Precision Auto Care Announces Preliminary 2nd Quarter Results and Annual Meeting Results

    LEESBURG, Va., Jan. 17 /PRNewswire-FirstCall/ -- Precision Auto Care, Inc.
(OTC Bulletin Board: PACI) today announced that the Company's stockholders had
approved by an overwhelming margin proposals to increase the authorized shares
from 20 million to 40 million, to reduce the minimum number of directors from
10 to 5, and to reduce the terms of office from 3 years to 1 year.  The
stockholders' approvals permit the Company to issue Warrants pursuant to the
previously-announced Exchange Agreement with its two senior debt holders,
Arthur Kellar, a member of the Board of Directors, and Precision Funding
L.L.C., comprised of Mr. Kellar and Desarollo Integrado, S. A. de C.V.,
controlled by Mauricio Zambrano, a former member of the Board of Directors.
    As a result of the stockholder action, all of the ten existing directors
resigned and were replaced by a board consisting of 5 directors, all of whom
were incumbent directors: Woodley A. Allen (Chairman), Louis M. Brown, Jr.,
Bassam Ibrahim, Dr. John Sanders and Arthur C. Kellar.  Mr. Brown, PACI's CEO
stated: "We are grateful for the shareholders support in simplifying the board
structure since a smaller board is more suitable for a company of our size.
We are also grateful for the shareholders' approval of the increase in the
authorized number of shares.  This lets us issue warrants under the Exchange
Agreement announced on October 31, 2002 and avoid the issuance of interest-
bearing preferred shares."
    Mr. Brown also reported preliminary 2nd quarter results for PACI noting
that they looked much better without the interest expense.  Although the
numbers are not audited, the internal numbers report revenues for the three
months beginning October 1 and ending December 31, 2002 at $4.15 million and
the loss for that period at $321,000, compared with a loss of $3.3 million on
revenues of $4.96 million for the 3 months ended 12/31/2001. This calculation
does not include any positive adjustments from the debt to equity transaction.
Robert Falconi, the company CFO, stated that "With the recapitalization in
place and the large amount of interest relief that is realized because of the
recapitalization, our opportunity to begin making profits in the future is
greatly enhanced."

    Precision Auto Care, Inc.'s affiliate, Precision Franchising LLC, is one
of the world's largest franchisor of auto care centers, with 444 operating
centers as of January 17, 2002.  The Company franchises and operates Precision
Tune Auto Care centers around the world.

    Cautionary Statement: The statements in this press release contain
forward-looking statements within the meaning of the Securities Act of 1933 or
the Securities Exchange Act of 1934.  These statements are based on the
Company's current expectations, estimates and projections.  Statements that
are not historical facts are forward-looking statements and typically are
identified by words like "believe," "anticipate," "could," "estimate,"
"expect," "intend," "plan," "project," "will" and similar terms.  These
statements are not guarantees of future performance, events or results and
involve potential risks and uncertainties.  Accordingly, actual results may
differ from current expectations, estimates and projections.  The Company
undertakes no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.  Important
factors that may impact the Company's actual results include: (i) business
conditions and the general economy; (ii) the federal, state and local
regulatory environment; (iii) increased competitive pressure in the automotive
after-market services business; (iv) significant automotive technology
advances; (v) management's ability to execute the Company's business plan; and
(vi) the Company's ability to sell franchises in each.  Additional information
concerning risks and uncertainties that could cause actual results to differ
materially from those projected or suggested in the forward-looking statements
in the Company's filings with the Securities and Exchange Commission and in
its Annual Report on Form 10-K for the year ended June 30, 2002.  The forward-
looking statements contained in this prospectus represent the Company's
judgment as of the date of this prospectus, and you should not unduly rely on
these statements.

                                           Three Months Ending December 31,

    000s except per share amounts

                                                2002             2001
    Revenue                                     $ 4,151          $ 4,957
    Net Income (loss)                           $  (321)         $(3,262)
    Diluted Income (loss) per share             $ (0.02)         $ (0.30)
    Shares Outstanding - diluted                 13,318           10,724


                                             Six Months Ending December 31,

    000s except per share amounts

                                                2002             2001
    Revenue                                     $ 8,878          $10,750
    Net Income (loss)                           $  (754)         $(5,149)
    Diluted Income (loss) per share             $ (0.06)         $ (0.50)
    Shares Outstanding - diluted                 13,318           10,370