##### 



FORM 10-QSB

U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

|                                            |  |                              
|------------------------------------------- |  | -----------------------------
|For the quarterly period endedJune 30, 2002 |  | Commission fileNumber 0-26150

MILE MARKER INTERNATIONAL, INC.

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(Exact Name Of Small Business Registrant As Specified In Its Charter)


|                                               |  |                                     
|---------------------------------------------- |  | ------------------------------------
|Florida                                        |  | 11-2128469                          
|                                               |  |                                     
|(State or other
jurisdiction of
incorporation) |  | (IRS Employer
Identification
Number)

1450 S.W. 13th Court, Pompano Beach, Florida 33069

---

(Address of principal executive offices)


Registrants Telephone Number: (954) 782-0604

Indicate by check mark whether the Registrant (1) has filed all documents
and reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or such shorter period that
the Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

Yes [X] No [   ]

APPLICABLE ONLY TO CORPORATE ISSUERS

On June 30, 2002, the Registrant had outstanding 10,484,357 shares of
common stock, $.001 par value.



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##### 



MILE MARKER INTERNATIONAL, INC.

RISKS AND UNCERTAINTIES

Current and potential shareholders should consider carefully the risk factors
described below. Any of these factors, or others, many of which are beyond the
Companys control, could negatively affect the Companys revenues, profitability
or cash flows in the future. These factors include:

|  |  |                                                                                                                                   
|- |  | ----------------------------------------------------------------------------------------------------------------------------------
|o |  | Demand for the Companys products in general and from the U.S.
Government in particular.                                          
| 
|o |  | Magnitude of price and product competition for the Companys products.                                                            
| 
|o |  | Effects of the weather and natural disasters on the demand for the
Companys products.                                            
| 
|o |  | Effects of foreign political, economic or military developments on the
Companys international customer or supplier relationships.
| 
|o |  | Ability to control costs and expenses.                                                                                            
| 
|o |  | Ability to retain qualified personnel.                                                                                            
| 
|o |  | Ability to develop and introduce new or enhanced versions of the
Companys products.                                              

FORWARD-LOOKING STATEMENTS

When used in this Quarterly Report on Form 10-QSB or in future filings by the
Company (as hereinafter defined) with the Securities and Exchange Commission, in
the Companys press releases or other public or shareholder communications, or
in oral statements made with the approval of an authorized executive officer,
the words or phrases will likely result, are expected to,  will continue,
is anticipated, estimate, project, or similar expressions are intended to
identify forward-looking statements. The Company wishes to caution readers not
to place undue reliance on any such forward-looking statements, which speak as
of the date made, and to advise readers that various factors, including regional
and national economic conditions, substantial changes in levels of market
interest rates, credit and other risks of manufacturing, distributing or
marketing activities, and competitive and regulatory factors could affect the
companys financial performance and could cause the Companys actual results for
future periods to differ materially from those anticipated by any
forward-looking statements.

The Company does not undertake and specifically disclaims any obligation to
update any forward-looking statements to reflect the occurrence of anticipated
or unanticipated events or circumstances after the date of such statements.

2



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##### 



MILE MARKER INTERNATIONAL, INC.

INDEX

|           |  |                                                                                                   |    |         
|---------- |  | ------------------------------------------------------------------------------------------------- | -- | --------
|           |  |                                                                                                   |    | Page No.
|           |  |                                                                                                   |    |         
|PART I     |  | FINANCIAL INFORMATION                                                                             |    |         
|          
|Item 1.    |  | Financial Statements                                                                              |    |         
|          
|           |  | Consolidated Condensed Balance Sheets, June 30, 2002
and December 31, 2001                        |    | 4       
|          
|           |  | Consolidated Condensed Statements of Income, Three
months ended June 30, 2002 and June 30, 2001   |    | 5       
|          
|           |  | Consolidated Condensed Statements of Income, Six
months ended June 30, 2002 and June 30, 2001     |    | 6       
|          
|           |  | Consolidated Condensed Statements of Cash Flows, Six
months ended June 30, 2002 and June 30, 2001 |    | 7       
|          
|           |  | Notes to Consolidated Condensed Financial Statements                                              |    | 8       
|          
|Item 2.    |  | Managements Discussion or Plan of Operation                                                      |    | 9-11    
|          
|          
|PART II    |  | OTHER INFORMATION                                                                                 |    |         
|          
|Item 1.    |  | Legal Proceedings                                                                                 |    | 12      
|          
|Item 2.    |  | Changes in Securities                                                                             |    | 12      
|          
|Item 3.    |  | Defaults Upon Senior Securities                                                                   |    | 12      
|          
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                               |    | 12      
|          
|Item 5.    |  | Other Information                                                                                 |    | 12      
|          
|Item 6.    |  | Exhibits and Reports on Form 8-K                                                                  |    | 12      
|          
|SIGNATURES |  |                                                                                                   | 13

