FAIRFIELD, Conn., Oct. 16, 2001 (PRIMEZONE) -- Competitive Technologies, Inc. (AMEX:CTT) today announced its results for the 2001 fiscal fourth quarter and year ended July 31, 2001.
CTT revenues for the fourth quarter of fiscal 2001 were $1,199,946 compared with $1,096,961 in the fourth quarter of fiscal 2000. Revenues for fiscal 2001 were $3,641,284 compared with $4,112,867 for fiscal 2000.
Retained royalties of $1,199,946 for the fourth quarter of fiscal 2001 were $114,113 (11%) higher than retained royalties of $1,085,833 in the fourth quarter of fiscal 2000. Retained royalties of $3,637,765 for fiscal 2001, the highest in its history, were $435,571 (14%) higher than retained royalties of $3,202,194 in fiscal 2000.
Net loss for the fourth quarter of fiscal 2001 was $1,706,544, ($0.28) per share, including patent enforcement expenses of approximately $1,316,000, compared with net income of $433,178, $0.07 per share, for the fourth quarter of fiscal 2000, including patent enforcement expenses of approximately $32,000. CTT's net loss for fiscal 2001 was $2,500,749, ($0.41) per share, including approximately $2,474,000 of patent enforcement expenses principally related to three legal actions in which CTT and its clients have sued to enforce their patent rights, compared with its net income of $1,300,937, $0.21 per share, for fiscal 2000, including enforcement expenses of approximately $157,000.
Retained royalties from the gallium arsenide semiconductor inventions, which include laser diode applications, were approximately $828,000 higher in fiscal 2001 than in fiscal 2000, principally because of increased sales of CTT-licensed products.
In 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 fiscal 2001.
Overall, the royalty revenue mix by sector, including royalty settlements (with laser diode and plasma display technologies included in the digital/electronic sector), was as follows:
Fiscal Year Ended July 31
2001 2000
---- ----
Digital/Electronic Technologies 63% 55%
Life Sciences 36% 43%
Physical Sciences 1% 2%
Operating loss for the fourth quarter of fiscal 2001 was $1,150,012 compared with operating income of 258,110 for the fourth quarter of fiscal 2000. CTT's operating loss for fiscal 2001 was $2,232,361 compared with its operating income of $774,038 for fiscal 2000.
Total operating expenses for the fourth quarter of fiscal 2001, including approximately $1,316,000 in patent enforcement expenses, were $2,349,958, which was $1,511,107 (180%) higher than in the fourth quarter of fiscal 2000. Total operating expenses for fiscal 2001, including $2,474,000 in enforcement expenses, were $5,873,645, which was $2,534,816 (76%) higher than in fiscal 2000.
As a result of Micro-ASI filing for protection under Chapter 7 of the United States Bankruptcy Code in August 2001, CTT recorded a $600,000 loss on its investment in and advances to Micro-ASI, Inc. in the fourth quarter of fiscal 2001. CTT wrote off its entire $500,000 investment in Micro-ASI preferred stock and its $100,000 advance to Micro-ASI under a secured bridge promissory note. It is uncertain when and how much, if any, CTT may realize from the final accounting and distribution of Micro-ASI's bankrupt estate.
"We were extremely disappointed by the demise of Micro-ASI, as were other Micro-ASI investors," said Frank R. McPike, Jr., President and CEO of CTT. "If more funding sources had been available or the economy had been stronger, Micro-ASI's future might have been different. Unfortunately, in the current economic climate, Micro-ASI was unable to secure additional financing and was forced to file for bankruptcy."
Mr. McPike went on to say, "The costs to enforce our intellectual property rights are high and although enforcement costs are an expense for financial reporting purposes, I consider them to be an investment we are making with the intention of reaping significant future royalties. We believe that the ultimate return from our enforcement actions will be financially significant for our clients and our shareholders. During the fourth quarter, we changed our strategy for enforcing our plasma display panel patent rights by activating our suit in the U. S. District Court for the Central District of Illinois against Fujitsu Limited of Tokyo, Japan and its subsidiaries (Fujitsu). We also asked to withdraw our complaint against Fujitsu before the International Trade Commission (ITC). This change in strategy will allow us to pursue additional legal remedies against Fujitsu that are not available at the ITC, including a permanent injunction and damages for past infringing sales. It will also permit us to raise the issue of the willfulness of Fujitsu's acts. We intend to seek to expedite the case in the District Court."
Mr. McPike continued, "We are also involved in two other lawsuits. In the suit filed in 1993 against American Cyanamid Company, a unit of American Home Products, for royalties due on sales of Materna(tm), a prenatal vitamin, the judge has issued a preliminary favorable decision, and we await his decision awarding damages. Trial is scheduled to begin in November 2001 in the suit against Laboratory Corporation of America Holdings for royalties due on certain homocysteine assays."
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, Conn., 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
Fourth Quarter Fiscal Year Ended
Ended July 31 July 31
2001 2000 2001 2000
Revenues:
Retained
royalties $ 1,199,946 $ 1,085,833 $ 3,637,765 $ 3,202,194
Royalty
settlement -- -- -- 736,375
Revenues
under service
contracts -- 11,128 3,519 174,298
---------- ---------- ---------- ----------
Total revenues 1,199,946 1,096,961 3,641,284 4,112,867
Total operating
expenses 2,349,958 838,851 5,873,645 3,338,829
---------- ---------- ---------- ----------
Operating
income (loss) $(1,150,012) $ 258,110 $(2,232,361) $ 774,038
========== ========== ========== ==========
Loss on
investments in
affiliates $ (600,000) $ -- $ (600,000) $ --
========== ========== ========== ==========
Income (loss)
before minority
interest $(1,690,562) $ 369,720 $(2,484,767) $ 1,237,479
========== ========== ========== ==========
Net income
(loss) $(1,706,544) $ 433,178 $(2,500,749) $ 1,300,937
========== ========== ========== ==========
Net income
(loss) per
share:
Basic and
diluted $ (0.28) $ 0.07 $ (0.41) $ 0.21
========== ========== ========== ==========
Weighted average
number of common
shares
outstanding:
Basic 6,123,709 6,185,310 6,135,486 6,079,211
Diluted 6,123,709 6,311,652 6,135,486 6,187,407
Other Financial
Data
Cash and cash
equivalents $ 224,436 $ 1,716,375
========== ==========
Short-term
investments $ 4,793,441 $ 5,000,054
========== ==========
Royalties
receivable $ 2,731,228 $ 2,347,176
========== ==========
Total assets $10,640,873 $12,093,965
========== ==========
Royalties payable $ 1,852,207 $ 1,780,988
========== ==========
Total liabilities $ 3,673,127 $ 2,165,853
========== ==========
Shareholders'
equity $ 6,967,746 $ 9,928,112
========== ==========