Thursday November 30, 9:29 am Eastern Time
Press Release
CT Holdings Reports Results for Quarter Ended September 30, 2000
Parago Announces Record Revenues For Its Third Quarter Ended September 30, 2000 And $15 Million In New Capital Commitments From Existing Venture Capital Shareholders
DALLAS--(BUSINESS WIRE)--Nov. 30, 2000-- CT Holdings, Inc. (NASDAQ: CITN - news) announced its financial results for its fiscal quarter ended September 30, 2000.
Revenues for the quarter ended September 30, 2000 were $200,614, a decrease of 74.7% from software revenues of $793,030 for the quarter ended September 30, 1999. Revenues do not include any subsidiary revenue from CT Holdings' investments. The Company reported a net loss for the quarter ended September 30, 2000 of $629,733, or $0.01 per share, compared to a net loss of $4,186,920, or $0.10 per share, for the quarter ended September 30, 1999, which included Parago's losses for that quarter. CT Holdings continues to hold 20,000,000 shares of Parago common stock.
``We feel more positive than ever about our current holdings and their prospects. We believe that Parago's client value proposition is compelling, its technology is being well received, and its client list continues to grow. Parago continues to expand its business model, recording record revenues and a growing client base, while River Logic, offering leading edge software solutions, continues to be well received by business clients,'' commented Steven B. Solomon, President and Chief Executive Officer of CT Holdings. ``Parago's ability to raise additional funds in the current environment is indicative of its strong business model and management team.''
Recent highlights for CT Holdings' incubator projects include the following:
For its quarter ended September 30, 2000, Parago reported record revenues of approximately $5,600,000, a 137% increase over the 1999 third quarter and a 40% sequential increase from the second quarter of 2000. Parago has also increased the number of its clients to approximately 180 as of September 30, 2000, which include leading national retailers, manufacturers and service providers, from approximately 160 clients at the end of the prior quarter.
Also in Q3 2000, Parago received commitments for an additional $15 million in funds, of which Parago has closed $10 million, through a sale of Series D Convertible Preferred Stock to two of its existing venture capital investors. The remaining $5 million is subject to expiration of the Hart-Scott-Rodino Act waiting period and other closing conditions.
Parago currently has approximately 350 employees. Parago recently hired a new Executive Vice President of Sales, Steve Blum. Previously, Steve was Vice President, The Americas, for Mentor Graphics Corporation, an electronic design automation software firm with approximately $560 million in annual revenues, where he managed 250 sales and support personnel.
At the end of Q3 2000, Parago rolled out its first upsell/cross-sell technology application, which Parago has branded ValueRewards(SM). ValueRewards is now part of Parago's regular product offering, and to date Parago has signed four clients to the program. Parago expects to begin seeing revenue from this exciting application in the near future.
In addition to ValueRewards, in Q3 2000 Parago piloted its KnowledgeCenter(TM) technology, a robust data warehousing application for analyzing promotional effectiveness. Five of Parago's clients are currently testing the application, and Parago will begin marketing this product later in Q4 2000.
In November, Parago rolled out a new Parago web site (www.parago.com), which Parago believes more effectively, conveys the unique aspects of its business model and incorporates a more appealing presentation.
Parago is currently pursuing COPC certification for its operations and customer service organizations (COPC is similar to Malcolm Baldridge's ISO 9000 but designed specifically for Parago's type of business). Parago believes that COPC certification is a hallmark of a world class operation and is a competitive advantage for those who obtain it.
Parago continues to talk with investment banks about the best timing for a successful IPO. Parago intends to pursue an IPO when market conditions permit.
In July 2000, River Logic closed a $3 million private placement of shares of its Series B preferred stock to a venture capital firm that specializes in early stage technology firms that offer B2B Internet solutions providing strong value-oriented models for their prospective market-space.
In addition, one of River Logic's resellers, Heads Up! Systems, LLC, and Price Waterhouse Coopers, LLC entered into a strategic alliance offering clients of process- and supply-chain modeling applications reliability in the use of enterprise modeling tools. New software such as COR Technology© by River Logic, provides business planners and managers with the ability to identify profit improvement opportunities, design and communicate supply chain and business process information, and to develop model-based tactical and strategic plans.
Recent highlights for CT Holdings include the following:
CT Holdings announced the appointment of Phil Romano, a leading entrepreneur in the Restaurant and Technology Industries, to its Board of Directors.
Two of CT Holdings' directors acquired 2.5 million shares of CT Holdings common stock in the quarter ended September 30, 2000.
In the quarter ended September 30, 2000, CT Holdings determined not to proceed with the previously announced letters of intent with ideavillage.com and Perclick, based on the results of CT Holdings' due diligence review.
About CT Holdings
CT Holdings, Inc. (NASDAQ: CITN - news), is an incubator of early stage Internet companies. (www.ct-holdings.com).
About Parago
Parago, Inc. is a subsidiary of CT Holdings, Inc. (NASDAQ: CITN - news). The company was founded in January 1999 and is headquartered in Dallas with offices in Silicon Valley and with approximately 350 employees. Parago has developed a continuous customer interaction model that automates promotional management and optimizes the customer care experience for its clients. Parago, an application solution provider (ASP) and Internet based business process outsourcer (BPO) provides an on-line suite of promotional offerings designed to increase sales, reduce costs, and retain customers, thereby increasing customer profitability. Parago's solutions and services include PromoCenter (on-line promotional management, on-line rebate processing, proactive e-mail, and on-line surveys), InfoCenter (online product demonstrations and manuals), and KnowledgeCenter (customer data warehousing, analysis and reporting).
About River Logic
River Logic, Inc. (www.riverlogic.com), headquartered in Beverly, Massachusetts, creates and operates integrated networks of decision support tools, eLearning solutions, and eCommerce capabilities designed to enable decision-makers to leverage knowledge and information to gain a decisive competitive advantage. By providing the knowledge databases needed to leverage its proprietary, web-enabled, industry standard decision support tools (COR Vantage(TM)), River Logic, offers one of the most comprehensive and technologically advanced value-added decision support networks available today.
For more information on CT Holdings, its Internet subsidiaries, and its Citadel Technology line of security software products, please visit our Web site at ct-holdings.com. For information on purchasing products, contact us directly by writing or calling: CT Holdings, 3811 Turtle Creek Blvd., Suite 770, Dallas, Texas 75219; phone: 214/520.9292; fax: 214/520.9293. For media or investor relations contact: Shayne Payne or Dian Griesel Ph.D. at The Investor Relations Group. 212/736.2650.
Forward-Looking Statements: This news release contains forward-looking statements, which involve risks and uncertainties. Accordingly, no assurances can be given that the actual events and results will not be materially different that the anticipated results described in the forward-looking statements. There are a number of important factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by us. These factors include our and our subsidiaries' success in integrating the business and operations of acquired companies and interests; no assurances of an initial public offering based on market conditions and suitable underwriters; availability of suitable incubator companies; implementation of Internet strategies; the activities of new or existing competitors; the ability to attract and retain employees and strategic partners; application of state unclaimed property or escheat laws; the availability of capital on terms acceptable to the Company; general economic conditions; and litigation costs. Investors are also directed to consider other risks and uncertainties discussed in documents we file with the Securities and Exchange Commission.
The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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