PacificHealth Laboratories, Inc. (OTCQB: PHLI), a leading nutrition company, reported financial results for the three months and year ended December 31, 2010.
Year Ended December 31 Financial Results
For the year ended December 31, 2010, revenues were $7,200,960 compared to $7,995,194 for the same period in 2009. The Company recorded a net loss of $761,422, or $0.05 per share, for 2010 compared to a net loss of $1,676,124, or $0.11 per share, for 2009. Included in the net loss for 2010 is approximately $462,000 that the Company expensed and paid out in severance costs as a result of the Company streamlining its operations. In the fourth quarter of 2009, the Company made the decision to forgo marketing its FORZE GPS™ weight management product line. As a result, the Company recorded $81,050 in non-cash restructuring charges consisting of writing off property and equipment specific to the marketing efforts of FORZE GPS and also recorded a $491,172 reserve for inventory as the value of this inventory may not ever be realized. Also, in 2009, 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.
Fred Duffner, President and CEO of PacificHealth, said, "2010 was a challenging year in which we had to focus on reducing fixed overhead costs, reducing inventories, and supporting our core sports nutrition brands with minimal consumer support. The reduction in revenue is the result of an over-reliance on customer driven promotional events in 2010 to create awareness, and the $279,000 of recognized revenues in 2009 from one of our major customers. We saw a continuing reduction in promotional revenue through the third and fourth quarters. Going into 2011, we are now able to reallocate our investment into creating consumer awareness through our new advertising campaign, new product launches, and new internet and social messaging. We should begin to see the impact in our second quarter when all of these efforts break aligning with the start of the endurance season. Our goal was to set ourselves up to become profitable in 2011 and I believe we have made the changes necessary to do just that."
Three-Month Financial Results
Revenues in the fourth quarter of 2010 were $996,900 compared to $1,198,230 for the same period in 2009. The Company recorded a net loss of $541,546, or $0.03 per share, compared to a net loss of $1,109,486, or $0.07 per share, for the same period in 2009. As noted above, in the fourth quarter of 2009, the Company recorded a restructuring charge of $81,050 and recorded a $491,172 reserve for inventory.
About the Company:
PacificHealth Laboratories, Inc. (OTCQB: PHLI) is a leading sports nutrition company that focuses on marketing, developing and selling premium nutrition tools for exercisers and athletes seeking to improve their health and performance. We are highly active in the endurance sports arena. Our brands and patents are typically protein-based and extend to cover areas such as appetite regulation. PHLI's principle areas of focus are sports performance and recovery, including optimal weight management. To learn more, visit www.pacifichealthlabs.com.