PacificHealth absorbs 2005 blow, 2Q
third quarter thanks to the sale of its sports drink brand
Accelerade - a relief for the company following a near cease of
operations in August 2005.
The New-Jersey company specializes in protein-based finished nutritional products that stimulate appetite regulation, as well as sports products. Their coffers received a blow in 2004 when GNC discontinued their NTS strength training line, resulting in PacificHealth writing off $679,000 of inventory and patents worth $137,138.
PacificHealth absorbed the bulk of its negative operating losses with the sale of the beverage rights for Accelerade to Motts, a division of Cadbury Schweppes Americas Beverages (CSAB)' in February and is optimistic advertising paid for by the marketing giant will have a trickle down effect on its own sales.
The sale of the Accelerade beverage brand also brought about reduced costs. "In the second quarter we reduced our operating losses primarily because of significantly reduced advertising, marketing and sales expenditures," said Robert Portman, president and CEO of PacificHealth.
In June, CSAB began an Accelerade ad campaign in sports publications such as Runner's World, Bicycling and Triathlete. CSAB also began Accelerade grass roots efforts in major markets. "Over the next two quarters we anticipate seeing the impact of these programs on the sales of Accelerade powder and gel," said Portman.
The net operating losses stood at $31,683 for the six months ended June 30, compared to $1,081,760 for the same period in 2005. A comparison between the operating losses between the 2006 and 2005 second quarters are not as dramatic - $49,006 and $380,484 respectively - but still show significant improvements.
PacificHealth is now focusing its energy on preparing its new weight loss product, Satiatrim, for market.
"We have now completed three quantitative market research studies involving 1,200 consumers," said Portman. "The results of these studies are extremely encouraging."
Satiatrim could be the bumper Pacific Health needs to further spur sales. The company reported net sales of $3,322,602 for the six months ended June 30, slightly up from $3,040,043 for the same period in 2005.
