Competitive Technologies, Inc. Reports Third Quarter Fiscal 2006 Results.FAIRFIELD Fairfield. 1 City (1990 pop. 12,200), Jefferson co., N central Ala., an industrial suburb of Birmingham; inc. 1919. Founded (1910) by the United States Steel Corp., its steel industry has greatly declined, negatively affecting the city's economy. , Conn. -- Competitive Technologies, Inc. (AMEX AMEX See: American Stock Exchange : CTT CTT Correios (Portuguese Postal Service) CTT Certified Technical Trainer CTT Charity Technology Trust CTT Cholesterol Treatment Trialists' (collaboration) CTT Common Task Training ) today announced a net loss of $1.1 million, or $0.14 per share, for its fiscal third quarter ended April 30, 2006. This compares to net income of $0.4 million, or $0.05 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the third quarter of the prior fiscal year. For the nine months ended April 30, 2006, we incurred a net loss of approximately $2.0 million, or $0.27 per share, compared to net income during the same period of the prior year of approximately $5.3 million, or $0.73 per diluted share. Retained royalties for the quarter ended April 30, 2006, were approximately $1.0 million, a decrease of $1.1 million, or 50%, compared to approximately $2.1 million of retained royalties for the same period in the prior year. Retained royalties for the prior year included an aggregate of approximately $0.8 million from the settlement of back royalties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc an expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. license, and upfront license fees relating to new homocysteine Homocysteine Definition Homocysteine is a naturally occurring amino acid found in blood plasma. High levels of homocysteine in the blood are believed to increase the chance of heart disease, stroke, Alzheimer's disease, and osteoporosis. testing licenses granted in the prior year. Excluding these items, retained royalties for the quarter ended April 30, 2006, would have decreased $0.2 million, or approximately 19% over the same period of the prior year, due to timing of receipts on one license, and a decrease in the number of homocysteine assays sold by one large licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor) LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. . Total revenues for the quarter ended April 30, 2006, were approximately $1.2 million, compared to approximately $2.5 million in the same period of the prior year, due to the decrease in retained royalties, and the absence in the current year of legal awards and dividends, as happened in the prior year, partially offset by an increase in interest income due to higher interest rates and higher average cash balances in the current quarter compared to the prior year quarter. Expenses overall were flat for the quarter ended April 30, 2006, compared to the prior year quarter. Personnel and other direct expenses related to revenues increased approximately $0.2 million. General and administrative expenses decreased approximately $0.4 million compared to the prior year, principally due to a decrease in legal costs incurred in the prior year to defend the company against a whistleblower whis·tle·blow·er or whis·tle-blow·er or whistle blower n. One who reveals wrongdoing within an organization to the public or to those in positions of authority: "The Pentagon's most famous whistleblower is . . claim that was later dismissed dis·miss tr.v. dis·missed, dis·miss·ing, dis·miss·es 1. To end the employment or service of; discharge. 2. , and a reduction in costs related to the documentation, testing and audit of internal controls required pursuant to Section 404 of the Sarbanes-Oxley Act See SOX. of 2002. Patent enforcement expenses, net of reimbursements, increased approximately $0.3 million compared to the prior year, principally due to net costs incurred in defense of our homocysteine patent at the U.S. Supreme Court. "We are focused on our goal of significantly growing our recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenues. To accomplish our goal, we first need to increase our portfolio of available technologies, and must continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. bring in new technology to keep our pipeline full," said Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. D. Davidson Da·vid·son , Jo(seph) 1883-1952. American sculptor best remembered for his vigorous portrait busts of Woodrow Wilson, Franklin D. Roosevelt, and Albert Einstein, among others. , CTT's Vice President and Chief Financial Officer. "Prior to the formation of the current management team, not enough new technologies were acquired, and we are paying for this now. But we are aggressively pursuing new technology and have added staff to accelerate this process. We expect our efforts to pay off within the next eighteen to thirty-six months." Dr. D. J. Freed, CTT's President and Chief Executive Officer added, "Due to our long revenue cycle, which we estimate to be two to three years from technology sign-up to recurring revenue, it is important that we stay active on both the acquisition and licensing sides of our business. This was a significant past weakness in our operations that we identified and we have made, and are continuing to make, the investments that we believe are needed to secure our Company's future. These investments have cost us in the short term, but we believe that they will be well worth it over time. Our strong balance sheet means that we won't won't Contraction of will not. won't will not won't will sacrifice our long-term goals Long-term goals Financial goals expected to be accomplished in five years or longer. for short term results. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that the people we have, and our strategic plans will be successful." Retained royalties for the nine months ended April 30, 2006, were approximately $3.4 million, compared to approximately $9.5 million in the prior year. The principal reason for the decrease in retained royalties was upfront license fees received on homocysteine licenses granted in the prior year that did not recur in the same magnitude in the current year, and the settlement in the prior year of the back royalties described above. Total revenues for the nine months ended April 30, 2006, were approximately $3.8 million, compared to approximately $11.7 million for the same period of the prior fiscal year. In addition to the decrease in retained royalties, during the prior year period an aggregate of approximately $1.8 million of revenue was received from legal awards and two dividends from one of our investments, neither of which recurred in the current year. Total expenses for the nine months ended April 30, 2006, decreased $0.5 million, to approximately $5.9 million from approximately $6.4 million incurred during the same period of the prior year. Personnel and other direct costs decreased approximately $0.9 million, principally due to less commission and bonus accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. in the current year compared to the prior year, partially offset by increased costs related to the addition of new business development staff. General and administrative expenses increased approximately $0.3 million compared to the prior year, principally due to an increase in legal costs related to claims filed against us by our former President and Chief Executive Officer, and costs related to our claim filed against him for damages for breach of contract, breach of fiduciary duty Noun 1. fiduciary duty - the legal duty of a fiduciary to act in the best interests of the beneficiary legal duty - acts which the law requires be done or forborne , statutory theft and other claims. Patent enforcement expenses, net of reimbursements, increased approximately $0.1 million. CTT will hold a conference call at 11:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT on June June: see month. 9, 2006 to discuss results and provide a strategic overview. Investors and others are invited to listen to the broadcast live and ask questions by dialing in at (800) 406-5356 (U.S./Canada) or (913) 981-5572 (International). The call will be web cast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.competitivetech.net in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section. A replay of the call will be available the following day on our website. About Competitive Technologies, Inc. Competitive Technologies, established in 1968, is a full service technology transfer and licensing provider, focused on bringing the intellectual property assets of its clients to the marketplace. CTT specializes in identifying, developing and commercializing innovative technologies in a variety of areas, including life and physical sciences, electronics, and nanotechnologies. Through its global distribution platform, CTT maximizes the value of its clients' intellectual property assets. For more information, please visit: www.competitivetech.net. Statements about our future expectations, including development and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. plans, and all other statements in this press release, other than historical facts, are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of applicable Federal Securities Laws, and are not guarantees of future performance. If and when used herein, the words "may," "will," "should," "anticipate," "believe," "intend," "plan," "expect," "estimate," "approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. ," and similar expressions, as they relate to us or our business or management, are intended to identify such forward-looking statements. These statements involve risks and uncertainties related to market acceptance of and competition for our licensed technologies, growth strategies, operating performance, industry trends, and other risks and uncertainties inherent in our business, including those set forth in Item 7 under the caption "Risk Factors," in our most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended July July: see month. 31, 2005, filed with the Securities and Exchange Commission ("SEC") on October October: see month. 13, 2005, and other factors that may be described in our 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except share amounts)
Three months ended Nine months ended
April 30, April 30,
------------------ ------------------
2006 2005 2006 2005
-------- -------- -------- --------
Revenues
Retained royalties $ 1,043 $ 2,078 $ 3,433 $ 9,520
Royalty legal awards - 221 - 1,037
Dividends received - 104 - 784
Investment income 156 93 391 306
Other income - 37 12 100
-------- -------- -------- --------
1,199 2,533 3,836 11,747
-------- -------- -------- --------
Expenses
Personnel and other direct
expenses relating to revenues 1,354 1,170 3,348 4,289
General and administrative
expenses 624 1,030 2,155 1,845
Patent enforcement expenses, net
of reimbursements 275 7 373 291
-------- -------- -------- --------
2,253 2,207 5,876 6,425
-------- -------- -------- --------
Income (loss) before income taxes (1,054) 326 (2,040) 5,322
Provision (benefit) for income
taxes - (34) (12) 37
-------- -------- -------- --------
Net income (loss) $(1,054) $ 360 $(2,028) $ 5,285
======== ======== ======== ========
Net income (loss) per common
share:
Basic $ (0.14) $ 0.05 $ (0.27) $ 0.80
======== ======== ======== ========
Diluted $ (0.14) $ 0.05 $ (0.27) $ 0.73
======== ======== ======== ========
Weighted average number of common
shares outstanding:
Basic 7,710 6,868 7,565 6,631
Diluted 7,710 7,685 7,565 7,242
COMPETITIVE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share amounts)
April 30, July 31,
2006 2005
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 14,461 $ 14,280
Receivables 4,054 4,086
Equity securities 368 -
Prepaid expenses and other current assets 244 272
--------- ---------
Total current assets 19,127 18,638
Equity securities 625 558
Prepaid royalties 250 75
Deferred equity financing costs, net - 96
Intangible assets, net 24 39
Property and equipment, net 65 35
--------- ---------
TOTAL ASSETS $ 20,091 $ 19,441
========= =========
LIABILITIES AND SHAREHOLDERS' INTEREST
Current liabilities:
Accounts payable $ 811 $ 643
Accrued expenses and other liabilities 3,687 4,690
--------- ---------
Total current liabilities 4,498 5,333
Non current royalties payable 1,169 -
--------- ---------
Commitments and contingencies
Shareholders' interest:
5% preferred stock, $25 par value, 35,920 shares
authorized, 2,427 shares issued and outstanding 61 61
Common stock, $.01 par value, 20,000,000
shares authorized, 7,787,669 and 7,326,749
shares issued, respectively 78 73
Capital in excess of par value 33,485 31,285
Accumulated deficit (19,072) (17,044)
Accumulated other comprehensive loss (128) (267)
--------- ---------
Total shareholders' interest 14,424 14,108
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS'
INTEREST $ 20,091 $ 19,441
========= =========
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