Allergy Research Group, Inc. Reports Second Quarter Results

ALAMEDA, Calif., Aug 12, 2005 (BUSINESS WIRE) -- Allergy Research Group, Inc. (ALRG) announced financial results for the second quarter ending June 30, 2005.

ALRG recorded total revenue of $3,981,676 for the quarter, up 4% from 2004. The increase of $149,316 is primarily due to increased sales to distributors and professional accounts.

Cost of sales increased $211,780 to $2,379,625 for the quarter ended June 30, 2005, compared to $2,167,845 for the quarter ended June 30, 2004. The increase in cost of sales is partially due to the increase in sales, but we also experienced increases in the cost of certain raw ingredients due to supply and demand pressures and the effect of the weakening U.S. dollar. The increase in costs was not passed on to our customers; therefore, gross profit margins decreased from approximately 43% for first quarter 2004 to approximately 40% for 2005. During the coming months we plan to recoup some of the increased cost through very selective price increases.

During the quarter ended June 30, 2005, the Company recorded net earnings of $324,710 as compared to net earnings of $344,962 for the same period in 2004. Net income decreased due to the decrease in profit margins and increased operating expenses.

Complete copies of the company's financial statements, including notes to the financials, can be found on its website at

About Allergy Research Group, Inc.

Allergy Research Group, Inc. is an innovative leader in nutraceutical research and product formulation. Since its inception in 1979, the company has been noted for quality, hypoallergenic nutritional supplements and supplies products to physicians and healthcare practitioners worldwide.

Except for historical information contained herein, this release contains, within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, forward-looking statements that are based on management's beliefs and assumptions, current expectations, estimates and projections. Many of the factors that will determine the Company's financial results are beyond the ability of the Company to control or predict. These statements are subject to risks and uncertainties and therefore actual results may differ materially. The Company disclaims any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise. Important factors and risks that may affect future results include but are not limited to: the impact of competitive products, changes in law and regulations, adequacy and availability of insurance coverage, availability of raw materials, dependence on distributors and customers, litigation, limitations on future financing, the effect of adverse publicity, uncertainties relating to acquisitions, managing and maintaining growth, customer demands, as well as other risks and uncertainties that are described from time to time in the Company's filings with the Securities and Exchange Commission, copies of which are available upon request from the Company's investor relations department.

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