3



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##### 



MILE MARKER INTERNATIONAL, INC. AND SUBSIDIARY

Consolidated Condensed Balance Sheets
June 30, 2002 and December 31, 2001
UNAUDITED

|                                                                                                                                                         |                                                                                                  |                             |           |           |           |              |           |           |           | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | --------------------------- | --------- | --------- | --------- | ------------ | --------- | --------- | --------- | 
|                                                                                                                                                         |                                                                                                  |                             |           | June 30,  |           | December 31,
|                                                                                                                                                         |                                                                                                  |                             |           | 2002      |           | 2001        
|                                                                                                                                                         |                                                                                                  |                             |           |           |           |             
|ASSETS                                                                                                                                                   |                                                                                                  |                             |           |           |           |              |           |          
|CURRENT ASSETS                                                                                                                                           |                                                                                                  |                             |           |           |           |              |           |          
|                                                                                                                                                         | Cash                                                                                             |                             | $         | 137,773   |           |              | $         | 50,089    |          
|                                                                                                                                                         | Accounts Receivable, net of allowance for doubtful
accounts of $19,000 and $29,000, respectively |                             |           | 1,638,175 |           |              |           | 3,063,209 |          
|                                                                                                                                                         | Inventories                                                                                      |                             |           | 3,190,767 |           |              |           | 3,254,473 |          
|                                                                                                                                                         | Notes and Other Receivables                                                                      |                             |           | 304,076   |           |              |           | 149,764   |          
|                                                                                                                                                         | Deferred Tax Asset                                                                               |                             |           | 36,664    |           |              |           | 39,800    |          
|                                                                                                                                                         | Prepaid Expenses                                                                                 |                             |           | 38,833    |           |              |           | 60,210    |          
|                                                                                                                                                         |                                                                                                  |                             |           |           |           |              |           |          
|                                                                                                                                                         |                                                                                                  | Total Current Assets        |           |           | 5,346,288 |              |           |           | 6,617,545 | 
|PROPERTY AND EQUIPMENT, NET                                                                                                                              |                                                                                                  |                             | 381,200   |           |           |              | 440,681   |          
|OTHER ASSETS                                                                                                                                             |                                                                                                  |                             | 120,331   |           |           |              | 101,904   |          
|                                                                                                                                                         |                                                                                                  |                             |           |           |           |              |           |          
|Total Assets                                                                                                                                             |                                                                                                  | $                           | 5,847,819 |           |           | $            | 7,160,130 |          
|                                                                                                                                                         |                                                                                                  |                             |           |           |           |              |           |          
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                     |                                                                                                  |                             |           |           |           |              |           |          
|CURRENT LIABILITIES                                                                                                                                      |                                                                                                  |                             |           |           |           |              |           |          
|                                                                                                                                                         | Notes Payable  Line of Credit                                                                   |                             | $         | 1,479,836 |           |              | $         | 2,584,282 |          
|                                                                                                                                                         | Notes Payable  Current Portion                                                                  |                             |           |          |           |              |           | 21,066    |          
|                                                                                                                                                         | Accounts Payable                                                                                 |                             |           | 342,649   |           |              |           | 1,111,343 |          
|                                                                                                                                                         | Income Taxes Payable                                                                             |                             |           | 291,595   |           |              |           | 425,538   |          
|                                                                                                                                                         | Accrued Liabilities                                                                              |                             |           | 47,582    |           |              |           | 73,953    |          
|                                                                                                                                                         |                                                                                                  |                             |           |           |           |              |           |          
|                                                                                                                                                         |                                                                                                  | Total Current Liabilities   |           |           | 2,161,662 |              |           |           | 4,216,182 | 
|DEFERRED TAX CREDIT                                                                                                                                      |                                                                                                  |                             | 15,208    |           |           |              | 42,172    |          
|LONG-TERM LIABILITIES                                                                                                                                    |                                                                                                  |                             |           |           |           |              |           |          
|                                                                                                                                                         | Notes Payable                                                                                    |                             |           |          |           |              |           | 87,790    |          
|                                                                                                                                                         |                                                                                                  |                             |           |           |           |              |           |          
|                                                                                                                                                         |                                                                                                  | Total Long-Term Liabilities |           |           |          |              |           |           | 87,790    | 
|                                                                                                                                                         |                                                                                                  |                             |           |           |           |              |           |          
|                                                                                                                                                         |                                                                                                  | Total Liabilities           |           |           | 2,176,870 |              |           |           | 4,346,144 | 
|                                                                                                                                                         |                                                                                                  |                             |           |           |           |              |           |          
|SHAREHOLDERS EQUITY                                                                                                                                     |                                                                                                  |                             |           |           |           |              |           |          
|Common Stock, $.001 par value; 20,000,000 shares authorized, 10,484,357 shares
issued at June 30, 2002 and 10,634,357 shares issued at
December 31, 2001 |                                                                                                  |                             | 10,484    |           |           |              | 10,634    |          
|Additional Paid-in Capital                                                                                                                               |                                                                                                  |                             | 1,426,865 |           |           |              | 1,521,215 |          
|Treasury Shares (102,500 shares at cost)                                                                                                                 |                                                                                                  |                             | (79,763   | )         |           |              |          |          
|Retained Earnings                                                                                                                                        |                                                                                                  |                             | 2,313,363 |           |           |              | 1,282,137 |          
|                                                                                                                                                         |                                                                                                  |                             |           |           |           |              |           |          
|                                                                                                                                                         |                                                                                                  | Total Shareholders Equity  |           |           | 3,670,949 |              |           |           | 2,813,986 | 
|                                                                                                                                                         |                                                                                                  |                             |           |           |           |              |           |          
|Total Liabilities & Shareholders Equity                                                                                                                 |                                                                                                  | $                           | 5,847,819 |           |           | $            | 7,160,130 |          
|                                                                                                                                                         |                                                                                                  |                             |           |           |           |              |           |          

