EL SEGUNDO, CA--(Marketwire - June 12, 2008) - Peerless Systems Corporation (
NASDAQ:
PRLS),
a provider of advanced imaging and networking technologies and components
to the digital document market, today reported financial results for its
2009 first fiscal quarter ended April 30, 2008.
First quarter revenue was $3.2 million versus $4.7 million in the first
quarter a year ago. The decline was largely attributable to the continued
downturn in licensing revenue that has resulted from previously discussed
changes taking place in the digital imaging industry. Product licensing
revenue was $0.7 million versus $2.1 million in last year's first quarter.
Engineering services and maintenance revenue was $2.5 million versus $2.7
million in the first quarter a year ago.
Research and development expenses were $0.9 million, or 29% of revenue,
versus $1.1 million, or 24% of revenue, in the first quarter last year.
Sales and marketing expenses were $0.7 million, or 21% of revenue, versus
$0.6 million, or 13% of revenue, in last year's first quarter.
General and administrative expenses were $3.6 million compared with $1.5
million in the first quarter last year. The increase is attributable to
transaction fees associated with the Kyocera Mita (KMC) asset sale, the
Company's due diligence efforts on Prism Software, stock based compensation
expense, and a year over year increase in board of director fees.
Peerless recorded a net gain of $32.9 million on the KMC transaction, as
well as a $1.1 million non-recurring charge related to the subsequent
restructuring of the Company. Income from operations was $25.7 million
versus a loss from operations of $1.0 million in the first quarter last
year. After recording a $10.6 million provision for income taxes, Peerless
reported net income of $15.4 million, or $0.84 per diluted share, versus a
net loss of $0.8 million, or $0.05 per diluted share, in the same quarter a
year ago.
Peerless ended the first quarter with cash and cash equivalents of $55.8
million compared to $23.1 million at the end of the previous quarter.
Management Commentary
Rick Roll, president and chief executive officer, said, "The first quarter
completion of our asset sale and the licensing back of our core imaging
technologies represented a key strategic accomplishment that has
significantly strengthened our balance sheet, provided us with ongoing
access to these core technologies and positioned us to more actively
advance our long-term growth strategies."
Roll added, "We continue to work closely with our investment banking
partner in the pursuit of a substantial transaction within the growing
digital content management sector, as well in other promising industries.
Although there is considerable work to be done in our analysis and due
diligence, we are encouraged by the prospects that are emerging. We also
continue to maintain our focus on opportunities in the all-in-one (AIO)
imaging device market.
"Going forward, we will continue to prudently manage our cash position and
pursue additional licensing opportunities with the core imaging
technologies we have licensed back from KMC. We also will seek to make
additional enhancements to our operating efficiencies. We have
dramatically improved our financial stature during the past year, and
intend to leverage this position for the benefit of our stockholders.
"We will continue to seek input and guidance from our board of directors
and our stockholders as we advance our strategies. We are pleased with the
progress that the Company has made so far and look forward to sharing more
as we can in the future."
Peerless Systems Conference Call
Management will hold a conference call to discuss fiscal first quarter
results today at 5:00 p.m. Eastern (2:00 p.m. Pacific). Investors are
invited to listen to the call live via the Internet at
www.peerless.com, or
by dialing into the teleconference 888-713-4213 (617-213-4865 for
international callers) and entering the passcode 75463799. Participants
should access the website at least 15 minutes early to register and
download any necessary audio software. A replay of the webcast will be
available for 30 days and an audio replay will be available through June
14, 2007, by calling 888-286-8010 (617-801-6888 for international callers)
and entering the passcode 74772442.
About Peerless Systems Corporation
Founded in 1982, Peerless Systems Corporation is a provider of imaging and
networking technologies and components to the digital document markets,
which include manufacturers of color, monochrome and multifunction office
products and digital appliances. 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 imaging controller.
Peerless' broad line of scalable software and silicon offerings enables its
customers to shorten their time-to-market and reduce costs by offering
unique solutions for multiple products. Peerless' customer base includes
companies such as Canon, IBM, Konica Minolta, Kyocera Mita, Lenovo,
OkiData, Ricoh, RISO, Seiko Epson and Xerox. Peerless also maintains
strategic partnerships with Adobe and Novell. For more information, visit
Peerless' web site at
www.peerless.com.
