Prolong International Corp. Reports Third-Quarter Results
14 November 2000
Prolong International Corp. Reports Third-Quarter Results
IRVINE, Calif.--Nov. 14, 2000--Prolong International Corp. (AMEX:PRL) Tuesday reported a loss of $505,000, or $0.02 per diluted share, on net sales of $3.7 million for the third quarter ended Sept. 30, 2000.In the third quarter of 1999, the company reported a loss of $416,000, or $0.01 per diluted share, on net sales of $9.8 million.
For the nine months ended Sept. 30, 2000, the company reported a loss of $375,000, or $0.01 per diluted share, on sales of $16.6 million, compared with a loss of $2.1 million, or $0.07 per diluted share on sales of $31.6 million in the first nine months of 1999.
Third-quarter gross profit was $2.6 million, or 71.3% of net sales, compared with $7.3 million, or 74.6% of net sales, a year ago. A reduction in selling and marketing expenses to $2.2 million, from $6.4 million in the third quarter of 1999 was primarily the result of lower expenses for endorsement and sponsorship payments, activities to promote product awareness, marketing allowances, commissions and reductions in advertising expenditures.
A reduction in general and administrative expenses to $980,000, from $1.4 million in the third quarter of 1999 reflects decreases in legal expenses, consulting, bad debt and general insurance expenses.
Elton Alderman, president and chief executive officer of Prolong International, said lower revenues in the third quarter are reflective of a recent soft market for the automotive aftermarket's specialty chemical category which encompasses, among others, the company's signature Prolong Engine Treatment.
"Large promotional orders placed by some of our largest retail accounts, logged in the third quarter of 1999 but not duplicated in the same time-period during 2000, were also a factor in declining sales," said Alderman. Other factors cited included a decline in direct response television (DRTV) advertising and increased competition in the marketplace.
"We continue to aggressively implement a comprehensive cost- cutting initiative that has spanned the third-quarter, and will extend well into the future," said Alderman. "These efforts are proving themselves effective. The cumulative financial benefits of these measures are integral to our plans for attaining sustained profitability and top-line growth during 2001."
PROLONG INTERNATIONAL CORP.
Consolidated Condensed Statements of Operations
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2000 1999 2000 1999
(unaudited)(unaudited) (unaudited) (unaudited)
Net sales $3,651,886 $9,758,596 $16,628,606 $31,509,675
Cost of sales 1,046,648 2,482,588 4,140,743 8,170,032
Gross profit 2,605,238 7,276,008 12,487,863 23,339,643
Selling and marketing
expenses 2,224,341 6,400,017 8,715,837 21,087,614
General and
administrative
expenses 979,547 1,379,843 3,674,633 5,195,419
Other (expense) (119,010) (136,420) (396,455) (288,275)
(Loss) before taxes (717,660) (640,272) (299,062) (3,231,665)
Provision (benefit)
for income taxes (213,124) (224,000) 75,734 (1,131,000)
Net (loss) ($504,536) ($416,272) ($374,796)($2,100,665)
Net (loss) per common
share
Basic ($0.02) ($0.01) ($0.01) ($0.07)
Diluted ($0.02) ($0.01) ($0.01) ($0.07)
Weighted average common
shares
Basic shares
outstanding 28,438,903 28,445,835 28,443,507 28,445,835
Diluted shares
outstanding 28,438,903 28,445,835 28,443,507 28,445,835
Consolidated Condensed Balance Sheet
Sept. 30, Dec. 31,
2000 1999
(unaudited) (audited)
Assets:
Cash and cash equivalents $ 321,191 $1,094,779
Accounts receivable, net 3,742,713 2,747,459
Inventories, net 1,642,690 2,171,728
Other current assets 2,193,635 2,112,886
Total current assets 7,900,229 8,126,852
Property and equipment, net 3,284,138 3,554,176
Intangible assets, net 6,656,657 7,036,670
Other assets 1,375,358 2,661,950
Total assets $19,216,382 $21,379,648
Liabilities and stockholders' equity
Accounts payable $2,620,938 $2,843,843
Accrued expenses and other current
liabilities 1,171,487 1,256,572
Line of credit bank 2,484,044 3,985,000
Total current liabilities 6,276,469 8,085,415
Notes payable, noncurrent 2,289,990 2,327,048
Total stockholders' equity 10,649,923 10,967,185
Total liabilities and stockholders'
equity $19,216,382 $21,379,648