FAIRFIELD, Conn., June 14, 2001 (PRIMEZONE) -- Competitive Technologies, Inc. (AMEX:CTT) announced today its fiscal third quarter and nine-month results for the periods ended April 30, 2001.
Net loss for the third quarter of fiscal 2001 was $1,103,268, $(0.18) per share, compared with net income of $580,100, $0.09 per share, for the third quarter of fiscal 2000. CTT's net loss for the first nine months of fiscal 2001 was $794,205, $(0.13) per share, compared with its net income of $867,759, $0.14 per share, for the first nine months of fiscal 2000.
Operating loss for the third quarter of fiscal 2001 was $1,176,988 compared with operating income of $456,165 for the third quarter of fiscal 2000. CTT's operating loss for the first nine months of fiscal 2001 was $1,082,349 compared with its operating income of $515,928 for the first nine months of fiscal 2000.
Revenues for the third quarter of fiscal 2001 were $416,562 compared with $1,299,010 in the third quarter of fiscal 2000. Revenues for the first nine months of fiscal 2001 were $2,441,338 compared with $3,015,906 for the first nine months of fiscal 2000.
Retained royalties of $416,562 for the third quarter of fiscal 2001 were $136,840 (25%) lower than retained royalties of $553,402 in the third quarter of fiscal 2000. Retained royalties of $2,437,819 for the first nine months of fiscal 2001 were $321,458 (15%) higher than retained royalties of $2,116,361 in the first nine months of fiscal 2000.
Retained royalties from the gallium arsenide semiconductor inventions, which include laser diode applications, were approximately $684,000 higher in the first nine months than in the comparable period of fiscal 2000, principally as a result of increased sales of licensed products. Retained royalties for the third quarter of fiscal 2000 included approximately $168,000 from a homocysteine licensee's increase in its previously estimated royalties for the period from 1995 through 1999.
In the third quarter of fiscal 2000, CTT recorded retained royalty settlement revenues of $736,375 for the estimated fair value of the royalty participation it exchanged for 2,945,500 shares of NTRU common stock valued at $0.25 per share. CTT had no similar royalty settlement in the third quarter of fiscal 2001.
Total operating expenses for the third quarter of fiscal 2001 were $1,593,550, which was $750,705 (89%) higher than in the third quarter of fiscal 2000. Total operating expenses for the first nine months of fiscal 2001 were $3,523,687, which was $1,023,709 (41%) higher than in the first nine months of fiscal 2000. Approximately $711,000 of the third quarter increase and $962,000 of the nine months increase related to increased patent enforcement expenses for three cases in which CTT and its clients have sued to enforce their patent rights.
Frank R. McPike, Jr., President and CEO of CTT said: "During the first nine months of fiscal 2001, CTT incurred approximately $1,158,000 of unreimbursed patent enforcement expenses and expects to continue to incur substantial unreimbursed patent enforcement expenses in our fourth fiscal quarter of 2001 and in fiscal 2002. We are currently engaged in legal proceedings to enforce our patent rights with respect to three technologies. Together with the University of Illinois, we filed complaints against Fujitsu in respect of our patent rights covering energy recovery circuitry for large plasma display panels with the US International Trade Commission and in the US District Court for the Central District of Illinois. The ITC administrative law judge is scheduled to hear evidence in this case beginning in August 2001 and to make an initial determination as to any violation (which is subject to review by the full commission) in early December 2001. During March 2001, the judge heard the Materna(tm) damages retrial in the US District Court for the District of Colorado and we await the judge's decision. Finally, the trial for our complaint against LabCorp is scheduled to begin in November 2001. We believe we have strong positions in all these cases, and we will enforce our patent rights to obtain the royalties we believe are due to our clients and to us. Clearly, the cost to enforce intellectual property rights is high, and there cannot be an absolute assurance that we will prevail. However, although litigation costs are treated as an expense for financial reporting purposes, it is my view that CTT effectively is making an investment through these enforcement actions. This investment, like any other investment, is intended to result in future royalties producing a significant financial return to our clients and to our shareholders."
McPike continued, "We are pleased to report revenues in excess of $2.4 million for the first nine months of fiscal 2001. A very positive component is the retained royalties from gallium arsenide semiconductor inventions, which include laser diode applications. They have grown dramatically in the last two years to approximately $1.3 million for the first nine months of fiscal 2001. Although we cannot predict whether these royalties will continue to grow at this rate, their growth has more than replaced declining Vitamin B12 royalties as those patents expire. With respect to the royalties withheld by licensees of our endoscopic ligator during the reexamination of our patent, I am pleased to report that our reexamination certificate was issued on May 8, 2001. We believe we are now entitled to all withheld and future endoscopic ligator royalties, although we cannot predict when, if ever, licensees will resume remitting those royalties."
About Competitive Technologies, Inc.
Competitive Technologies is a global leader in identifying, developing and commercializing innovative life sciences, physical sciences and digital technologies. Competitive Technologies' specialized expertise and experience make it a valuable partner for inventors, companies and universities of all sizes. CTT has been responsible for closing hundreds of licensing agreements. CTT clients and licensees include: Sony, Matsushita Electric Industrial, the University of Arizona, the University of Colorado, the University of Illinois, Digital Ink, Inc., NTRU Cryptosystems, Inc., Palatin Technologies, Inc. and Ribozyme Pharmaceuticals, Inc. Competitive Technologies, Inc. is based in Fairfield, Connecticut and has affiliates in Osaka, Japan and London, England.
Statements about the Company's future expectations, including development and regulatory plans, and all other statements in this document other than historical facts are "forward-looking statements" within the meaning of applicable Federal Securities Laws and are not guarantees of future performance. These statements involve risks and uncertainties related to market acceptance of and competition for the Company's licensed technologies and other risks and uncertainties inherent in CTT's business, including those set forth in Item 1 of the Company's most recent Form 10-K and other factors that may be described in CTT's filings with the SEC, and are subject to change at any time. The Company's actual results could differ materially from these forward-looking statements. The Company undertakes no obligation to update publicly any forward-looking statement.
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
(Unaudited)
Three Months ended Nine Months ended
April 30, April 30,
2001 2000 2001 2000
----------- ----------- ----------- -----------
Revenues:
Retained
royalties $416,562 $553,402 $2,437,819 $2,116,361
Retained
royalty
settlement -- 736,375 -- 736,375
Revenues under
service
contracts -- 9,233 3,519 163,170
----------- ----------- ----------- -----------
Total revenues 416,562 1,299,010 2,441,338 3,015,906
----------- ----------- ----------- -----------
Total operating
expenses 1,593,550 842,845 3,523,687 2,499,978
----------- ----------- ----------- -----------
Operating income
(loss) (1,176,988) 456,165 (1,082,349) 515,928
=========== =========== =========== ===========
Net income
(loss) $(1,103,268) $580,100 $(794,205) $867,759
=========== =========== =========== ===========
Net income (loss)
per share:
Basic and
diluted $(0.18) $0.09 $(0.13) $0.14
=========== =========== =========== ===========
Weighted average
number of common
shares outstanding:
Basic 6,120,677 6,120,254 6,161,868 6,043,586
=========== =========== =========== ===========
Diluted 6,120,677 6,369,160 6,161,868 6,145,690
=========== =========== =========== ===========
Other Financial Data:
Cash and cash
equivalents $741,100 $80,607
Short-term
investments 6,546,818 6,913,969
Royalties
receivable 247,209 971,651
Total assets $10,904,357 $11,009,304
Royalties payable $1,065,388 $1,079,901
Total liabilities 2,331,192 1,595,187
Shareholders' equity $8,573,165 $9,414,117