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ProPhase Labs (PRPH) Reports Q1 Data, 60% Upswing in Net Sales, Expanded and Improved Product Portfolio

ProPhase Labs, the remarkable little medical science company that is currently pursuing a variety of natural health targets and is widely known as the producer of the clinically-proven Cold-EEZE® (based on a proprietary cold remedy formula of zinc gluconate glycine) family of lozenges for the common cold, recently presented a report of the Company’s Q1 2011 results.

Chief among the data is a 60% increase in net sales (three-month period ended Mar. 31, 2011) over the same period the previous year, as the Company raked in some $3.2M led by strong uptake of the Cold-EEZE line by retailers.

Chairman and CEO of PRPH, Ted Karkus, pointed out his analysis in the Company’s year-end report to shareholders, which offered a detailed breakdown of the many successful “major initiatives” in FY10 that included a rigorous overhaul of the personnel load out, as well as new packaging and flavors for PRPH’s flagship Cold-EEZE brand in conjunction with the repositioning of the Kids-EEZE® brand. Karkus also explained that several steps to shore up and improve relationships with end market retailers have resulted in a more efficient pipeline.

Karkus acknowledged the running downtrend in profitability, but clearly conveyed management’s strong position that this data represents a decided move towards an inversion of the trend, showing good product momentum despite increased sales/marketing (which increased by some $821k compared to the same quarter in 2010) and R&D (up $131k over the same quarter in 2010) expenditures associated with the Kids-EEZE reformat and ancillary growth objectives. Sales and marketing expenses were largely attributable to an increased media push along traditional mediums aimed at bolstering sales of Cold-EEZE products, a move validated by the sales data.

The Company also offered a new oral delivery application, Cold-EEZE® Oral Spray, which showed extremely positive response from retailers. Karkus looked forward to the fall 2011 launch of the product into consumer markets, where the new oral spray and better Kids-EEZE offerings will grant the Company solid nation-wide product envelope in the consumer space.

The report looked at data from SDI Health which indicates that Dec. 2010 – Feb. 2011 peak incidence rate period for upper respiratory disorders in the 2010-2011 Cold Season shifted from the prior year, resulting in a timing, stocking and demand dynamic only enhanced by the severity of the Cold Season. The Company shrewdly exploited this dynamic with enhanced marketing initiatives.

Karkus projected FY11 strategy as well, indicating that revenue growth and increased consumer awareness of the Company’s primary brands were chief among the objectives set. Karkus was confident that the sales and marketing targets would result in the best mix of short- and long-term results for shareholders and emphasized that the new oral spray would be a big addition to 2011 revenue growth.

For more information and a closer look at the data, please visit the Company’s website at:

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