The accompanying Notes are an integral part of these financial statements.

4



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##### 



MILE MARKER INTERNATIONAL, INC. AND SUBSIDIARY

Consolidated Condensed Statements of Income
Three Months Ended June 30, 2002 and 2001
UNAUDITED

|                                         |                                     |                                               |                                           |                              |            |         |           |      |            |         |           |  
|---------------------------------------- | ----------------------------------- | --------------------------------------------- | ----------------------------------------- | ---------------------------- | ---------- | ------- | --------- | ---- | ---------- | ------- | --------- | -
|                                         |                                     |                                               |                                           |                              |            | 2002    |           | 2001
|                                         |                                     |                                               |                                           |                              |            |         |           |     
|Sales                                    |                                     | $                                             | 2,883,835                                 |                              |            | $       | 3,109,807 |     
|Cost of Sales                            |                                     |                                               | 1,386,470                                 |                              |            |         | 1,635,451 |     
|                                         |                                     |                                               |                                           |                              |            |         |           |     
|                                         |                                     |                                               |                                           | Gross Profit                 |            |         | 1,497,365 |      |            |         | 1,474,356 |  
|                                         |                                     |                                               |                                           |                              |            |         |           |     
|Selling Expenses                         |                                     |                                               | 280,914                                   |                              |            |         | 261,008   |     
|                                         |                                     |                                               |                                           |                              |            |         |           |     
|General and Administrative Expenses      |                                     |                                               |                                           |                              |            |         |           |     
|                                         |                                     | Salaries and Wages                            |                                           |                              | 298,759    |         |           |      | 261,794    |        
|                                         |                                     | Professional Fees                             |                                           |                              | 24,774     |         |           |      | 51,002     |        
|                                         |                                     | Rent                                          |                                           |                              | 37,747     |         |           |      | 38,933     |        
|                                         |                                     | Depreciation and Amortization                 |                                           |                              | 36,190     |         |           |      | 29,381     |        
|                                         |                                     | Insurance                                     |                                           |                              | 20,226     |         |           |      | 12,780     |        
|                                         |                                     | Vehicle Expenses                              |                                           |                              | 19,034     |         |           |      | 9,787      |        
|                                         |                                     | Research & Development                        |                                           |                              | 11,910     |         |           |      | 8,040      |        
|                                         |                                     | Other                                         |                                           |                              | 77,549     |         |           |      | 56,065     |        
|                                         |                                     |                                               |                                           |                              |            |         |           |     
|                                         |                                     |                                               | Total General and Administrative Expenses |                              |            | 526,189 |           |      |            | 467,782 |          
|                                         |                                     |                                               |                                           |                              |            |         |           |     
|                                         |                                     |                                               |                                           | Total Expenses               |            |         | 807,103   |      |            |         | 728,790   |  
|                                         |                                     |                                               |                                           |                              |            |         |           |     
|Income from Operations                   |                                     |                                               | 690,262                                   |                              |            |         | 745,566   |     
|                                         |                                     |                                               |                                           |                              |            |         |           |     
|Other Income/(Expense)                   |                                     |                                               |                                           |                              |            |         |           |     
|                                         |                                     |                                               |                                           | Interest Expense             |            |         | (19,624   | )    |            |         | (41,700   | )
|                                         |                                     |                                               |                                           | Interest Income              |            |         | 7,866     |      |            |         |          |  
|                                         |                                     |                                               |                                           |                              |            |         |           |     
|                                         |                                     |                                               |                                           | Total Other Income/(Expense) |            |         | (11,758   | )    |            |         | (41,700   | )
|                                         |                                     |                                               |                                           |                              |            |         |           |     
|Income before Provision for Income Taxes |                                     |                                               | 678,504                                   |                              |            |         | 703,866   |     
|Provision for Income Taxes               |                                     |                                               | (221,882                                  | )                            |            |         | (286,611  | )   
|                                         |                                     |                                               |                                           |                              |            |         |           |     
|                                         |                                     |                                               | Net Income                                |                              | $          | 456,622 |           |      | $          | 417,255 |          
|                                         |                                     |                                               |                                           |                              |            |         |           |     
|Per Share Data:                          |                                     |                                               |                                           |                              |            |         |           |     
|                                         |                                     | Weighted Average Shares Outstanding  Basic   |                                           |                              | 10,521,857 |         |           |      | 10,634,357 |        
|                                         |                                     | Weighted Average Shares Outstanding  Diluted |                                           |                              | 10,534,357 |         |           |      | 10,634,357 |        
|                                         | Earnings per Common Share  Basic   |                                               | $                                         | 0.04                         |            |         | $         | 0.04 |           
|                                         | Earnings per Common Share  Diluted |                                               | $                                         | 0.04                         |            |         | $         | 0.04 |           

