Allergy Research Group, Inc. Reports Profits For The Second Quarter

HAYWARD, Calif.--(BW HealthWire)--Aug. 15, 2002--Allergy Research Group, Inc. (ARG) (OTCBB:ALRG) today announced financial results for its second quarter of fiscal 2002 which ended June 30, 2002.

ARG recorded total revenue of $3,234,125 for the quarter, up 7% from the second quarter 2001. The increase of $205,397 is due to increased marketing efforts and due to the introduction of new products.

"The increase in sales in the second quarter shows that we are continuing to meet our financial goals," said Chief Executive Officer and Chairman, Dr. Stephen A. Levine, Ph.D., who has implemented a strategy that includes cost controls, the development of a comprehensive management team and increased sales and marketing efforts.

Cost of sales increased $212,109 to $2,034,133 for the three months ended June 30, 2002, compared to $1,822,024 for the three months ended June 30, 2001. Gross profit margins decreased approximately 2.7% for the second quarter, approximating 39% for 2002. Profit margins are decreasing due to (1) increased discounts offered this year over last, (2) sales of selected products at smaller than normal margins to be competitively priced in the marketplace and (3) increases in the cost of freight. It is anticipated that margins will remain lower throughout 2002.

During the quarter and six-month period ended June 30, 2002, the Company recorded net income of $221,693 and $514,648, respectively, compared to net income of $144,115 and $321,889 for the same period in 2001. The increase of $77,578 for the quarter and $192,759 for year-to-date is due primarily to a decrease in selling, general and administrative expenses such as administrative payroll, legal fees and settlements, and interest expense for 2002 compared to the same period last year.

In May 2002, the Company announced a stock repurchase program for between 1,000,000 and 2,500,000 shares of its common stock. Based on then current market prices, the aggregate purchase price for the shares would be approximately $120,000 to $300,000. During the second quarter of 2002, the Company purchased 90,000 shares of common stock for a total of $14,300. The Company purchased an additional 192,500 shares during July 2002 for $37,500.

On July 15, 2002, the Company hired Fred Salomon to fill the role of Director of Operations. Mr. Salomon brings 40 years of executive management experience. He comes from the Home-sewing & Craft industry where he managed and grew several businesses. He also founded his own company, which he sold to the McCall Pattern Company, where he served as Chief Operating Officer of their national distribution company, NMI, Inc. For the last 20 years, Mr. Salomon was general manager of Lion Notions, Inc. and Fantasy Importers, Inc., both privately held corporations.

Complete copies of the company's financial statements, including notes to the financials, can be found on its website at

About Allergy Research Group, Inc.

Allergy Research Group, Inc. is an innovative leader in nutraceutical research and product formulation. Since its inception in 1979, the company has been noted for quality, hypoallergenic nutritional supplements and supplies products to physicians and healthcare practitioners worldwide.

Except for historical information contained herein, this release contains, within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, forward-looking statements that are based on management's beliefs and assumptions, current expectations, estimates and projections. Many of the factors that will determine the Company's financial results are beyond the ability of the Company to control or predict. These statements are subject to risks and uncertainties and therefore actual results may differ materially. The Company disclaims any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise. Important factors and risks that may affect future results include but are not limited to: the impact of competitive products, changes in law and regulations, adequacy and availability of insurance coverage, availability of raw materials, dependence on distributors and customers, litigation, limitations on future financing, the effect of adverse publicity, uncertainties relating to acquisitions, managing and maintaining growth, customer demands, as well as other risks and uncertainties that are described from time to time in the Company's filings with the Securities and Exchange Commission, copies of which are available upon request from the Company's investor relations department.

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