Safe Harbor Statement Under The U.S. Private Securities Litigation Reform
Act Of 1995
Statements made by us in this press release that are not historical facts
constitute "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements are necessarily estimates
reflecting the best judgment of our senior management based on our current
estimates, expectations, forecasts and projections and include comments
that express our current opinions about trends and factors that may impact
future operating results. Statements that use words such as we "believe,"
"anticipate," "estimate," "intend," "could," "plan," "expect," "project,"
"predict," "forecast," "outlook," "potential," "continue," "may," "future,"
"can," "enhance," and "should," or the negative of these, as well as
similar expressions, can be used to identify forward-looking statements.
These statements are not guarantees of future performance, rely on a number
of assumptions concerning future events, many of which are outside of our
control, and involve known and unknown risks and uncertainties that could
cause our actual results, performance or achievements, or industry results,
to differ materially from any future results, performance or achievements,
expressed or implied by such forward-looking statements. Such risks and
uncertainties include, among other things, changing competitive and market
conditions, our reliance on certain OEM customers for significant portions
of our revenues, the sufficiency of our capital resources, any adverse
change in our relationship with Adobe Systems Incorporated and/or Novell,
Inc, increased competition both from in-house OEM products and low cost
offshore competitors, the impact of Microsoft's Vista™ operating system,
reduced demand for our existing monochrome technologies or other products,
the rapid changes taking place in the emerging color print devices markets,
our ability to realize contract backlog, our ability to identify new
customers or place our technology in a broader base of products, our
ability to leverage core competencies and find product segments that blend
well with our core business, our ability to successfully enter new software
application sectors, our ability to maintain our profit objectives and
create compelling margins, the tenure of the competitive advantage of our
old and new technologies, our reliance on block licensing, our ability to
develop and market our advanced devices and software, the validity and
protection of our intellectual property rights, risks associated with
international business activities, our reliance on key personnel and our
board of directors and our ability to execute our business plan and
strategic partnering transactions.
The above risks, and others, are described in further detail in our reports
filed with the Securities and Exchange Commission, including, but not
limited to, those described under "Item 1A. Risk Factors" in our most
recent Annual Report on Form 10-K for the fiscal year ended January 31,
2008, filed on May 12, 2008.
PEERLESS SYSTEMS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Three Months Ended
April 30,
----------------------------------------------
2008 2007
---------------------- ----------------------
Revenues:
Product licensing $ 749 23.2% $ 2,093 44.1%
Engineering services
and maintenance 2,485 76.8% 2,653 55.9%
Hardware and other
sales - 0.0% 1 0.0%
---------- ----------
Total revenues 3,234 100.0% 4,747 100.0%
---------- ----------
Cost of revenues:
Product licensing 2,696 83.4% 762 16.1%
Engineering services
and maintenance 1,396 43.1% 1,781 37.5%
---------- ----------
Total cost of
revenues 4,092 126.5% 2,543 53.6%
---------- ----------
Gross margin (858) (26.5)% 2,204 46.4%
---------- ----------
Operating expenses:
Research and
development 940 29.1% 1,147 24.2%
Sales and marketing 672 20.8% 607 12.8%
General and
administrative 3,626 112.1% 1,498 31.6%
(Gain) on sale of
operating assets (32,915) (1,117.8)% - 0.00%
Restructuring charges 1,088 33.6% - 0.00%
---------- ----------
(26,589) 3,252
---------- ----------
Income (loss) from
operations 25,731 795.6% (1,048) (22.1)%
Other income 182 5.6% 222 4.7%
---------- ----------
Income (loss) before income
taxes 25,913 801.3% (826) (17.4)%
Provision for income taxes 10,556 326.4% 3 0.1%
---------- ----------
Net income (loss) $ 15,357 474.9% $ (829) (17.5)%
========== ==========
Basic earnings (loss)
per share $ 0.87 $ (0.05)
========== ==========
Diluted earnings (loss)
per share $ 0.84 $ (0.05)
========== ==========
Weighted average common
shares outstanding - basic 17,639 17,189
========== ==========
Weighted average common
shares outstanding - diluted 18,249 17,189
========== ==========
Contact Information: Contacts:
Peerless Systems Corporation:
John Rigali
Chief Financial Officer
(310) 297-3146
Investor Contact:
Geoff High
Pfeiffer High Investor Relations, Inc.
(303) 393-7044