The accompanying Notes are an integral part of these financial statements.

5



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##### 



MILE MARKER INTERNATIONAL, INC. AND SUBSIDIARY

Consolidated Condensed Statements of Income
Six Months Ended June 30, 2002 and 2001
UNAUDITED

|                                         |                                     |                                               |                                           |                              |            |           |           |      |            |         |           |  
|---------------------------------------- | ----------------------------------- | --------------------------------------------- | ----------------------------------------- | ---------------------------- | ---------- | --------- | --------- | ---- | ---------- | ------- | --------- | -
|                                         |                                     |                                               |                                           |                              |            | 2002      |           | 2001
|                                         |                                     |                                               |                                           |                              |            |           |           |     
|Sales                                    |                                     | $                                             | 6,392,915                                 |                              |            | $         | 4,624,680 |     
|Cost of Sales                            |                                     |                                               | 3,055,208                                 |                              |            |           | 2,562,802 |     
|                                         |                                     |                                               |                                           |                              |            |           |           |     
|                                         |                                     |                                               |                                           | Gross Profit                 |            |           | 3,337,707 |      |            |         | 2,061,878 |  
|                                         |                                     |                                               |                                           |                              |            |           |           |     
|Selling Expenses                         |                                     |                                               | 527,776                                   |                              |            |           | 429,054   |     
|                                         |                                     |                                               |                                           |                              |            |           |           |     
|General and Administrative Expenses      |                                     |                                               |                                           |                              |            |           |           |     
|                                         |                                     | Salaries and Wages                            |                                           |                              | 660,430    |           |           |      | 461,346    |        
|                                         |                                     | Professional Fees                             |                                           |                              | 104,352    |           |           |      | 108,213    |        
|                                         |                                     | Rent                                          |                                           |                              | 79,481     |           |           |      | 66,327     |        
|                                         |                                     | Depreciation and Amortization                 |                                           |                              | 70,228     |           |           |      | 57,101     |        
|                                         |                                     | Insurance                                     |                                           |                              | 43,209     |           |           |      | 25,381     |        
|                                         |                                     | Vehicle Expenses                              |                                           |                              | 31,862     |           |           |      | 20,314     |        
|                                         |                                     | Research & Development                        |                                           |                              | 15,504     |           |           |      | 37,045     |        
|                                         |                                     | Other                                         |                                           |                              | 159,254    |           |           |      | 113,432    |        
|                                         |                                     |                                               |                                           |                              |            |           |           |     
|                                         |                                     |                                               | Total General and Administrative Expenses |                              |            | 1,164,320 |           |      |            | 889,159 |          
|                                         |                                     |                                               |                                           |                              |            |           |           |     
|                                         |                                     |                                               |                                           | Total Expenses               |            |           | 1,692,096 |      |            |         | 1,318,213 |  
|                                         |                                     |                                               |                                           |                              |            |           |           |     
|Income from Operations                   |                                     |                                               | 1,645,611                                 |                              |            |           | 743,665   |     
|                                         |                                     |                                               |                                           |                              |            |           |           |     
|Other Income/(Expense)                   |                                     |                                               |                                           |                              |            |           |           |     
|                                         |                                     |                                               |                                           | Interest Expense             |            |           | (46,001   | )    |            |         | (81,857   | )
|                                         |                                     |                                               |                                           | Interest Income              |            |           | 12,346    |      |            |         |          |  
|                                         |                                     |                                               |                                           | Other                        |            |           | (5,322    | )    |            |         |          |  
|                                         |                                     |                                               |                                           |                              |            |           |           |     
|                                         |                                     |                                               |                                           | Total Other Income/(Expense) |            |           | (38,977   | )    |            |         | (81,857   | )
|                                         |                                     |                                               |                                           |                              |            |           |           |     
|Income before Provision for Income Taxes |                                     |                                               | 1,606,634                                 |                              |            |           | 661,808   |     
|Provision for Income Taxes               |                                     |                                               | (575,408                                  | )                            |            |           | (273,361  | )   
|                                         |                                     |                                               |                                           |                              |            |           |           |     
|                                         |                                     |                                               | Net Income                                |                              | $          | 1,031,226 |           |      | $          | 388,447 |          
|                                         |                                     |                                               |                                           |                              |            |           |           |     
|Per Share Data:                          |                                     |                                               |                                           |                              |            |           |           |     
|                                         |                                     | Weighted Average Shares Outstanding  Basic   |                                           |                              | 10,570,071 |           |           |      | 10,634,357 |        
|                                         |                                     | Weighted Average Shares Outstanding  Diluted |                                           |                              | 10,580,134 |           |           |      | 10,634,357 |        
|                                         | Earnings per Common Share  Basic   |                                               | $                                         | 0.10                         |            |           | $         | 0.04 |           
|                                         | Earnings per Common Share  Diluted |                                               | $                                         | 0.10                         |            |           | $         | 0.04 |           

