Exhibit 99
For Immediate Release
National Patent Development Corporation Reports Year End Operating Results
NEW YORK, March 31, 2009--National Patent Development Corporation (OTC Bulletin Board: NPDV.OB - News) today reported a net loss of $(3,394,000), $(0.20) per basic share, for the year ended December 31, 2008, compared to net income of $11,722,000, or $0.67 per basic and diluted share, for the year ended December 31, 2007.
The results for the year ended December 31, 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 $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 year ended December 31, 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 loss excluding the items set forth above for the year ended December 31 was $(1,720,000) in 2008 and $(762,000) in 2007.
The increase in adjusted operating loss was primarily attributable to the decline in operating profits of Five Star, National Patent's wholly owned subsidiary, during 2008 due to the overall weakness in the economy and its marketplace. Harvey Eisen, the Company’s CEO, said, “Five Star’s disappointing results reflect the current extraordinary market conditions. During this period, Five Star will continue its disciplined focus on managing working capital, margin and expenses. The Company has reacted quickly and effectively to deal with the current adverse environment and to protect itself from future challenges.”
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 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, 973-428-4600 (x167)
Tables Follow:
NATIONAL PATENT DEVELOPMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS DATA
(in thousands, except per share data)
| | | Year Ended | |
| | | December 31, | |
| | | 2008 | | | 2007 | |
| | | | | | | |
| Sales | | $ | 115,461 | | | $ | 123,713 | |
| Cost of sales | | | 95,133 | | | | 102,246 | |
| Gross margin | | | 20,328 | | | | 21,467 | |
| | | | | | | | | |
Selling, general and administrative expenses | | | (22,537 | ) | | | (22,229 | ) |
| Charge related to resignation of Chairman of Five Star | | | (1,096 | ) | | | | |
| | | | | | | | | |
| Operating loss | | | (3,305 | ) | | | (762 | ) |
| | | | | | | | | |
| Interest expense | | | (1,366 | ) | | | (1,429 | ) |
| Gain on exchange of Valera for Indevus shares | | | - | | | | 17,031 | |
| Investment and other income (loss), net | | | 94 | | | | (1,605 | ) |
| | | | | | | | | |
| (Loss) income from continuing operations before income taxes and minority interest | | | (4,577 | ) | | | 13,235 | |
| | | | | | | | | |
| Income tax benefit (expense) | | | 940 | | | | (1,269 | ) |
| | | | | | | | | |
| (Loss) income from continuing operations before minority interest | | | (3,637 | ) | | | 11,966 | |
| | | | | | | | | |
| Minority interest | | | (34 | ) | | | (514 | ) |
| | | | | | | | | |
| (Loss) income from continuing operations | | | (3,671 | ) | | | 11,452 | |
| | | | | | | | | |
Income from discontinued operations, net of taxes, including an $87 gain on sale of assets in 2008 | | | 277 | | | | 270 | |
| | | | | | | | | |
| Net (loss) income | | $ | (3,394 | ) | | $ | 11,722 | |
| | | | | | | | | |
| Basic and diluted net (loss) income per share: | | | | | | | | |
| Continuing operations | | $ | (0.22 | ) | | $ | 0.65 | |
| Discontinued operations | | | 0.02 | | | | 0.02 | |
| Net (loss) income per share | | $ | (0.20 | ) | | $ | 0.67 | |
NATIONAL PATENT DEVELOPMENT CORPORATION
CONSOLIDATED BALANCE SHEETS DATA
(in thousands, except share and per share data)
| | | December 31, | |
| | | 2008 | | | 2007 | |
| Assets | | | | | | |
| Current assets | | | | | | |
| Cash and cash equivalents | | $ | 13,089 | | | $ | 15,698 | |
| Accounts and other receivables, less allowance for doubtful accounts of $420 and $271 | | | 9,814 | | | | 12,755 | |
| Inventories | | | 23,045 | | | | 27,720 | |
| Deferred tax asset | | | 132 | | | | 470 | |
| Prepaid expenses and other current assets | | | 1,334 | | | | 1,326 | |
| Total current assets | | | 47,414 | | | | 57,969 | |
| Marketable securities available for sale | | | 7 | | | | 109 | |
| Property, plant and equipment, net | | | 912 | | | | 3,534 | |
| Intangible assets, net | | | 599 | | | | | |
| Deferred tax asset | | | 1,537 | | | | | |
| Other assets | | | 3,202 | | | | 3,293 | |
| Total assets | | $ | 53,671 | | | $ | 64,905 | |
| | | | | | | | | |
| Liabilities and stockholders’ equity | | | | | | | | |
| Current liabilities | | | | | | | | |
| Current maturities of long-term debt | | $ | | | | $ | 257 | |
| Short term borrowings | | | 18,375 | | | | 19,928 | |
| Accounts payable and accrued expenses | | | 8,236 | | | | 13,530 | |
| Total current liabilities | | | 26,611 | | | | 33,715 | |
| Long-term debt less current maturities | | | | | | | 1,441 | |
| Deferred tax liability | | | | | | | 279 | |
| Liability related to interest rate swap | | | 1,111 | | | | | |
| Minority interest | | | | | | | 2,902 | |
| Common stock subject to exchange rights | | | | | | | 493 | |
| | | | | | | | | |
| Commitments and contingencies | | | | | | | | |
| | | | | | | | | |
| Stockholders’ equity | | | | | | | | |
Preferred stock, par value $0.01 per share authorized 10,000,000 shares; issued none | | | - | | | | - | |
Common stock, par value $0.01 per share authorized 30,000,000 shares; issued 18,105,148 shares in 2008 and 18,086,006 shares in 2007 | | | 181 | | | | 180 | |
| Additional paid-in capital | | | 28,642 | | | | 26,825 | |
| Retained earnings (deficit) | | | (849 | ) | | | 2,545 | |
| Treasury stock, at cost (564,569 shares in 2008 and 1,528,462 shares in 2007) | | | (1,358 | ) | | | (3,458 | ) |
Accumulated other comprehensive (loss) income | | | (667 | ) | | | (17 | ) |
| Total stockholders’ equity | | | 25,949 | | | | 26,075 | |
| Total liabilities and stockholders’ equity | | $ | 53,671 | | | $ | 64,905 | |
