Prolong International Corporation Reports First Quarter 2003 Results

    IRVINE, Calif.--May 12, 2003--Prolong International Corporation (AMEX:PRL), (http://www.prolong.com), a technology driven consumer products holding company and parent of Prolong Super Lubricants, Inc., manufacturer and marketer of patented consumer automotive, commercial/industrial and household products, announced today financial results for the first quarter ended March 31, 2003. For the first quarter of 2003, the Company reported a net loss of $242,000 or $(0.01) per diluted share, on net sales of $2.2 million, compared to a net income of $132,000, or $0.00 per diluted share, on net sales of $2.9 million in the same period a year ago. Gross profit was $1.4 million, or 65.6% of net sales, for the first quarter of 2003 compared to $1.9 million, or 65.6% of net sales, in the first quarter of 2002. Selling and marketing expenses for the first quarter of 2003 were $857,000, or 39.1% of net sales, compared to $1,025,000, or 35.5% of net sales, for the comparable period a year ago. General and administrative expenses were $741,000, or 33.9% of net sales, for the first quarter of 2003, compared to $758,000, or 26.3% of net sales, for the comparable period a year ago.
    Elton Alderman, Prolong's President and CEO said, "The results of operations for the first quarter of 2003 do not reflect the results we are working to obtain for the full year." Alderman emphasized that the Company is focused on three main areas; premiering the new 'APC Fusion Series by Prolong' to its customers, rolling out a grass roots distributor program, and continuing to implement cost saving initiatives. Mr. Alderman further stated that, "These are challenging times, both in our business and in the general economy, but there is a tremendous amount of hard work being done within the Company to bring out the inherent value of the Prolong brand."
    Prolong International Corporation (AMEX:PRL), a consumer products holding company headquartered in Irvine, California, through its operating subsidiaries, manufactures, markets and distributes a complete line of patented lubricant and proprietary automotive, commercial/industrial and household products. The Company's products are marketed and sold under the brand name Prolong Super Lubricants(R) and are used in consumer, automotive and industrial applications. Prolong products are sold throughout the United States at major chain stores and auto retailers and in international markets. More information about Prolong International Corporation and its products can be obtained at http://www.prolong.com.

    Forward-Looking Statements

                   PROLONG INTERNATIONAL CORPORATION
                   Consolidated Condensed Statements
                             of Operations

                                                Three Months Ended
                                                     March 31,
                                                 2003         2002
                                             (unaudited)  (unaudited)

Net revenues                                  $2,188,061   $2,885,925
Cost of goods sold                               751,867      992,873
Gross profit                                   1,436,194    1,893,052

Selling and marketing expenses                   856,603    1,025,144
General and administrative expenses              741,309      758,407

Other (expenses) income, net                     (80,640)     (45,947)

(Loss) income before extraordinary item and
 provision for income taxes                     (242,358)      63,554
Extraordinary item-gain from forgiveness of
 debt, net of income taxes.                           --       94,924

(Loss) income before provision for income
 taxes                                          (242,358)     158,478
Provision for income taxes                            --       26,600
Net (loss) income                              $(242,358)    $131,878

Net (loss) income per common share:
  Basic                                           ($0.01)       $0.00
  Diluted                                         ($0.01)       $0.00

Weighted average common shares:
  Basic shares outstanding                    29,789,598   29,789,598
  Diluted shares outstanding                  29,789,598   29,789,598


                        Consolidated Condensed
                            Balance Sheets

                                                March 31, December 31,
                                                    2003         2002
                                              (unaudited)     audited

Assets:
Cash and cash equivalents                        $22,646     $261,623
Accounts receivable, net                       1,958,400    1,622,414
Inventories, net                                 587,785      512,595
Other current assets                             518,665      566,984
Total current assets                           3,087,496    2,963,616

Property and equipment, net                      311,033      329,985
Intangible assets, net                         6,466,543    6,484,836
Other assets                                   1,896,164    1,871,247

  Total assets                               $11,761,236  $11,649,684

Liabilities and stockholders' equity:
Accounts payable                                $872,793     $981,388
Accrued expenses and other current
 liabilities                                     890,967      700,740
Line of credit                                 1,183,712      863,592
Total current liabilities                      2,947,472    2,545,720

Notes payable, noncurrent                        544,639      592,481

Total stockholders' equity                     8,269,125    8,511,483

  Total liabilities and stockholders' 
  equity                                     $11,761,236  $11,649,684