Peerless Systems Corp. Reports Operating Results (10-Q)

Peerless Systems Corp. (PRLS, Financial) filed Quarterly Report for the period ended 2010-10-31.

Peerless Systems Corp. has a market cap of $52 million; its shares were traded at around $3.16 with a P/E ratio of 7.6 and P/S ratio of 10.8. PRLS is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Our total assets at October 31, 2010 were $58.6 million, an increase of 3.8% from $56.4 million as of January 31, 2010. Stockholders equity at October 31, 2010 was $54.3 million, an increase of 3.4% from $52.6 million as of January 31, 2010. Our ratio of current assets to current liabilities was 22.2:1, which is an increase from the 17.7:1 ratio as of January 31, 2010. Our operations provided $1.8 million mainly because of the operating profits and timing of receipts and payments associated with those operations during the nine months ended October 31, 2010, compared to $2.2 million in cash provided by operations during the nine months ended October 31, 2009.

Consolidated revenues were $2.8 million for the third quarter of fiscal year 2011, compared to $1.0 million for the third quarter of fiscal year 2010. We experienced an increase in licensing revenues because of a non-recurring increase in product licensing during the current quarter versus the third quarter of fiscal year 2010. Engineering services and maintenance revenues were $0 and $0.3 million, for the third quarter of fiscal year 2011 and 2010, respectively. The decrease was due to the expiration of service and maintenance contracts with customers which we decided not to renew.

Our net income in the first nine months of fiscal year 2011 was $3.9 million, or $0.25 per basic and $0.24 per diluted share, compared to a net income of $7.1 million, or $0.42 per basic and diluted share, in the first nine months of fiscal year 2010.

Consolidated revenues were $4.5 million for the first nine months of fiscal year 2011, compared to $4.0 million for the first nine months of fiscal year 2010. Licensing revenues increased $1.0 million in the first nine months of fiscal year 2011 primarily resulting from non-recurring new product licensing during the third quarter of fiscal 2011 offset by a decline in the demand for the other technologies we license. Engineering services and maintenance revenues decreased $0.5 million, primarily as a result of the expiration of service and maintenance contracts which we decided not to renew.

Total cost of revenues was $1.3 million in the first nine months of fiscal year 2011, compared to a gain of $1.2 million in the first nine months of fiscal year 2010. Product licensing costs increased $2.5 million in the first nine months of fiscal year 2011 primarily resulting from the reversal of accrued licensing cost of $2.6 million during the first quarter of fiscal year 2010. Excluding this reversal, product licensing costs were comparable fiscal year over year. Engineering services and maintenance costs in the first nine months of fiscal year 2011 and 2010 were $0.2 million.

Total other income was $6.0 million for the first nine months of fiscal 2011, compared to $5.0 million for the first nine months of fiscal 2010. Other income for the first nine months of fiscal year 2011 was mainly due to dividends received of $3.1 million, and a $3.7 million realized gain on the Company s investment in Highbury Financial, Inc. Other income for the first nine months of fiscal year 2010 was mainly attributable to $4.8 million dividend received from Highbury Financial, Inc.

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