Exhibit 99.1
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N E W S CONTACT: Raymond A. Cardonne
201-585-0600
Fax: 201-585-2020
E-mail: cardonne@refac.com
about REFAC [GRAPHIC OMITTED] Web site: www.refac.com
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REFAC REPORTS THIRD QUARTER RESULTS
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Fort Lee, New Jersey, November 15, 2005 - Refac (AMEX: REF) today reported
that it had a net loss for the third quarter of 2005 of $454,000 or ($0.06)
per share. During the comparable period in 2004, the Company had net income of
$131,000, or $0.02 per share, on a diluted basis.
Revenues for the three months ended September 30, 2005 were $326,000
as compared to $519,000 for the same period in 2004. The revenue decline of
$193,000 in the third quarter of 2005 was due to a decrease in income from the
Company's contract with Patlex Corporation ("Patlex") of $147,000 and a
reduction in related party consulting income of $45,000. Expenses for the
three months ended September 30, 2005 were $1,097,000 as compared to $440,000
for the same period in 2004. The $657,000 increase in expenses in the third
quarter of 2005 over the comparable period of 2004 was primarily due to costs
incurred in connection with the possible acquisition of two affiliated
companies totaling $322,000 and an increase in salaries of $137,000.
For the nine months ended September 30, 2005, the Company reported a
net loss of $186,000 or ($0.03) per share, on a diluted basis, attributable
entirely to its continuing operations. During the same period in 2004, the
Company had a net loss of $77,000, or ($0.01) per share, on a diluted basis,
which consisted of a net loss from continuing operations of $87,000, or
($0.01) per share, and a gain, net of tax, from discontinued operations of
$10,000, or less than $0.01 per share.
Revenues from continuing operations for the nine months ended September
30, 2005 were $2,354,000 as compared to $1,413,000 for the same period in 2004.
The revenue increase of $941,000 was attributable to non-recurring
licensing-related income of $1,500,000 arising from the settlement of a
litigation, offset by a decline in income relating to the Company's agreement
with Patlex of $477,000 and a reduction of related party consulting of $80,000.
Expenses from continuing operations for the nine months ended September 30, 2005
were $2,888,000 as compared to $1,852,000 for the same period in 2004. The
$1,036,000 increase in expenses nine months ended September 30, 2005 as compared
to the same period in 2004 was principally attributable to costs incurred in
connection with the possible acquisition of two affiliated companies totaling
$792,000 and an increase in salaries of $168,000.
Update on Pending Mergers
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On August 22, 2005, the Company entered into separate merger
agreements with two affiliated companies, OptiCare Health Systems, Inc.
("OptiCare") and U.S. Vision, Inc. ("U.S. Vision") pursuant to which they will
become wholly-owned subsidiaries of the Company. OptiCare, a public company
listed in the American Stock Exchange, operates 18 retail optical centers in
Connecticut and is a managed vision care provider in the United States. U.S.
Vision, a privately held company, operates 523 retail optical locations in 47
states and Canada, consisting of 512 licensed departments and 11 freestanding
stores. The Company, U.S. Vision and OptiCare are all controlled by Palisade
Concentrated Equity Partnership, L.P. ("Palisade"), which beneficially owns
approximately 90% of the Company's outstanding common stock, 88% of U.S.
Vision's outstanding common stock and 84% of OptiCare's outstanding common
stock (on a fully diluted basis).
The Company estimates that upon the completion of both mergers, it
will have approximately 18,101,000 shares outstanding, and that the shares
issued in the OptiCare and U.S. Vision mergers will represent approximately
25% and 36%, respectively, of the Company's outstanding common stock.
Immediately following the mergers, Palisade is expected to remain the
controlling stockholder of the Company, with approximately 87% of the
outstanding common stock. The foregoing numbers do not take into account the
number of shares that the Company may be required to purchase pursuant to the
non-transferable payment right granted to qualifying stockholders in
connection with the Company's 2003 merger with a wholly-owned subsidiary of
Palisade. As of November 11, 2005, the Company estimates that approximately
608,000 shares of its common stock were subject to this payment right which
entitles the holder to sell such shares to the Company at a price of $8.29 per
share on or before September 30, 2006.
