Exhibit 99
For Immediate Release
National Patent Development Corporation Reports First Quarter Operating Results
NEW YORK, May 15, 2008--National Patent Development Corporation (OTC Bulletin Board: NPDV.OB - News) today reported a net loss of $(1,377,000), or $(0.08) per basic and diluted share, for the three months ended March 31, 2008, compared to a net loss of $(427,000) or $(0.02) per basic share, for the three months ended March 31, 2007.
The results for the three months ended March 31, 2008 include a charge of $1,096,000 related to the resignation of S. Leslie Flegel, the former Chairman of the Board of Five Star on March 25, 2008. The Company’s operating loss for the three months ended March 31, 2008 was $(40,000) prior to the charge, and $(1,136,000) including the charge, both as compared to operating income of $388,000 for the three months ended March 31, 2007.
National Patent's majority owned subsidiary, Five Star, issued a press release on May 15, 2008 announcing its results for the three months ended March 31, 2008, which is attached hereto.
About National Patent Development Corporation
National Patent Development Corporation (OTC Bulletin Board: NPDV.OB - News), is the majority owner of Five Star. National Patent also owns and operates an optical plastics business through its wholly owned subsidiary, MXL Industries, Inc. In addition, National Patent owns certain other non-core assets including real estate.
Safe Harbor Statement
This press release contains certain "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995, including statements relating to, among other things, future business plans, strategies and financial position, working capital and capital expenditure needs, growth opportunities, and any statements of belief and any statements of assumptions underlying any of the foregoing. Neither the Company nor Five Star Products, Inc. have any material third party commitments with respect to growth plans. There is no assurance that specific plans can be executed or, if executed, will be successful from an operational or financial standpoint. These plans could require capital beyond the funds presently available to the Company.
These forward-looking statements reflect the current view of the management of National Patent Development Corporation with respect to future events and financial performance and are subject to certain risks, uncertainties, assumptions and changes in condition that could cause actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of National Patent Development Corporation, including, but not limited to the risks, uncertainties, assumptions and changes in condition detailed National Patents' periodic reports and registration statements filed with the Securities and Exchange Commission.
National Patent Development Corporation does not intend to, and disclaims any duty or obligation to, update or revise any forward-looking statements or industry information set forth in this press release to reflect new information, future events or otherwise.
Contact:
National Patent Development Corporation
John Belknap, 646-742-1627
Tables Follow:
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS DATA
(Unaudited)
(in thousands, except per share data)
| | | Three Months Ended | |
| | | March 31, | |
| | | 2008 | | | 2007 | |
| | | | | | | |
| Sales | | $ | 33,808 | | | $ | 31,931 | |
| Cost of sales | | | (28,023 | ) | | | (26,841 | ) |
| Gross margin | | | 5,785 | | | | 5,090 | |
| | | | | | | | | |
| Selling, general and administrative expenses | | | (5,825 | ) | | | (4,702 | ) |
| Charge related to resignation of Chairman of the Board of Five Star | | | (1,096 | ) | | | | |
| | | | | | | | | |
| Operating profit (loss) | | | (1,136 | ) | | | 388 | |
| | | | | | | | | |
| Interest expense | | | (340 | ) | | | (326 | ) |
| Investment and other income | | | 100 | | | | 66 | |
| | | | | | | | | |
| Income (loss) before income taxes and minority interest | | | (1,376 | ) | | | 128 | |
| | | | | | | | | |
| Income tax expense | | | (14 | ) | | | (360 | ) |
| | | | | | | | | |
| Loss before minority interest | | | (1,390 | ) | | | (232 | ) |
| | | | | | | | | |
| Minority interest | | | 13 | | | | (195 | ) |
| | | | | | | | | |
| Net loss | | $ | (1,377 | ) | | $ | (427 | ) |
| | | | | | | | | |
| Net loss per share | | | | | | | | |
| Basic and diluted | | $ | (0.08 | ) | | $ | (0.02 | ) |
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS DATA
(in thousands)
| | | March 31, 2008 | | | December 31, 2007 | |
| | | (unaudited) | | | | |
| Assets | | | | | | |
| Current assets | | | | | | |
| Cash and cash equivalents | | $ | 12,366 | | | $ | 15,698 | |
| Accounts receivable, less allowance | | | | | | | | |
| for doubtful accounts of $216 and $412 | | | 20,750 | | | | 12,755 | |
| Inventories | | | 33,806 | | | | 27,720 | |
| Prepaid expenses and other current assets | | | 805 | | | | 1,326 | |
| Deferred tax asset | | | 470 | | | | 470 | |
| Total current assets | | | 68,197 | | | | 57,969 | |
| | | | | | | | | |
