FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 4 to
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1992
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File Number 1-7234
NATIONAL PATENT DEVELOPMENT CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 13-1926739
(State of Incorporation) (I.R.S. Employer
Identification No.)
9 West 57th Street, New York, NY 10019
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(212) 826-8500
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of each exchange on which registered
Common Stock, $.01 Par Value American Stock Exchange, Inc.
Pacific Stock Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
___
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
As of March 15, 1993, the aggregate market value of the
outstanding shares of the Registrant's Common Stock, par value
$.01 per share, held by non- affiliates was approximately
$55,777,770 based on the closing price of the Common Stock on the
American Stock Exchange on March 15, 1993. None of the Class B
Capital Stock, par value $.01 per share, was held by non-
affiliates.
Indicate the number of shares outstanding of each of the
Registrant's classes of common stock, as of the most recent
practicable date.
Outstanding
Class at March 15, 1993
Common Stock,
par value $.01 per share 16,250,955 shares
Class B Capital Stock,
par value $.01 per share 250,000 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive Proxy Statement for its
1993 Annual Meeting of Stockholders is incorporated by reference
into Part III hereof.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations is hereby amended and
restated in its entirety as follows:
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
Overview
During 1992, the loss before income taxes and extraordinary items
was $13,178,000 compared to income of $1,157,000 in 1991 and a
loss of $39,265,000 in 1990. The change from a profit in 1991 to
a loss in 1992 was primarily the result of the public offering by
General Physics Corporation (GP) in October 1991, through which
the Company sold 68% of its GP common stock and recognized a gain
on the transaction of $18,844,000. The Company currently owns
approximately 28% of GP. The effect of the gain on GP was
partially offset by improved operating results achieved in 1992
by the remaining companies within the Physical Science Group, GPS
Technologies, Inc. (GPS) (formerly General Physics Services
Corp.), a 92% owned subsidiary, and GTS Duratek, Inc. (Duratek),
an approximately 80% owned subsidiary. At the corporate level,
improved operating results were partially the result of gains
recognized on the sale of certain investments and the continuing
reduction in interest expense as a result of reduced short-term
borrowings, lower rates of interest on the Company's variable
rate obligations and reduced interest on the Company's Swiss Debt
obligation due to the Company's continuing practice of
repurchasing its Swiss Debt from time to time. The improved
operating results within the Physical Science Group were due to
both GPS and Duratek achieving operating profits in 1992 as
opposed to operating losses in 1991. GPS achieved a significant
turnaround as a result of reduced losses at its subsidiary, GP
International Engineering & Simulation, Inc. (GPI), an operating
profit generated for the first time by its subsidiary GP
Environmental Services, Inc. (GPE) and an overall improvement
within the core businesses of GPS. Duratek showed an improvement
in operations during 1992 as a result of increased sales and
gross profit in both its Environmental Technology and Consulting
and Temporary Technical Staff businesses, as well as the impact
of the effort in the latter half of 1991 to consolidate and
streamline its administrative structure. The improvements in
operations achieved by the current members of the Physical
Science Group and at the corporate level were partially offset by
an increased operating loss at the Electronics Group and reduced
operating profits at the Optical Plastics Group. The Electronics
Group, which is Eastern Electronics Manufacturing Corporation
(Eastern), the Company's electronic assembly and manufacturing
subsidiary, incurred increased operating losses due to reduced
sales, increased operating costs and the effect of reserves taken
1
for obsolete inventory. The Optical Plastics Group, which is MXL
Industries, Inc. (MXL), the Company's injection molding and
coating subsidiary, had a small decrease in operating profit as a
result of weakness in the precision tooling part of its business,
as well as reduced orders from a number of MXL's established
customers in the beginning of 1992. The Health Care Group's
operating loss and the Distribution Group's operating profit
remained virtually unchanged.
