U.S. 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): November 14, 2003
Berkeley Technology Limited
(Exact Name of Registrant as Specified in its Articles)
----------------------
0-21874
(Commission File Number)
Jersey (Channel Islands) Not applicable
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation)
Minden House
6 Minden Place
St. Helier
Jersey
Channel Islands
JE2 4WQ
Tel: 011 44 1534 607700
(Address and telephone of Principal Executive Offices)
(Former Name or Address, if Changed Since Last Report)
The following information is furnished pursuant to this
Item 9,"Regulation FD Disclosure" and Item 12, " Results of Operations and
Financial Condition."
FOR IMMEDIATE RELEASE November 14, 2003
Berkeley Technology Limited
Financial Results
For the Quarter Ended
September 30, 2003
London, November 14, 2003 - Berkeley Technology Limited (OTCBB: BKLYY; London:
BEK) (the "Company"), today reported financial results for its fiscal quarter
ended September 30, 2003. The Company's consolidated net loss, computed in
accordance with U.S. generally accepted accounting principles ("U.S. GAAP"), for
the three months ended September 30, 2003 was $6.3 million, or $(0.13) per
diluted share and $(1.25) per diluted ADR, compared with a loss of $50.2
million, or $(0.99) per diluted share and $(9.88) per diluted ADR, for the same
period in 2002. For the third quarter of 2003, the Company's consolidated loss
from continuing operations was $6.3 million, or $(0.13) per diluted share and
$(1.25) per diluted ADR, compared with a loss from continuing operations of $9.0
million, or $(0.18) per diluted share and $(1.76) per diluted ADR, for the third
quarter of 2002.
For the nine months ended September 30, 2003, the Company's consolidated net
income was $8.2 million, or $0.16 per diluted share and $1.60 per diluted ADR,
compared with a loss of $189.6 million, or $(3.73) per diluted share and
$(37.35) per diluted ADR, for the same period in 2002. For the nine months ended
September 30, 2003, the Company's consolidated loss from continuing operations
was $1.8 million, or $(0.03) per diluted share and $(0.35) per diluted ADR,
compared with a loss from continuing operations of $43.0 million, or $(0.85) per
diluted share and $(8.46) per diluted ADR, for the same period in 2002.
The Company reports net income (loss) and diluted earnings (loss) per share and
ADR in accordance with U.S. GAAP.
The results for the third quarter of 2003 were affected negatively by a fall in
value of the quoted securities held by the Company, including those held by
London Pacific Assurance Limited ("LPAL"), and by a write-down in the book value
of private equity securities. The quoted securities held in LPAL are not
available to fund the operations or commitments of the Company or its other
subsidiaries. Net realized and unrealized investment losses totaled $5.1 million
in the third quarter of 2003, compared to net realized and unrealized losses of
$7.5 million in the third quarter of 2002. Volatility in the Company's quoted
equity holdings continued to have a substantial impact on the Company's
financial results.
As a result of the sale of both London Pacific Advisors ("LPA") and Berkeley
Capital Management ("BCM") in the second quarter, the Company no longer
consolidates the financial results of LPA and BCM in its financial statements.
Reclassifications have been made in the prior period financial statements to
reflect these discontinued operations. The Company used the proceeds from the
sale of LPA and BCM to pay down its bank facility which was terminated in the
second quarter.
<page>
As of September 30, 2003, the book value per share and book value per ADR were
$0.63 and $6.28, respectively. These book value per share and ADR computations
exclude the number of shares held by the employee benefit trusts and the related
cost of those shares.
LPAL, the Company's Jersey, Channel Islands based insurance company, continued
to serve its policyholders. No new policies are currently being sold.
Policyholder liabilities for LPAL fell during the third quarter of 2003 by $5.0
million to $29.3 million due primarily to maturing policies. As of September 30,
2003, LPAL's corporate bonds, cash and accrued interest totaled $31.4 million,
quoted equities were $9.7 million and the book value of private equities was
$5.1 million.
Berkeley International Capital Corporation arranges private equity placements
into rapidly growing technology companies. Venture capital is the foundation of
the Company dating back to the early 1980s. The market environment for venture
capital continues to be very weak. We are pursuing opportunities to grow the
business in the future.
