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, 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 November 14, 2005
Berkeley Technology Limited
Financial Results
For the Quarter Ended
September 30, 2005
London, November 14, 2005 - Berkeley Technology Limited (OTCBB: BKLYY.PK,
London: BEK.L) (the "Company") is an international venture capital and
consulting firm, primarily in the telecommunications and medical industries. The
Company currently represents four Silicon Valley telecommunications equipment
companies in dealing with large incumbent European and Japanese
telecommunications companies. Its objective is to use consulting revenues and
expense reimbursements to finance the development of large telecommunications
company relationships, which will eventually lead to equity based transactions,
with fees or direct investment opportunities for the Company. There is also the
possiblity of new venture funds raised in partnership with international sources
of capital leading to management fees and carried interests.
Progress has been made in reducing the cash burn rate of the Company. Consulting
fee and interest income are approaching $1 million on an annual basis.
Approximately $1 million of annual expense reductions were implemented at the
beginning of 2005, substantially dropping the burn rate. Some of these savings
have been lost to litigation costs related to the SunGard matter, but the
current run rate is about right with only nine people in the Company, most
having taken salary reductions. Additional downsizing is probably not practical.
Longstanding key employees continue to serve as do the three eminent independent
directors on a board of four people, including Mr. Arthur Trueger, the Executive
Chairman.
The intention is to continue operating the Company to maximize shareholder
value. We are an operating company and intend to generate value through our
successful efforts over time.
The Company today reported financial results for its fiscal quarter ended
September 30, 2005. The Company's consolidated net loss, computed in accordance
with U.S. generally accepted accounting principles ("U.S. GAAP"), for the third
quarter of 2005, was $0.7 million, or $0.01 per diluted share and $0.14 per
diluted ADR, compared with a net loss of $3.9 million, or $0.08 per diluted
share and $0.77 per diluted ADR, for the same period in 2004. For the nine
months ended September 30, 2005, the Company's consolidated net loss was $2.5
million, or $0.05 per diluted share and $0.50 per diluted ADR, compared with a
net loss of $10.4 million, or $0.21 per diluted share and $2.05 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. A decline in
expenses of $108,000 and higher net investment income (after amounts credited to
insurance policyholder accounts) of $150,000 more than offset a fall in
consulting fee income of $30,000 during the quarter. The impact of stock market
volatility on the Company's results has been negligible following the sale of
most of its common stock holdings during 2004 and early in 2005. Net realized
and unrealized investment gains totaled $16,000 in the third quarter of 2005,
compared to net realized and unrealized investment losses of $3.0 million in the
third quarter of 2004. The Company's Jersey, Channel Islands based insurance
company, continued to serve its policyholders; however, no new policies are
currently being sold. Policyholder liabilities fell during the third quarter of
2005 by $1.9 million to $15.3 million primarily due to maturing
policies. As of September 30, 2005, LPAL's corporate bonds, cash and accrued
interest totaled $25.6 million.
********
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, 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 Nine Months Ended
September 30, September 30,
........................ .......................
2005 2004 2005 2004
.......... .......... ......... ..........
Revenues:
Investment income $ 383 $ 337 $ 1,185 $ 1,028
Insurance policy charges 1 - 4 3
Consulting and other fee income 105 135 429 329
Net realized investment gains (losses) - 4,787 (43) 5,700
Change in net unrealized investment gains and
losses on trading securities 16 (7,757) 6 (12,498)
.......... .......... ......... ..........
505 (2,498) 1,581 (5,438)
Expenses:
Amounts credited on insurance policyholder
accounts 222 326 779 1,043
Operating expenses 981 1,089 3,328 3,637
Interest expense - - 3 -
.......... .......... ......... ..........
1,203 1,415 4,110 4,680
.......... .......... ......... ..........
Loss before income tax expense (698) (3,913) (2,529) (10,118)
Income tax expense - - 5 290
.......... .......... ......... ..........
Net loss $ (698) $ (3,913) $ (2,534) $(10,408)
.......... .......... ......... ..........
.......... .......... ......... ..........
Basic and diluted loss per share
and ADR:
Basic and diluted loss per share $ (0.01) $ (0.08) $ (0.05) $ (0.21)
.......... .......... ......... ..........
.......... .......... ......... ..........
Basic and diluted loss per ADR $ (0.14) $ (0.77) $ (0.50) $ (2.05)
.......... .......... ......... ..........
.......... .......... ......... ..........
Berkeley Technology Limited
Condensed Consolidated Balance Sheets
Under U.S. GAAP (unaudited)
In thousands, except share amounts
September 30, December 31,
2005 2004
............ ...........
ASSETS
Investments (principally of life insurance subsidiary):
Fixed maturities:
Available-for-sale, at fair value (amortized cost: $16,450 and
$21,341 as of September 30, 2005 and December 31, 2004, respectively) $ 16,489 $ 21,377
Held-to-maturity, at amortized cost (fair value: $7,039 and $0 as of
September 30, 2005 and December 31, 2004, respectively) 7,056 -
Equity securities:
Trading, at fair value (cost: $102 and $586 as of September 30, 2005
and December 31, 2004, respectively) 73 552
Available-for-sale, at estimated fair value (cost: $850 as of
September 30, 2005 and December 31, 2004) 850 850
.......... ..........
Total investments 24,468(1) 22,779
Cash and cash equivalents 9,860(1) 19,495
Cash held in escrow 1,021 1,005
Accrued investment income 566 737
Other assets 261 691
.......... ..........
Total assets $ 36,176 $ 44,707
.......... ..........
.......... ..........
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Life insurance policy liabilities $ 15,285 $ 21,229
Accounts payable and accruals 557 585
.......... ..........
Total liabilities 15,842 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 September 30, 2005 and
December 31, 2004 3,222 3,222
Additional paid-in capital 67,660 68,615
Retained earnings 12,395 14,929
Employee benefit trusts, at cost (13,522,381 and 13,684,881 shares as of
September 30, 2005 and December 31, 2004, respectively) (62,598) (63,571)
Accumulated other comprehensive loss (345) (302)
.......... ..........
Total shareholders' equity 20,334 22,893
.......... ..........
Total liabilities and shareholders' equity $ 36,176 $ 44,707
......... ..........
......... ..........
<FN>
(1) Includes $17,333 of investments and $8,680 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
Nine Months Ended
September 30,
........................
2005 2004
.......... ..........
Net cash provided by (used in) operating activities $ (120) $ 6,156
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 1,350 -
Proceeds from sale and maturity of available-for-sale fixed maturity
securities 8,284 5,034
Proceeds from sale of available-for-sale equity securities - 75
Capital expenditures (2) (5)
.......... ..........
Net cash provided by (used in) investing activities (3,999) 5,089
.......... ..........
Cash flows from financing activities:
Insurance policyholder benefits paid (5,221) (7,332)
Proceeds from disposal of shares by the employee benefit trusts 18 -
.......... ..........
Net cash used in financing activities (5,203) (7,332)
.......... ..........
Net increase (decrease) in cash and cash equivalents (9,322) 3,913
Cash and cash equivalents at beginning of period (1) 19,495 14,408
Foreign currency translation adjustment (313) 27
.......... ..........
Cash and cash equivalents at end of period (1), (2) $ 9,860 $ 18,348
.......... ..........
.......... ..........
<FN>
(1) Does not include $1,021 of cash held in escrow as of September 30, 2005.
(2) The amount for September 30, 2005 includes $8,680 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>