Prolong International Corp. Reports Third-Quarter results
IRVINE, Calif.--Nov. 13, 2001--Prolong International Corp. (AMEX:PRL) today reported financial results for the quarter ended Sept. 30, 2001.For the third quarter of 2001, the company reported a net loss of $420,000, or $0.01 per diluted share, on net sales of $2.9 million. In the third quarter of 2000, the company reported a net loss of $505,000, or $0.02 per diluted share, on net sales of $3.7 million.
For the nine months ended Sept. 30, 2001, the company reported a net loss of $395,000, or $0.01 per diluted share, on sales of $10.9 million, compared with a net loss of $375,000, or $0.01 per diluted share on sales of $16.6 million in the first nine months of 2000.
Third-quarter gross profit was $1.9 million, or 67.5% of net sales, compared with $2.6 million, or 71.3% of net sales, a year ago. A reduction in selling and marketing expenses to $1.4 million from $2.2 million in the third quarter of 2000 was primarily the result of lower expenses for endorsements, sponsorships, promotions, salaries, travel and television airtime purchases.
A reduction in general and administrative expenses to $0.9 million from $1.0 million in the third quarter of 2000 reflects decreases in legal expenses and administrative salaries.
"The resolution of the litigation related to the company's acquisition of the assets of EPL Prolong Inc., which has dragged on since November of 1998, is a welcome event," said Thomas Billstein, the company's chief operating officer.
"Significant monthly expenditures for legal defense diverted funds that could have otherwise been utilized for working capital purposes. The entire management team is obviously thrilled to see this issue finally and permanently resolved."
"The company has also entered into stipulated settlement agreements on all of the outstanding litigation related to substantiation of advertising claims. Upon approval by the court, these settlements will cut off even more legal expense, will free up management's time for productive efforts and will, of course, remove any lingering concerns about possible financial impacts on the company from these issues," said Billstein.
"Subject to the court approving these agreements, all of this litigation will have been settled without any admission of liability by the company, future claims on the same issues will be forever barred and there will be no material adverse effect on the company's financial results."
Elton Alderman, president and chief executive officer of Prolong International, said: "The management team is totally focused on returning the company to profitability. Every member of the senior management team has voluntarily taken a 10% reduction in his or her own salary as a contribution to the profit-making effort.
"The company's employees are all sensitized to maximizing income and minimizing expenses, and are pulling together, working extra hard, to meet the company's financial goals. I'm very proud of their collective performance.
"The company's investment in Prolong Environmental Energy Corp. (PEEC) and its fuel additive technology remains very promising. PEEC employees are diligently working to complete certifications of various fuel additive formulations. They are meeting with potential customers and they are working to further capitalize the company in order to commercialize the technology."
Prolong International, through its operating subsidiaries, manufactures, markets and distributes a complete line of patented lubricant and automotive appearance products. The company's products are marketed and sold under the brand name Prolong Super Lubricants(R) and are used by automotive consumers, businesses and industry. Prolong products are sold throughout the United States and in selected international markets.
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 Nine Months Ended
Sept. 30, Sept. 30,
2001 2000 2001 2000
(unaudited)(unaudited) (unaudited) (unaudited)
Net sales $2,858,222 $3,651,886 $10,939,283 $16,628,606
Cost of sales 929,751 1,046,648 3,401,632 4,140,743
Gross profit 1,928,471 2,605,238 7,537,651 12,487,863
Selling and marketing
expenses 1,397,081 2,224,341 4,726,728 8,715,837
General and administrative
expenses 908,713 979,547 2,799,902 3,674,633
Other (expenses), net (149,165) (119,010) (409,063) (396,455)
Income (loss) before
taxes (526,488) (717,660) (398,042) (299,062)
Provision (benefit) for
income taxes (106,392) (213,124) (2,936) 75,734
Net income (loss) ($420,096) ($504,536) ($395,106) ($374,796)
Net income (loss) per
common share:
Basic ($0.01) ($0.02) ($0.01) ($0.01)
Diluted ($0.01) ($0.02) ($0.01) ($0.01)
Weighted average common
shares:
Basic shares
outstanding 28,438,903 28,438,903 28,438,903 28,443,507
Diluted shares
outstanding 28,438,903 28,438,903 28,438,903 28,443,507
Consolidated Condensed Balance Sheets
Sept. 30, Dec. 31,
2001 2000
(unaudited)
Assets:
Cash and cash equivalents $33,792 $126,917
Accounts receivable, net 3,827,820 3,245,892
Inventories, net 734,371 970,236
Other current assets 642,811 1,453,514
Total current assets 5,238,794 5,796,559
Property and equipment, net 2,955,030 3,193,109
Intangible assets, net 6,149,973 6,529,986
Other assets 2,855,741 2,195,546
Total assets $17,199,538 $17,715,200
Liabilities and stockholders' equity:
Accounts payable $2,553,364 $2,183,482
Accrued expenses and other current
liabilities 1,331,123 1,663,060
Line of credit 1,932,551 2,050,716
Total current liabilities 5,817,038 5,897,258
Notes payable, noncurrent 2,236,794 2,277,130
Total stockholders' equity 9,145,706 9,540,812
Total liabilities and stockholders'
equity $17,199,538 $17,715,200