The accompanying Notes are an integral part of these financial statements.

6



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##### 



MILE MARKER INTERNATIONAL, INC. AND SUBSIDIARY

Consolidated Condensed Statements of Cash Flows
Six Months Ended June 30, 2002 and 2001
UNAUDITED

|                                                                                         |                      |                               |                                              |                             |         |         |           |      |        |        |            |  
|---------------------------------------------------------------------------------------- | -------------------- | ----------------------------- | -------------------------------------------- | --------------------------- | ------- | ------- | --------- | ---- | ------ | ------ | ---------- | -
|                                                                                         |                      |                               |                                              |                             |         | 2002    |           | 2001
|                                                                                         |                      |                               |                                              |                             |         |         |           |     
|                                                                                         | OPERATING ACTIVITIES |                               |                                              |                             |         |         |           |      |       
|Net income                                                                               |                      | $                             | 1,031,226                                    |                             |         | $       | 388,447   |     
|Adjustments to reconcile net income to net cash
provided/(used) by operating activities: |                      |                               |                                              |                             |         |         |           |     
|                                                                                         |                      | Depreciation and amortization |                                              |                             | 85,744  |         |           |      | 67,076 |       
|                                                                                         |                      | Deferred income taxes         |                                              |                             | (23,828 | )       |           |      | 21,214 |       
|                                                                                         |                      | Bad debts                     |                                              |                             | 14,492  |         |           |      | 32,401 |       
|Changes in operating assets and liabilities:                                             |                      |                               |                                              |                             |         |         |           |     
|(Increase) decrease in:                                                                  |                      |                               |                                              |                             |         |         |           |     
|                                                                                         |                      |                               |                                              | Accounts receivable         |         |         | 1,410,542 |      |        |        | (1,408,518 | )
|                                                                                         |                      |                               |                                              | Inventories                 |         |         | 63,706    |      |        |        | (506,327   | )
|                                                                                         |                      |                               |                                              | Prepaid expenses            |         |         | 21,377    |      |        |        | (35,472    | )
|                                                                                         |                      |                               |                                              | Notes and other receivables |         |         | (154,312  | )    |        |        | 7,559      |  
|                                                                                         |                      |                               |                                              | Other assets                |         |         | (42,760   | )    |        |        | (33,062    | )
|(Decrease) increase in:                                                                  |                      |                               |                                              |                             |         |         |           |     
|                                                                                         |                      |                               |                                              | Accounts payable            |         |         | (768,694  | )    |        |        | 696,733    |  
|                                                                                         |                      |                               |                                              | Income taxes payable        |         |         | (133,943  | )    |        |        | 153,642    |  
|                                                                                         |                      |                               |                                              | Accrued liabilities         |         |         | (26,371   | )    |        |        | 2,847      |  
|                                                                                         |                      |                               |                                              |                             |         |         |           |     
|Net cash provided/(used) by operating activities                                         |                      |                               | 1,477,179                                    |                             |         |         | (613,460  | )   
|                                                                                         |                      |                               |                                              |                             |         |         |           |     
|INVESTING ACTIVITIES:                                                                    |                      |                               |                                              |                             |         |         |           |     
|Proceeds from sale of property and equipment                                             |                      |                               | 29,000                                       |                             |         |         |          |     
|Property and equipment acquisitions                                                      |                      |                               | (30,930                                      | )                           |         |         | (166,917  | )   
|                                                                                         |                      |                               |                                              |                             |         |         |           |     
|Net cash (used) by investing activities                                                  |                      |                               | (1,930                                       | )                           |         |         | (166,917  | )   
|                                                                                         |                      |                               |                                              |                             |         |         |           |     
|FINANCING ACTIVITIES                                                                     |                      |                               |                                              |                             |         |         |           |     
|(Repayments)/proceeds
of short term borrowingnet                                        |                      |                               | (1,104,446                                   | )                           |         |         | 757,081   |     
|Purchase of treasury common stock                                                        |                      |                               | (174,263                                     | )                           |         |         |          |     
|Proceeds from long term borrowing                                                        |                      |                               |                                             |                             |         |         | 57,862    |     
|Principal payments on long-term debt                                                     |                      |                               | (108,856                                     | )                           |         |         |          |     
|                                                                                         |                      |                               |                                              |                             |         |         |           |     
|Net cash (used)/provided by financing activities                                         |                      |                               | (1,387,565                                   | )                           |         |         | 814,943   |     
|                                                                                         |                      |                               |                                              |                             |         |         |           |     
|Increase in Cash                                                                         |                      |                               | 87,684                                       |                             |         |         | 34,566    |     
|Cash at Beginning of Period                                                              |                      |                               | 50,089                                       |                             |         |         | 27,191    |     
|                                                                                         |                      |                               |                                              |                             |         |         |           |     
|Cash at End of Period                                                                    |                      | $                             | 137,773                                      |                             |         | $       | 61,757    |     
|                                                                                         |                      |                               |                                              |                             |         |         |           |     
|Supplemental disclosure of cash flow information:                                        |                      |                               |                                              |                             |         |         |           |     
|                                                                                         |                      |                               | Cash paid during the period for interest     |                             | $       | 40,525  |           |      | $      | 81,857 |           
|                                                                                         |                      |                               | Cash paid during the period for income taxes |                             | $       | 733,178 |           |      | $      | 98,505 |           