During 1991, income before income taxes and extraordinary items
was $1,157,000 compared to a loss of $39,265,000 for 1990. The
improved performance in 1991 was the result of the $18,844,000
gain recognized on the sale of GP common stock, reduced operating
losses within the Health Care Group and increased operating
profits in the Physical Science Group. At the corporate level,
the improved results were partially the result of reduced
interest expense, primarily due to repayments of short-term
borrowings, lower rates of interest on the Company's variable
rate obligations, and reduced interest on the Company's Swiss
Debt obligations due to repurchases of the Swiss Debt during 1990
and 1991. In addition, in 1991 the Company realized a net
foreign currency transaction gain of $3,042,000 as compared to a
net currency transaction loss of $4,356,000 incurred in 1990, as
a result of the Company's decision not to hedge its Swiss Franc
denominated debt. The Health Care Group incurred reduced
operating losses in 1991 due to improved results at Interferon
Sciences, Inc. (ISI), the Company's 53% owned subsidiary, and
lower losses recognized at National Patent Medical (NPM). The
reduced operating loss at ISI was the result of reduced research
and development costs, due to ISI focusing its resources on the
production of commercial quantities of ALFERONR N Injection,
ISI's FDA approved product for the treatment of recurring and
refractory external genital warts. The Company realized reduced
operating losses at NPM in 1991 due to the transfer in April 1991
of substantially all the assets and business of the Company's NPM
division to a partnership in which the Company had a 49%
interest. In 1992, as a result of an initial public offering,
the partnership was disolved, and the Company currently owns 14%
of NPM Healthcare Products, Inc. (NPMH) (see Note 11(d) of the
Notes to Consolidated Financial Statements). The Physical
Science Group achieved improved operating profits since 1990's
results were impacted by a $4,954,000 writeoff of an investment
by GP (see Note 11(a) of the Notes to Consolidated Financial
Statements). In connection with the public offering in 1991, GP
transferred certain assets and businesses to GPS (see Note 2 of
the Notes to Consolidated Financial Statements). The Company
currently owns approximately 28% of GP, and since October 3, 1991
accounts for its investment in GP on the equity basis. The
improved operating results of GP and GPS within the Physical
Science Group were partially offset by an operating loss incurred
by Duratek due to the net effect of reduced gross margin achieved
in 1991 and the costs incurred during the year to invest in
2
environmental remediation technology, as well as a $1,202,000
net gain recognized on the sale of two lines of business in 1990
(see Note 11(b) and (c) of the Notes to Consolidated Financial
Statements). The improvements in operations achieved by the
Health Care Group, the Physical Science Group and at the
corporate level were partially offset by reduced operating
profits at the Distribution Group in 1991. The Distribution
Group incurred a small decrease in operating profits due to
reduced sales and gross margin as a result of the continuing
weakness in the northeast economy. The Optical Plastics and the
Electronics Groups' operating profits remained virtually
unchanged.
Sales
Consolidated sales from continuing operations decreased by
$63,168,000 in 1992, to $195,765,000, as a result of the transfer
in April 1991 of a majority interest in NPMH, in which the
Company currently has a 14% interest, and the public offering by
GP in October 1991. The decrease was partially offset by
increased sales within the Distribution Group and by the
remaining companies in the Physical Science Group. Sales
decreased by $34,158,000 in 1991 to $258,933,000, primarily
within the Health Care Group as a result of the transfer in April
1991 of a majority interest in NPM.
The Physical Science Group sales decreased from $164,135,000 in
1990 to $162,727,000 in 1991 and to $109,303,000 in 1992. During
1992, sales decreased by $53,424,000, due to the public offering
by GP on October 3, 1991, from which time the results of GP were
accounted for on the equity basis, since the Company's percentage
of ownership was reduced to approximately 28%. In 1991, the
Physical Science Group included sales of $62,325,000 for GP. The
loss of GP's sales in 1992 was partially offset by increased
sales at both GPS and Duratek. Duratek generated increased sales
in 1992 as a result of work performed on two new environmental
technology projects, as well as an increase in services provided
by the consulting and temporary technical staff support business.
GPS generated increased revenues in new business areas such as
environmental analytical services and full scope simulation.
These increases at GPS were partially offset by a reduction in
revenue for certain subcontracts, which terminated in 1991, for
construction management services provided to the Department of
the Army. In 1991, the decrease was due to the public offering
by GP in October 1991, partially offset by an increase in work
performed by GP for the Department of Energy during the first
nine months of 1991.
The Distribution Group sales decreased from $66,511,000 in 1990,
to $64,788,000 in 1991, and increased to $68,450,000 in 1992.
The increase of $3,662,000, or 6%, in 1992 was attributable to
the introduction during the year of a new line of hardware
supplies. The 1991 decrease of $1,723,000, or 3%, was primarily
3
due to the continuing overall weakness of the northeast economy.
