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): March 21, 2007
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 March 21, 2007
Berkeley Technology Limited
Preliminary Financial Results
For the Year Ended
December 31, 2006
London, March 21, 2007 - 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 and other telecommunications equipment companies in
dealing with large incumbent European and Japanese telecommunications companies.
Our 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 the year ended December 31,
2006. The Company's consolidated net loss from continuing operations, computed
in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"),
for the year ended December 31, 2006, was $2.7 million, or $0.05 per diluted
share and $0.53 per diluted ADR, compared with a net loss of $3.2 million, or
$0.06 per diluted share and $0.64 per diluted ADR, for the year ended December
31, 2005. No dividends will be paid on the outstanding shares and ADRs for 2006.
An increase in consulting fee income of $0.2 million, a decline in operating
expenses of $0.2 million and higher net investment income (after amounts
credited to insurance policyholder accounts) of $0.15 million contributed toward
the lower net loss from continuing operations for 2006. The Company's Jersey,
Channel Islands based insurance company, London Pacific Assurance Limited
("LPAL"), continued to serve its policyholders; however, no new policies are
currently being sold. Policyholder liabilities for LPAL fell during 2006 by $9.9
million to $3.6 million primarily due to maturing policies. As of December 31,
2006, LPAL's corporate bonds, cash and accrued interest totaled $13.6 million.
Subsequent to December 31, 2006, the Company received a $1.2 million payment
representing a partial distribution resulting from the settlements achieved in
the WorldCom, Inc. securities litigation. LPAL held certain WorldCom, Inc.
publicly traded bonds which it sold at a loss in 2002. The $1.2 million payment
will be recognized in the first quarter of 2007 in the Company's consolidated
statement of operations as a realized gain, which reverses part of the realized
loss recorded in 2002. The Company expects to receive an additional $0.4 million
as a final distribution later in 2007. Since these payments are for LPAL's
account, they are not available to fund the operations or commitments of the
Company or its other subsidiaries.
The Company's consolidated net loss including a $1.0 million loss on
discontinued operations for the year ended December 31, 2006, was $3.7 million,
or $0.07 per diluted share and $0.73 per diluted ADR. The $1.0 million loss on
discontinued operations in 2006 resulted from the settlement reached with
SunGard Data Systems Inc., as disclosed in the Company's August 10, 2006 press
release. Under the terms of the settlement, the Company was required to forgo
the $1.0 million escrow account.
*****
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
The Company's 2006 annual report will be sent to shareholders during May. Copies
of this report may be obtained by contacting the registered office in Jersey,
Channel Islands.
Form 10-K for the year ended December 31, 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
Consolidated Statements of Operations (Preliminary)
Under U.S. GAAP
In thousands, except per share and ADS amounts
Years Ended December 31,
.....................................
2006 2005 2004
........... ........... ...........
Continuing operations:
Revenues:
Investment income $ 1,203 $ 1,562 $ 1,397
Insurance policy charges 2 4 4
Consulting and other fee income 722 553 513
Net realized investment gains (losses) (2) (43) 4,700
Change in net unrealized investment gains and losses on trading
securities 18 17 (12,373)
........... ........... ...........
1,943 2,093 (5,759)
Expenses:
Amounts credited on insurance policyholder accounts 468 980 1,358
Operating expenses 4,152 4,344 4,629
Interest expense 1 4 105
........... ........... ...........
4,621 5,328 6,092
........... ........... ...........
Loss from continuing operations before income tax expense (2,678) (3,235) (11,851)
Income tax expense 5 12 290
........... ........... ...........
Loss from continuing operations (2,683) (3,247) (12,141)
Discontinued operations:
Loss on disposal of discontinued operations, net of income
tax expense of $0 (1,000) - -
........... ........... ...........
Loss on discontinued operations (1,000) - -
........... ........... ...........
Net loss $ (3,683) $ (3,247) $ (12,141)
........... ........... ...........
........... ........... ...........
Basic and diluted loss per share and ADS:
Basic and diluted loss per share:
Continuing operations $ (0.05) $ (0.06) $ (0.24)
Discontinued operations (0.02) - -
........... ........... ...........
$ (0.07) $ (0.06) $ (0.24)
........... ........... ...........
........... ........... ...........
Basic and diluted loss per ADS:
Continuing operations $ (0.53) $ (0.64) $ (2.39)
Discontinued operations (0.20) - -
........... ........... ...........
$ (0.73) $ (0.64) $ (2.39)
........... ........... ...........
