PacificHealth Laboratories Reports 15% Revenue Growth and Records Net Income for FY09 Q2

PacificHealth Laboratories, Inc., a leading sports nutrition company, today reported its financial results for the quarter and six months ended June 30, 2009.

Second Quarter 2009 vs. Second Quarter 2008 Financial Results

Revenues increased 15% to $2,725,055 compared to $2,370,429 for the same period in 2008. Net income for the second quarter of 2009 was $12,922, or $0.00 per diluted share, compared to a net loss of $146,608, or $0.01 per diluted share, for the same period in 2008. As a result of a change in estimate relating to revenue recognition in connection with sales to a major customer, the Company recognized revenues of approximately $279,000 and reduced inventory by approximately $129,000 that was previously recorded as deferred revenue and inventory, respectively. Sales and marketing expenses increased $209,436, or 85%, in the quarter ended June 30, 2009 compared to the same period in 2008. This increase was primarily due to increased spend for a public relations and marketing campaign associated with the launch of ForzeGPS(TM), the Company's new weight management tool. General and administrative expenses decreased $70,446 in the quarter ended June 30, 2009 compared to the same period in 2008, primarily due to the organizational restructuring initiated in the third quarter of 2008.

At June 30, 2009, the Company had cash, cash equivalents, and other short-term investments of $857,000 as compared to $811,000 at March 31, 2009 and $1.2 million at December 31, 2008.

"I am pleased with the condition of our business in light of a continued challenging retail and consumer spend environment," said Jason Ash, President and Chief Executive Officer of PacificHealth Laboratories. "We reported growth in revenue and profit in Q2 and we are confident we can build from this going forward. Both our core endurance and weight control business sectors grew in Q2, and this improved performance was driven by our new commercial strategy, focused marketing campaigns, and implementation of a new national sales team. PHLI continues to meet its goals in terms of innovation, market expansion and operational efficiency.

"We recently introduced our highly innovative new weight management tool ForzeGPS. The continued exposure we are receiving as the 'Official Bar' of the 2009 and 2010 Rock 'n' Roll marathon series has resulted in more and more people requesting product from their local retailers. This exposure has positively impacted our base business as was demonstrated by our recent announcement that GNC is now selling ACCELERADE(TM) HYDRO(TM) for the first time. The next event in the series, the Rock 'n' Roll Half Marathon in Chicago on August 2, is expected to continue to build both distribution and consumer momentum. Operationally, we are beginning to realize the benefits of our cost reduction efforts that we initiated in late 2008 and we expect to see further improvement in the second half of 2009."

First Half 2009 Financial results vs. First Half 2008 Financial Results

Revenue increased 8% to $4,420,673 compared to $4,089,804 for the same period in 2008. Net loss for the first half of 2009 was $392,543, or $0.03 per diluted share, compared to a net loss of $418,013, or $0.03 per diluted share, for the same period in 2008. Sales and marketing expenses increased $381,310, or 98%, for the six months ended June 30, 2009 compared to the same period in 2008. General and administrative expenses decreased $138,270 for the six months ended June 30, 2009 compared to the same period in 2008, primarily due to the organizational restructuring initiated in the third quarter of 2008.

Mr. Ash concluded, "The combination of a new sales strategy, the launch of ForzeGPS, and a focus on increasing gross margin and containing G&A expenses, resulted in a solid start to our third quarter. We are encouraged by this positive business momentum and the market acceptance of our new product launches and we look forward to the second half of the year with confidence."

Conference Call/Webcast Information

As previously announced, we have scheduled an earnings release conference call for 4:00 p.m. Eastern Daylight Time today, Wednesday, July 29, 2009. The dial-in numbers for this conference call are as follows:

Domestic Dial-in Number: (877) 407-9210 International Dial-in Number: (201) 689-8049

A simultaneous webcast will be available via the Company's website at www.pacifichealthlabs.com. The call will be archived on the Company's website for at least 90 days.

A recording of the live-call will be available approximately 2 hours after the event through August 12, 2009. The replay will be accessible by dialing (877) 660-6853 or (201) 612-7415 and using account #286 and conference ID # 328729.

About the Company:

PacificHealth Laboratories, Inc. is an innovative and leading sports nutrition company that focuses on marketing, developing, and selling premium nutrition products to active consumers seeking to improve their health and performance. Our brands and nutrition tools consist of three discreet platforms: rehydration/energy, recovery, and optimal racing weight and include ForzeGPS, the first scientifically proven appetite management tool created specifically for athletes. To learn more, visit www.pacifichealthlabs.com.

This press 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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