The Health Care Group sales decreased from $45,907,000 in 1990,
to $14,607,000 in 1991, and to $4,042,000 in 1992. The
$10,565,000 reduction in sales in 1992 was due to the transfer on
April 8, 1991 of a majority interest in NPM, partially offset by
increased sales by ISI of ALFERONR N Injection to its marketing
partner, the Purdue Frederick Company (Purdue). In December
1991, Purdue agreed to purchase an aggregate of 45,000 vials of
ALFERONR N Injection from the Company over approximately a six
month period which commenced in March 1992 and was completed in
September 1992. During the twelve month period ended December
31, 1992, Purdue sold (including samples) approximately 2,400
vials of ALFERONR N Injection per month. The Company is
currently discussing future requirements of ALFERONR N Injection
with Purdue. Pending resolution of this issue with Purdue, the
Company has temporarily suspended its production of ALFERONR N
Injection. In 1991, the decrease of $31,300,000 was due to the
transfer of a majority interest in NPM, as discussed above. The
loss of NPM's sales was partially offset by ISI which commenced
sales of ALFERONR N Injection in July 1991 from its expanded
manufacturing facility, which was concurrent with the national
introduction of the product by Purdue.
The Optical Plastics Group sales decreased from $9,486,000 in
1990, to $9,454,000 in 1991, and to $7,862,000 in 1992. The
decreased sales in 1992 was due to weakness at MXL's precision
tooling division, as well as reduced orders from a number of
MXL's established customers in the beginning of 1992.
The Electronics Group sales increased from $6,872,000 in 1990, to
$7,151,000 in 1991, and decreased to $5,968,000 in 1992. The
decreased sales in 1992 was the result of the weakness in the
electronics industry, particularly among some of the major
computer and electronics companies which comprise Eastern's
customer base.
Gross margin
Consolidated gross margin was $42,711,000, or 15% of net sales in
1990, $36,013,000 or 14% of net sales in 1991 and $29,772,000 or
15% of net sales in 1992. In 1992, the decrease in gross margin
of $6,241,000 occurred primarily in the Physical Science Group as
a result of the public offering by GP in October 1991, and to a
lesser extent, in the Health Care Group due to the transfer in
April 1991 of a majority interest in NPM in which the Company
currently has a 14% interest. The reduced gross margin in 1992
was partially offset by increased gross margin achieved by the
Distribution Group as a result of increased sales. In 1991, the
decrease in gross margin of $6,698,000 occurred primarily in the
Health Care Group due to the transfer in April 1991 of a majority
interest in NPM, as discussed above.
4
The Physical Science Group gross margin decreased from
$18,867,000, or 12% of net sales in 1990, to $18,370,000, or 11%
of net sales in 1991, and to $13,728,000 or 13% of net sales in
1992. In 1992, the decreased gross margin was due to the public
offering by GP in October 1991, partially offset by increased
gross margins at Duratek and GPS. The increased gross margin
dollars and percentage at GPS was due to increased sales,
significant profit improvements at GPI and GPE during 1992, as
well as an improved mix of services performed at higher margins
within the core businesses. Duratek achieved increased gross
margins in 1992 as a result of increased revenues generated by
its environmental technology projects. In 1991, the decrease in
gross margin was attributable to reduced sales and gross margin
percentage at Duratek. This decrease was partially offset by
increased gross margin at GPS as a result of steps taken to
reduce costs, which led to an increased gross margin percentage.
The Distribution Group gross margin decreased from $12,657,000 or
19% of net sales in 1990, to $11,679,000 or 18% in 1991, and
increased to $12,355,000 or 18% of sales in 1992. In 1992, the
increased gross margin was the result of increased sales due to
the introduction of a new line of hardware products. In 1991,
the decrease in gross margin was due to reduced sales and gross
margin percentage. The reduced sales volume was a result of the
continuing weakness in the northeast economy and the reduced
gross margin percentage was due to competitive pressures within
the industry.
The Health Care Group gross margin decreased from $7,788,000, or
17% of net sales in 1990, to $2,509,000 or 17% of net sales in
1991, and to $358,000 or 9% of net sales in 1992. The decrease
in gross margin in 1991 and 1992 was the result of the transfer
on April 8, 1991 of a majority interest in NPM, as discussed
above. The reduced gross margin percentage in 1992 is
attributable to the low gross margin percentages achieved by ISI
due to the writedown of inventory to its estimated net realizable
value, as a result of increased unit production costs caused by
limited production volumes.
