EX-99.1 2 ex99.htm PRESS RELEASE DATED MAY 15, 2008 ex99.htm
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