PacificHealth Laboratories Reports Third Quarter 2008 Financial Results

PacificHealth Laboratories, Inc., a leading nutrition company, today reported financial results for the three and nine months ended September 30, 2008. The Company also announced a strategic restructuring initiative to reduce expenses, increase competitiveness, strengthen customer relationships, and enhance shareholder value.

Three-Month Financial Results
Revenues in the third quarter of 2008 were $2,176,196 compared to $2,134,736 for the same period in 2007. The Company recorded a net loss of $849,969, or $0.06 per share, compared to a net loss of $432,905, or $0.03 per share, for the same period in 2007. For the three-month period ended September 30, 2008, non-cash equity instrument-based (options) expense was $124,047 compared to $65,091 for the same period in 2007. 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 a $472,069 non-cash restructuring charge and reserved $84,669 of SATIATRIM(R) finished goods as obsolete in the third quarter of 2008. The net loss for the third quarter of 2007 included a $439,208 reserve of SATIATRIM inventory as obsolete. The Company still has significant plans for this weight regulation technology under a new brand and platform in 2009. Excluding these non-cash items, PacificHealth Laboratories' net loss was $169,184 (non-GAAP measure), or $0.01 per share, for the three months ended September 30, 2008 and net income of $71,394 (non-GAAP measure), or $0.01 per share, for the three months ended September 30, 2007.

Jason Ash, President and Chief Executive Officer of PacificHealth Laboratories said, "Both I and the management team continue to believe that PacificHealth Laboratories has a significant opportunity to gain market share in the large and growing U.S. sports nutrition market. The targeted restructuring initiative implemented in the third quarter was aimed to reduce costs, improve the efficiency of operations, and to direct resources to higher growth, higher margin opportunities. Our goal is to accelerate our organic growth through more strategic marketing to our core customers and to seek out complementary strategic partners. Our plan next year is to launch a truly differentiated new brand and platform to our existing consumers that utilizes technology outside of the patented 4:1 ratio of carbohydrates to protein."

Nine-Month Financial Results
For the nine months ended September 30, 2008, revenues increased 4% to $6,266,000 compared to $6,023,519 for the same period in 2007. The Company recorded a net loss of $1,267,982, or $0.09 per share, in the third quarter of 2008 compared to a net loss of $784,597, or $0.06 per share, for the same period in 2007. The net losses included non-cash equity instrument-based (options) expense of $325,719 and $189,958, respectively, for the nine months ending September 30, 2008 and 2007. As mentioned above, the Company also recorded a $472,069 restructuring fee and reserved $84,669 of SATIATRIM finished goods as obsolete in the nine months ended September 30, 2008 and reserved $439,208 of SATIATRIM finished goods as obsolete in the nine months ended September 30, 2007. Excluding these non-cash items, the Company recorded net losses of $385,525 (non-GAAP measure), or $0.03 per share, and $155,431 (non-GAAP measure), or $0.01 per share, respectively, for the nine months ended September 30, 2008 and 2007.

Mr. Ash concluded, "The restructuring and re-basing of the business in the third quarter represents the first of a number of bold steps that we as the new management team are taking towards creating a performance-orientated business. In addition to growth in our core sports nutrition business, we are also sharply focused on delivering innovative new products that will enable us to expand beyond our existing channels and geographic markets. These initiatives, taken together, should position the Company for improved performance in 2009 and beyond."

About the Company:
PacificHealth Laboratories, Inc. is a leading nutrition company that focuses on the development, marketing, and selling of patented premium nutrition tools that enable our consumers to enhance their health and improve their performance. Our principle areas of focus are sports performance, recovery, and optimal weight regulation. 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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