SOURCE: PacificHealth Laboratories, Inc.

PacificHealth Laboratories, Inc.

March 04, 2011 09:53 ET

PacificHealth Laboratories Reports 2010 Financial Results

MATAWAN, NJ--(Marketwire - March 4, 2011) - PacificHealth Laboratories, Inc. (OTCQB: PHLI), a leading nutrition company, today 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.

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.

                     PACIFICHEALTH LABORATORIES, INC.
                         STATEMENTS OF OPERATIONS
     FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2010 AND 2009


                                Three Months            Twelve Months
                            Ended December 31,       Ended December 31,
                          -----------------------  -----------------------
                             2010         2009        2010         2009
                          ----------  -----------  ----------  -----------
Revenues:
   Net product sales      $  996,900  $ 1,198,230  $7,200,960  $ 7,995,194

Cost of goods sold:
   Product sales             667,951      718,759   4,037,332    4,282,777
   Write-down of
    inventories                    -      491,172           -      491,172
                          ----------  -----------  ----------  -----------
Total cost of goods sold     667,951    1,209,931   4,037,332    4,773,949
                          ----------  -----------  ----------  -----------

Gross profit (loss)          328,949      (11,701)  3,163,628    3,221,245
                          ----------  -----------  ----------  -----------

Operating expenses:
   Sales and marketing       258,068      539,385   1,166,471    1,880,102
   General and
    administrative
    (Includes related
    party consulting of
    $33,000 and $55,000,
    respectively, for the
    three- and twelve-
    month periods ended
    December 31, 2010)       607,265      740,206   2,753,512    3,200,680
   Research and
    development                4,000            -       4,000            -
   Restructuring expense           -       81,050           -       81,050
                          ----------  -----------  ----------  -----------
                             869,333    1,360,641   3,923,983    5,161,832
                          ----------  -----------  ----------  -----------

Loss before other
 (expense) income and
  benefit from income
  taxes                     (540,384)  (1,372,342)   (760,355)  (1,940,587)
                          ----------  -----------  ----------  -----------

Other (expense) income:
   Other income                    -          248       4,000        4,248
   Interest income               264          239       1,055        3,684
   Interest expense           (1,426)      (1,562)     (6,122)      (5,320)
                          ----------  -----------  ----------  -----------
                              (1,162)      (1,075)     (1,067)       2,612
                          ----------  -----------  ----------  -----------

Loss before benefit from
 income taxes               (541,546)  (1,373,417)   (761,422)  (1,937,975)

Benefit from income taxes          -      263,931           -      261,851
                          ----------  -----------  ----------  -----------

Net loss                  $ (541,546) $(1,109,486) $ (761,422) $(1,676,124)
                          ==========  ===========  ==========  ===========

Basic and diluted loss
 per share                $    (0.03) $     (0.07) $    (0.05) $     (0.11)
                          ==========  ===========  ==========  ===========

Weighted average common
 shares - basic and
 diluted                  16,485,257   15,448,819  16,146,664   14,974,931
                          ==========  ===========  ==========  ===========








                     PACIFICHEALTH LABORATORIES, INC.
                              BALANCE SHEETS

                                  ASSETS
                                                December 31,  December 31,
                                                    2010          2009
                                                ------------  ------------
Current assets:
  Cash and cash equivalents                     $    134,165  $    281,159
  Other short-term investments                       150,000       175,000
  Accounts receivable, net                           416,722       763,288
  Inventories                                        596,317       806,212
  Prepaid expenses                                    64,780        92,702
  Tax loss receivable                                      -       303,931
                                                ------------  ------------
       Total current assets                        1,361,984     2,422,292

Property and equipment, net                           52,531       110,904

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

            Total assets                        $  1,425,410  $  2,544,091
                                                ============  ============




                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Line of credit                                $     75,000  $          -
  Notes payable                                       20,670        12,182
  Accounts payable and accrued expenses
   (Includes related party of $11,000
    and $0, respectively)                            713,184     1,042,051
  Deferred revenue                                    60,836       306,239
                                                ------------  ------------
        Total current liabilities                    869,690     1,360,472
                                                ------------  ------------

Stockholders' equity:
  Common stock, $.0025 par value; authorized
   50,000,000 shares; issued and outstanding:
   16,485,257 and 15,624,017 shares,
   respectively                                       41,213        39,060
  Additional paid-in capital                      20,162,969    20,031,599
  Accumulated deficit                            (19,648,462)  (18,887,040)
                                                ------------  ------------

                                                     555,720     1,183,619
                                                ------------  ------------

            Total liabilities and stockholders'
             equity                             $  1,425,410  $  2,544,091
                                                ============  ============

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