Exhibit 99(a)
NCT Group, Inc.
NEWS RELEASE
CONTACTS: Joanna Lipper
NCT Group, Inc.
(203) 226-4447 ext. 3506
(203) 226-3123 (fax)
jlipper@nctgroupinc.com
FOR IMMEDIATE RELEASE
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NCTI REPORTS SECOND QUARTER RESULTS
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WESTPORT, Conn. August 12, 2005 - NCT Group, Inc. (OTCBB: NCTI) reported that
total revenue for the three months ended June 30, 2005 was $0.9 million compared
to $1.4 million for the same period in 2004. The decrease of $0.5 million was
primarily due to our having fully recognized previously deferred license fee
revenue from New Transducers Ltd. ("NXT") as of March 31, 2005. Net loss for the
three months ended June 30, 2005 was $16.7 million compared to a net loss of
$10.0 million for the same period a year ago. The increase in net loss was due
primarily to higher interest costs in 2005.
The company reported that total revenue for the six months ended June 30,
2005 was $2.5 million compared to $2.6 million for the same period in 2004. The
above noted loss of NXT deferred revenue was largely offset by an increase in
royalties related to our ClearSpeech(R) technology licenses. Net loss for the
six months ended June 30, 2005 was $33.7 million compared to a net loss of $25.8
million for the same period in 2004. The increase in net loss was due primarily
to higher interest costs in 2005. While our interest expense has been rising,
net cash used in operating activities has remained relatively flat at $4.4
million for the six months ended June 30, 2005 versus $4.3 million for the same
period last year.
"With the April launch of our RevTheWeb(TM) free web accelerator service,
we entered the world of Internet advertising," said Michael J. Parrella,
Chairman and CEO, NCT Group, Inc. "RevTheWeb is based on Artera Turbo(TM)
technology, but it utilizes an advertising-assisted revenue model. We are
expanding our base of subscribers, both directly through downloads from our
RevTheWeb website and through free download/shareware sites, as well as
indirectly through distribution partnerships with ISPs and website publishers."
NCTI REPORTS SECOND QUARTER RESULTS - p.2
"Another initiative in our growth strategy for Artera," continued Mr.
Parrella, "is the expansion of the Artera Turbo product line with the May
introduction of a clientless version of the Artera Turbo service. Artera Turbo
Clientless optimizes the performance of an ISP's network and accelerates all
users' browsing activities without requiring the installation of any software on
users' PCs. For companies for whom bandwidth is expensive, such as satellite
companies, reducing bandwidth consumption by up to 80% can lead to significant
cost savings."
"We believe that the introduction of both of these new services will help
improve our penetration of the web acceleration and network optimization
market."
"Within our Pro Tech subsidiary, sales of the NoiseBuster(R) audio
headphone and the Apollo communications headset product line are beginning to
increase. We are also excited about Pro Tech's recent introduction of the
NoiseBuster Electronic Noise Canceling Safety Earmuff. This product delivers
superior hearing protection across all noise frequencies. Pro Tech will market
it to industrial workers, do-it-yourself users of lawnmowers and power equipment
and to motor sports fans for use with scanners. We look forward to shipments of
that product in the third quarter. Additionally, we continue to license and
enhance our suite of ClearSpeech algorithms. We recently announced that the
ClearSpeech Adaptive Speech Filter algorithm was licensed to Sepura, Ltd. for
integration into its line of digital radios for the public safety market, as
well as military, transport and utilities markets. We have recently enhanced our
marketing efforts for this technology, including a redesigned website at
www.nctclearspeech.com."
About NCT Group, Inc.
NCT Group, Inc. is a publicly-traded, high-tech company with a strong technology
base. NCTI is rich in intellectual property with over 500 patents and related
rights. The company's major focus is the development of its communications
subsidiaries. Artera Group, Inc. is a provider of breakthrough "last mile"
optimization technology for residential, small business and enterprise
applications, called Artera Turbo(TM). Pro Tech Communications, Inc. (OTCBB:
PCTU) engineers, designs and distributes audio and communications headsets and
other products for call centers, business users, industrial users and consumers.
NCTI also has strategic licensing relationships with manufacturers for
integration of certain NCTI technologies into products and applications. For
more information visit
www.nctgroupinc.com.
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NCTI REPORTS SECOND QUARTER RESULTS - p.3
NCT GROUP, INC.
(Unaudited)
For The Three Months For The Six Months
Ended June 30, Ended June 30,
--------------- ---------------
(In millions, except per share data) 2004 2005 2004 2005
---- ---- ---- ----
Total revenue $ 1.4 $ 0.9 $ 2.6 $ 2.5
Operating costs and expenses $ 3.5 (a) $ 3.3 (a) $ 6.9 (b) $ 5.9 (b)
Other expense, net $ 2.6 $ 0.5 $ 3.9 $ 3.4
Interest expense, net $ 5.4 $ 13.7 $ 17.7 $ 26.9
Net loss $(10.0) (a) $(16.7) (a) $(25.8) (b) $(33.7)(b)
Net loss per share $ (0.02)(c) $ (0.03)(d) $ (0.04)(e) $(0.06)(f)
Weighted average common shares
outstanding 645.0 645.0 645.0 645.0
Footnotes:
(a) Includes depreciation and amortization of approximately $0.1 million.
(b)Includes depreciation and amortization of approximately $0.2 million.
(c) The loss per share for the three months ended June 30, 2004 includes
preferred stock dividends of $0.2 million, non-conversion/exchange charges
of $1.7 million and non-registration charges of $0.2 million.
(d) The loss per share for the three months ended June 30, 2005 includes
preferred stock dividends of $0.3 million, non-conversion/exchange charges
of $1.1 million and non-registration charges of $1.2 million.
(e) The loss per share for the six months ended June 30, 2004 includes
preferred stock dividends of $0.5 million, non-conversion/exchange charges
of $1.7 million and non-registration charges of $0.3 million.
(f) The loss per share for the six months ended June 30, 2005 includes
preferred stock dividends of $0.6 million, non-conversion/exchange charges
of $2.3 million and non-registration charges $2.4 million.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this press release that are not historical are forward-looking.
These statements are subject to numerous risks and uncertainties that could
cause actual results to differ materially, including but not limited to: NCTI's
ability to generate sufficient funds to execute its business plan; its ability
to obtain additional financing if and when necessary; its ability to repay or
refinance indebtedness as it becomes due; the results of litigation; general
economic and business conditions; the level of demand for NCTI's products and
services; the level and intensity of competition in the technology industry;
NCTI's ability to develop new products and the market's acceptance of those
products; and its ability to manage its operating costs effectively. These
forward-looking statements speak only as of the date of this press release. NCTI
undertakes no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise. These and
other factors affecting NCTI's business and prospects are discussed in greater
detail in NCTI's filings with the Securities and Exchange Commission, which are
available online in the EDGAR database at http://www.sec.gov.