company for the
shareholders, vendors, and customers.


15


Trading
Policy:In
March 2003, the Company implemented a Trading Policy whereby if a director,
officer or employee has material non-public information relating to the Company,
neither that person nor any related person may buy or sell securities of the
Company or engage in any other action to take advantage of, or pass on to
others, that information.  Additionally, on October 16, 2006 the Board
of Directors approved an updated trading policy in which insiders may purchase
or sell MED securities if such purchase or sale is made 7 days after or 14 days
before an earnings announcement to include the10-K or 10-Q in order to insure that investors have
available the same information necessary to make investment decisions as
insiders.





Evaluation
of Disclosure
Controls and Procedures:




The Securities and Exchange Commission
defines the term “disclosure controls and procedures” to mean a company’s
controls and other procedures that are designed to ensure that information
required to be disclosed in the reports that it files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission’s
rules and forms. Based on the evaluation of the effectiveness of our disclosure
controls and procedures by our management, with the participation of our Chief
Executive Officer and our Chief Financial Officer, as of the end of the period
covered by this report, our Chief Executive Officer and our Chief Financial
Officer have concluded that our disclosure controls and procedures at the end of
the period covered by this report were effective to ensure that information
required to be disclosed in the reports that we file or submit under the
Securities Exchange Act of 1934 is (i) recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and forms,
and (ii) accumulated and communicated to our management, including our
Chief Executive Officer and Chief Financial Officer, as appropriate to allow
timely decisions regarding disclosure.





Changes in
Internal Control over
Financial Reporting:




No change in our internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) occurred during the fiscal quarter ended March 31,
2009that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.





Forward Looking
Statements:    Some of the information presented in
this quarterly report constitutes forward-looking statements within the meaning
of the private Securities Litigation Reform Act of 1995.  Statements
that are not historical facts, including statements about management’s
expectations for fiscal year 2003 and beyond, are forward-looking statements and
involve various risks and uncertainties.  Although the Company
believes that its expectations are based on reasonable assumptions within the
bounds of its knowledge, there can be no assurance that actual results will not
differ materially from the Company’s expectations.  The Company
cautions investors not to place undue reliance on forward-looking statements
which speak only to management’s experience on this data.





SIGNATURES





Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly
authorized.





Medifast, Inc.




BY:
                          /S/ MICHAEL S.
      MCDEVITT
                          
                          May 8,
  2009Michael S.
      McDevittChief Executive Officer and Chief
      Financial Officer(principal executive officer and
      principal financial officer)


16


Index to
Exhibits





Exhibit Number
              Description
      of Exhibit31.1
              Certification
      of Chief Executive Officer pursuant to Item 601(b)(31) of Regulation S-K,
      as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.31.2
              Certification
      of Chief Financial Officer pursuant to Item 601(b)(31) of Regulation S-K,
      as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.32.1
              Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      906 of the Sarbanes-Oxley Act of
2002




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