The accompanying Notes are an integral part of these financial statements.

7



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##### 



MILE MARKER INTERNATIONAL,
INC.
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

Note 1: Basis of Presentation

The unaudited
consolidated condensed financial statements include the accounts of
Mile Marker International, Inc. and its wholly-owned subsidiary, Mile Marker,
Inc. (collectively the Company). All necessary adjustments to the financial
statements have been made, and significant inter-company accounts and
transactions have been eliminated in consolidation.

The accompanying
unaudited consolidated condensed financial statements, which are
for interim periods, do not include all disclosures provided in the annual
consolidated financial statements. These unaudited consolidated
condensed financial
statements should be read in conjunction with the consolidated financial
statements and the footnotes thereto contained in the Annual Report on Form
10-KSB for the year ended December 31, 2001 of Mile Marker International, Inc.,
as filed with the Securities and Exchange Commission. The summary December 31,
2001, balance sheet was derived from audited consolidated financial statements,
but does not include all disclosures required by generally accepted accounting
principles at December 31, 2001.

In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (which are of a normal recurring
nature) necessary for a fair presentation of the financial statements. The
results for interim periods are not necessarily indicative of results to be
expected for the complete fiscal year.

Per share data was computed by dividing net income by the weighted
average number of shares outstanding during the period. The diluted share base
for the period ended June 30, 2002 includes incremental shares for stock options
outstanding during this period, but excludes incremental shares for stock
options outstanding during the period ended June 30, 2001, since their effect
was anti-dilutive during that period.

Note 2: Shareholders Equity

During the six months ended June 30, 2002, the Company purchased 252,500
shares of its common stock, $.001 par value, for $174,263.50. As of June 30,
2002, 102,500 shares were being held in the Companys treasury, and 150,000 of
the Companys common shares had been retired. In July, 2002, the Company
purchased another 72,500 shares of its common stock for $67,263.50.

Note 3: Reclassification

Certain amounts in prior periods have been reclassified for comparative
purposes.

8



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##### 



Item 2. Managements Discussion or Plan of Operation

The following discussion and analysis should be read in conjunction
with the Financial Statements appearing elsewhere in this quarterly report on
Form 10-QSB.

RESULTS OF OPERATIONS

The following table summarizes the results of operations, stated as a
percentage of sales, for the six months and three months ended June 30, 2002,
and 2001:

