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): May 14, 2004
Berkeley Technology Limited
(Exact Name of Registrant as Specified in its Articles)
----------------------
0-21874
(Commission File Number)
Jersey (Channel Islands) U.K. 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)
N/A
(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 May 14, 2004
Berkeley Technology Limited
Financial Results
For the Quarter Ended
March 31, 2004
London, May 14, 2004 - Berkeley Technology Limited (OTCBB: BKLYY.PK, London:
BEK.L) (the "Company") today reported financial results for its fiscal quarter
ended March 31, 2004. The Company's consolidated net loss, computed in
accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for
the first quarter of 2004, was $6.7 million, or $(0.13) per diluted share and
$(1.32) per diluted ADR, compared with a loss of $1.9 million, or $(0.04) per
diluted share and $(0.37) per diluted ADR, for the same period in 2003. For the
first quarter of 2004, the Company's consolidated loss from continuing
operations was $6.7 million, or $(0.13) per diluted share and $(1.32) per
diluted ADR, compared with a loss from continuing operations of $0.9 million, or
$(0.02) per diluted share and $(0.17) per diluted ADR, for the same period in
2003.
The Company reports net income (loss) and diluted earnings (loss) per share and
ADR in accordance with U.S. GAAP.
The results for the first quarter of 2004 were significantly impacted by the
decrease in the value of the quoted securities held by the Company, including
those held by London Pacific Assurance Limited ("LPAL"), and by the write-down
in the book value of one private equity security. 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
$5.5 million in the first quarter of 2004, compared to net realized and
unrealized gains of $1.0 million in the first quarter of 2003. Volatility in the
Company's quoted equity holdings continues 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 of 2003, 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 loss on discontinued operations for
the first quarter of 2003 totaled $1.0 million.
As of March 31, 2004, the book value per share and book value per ADR were $0.56
and $5.57, 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; however, no new policies are currently being sold.
Policyholder liabilities for LPAL fell during the first quarter of 2004 by $3.0
million to $25.1 million primarily due to maturing policies. As of March 31,
2004, LPAL's corporate bonds, cash, due from brokers and accrued interest
totaled $28.1 million, quoted equities were $9.5 million and the book value of
private equities was $2.3 million.
The Company now focuses on its venture capital and consulting business. Berkeley
International Capital Corporation, the Company's venture capital operation,
currently works with North American private technology companies that are
looking to grow their businesses and to expand their investor base overseas. The
Company advises on overseas operations,
assists in locating investment capital, and occasionally takes principal
positions where the case is compelling and the timeframe for realization could
be relatively short. It is still early in the process but consulting fees are
now being generated.
*****
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 March 31, 2004
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
March 31,
.............................
2004 2003(1)
Continuing operations: ............ ............
Revenues:
Investment income $ 357 $ 531
Insurance policy charges 2 4
Consulting and other fee income 97 -
Net realized investment losses (644) (7,324)
Change in net unrealized investment gains and losses on
trading securities (4,833) 8,313
............ ............
(5,021) 1,524
Expenses:
Amounts credited on insurance policyholder accounts 384 519
Operating expenses 1,278 1,734
Interest expense - 136
............ ............
1,662 2,389
............ ............
Loss from continuing operations before income taxes (6,683) (865)
Income tax expense 7 7
............ ............
Loss from continuing operations (6,690) (872)
Discontinued operations:
Loss from discontinued operations, net of income
tax expense of $0 and $5, respectively
- (982)
............ ............
Loss on discontinued operations - (982)
............ ............
Net loss $ (6,690) $ (1,854)
............ ............
............ ............
Basic and diluted loss per share and ADR:
Basic and diluted loss per share:
Continuing operations $ (0.13) $ (0.02)
Discontinued operations - (0.02)
............ ............
$ (0.13) $ (0.04)
............ ............
............ ............
Basic and diluted loss per ADR:
Continuing operations $ (1.32) $ (0.17)
Discontinued operations - (0.20)
............ ............
$ (1.32) $ (0.37)
............ ............
............ ............
<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
March 31, December 31,
2004 2003
............ ............
ASSETS
Investments (principally of life insurance subsidiary):
Fixed maturities:
Available-for-sale, at fair value (amortized cost: $22,857 and $25,403
as of March 31, 2004 and December 31, 2003, respectively) $ 22,833 $ 25,393
Equity securities:
Trading, at fair value (cost: $4,004 and $4,544 as of March 31, 2004
and December 31, 2003, respectively) 11,508 16,882
Available-for-sale, at estimated fair value (cost: $2,402 and $4,262
as of March 31, 2004 and December 31, 2003, respectively) 2,402 4,262
............ ............
Total investments 36,743 (1) 46,537
Cash and cash equivalents 13,544 (1) 14,408
Cash held in escrow 1,001 999
Accrued investment income 866 926
Other assets 1,738 643
............ ............
Total assets $ 53,892 $ 63,513
............ ............
............ ............
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Life insurance policy liabilities $ 25,066 $ 28,054
Accounts payable and accruals 580 562
............ ............
Total liabilities 25,646 28,616
............ ............
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 March 31, 2004 and
December 31, 2003 3,222 3,222
Additional paid-in capital 68,615 68,615
Retained earnings 20,380 27,070
Employee benefit trusts, at cost (13,684,881 shares as of March 31, 2004
and December 31, 2003) (63,571) (63,571)
Accumulated other comprehensive loss (400) (439)
............ ............
Total shareholders' equity 28,246 34,897
............ ............
Total liabilities and shareholders' equity $ 53,892 $ 63,513
............ ............
............ ............
<FN>
(1) Includes $34,637 of investments and $3,216 of cash and cash equivalents in the Company's insurance subsidiary
(London Pacific Assurance Limited ("LPAL")) which are not currently 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
Three Months Ended
March 31,
.............................
2004 2003(1)
............ ............
Net cash provided by continuing operations $ 113 $ 7,211
Net cash used in discontinued operations - (858)
............ ............
Net cash provided by operating activities 113 6,353
............ ............
Cash flows from investing activities:
Purchases of available-for-sale fixed maturity securities - (140)
Purchases of available-for-sale equity securities (15) -
Proceeds from sale and maturity of available-for-sale fixed maturity
securities 3,098 2,914
Other investing cash flows (2) -
............ ............
Net cash provided by investing activities 3,081 2,774
............ ............
Cash flows from financing activities:
Insurance policyholder benefits paid (4,137) (986)
Repayment of notes payable - (4,944)
........... ............
Net cash used in financing activities (4,137) (5,930)
............ ............
Net increase (decrease) in cash and cash equivalents (943) 3,197
Cash and cash equivalents at beginning of period (2) 14,408 15,308
Foreign currency translation adjustment 79 (126)
............ ............
Cash and cash equivalents at end of period (2), (3) $ 13,544 $ 18,379
............ ............
............ ............
<FN>
(1) Reclassifications have been made related to discontinued operations.
(2) Amounts reflect continuing operations only. Does not include $1,001 of cash held in escrow as of March 31, 2004.
(3) The amount for March 31, 2004 includes $3,216 in the Company's insurance subsidiary (LPAL) which is not currently
available to fund the operations or commitments of the Company or its other subsidiaries.
</FN>