*****
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, 2003
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 Statements of Income
Under U.S. GAAP (unaudited)
In thousands, except per share and ADR amounts
Three Months Ended Nine Months Ended
September 30, September 30,
........................ ........................
2003 2002 (1) 2003 2002 (1)
.......... .......... .......... ..........
Continuing operations:
Revenues:
Investment income $ 433 $ 1,364 $ 1,492 $ 5,962
Insurance policy charges 2 1,207 6 1,152
Fee income (2) - - - 2,908
Net realized investment losses (839) (2,065) (14,988) (1,740)
Change in net unrealized investment gains and
losses on trading securities (4,213) (5,403) 18,226 (31,276)
.......... .......... .......... ..........
(4,617) (4,897) 4,736 (22,994)
Expenses:
Amounts credited on insurance policyholder accounts 463 1,423 1,509 5,495
Amortization of deferred policy acquisition costs - 1,689 - 2,952
Operating expenses 1,269 2,489 4,317 9,198
Interest expense - 252 676 807
.......... .......... .......... ..........
1,732 5,853 6,502 18,452
.......... .......... .......... ..........
Loss from continuing operations before
income taxes (6,349) (10,750) (1,766) (41,446)
Income tax expense (benefit) (3) (1,798) 9 1,515
.......... .......... .......... ..........
Loss from continuing operations (6,346) (8,952) (1,775) (42,961)
Discontinued operations:
Loss from discontinued operations, net of income
tax expense (benefit) of $0, $1,617,
$2 and $(6,734), respectively - (2,667) (1,758) (108,058)
Income (loss) on disposal of discontinued
operations, net of income tax expense of $0,
$0, $36 and $0, respectively - (38,532) 11,685 (38,532)
.......... .......... .......... ..........
Income (loss) on discontinued operations - (41,199) 9,927 (146,590)
.......... .......... .......... ..........
Net income (loss) $ (6,346) $ (50,151) $ 8,152 $ (189,551)
.......... .......... .......... ..........
.......... .......... .......... ..........
<FN>
(1) Reclassifications have been made related to discontinued operations.
(2) Amount represents revenues earned from an entity included in discontinued operations.
</FN>
Berkeley Technology Limited
Condensed Consolidated Statements of Income
(Continued)
Under U.S. GAAP (unaudited)
In thousands, except per share and ADR amounts
Three Months Ended Nine Months Ended
September 30, September 30,
........................ ........................
2003 2002 (1) 2003 2002 (1)
.......... .......... .......... ..........
Basic earnings (loss) per share and ADR:
Basic earnings (loss) per share:
Continuing operations $ 0.13) $ (0.18) $ (0.03) $ (0.85)
Discontinued operations - (0.81) 0.19 (2.88)
.......... .......... .......... ..........
$ (0.13) $ (0.99) $ 0.16 $ (3.73)
.......... .......... .......... ..........
.......... .......... .......... ..........
Basic earnings (loss) per ADR:
Continuing operations $ (1.25) $ (1.76) $ (0.35) $ (8.46)
Discontinued operations - (8.12) 1.96 (28.89)
.......... .......... .......... ..........
$ (1.25) $ (9.88) $ 1.61 $ (37.35)
.......... .......... .......... ..........
.......... .......... .......... ..........
Diluted earnings (loss) per share and ADR:
Diluted earnings (loss) per share:
Continuing operations $ 0.13) $ (0.18) $ (0.03) $ (0.85)
Discontinued operations - (0.81) 0.19 (2.88)
.......... .......... .......... ..........
$ (0.13) $ (0.99) $ 0.16 $ (3.73)
.......... .......... .......... ..........
.......... .......... .......... ..........
Diluted earnings (loss) per ADR:
Continuing operations $ (1.25) $ (1.76) $ (0.35) $ (8.46)
Discontinued operations - (8.12) 1.95 (28.89)
.......... .......... .......... ..........
$ (1.25) $ (9.88) $ 1.60 $ (37.35)
.......... .......... .......... ..........
.......... .......... .......... ..........
<FN>
(1) Reclassifications have been made related to discontinued operations.