The Optical Plastics Group gross margin increased from
$2,885,000, or 30% of net sales in 1990, to $3,231,000 or 34% of
net sales in 1991, and decreased to $2,740,000 or 35% of net
sales in 1992. In 1992, the reduced gross margin was the result
of reduced sales volume. In 1991, the increase in gross margin
dollars and percentage was attributable to an increased gross
margin percentage at MXL due to a favorable change in the product
mix.
The Electronics Group gross margin decreased from $389,000 or 6%
of net sales in 1990, to $221,000 or 3% of net sales in 1991, and
increased to $561,000 or 9% of net sales in 1992. The increased
gross margin in 1992, in spite of reduced sales at Eastern, was
5
attributable to improved gross margin percentages as a result of
a better product mix, a reduction in the fixed manufacturing
costs and improved operating efficiencies. In 1991, the reduced
gross margin percentage was the result of operating
inefficiencies, which led to unabsorbed overhead.
Investment and other income, net
Investment and other income was $413,000 in 1990, $2,790,000 in
1991 and $6,221,000 in 1992. In 1992, the increase in investment
and other income, net was primarily due to two factors. In 1992,
the Company realized increased gains on the sales of certain
investments, and recognized an expense for reserves taken and
losses realized on certain assets of $1,336,000 in 1992 as
compared to $4,774,000 in 1991. In 1992, the Company realized a
net foreign currency transaction gain of $3,362,000. In 1991,
the increase in investment and other income, net was primarily
due to two factors. In 1991, the Company realized a net foreign
currency transaction gain of $3,042,000, compared to a loss of
$4,356,000 in 1990. This net gain was partially offset by
$4,774,000 of reserves taken and losses realized on certain
assets and investments in 1991. The reserves were taken in 1992
and 1991 due primarily to reduced values and impairments relating
to long-term investments and related assets accounted for on the
cost basis. The Company evaluates its long-term investments at
least annually. An investment is written down or written off if
it is judged to have sustained a decline in value which is other
than temporary. During 1991, a 19% interest in and advances to a
vendor and distributor of pay telephones was written down by
$3,100,000, to an estimated residual value of $175,000, since the
telephone company ceased marketing its principal product in 1991.
This resulted from (a) the loss by the telephone company of two
major vending accounts in 1991, which substantially reduced
revenues and (b) the telephone company's effort to sell
telephones as well as to vend them was unsuccessful in 1991.
Based upon the fact that the remaining vending revenues were
insufficient to support operations the telephone company ceased
operations. In preparing the financial statements for the year
ended December 31, 1990, the Company reviewed business plans of
the telephone company and determined that the carrying value of
the investment in the telephone company could be recovered from
future revenues. This determination was based upon recent
successes in both vending and selling telephones and its
projected cash flow, which was estimated to be approximately
breakeven for 1991. In addition, the telephone company had
inventory in telephones and parts justifying the Company's
investment. However, due to the telephone company losing two
major vending accounts in 1991, the telephone company could not
support operations and determined that without substantial
ongoing vending operations, the telephone company could not sell
existing inventory and parts. In 1992, the estimated residual
value of $175,000 of this investment, which was based upon
estimated proceeds on liquidation of telephone equipment, was
6
written off since it was determined that such sales could not be
consummated. Additionally, in 1992, the Company fully reserved
its investment of $305,000 in a medical blood center company.
The blood center company ceased operations in 1992 as its major
investor, a large financial institution, decided to no longer
provide financing and working capital. In 1991 and prior years,
the medical blood center company received substantial funding for
its centers and the financial institution provided working
capital and equity financing. In both 1991 and 1992, a number of
other relatively small investments were written off or written
down because the Company's periodic evaluations indicated
declines in value which were judged to be other than temporary.
At December 31, 1992, there was an aggregate of SFr. 60,769,000
of Swiss denominated indebtedness outstanding, of which SFr.
58,889,000 represents principal amount outstanding and SFr.
