Noise Cancellation chief is cautiously optimistic

January 05, 1995|By Ted Shelsby | Ted Shelsby,Sun Staff Writer

The chairman of Noise Cancellation Technologies Inc. offered a cautiously optimistic outlook for the financially ailing company yesterday as it launched several new products aimed at expanding the market for its technology.

Jay M. Haft, who took over in November as chairman, president and chief executive of the Linthicum-based company, said that he was not ready to guarantee that the company could survive but that he thinks "we are getting closer to doing that."

Mr. Haft said the goal was for the company to break even by the end of the year. "It is going to be tough to get down to the actual break-even, but we intend to get pretty close to it," he said. Noise Cancellation, which has not posted a profit since it was created in 1988, lost $17.2 million on revenues of $5.4 million in 1993.

Its stock rose yesterday 9.375 cents to close at 81.25 cents a share.

The company had warned in a filing with the Securities and Exchange Commission last month that uncertainty over the availability of financing raised "substantial doubt" about Noise Cancellation's ability to continue operating.

Mr. Haft said the filing represented an accurate description of the company's position before the implementation of a restructuring plan in November.

The restructuring led to a number of personnel changes at the company, including replacing the chairman and president. Mr. Haft, who was on the board of directors, took over the top positions at that time. The company also reduced its work force to 113 employees from 173, with many of the reductions coming at its research and development center in Linthicum.

Among its current efforts, the company is negotiating with its business partners about paying a greater share for product development, which costs hundreds of thousands of dollars each month.

Mr. Haft said he hoped the company would have major announcements regarding the financial talks within the next 60 to 90 days. "We're very optimistic," he said. "Things are going along on a very positive path."

Regarding the technologies introduced yesterday, Mr. Haft said they represented the potential for "millions and millions and millions of dollars" in sales. But he cautioned that it was too soon to estimate the size of the market.

The company conceded that it faced stiff competition from other companies.

Michael J. Parrella, executive vice president of NCT, said the new products included a microphone made with a silicon chip to filter out unwanted noise that could significantly cut the cost of a high quality microphone.

A second technology, which the company calls EarPeace, was designed to eliminate background noise, like that inside a factory or stock market trading floor, to allow for a clearer telephone conversation. Mr. Parrella said the noise reduction system could be added on a new telephone for less than $5.

A third technology was designed to filter out noise in products ranging from hearing aids to speech recognition systems, which are used for hands-free dialing in car phones and voice commands to computers.

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