</FN>
Berkeley Technology Limited
Condensed Consolidated Balance Sheets
Under U.S. GAAP (unaudited)
In thousands, except share amounts
September 30, December 31,
2003 2002 (1)
........... ...........
ASSETS
Investments (principally of life insurance subsidiary):
Fixed maturities:
Available-for-sale, at fair value (amortized cost: $19,449 and
$30,481 as of September 30, 2003 and December 31, 2002, respectively) $ 19,449 $ 30,335
Equity securities:
Trading, at fair value (cost: $4,721 and $26,785 as of September
30, 2003 and December 31, 2002, respectively) 12,668 16,505
Available-for-sale, at estimated fair value (cost: $5,106 and
$8,980 as of September 30, 2003 and December 31, 2002, respectively) 5,106 7,230
........... ...........
Total investments 37,223(2) 54,070
Cash and cash equivalents 21,385(2) 15,308
Cash held in escrow 998 -
Accrued investment income 795 900
Other assets 1,337 1,549
Total assets of discontinued operations - 8,390
........... ...........
Total assets $ 61,738 $ 80,217
........... ...........
........... ...........
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Life insurance policy liabilities $ 29,274 $ 35,441
Notes payable - 9,314
Accounts payable, accruals and taxes payable 595 832
Guarantees under bank facility - 10,590
Total liabilities of discontinued operations - 2,554
........... ...........
Total liabilities 29,869 58,731
........... ...........
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, 2003 and 3,222 3,222
December 31, 2002
Additional paid-in capital 68,615 68,394
Retained earnings 24,206 16,054
Employee benefit trusts, at cost (13,684,881 shares as of September
30, 2003 and December 31, 2002) (63,571) (63,571)
Accumulated other comprehensive loss (603) (2,613)
........... ...........
Total shareholders' equity 31,869 21,486
........... ...........
Total liabilities and shareholders' equity $ 61,738 $ 80,217
........... ...........
........... ...........
<FN>
(1) Reclassifications have been made related to discontinued operations.
(2) Includes $34,225 of investments and $11,206 of cash and cash equivalents in the Company's insurance subsidiary
which are not available to fund the operations or commitments of the Company or its other subsidiaries.
</FN>
Berkeley Technology Limited
Condensed Consolidated Statements of Cash Flows
Under U.S. GAAP (unaudited)
In thousands
Nine Months Ended
September 30,
.........................
2003 (1) 2002 (2)
........... ...........
Net cash provided by continuing operations $ 8,866 $ 23,711
Net cash used in discontinued operations (523) (19,980)
........... ...........
Net cash provided by operating activities 8,343 3,731
........... ...........
Cash flows from investing activities:
Payments of guarantee obligations (10,836) -
Purchases of held-to-maturity fixed maturity securities - (2,828)
Purchases of available-for-sale fixed maturity securities (8,422) (7,209)
Proceeds from sale of available-for-sale fixed maturity securities 20,004 93,256
Proceeds from disposal of discontinued operations 15,148 -
Capital expenditures (4) (23)
........... ...........
Net cash provided by investing activities 15,890 83,196
........... ...........
Cash flows from financing activities:
Insurance policyholder contract deposits - 6,827
Insurance policyholder benefits paid (8,630) (110,620)
Dividends paid - (2,032)
Proceeds from disposal of shares by the employee benefit trusts - 43
Notes payable - 2,440
Repayment of notes payable (9,314) (27,000)
........... ...........
Net cash used in financing activities (17,944) (130,342)
........... ...........
Net increase (decrease) in cash and cash equivalents 6,289 (43,415)
Cash and cash equivalents at beginning of period (3) 15,308 60,571
Foreign currency translation adjustment (212) 208
........... ...........
Cash and cash equivalents at end of period (3) $ 21,385(4)$ 17,364
........... ...........
........... ...........
<FN>
(1) Reclassifications have been made to conform with the current period presentation.
(2) Reclassifications have been made related to discontinued operations.
(3) Amounts reflect continuing operations only. Does not include $998 of cash held in escrow as of September 30, 2003.
(4) Includes $11,206 in the Company's insurance subsidiary which is not available to fund the operations or commitments
of the Company or its other subsidiaries.
</FN>