Action Products Reports Significant Growth in Largest Specialty Toy Chain; Action Achieves Record Breaking Sales at Learning Express Expo.

ORLANDO, Fla. -- Action Products International, Inc. (Nasdaq:APII), a leading toy designer and manufacturer of educational and positive, non-violent branded toys for pre-school children through pre-teens, today announced that the Company has achieved significant sales growth in Learning Express stores, the largest specialty toy chain in the U.S. with over 100 stores. Sales are expected to increase over 130% during the first six months of 2004 (January - June) compared to last year.

The Company enjoyed unprecedented success and achieved record sales at the annual Learning Express Convention & Expo held in Boston between June 19 and June 23. The Expo drew storeowners from all over the country. In review of direct sales orders received at the Expo, Action Products estimates that it will realize more than a 380% increase on sales orders from this year's show when compared to the prior year. Most shipments are scheduled to be sent in the third fiscal quarter.

The significant increase in this chain is primarily attributed to organic growth of the Company's existing brands. Specifically, the Company added a number of new independent Learning Express stores who have agreed to feature JAY JAY THE JET PLANE Wooden Adventure System(TM). Action Products' new pirate-themed line of I DIG Treasures(R) excavation kits has been well received. The Curiosity Kits collection of art and craft projects offers significant growth potential in 2005. "Sales from this year's Learning Express Expo are far exceeding our most optimistic forecasts," stated Bill Bordegon, Vice President Sales at Action Products. "This success is attributed to significantly larger average orders due to the interest in our new products and a strong partnership with the stores and corporate," he added.

Action Products hosted a luncheon for the Learning Express storeowners and corporate staff at the Convention in the Boston Park Plaza Hotel on June 20. The Company presented a special award to the store with the most developed Action Products business. The winners were Rosaleen Tully and Stephen Zdunek, owners of the Homer Glen, Illinois store.

At Learning Express' Banquet & Awards event, Action Products was presented a prestigious award recognizing the Company's partnership and support to grow the Learning Express business. "We are honored to be presented this award since this recognition is voted on by the store owners," said Bob Muniz, National Sales Manager. "We have worked very hard this last year to significantly increase our business with this very important specialty toy chain and we expect to more than double our business with them in 2004 with additional gains in 2005"

The first shipments from the Curiosity Kits(R) brand started on a partial basis in mid-April and sales have been limited due to the completion of a final audit of the Curiosity Kits inventory and re-sourcing from China which is expected to deliver lower costs and improved quality control. The Company expects to complete most of the integration and new sourcing by the fourth quarter of 2004, however, this has caused erratic inventory shortages.

The one weak spot in sales, which is expected to impact sales in the short-term, is in the mass market and the time needed to bring Curiosity Kits up to potential. However, the company has recently opened a number of new specialty sales channels to help offset the orderly cut back by a major toy chain and the bankruptcy of another. New specialty distribution includes Borders, Nordstrom, the Saks Department Store Group (Proffitt's and McRae's), Discovery Channel Stores, 7-Eleven Stores, and a number of major specialty catalog retailers. Additionally, Action Products is making its first shipments into new international markets including Australia, New Zealand and Chile. The Company is now forecasting sales gains of 20% for 2004, which was its original forecast earlier this year. Consistent with the Company's aggressive growth strategy, Action Products expects to complete one additional acquisition within the next 12 months.

ABOUT ACTION PRODUCTS INTERNATIONAL, INC.

Action Products is a leading designer and manufacturer of educational and positive branded toys emphasizing fun, quality brands including JAY JAY THE JET PLANE Wooden Adventure System(TM), I DIG Dinosaurs(R) and I DIG Treasures(R) excavation activity kits, Space Voyagers(R) ("The most authentic Space Toys on Earth"), Wild Climbers(TM) and Climb@Tron(TM) window-climbing animals and robots, Play and Store(TM) themed playsets, Kidz Workshop(TM) wooden projects, Drop Zone Extreme(TM) parachute toys, and it's recently acquired Curiosity Kits(R), a leading, award-winning specialty brand for kids' craft and activity kits. Its products are marketed and sold worldwide to specialty retailers, museums, toy stores, theme parks, attractions, zoos, catalog companies, Internet retailers and educational markets. For more information on Action Products' toys, email [e-mail] or visit the Company's web site at www.apii.com.

Any statements that are not historical facts contained in this release are forward-looking statements. It is possible that the assumptions made by management for purposes of such statements may not materialize. Actual results may differ materially from those projected or implied in any forward-looking statements. Such statements may involve risks and uncertainties, including but not limited to those relating to product demand, pricing, market acceptance, the effect of economic conditions, and intellectual property rights and the outcome of competitive products, risks in product development, the results of financing efforts, the ability to complete transactions, and other factors discussed from time to time in the Company's Securities and Exchange Commission filings. The Company undertakes no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made.