Exhibit 99.1
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For Immediate Release: | |
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Contact: Peerless Systems Corporation Timothy E. Brog Chief Executive Officer 203-350-0045 | |
Peerless Systems Announces Results for the Second Quarter ended July 31, 2014
Stamford, Connecticut September 15, 2014 — Peerless Systems Corporation (Nasdaq: PRLS) today reported financial results for its second fiscal quarter and first six months of fiscal 2015 that ended July 31, 2014.
Second Quarter Results
Revenues were $569,000 for the three months ended July 31, 2014, compared to $847,000 for the three months ended July 31, 2013. This 32.8% decrease in revenue is primarily attributable to a large customer whose revenue dropped significantly during the three months ended July 31, 2014 when compared to the same period in 2013. This 32.8% decrease in revenue is also attributable in part to the declining revenue trajectory from our other OEM customers.
Gross margins were 96.1% and 94.9% for the three months ended July 31, 2014 and July 31, 2013, respectively. The increase in gross margins was primarily due to lower fees being paid to third parties due to the change in the product mix generating licensing revenues.
Income from operations was $222,000 for the three months ended July 31, 2014, compared to $137,000 for the three months ended July 31, 2013. This 62.0% increase in income from operation is primarily attributable to lower operating expenses despite the 32.8% drop in revenues during the three months ended July 31, 2014.
Other loss, net was $2,000 for the three months ended July 31, 2014, as compared to a loss of $702,000 for the three months ended July 31, 2013, due to realized losses on sales of marketable securities in the three months ended July 31, 2013.
Our net income for the three months ended July 31, 2014 was approximately $136,000 or $0.05 per basic and per diluted share, compared to a net loss of approximately $399,000, or $0.14 per basic and diluted share, for the three months ended July 31, 2013.
Fiscal 2015 First Six Months Results
Revenues were $1,116,000 for the six months ended July 31, 2014, compared to $1,948,000 for the six months ended July 31, 2013. This 42.7% decrease in revenue is primarily attributable to a large customer whose revenue dropped significantly during the six months ended July 31, 2014 when compared to the same period in 2013. The 42.7% decrease in revenue is also attributable in part to the declining revenue trajectory from our other OEM customers.
Gross margins were 91.0% and 91.2% for the six months ended July 31, 2014 and 2013, respectively.
Income from operations was $426,000 for the six months ended July 31, 2014, compared to $772,000 for the six months ended July 31, 2013. This 44.8% decrease in income from operation is primarily attributable to the 42.7% drop in revenue during the six months ended July 31, 2014.
Other loss, net was $121,000 for the six months ended July 31, 2014, as compared to a loss of $1,116,000 for the six months ended July 31, 2013, due to lower realized losses on sales of marketable securities in the current period.
Our net income for the six months ended July 31, 2014 was approximately $187,000 or $0.07 per basic and diluted share, compared to a net loss of approximately $264,000, or $0.09 per basic and diluted share, for the six months ended July 31, 2013.
About Peerless Systems Corporation
Founded in 1982, Peerless historically licensed imaging and networking technologies to the digital document markets. Effective July 31, 2008, Peerless sold its imaging and networking technologies and certain other assets to Kyocera-Mita Corporation. Peerless retains certain rights to continue licensing these technologies to customers in the digital document markets. Peerless is seeking to maximize the value of its licensing business and is exploring various alternatives to enhance stockholder value, potentially through establishing a new venture or acquiring an existing business, as well as through other investment opportunities.
Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995
Some statements included in this news release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, and, therefore, involve uncertainties or risks that could cause actual results to differ materially there from. These statements may contain words such as "desires," "believes," "anticipates," "plans," "expects," "intends," "estimates" or similar expressions. These statements are not guarantees of the Company's future performance and are subject to risks, uncertainties and other important factors that could cause actual performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Such statements include, but are not limited to, the Company’s ability to maximize the value of its licensing business or to enhance stockholder value, potentially through establishing a new venture or acquiring an existing business, or through other investment opportunities. Additional information regarding factors that could cause results to differ materially from management's expectations is found in the section entitled "Risk Factors" in the Company's 2014 Annual Report on Form 10-K filed with the SEC on July 31, 2014. The Company intends that the forward-looking statements included herein be subject to the above-mentioned statutory safe harbors. Investors are cautioned not to rely on forward-looking statements. The Company disclaims any obligation to update forward-looking statements.
