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): August 10, 2005
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 7.01,"Regulation FD Disclosure" and Item 2.02, " Results of Operations and
Financial Condition."
FOR IMMEDIATE RELEASE August 10, 2005
Berkeley Technology Limited
Financial Results
For the Quarter Ended
June 30, 2005
London, August 10, 2005 - Berkeley Technology Limited (OTCBB: BKLYY.PK, London:
BEK.L) (the "Company") today reported financial results for its fiscal quarter
ended June 30, 2005. The Company's consolidated net loss, computed in accordance
with U.S. generally accepted accounting principles ("U.S. GAAP") for the second
quarter of 2005, was $(0.7) million, or $(0.01) per diluted share and $(0.13)
per diluted ADR, compared with net income of $0.2 million, or $0.00 per diluted
share and $0.04 per diluted ADR, for the same period in 2004.
For the six months ended June 30, 2005, the Company's consolidated net loss was
$(1.8) million, or $(0.04) per diluted share and $(0.36) per diluted ADR,
compared with a net loss of $(6.5) million, or $(0.13) per diluted share and
$(1.28) per diluted ADR, for the same period in 2004.
The Company reports net income (loss) and diluted earnings (loss) per share and
ADR in accordance with U.S. GAAP.
The impact of stock market volatility on the Company's results has been
negligible following the sale of its Packeteer common stock holdings during
2004, as well as the sale of all but $0.1 million of other listed equity
securities during January 2005. Net realized and unrealized investment gains
totaled $12,000 in the second quarter of 2005, compared to net realized and
unrealized investment gains of $1.6 million in the second quarter of 2004.
London Pacific Assurance Limited ("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 second quarter of 2005 by $2.7 million to $17.2 million primarily due to
maturing policies. As of June 30, 2005, LPAL's corporate bonds, cash and accrued
interest totaled $27.7 million.
The Company now focuses on its venture capital and consulting business, which
works with North American technology companies that are looking to grow their
businesses or to expand their investor base overseas, primarily in Europe and
Japan. The Company advises on overseas operations, assists in locating partners,
customers and 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.
Operating expenses totaled $1.0 million in the second quarter of 2005, compared
to $1.3 million in the second quarter of 2004. This decrease reflects the cost
reductions that were implemented by the Company during the first quarter of
2005.
*****
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 June 30, 2005
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 Operations
Under U.S. GAAP (unaudited)
In thousands, except per share and ADR amounts
Three Months Ended Six Months Ended
June 30, June 30,
................................................
2005 2004 2005 2004
....... ....... ....... .......
Revenues:
Investment income $ 405 $ 334 $ 802 $ 691
Insurance policy charges 3 1 3 3
Consulting and other fee income 181 97 324 194
Net realized investment gains (losses) - 1,557 (43) 913
Change in net unrealized investment gains and
losses on trading securities 12 92 (10) (4,741)
....... ....... ....... .......
601 2,081 1,076 (2,940)
Expenses:
Amounts credited on insurance policyholder
accounts 267 333 557 717
Operating expenses 1,008 1,270 2,347 2,548
Interest expense 3 - 3 -
....... ....... ....... .......
1,278 1,603 2,907 3,265
....... ....... ....... .......
Income (loss) before income tax expense (677) 478 (1,831) (6,205)
Income tax expense - 283 5 290
....... ....... ....... .......
Net income (loss) $ (677) $ 195 $(1,836) $(6,495)
....... ....... ....... .......
....... ....... ....... .......
Basic and diluted earnings (loss) per share
and ADR:
Basic and diluted earnings (loss) per share $ (0.01) $ 0.00 $ (0.04) $ (0.13)
....... ....... ....... .......
....... ....... ....... .......
Basic and diluted earnings (loss) per ADR $ (0.13) $ 0.04 $ (0.36) $ (1.28)
....... ....... ....... .......
....... ....... ....... .......
Berkeley Technology Limited
Condensed Consolidated Balance Sheets
Under U.S. GAAP (unaudited)
In thousands, except share amounts
June 30, December 31,
2005 2004
........... ...........
ASSETS
Investments (principally of life insurance subsidiary):
Fixed maturities:
Available-for-sale, at fair value (amortized cost: $18,484 and $21,341
as of June 30, 2005 and December 31, 2004, respectively) $ 18,521 $ 21,377
Held-to-maturity, at amortized cost (fair value: $7,566 and $0 as of
June 30, 2005 and December 31, 2004, respectively) 7,599 -
Equity securities:
Trading, at fair value (cost: $102 and $586 as of June 30, 2005
and December 31, 2004, respectively) 57 552
Available-for-sale, at estimated fair value (cost: $850 as of
June 30, 2005 and December 31, 2004) 850 850
........ ........
Total investments 27,027(1) 22,779
Cash and cash equivalents 9,748(1) 19,495
Cash held in escrow 1,014 1,005
Accrued investment income 787 737
Other assets 380 691
........ ........
Total assets $ 38,956 $ 44,707
........ ........
........ ........
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Life insurance policy liabilities $ 17,159 $ 21,229
Accounts payable and accruals 756 585
........ ........
Total liabilities 17,915 21,814
........ ........
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 June 30, 2005 and
December 31, 2004 3,222 3,222
Additional paid-in capital 67,660 68,615
Retained earnings 13,093 14,929
Employee benefit trusts, at cost (13,522,381 and 13,684,881 shares as of
June 30, 2005 and December 31, 2004, respectively) (62,598) (63,571)
Accumulated other comprehensive loss (336) (302)
........ ........
Total shareholders' equity 21,041 22,893
........ ........
Total liabilities and shareholders' equity $ 38,956 $ 44,707
........ ........
........ ........
<FN>
(1) Includes $19,365 of investments and $8,573 of cash and cash equivalents in the Company's insurance subsidiary
(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
Six Months Ended
June 30,
...........................
2005 2004
........ ........
Net cash provided by operating activities $ 63 $ 2,736
Cash flows from investing activities:
Purchases of held-to-maturity fixed maturity securities (8,510) -
Purchases of available-for-sale fixed maturity securities (5,121) -
Purchases of available-for-sale equity securities - (15)
Proceeds from maturity of held-to-maturity fixed maturity securities 850 -
Proceeds from sale and maturity of available-for-sale fixed maturity
securities 6,546 3,082
Proceeds from sale of available-for-sale equity securities - 75
Capital expenditures - (4)
Other investing cash flows - (3)
........ ........
Net cash provided by (used in) investing activities (6,235) 3,135
........ ........
Cash flows from financing activities:
Insurance policyholder benefits paid (3,317) (5,561)
Proceeds from disposal of shares by the employee benefit trusts 18 -
........ ........
Net cash used in financing activities (3,299) (5,561)
........ ........
Net increase (decrease) in cash and cash equivalents (9,471) 310
Cash and cash equivalents at beginning of period (1) 19,495 14,408
Foreign currency translation adjustment (276) 23
........ ........
Cash and cash equivalents at end of period (1), (2) $ 9,748 $ 14,741
........ ........
........ ........
<FN>
(1) Does not include $1,014 of cash held in escrow as of June 30, 2005.
(2) The amount for June 30, 2005 includes $8,573 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>