PacificHealth Laboratories, Inc. Announces 2nd Quarter Results

MATAWAN, N.J., Aug 02, 2006 (BUSINESS WIRE) -- PacificHealth Laboratories, Inc. (PHLI) , an innovative nutrition technology company, today announced its financial results for the second quarter and six months ended June 30, 2006.

For the second quarter ended June 30, 2006, PacificHealth reported revenues of $1,747,206 compared to revenues of $2,042,382 in the same period last year. For the second quarter, the Company reduced its net loss 93.6% to ($26,174), or ($0.00) per share, compared to a net loss of ($407,350), or ($0.04) per share, for the same period last year. Included in the 2005 revenues was a $257,957 transaction that resolved a consignment inventory issue with a major customer. Previously, this sale had been recorded as deferred revenue.

Dr. Robert Portman, President and CEO of PacificHealth said, "In the second quarter we reduced our operating losses primarily because of significantly reduced advertising, marketing and sales expenditures. This reduction was a direct result of the asset sale of Accelerade(R) to Motts LLC, a division of Cadbury Schweppes Americas Beverages (CSAB) in February. We anticipated that CSAB would initiate their marketing efforts for the brand in the second quarter. Commencing in June, CSAB instituted a new ad campaign for Accelerade, which is now running in major sports publications such as Runner's World, Bicycling and Triathlete. CSAB has also begun Accelerade grass roots efforts in major markets. Over the next two quarters we anticipate seeing the impact of these programs on the sales of Accelerade powder and gel."
Dr. Portman continued, "In the second quarter we also saw the publication of additional studies reinforcing the superiority of Accelerade over conventional sports drinks such as Gatorade(R). These studies show that Accelerade offers significant benefits in terms of recovery, endurance and reduction in muscle soreness. In the third quarter a major study will be published demonstrating the rehydration benefits of Accelerade over both Gatorade and water."

For the six months ended June 30, 2006, PacificHealth increased revenues 9% to $3,322,602, compared to revenues of $3,040,043 in the same period in 2005. For the six months ended June 30, 2006, the Company recorded net income of $2,593,119, or $0.20 per share, compared to a net loss of ($1,128,696), or ($0.11) per share, for the same period in 2005. Net income in the first six months of 2006 included approximately $2,622,000 from gain on the sale of patents and technology, net of tax effects, to Mott's LLP, a division of Cadbury Schweppes.

Dr. Portman concluded, "In the second quarter we also made strong progress in preparing Satiatrim, our new weight loss product, for market. We have now completed three quantitative market research studies involving 1,200 consumers. The results of these studies are extremely encouraging. Consumers gave Satiatrim extremely high ratings in terms of it being new and different from existing products and willingness to purchase. We plan to initiate an extensive home use test starting in August. The feedback from the home use test combined with the results of three market research studies gives us a wealth of consumer feedback on how to best position Satiatrim for optimal consumer acceptance."

About PacificHealth Laboratories, Inc.:
PacificHealth Laboratories, Inc. (PHLI.OB), a leading nutrition technology company, has been a pioneer in discovering, developing and commercializing patented, protein-based nutritional products that stimulate specific peptides involved in appetite regulation and that activate biochemical pathways involved in muscle performance and growth. PHLI's principle areas of focus include weight loss, management of Type 2 diabetes and sports performance. To learn more, visit

This news release and oral statements made from time to time by Company representatives concerning the same subject matter may contain so-called "forward-looking statements". These statements can be identified by introductory words such as "expects", "plans", "will", "estimates", "forecasts", "projects" or words of similar meaning and by the fact they do not relate strictly to historical or current facts. Forward-looking statements frequently are used in discussing new products and their potential. Many factors may cause actual results to differ from forward-looking statements, including inaccurate assumptions and a broad variety of risks and uncertainties, some of which are known, such general economic conditions, consumer product acceptance and competitive products, and others of which are not. No forward-looking statements are a guarantee of future results or events, and one should avoid placing undue reliance on such statements.

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