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, 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 August 10, 2007
Berkeley Technology Limited
Financial Results
For the Quarter Ended
June 30, 2007
London, August 10, 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 works
with Silicon Valley telecommunications equipment and application software
companies in dealing with large incumbent European telecommunications companies.
It also represents strategic investors operating in the telecommunications
industry seeking to invest in Silicon Valley firms at the forefront of
technology innovation. Our intention is to continue managing 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 June
30, 2007. The Company's consolidated net loss, computed in accordance with U.S.
generally accepted accounting principles ("U.S. GAAP") for the second quarter of
2007, was $(0.3) million, or $(0.01) per diluted share and $(0.06) per diluted
ADR, compared with a loss of $(2.0) million, or $(0.04) per diluted share and
$(0.40) per diluted ADR, for the same period in 2006. For the second quarter of
2006, the Company's consolidated loss from continuing operations was $(1.0)
million, or $(0.02) per diluted share and $(0.20) per diluted ADR.
For the six months ended June 30, 2007, the Company's consolidated net income
was $0.4 million, or $0.01 per diluted share and $0.07 per diluted ADR, compared
with a net loss of $(2.7) million, or $(0.05) per diluted share and $(0.54) per
diluted ADR for the same period in 2006. For the six months ended June 30, 2006,
the Company's consolidated loss from continuing operations was $(1.7) million,
or $(0.03) per diluted share and $(0.34) per diluted ADR.
A decline in operating expenses of $0.4 million and an increase in consulting
fee income of $0.2 million contributed toward the lower net loss from continuing
operations for the second quarter of 2007 compared to the second quarter of
2006. London Pacific Assurance Limited ("LPAL"), the Company's Jersey, Channel
Islands based insurance company, continued to serve its policyholders.
Policyholder liabilities for LPAL fell during the second quarter of 2007 by $1.8
million to $0.2 million primarily due to maturing policies. The remaining
policies are likely to remain in place until 2009.
A $1.2 million payment representing a partial distribution resulting from the
settlements achieved in the WorldCom, Inc. securities litigation primarily
contributed to the net income for the first six months of 2007. LPAL held
certain WorldCom, Inc. publicly traded bonds which it sold at a loss in 2002.
The $1.2 million payment was 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.
*****
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, 2007
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,
...................................................
2007 2006 2007 2006
...................................................
Revenues:
Investment income $ 205 $ 284 $ 436 $ 638
Insurance policy charges - 2 - 2
Consulting and other fee income 365 160 570 314
Net realized investment gains - - 1,198 -
Change in net unrealized investment gains and
losses on trading securities - (33) - 24
......... ......... ........ .........
570 413 2,204 978
Expenses:
Amounts credited on insurance policyholder
accounts 10 137 40 307
Operating expenses 867 1,294 1,791 2,410
......... ......... ........ .........
877 1,431 1,831 2,717
......... ......... ........ .........
Income (loss) from continuing operations before
income tax expense (307) (1,018) 373 (1,739)
Income tax expense - - 2 5
......... ......... ........ .........
Income (loss) from continuing operations (307) (1,018) 371 (1,744)
Discontinued operations:
Loss on disposal of discontinued operations, -
net of income tax expense (benefit) of $0 - (1,000) (1,000)
......... ......... ........ .........
Loss on discontinued operations - (1,000) - (1,000)
......... ......... ........ .........
Net income (loss) $ (307) $ (2,018) $ 371 $ (2,744)
......... ......... ........ .........
......... ......... ........ .........
Basic and diluted earnings (loss) per share:
Continuing operations $ (0.01) $ (0.02) $ 0.01 $ (0.03)
Discontinued operations - (0.02) - (0.02)
......... ......... ........ .........
$ (0.01) $ (0.04) $ 0.01 $ (0.05)
......... ......... ........ .........
......... ......... ........ .........
Basic and diluted earnings (loss) per ADR:
Continuing operations $ (0.06) $ (0.20) $ 0.07 $ (0.34)
Discontinued operations - (0.20) - (0.20)
......... ......... ........ .........
$ (0.06) $ (0.40) $ 0.07 $ (0.54)
......... ......... ........ .........
......... ......... ........ .........
Berkeley Technology Limited
Condensed Consolidated Balance Sheets
Under U.S. GAAP (unaudited)
In thousands, except share amounts
June 30, December 31,
2007 2006
.......................
ASSETS
Investments (principally of life insurance subsidiary):
Fixed maturities:
Available-for-sale, at fair value (amortized cost: $1,000 and
$9,021 as of June 30, 2007 and December 31, 2006, respectively) $ 999 $ 9,007
Held-to-maturity, at amortized cost (fair value: $0 and $3,004
as of June 30, 2007 and December 31, 2006, respectively) - 3,009
Equity securities:
Available-for-sale, at estimated fair value (cost: $844 as
of June 30, 2007 and December 31, 2006) 844 844
......... .........
Total investments 1,843 (1) 12,860
Cash and cash equivalents 14,676 (1) 6,707
Accrued investment income 34 304
Other assets 549 366
......... .........
Total assets $ 17,102 $ 20,237
......... .........
......... .........
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Life insurance policy liabilities $ 189 $ 3,640
Accounts payable and accruals 574 674
......... .........
Total liabilities 763 4,314
......... .........
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 3,222 3,222
30, 2007 and December 31, 2006
Additional paid-in capital 67,745 67,718
Retained earnings 8,370 7,999
Employee benefit trusts, at cost (13,522,381 shares as of
June 30, 2007 and December 31, 2006) (62,598) (62,598)
Accumulated other comprehensive loss (400) (418)
......... .........
Total shareholders' equity 16,339 15,923
......... .........
Total liabilities and shareholders' equity $ 17,102 $ 20,237
......... .........
......... .........
<FN>
(1) Includes $1,843 of investments and $10,311 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,
......................
2007 2006
........ .........
Net cash used in operating activities $ (733) $ (544)
Cash flows from investing activities:
Purchases of held-to-maturity fixed maturity securities - (3,035)
Purchases of available-for-sale fixed maturity securities - (9,082)
Proceeds from maturity of held-to-maturity fixed maturity securities 3,000 7,000
Proceeds from sale and maturity of available-for-sale fixed maturity 8,000 8,701
securities
Partial proceeds from WorldCom, Inc. securities litigation settlement 1,198 -
......... .........
Net cash provided by investing activities 12,198 3,584
......... .........
Cash flows from financing activities:
Insurance policyholder benefits paid (3,510) (5,603)
......... .........
Net cash used in financing activities (3,510) (5,603)
......... .........
Net increase (decrease) in cash and cash equivalents 7,955 (2,563)
Cash and cash equivalents at beginning of period 6,707 10,039
Foreign currency translation adjustment 14 229
......... .........
Cash and cash equivalents at end of period (1) $ 14,676 $ 7,705
......... .........
......... .........
<FN>
(1) The amount for June 30, 2007 includes $10,311 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>