........... ........... ...........
Berkeley Technology Limited
Consolidated Balance Sheets (Preliminary)
Under U.S. GAAP
In thousands, except share amounts
December 31,
........................
2006 2005
........... ...........
ASSETS
Investments (principally of life insurance subsidiary):
Fixed maturities:
Available-for-sale, at fair value (amortized cost: $9,021 and $13,809
as of December 31, 2006 and 2005, respectively) $ 9,007 $ 13,829
Held-to-maturity, at amortized cost (fair value: $3,004 and $6,982
as of December 31, 2006 and 2005, respectively) 3,009 7,011
Equity securities:
Trading, at fair value (cost: $0 and $102 as of December 31,
2006 and 2005, respectively) - 84
Available-for-sale, at estimated fair value (cost: $844 and
$850 as of December 31, 2006 and 2005, respectively) 844 850
........... ...........
Total investments 12,860 21,774
Cash and cash equivalents 6,707 10,039
Cash held in escrow - 1,027
Accrued investment income 304 609
Property and equipment, net 17 43
Other assets 349 311
........... ...........
Total assets $ 20,237 $ 33,803
........... ...........
........... ...........
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Life insurance policy liabilities $ 3,640 $ 13,573
Accounts payable and accruals 674 627
........... ...........
Total liabilities 4,314 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 December 31, 2006 and 2005 3,222 3,222
Additional paid-in capital 67,718 67,660
Retained earnings 7,999 11,682
Employee benefit trusts, at cost (13,522,381 shares as of
December 31, 2006 and 2005) (62,598) (62,598)
Accumulated other comprehensive loss (418) (363)
........... ...........
Total shareholders' equity 15,923 19,603
........... ...........
Total liabilities and shareholders' equity $ 20,237 $ 33,803
........... ...........
........... ...........
<FN>
(1) Includes $9,851 of investments and $4,354 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
Consolidated Statements of Cash Flows (Preliminary)
Under U.S. GAAP
In thousands
Years Ended December 31,
.....................................
2006 2005 2004
........... ........... ...........
Cash flows from continuing operating activities:
Net loss $ (2,683) $ (3,247) $ (12,141)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 32 36 53
Amounts credited on insurance policyholder accounts 468 980 1,358
Net realized investment losses (gains) 2 43 (4,700)
Change in net unrealized investment gains and losses on trading
securities (18) (17) 12,373
Net amortization of investment premiums and discounts 185 656 572
Share based compensation 58 - -
Net changes in operating assets and liabilities:
Trading equity securities 108 441 12,009
Accrued investment income 305 128 189
Other assets (37) 310 (112)
Life insurance policy liabilities (2) (4) (4)
Accounts payable, accruals and other liabilities 168 193 174
Income taxes payable - 7 17
Other operating cash flows 25 (22) (6)
........... ........... ...........
Net cash provided by (used in) continuing operations (1,389) (496) 9,782
........... ........... ...........
Net cash used in discontinued operations - - -
........... ........... ...........
Net cash provided by (used in) operating activities (1,389) (496) 9,782
........... ........... ...........
Cash flows from investing activities:
Purchases of held-to-maturity fixed maturity securities (3,036) (8,510) -
Purchases of available-for-sale fixed maturity securities (9,082) (5,121) -
Purchases of available-for-sale equity securities - - (15)
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 securities 14,364 10,611 5,060
Proceeds from sale of available-for-sale equity securities - - 75
Capital expenditures (7) (9) (5)
........... ........... ...........
Net cash provided by (used in) investing activities 9,239 (1,679) 5,115
........... ........... ...........
Cash flows from financing activities:
Insurance policyholder benefits paid (11,625) (6,749) (9,824)
Proceeds from disposal of shares by the employee benefit trusts - 18 -
........... ........... ...........
Net cash used in financing activities (11,625) (6,731) (9,824)
........... ........... ...........
Net increase (decrease) in cash and cash equivalents (3,775) (8,906) 5,073
Cash and cash equivalents at beginning of year 10,039 19,495 14,408
Foreign currency translation adjustment 443 (550) 14
........... ........... ...........
Cash and cash equivalents at end of year (1), (2) $ 6,707 $ 10,039 $ 19,495
........... ........... ...........
........... ........... ...........
<FN>
(1) The amount for December 31, 2006 includes $4,354 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.
(2) Does not include $1,027 of cash held in escrow as of December 31, 2005.
</FN>