The mergers are currently expected to close in the first or second
quarter of 2006.
Refac
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Operating Results
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(UNAUDITED)
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Three Months Ended
September 30,
2005 2004
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Total revenues $326,000 $519,000
Net income (loss) from continuing operations $(454,000) $126,000
Income from discontinued operations, net of taxes - $5,000
Net income (loss) $(454,000) $131,000
Net income (loss) per diluted share $(0.06) $0.02
Number of diluted shares 7,039,399 6,996,963
Nine Months Ended
September 30,
2005 2004
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Total revenues $2,354,000 $1,413,000
Net loss from continuing operations $(186,000) $(87,000)
Income from discontinued operations, net of taxes - $10,000
Net loss $(186,000) $(77,000)
Diluted loss per share from continuing operations $(0.03) ($0.01)
Income per diluted share from discontinued operations - -
Net loss per diluted share $(0.03) $(0.01)
Number of diluted shares 7,009,615 6,991,678
* * * * *
ADDITIONAL INFORMATION ABOUT THE MERGERS AND WHERE TO FIND IT:
This press release does not constitute an offer to sell or a solicitation of
an offer to buy and does not constitute an offer, solicitation, or sale in any
jurisdiction. Refac intends to file with the SEC a registration statement on
Form S-4 that will include a proxy statement to stockholders of Refac, an
information statement to stockholders of OptiCare and other relevant documents
in connection with the proposed transactions. INVESTORS AND SECURITYHOLDERS OF
REFAC, OPTICARE AND U.S. VISION ARE URGED TO READ THE JOINT PROXY AND
INFORMATION STATEMENT/PROSPECTUS AND OTHER RELEVANT MATERIALS WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT REFAC,
OPTICARE AND U.S. VISION AND THE PROPOSED TRANSACTIONS. Investors and
securityholders may obtain a free copy of these materials (when they are
available) and other documents filed with the Securities and Exchange
Commission at the SEC's web site at www.sec.gov. A free copy of the joint
proxy and information statement/prospectus, when it becomes available, may
also be obtained from Corporate Secretary of Refac, One Bridge Plaza, Suite
550 Fort Lee, New Jersey 07024 or from Refac's website at www.refac.com. In
addition, investors and securityholders may access copies of the documents
filed with the SEC by OptiCare on OptiCare's web site at www.opticare.com, and
investors and security holders may access copies of the documents filed with
the SEC by Refac on Refac's web site at www.refac.com. Refac and its executive
officers and directors may be deemed to be participants in the solicitation of
proxies from its stockholders with respect to the proposed transactions.
Information regarding the interests of these officers and directors in the
proposed transactions will be included in the joint proxy and information
statement/prospectus.
CAUTIONARY STATEMENT REGARDING
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FORWARD-LOOKING STATEMENTS
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This News Release includes certain statements of the Company that may
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, and which are made pursuant to the Private Securities
Litigation Reform Act of 1995. These forward-looking statements and other
information relating to the Company are based upon the beliefs of management and
assumptions made by and information currently available to the Company.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, future events, or performance, as well as underlying
assumptions and statements that are other than statements of historical fact,
including statements regarding the Company's acquisition plans. When used in
this document, the words "expects," "anticipates," "estimates," "plans,"
"intends," "projects," "predicts," "believes," "may" or "should," and similar
expressions, are intended to identify forward-looking statements. These
statements reflect the current view of the Company's management with respect to
future events. Many factors could cause the actual results, performance or
achievements of the Company to be materially different from any future results,
performance, or achievements that may be expressed or implied by such
forward-looking statements, including, but not limited to, whether the proposed
mergers with OptiCare and U.S. Vision will prove to be beneficial acquisitions
for the Company. Investors are cautioned that all forward-looking statements
involve those risks and uncertainties detailed in the Company's filings with the
Securities and Exchange Commission, including its Annual Report on Form 10-K for
the fiscal year ended December 31, 2004. Forward-looking statements speak only
as of the date they are made and the Company undertakes no duty or obligation to
update any forward-looking statements in light of new information or future
events.
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