1,880,000 represents interest accrued thereon. Foreign currency
valuation fluctuations may adversely affect the results of
operations and financial condition of the Company. In order to
protect itself against currency valuation fluctuations, the
Company has at times swapped or hedged a portion of its obliga-
tions denominated in Swiss Francs. At December 31, 1992, the
Company had not hedged its Swiss Franc obligations. If the value
of the Swiss Franc to the U.S. dollar increases, the Company will
recognize transaction losses on the unhedged portion of its Swiss
Franc obligations. On December 31, 1992, the value of the Swiss
Franc to the U.S. dollar was 1.4657. There can be no assurance
that the Company will be able to swap or hedge obligations
denominated in foreign currencies at prices acceptable to the
Company or at all. The Company will continue to review this
policy on a continuing basis.
Selling, general, and administrative expenses
Selling, general and administrative expenses (SG&A) decreased
from $50,607,000 in 1990 to $38,356,000 in 1991 and to
$36,274,000 in 1992. In 1992, the decrease in SG&A expenses was
primarily due to decreases in the Health Care Group and the
Physical Science Group as a result of the transfer on April 8,
1991 of a majority interest in NPM and the public offering by
GP in October 1991, respectively. The decrease was partially
offset by increased SG&A within the Distribution Group as a
result of Five Star's expansion into the hardware supply
distribution business and increased SG&A within the Electronics
Group due to costs connected with Eastern's efforts to
restructure its business operations. In 1991, the decrease in
SG&A occurred within all operating groups of the Company. The
major decrease occurred within the Health Care Group due to the
transfer on April 8, 1991 of a majority interest in NPM, as
discussed above. In addition, the Distribution, Physical Science
and Electronics Groups were all successful in implementing steps
to control and reduce SG&A costs, as was the Company at the
corporate level.
7
Research and development costs
The Company's research and development activities are conducted
both internally and under various types of arrangements at
outside facilities. Research and development costs were
$7,892,000, $4,651,000 and $4,645,000 for 1990, 1991, and 1992,
respectively. In 1992, ISI experienced increased research and
development costs because of increased levels of research on
ALFERONR N Gel, ALFERONR LDO and other proprietary research. The
increased spending at ISI in 1992 was offset by reduced spending
on various corporate projects. In 1991, the decrease was due to
a reduced level of research and development at ISI, relating to
ALFERONR N Injection, as a result of ISI focusing its resources
on the production of commercial quantities of ALFERONR N
Injection.
Interest expense
Interest expense aggregated $20,447,000 in 1990, $15,579,000 in
1991 and $11,044,000 in 1992. In 1992, the Company continued to
reduce its interest expense at the corporate level as a result
of reduced short-term borrowings, lower rates of interest on the
Company's variable rate obligations and reduced interest on the
Company's Swiss Debt obligations due to the Company's practice of
repurchasing Swiss Debt from time to time. In 1991, the
decreased interest expense was the result of reduced short-term
borrowings incurred at lower interest rates, and reduced long-
term debt. In addition, in 1992 and 1991, the Company
experienced cost savings associated with the Company's decision
not to hedge its Swiss Franc obligations.
Income taxes and extraordinary item
Income tax benefit (expense) from operations for 1990, 1991, and
1992 was $1,272,000, $(549,000) and $(427,000), respectively.
The Company's income tax benefit in 1990 is primarily
attributable to the reversal of $1,289,000 of deferred taxes of
GP, a then 92% owned subsidiary, which taxes were offset by the
operating losses and tax credits of the Company. This income tax
benefit exceeded Duratek's separate company Federal income tax
expense and the Company's state and local tax expense by
$1,272,000 for 1990.
In 1992, the Company's loss before income taxes from operations
exceeded its gains from extraordinary items: therefore, no income
tax expense applicable to such extraordinary gains was
recognized. The income tax expense for 1992 of $427,000
represents state and local income taxes.
In 1991, despite the Company's $1,157,000 income before income
taxes from operations, no Federal income tax expense was
recognized. This is due principally to significant permanent
differences between financial and tax reporting of 1991
transactions, including the elimination for tax purposes of the
$18,844,000 gain on the sale of GP stock, net of a gain
8
recognized only for tax purposes upon ISI ceasing to be a member
of the Company's consolidated Federal income tax return group on
May 31, 1991. The income tax expense for 1991 of $549,000
represents state and local income taxes.
In 1990, the Company's loss before income taxes from operations
exceeded its gains from extraordinary items; therefore, no income
tax expense applicable to such extraordinary gains was
recognized.