PEERLESS SYSTEMS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
| | | Three Months Ended | | | Six Months Ended | |
| | | July 31, | | | July 31, | |
| | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
Revenues | | $ | 569 | | | $ | 847 | | | $ | 1,116 | | | $ | 1,948 | |
Cost of revenues | | | 22 | | | | 43 | | | | 100 | | | | 171 | |
Gross margin | | | 547 | | | | 804 | | | | 1,016 | | | | 1,777 | |
Operating expenses | | | 325 | | | | 667 | | | | 590 | | | | 1,005 | |
Income from operations | | | 222 | | | | 137 | | | | 426 | | | | 772 | |
Other loss, net | | | (2 | ) | | | (702 | ) | | | (121 | ) | | | (1,116 | ) |
Income (loss) before income taxes | | | 220 | | | | (565 | ) | | | 305 | | | | (344 | ) |
Provision for (benefit from) income taxes | | | 84 | | | | (166 | ) | | | 118 | | | | (80 | ) |
Net income (loss) | | $ | 136 | | | $ | (399 | ) | | $ | 187 | | | $ | (264 | ) |
Basic earnings (loss) per share | | $ | 0.05 | | | $ | (0.14 | ) | | $ | 0.07 | | | $ | (0.09 | ) |
Diluted earnings (loss) per share | | $ | 0.05 | | | $ | (0.14 | ) | | $ | 0.07 | | | $ | (0.09 | ) |
Weighted average common shares - outstanding — basic | | | 2,537 | | | | 2,762 | | | | 2,543 | | | | 2,834 | |
Weighted average common shares - outstanding — diluted | | | 2,649 | | | | 2,762 | | | | 2,658 | | | | 2,834 | |
PEERLESS SYSTEMS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| | | July 31, 2014 | | | January 31, 2014 | |
| | | | | | | | | |
ASSETS | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 10,826 | | | $ | 7,962 | |
Marketable securities | | | - | | | | 4,301 | |
Trade accounts receivable, net | | | 927 | | | | 1,186 | |
Deferred tax assets | | | 173 | | | | 137 | |
Income tax receivable | | | 850 | | | | 416 | |
Prepaid expenses and other current assets | | | 28 | | | | 58 | |
Total current assets | | | 12,804 | | | | 14,060 | |
Other assets | | | 6 | | | | 6 | |
Total assets | | $ | 12,810 | | | $ | 14,066 | |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | |
Current liabilities: | | | | | |
Accrued wages and compensated absences | | $ | 61 | | | $ | 60 | |
Accrued product licensing costs | | | 73 | | | | 137 | |
Other current liabilities | | | 97 | | | | 1,457 | |
Total current liabilities | | | 231 | | | | 1,654 | |
Other liabilities | | | | | | | | |
Tax liabilities | | | 289 | | | | 285 | |
Total liabilities | | | 520 | | | | 1,939 | |
Stockholders’ equity: | |
Common stock, $.001 par value, 30,000 shares authorized, 19,703 issued at July 31, 2014 and 19,679 at January 31, 2014 | | | 20 | | | | 20 | |
Additional paid-in capital | | | 58,576 | | | | 58,535 | |
Retained earnings | | | 5,955 | | | | 5,768 | |
Accumulated other comprehensive loss, net of taxes | | | - | | | | (134 | ) |
Treasury stock, 16,964 at July 31, 2014 and 16,910 at January 31, 2014 | | | (52,261 | ) | | | (52,062 | ) |
Total stockholders’ equity | | | 12,290 | | | | 12,127 | |
Total liabilities and stockholders’ equity | | $ | 12,810 | | | $ | 14,066 | |
