Prolong International Corp. Initiates Measures to Enhance Profitability

19 July 1999

Prolong International Corp. Initiates Measures to Enhance Profitability; Anticipates Second-Quarter Loss

    IRVINE, Calif.--July 19, 1999--Prolong International Corp. (AMEX:PRL) Monday announced that it has initiated measures designed to improve future profitability in the face of an anticipated second-quarter loss of approximately $1.6 million on expected revenues of approximately $12 million.
    A program to reduce overhead as a percentage of sales includes, among other measures, a strategy to more efficiently purchase television air-time; a reallocation of advertising dollars among print and media outlets; a review of sponsorship payments and motorsports promotional activities; a curtailment of legal expenses; and across-the-board reductions in general and administrative expenses.
    Elton Alderman, president and chief executive officer of Prolong International, attributed the second-quarter loss primarily to higher-than-anticipated start-up costs associated with the roll-out of the company's new line of automotive appearance products.
    "Launching what is essentially a new product division is an expensive undertaking," said Alderman. "In addition to one-time slotting fees, these costs included a considerable investment in fine-tuning the marketing appeal of the appearance products and the related direct-response television advertisements -- enhancements that we believe to be essential to the long-term success of the product line."
    Results for the company's second quarter ended June 30 will be reported during the week of August 9, 1999. In the second quarter of 1998 the company reported earnings of $116,000 on net sales of $8.4 million.
    Prolong International, through its operating subsidiaries, manufactures, markets and distributes a complete line of patented lubricant and proprietary automotive appearance products. The company's products are marketed and sold under the brand name Prolong Super Lubricants(R) and are used in automotive, industrial and consumer applications. 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.