PHLI PacificHealth Laboratories Inc (CE)

PacificHealth Laboratories, Inc. (OTCQB: PHLI), a leading sports nutrition company, today reported its financial results for the quarter and nine months ended September 30, 2011.

Third Quarter & Nine Months 2011 vs. 2010 Financial Results Revenues were $1,971,624 for the third quarter and $5,948,461 for the nine months ended September 30, 2011 compared to $1,999,489 and $6,204,060, respectively, for the same periods in 2010. Net loss for the third quarter was ($116,675), or ($0.01) per share, and net income was $2,324, or $0.00 per diluted share, for the nine months ended September 30, 2011 compared to net losses of ($87,371), or ($0.01) per share, and ($219,876), or ($0.01) per share, for the same periods in 2010. Sales and marketing expenses increased $90,397 to $414,453 in the third quarter and increased $75,093 to $983,496 for the nine months ended September 30, 2011 compared to the same periods in 2010 primarily as a result of increased advertising expenses. General and administrative expenses decreased $108,069, or 17%, to $529,585 in the third quarter and decreased $568,188, or 26%, to $1,578,059 for the nine months ended September 30, 2011 compared to the same periods in 2010 primarily as a result of a reduction in personnel and personnel related expenses.

At September 30, 2011, the Company had cash, cash equivalents, and other short-term investments of $1,114,840 compared to $284,165 at December 31, 2010, which increased primarily due to two private placements completed in 2011.

Fred Duffner, President and CEO of PacificHealth Laboratories, said, "We continued to make progress. Although total endurance sales for the three month period were flat year over year, we had strong growth in a number of our key channels: ecommerce sales were up 75%, sports specialty was up 32%, outdoor retailers were up 50% and international increased 26%. This growth was somewhat offset by the fact that our major retailers continue to reduce inventory in their supply chain. Additionally, the current period reflects a loss in revenues of approximately $36,000 from FORZE™ that we no longer market."

Mr. Duffner added, "I am pleased to see continued momentum and sales from our newest products, 2ND SURGE® and ACCEL RECOVER™. 2ND SURGE and ACCEL RECOVER are now found in the top 1,000 GNC stores, and 2ND SURGE is also now carried by Vitamin Shoppe. Consumer response, particularly to 2ND SURGE, has been gratifying. One of our goals was to increase our presence on Facebook. We have over 3,600 fans on our Facebook page and that is up 400% since June. Another noteworthy success was the re-launch of ENDUROX® EXCEL® Workout Supplement. At one time ENDUROX EXCEL was one of our largest and most profitable products. This year we reestablished distribution with our major retailers and we are seeing a significant increase in sales year over year."

Mr Duffner concluded, "This continues to be a challenging environment. Cost of raw materials, particularly protein, is growing by double digits. However, in 2011 we made the necessary changes to position ourselves for growth. Our advertising and marketing campaigns have reestablished our brands with the endurance athlete. We introduced two new products and restarted our research program. We are far better positioned to grow our ecommerce business. We are not yet where we want to be, but we are clearly moving toward that goal."

About PacificHealth Laboratories, Inc. PacificHealth Laboratories, Inc. (OTCQB: PHLI), 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 principal areas of focus include sports performance and weight loss. 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.

SELECTED FINANCIAL DATA:

                      PACIFICHEALTH LABORATORIES, INC.
                          STATEMENTS OF OPERATIONS
      FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
                                (UNAUDITED)

                               Three Months               Nine Months
                            Ended September 30,       Ended September 30,
                             2011         2010         2011         2010
                         -----------  -----------  -----------  -----------
Revenues:
  Net product sales      $ 1,971,624  $ 1,999,489  $ 5,948,461  $ 6,204,060

Cost of goods sold         1,120,865    1,123,711    3,332,367    3,369,381
                         -----------  -----------  -----------  -----------

Gross profit                 850,759      875,778    2,616,094    2,834,679
                         -----------  -----------  -----------  -----------

Operating expenses:
  Sales and marketing        414,453      324,056      983,496      908,403
  General and
   administrative
   (Includes related
   party consulting of
   $48,000, $22,000,
   $139,000 and $22,000,
   respectively)             529,585      637,654    1,578,059    2,146,247
  Research and
   development                16,141            -       40,936            -
                         -----------  -----------  -----------  -----------
                             960,179      961,710    2,602,491    3,054,650
                         -----------  -----------  -----------  -----------

(Loss) income before
 other (expense) income
 and provision for
 income taxes               (109,420)     (85,932)      13,603     (219,971)

Other (expense) income:
  Other income                     -            -        2,100        4,000
  Interest income                112          286          391          791
  Interest expense            (7,367)      (1,725)     (13,770)      (4,696)
                         -----------  -----------  -----------  -----------
                              (7,255)      (1,439)     (11,279)          95
                         -----------  -----------  -----------  -----------

(Loss) income before
 provision for income
 taxes                      (116,675)     (87,371)       2,324     (219,876)

Provision for income
 taxes                             -            -            -            -
                         -----------  -----------  -----------  -----------

Net (loss) income        $  (116,675) $   (87,371) $     2,324  $  (219,876)
                         ===========  ===========  ===========  ===========

Basic (loss) income per
 share                   $     (0.01) $     (0.01) $      0.00  $     (0.01)
                         ===========  ===========  ===========  ===========

Diluted (loss) income
 per share               $     (0.01) $     (0.01) $      0.00  $     (0.01)
                         ===========  ===========  ===========  ===========

Weighted average common
 shares - basic           20,865,257   16,366,561   19,100,056   16,032,559
                         ===========  ===========  ===========  ===========

Weighted average common
 shares - diluted         20,865,257   16,366,561   19,330,073   16,032,559
                         ===========  ===========  ===========  ===========

                      PACIFICHEALTH LABORATORIES, INC.
                               BALANCE SHEETS
                                (UNAUDITED)

                                   ASSETS
                                         September 30,         December 31,
                                                  2011                 2010
                                   -------------------  -------------------
Current assets:
  Cash and cash equivalents        $         1,039,840  $           134,165
  Other short-term investments                  75,000              150,000
  Accounts receivable, net                     728,414              416,722
  Inventories, net                             711,596              596,317
  Prepaid expenses                             124,726               64,780
                                   -------------------  -------------------
    Total current assets                     2,679,576            1,361,984

Property and equipment, net                     26,939               52,531

Deposits                                        10,895               10,895
                                   -------------------  -------------------

      Total assets                 $         2,717,410  $         1,425,410
                                   ===================  ===================


                    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Line of credit                   $            37,500  $            75,000
  Notes payable                                 39,354               20,670
  Accounts payable and accrued
   expenses (Includes related
   party of $48,000 and $11,000,
   respectively)                               872,507              713,184
  Deferred revenue                              65,801               60,836
                                   -------------------  -------------------
    Total current liabilities                1,015,162              869,690
                                   -------------------  -------------------

Stockholders' equity:
  Common stock, $.0025 par value;
   authorized 50,000,000 shares;
   issued and outstanding:
   20,865,257 and 16,485,257
   shares, respectively                         52,163               41,213
  Additional paid-in capital                21,296,223           20,162,969
  Accumulated deficit                      (19,646,138)         (19,648,462)
                                   -------------------  -------------------

                                             1,702,248              555,720
                                   -------------------  -------------------

      Total liabilities and
       stockholders' equity        $         2,717,410  $         1,425,410
                                   ===================  ===================

Contact: Stephen Kuchen CFO 732-739-2900, x603 Email Contact