RNS Number : 1578I
Berkeley Technology Limited
14 November 2008
FOR IMMEDIATE RELEASE November 14, 2008
Berkeley Technology Limited
Financial Results
For the Nine Months Ended
September 30, 2008
London, November 14, 2008 - Berkeley Technology Limited (OTCBB: BKLYY.PK, London: BEK.L) (the "Company") is an international venture
capital and consulting firm with a focus on Silicon Valley technology companies.
The Company today reported financial results for the nine months ended September 30, 2008. The Company's consolidated net loss for the
nine months ended September 30, 2008, was $(2.1) million, or $(0.04) per diluted share and $(0.41) per diluted ADR, compared with
consolidated net income of $0.2 million, or $0.00 per diluted share and $0.05 per diluted ADR, for the nine months ended September 30, 2007.
The Company computes and reports consolidated net income (loss) and diluted earnings (loss) per share and ADR in accordance with U.S.
generally accepted accounting principles ("U.S. GAAP").
Consulting fee income fell $0.6 million for the nine month period due to a fall in the number of clients and the scope of one contract
was reduced. Investment income fell $0.4 million due to lower interest rates and insurance policy maturities. There was a decline in
realized investment gains of $1.2 million due the receipt of a partial distribution of $1.2 million from the WorldCom, Inc. securities
litigation in 2007. A final distribution of $0.3 million was received in 2008 but this gain was offset by a $0.3 million write-down on one
of our private equity investments during the third quarter of 2008. Our quarterly review of investments identified an "other-than-temporary"
impairment that was taken in accordance with U.S. GAAP. Operating expenses increased by $0.2 million primarily due to severance costs. These
increased costs will continue through June 30, 2009, but after taking into account other cost savings and favourable currency movements, the
net increase in quarterly costs are expected to be approximately $67,000 until the end of the second quarter of 2009. In February 2008, the Company submitted a claim in the Enron securities
class action settlement, based on Enron bonds previously held by LPAL. Any receipts based on the claim are not expected until 2009 at the
earliest and the amount of the recovery is unknown at this time. There has been no update in the status of our claim. The claims
administrator has still been accepting new claims until an extended deadline of November 10, 2008. As of September 30, 2008, 86% of our
assets were invested in U.S. dollar bank deposits and money market mutual funds. We are, however, operating in a much weaker economic
environment.
Our intention is to continue managing the Company to create value for all of our shareholders regardless of their different interests in the
Company's shares. In certain cases, we may benefit from investments made by our clients if their investments are successful. Last year, we
established several new equity positions, through direct investment and through equity rights received as part of our consulting activities.
We use our consulting relationships in part to generate fees that help cover operating expenses. The level of consulting fees is expected to
be volatile depending on the nature and extent of our work at any point in time, but we are actively seeking new clients and business
opportunities.
**********
Statements contained herein which are not historical facts are forward-looking statements that involve a number of risks and uncertainties
that could cause the actual results of the future events described in such forward-looking statements to differ materially from those
anticipated in such forward-looking statements. Factors that could cause or contribute to deviations from the forward-looking statements
include, but are not limited to, (i) variations in demand for the Company's products and services, (ii) the success of the Company's new
products and services, (iii) significant changes in net cash flows in or out of the Company's businesses, (iv) fluctuations in the
performance of debt and equity markets worldwide, (v) the enactment of adverse state, federal or foreign regulation or changes in government
policy or regulation (including accounting standards) affecting the Company's operations, (vi) the effect of economic conditions and
interest rates in the U.S., the U.K. or internationally, (vii) the ability of the Company's subsidiaries to compete in their respective businesses, (viii) the ability of the Company to attract and retain key
personnel, and (ix) actions by governmental authorities that regulate the Company's businesses, including insurance commissions. The Company
undertakes no obligation to update any forward-looking statements, whether as a result of new information, future developments or
otherwise.
