Prolong International Corp. Reports First-Quarter 2001 Results
IRVINE, Calif.--May 7, 2001--Prolong International Corp. (Amex:PRL) today reported financial results for the quarter ended March 31, 2001.For the first quarter of 2001, the company reported net income of $45,000, or $0.00 per diluted share, on net sales of $4.2 million, compared with a net income of $641,000, or $0.02 per diluted share, on net sales of $7.8 million in the same period a year ago.
Gross profit was $2.8 million, or 68.5% of net sales, compared with $6.0 million, or 77.7% of net sales, in the first quarter of 2000. The decrease in gross margins was attributed to a shift in product mix that resulted in an increased percentage of international sales which carry a lower gross margin than domestic retail lubricant sales. In addition, margins were impacted by a one-time sale of slower moving appearance products that were sold at a discount.
Selling and marketing expenses for the quarter were $1.57 million, or 37.8% of net sales, compared with $3,313,000 or 42.7% of net sales for the comparable period a year ago. General and administrative expenses were $977,000 or 23.5% for the quarter, compared with $1,428,000 or 18.4% for the comparable period a year ago.
"We are pleased that we reported a profit in the first quarter, as it evidences results of our drive to balance operating expenses with anticipated sales," said Elton Alderman, president and CEO of Prolong International. "On the other hand, our expectations were for a larger profit than was recorded. While sales in the automotive specialty chemical market are currently soft, that doesn't mean the company can't grow its business," said Alderman. "We are going to continue to work hard at improving our operating efficiencies, optimizing our marketing expenditures, and using the talents of our creative staff as we work to grow the company's overall profitability."
Prolong International, through its operating subsidiaries, markets and distributes patented premium lubricants and appearance products for automotive, industrial and consumer applications. Its products are sold throughout the United States and in selected international markets under the brand names Prolong Super Lubricants(R) and Prolong Appearance Products.
Certain statements in this news release that relate to financial results, projections, future plans, events, or performance, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and involve significant risks and uncertainties, including but not limited to the following: competition, cost of components, product concentration and risk of declining selling prices. The company's actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors. These risks and uncertainties, and certain other related factors, are discussed in the company's Form 10-K, Form 10-Q, and other filings with the Securities and Exchange Commission. These forward-looking statements are made as of the date of this release, and the company assumes no obligation to update such forward-looking statements.
PROLONG INTERNATIONAL CORP.
Consolidated Condensed Statements of Operations
Three Months Ended
March 31,
2001 2000
(unaudited) (unaudited)
Net sales $4,151,945 $7,757,199
Cost of sales 1,307,251 1,726,911
Gross profit 2,844,694 6,030,288
Selling and marketing expenses 1,569,927 3,312,551
General and administrative expenses 977,156 1,428,153
Other (expenses), net (116,910) (151,921)
Income before taxes 180,701 1,137,663
Provision for income taxes 136,141 496,843
Net income $44,560 $640,820
Net income per common share:
Basic $0.00 $0.02
Diluted $0.00 $0.02
Weighted average common shares:
Basic shares outstanding 28,438,903 28,445,835
Diluted shares outstanding 28,438,903 28,574,054
Consolidated Condensed Balance Sheets
March 31, December 31,
2001 2000
(unaudited)
Assets:
Cash and cash equivalents $124,380 $126,917
Accounts receivable, net 4,119,891 3,245,892
Inventories, net 1,031,122 970,236
Other current assets 1,355,735 1,453,514
Total current assets 6,631,128 5,796,559
Property and equipment , net 3,114,244 3,193,109
Intangible assets, net 6,403,315 6,529,986
Other assets 2,091,694 2,195,546
Total assets $18,240,381 $17,715,200
Liabilities and stockholders' equity:
Accounts payable $2,682,360 $2,183,482
Accrued expenses and other current
liabilities 1,618,754 1,663,060
Line of credit 2,088,157 2,050,716
Total current liabilities 6,389,271 5,897,258
Notes payable, noncurrent 2,265,738 2,277,130
Total stockholders' equity 9,585,372 9,540,812
Total liabilities and stockholders'
equity $18,240,381 $17,715,200