|                                             |                |  |            |      |              |  |       |      |      |  |       |      |   |  |       |      |  
|-------------------------------------------- | -------------- |  | ---------- | ---- | ------------ |  | ----- | ---- | ---- |  | ----- | ---- | - |  | ----- | ---- | -
|                                             |                |  | Six Months |      | Three Months
|                                             |                |  |            |      |             
|                                             |                |  | 2002       |      | 2001         |  | 2002  |      | 2001
|                                             |                |  |            |      |              |  |       |      |     
|Sales                                        |                |  | 100.0      | %    |              |  | 100.0 | %    |      |  | 100.0 | %    |   |  | 100.0 | %   
|Cost of Sales                                |                |  | 47.8       | %    |              |  | 55.4  | %    |      |  | 48.1  | %    |   |  | 52.6  | %   
|                                             |                |  |            |      |              |  |       |      |     
|                                             | Gross Profit   |  |            | 52.2 | %            |  |       | 44.6 | %    |  |       | 51.9 | % |  |       | 47.4 | %
|Selling, General and
Administrative Expenses |                |  | 26.5       | %    |              |  | 28.5  | %    |      |  | 28.0  | %    |   |  | 23.4  | %   
|                                             |                |  |            |      |              |  |       |      |     
|Income from Operations                       |                |  | 25.7       | %    |              |  | 16.1  | %    |      |  | 23.9  | %    |   |  | 24.0  | %   
|Other Income/(Expense)                       |                |  | (0.6       | )%   |              |  | (1.8  | )%   |      |  | (0.4  | )%   |   |  | (1.4  | )%  
|                                             |                |  |            |      |              |  |       |      |     
|                                             | Pre-Tax Income |  |            | 25.1 | %            |  |       | 14.3 | %    |  |       | 23.5 | % |  |       | 22.6 | %
|Income Taxes                                 |                |  | (9.0       | )%   |              |  | (5.9  | %    |      |  | (7.7  | )%   |   |  | (9.2  | )%  
|                                             |                |  |            |      |              |  |       |      |     
|                                             | Net Income     |  |            | 16.1 | %            |  |       | 8.4  | %    |  |       | 15.8 | % |  |       | 13.4 | %

Sales of $6,392,915 for the six months ended June 30, 2002, were
$1,768,235, or approximately 38%, more than sales of $4,624,680 during the same
period in 2001. This sales increase was due primarily to approximately
$2,200,000 more military winch sales in the first six months of 2002 than in the
comparable period in 2001. The increase in military winch sales during this
period was offset by $358,844 in lower sales of special order products. Total
sales of $2,883,835 in the three months ended June 30, 2002, were $225,972, or
approximately 7%, less than sales of $3,109,807 in the same period in 2001. The
major reasons for this decrease were a $134,635 decrease in special products
sales and a $113,505 decrease in military winch sales during the June 2002
quarter. Military winch sales constituted about 60% of total sales both in the
three months ended June 30, 2002, and the three months ended June 30, 2001. The
high sales volume during the six months ended June 30, 2002, was heavily
affected by the completion of the $7,137,938 military winch order that the
Company announced in 2001, and such high sales volume will not be sustainable in
the near future without another similar large military order.

The Companys gross profit margin increased from 44.6% of sales in the
six months ended June 30, 2001 to 52.2% of sales in the comparable 2002 period
primarily due to a decreased volume of lower margin special order products and
an increased volume of military winch orders. The gross margin in the three
months ended June 30, 2002 increased to 51.9% from 47.4% in the comparable
period in 2001 for the same reason.

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##### 



Selling costs increased by $98,722, or about 23%, in the first six
months of 2002 to $527,776 from $429,054 in the comparable period in 2001.
Virtually all of this increase in selling costs was due to increased sales
commissions paid on higher sales volume. For the three months ending June 30,
2002, selling costs were approximately $20,000 higher than during the comparable
period in 2001 due to higher co-op advertising costs.

Total general and administrative expenses for the six months ended June
30, 2002, increased by approximately $275,000, or about 31%, to $1,164,320 from
$889,159 in the comparable period in 2001. $242,051 of this increase is
attributable to increased staffing costs required to fulfill the Companys
substantial military orders and to aggressively market winches to the
non-military markets. Higher rent, insurance, depreciation, and vehicle expenses
were offset by lower professional fees and research costs during the six months
ended June 30, 2002 compared to the comparable period in 2001. Relative to sales
volume, the Companys total general and administrative costs decreased from
19.2% of sales in the first six months of 2001 to 18.2% of sales during the same
period in 2002. For the three months ended June 30, 2002, general and
administrative expenses increased by $58,407, or approximately 12%, over the
comparable period in 2001. These increases in this period were principally in
staffing, insurance and vehicle expenses.

The Companys results from operations for the first six months of 2002
reflected income from operations of $1,645,611 compared to income from
operations of $743,665 during the same period in 2001. This increase of
approximately 120% in the first six months of 2002 compared to the same period
in 2001 is due to the 38% increase in sales, an improved profit margin and
controlled expense increases. Income from operations in the three months ended
June 30, 2002, were $690,262, compared to $745,566 in income from operations
during the same period in 2001. This decrease of approximately 7% is due
primarily to the fact that sales in the second quarter of 2002 were 7% less than
sales in the same period in 2001. Interest expenses in the first six months of
2002 were $46,001, compared to $81,857 in the first six months of 2001,
reflecting lower borrowing costs and a lower volume of borrowings. Also, during
the three months and six months ended June 30, 2002, the Company received $7,866
and $12,346, respectively, of interest income on its notes receivable, compared
to no such interest income in 2001.

