PHLI PacificHealth Laboratories Inc (CE)

PacificHealth Laboratories, Inc. (OTCQB: PHLI) (OTCBB: PHLI), a leading sports nutrition company, today reported its financial results for the quarter and six months ended June 30, 2012.

Second Quarter & First Half 2012 vs. 2011 Financial Results Revenues were $2,229,234 for the second quarter and $3,980,173 for the first six months of 2012 compared to $2,245,226 and $3,976,837, respectively, for the same periods in 2011. Included in revenues for the six months of 2011 is approximately $25,000 of weight regulation sales that have been discontinued in 2012. Net loss for the second quarter was ($69,677), or $0.00 per share, and ($109,526), or ($0.01) per share, for the first six months of 2012 compared to net income of $91,769, or $0.00 per diluted share and $118,999, or $0.01 per diluted share, for the same periods in 2011. Included in expenses in 2012 is approximately $102,000 for the quarter and $158,000 for the first six months as part of the Company's investment in internet and social marketing campaigns.

At June 30, 2012, the Company had cash, cash equivalents, and other short-term investments of $521,369 compared to $820,904 at December 31, 2011. Current assets exceeded current liabilities by approximately $1,005,000 at June 30, 2012.

Fred Duffner, President and CEO of PacificHealth Laboratories, said, "Second quarter and year to date sales were impacted by the continued reduction in inventory purchases by our nutritional channel which was down approximately $156,000 in second quarter and approximately $189,000 year to date. In addition, we invested $41,000 in markdown monies with key retailers to help accelerate the transition to our new packaging and formulation that impacted net sales. Ecommerce is up 9% year to date but below our expectations. We continue to make modifications to the site, shopping basket experience, and promotional offers to focus on increasing this channel as a percentage of overall sales.

Mr. Duffner added, "We continued to make progress on our key marketing initiatives during the second quarter:

• We completed the transition of all our core brands: ACCEL GEL®, ACCELERADE™, and ENDUROX R4®, to all-natural formulations. This included the updating of packaging to one cohesive brand look.
• Our internet marketing efforts to drive awareness resulted in over 16 million impressions year to date. Twitter followers are at almost 8,000 and are now over five times what they were in November 2011; Facebook followers year to date are now over 6,300, up 73% vs. November 2011; and YouTube views are now approximately 18,000 versus approximately 800 at the end of 2011. This will expand further in the third quarter with the launch of four new videos featuring Leanda Cave, who was on the podium at the 2011 Kona World Championship and recently won 'Escape from Alcatraz,' along with a new PHLI branding video.
• We entered into an agreement with Body Glove International to private label a product similar to 2ND SURGE® under the Body Glove label which launches in the third quarter in test market in Southern California and allows PHLI to break into action sports and convenience stores for the first time.
• We launched a new nutrition tool, The Portman Calculator, to help athletes create their specific nutritional plan for over 75 different activities at www.portmancalculator.com."

Mr. Duffner concluded, "Although sales have not yet responded, we stay committed to our need to expand our consumer audience. The changes we have made in packaging, messaging, and the new partnership with Body Glove we believe sets us up to do just that."

About PacificHealth Laboratories. Inc. PacificHealth Laboratories, Inc. (OTCQB: PHLI) (OTCBB: 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 SIX MONTHS ENDED JUNE 30, 2012 AND 2011
                                (UNAUDITED)

                               Three Months               Six Months
                              Ended June 30,            Ended June 30,
                             2012         2011         2012         2011
                         -----------  -----------  -----------  -----------
Revenues:
  Net product sales      $ 2,229,234  $ 2,245,226  $ 3,980,173  $ 3,976,837

Cost of goods sold         1,363,129    1,250,510    2,369,898    2,211,502
                         -----------  -----------  -----------  -----------

Gross profit                 866,105      994,716    1,610,275    1,765,335
                         -----------  -----------  -----------  -----------

Operating expenses:
  Sales and marketing        307,012      378,612      503,425      569,043
  General and
   administrative
   (Includes related
   party consulting of
   $49,475, $48,000,
   $98,620 and $91,000,
   respectively)             606,254      511,490    1,172,497    1,048,474
  Research and
   development                18,439        9,978       35,487       24,795
                         -----------  -----------  -----------  -----------
                             931,705      900,080    1,711,409    1,642,312
                         -----------  -----------  -----------  -----------

(Loss) income before
 other (expense) income
 and provision for
 income taxes                (65,600)      94,636     (101,134)     123,023
                         -----------  -----------  -----------  -----------

Other (expense) income:
  Other income                     -            -            -        2,100
  Interest income                121          127          234          279
  Interest expense            (4,198)      (2,994)      (8,626)      (6,403)
                         -----------  -----------  -----------  -----------
                              (4,077)      (2,867)      (8,392)      (4,024)
                         -----------  -----------  -----------  -----------

(Loss) income before
 provision for income
 taxes                       (69,677)      91,769     (109,526)     118,999

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

Net (loss) income        $   (69,677) $    91,769  $  (109,526) $   118,999
                         ===========  ===========  ===========  ===========

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

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

Weighted average common
 shares - basic           20,871,772   19,723,499   20,871,772   18,202,826
                         ===========  ===========  ===========  ===========

Weighted average common
 shares - diluted         20,871,772   19,929,921   20,871,772   18,390,201
                         ===========  ===========  ===========  ===========



                      PACIFICHEALTH LABORATORIES, INC.
                               BALANCE SHEETS
                                (UNAUDITED)

                                   ASSETS
                                                  June 30,     December 31,
                                                    2012           2011
                                               -------------  -------------
Current assets:
  Cash and cash equivalents                    $     446,369  $     745,904
  Other short-term investments                        75,000         75,000
  Accounts receivable, net                           834,331        369,376
  Inventories, net                                   982,547        571,403
  Prepaid expenses                                   116,858         91,479
                                               -------------  -------------
    Total current assets                           2,455,105      1,853,162

Property and equipment, net                          141,072         26,729

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

      Total assets                             $   2,607,072  $   1,890,786
                                               =============  =============

                    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Line of credit                               $      37,500  $      37,500
  Notes payable                                       43,912         19,679
  Accounts payable and accrued expenses
   (Includes related party of $16,275 and
   $32,000, respectively)                          1,315,267        546,712
  Deferred revenue                                    53,312         56,170
                                               -------------  -------------
    Total current liabilities                      1,449,991        660,061
                                               -------------  -------------

Commitments

Stockholders' equity:
  Common stock, $.0025 par value; authorized
   50,000,000 shares; issued and outstanding:
   20,871,772 shares                                  52,179         52,179
  Additional paid-in capital                      21,349,201     21,313,319
  Accumulated deficit                            (20,244,299)   (20,134,773)
                                               -------------  -------------

                                                   1,157,081      1,230,725
                                               -------------  -------------

      Total liabilities and stockholders'
       equity                                  $   2,607,072  $   1,890,786
                                               =============  =============

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