PacificHealth Laboratories Reports Second Quarter 2007 Results

MATAWAN, N.J., Aug 08, 2007 (BUSINESS WIRE) -- PacificHealth Laboratories, Inc. (PHLI) , a nutrition technology company, reported today an 18% increase in revenues to $2,069,889 for the quarter ended June 30, 2007 compared to revenues of $1,747,206 for the same period in 2006. The Company recorded a net loss attributable to common stockholders of ($127,276), or ($0.01) per share, for the three-months ended June 30, 2007 compared to a net loss attributable to common stockholders of ($31,174), or $0.00 per share, for the same period in 2006. The loss for the second quarter of 2007 was primarily the result of increased sales and marketing expenses involved in the launch of SATIATRIM(R) and lower gross margins on ACCELERADE(R) and ACCEL GEL(R). Gross margin was impacted due to a change in product mix, an increase in the cost of raw materials, and a planned initiative to discount older-labeled product to ensure that new packaging was consistent with the ACCELERADE RTD recently launched by Cadbury Schweppes Americas Beverages ("CSAB"). To offset the raw material cost increases, the Company successfully instituted a price increase on July 1, its first ever price increase, on the full line of endurance products. As a result of this, PHLI expects gross margins to return to historical levels.

Dr. Robert Portman, President and CEO of PacificHealth said, "I was pleased with our second quarter growth. The national launch of ACCELERADE RTD, which commenced in the last week of June and therefore did not affect our second quarter sales results, featured a major media event in Times Square as well as extensive TV, Internet and billboard advertising. Based on initial feedback from our retailers, we are optimistic about the future growth resulting from the CSAB national advertising campaign. The growth in our endurance line during the quarter was the result of new programs involving our retailers as well as online sales. Our point of purchase program, directed toward sport specialty retailers, has seen a 71% increase in same store sales over the same period in 2006. Online sales, which deliver higher margins, are up 44% in the first six months compared to the same period in 2006."

Dr. Portman continued, "Late in the second quarter we launched the new SATIATRIM website, which, based on consumer feedback, establishes a compelling proposition for SATIATRIM. In July we also began a national public relations program directed at leading women's magazines. This public relations effort will be supplemented in the second half of 2007 by numerous direct response campaigns including e-mail as well as a series of full-page color ads in one of the leading woman's magazines. We are also expanding our efforts beyond the U.S. market. In August, a major direct response company will launch SATIATRIM in Great Britain."

For the six months ended June 30, 2007, PacificHealth increased revenues 17% to $3,888,783, compared to revenues of $3,322,602 in the same period in 2006. For the six months ended June 30, 2007, the Company recorded a net loss applicable to common stockholders of ($351,692), or ($0.03) per share, compared to net income applicable to common stockholders of $2,587,694, or $0.20 per share fully diluted, for the same period in 2006. The six-month period ended June 30, 2007 included marketing and other expenses of $187,000 for the launch of SATIATRIM(R). The six-month period ended June 30, 2006 would have resulted in a net loss (non-GAAP measure) of ($43,511), or $0.00 per share, if $2,631,205 (net of income taxes of $1,278,000) from the sale of patents and technology to Mott's LLP, a division of CSAB, was excluded from net income.

Dr. Portman concluded, "Growth of our endurance products will be driven primarily by the marketing efforts of CSAB. The Accelerade RTD commercials are pervasive and product distribution is growing daily. All of these efforts will have a major effect on the sale of our powder and gel products. Over the next six months we also expect to see the results of our increased sales and marketing efforts for SATIATRIM."

About PacificHealth Laboratories, Inc.:
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

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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