SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 9, 1998
Noise Cancellation Technologies, Inc.
(Exact name of Registrant as specified in Charter)
Delaware 0-18267 59-2501025
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification
Number)
1025 West Nursery Road, Linthicum, Maryland 21090
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (410) 636-8700
None
(Former name or former address, if changes since last report)
<PAGE>
Item 5. Other Events
On June 9, 1998, the Company issued a press release announcing: (i) the
signing of letters of intent by the Company's subsidiary, NCT Audio Products,
Inc. ("NCT Audio"), to acquire three companies in the audio business; (ii) the
Company's plans to establish NCT Audio as a separately capitalized company
through either public or private funding; and (iii) the appointment of Robert
Pothier as President of NCT Audio. The Company also announced that upon
successful completion of the independent financing of NCT Audio, the Company
intends to pursue a similar strategy for each of its other business units. The
full text of this press release is included herewith as Exhibit 99(a).
<PAGE>
Item 7. Exhibits
Sequential
Exhibit No. Description Page
99(a) Press Release of June 9, 1998 6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NOISE CANCELLATION TECHNOLOGIES, INC.
By /s/ CY E. HAMMOND
-------------------------
Cy E. Hammond
Senior Vice President,
Chief Financial Officer
Dated: June 10, 1998
Exhibit 99(a)
[Noise Cancellation Technologies, Inc. Letterhead]
NEWS RELEASE
CONTACT: Joanna Lipper
Noise Cancellation Technologies, Inc.
(203) 961-0500 ext. 386
(203) 348-4106 (fax)
FOR IMMEDIATE RELEASE
NCTI SUBSIDIARY SIGNS LETTERS OF INTENT TO ACQUIRE THREE AUDIO COMPANIES TO
CREATE $67 MILLION REVENUE-PRODUCING ENTITY
Plans Announced to Establish NCT Audio Products, Inc.
as Separately Capitalized Company
----------
Robert Pothier Named President of Subsidiary
STAMFORD, Conn, June 9, 1998 - Noise Cancellation Technologies, Inc. (NASDAQ:
NCTI) announced today the signing of letters of intent, by the Company's NCT
Audio Products, Inc. subsidiary, to acquire three companies in the audio
business.
The Company also announced that it will fund the acquisitions by capitalizing
NCT Audio Products, Inc. with public or private funding. Regardless of type of
funding, NCTI intends to retain a majority interest in NCT Audio Products, Inc.
NCTI said the companies to be acquired, along with the subsidiary's GekkoTM
Flat Speaker product line, are expected to report approximately $67 million in
annual revenues and approximately $5 million in pre-tax profits in calendar year
1998. The companies include an automotive audio aftermarket company, an
automotive OEM company and a leading European home audio company.
The Company also announced the naming of Robert Pothier as President of NCT
Audio Products, Inc. Mr. Pothier is a former Chairman and CEO of Rockford
Corporation, an international car and home stereo speaker manufacturer. In that
position, Mr. Pothier developed the business from 15 employees and less than $1
million in sales to 670 employees and $60 million in sales over a period of nine
years.
"The acquisition companies are established market leaders with strong
management teams and talented marketing and sales personnel," said Mr. Pothier.
"NCT Audio Products will benefit from these strengths and therefore we intend to
allow the companies to continue operating as they had prior to the acquisition."
Each of the acquisition companies manufactures and sells well known brands
and will expand their product lines by developing products utilizing NCT Audio's
flat panel transducer technology. Some of the companies will also sell NCT
Audio's current Gekko product line. Furthermore, the companies will benefit from
cross-company synergies in their product lines and distribution channels.
Upon successful completion of the independent financing of NCT Audio
Products, Inc., the Company intends to pursue a similar strategy for each of its
other strategic business units including NCT Hearing Products, NCT
Communications and NCT Microphones. Each business unit is structured to develop
a business plan that is exclusively dedicated to its particular field of use and
will raise capital to exploit its markets.
"Placing NCTI's audio technology into an entity separate from its parent
company allows us to develop business and management expertise that is
exclusively focused on exploiting the potential of the vast audio market," said
Michael J. Parrella, President, NCTI. "Additionally, it allows the financial
community to properly value the potential of our audio technology without being
distracted by the parent company's other technical and product development
endeavors." Mr. Parrella continued, "The acquisition component of this strategy
is a cornerstone because it delivers an immediate revenue stream and effective
distribution channels to the subsidiary."
Mr. Parrella concluded, "As we had committed to our shareholders, it is
gratifying to be able to begin executing our strategy in earnest, a strategy we
believe offers the greatest potential for increasing NCTI's share price while
minimizing shareholder dilution. The audio subsidiary is a model for how NCTI
plans to capitalize its other strategic business units as they transition from
technology development to product commercialization and licensing. Each
subsidiary will be majority owned by NCTI and will be a source of licensing,
royalty and service revenues. Additionally, NCTI's overhead will be reduced as
personnel move from the parent company to a subsidiary. This is truly an
instance when the value of the sum of the parts will be greater than the whole."
The acquisitions are contingent on a definitive agreement, the commitment of
funding and the closing of the transaction.
NCTI is a leading technology developer with an extensive portfolio of
proprietary algorithms and a wide variety of product offerings for consumer,
commercial and industrial applications. The Company specializes in the
utilization of sound and signal waves to reduce noise, improve signal-to-noise
ratio and enhance sound quality. For more information, refer to the Company's
World Wide Web site at http://www.nct-active.com.
# # #
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this press release are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Act"). In order to obtain the benefits of the "safe harbor"
provisions of the Act for any such forward-looking statements, the Company
wishes to caution investors and prospective investors about significant factors,
which among others, have in some cases affected the Company's actual results and
are in the future likely to affect the Company's actual results and cause them
to differ materially from those expressed in any such forward-looking
statements. Investors and prospective investors should read this press release
in conjunction with the Company's reports on Form 10-K and Forms 10-Q as filed
with the Securities and Exchange Commission.
