Peerless Systems Corp. Reports Operating Results (10-Q)
Peerless Systems Corp. has a market cap of $42.8 million; its shares were traded at around $2.67 with a P/E ratio of 13.4 and P/S ratio of 8.8. PRLS is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Jim Simons of Renaissance Technologies LLC, John Rogers of ARIEL CAPITAL MANAGEMENT LLC.
Highlight of Business Operations:As of January 31, 2010, the Company held 3,070,355 shares of Highbury common stock. On April 15, 2010, Highbury paid a special dividend of $3.1 million, or $0.9977 per share of Highbury common stock. On the same date, AMG completed its acquisition of Highbury and the Company s 3,070,355 shares of Highbury common stock were converted into 230,199 shares of AMG common stock (or 0.075951794 shares of AMG common stock per Highbury share). The Company recognized a gain of approximately $5.3 million during the first quarter of fiscal 2011 which included dividends of approximately $3.1 million and $0.5 million incentive compensation to a director and a consultant. During the term of its investment in Highbury, the Company recognized a gain of approximately $10.3 million taking into account the purchase price for the Highbury securities, aggregate regular and special dividends received on the Highbury common stock, the outcome of the above mentioned strategy and incentive compensation to a director and a consultant for their efforts related to the investment. As of June 2, 2010, the Company no longer owns any shares of AMG or Highbury or other marketable securities.
Total assets as of April 30, 2010 were $56.9 million, an increase of 0.9% from $56.4 million as of January 31, 2010. Total stockholders equity as of April 30, 2010 was $53.1 million, an increase of 1.1% from $52.6 million as of January 31, 2010. Our cash and investment portfolio at April 30, 2010 was $55.6 million, an increase of 2.8% from $54.6 million as of January 31, 2010, and the ratio of current assets to current liabilities was 25.1:1, which is an increase from the 17.7:1 ratio as of January 31, 2010. The increase was primarily the result of (i) the reduction to accrued licensing cost, (ii) a change in estimate relating to an amendment to a third party license agreement and the resulting reduction in certain licensing costs and (iii) the realization of the Company s investment in Highbury. Our operations provided $2.9 million in cash during the three months ended April 30, 2010, compared to $1.1 million in cash used by operations during the quarter ended April 30, 2009.
At April 30, 2010, our principal source of liquidity, cash and cash equivalents were $55.6 million; an increase of $18.9 million from $36.7 million as of January 31, 2010. The increase is primarily due to the receipt of approximately $19.2 million in cash for the sale of marketable securities related to the Company s investment in Highbury. We do not have a credit facility and may require additional long-term capital to finance an acquisition.
Our net income in the first quarter of fiscal year 2010 was $3.3 million, or $0.21 per basic share and diluted share, respectively, compared to a net income of $1.5 million, or $0.09 per basic share and diluted share, respectively, in the first quarter of fiscal year 2009.
Consolidated revenues were $0.9 million for the first quarter of fiscal year 2010 and 2009. Engineering services and maintenance revenues were $0.1 million and $0.2 million, for the first quarter of fiscal year 2011 and 2010, respectively.
Total cost of revenues were $0.2 million in the first quarter of fiscal year 2011, compared to $(2.3) million in the first quarter of fiscal year 2010. Product licensing costs increased $2.5 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 during the quarter ended April 30, 2009.
Read the The complete Report