Prolong International Corp. Announces Q4 and Year-End Results

    IRVINE, Calif.--March 15, 2001--Prolong International Corp. (AMEX:PRL) today reported that in its fourth quarter ended Dec. 31, 2000 it incurred a net loss of $1.3 million, or $0.04 per diluted share, on net sales of $2.5 million.
    In the fourth quarter of 1999 the company reported a net loss of $4.5 million, or $0.16 per diluted share, on net sales of $3 million.
    For the year ended Dec. 31, 2000, the company reported a net loss of $1.7 million or $0.06 per diluted share, on sales of $19.1 million, compared with a net loss of $6.6 million, or $0.23 per diluted share on sales of $34.5 million in 1999.
    Contributing to the fourth-quarter and year-to-date loss were lower revenues reflecting the recent soft market for the automotive after-market's specialty chemical category, which encompasses, among others, the company's signature Prolong Engine Treatment.
    "Large promotional orders placed by some of our largest retail accounts, during 1999, but not duplicated during 2000, were also a factor in declining sales," said Elton Alderman, president and CEO of Prolong International.
    Other factors cited included a decline in direct response television (DRTV) advertising, increased competition in the market place and also due to a decreased demand and acceptance of the appearance product line in Year 2000.
    "As a result, the company initiated vigorous expense-reduction strategies during the Year 2000 to bring expenses in line with anticipated revenues," said Alderman.
    "The company anticipates realizing the full impact of these expense reductions in Year 2001. The company also is redirecting its focus on sales strategies which promote the core lubricant product line. The cumulative financial benefits of these measures are integral to our plans for attaining sustained profitability and top-line growth during 2001."

                      PROLONG INTERNATIONAL CORP.
            Consolidated Condensed Statements of Operations

                                           Three Months Ended         
                                              December 31,            
                                         2000              1999          
                                      (unaudited)       (unaudited)     

Net sales                             $2,451,612        $2,961,240     
Cost of sales                          1,116,857         2,330,554     
Gross profit                           1,334,755           630,686     

Selling and marketing expenses         1,997,723         4,944,795     
General and administrative expenses    1,038,871         2,449,902     
Research and development expenses         18,488           123,362     

Other expenses, net                     (130,134)         (154,949)    

Loss before taxes                     (1,850,461)       (7,042,322)    
Benefit for income taxes                (572,979)       (2,562,926)    
Net loss                             ($1,277,482)      ($4,479,396)    

Net loss per common share
  Basic                                   ($0.04)           ($0.16)    
  Diluted                                 ($0.04)           ($0.16)    

Weighted average common shares
  Basic shares outstanding            28,438,903        28,445,835     
  Diluted shares outstanding          28,438,903        28,445,835     

                                               Year Ended
                                              December 31,
                                         2000              1999
                                       (audited)         (audited)

Net sales                            $19,080,218       $34,470,915
Cost of sales                          5,257,600        10,500,586
Gross profit                          13,822,618        23,970,329

Selling and marketing expenses        10,631,959        25,850,474
General and administrative expenses    4,709,504         7,645,321
Research and development expenses        104,089           305,297

Other expenses, net                     (526,589)         (443,224)

Loss before taxes                     (2,149,523)      (10,273,987)
Benefit for income taxes                (497,245)       (3,693,926)
Net loss                             ($1,652,278)      ($6,580,061)

Net loss per common share
  Basic                                   ($0.06)           ($0.23)
  Diluted                                 ($0.06)           ($0.23)

Weighted average common shares
  Basic shares outstanding            28,442,341        28,445,835
  Diluted shares outstanding          28,442,341        28,445,835


                 Consolidated Condensed Balance Sheets

                                    December 31,         December 31,
                                       2000                 1999
                                     (audited)            (audited)

Assets:
Cash and cash equivalents          $   126,917          $ 1,094,779
Accounts receivable, net             3,245,892            2,747,459
Inventories, net                       970,236            2,171,728
Other current assets                 1,453,514            2,001,613
Total current assets                 5,796,559            8,015,579

Property and equipment, net          3,193,109            3,554,176
Intangible assets, net               6,529,986            7,036,670
Other assets                         2,195,546            2,773,223

  Total assets                     $17,715,200          $21,379,648

Liabilities and stockholders' equity:
Accounts payable                   $ 2,183,482          $ 2,843,843
Accrued expenses and other 
  current liabilities                1,663,060            1,256,572
Line of credit                       2,050,716            3,985,000
Total current liabilities            5,897,258            8,085,415

Notes payable, noncurrent            2,277,130            2,327,048

Total stockholders' equity           9,540,812           10,967,185

 Total liabilities and 
   stockholders' equity            $17,715,200          $21,379,648