Please address any inquiries to:
Ian Whitehead Jersey (0)1534 607700
Chief Financial Officer
Berkeley Technology Limited
Form 10-Q for the quarter ended September 30, 2008
A copy of the above document will be submitted to the U.K. Listing Authority and will be shortly available for inspection at the U.K.
Listing Authority's Document Viewing Facility, which is situated at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London
E14 5HS
Tel: 020 7676 1000
Berkeley Technology Limited
Condensed Consolidated Balance Sheets
Under U.S. GAAP (unaudited)
In thousands, except share amounts
September December 31,
30, 2008 2007
ASSETS
Current assets:
Cash and cash equivalents $ 13,064 (1) $ 14,568
Accounts receivable, less allowances of $34 as
of September 30, 233 423
2008 and December 31, 2007
Interest receivable 3 14
Prepaid expenses and deposits 84 164
Total current assets 13,384 15,169
Private equity investments (at lower of cost 1,734 (1) 1,984
or estimated fair value)
Property and equipment, net of accumulated
depreciation of $176 and $175 as of 11 14
September 30, 2008 and December 31, 2007,
respectively
Total assets $ 15,129 $ 17,167
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 554 $ 547
Policyholder liabilities (due in less than 130 46
one year)
Total current liabilities 684 593
Policyholder liabilities (due in more than one - 95
year)
Total liabilities 684 688
Commitments and contingencies
Shareholders' equity:
Ordinary shares, $0.05 par value per share:
86,400,000 shares authorized; 64,439,073
shares issued and outstanding as of September
30, 2008 and December 31, 2007 3,222 3,222
Additional paid-in capital 67,840 67,789
Retained earnings 6,380 8,465
Employee benefit trusts, at cost (13,522,381
shares as of (62,598) (62,598)
September 30, 2008 and December 31, 2007)
Accumulated other comprehensive loss (399) (399)
Total shareholders' equity 14,445 16,479
Total liabilities and shareholders' equity $ 15,129 $ 17,167
(1) The Company's insurance subsidiary, London Pacific Assurance Limited ("LPAL"), holds $10,555 of the Group's $13,064 in cash and
cash equivalents and $1,594 of the Group's $1,734 in private equity investments which are only available to fund the operations or
commitments of LPAL, and not to the parent company or any of the other subsidiaries.
Berkeley Technology Limited
Condensed Consolidated Statements of Operations
Under U.S. GAAP (unaudited)
In thousands, except per share and ADS amounts
Nine Months Ended
September 30,
2008 2007
Revenues:
Consulting fee income $ 414 $ 1,017
Investment income 271 632
Net realized investment gains 20 1,198
705 2,847
Expenses:
Operating expenses 2,784 2,557
Amounts credited on insurance policyholder accounts 4 42
2,788 2,599
Income (loss) before income tax expense (2,083) 248
Income tax expense 2 2
Net income (loss) $ (2,085) $ 246
Basic and diluted earnings (loss) per share $ (0.04) $ 0.00
Basic and diluted earnings (loss) per ADS $ (0.41) $ 0.05
Berkeley Technology Limited
Condensed Consolidated Statements of Cash Flows
Under U.S. GAAP (unaudited)
In thousands
Nine Months Ended
September 30,
2008 2007
Net cash used in operating activities $ (1,754) $ (779)
Cash flows from investing activities:
Purchases of available-for-sale equity securities - (1,000)
Proceeds from maturity of held-to-maturity fixed - 3,000
maturity securities
Proceeds from maturity of available-for-sale fixed - 9,000
maturity securities
Proceeds from WorldCom, Inc. securities litigation 270 1,198
settlement
Capital expenditures (2) -
Net cash provided by investing activities 268 12,198
Cash flows from financing activities:
Insurance policyholder benefits paid - (3,510)
Net cash used in financing activities - (3,510)
Effect of exchange rate changes on cash (18) 14
Net increase (decrease) in cash and cash equivalents (1,504) 7,923
Cash and cash equivalents at beginning of period 14,568 6,707
Cash and cash equivalents at end of period $ 13,064 $ 14,630
This information is provided by RNS
The company news service from the London Stock Exchange
END
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