Prolong International Corporation Reports First Quarter 2004 Results

IRVINE, Calif.--May 2, 20041, 2004--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, 2004. For the first quarter of 2004, the Company reported a net loss of $510,000 or $(0.02) per diluted share, on net sales of $2.3 million, compared to a net loss of $188,000, or $0.01 per diluted share, on net sales of $2.2 million in the same period a year ago. Gross profit was $1.5 million, or 65.0% of net sales, for the first quarter of 2004 compared to $1.4 million, or 65.6% of net sales, in the first quarter of 2003. Selling and marketing expenses for the first quarter of 2004 were $1,064,000, or 46.3% of net sales, compared to $857,000, or 39.1% of net sales, for the comparable period a year ago. General and administrative expenses were $757,000, or 32.9% of net sales, for the first quarter of 2004, compared to $741,000, or 33.9% of net sales, for the comparable period a year ago.

Elton Alderman, the Company's President and CEO said, "The results of operations for the first quarter of 2004 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; we are producing a new infomercial to support retail sales with an expected June 2004 launch date, we are optimizing the in-store sales promotion programs with our existing retailers, and we are running television spots to help sales through retail, finally we are continuing to strengthen the relationships with our international distributors and we expect to see international sales increase during 2004, especially in the Asian and European markets. Mr. Alderman further stated that, "these are challenging times, especially in our business climate, but there is a tremendous amount of strategic work being done within the Company to bring out the inherent value of the Prolong brand and to drive the revenue line."

Prolong International Corporation, 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.

                      PROLONG INTERNATIONAL
                           CORPORATION
           Consolidated Condensed Statements of Operations

                                                Three Months Ended
                                                     March 31,
                                                 2004         2003
                                                              (As
                                                            Restated)
                                             (unaudited)  (unaudited)

Net sales                                     $2,299,222   $2,188,061
Cost of sales                                    805,661      751,867
Gross profit                                   1,493,561    1,436,194

Selling and marketing expenses                 1,064,431      856,603
General and administrative expenses              757,194      741,309

Other (expenses) income, net                     (68,547)     (26,007)

(Loss) before provision for income taxes        (396,611)    (187,725)
Provision for income taxes                       113,000            -
Net (loss)                                     $(509,611)   $(187,725)

Net (loss) per common share:
  Basic                                           ($0.02)      ($0.01)
  Diluted                                         ($0.02)      ($0.01)

Weighted average common shares:
  Basic shares outstanding                    29,828,362   29,789,598
  Diluted shares outstanding                  29,828,362   29,789,598

                Consolidated Condensed Balance Sheets

                                              March 31,   December 31,
                                                2004          2003
                                             (unaudited)    audited

Assets:
Cash and cash equivalents                       $797,711   $1,700,666
Accounts receivable, net                       1,700,070    1,019,052
Inventories, net                                 874,364      604,498
Other current assets                             901,697      855,148
Total current assets                           4,273,842    4,179,364

Property and equipment , net                     221,671      234,768
Trademarks and intangible assets               3,000,000    3,000,000
Goodwill                                       2,523,302    2,523,302
Other assets                                   1,549,285    1,649,884

  Total assets                               $11,568,100  $11,587,318

Liabilities and stockholders' equity:
Accounts payable                              $1,003,949     $826,475
Accrued expenses and other current
 liabilities                                   2,015,954    1,911,017
Line of credit                                 1,064,074      737,564
Total current liabilities                      4,083,977    3,475,056

Deferred gain, noncurrent                        382,433      437,066
Notes payable, noncurrent                      1,682,728    1,756,998

Total stockholders' equity                     5,418,962    5,918,198

  Total liabilities and stockholders' equity $11,568,100  $11,587,318