| Marketable securities available for sale | | | 44 | | | | 109 | |
| Property, plant and equipment, net | | | 3,522 | | | | 3,534 | |
| Goodwill | | | 96 | | | | | |
| Deferred tax asset | | | 190 | | | | | |
| Other assets | | | 2,918 | | | | 3,293 | |
| Total assets | | $ | 74,967 | | | $ | 64,905 | |
| | | | | | | | | |
| Liabilities and stockholders’ equity | | | | | | | | |
| Current liabilities | | | | | | | | |
| Current maturities of long-term debt | | $ | 257 | | | $ | 257 | |
| Short term borrowings | | | 28,101 | | | | 19,928 | |
| Accounts payable and accrued expenses | | | 18,914 | | | | 13,530 | |
| Total current liabilities | | | 47,272 | | | | 33,715 | |
| | | | | | | | | |
| Long-term debt less current maturities | | | 1,377 | | | | 1,441 | |
| Deferred tax liability | | | 279 | | | | 279 | |
| | | | | | | | | |
| Minority interest | | | 1,677 | | | | 2,902 | |
| Common stock subject to exchange rights | | | | | | | 493 | |
| | | | | | | | | |
| Stockholders’ equity | | | | | | | | |
| Common stock | | | 180 | | | | 180 | |
| Additional paid-in capital | | | 27,322 | | | | 26,825 | |
| Retained earnings | | | 1,168 | | | | 2,545 | |
| Treasury stock, at cost | | | (4,187 | ) | | | (3,458 | ) |
| Accumulated other comprehensive loss | | | (121 | ) | | | (17 | ) |
| Total stockholders’ equity | | | 24,362 | | | | 26,075 | |
| Total liabilities and stockholders’ equity | | $ | 74,967 | | | $ | 64,905 | |
For Immediate Release
Five Star Products, Inc. Reports First Quarter Results
NEW YORK, May 15, 2008 -- Five Star Products, Inc. (OTC Bulletin Board: FSPX.OB - News), a leading distributor of paint sundry and hardware products in the Northeast and Middle-Atlantic states, today announced its revenue of $31.5 million for the three months ended March 31, 2008, a 5.4% increase over the $29.9 million reported for the three months ended March 31, 2007. Net income (loss) was $(707,000) for the three months ended March 31, 2008, $(0.04) per basic and diluted share, compared to net income of $460,000, $.03 per basic and diluted share, for the three months ended March 31, 2007. The results for the three months ended March 31, 2008 include a non-cash charge related to the resignation of S. Leslie Flegel, the former Chairman of the Board on March 25, 2008. The Company reported that results for the three months ended March 31, 2008 included the contribution from the Right-Way Dealer Warehouse, Inc. business which was acquired on April 5, 2007.
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), as stated before stock compensation expense of $100,000, and a non-cash charge related to the resignation of the Chairman of $1,096,000, was $933,000, as compared to $1,284,000 which is before a stock compensation expense of $42,000, for the three months ended March 31, 2007.
About Five Star Products, Inc.
Five Star Products, Inc. (OTC Bulletin Board: FSPX.OB - News) is engaged in the wholesale distribution of paint sundry and hardware products in the Northeast and Middle-Atlantic states with particular strength in the greater New York metropolitan area. The Company distributes products to approximately 3,000 independent retail dealers, which include paint stores, independent hardware stores, lumber yards, and do-it yourself centers. The Company distributes a range of private label products sold under the "Five Star" name. Five Star operates two distribution centers, the primary one located in East Hanover, NJ and another in Newington, CT.
Safe Harbor Statement
This press release contains certain "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995, including statements relating to, among other things, future business plans, strategies and financial position, working capital and capital expenditure needs, growth opportunities, and any statements of belief and any statements of assumptions underlying any of the foregoing. The Company has no material third party commitments with respect to growth plans. There is no assurance that specific plans can be executed or, if executed, will be successful from an operational or financial standpoint. These plans could require capital beyond the funds presently available to the Company.
These forward-looking statements reflect current views of the management of Five Star Products, Inc. with respect to future events and financial performance and are subject to certain risks, uncertainties, assumptions and changes in condition that could cause actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of Five Star Products including, but not limited to the risks, uncertainties, assumptions and changes in condition detailed in Five Star Products' periodic reports and registration statements filed with the Securities and Exchange Commission.
Five Star Products, Inc. does not intend to, and disclaims any duty or obligation to, update or revise any forward-looking statements or industry information set forth in this press release to reflect new to reflect new information, future events or otherwise.
Contact:
Five Star Products, Inc.
