Peerless Systems Corp. (PRLS, Financial) filed Quarterly Report for the period ended 2008-10-31.
Peerless Systems Corporation is a leading provider of software-based embedded imaging and networking systems to original equipment manufacturers of digital document products. Digital document products include monochrome and color printers copiers fax machines and scanners as well as multifunction products that perform a combination of these imaging functions. In order to process digital text and graphics digital document products rely on a core set of imaging software and supporting electronics collectively known as an embedded imaging system. Peerless Systems Corp. has a market cap of $33.71 million; its shares were traded at around $2 with and P/S ratio of 1.19.
On April 30, 2008, we consummated the transactions contemplated by that certain Asset Purchase Agreement, dated as of January 9, 2008, between KMC and Peerless, pursuant to which we sold substantially all of our IP to KMC, transferred to KMC thirty eight (38) of our employees, licensed the IP back from KMC on a nonexclusive, worldwide, perpetual and royalty free basis subject to certain restrictions, entered into a sublease pursuant to which we are subleasing to a subsidiary of KMC 16,409 square feet of office space at our executive offices for a period of forty (40) months at a monthly rent equal to the allocable portion of the rent and common charges payable by us under our lease for the property, and terminated substantially all of our existing agreements with KMC. As consideration for the sale, KMC assumed certain of our liabilities, and paid us approximately $37.0 million, less a holdback amount of $4.0 million relating to potential indemnification obligations. The cash proceeds generated from the KMC transaction will position us to continue executing our strategic plan. A certain portion of the net proceeds from the KMC transaction will be used for general corporate purposes, including satisfying our working capital needs and paying our remaining liabilities as they come due, relating to the assets that we retain following the consummation of this transaction, including our rights under our sublicenses with Adobe Systems Incorporated and Novell, Inc. and our customized intellectual property.
We provide an accrual for estimated product licensing costs owed to third party vendors whose technology is included in the products sold by us. The accrual is impacted by estimates of the mix of products shipped under certain of our block license agreements. The estimates are based on historical data and available information as provided by our customers concerning projected shipments. Should actual shipments under these agreements vary from these estimates, adjustments to the estimated accruals for product licensing costs may be required. Such adjustments have historically been within management s expectations. However, product licensing cost increased by $0.4 million during the third quarter of fiscal 2007 as a result of a change in estimate reported by one of our OEM customers, decreased by $0.3 million in the fourth quarter of fiscal 2008 as a result of the settlement of differences arising from a third party licensing agreement review and increased by $2.4 million in the first quarter of fiscal 2009 resulting from the KMC transaction.
Our net loss in the third quarter of fiscal year 2009 was ($1.2) million, or ($0.06) per basic share and ( $0.06) per diluted share, compared to a net income of $1.3 million, or $0.07 per basis share and $0.07 per diluted share, in the third quarter of fiscal year 2008.
Consolidated revenues were $1.6 million for the third quarter of fiscal year 2009, compared to $7.4 million for the third quarter of fiscal year 2008. Licensing revenues decreased $3.6 million in the third quarter of fiscal year 2009 due primarily to a decrease in block licensing revenue resulting from a decline in the demand for our technologies and services. Engineering services and maintenance revenues decreased $2.2 million, primarily as a result of the sale of our IP to KMC, resulting in the transfer of engineering and support staff to KMC and the termination of the development efforts being performed for KMC.
Total cost of revenues were $0.7 million in the third quarter of fiscal year 2009, compared to $3.0 million in the third quarter of fiscal year 2008. Product licensing costs decreased $1.2 million in the period primarily due to the lower level of licensing revenues. Engineering services and maintenance costs in the third quarter of fiscal year 2009 decreased $1.1 million compared to the third quarter of fiscal 2008 due to the transfer of employees to KMC.
Read the The complete Report
More on PRLS:
Gurus buys and sells of PRLS
10-year financial history of PRLS.
Insider buys/sells of PRLS.
Peerless Systems Corporation is a leading provider of software-based embedded imaging and networking systems to original equipment manufacturers of digital document products. Digital document products include monochrome and color printers copiers fax machines and scanners as well as multifunction products that perform a combination of these imaging functions. In order to process digital text and graphics digital document products rely on a core set of imaging software and supporting electronics collectively known as an embedded imaging system. Peerless Systems Corp. has a market cap of $33.71 million; its shares were traded at around $2 with and P/S ratio of 1.19.