As of December 31, 1992, the Company has approximately
$30,566,000 of consolidated net operating losses available for
financial statement reporting purposes. ISI, on a separate
company basis, has approximately $10,600,000 of net operating
loss carryforwards available to apply against its separate
company future taxable income. Such losses expire before or in
the year 2007.
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes," will be adopted by the Company in 1993 on a
prospective basis. This standard requires that deferred income
taxes be recorded following the liability method of accounting
and adjusted periodically when income tax rates change. As of
December 31, 1992, the Company was not carrying any deferred tax
accounts. Adoption of the new Statement will not have a material
effect on the Company's financial condition or results of
operations.
Liquidity and capital resources
At December 31, 1992, the Company had cash, cash equivalents and
marketable securities totaling $22,474,000. ISI, GPS and Duratek
had cash, cash equivalents and marketable securities of
$9,082,000 at December 31, 1992. The minority interests of these
companies are owned by the general public, and therefore, the
assets of these subsidiaries have been dedicated to the
operations of these companies and may not be readily available
for the general corporate purpose of the parent.
The Company believes that it has sufficient cash, cash
equivalents and marketable securities and borrowing availability
under existing and potential lines of credit to satisfy its cash
requirements until the first scheduled maturity of its Swiss
Franc denominated indebtedness on March 1, 1995. However, in
order for the Company to meet its long-term cash needs, which
include the repayment of $34,244,000 of Swiss Franc denominated
indebtedness scheduled to mature in 1995 and $11,005,000 of Swiss
Franc denominated indebtedness which is scheduled to mature in
1996, the Company must obtain additional funds. The Company has
reduced and is continuing to reduce its long-term debt through
the issuance of equity securities in exchange for long-term debt
and is also exploring new credit arrangements on an ongoing
basis. However, there is no assurance that the Company will be
9
able to obtain any new credit arrangements.
At December 31, 1992, the Five Star Group was not in compliance
with various covenants. Management has advised the bank of such
violations and does not anticipate any problems in obtaining a
waiver of these violations and an extension of the current line.
For the year ended December 31, 1992, the Company's working
capital decreased by $10,683,000 to $44,877,000, reflecting the
decrease in cash, cash equivalents, restricted cash and
marketable securities, which were used to fund the loss and the
reduction of long-term debt. During 1992, the Company reduced
its long-term debt by $6,244,000. Consolidated cash and cash
equivalents decreased by $6,075,000 to $17,921,000 at December
31, 1992.
The decrease in cash and cash equivalents of $6,075,000 in 1992
primarily resulted from cash used in operations of $12,040,000
offset by cash provided by investing and financing activities of
$5,277,000 and $688,000, respectively. Cash used in operations
was primarily required to fund the operating loss for the year.
The cash from investing activities was provided by the sales of
certain investments and marketable securities, partially offset
by investment in property, plant and equipment and intangible
assets. Financing activities consisted primarily of repayments
and reductions in short-term borrowings and repayments of long-
term debt, offset by proceeds from short-term borrowing as well
as the elimination of restrictions on a portion of the Company's
cash. At December 31, 1992, the Company at the parent company
level had substantially exhausted its ability to borrow funds
from its subsidiaries under their respective line of credit
arrangements.
The Company's principal manufacturing facilities were constructed
subsequent to 1976 and management does not anticipate having to
replace major facilities in the near term. As of December 31,
1992, the Company has not contractually committed itself for any
other new major capital expenditures.
10
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NATIONAL PATENT DEVELOPMENT
CORPORATION
By: /s/ Jerome I. Feldman
Jerome I. Feldman, President
and Chief Executive Officer
Dated: January 12, 1994
11
EXHIBIT 24
CONSENT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS
NATIONAL PATENT DEVELOPMENT CORPORATION
We consent to incorporation by reference in the Registration
Statement (No. 33-71698, No. 33-66634 and No. 33-63670) on Form
S-3 and the Registration Statement (No. 33-26261) on Form S-8 of
National Patent Development Corporation and subsidiaries of our
report dated March 16, 1993, relating to the consolidated balance
sheets of National Patent Development Corporation as of December
31, 1992 and 1991 and the related consolidated statements of
operations, changes in stockholders' equity, and cash flows for
each of the years in the three-year period ended December 31,
1992, which report appears in Form 10-K/A for the year ended
December 31, 1992 of National Patent Development Corporation.
KPMG PEAT MARWICK
New York, New York
January 18, 1994
