NCTI Reports $3 Million Profit in Second Quarter
Posts $0.01 Earnings Per Share
WESTPORT, Conn., Aug 21, 2000 (BUSINESS WIRE) -- NCT Group, Inc. (OTCBB: NCTI chart, msgs) reported a profitable second quarter with total
revenues for the three months ended June 30, 2000 of $6.8 million compared to $1.7 million in the same period in 1999, an increase of 297%.
Pretax net profit for the three months ended June 30, 2000 was $3.0 million, compared to a net loss of $6.3 million for the three months ended June
30, 1999. The Company reported earnings per share of $0.01 for the second quarter ended June 30, 2000 versus a loss per share of $0.04 for the
same period year ago.
"We are encouraged by this quarter's performance," said Michael J. Parrella, chairman and chief executive officer. "We believe that directing our efforts
toward substantial, high-growth industries such as media, communications and Internet infrastructure is a solid strategy. I wish to convey that we are
excited and confident about the direction of our company and appreciate the patience of our very dedicated shareholders."
In accordance with SEC Staff Accounting Bulletin Number 101 ("SAB 101"), Revenue Recognition in Financial Statements, the Company is restating
revenues and net loss for the first quarter of 2000. Compliance with SAB 101 is required by December 31, 2000, retroactive to January 1, 2000.
Total revenues and net loss as restated for the first three months ended March 31, 2000 are $0.6 million and $6.5 million, respectively, as compared
to $4.5 million and $2.5 million, respectively, as previously reported. As of March 31, 2000, the Company reported $3.9 million in deferred revenue
which will be recognized over 36 months.
The Company reported that total revenues for the six months ended June 30, 2000 were $7.4 million compared to $5.9 million in the same period in
1999, an increase of 25%. Net loss for the six months ended June 30, 2000 was $3.4 million, compared to $7.8 million in the same period in 1999.
These results reflect the restatement of the first quarter of 2000.
Mr. Parrella continued, "SAB 101 affects the way many companies account for the recognition of certain revenues, including license fees. We believe
that the proactive adoption of SAB 101 is the proper course of action. Going forward you will see a portion of our licensing revenue stated as
`deferred revenue' which reflects our full compliance with SAB 101 in advance of the end-of-year compliance deadline."
About NCT Group, Inc.
NCT Group, Inc. is a publicly-traded, high-tech company. Having historically specialized in the utilization of sound and signal waves to electronically
reduce noise, improve signal-to-noise ratio and enhance sound quality, the Company of today is applying its technological innovations to the areas
of media, through its DistributedMedia.com, Inc. subsidiary, and communications, with a specific concentration on IP telephony applications. The
Company's emerging technology incubation strategy nurtures development of NCT technologies and complimentary technologies from outside
developers. Current offerings include the proprietary Sight & Sound(TM) system, a place-based advertising medium installed in retail and commercial
locations; ClearSpeech(R), a suite of software algorithms for integrated Internet telephony and enhanced speech-driven applications; silicon
micromachined microphone chips for use in communications products; and Java(TM) chip technology targeted to developers of smartcards,
appliances and communications applications. The Company's award-winning brands include Gekko(TM) flat audio speakers and NoiseBuster(R) and
ProActive(R) active noise reduction headsets. For more information, refer to www.nct-active.com
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Act"). In order to obtain the benefits of the "safe harbor" provisions of the Act for any such forward-looking statements, the Company
wishes to caution investors and prospective investors about significant factors, which among others, have in some cases affected the Company's
actual results and are in the future likely to affect the Company's actual results and cause them to differ materially from those expressed in any such
forward-looking statements. Investors and prospective investors should read this press release in conjunction with the Company's reports on Form
10-K and Forms 10-Q as filed with the Securities and Exchange Commission.
NCT Group, Inc.
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(In millions, except 1999 2000 1999 2000
per share amounts) ---- ---- ---- ----
Total revenue $ 1.7 $ 6.8 $ 5.9 $ 7.4
Other income/(expense), net $ (2.6) $ 0.1 $ (2.7) $ (2.9)(a)
Net income/(loss) $ (6.3) $ 3.0 $(7.8) $ (3.4)(b)
Net profit/(loss)
per share $ (0.04) $ 0.01 $(0.08) $ (0.02)
Weighted average
number of common
shares outstanding 174.2 275.3 165.2 274.5
(a) Includes a one-time, non-cash charge of $3.1 million for
impairment of goodwill
(b) Excludes deferred income of $3.6 million |