Highlight of Business Operations:
Compared to January 31, 2008, total assets at October 31, 2008 increased 52.3% to $50.6 million and stockholders equity increased 48.3% to $41.2 million, primarily the result of the net income. Our cash and cash equivalents at October 31, 2008 was $48.9 million, an increase of 111.2% from $23.1 million as of January 31, 2008, and the ratio of current assets to current liabilities was 8.8:1, which is an increase from the 6.7:1 ratio as of January 31, 2008. The increase was primarily due to the sale of IP to KMC, partially offset by the additional accrued licensing costs associated with the KMC transaction in the first quarter. Our operations used $7.9 million in cash during the nine months ended October 31, 2008, compared to $5.4 million in cash provided by operations during the nine months ended October 31, 2007.On April 30, 2008, we consummated the transactions contemplated by that certain Asset Purchase Agreement, dated as of January 9, 2008, between KMC and Peerless, pursuant to which we sold substantially all of our IP to KMC, transferred to KMC thirty eight (38) of our employees, licensed the IP back from KMC on a nonexclusive, worldwide, perpetual and royalty free basis subject to certain restrictions, entered into a sublease pursuant to which we are subleasing to a subsidiary of KMC 16,409 square feet of office space at our executive offices for a period of forty (40) months at a monthly rent equal to the allocable portion of the rent and common charges payable by us under our lease for the property, and terminated substantially all of our existing agreements with KMC. As consideration for the sale, KMC assumed certain of our liabilities, and paid us approximately $37.0 million, less a holdback amount of $4.0 million relating to potential indemnification obligations. The cash proceeds generated from the KMC transaction will position us to continue executing our strategic plan. A certain portion of the net proceeds from the KMC transaction will be used for general corporate purposes, including satisfying our working capital needs and paying our remaining liabilities as they come due, relating to the assets that we retain following the consummation of this transaction, including our rights under our sublicenses with Adobe Systems Incorporated and Novell, Inc. and our customized intellectual property.
We provide an accrual for estimated product licensing costs owed to third party vendors whose technology is included in the products sold by us. The accrual is impacted by estimates of the mix of products shipped under certain of our block license agreements. The estimates are based on historical data and available information as provided by our customers concerning projected shipments. Should actual shipments under these agreements vary from these estimates, adjustments to the estimated accruals for product licensing costs may be required. Such adjustments have historically been within management s expectations. However, product licensing cost increased by $0.4 million during the third quarter of fiscal 2007 as a result of a change in estimate reported by one of our OEM customers, decreased by $0.3 million in the fourth quarter of fiscal 2008 as a result of the settlement of differences arising from a third party licensing agreement review and increased by $2.4 million in the first quarter of fiscal 2009 resulting from the KMC transaction.
Our net loss in the third quarter of fiscal year 2009 was ($1.2) million, or ($0.06) per basic share and ( $0.06) per diluted share, compared to a net income of $1.3 million, or $0.07 per basis share and $0.07 per diluted share, in the third quarter of fiscal year 2008.
Consolidated revenues were $1.6 million for the third quarter of fiscal year 2009, compared to $7.4 million for the third quarter of fiscal year 2008. Licensing revenues decreased $3.6 million in the third quarter of fiscal year 2009 due primarily to a decrease in block licensing revenue resulting from a decline in the demand for our technologies and services. Engineering services and maintenance revenues decreased $2.2 million, primarily as a result of the sale of our IP to KMC, resulting in the transfer of engineering and support staff to KMC and the termination of the development efforts being performed for KMC.
Total cost of revenues were $0.7 million in the third quarter of fiscal year 2009, compared to $3.0 million in the third quarter of fiscal year 2008. Product licensing costs decreased $1.2 million in the period primarily due to the lower level of licensing revenues. Engineering services and maintenance costs in the third quarter of fiscal year 2009 decreased $1.1 million compared to the third quarter of fiscal 2008 due to the transfer of employees to KMC.
Read the The complete Report
More on PRLS:
Gurus buys and sells of PRLS
10-year financial history of PRLS.
Insider buys/sells of PRLS.
