FAIRFIELD, Conn., June 15, 2007 (PRIME NEWSWIRE) -- Competitive Technologies, Inc. (AMEX:CTT) today announced financial results for the three and nine months ended April 30, 2007.
"CTT's financial results continue to be unacceptable. However, we believe that the third quarter results being announced today point towards an improving picture for CTT's future, especially in view of several charges recorded in this quarter," said John B. Nano, CTT's Chairman, President and CEO. "Results for the quarter reflect our ongoing cost-reduction program and our dedicated marketing program to increase sales, in addition to our strategy to deal with actions taken by the prior Board and management. The new Board of Directors and management are aggressively working to grow revenue, increase shareholder value, and reduce costs wherever possible, having targeted a $2 million cost reduction on an annual basis. Our April 2007 sale of several patents at auction for $1.0 million on behalf of our client and CTT is not reflected in the current quarter's results as we await final documentation. We are fortunate to have over $9 million in the bank and no long-term debt. In February 2006, the prior Board and management added a 'change of control provision' to the 1997 Employees' Stock Option Plan stating that if 50% or more of the then Board were replaced a 'change of control' was to be considered as having taken place. All unvested employee option grants in place at that time would become fully vested. The election of the current Board triggered this undisclosed clause. The Plan changes, which had not been filed with the SEC nor approved by shareholders, resulted in a $467,000 non-cash charge to earnings in the current third quarter."
Mr. Nano added, "Certain expenses in this quarter totaling about $393,000 are a part of our cost reduction program, including $180,000 for canceling of consulting agreements, final payments of $173,000 to five terminated employees, and additional proxy solicitation charges of $40,000 associated with the CTT proxy contest."
As a result of a proxy contest, CTT's prior Board was completely replaced with a new Board, including Mr. Nano, at a shareholder meeting on February 2, 2007.
The financial result for CTT's third quarter ended April 30, 2007 is a net loss of approximately $2.0 million, or $0.25 per share, including non-cash charges of approximately $0.7 million and cost reduction items of $0.4 million. This compares to a net loss of approximately $1.1 million, or $0.14 per share, for the third quarter of the prior fiscal year. The net loss for the nine-month period ending April 30, 2007 is approximately $6.7 million, or $0.84 per share, compared to a net loss of approximately $2.0 million, or $0.27 per share, for the prior-year period.
Total revenues for the quarter ended April 30, 2007, were approximately $0.9 million, compared to approximately $1.2 million in the same period of the prior year. Revenues for the nine-month period ended April 30, 2007 were approximately $2.7 million compared to approximately $3.8 million in the same period of the prior year. The decrease in total revenues in the current quarter was primarily due to the decrease in homocysteine royalties. CTT is currently pursuing litigation against alleged infringers of its homocysteine assay patent, including Carolina Liquid Chemistries Corporation, Catch, Inc., and the Diazyme Laboratories Division of General Atomics.
Expenses in total for the quarter ended April 30, 2007 were approximately $2.9 million, compared to approximately $2.3 million in the prior year quarter. For the nine-month period ended April 30, 2007, expenses were approximately $9.4 million compared to approximately $5.9 million for the prior year period.
Personnel and other direct expenses relating to revenues for the quarter increased approximately $0.6 million primarily due to compensation expense related to stock options and the accelerated vesting of options outstanding on February 2, 2007. The $0.6 million increase included the $467,000 non-cash charge relating to the 'change of control' provision change and a $195,000 non-cash charge recorded to cover options granted to Mr. Nano under his employment agreement. For the nine-month period personnel and other direct expenses increased to about $4.5 million from about $3.3 million in the prior year. These expenses were primarily due to employee additions made by prior management and accrued severance costs covering agreements negotiated by prior management with two employees who have both been rehired by current management, in addition to the quarter's expenses relating to the stock options.
General and administrative expenses for the quarter were about $0.8 million, compared to the prior year amount of about $0.6 million. The approximately $4.4 million general and administrative expenses for the current nine months are about $2.2 million higher than the approximately $2.2 million for the prior year nine months. The increase for the nine-month period was primarily due to costs associated with the prior Board and management's annual meetings and proxy contest of about $1.0 million, amounts paid to settle an employee suit claiming $5.1 million for $1.0 million and the employee's related legal costs of $0.65 million. Increased expenses in the third quarter, primarily a result of higher rent under the lease negotiated by the prior management for the new office space, corporate legal costs, and investor relations, added to the full nine-month variance.
Patent enforcement expenses for the quarter decreased to $0.1 million, net of reimbursements, from approximately $0.3 million for the prior year, with the nine-month period increasing from approximately $0.5 million compared to approximately $0.4 million in the prior year. The nine-month increase was primarily due to increased litigation costs in the current fiscal year for the Fujitsu and homocysteine assay litigations offset by decreased litigation activity in the current quarter.
Mr. Nano further stated, "CTT's management team is committed to restoring stockholder value by signing new license agreements, and utilizing its strong sales team and effective global alliances. We continue to meet with current and potential shareholders to present our strategy for growth. We will be presenting to the Philadelphia Securities Association on June 26. We are concentrating on collecting monies owed to CTT under various technologies including homocysteine, obesity treatment and sexual dysfunction treatment. CTT is actively marketing our nutraceutical ingredients technology, the molecular memory devices, the HB LED technology, bone biomaterial, cholesterol trapping/regeneration technology, and the Lupus diagnostic and monitoring technology to drive revenue growth, improve profitability and create shareholder value."
About Competitive Technologies, Inc.
Competitive Technologies, established in 1968, is a full service technology transfer and licensing provider focused on the technology needs of its customers and transforming those requirements into commercially viable solutions. CTT is a global leader in identifying, developing and commercializing innovative technologies in life, electronic, nano, and physical sciences developed by universities, companies and inventors. CTT maximizes the value of intellectual assets for the benefit of its customers, clients and shareholders. Visit CTT's website: www.competitivetech.net
Statements about our future expectations are "forward-looking statements" within the meaning of applicable Federal Securities Laws, and are not guarantees of future performance. When used herein, the words "may," "will," "should," "anticipate," "believe," "appear," "intend," "plan," "expect," "estimate," "approximate," and similar expressions are intended to identify such forward-looking statements. These statements involve risks and uncertainties inherent in our business, including those set forth in Item 1A under the caption "Risk Factors," in our most recent Annual Report on Form 10-K for the year ended July 31, 2006, filed with the SEC on October 30, 2006, and other filings with the SEC, and are subject to change at any time. Our actual results could differ materially from these forward-looking statements. We undertake no obligation to update publicly any forward-looking statement.
COMPETITIVE TECHNOLOGIES, INC.
FIRST NINE MONTHS FISCAL 2007
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
(dollars in thousands, except per share amounts) (unaudited)
Third Quarter ended Nine Months Ended
April 30, April 30,
2007 2006 2007 2006
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Revenue $ 893 $ 1,199 $ 2,692 $ 3,836
Operating expenses 2,934 2,253 9,419 5,876
(Benefit) from income tax -- -- -- (12)
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Net (loss) $(2,041) $(1,054) $(6,727) $(2,028)
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Net (loss) per share:
Basic and diluted $ (0.25) $ (0.14) $ (0.84) $ (0.27)
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Weighted average number of
common shares outstanding:
Basic and diluted (in 000s) 8,048 7,710 8,018 7,565
At April 30, At July 31,
2007 2006
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Other Financial Data
Cash, cash equivalents and restricted cash $ 9,238 $12,909
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Total assets $14,967 $18,417
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Total liabilities $ 4,835 $ 3,963
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Shareholders' equity $10,132 $14,454
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