Exhibit 99
For Immediate Release
National Patent Development Corporation Reports Third Quarter Operating Results
NEW YORK, November 14, 2008--National Patent Development Corporation (OTC Bulletin Board: NPDV.OB - News) today reported a net loss of $(870,000), $(0.05) per basic share, for the three months ended September 30, 2008, compared to a net loss of $(1,351,000), $(0.08) per basic share, for the three months ended September 30, 2007.
For the nine months ended September 30, 2008, the Company reported a net loss of $(2,675,000), $(0.16) per basic share, compared to net income of $13,492,000, $0.76 per basic and diluted share, in the corresponding nine month period a year ago.
For the three and nine months ended September 30, 2008, the Company reported revenue from continuing operations of $31,216,000 and $94,114,000, respectively, compared to $32,938,000 and $98,726,000 for the three and nine months ended September 30, 2007, respectively.
The results for the nine months ended September 30, 2008 include a charge of $1,096,000 related to the resignation of the former Chairman of the Board of its wholly owned subsidiary, Five Star Products, Inc. (“Five Star”) on March 25, 2008 and the three and nine months ended September 30, 2008 include $489,000 of previously unrecognized compensation cost related to unvested share-based compensation arrangements of Five Star being charged to operations. The results for the nine months ended September 30, 2007 include a gain of $17,031,000 recognized as a result of the sale of the Company’s ownership interest in Indevus Pharmaceuticals, Inc which it received as a result of the merger of Valera Pharmaceuticals, Inc. into Indevus, including the receipt, in May 2007, of an additional payment based upon the attainment of a post-merger milestone. The Company’s operating profit (loss) excluding the items set forth above for the nine months ended September 30 was $(832,000) in 2008 and $1,279,000 in 2007 and for the three months ended September 30 was $(268,000) in 2008 and $327,000 in 2007.
The decrease in adjusted operating profit (loss) was primarily attributable to the decline in operating profits of Five Star, National Patent's wholly owned subsidiary, during the periods due to overall weakness in its marketplace. Harvey Eisen, the Company’s CEO, said, “Five Star continues to feel the effect of the weakening economy and remains focused on managing overhead and working capital during this economic downturn.”
On August 26, 2008, the Company announced that it had completed the purchase of the remaining Five Star shares that it did not already own pursuant to the previously announced Tender Offer and Merger Agreement.
About National Patent Development Corporation
National Patent Development Corporation (OTC Bulletin Board: NPDV.OB - - News), is the owner of Five Star. Five Star 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. 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, and any statements of belief and any statements of assumptions underlying any of the foregoing.
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, except as required by law.
Contact:
National Patent Development Corporation
John Belknap, 646-742-1627
Tables Follow:
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA
(Unaudited)
(in thousands, except per share data)
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| | | | | | | | | | | | | |
| Sales | | $ | 31,216 | | | $ | 32,938 | | | $ | 94,114 | | | $ | 98,726 | |
| Cost of sales | | | 25,702 | | | | 26,953 | | | | 77,975 | | | | 81,758 | |
| Gross margin | | | 5,514 | | | | 5,985 | | | | 16,139 | | | | 16,968 | |
| | | | | | | | | | | | | | | | | |
Selling, general and administrative Expenses | | | (6,271 | ) | | | (5,658 | ) | | | (17,460 | ) | | | (15,689 | ) |
| Charge related to resignation of Chairman of Five Star | | | - | | | | - | | | | (1,096 | ) | | | - | |
| | | | | | | | | | | | | | | | | |
| Operating profit (loss) | | | (757 | ) | | | 327 | | | | (2,417 | ) | | | 1,279 | |
| | | | | | | | | | | | | | | | | |
| Interest expense | | | (370 | ) | | | (394 | ) | | | (1,060 | ) | | | (1,126 | ) |