During the six months ended June 30, 2002, the Company recorded income
before taxes of $1,606,634 compared to income before taxes of $661,808 during
the same period in 2001. Net income for the first six months of 2002 totaled
$1,031,226 compared to net income of $388,447 for the first six months of 2001,
an increase of approximately 166%. This net income represents earnings per
common share of $0.10 for the first six months of 2002 compared to earnings per
common share of $0.04 for the first six months of 2001. During the three months
ended June 30, 2002, the Company recorded net income of $456,622 compared to net
income of $417,255 during the same three-month period in 2001, and increase of
approximately 9%. This net income represents earnings per common share of $0.04
for the second quarter of 2002 compared to earnings per common share of $0.04
for the same period in 2001.

10



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##### 



LIQUIDITY AND CAPITAL RESOURCES

Net working capital increased by $783,264 to $3,184,627 on June 30,
2002, from $2,401,363 on December 31, 2001, and the Companys current ratio
increased to 2.46 at June 30, 2002, compared to 1.57 at December 31, 2001. The
Companys current assets decreased by $1,271,257 to $5,346,288 at June 30, 2002,
compared to $6,617,545 at December 31, 2001. Most of this decrease was due to
collected accounts receivable, that decreased from $3,063,209 on December 31,
2001, to $1,638,175 on June 30, 2001. Offsetting this decrease in accounts
receivable was an increase of $154,314 in notes receivable in the first six
months of 2002. Inventory levels also decreased by approximately $64,000 during
this same period.

The Companys current liabilities decreased by $2,054,520 to $2,161,662
at June 30, 2002, compared to $4,216,182 at December 31, 2001, and all $87,790
of the Companys long term debt was repaid. The Companys short-term borrowings
under its line of credit decreased by $1,104,446 from December 31, 2001 levels,
and its trade accounts payable decreased by $768,694 during the six months
ended June 30, 2002. Income taxes payable also decreased by $133,943 in the
same period. The major source of cash to reduce these liabilities in 2002 was
the cash provided by operating activities, which was $1,477,179, compared to
$613,460 of cash used by operating activities in the first six months of 2001.

The Company anticipates having more than adequate capital and liquidity
for its foreseeable operational needs. The Company has no material commitments
outstanding for major capital expenditures during 2002. During the first six
months of 2002, the Company invested approximately $31,000 in capital
expenditures, primarily tooling. During the first six months of 2002, the
Company also utilized $174,263 of its cash to repurchase 252,500 shares of its
common stock.

The Companys cash balances increased by $87,684 from the December 31,
2001, level of $50,089 to $137,773 on June 30, 2002, due to the timing of
deposits in transit. However, these cash balances are not indicative of the
Companys true liquidity because the Company employs an efficient cash
management system utilizing a zero balance disbursement account funded by the
Companys credit facility at the time outstanding checks are presented and paid.
The Company funds its operations chiefly through the collection of its trade
receivables, supplemented with periodic short-term borrowings from a lender.

On February 28, 2002, the Companys lender increased the maximum amount
of the Companys working capital line of credit to $3,500,000, extended its
maturity date to February 28, 2003, and changed the interest rate on all
borrowings to 2.55% above the One Month London Interbank Offered Rate. This
credit facility is secured by substantially all of the Companys assets and
contains certain affirmative, negative and

11



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##### 



financial covenants which, among others, specify tangible net worth and fixed
charge coverage requirements. The Companys actual borrowings at June 30, 2002,
however, were only about 42% of its total availability due to the significant
cash flow generated from its operations, which facilitated the substantial
reduction of its liabilities.

PART II  OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, the Company is a party to business disputes arising
in the normal course of its business operations. The Companys management
believes that none of these actions, standing alone, or in the aggregate,
currently are material to the Companys operations or finances.

Item 2. Changes in Securities

None.

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

None

Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8K

SEC Form 8-K was filed on May 15, 2002, by the Company announcing the
planned repurchase of up to 300,000 additional common shares of the Registrant
for a total cost not to exceed $235,000 for the additional shares.

12



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##### 



SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, duly authorized.

|                                              |  |                                                                 
|--------------------------------------------- |  | ----------------------------------------------------------------
|MILE MARKER INTERNATIONAL, INC.

(Registrant) |  |                                                                 
|                                             
|                                             
|                                             
|7/30/02                                       |  | /s/ Richard E. Aho                                              
|                                              |  |                                                                 
|(Date)                                        |  | Richard E. Aho, President and
Chief Executive Officer           
|                                             
|                                             
|7/30/02                                       |  | /s/ Alvin A. Hirsch                                             
|                                              |  |                                                                 
|(Date)                                        |  | Alvin A. Hirsch, Secretary/Treasurer
and Chief Financial Officer

13