NCTI -- .27 x .28 Earnings news...
November 27, 2000 12:35
NCTI Reports Profitable Third Quarter Results; Nine-Month Revenues of $9.4 Million Exceed Total of Any Previous Year
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WESTPORT, Conn.--(BUSINESS WIRE)--Nov. 27, 2000--NCT Group, Inc. (OTCBB: NCTI) reported that total revenue for the third quarter ended September 30, 2000 was $8.0 million compared to $0.7 million for the same period a year ago. The Company reported a net profit of $3.6 million for the third quarter ended September 30, 2000 compared to a net loss of $7.0 million in the same period a year ago. Deferred revenue at September 30, 2000 totaled $4.1 million.
The Company reported that total revenues for the nine months ended September 30, 2000 were $9.4 million compared to $6.6 million in the same period in 1999, an increase of 42%. Net loss for the nine months ended September 30, 2000 was $5.8 million compared to $14.8 million in the same period in 1999, an improvement of 61%. Deferred revenue plus the license fee revenue to be recognized in the future as described below is $6.5 million.
The Company is amending its second quarter Form 10Q to reflect a change in the timing of $6.0 million in revenue related to the technology license granted to Infinite Technology Corporation ("ITC") which was announced on May 10, 2000. As noted in the Company's Definitive 14A Proxy Statement, filed on June 6, 2000, contemporaneous with the execution of the ITC license agreement, the Company and ITC entered into a separate, unrelated definitive research and development agreement for which the Company will pay ITC $2.4 million for development of a proprietary chip. Based upon recent advice of the Company's independent accountants, it was determined that both ITC agreements should be combined for financial reporting purposes in the quarter ended September 30, 2000. Therefore, the Company is restating its second quarter 2000 revenue to exclude the $6.0 million ITC license fee revenue, moving the $6.0 million ITC license fee revenue to the third quarter 2000 and deferring recognition of the $2.4 million of such ITC license fee related to the research and development agreement. The Company fully expects to recognize the $2.4 million as revenue over the next nine to twelve months as work on the research and development contract progresses.
"Our year-to-date revenue growth has been strong with the first nine months exceeding that of any full year in our company's history," said Michael J. Parrella, chairman and CEO. "In addition, deferred revenue continues to grow making future quarters more predictable. Our booked revenue of $9.4 million plus the revenue to be recognized in the future on the ITC transaction means that we have signed $15.9 million of new business with still a quarter to go."
Mr. Parrella continued, "I would like to point out the extremely conservative valuation of the Pro Tech Communications, Inc. ("Pro Tech") license transaction. While Pro Tech only accounted for $2.5 million in revenue, our balance sheet was strengthened significantly with the acquisition of Pro Tech. We now own 23.4 million shares of Pro Tech at a book or carrying value of $2.6 million with a current market value of approximately $18 million. Our book value and our underlying market value are steadily improving and will continue to improve as we acquire and develop more valuable assets. We believe that the Company is moving in the right direction and we appreciate the continued support and patience of our dedicated shareholders."
About NCT Group, Inc.
NCT Group, Inc. is a publicly-traded, high-tech company with operating subsidiaries in media and communications. NCT's strong technology base of using sound and signal waves to electronically reduce noise, improve signal-to-noise ratio and enhance sound quality, drives leading edge technological innovations in media, through its Distributed Media subsidiary, and communications, through its MidCore Software and Pro Tech (OTCBB: PCTU) subsidiaries, with a specific concentration on IP telephony applications. The Company's emerging technology incubation strategy nurtures development of NCT technologies and complementary technologies from outside developers. For more information refer to www.nct-active.com.
Cautionary Statement Regarding Forward-Looking Statements Certain information contained in this press release comprise forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 (the "Act"), which became law in December 1995. 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 most recent Form 10-K and Forms 10-Q.
NCT GROUP, INC.
(Unaudited)
For The Three Months For The Nine Months
Ended Sept. 30, Ended Sept. 30,
(In millions,
except per share amounts) 1999 2000 1999 2000
---- ---- ---- ----
Total revenue $ 0.7 $ 8.0 $ 6.6 $ 9.4
Other income/(expense),
net $(2.3)(a) $ 0.2 $(5.0)(b) $(2.9)(c)
Net profit/(loss) $(7.0)(d) $ 3.6 $(14.8) $(5.8)(c)
Net (loss) per share $(0.06)(e) $(0.00)(f) $(0.14)(e) $(0.04)(f)
Weighted average number of
common shares outstanding 188.0 296.4 173.5 281.8
(a) Includes a $1.7 million reserve for the Precision Power, Inc.
("PPI") promissory note, interest and pre-acquisition expenses.
(b) Includes a $2.4 million reserve against the NCT Audio Products,
Inc. investment in Top Source Automotive, Inc. and a $1.7 million
reserve related to PPI (see Note (a) above).
(c) Includes a one-time, non-cash charge of $3.1 million for
impairment of goodwill.
(d) Includes approximately $3.0 million in one-time and non-recurring
charges consisting of a $1.7 million reserve related to PPI (see
Note (a) above) and approximately $1.3 million in reserves and
charges primarily related to inventory, tooling and software
development tool expense.
(e) The loss per share calculation includes a non-cash embedded
preferred stock dividend plus accretion of $13.6 million
year-to-date and $8.2 million in the three months ended September
30, 1999.
(f) The 2000 loss per share calculation includes a non-cash embedded
preferred stock dividend plus accretion and common stock
preferential return of $4.8 million year-to-date and $4.0 million
for the three months ended September 30, 2000.
CONTACT: NCT Group, Inc.
Media:
Joanna Lipper, 203/226-4447 ext. 3506
203/226-3123 (fax)
jlipper@nct-active.com
or
NCT Group, Inc.
Investor:
Robert Onesti, 203/226-4447 ext. 3502
203/226-3123 (fax)
rjonesti@nct-active.com |
