Peerless Systems Corp. (PRLS) filed Quarterly Report for the period ended 2009-04-30.
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 $33.14 million; its shares were traded at around $1.94 with a P/E ratio of 4.62 and P/S ratio of 3.18.
Highlight of Business Operations:
In connection with the KMC transaction, $4.0 million of consideration payable from KMC to the Company was held in escrow. In May 2009, the Company negotiated for the early release of these escrow funds, subject to a discount payable to KMC. The Company received a sum of approximately $3.8 million on May 29, 2009. The Company will record a gain associated with the release of funds in the quarter ending July 31, 2009.
Compared to January 31, 2009, total assets at April 30, 2009 decreased 2.5% to $50.3 million and stockholders equity increased 3.3% to $46.0 million, primarily the result of the net income generated by the reversal of the product licensing cost related to a licensing agreement amendment. Our cash and investment portfolio at April 30, 2009 was $43.4 million, a decrease of 2.9% from $44.7 million as of January 31, 2009, and the ratio of current assets to current liabilities was 17.5:1, which is an increase from the 9.2:1 ratio as of January 31, 2009. The increase was primarily the result of the reduction to accrued licensing cost for which the reduced amount has been disbursed in the current quarter and a reversal for technologies licensed by the Company to a customer due to an agreement amending a third party technology license agreement. Our operations used $1.1 million in cash during the three months ended April 30, 2009, compared to $0.3 million in cash used by operations during the quarter ended April 30, 2008.
At April 30, 2009, our principal source of liquidity, cash and cash equivalents was $42.3 million; a decrease of $2.4 million from January 31, 2009. The decrease is primarily due to the increase in marketable securities of $1.1 million. The Company in the current quarter purchased exchanged traded marketable securities. As of April 30, 2009, the Company has purchased 416,800 of Highbury common stocks. We do not have a credit facility and may require additional long-term capital to finance an acquisition or merger.
Our net income in the first quarter of fiscal year 2010 was $1.5 million, or $0.09 per basic share and $0.09 per diluted share, compared to a net income of $15.4 million, or $0.87 per basis share and $0.84 per diluted share, in the first quarter of fiscal year 2009, which included the $32.9 million gain associated with the KMC transaction.
Consolidated revenues were $0.9 million for the first quarter of fiscal year 2010, compared to $3.2 million for the first quarter of fiscal year 2009. Engineering services and maintenance revenues decreased $3.1 million, primarily as a result of the sale of our intellectual properties to KMC.
Total cost of revenues were $(2.3) million in the first quarter of fiscal year 2010, compared to $4.1 million in the first quarter of fiscal year 2009. Product licensing costs decreased $5.1 million in the period primarily due to a reversal of accrued licensing costs for technologies licensed by the Company to a customer due to an agreement amending a third party technology license agreement and the $2.4 million of additional product licensing costs associated with the restructured license agreements with KMC recorded during the quarter ended April 30, 2008. Engineering services and maintenance costs in the first quarter of fiscal year 2010 decreased $0.6 million compared to the first quarter of fiscal 2009 mainly due to the transfer of 38 employees to KMC as a part of the KMC transaction.