John Belknap, 646-742-1627
Tables Follow:
FIVE STAR PRODUCTS, INC. AND SUBSIDIARIES
Non- GAAP Reconciliation- EBITDA and Adjusted EBITDA
(in thousands)
(unaudited)
| | | Three months ended March 31, | |
| | | 2008 | | | 2007 | |
| Net income (loss) | | $ | (707 | ) | | $ | 460 | |
| Interest expense, net | | | 365 | | | | 342 | |
| Income tax expense | | | | | | | 354 | |
| Depreciation and amortization | | | 79 | | | | 86 | |
| EBITDA | | | (263 | ) | | | 1,242 | |
| Stock compensation expense | | | 100 | | | | 42 | |
| Charge related to resignation of Chairman of the Board | | | 1,096 | | | | | |
| Adjusted EBITDA | | $ | 933 | | | $ | 1,284 | |
EBITDA is a widely used non-GAAP financial measure of operating performance. It is presented as supplemental information that the Company believes is useful to investors to evaluate its results because it excludes certain items that are not directly related to the Company's core operating performance. EBITDA is calculated by adding back net interest expense, income tax expense, and depreciation and amortization to net income. EBITDA should not be considered as a substitute either for net income, as an indicator of the Company's operating performance, or cash flow, as a measure of the Company's liquidity. In addition, because EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA is calculated as EBITDA prior to non-cash stock compensation expense.
FIVE STAR PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS DATA
(in thousands)
| | | March 31, 2008 | | | December 31, 2007 | |
| | | (unaudited) | | | | |
| ASSETS | | | | | | |
| | | | | | | |
| Current assets | | | | | | |
| Cash | | $ | 3 | | | $ | 3 | |
| Accounts receivable, net | | | 19,419 | | | | 11,254 | |
| Inventory | | | 32,990 | | | | 26,965 | |
| Deferred income taxes | | | 496 | | | | 469 | |
| Prepaid expenses and other current assets | | | 572 | | | | 1,151 | |
| Total current assets | | | 53,480 | | | | 39,842 | |
| | | | | | | | | |
| Machinery and equipment, net | | | 763 | | | | 833 | |
| Deferred income taxes | | | 190 | | | | 24 | |
| Other assets | | | 15 | | | | 391 | |
| Total Assets | | $ | 54,448 | | | $ | 41,090 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| Current liabilities | | | | | | | | |
| Short-term borrowings | | $ | 27,476 | | | $ | 19,303 | |
Accounts payable and accrued expenses (including due to affiliates of $73 and $129) | | | 17,485 | | | | 12,211 | |
| Total current liabilities | | | 44,961 | | | | 31,514 | |
| Convertible note payable to NPDC | | | 2,800 | | | | 2,800 | |
| Total Liabilities | | | 47,761 | | | | 34,314 | |
| | | | | | | | | |
| Stockholders' equity | | | | | | | | |
| Common stock | | | 198 | | | | 195 | |
| Additional paid-in capital | | | 10,218 | | | | 9,544 | |
| Accumulated deficit | | | (3,003 | ) | | | (2,296 | ) |
| Accumulated other comprehensive (loss) income | | | (26 | ) | | | 33 | |
| Treasury stock, at cost | | | (700 | ) | | | (700 | ) |
| Total stockholders' equity | | | 6,687 | | | | 6,776 | |
| | | $ | 54,448 | | | $ | 41,090 | |
FIVE STAR PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS DATA
(Unaudited)
(in thousands, except per share data)
| | | Three Months Ended | |
| | | March 31, | |
| | | 2008 | | | 2007 | |
| | | | | | | |
| Sales | | $ | 31,469 | | | $ | 29,861 | |
| Cost of goods sold | | | 26,293 | | | | 25,133 | |
| Gross margin | | | 5,176 | | | | 4,728 | |
| | | | | | | | | |
| Selling, general and administrative expenses | | | (4,431 | ) | | | (3,590 | ) |
| Charge related to resignation of Chairman of the Board | | | (1,096 | ) | | | |
| | | | | | | | | |
| Operating income (loss) | | | (351 | ) | | | 1,138 | |
| | | | | | | | | |
| Other income | | | 9 | | | | 18 | |
| | | | | | | | | |
| Interest expense (including $63 in 2008 and in 2007 for NPDC convertible note) | | | (365 | ) | | | (342 | ) |
| | | | | | | | | |
| Income (loss) before income taxes | | | (707 | ) | | | 814 | |
| | | | | | | | | |
| Income tax benefit (expense) | | | | | | (354 | ) |
| | | | | | | | | |
| Net income (loss) | | $ | (707 | ) | | $ | 460 | |
| | | | | | | | | |
| Net income (loss) per share | | | | | | | | |
| Basic | | $ | (0.04 | ) | | $ | 0.03 | |
| Diluted | | $ | (0.04 | ) | | $ | 0.03 | |
