PacificHealth Laboratories Reports 9% Third Quarter 2009 Revenue Growth

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

Third Quarter 2009 vs. Third Quarter 2008 Financial Results

Revenues increased approximately 9% to $2,376,291 compared to $2,176,196 for the same period in 2008. Net loss for the third quarter of 2009 was $174,095, or $0.01 per basic and diluted share, compared to a net loss of $849,969, or $0.06 per basic and diluted share, for the same period in 2008. In the third quarter of 2008, the Company restructured its operations to better support its base sports performance business. As part of this restructuring, a number of positions within the Company were eliminated and certain market sectors were exited. As a result, the Company recorded $472,069 in non-cash restructuring charges and reserved $84,669 of SATIATRIM(R) finished goods as obsolete in the third quarter of 2008. Sales and marketing expenses increased $224,876, or approximately 65%, in the quarter ended September 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 FORZE GPS(TM), the Company's new weight management nutrition tool. General and administrative expenses decreased $106,838, or approximately 12%, in the quarter ended September 30, 2009 compared to the same period in 2008, primarily due to the organizational restructuring initiated in the third quarter of 2008.

At September 30, 2009, the Company had cash, cash equivalents, and other short-term investments of approximately $633,000 as compared to approximately $857,000 at June 30, 2009 and $1.2 million at December 31, 2008. At September 30, 2009, the Company had net working capital of approximately $1,938,000 as compared to $2,075,000 at June 30, 2009 and $2,150,000 at December 31, 2008.

Jason Ash, President and Chief Executive Officer of PacificHealth Laboratories, stated, "We are encouraged by the progress achieved during the third quarter. Revenue growth of approximately 9% versus the period a year ago was due to a good performance from our core business combined with a solid contribution from our recently launched FORZE GPS branded product.

"We also achieved a significant improvement in our gross profit and net loss in the quarter and overall we are beginning to see the benefit from our restructuring initiatives undertaken last year. Our expenses continue to rebalance in favor of a strong, long-term business model. For example, we were able to increase sales and marketing expense by over $200,000 quarter over quarter and decrease G&A by over $100,000 in the same time period, marking some good progress.

"We have been pleased with the continued exposure and consumer feedback FORZE GPS (our highly innovative new weight management tool) has been receiving as the official bar of the Rock 'n' Roll marathon series (the largest aggregate race series in the world). This, coupled with our additional marketing investments designed to expand both consumer and retail awareness across our portfolio, inclusive of FORZE GPS, has begun to deliver growth in our revenue. Our plan is to continue to support FORZE GPS in the Sports Specialty channel with high profile marketing events and then to leverage this consumer awareness regionally in larger classes of retail trade via higher velocity product formats. We believe we are well positioned to support the growth of our brands and compete aggressively over the long term."

Nine Months Ended September 30, 2009 vs. Nine Months Ended September 30, 2008

Revenues increased approximately 8% to $6,796,964 compared to $6,266,000 for the same period in 2008. Net loss for the nine months ended September 30, 2009 was $566,638, or $0.04 per diluted share, compared to a net loss of $1,267,982, or $0.09 per diluted share, for the same period in 2008. As previously mentioned, in the third quarter of 2008, the Company restructured its operations to better support its base sports performance business. As part of this restructuring, a number of positions within the Company were eliminated and certain market sectors were exited. As a result, the Company recorded $472,069 in non-cash restructuring charges and reserved $84,669 of SATIATRIM finished goods as obsolete in the third quarter of 2008. Sales and marketing expenses increased $606,186, or approximately 83%, for the nine months ended September 30, 2009 compared to the same period in 2008. General and administrative expenses decreased $245,108, or approximately 9% for the nine months ended September 30, 2009 compared to the same period in 2008, primarily due to the organizational restructuring initiated in the third quarter of 2008.

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, October 28, 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 November 12, 2009. The replay will be accessible by dialing (877) 660-6853 or (201) 612-7415 and using account #286 and conference ID # 335278.

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 FORZE GPS, 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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