PacificHealth Laboratories Reports Second Quarter 2008 Results

MATAWAN, N.J., Jul 31, 2008 (BUSINESS WIRE) -- PacificHealth Laboratories, Inc. (PHLI) , a nutrition technology company, today reported results for the second quarter 2008. Revenues increased 15% to $2,370,429 compared to $2,069,889 for the same period in 2007. For the quarter ended June 30, 2008, the Company recorded a net loss of ($146,608), or ($0.01) per share compared to a net loss of ($127,276), or ($0.01) per share, for the same period in 2007. During the three-month period ended June 30, 2008, S, G, & A expenses included increased salary expenses of approximately $172,000 as compared to the same period in 2007 that was anticipated as part of our additions to senior management. Included in the net losses detailed above are non-cash equity instrument-based (options) expense of $92,410 and $64,023, respectively, for the periods ending June 30, 2008 and 2007. Excluding these non-cash items results in net losses of ($54,198) and ($63,253) (non-GAAP measure), respectively, for the quarters ending June 30, 2008 and 2007.

Jason Ash, President and Chief Operating Officer of PacificHealth Laboratories said, "At the beginning of the year, we said we'd focus on continued base business growth and increased efficiency. Clearly we have made considerable ground against these objectives despite the high hurdle set by last year and today's economic climate. Achieving 15% revenue growth for the second quarter, moving our gross profit margin from 37.3% to 45.0% for the half year, and ongoing working capital improvements is clear evidence that we are executing what we set out to achieve."

For the six months ended June 30, 2008, revenues were $4,089,804 compared to $3,888,783 for the same period in 2007. For the six months ended June 30, 2008, the Company recorded a net loss of ($418,013), or ($0.03) per share compared to a net loss of ($351,692), or ($0.03) per share, for the same period in 2007. During the six-month period ended June 30, 2008, S, G, & A expenses included increased salary expenses of approximately $345,000 as compared to the same period in 2007 that was anticipated as part of our additions to senior management. Included in the net losses detailed above are non-cash equity instrument-based (options) expense of $201,672 and $124,867, respectively, for the six months ending June 30, 2008 and 2007. Excluding these non-cash items results in net losses of ($216,341) and ($226,825) (non-GAAP measure), respectively, for the six month periods ending June 30, 2008 and 2007.

Mr. Ash concluded, "We have maintained the strength of our balance sheet and we are protecting our cash. Our continued efficiency drive on the base business will put us in a good position to leverage our key customer and intellectual property assets in 2009 and we are planning some significant innovation."

About the Company:
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 www.pacifichealthlabs.com.

Notice: 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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