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Company
Contact: Press Contact: Dian
Griesel, Ph.D. CT Holdings Reports Results for First Quarter Ended May 31, 2000; Parago Announces Record Revenues for its Second Quarter Ended June 30, 2000 Dallas—July
18, 2000 -- CT Holdings, Inc. (Nasdaq: CITN), an early stage Internet
services company incubator, today announced its financial results for the
fiscal quarter ended May 31, 2000. Revenues
for the quarter ended May 31, 2000 were $176,849, a decrease of 11.8% from
software revenues of $200,573 for the quarter ended May 31, 1999 (after
giving effect to the deconsolidation of our Parago subsidiary). Revenues
do not include any subsidiary revenue as no investments are accounted for
on a consolidated basis. We reported a net loss for the quarter ended May
31, 2000 of $4,147,520, or $0.09 per share, compared to a net loss of
$1,882,869, or $0.05 per share, for the quarter ended May 31, 1999, which
included Parago’s losses for that quarter. Our first quarter 2001 losses
included a one time charge of $1,912,500 related to the settlement of
litigation related to a claim against our predecessor, approximately
$557,000 in severance charges, and $1,060,884 of equity in loss of
unconsolidated affiliates associated with our subsidiary, Parago. “We
are pleased with our results and business operations for the first quarter
of fiscal 2001 and the continued expansion of Parago’s business model as
well as the progress that River Logic is making in its industry segments.
Parago’s services continue to be well–received by its business
clients and its revenues continue to accelerate.
We continue to explore other strategic investments that will
complement our portfolio and increase value for our shareholders,”
commented Steven B. Solomon, President and Chief Executive Officer of CT
Holdings. Mr.
Solomon continued, “CT retains its 20 million Parago shares, which we
believe will substantially increase the value of CT’s assets. We will
continue to look for similar attractive investment opportunities.” Recent
highlights for CT Holdings’ incubator projects include the following: -- Parago continued its strong growth in the second quarter ended June 30, 2000, and posted a record $4.0 million in revenues, a 22% increase in growth over the previous quarter on a normalized basis (excluding revenues related to its How2 business). Parago sees continued strong growth in revenues. --
Parago ended its June 2000 quarter with approximately 160 clients
compared to 130 at the end of its prior quarter. --
Parago’s gross margin increased to approximately 59.2% of revenue
versus 46.2% in the previous quarter, as a result of new technology
offerings and higher margin solutions. --
Parago’s EBITDA loss for the quarter was $6.8 million, after a
one time writeoff of approximately $570,000 relating to IPO costs incurred
in 1999 and approximately $480,000 in noncash stock compensation expense.
Parago’s EBITDA loss was $8.4 million for the previous quarter,
after approximately $430,000 in noncash stock compensation expense. --
Parago is opening its 32,000 square foot state-of-the-art Data
Center and R&D lab in Coppell, Texas (near the DFW Airport) in late
July, 2000. This world class
facility will house our technology design and architecture team, usability
lab, testing lab, and quality assurance. --
Parago has made several key hires to round out its management team,
including Rick Speyer as its EVP - Business Development.
Mr. Speyer brings 18 years of experience in the high tech field,
including most recently with Compaq Computer Corporation, where he managed
the business development activities for the High Availability and Solution
Group. Parago also added Sean M. Hicks as EVP - Client Services. Prior to
joining Parago, Mr. Hicks served as President and Chief Operating Officer
of Warrantech Consumer Product Services, Inc., an industry-leading third
party administrator of service contracts. --
Parago also enhanced its board of directors by adding Doug Hsieh to
its board of directors. Mr.
Hsieh is a Vice President with THLee.Putnam Internet Partners (whose
owners include Thomas H. Lee Company, one of the most successful private
investment firms in the U.S., and Putnam Investments, a leading money
management firm) and previously worked with GE Equity where he focused on
Internet and media-related investments. --
In July 2000, River Logic completed a private placement of
$3,000,000 in shares of preferred stock. One of River Logic’s resellers entered into a strategic
alliance with PriceWaterhouseCoopers to license River Logic’s
technologies to key industry partners. About CT Holdings CT
Holdings, Inc. (Nasdaq: CITN), is an early stage Internet Services Company
incubator (http://www.ct-holdings.com).
CT Holdings’ Internet subsidiary Parago, www.parago.com, provides
online, continuous interactive customer care solutions. About Parago Parago,
Inc. (http://www.parago.com)
is a subsidiary of CT Holdings, Inc. (Nasdaq: CITN). The company was
founded in January 1999 and is headquartered in Dallas with offices in
Silicon Valley and Los Angeles and with more than 400 employees. Parago
has developed a continuous customer interaction model that automates
promotional management and optimizes the customer care experience for its
clients. Parago, an application solution provider (ASP) and Internet based
business process outsourcer (BPO) provides an on-line suite of promotional
offerings designed to increase sales, reduce costs, and retain customers,
thereby increasing customer profitability. Parago’s solutions and
services include PromoCenter (on-line promotional management, on-line
rebate processing, proactive e-mail, and on-line surveys), InfoCenter
(online product demonstrations and manuals), and KnowledgeCenter (customer
data warehousing, analysis and reporting). About River Logic River
Logic, Inc. (www.riverlogic.com),
headquartered in Beverly, Massachusetts, creates and operates integrated
networks of decision support tools, eLearning solutions, and eCommerce
capabilities designed to enable decision-makers to leverage knowledge and
information to gain a decisive competitive advantage. By providing the
knowledge databases needed to leverage its proprietary, web-enabled,
industry standard decision support tools (COR Vantage™), River Logic,
offers one of the most comprehensive and technologically advanced
value-added decision support networks available today. For more information on CT Holdings, its Internet subsidiaries, and its Citadel Technology line of security software products, please visit our Web site at http://www.ct-holdings.com. For information on purchasing products, contact us directly by writing or calling: CT Holdings, 3811 Turtle Creek Blvd., Suite 770, Dallas, Texas 75219; phone: 214/520.9292; fax: 214/520.9293. For media or investor relations contact: The Investor Relations Group at 212/736.2650. Forward-Looking Statements: This news release contains forward-looking statements, which involve risks and uncertainties. Accordingly, no assurances can be given that the actual events and results will not be materially different that the anticipated results described in the forward-looking statements. There are a number of important factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by us. These factors include our and our subsidiaries’ success in integrating the business and operations of acquired companies and interests; no assurances of an initial public offering based on market conditions and suitable underwriters; availability of suitable incubator companies; implementation of Internet strategies; the activities of new or existing competitors; the ability to attract and retain employees and strategic partners; application of state unclaimed property or escheat laws; the availability of capital on terms acceptable to the Company; general economic conditions; and litigation costs. Investors are also directed to consider other risks and uncertainties discussed in documents we file with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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