| Gain on exchange of Valera for Indevus shares | | | - | | | | - | | | | - | | | | 17,031 | |
| Investment and other income (loss), net | | | (73 | ) | | | (957 | ) | | | 78 | | | | (1,739 | ) |
| | | | | | | | | | | | | | | | | |
| Income (loss) from continuing operations before income taxes and minority interest | | | (1,200 | ) | | | (1,024 | ) | | | (3,399 | ) | | | 15,445 | |
| | | | | | | | | | | | | | | | | |
| Income tax (expense) benefit | | | 354 | | | | ( 236 | ) | | | 329 | | | | (1,296 | ) |
| | | | | | | | | | | | | | | | | |
| Income (loss) from continuing operations before minority interest | | | (846 | ) | | | (1,260 | ) | | | (3,070 | ) | | | 14,149 | |
| | | | | | | | | | | | | | | | | |
| Minority interest | | | (24 | ) | | | (142 | ) | | | (34 | ) | | | (578 | ) |
| | | | | | | | | | | | | | | | | |
| Income (loss) from continuing operations | | | (870 | ) | | | (1,402 | ) | | | (3,104 | ) | | | 13,571 | |
| | | | | | | | | | | | | | | | | |
| Income (loss) from discontinued operations, net of taxes, including an $87 gain on sales of assets in 2008 | | | - | | | | 51 | | | | 429 | | | | (79 | ) |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | (870 | ) | | $ | (1,351 | ) | | $ | (2,675 | ) | | $ | 13,492 | |
| | | | | | | | | | | | | | | | | |
| Basic net income(loss) per share: | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | (0.05 | ) | | $ | (0.08 | ) | | $ | (0.19 | ) | | $ | 0.76 | |
| Discontinued operations | | | - | | | | - | | | | 0.03 | | | | - | |
| Net (loss) income per share | | $ | (0.05 | ) | | $ | (0.08 | ) | | $ | (0.16 | ) | | $ | 0.76 | |
| | | | | | | | | | | | | | | | | |
| Diluted net income (loss) per share: | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | (0.05 | ) | | $ | (0.08 | ) | | $ | (0.19 | ) | | $ | 0.76 | |
| Discontinued operations | | | - | | | | - | | | | 0.03 | | | | - | |
| Net (loss) income per share | | $ | (0.05 | ) | | $ | (0.08 | ) | | $ | (0.16 | ) | | $ | 0.76 | |
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS DATA
(in thousands)
| | | September 30, 2008 | | | December 31, 2007 | |
| | | (unaudited) | | | | |
| Assets | | | | | | |
| Current assets | | | | | | |
| Cash and cash equivalents | | $ | 13,777 | | | $ | 15,698 | |
| Accounts receivable, less allowance | | | | | | | | |
| for doubtful accounts of $226 and $412 | | | 15,956 | | | | 12,755 | |
| Inventories | | | 24,267 | | | | 27,720 | |
| Prepaid expenses and other current assets | | | 542 | | | | 1,326 | |
| Deferred tax asset | | | 199 | | | | 470 | |
| Total current assets | | | 54,741 | | | | 57,969 | |
| | | | | | | | | |
| Marketable securities available for sale | | | 7 | | | | 109 | |
| Property, plant and equipment, net | | | 981 | | | | 3,534 | |
| Intangible assets | | | 626 | | | | - | |
| Deferred tax asset | | | 927 | | | | - | |
| Other assets | | | 3,155 | | | | 3,293 | |
| Total assets | | $ | 60,437 | | | $ | 64,905 | |
| | | | | | | | | |
| Liabilities and stockholders’ equity | | | | | | | | |
| Current liabilities | | | | | | | | |
| Current maturities of long-term debt | | $ | - | | | $ | 257 | |
| Short term borrowings | | | 19,474 | | | | 19,928 | |
| Accounts payable and accrued expenses | | | 13,891 | | | | 13,530 | |
| | | | | | | | | |
| Total current liabilities | | | 33,365 | | | | 33,715 | |
| | | | | | | | | |
| Long-term debt less current maturities | | | - | | | | 1,441 | |
| Deferred tax liability | | | - | | | | 279 | |
| | | | | | | | | |
| Minority interest | | | - | | | | 2,902 | |
| Common stock subject to exchange rights | | | - | | | | 493 | |
| | | | | | | | | |
| Stockholders’ equity | | | | | | | | |
| Common stock | | | 181 | | | | 180 | |
| Additional paid-in capital | | | 28,412 | | | | 26,825 | |
| Retained earnings (deficit) | | | (130 | ) | | | 2,545 | |
| Treasury stock, at cost | | | (1,364 | ) | | | (3,458 | ) |
| Accumulated other comprehensive loss | | | (27 | ) | | | (17 | ) |
| Total stockholders’ equity | | | 27,072 | | | | 26,075 | |
| Total liabilities and stockholders’ equity | | $ | 60,437 | | | $ | 64,905 | |
