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 13, 2006
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 13, 2006
Berkeley Technology Limited
Financial Results
For the Quarter Ended
September 30, 2006
London, November 13, 2006 - 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 represents Silicon Valley telecommunications equipment companies in
dealing with large incumbent European and Japanese telecommunications companies.
Its objective is to use consulting revenues 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 possibility of new venture funds raised in
partnership with international sources of capital leading to management fees and
carried interests.
The Company today reported financial results for its fiscal quarter ended
September 30, 2006. The Company's consolidated net loss, computed in accordance
with U.S. generally accepted accounting principles for the third quarter of
2006, was $0.6 million, or $0.01 per diluted share and $0.11 per diluted ADR,
compared with a net loss of $0.7 million, or $0.01 per diluted share and $0.14
per diluted ADR, for the same period in 2005.
For the nine months ended September 30, 2006, the Company's consolidated net
loss was $3.3 million, or $0.07 per diluted share and $0.65 per diluted ADR,
compared with a net loss of $2.5 million, or $0.05 per diluted share and $0.50
per diluted ADR, for the same period in 2005. For the nine months ended
September 30, 2006, the Company's consolidated loss from continuing operations
was $2.3 million, or $0.05 per diluted share and $0.45 per diluted ADR.
An increase in consulting fee revenues of $58,000 and a decrease in operating
expenses of $61,000 contributed toward the lower net loss for 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 investment losses totaled $6,000 in the third quarter of 2006,
compared to net investment gains of $16,000 in the third quarter of 2005. 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 third quarter of 2006 by $2.9 million to $6.3 million primarily due to
maturing policies. As of September 30, 2006, LPAL's corporate bonds, cash and
accrued interest totaled $16.3 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, 2006
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,
...................................................
2006 2005 2006 2005
.......... ........ ......... .........
Revenues:
Investment income $ 300 $ 383 $ 938 $ 1,185
Insurance policy charges - 1 2 4
Consulting and other fee income 163 105 477 429
Net realized investment losses - - - (43)
Change in net unrealized investment gains and
losses on trading securities (6) 16 18 6
.......... ........ ......... .........
457 505 1,435 1,581
Expenses:
Amounts credited on insurance policyholder
accounts 95 222 402 779
Operating expenses 920 981 3,330 3,328
Interest expense - - - 3
.......... ........ ......... .........
1,015 1,203 3,732 4,110
.......... ........ ......... .........
Loss from continuing operations before
income tax expense (558) (698) (2,297) (2,529)
Income tax expense - - 5 5
.......... ........ ......... .........
Loss from continuing operations (558) (698) (2,302) (2,534)
Discontinued operations:
Loss on disposal of discontinued operations,
net of income tax expense (benefit) of $0 - - (1,000) -
.......... ........ ......... .........
Loss on discontinued operations - - (1,000) -
.......... ........ ......... .........
Net loss $ (558) $ (698) $ (3,302) $ (2,534)
.......... ........ ......... .........
.......... ........ ......... .........
Basic and diluted loss per share:
Continuing operations $ (0.01) $ (0.01) $ (0.05) $ (0.05)
Discontinued operations - - (0.02) -
.......... ........ ......... .........
$ (0.01) $ (0.01) $ (0.07) $ (0.05)
.......... ........ ......... .........
.......... ........ ......... .........
Basic and diluted loss per ADR:
Continuing operations $ (0.11) $ (0.14) $ (0.45) $ (0.50)
Discontinued operations - - (0.20) -
.......... ........ ......... .........
$ (0.11) $ (0.14) $ (0.65) $ (0.50)
.......... ........ ......... .........
.......... ........ ......... .........
Berkeley Technology Limited
Condensed Consolidated Balance Sheets
Under U.S. GAAP (unaudited)
In thousands, except share amounts
September 30, December 31,
2006 2005
............. .............
ASSETS
Investments (principally of life insurance subsidiary):
Fixed maturities:
Available-for-sale, at fair value (amortized cost: $14,654
and $13,809 as of September 30, 2006 and December 31, 2005,
respectively) $ 14,638 $ 13,829
Held-to-maturity, at amortized cost (fair value: $3,010 and $6,982
as of September 30, 2006 and December 31, 2005, respectively) 3,017 7,011
Equity securities:
Trading, at fair value (cost: $0 and $102 as of September 30, 2006
and December 31, 2005, respectively) - 84
Available-for-sale, at estimated fair value (cost: $844 and $850 as
of September 30, 2006 and December 31, 2005, respectively) 844 850
............. .............
Total investments 18,499 (1) 21,774
Cash and cash equivalents 4,051 (1) 10,039
Cash held in escrow - 1,027
Accrued investment income 429 609
Other assets 284 354
............. .............
Total assets $ 23,263 $ 33,803
............. .............
............. .............
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Life insurance policy liabilities $ 6,317 $ 13,573
Accounts payable and accruals 644 627
............. .............
Total liabilities 6,961 14,200
............. .............
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, 2006
and December 31, 2005 3,222 3,222
Additional paid-in capital 67,714 67,660
Retained earnings 8,380 11,682
Employee benefit trusts, at cost (13,522,381 shares as of
September 30, 2006 and December 31, 2005) (62,598) (62,598)
Accumulated other comprehensive loss (416) (363)
............. .............
Total shareholders' equity 16,302 19,603
............. .............
Total liabilities and shareholders' equity $ 23,263 $ 33,803
............. .............
............. .............
<FN>
(1) Includes $15,482 of investments and $1,350 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,
..................................
2006 2005
............. .............
Net cash used in operating activities $ (898) $ (120)
Cash flows from investing activities:
Purchases of held-to-maturity fixed maturity securities (3,035) (8,510)
Purchases of available-for-sale fixed maturity securities (9,082) (5,121)
Proceeds from maturity of held-to-maturity fixed maturity securities 7,000 1,350
Proceeds from sale and maturity of available-for-sale fixed maturity 8,701 8,284
securities
Capital expenditures (5) (2)
............. .............
Net cash provided by (used in) investing activities 3,579 (3,999)
............. .............
Cash flows from financing activities:
Insurance policyholder benefits paid (8,703) (5,221)
Proceeds from disposal of shares by the employee benefit trusts - 18
............. .............
Net cash used in financing activities (8,703) (5,203)
............. .............
Net decrease in cash and cash equivalents (6,022) (9,322)
Cash and cash equivalents at beginning of period 10,039 19,495
Foreign currency translation adjustment 34 (313)
............. .............
Cash and cash equivalents at end of period (1) $ 4,051 $ 9,860
............. .............
............. .............
<FN>
(1) The amount for September 30, 2006 includes $1,350 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>