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Peerless
Systems Corporation (PRLS:NASDAQ):
Reports
Second Quarter Results
EL SEGUNDO,
Calif., August 28, 2003--Peerless Systems Corporation (Nasdaq:PRLS):
Selected Second Quarter Highlights:
-- Revenue growth of 8.2 percent over the first quarter exceeded
prior expectations
-- Recognized revenues of $1.4 million from new license
agreements
-- Cash and investments balance of $15.0 million, or $0.96 per
share
-- Channel product on schedule for planned launch in fiscal
fourth quarter
Peerless Systems Corporation (Nasdaq:PRLS), a provider of imaging
and networking controllers to the digital document markets, today
reported financial results for the second quarter ended July 31, 2003.
Second Quarter Fiscal 2004 Results
For the second fiscal quarter ended July 31, 2003, the Company
reported revenues of $6.2 million, a 13.3 percent decrease from $7.1
million for the same quarter of the prior fiscal year and a sequential
increase of 8.2 percent from the $5.7 million reported in the previous
quarter. The sales increase over the first quarter was primarily the
result of higher levels of licensing fees.
During the quarter, the Company signed four new license agreements
totaling $1.4 million, all of which was recognized in the second
quarter. Engineering services contract backlog was $283,000 at July
31, 2003, compared with $785,000 at January 31, 2003. As of July 31,
2003, the Company had $2.1 million in licensing agreements to be
recognized over the next three quarters, compared with $6.7 million as
of January 31, 2003.
Gross margin for the second quarter was 48.6 percent, down from
57.6 percent for the same quarter of the prior fiscal year, and down
from the 53.0 percent reported in the first quarter. The decrease in
gross margin as a percent of total revenues was the result of an
additional accrual for certain disputed third party licensing costs
totaling approximately $677,000. The additional accrual represents
management's best estimate of the Company's exposure related to the
licensor's claims. The dispute arose as a result of an audit performed
by an independent accounting firm. The additional accrual is based on
licensing costs of approximately $19 million over a three-year period
ending July 31, 2003. Without the additional accrual for these
licensing costs, gross margin for the second quarter would have been
58.7 percent, a year-over-year and sequential improvement.
The Company's second quarter research and development expenses
increased to $2.9 million, or 47.1 percent of revenues, from the
year-ago quarter's expenses of $2.4 million, or 34.5 percent of
revenues, and $2.3 million, or 40.3 percent of revenues, in the
previous quarter. The increases were due primarily to higher staffing
and consulting costs associated with the continuing development of the
Company's high performance color technology and products. Sales and
marketing expenses were relatively unchanged at $1.2 million, or 19.8
percent of revenues, compared with $1.1 million, or 15.6 percent of
revenues, for the same quarter last year and $1.2 million, or 20.6
percent of revenues, in the first quarter of fiscal year 2004. General
and administrative expenses for the second quarter were $1.4 million,
or 22.7 percent of revenues, compared with $1.6 million, or 22.2
percent of revenues, in the comparable period last year and $1.0
million, or 17.1 percent of revenues, in the previous fiscal quarter.
The net loss for the second quarter of fiscal year 2004 was $2.8
million, or $0.18 per share, compared with a net loss of $1.2 million,
or $0.08 per share, for the same quarter of fiscal year 2003 and a net
loss of $180,000, or $0.01 per share, in the previous quarter.
At July 31, 2003, days sales outstanding (DSO) for receivables and
unbilled were 36, compared with 48 at the end of the first quarter and
23 at January 31, 2003. DSOs vary from quarter to quarter based on the
timing and collection of licensing transactions. The Company ended the
second quarter of fiscal year 2004 with total assets of $21.4 million,
including cash and investments of $15.0 million, or $0.96 per share.
Stockholders' equity was $13.4 million, or $0.86 per share, as of July
31, 2003.
Commenting on second quarter results, Howard J. Nellor, President
and Chief Executive Officer of Peerless Systems Corporation, said,
"Second quarter revenues exceeded our prior guidance level of $5.7
million. Having forecasted sales to be relatively unchanged from the
first quarter, we were pleased to have achieved an eight percent top
line growth, which was driven by higher product licensing fees and
continued strong sales of our application-specific integrated circuits
(ASICs)."
Mr. Nellor continued, "We made good progress in the second quarter
on both the OEM and channel fronts for our Sierra high-performance
color architecture. On our recent trip to Asia, we met with a number
of OEMs and the response was very positive. OEMs in the People's
Republic of China and Japan stated that our solutions corresponded to
their technology roadmaps and matched their advanced imaging
performance requirements. We are encouraged by this feedback and it
reinforces our belief in Sierra's compelling value proposition as a
powerful, yet cost-effective solution.
"Additionally, we are preparing for the introduction of our high
resolution color, Sierra hardware product for the channels, which is
targeted for the office workgroup segment," commented Mr. Nellor. "We
are currently testing all of the complex functions, including
scanning, copying and printing, at 30-pages-per-minute rated engine
speed. This multi-function product controller is in the final stages
of integration and is performing very well. We will be demonstrating
the controller live at the Seybold Conference in September and the
Japan Open House in October. We expect to formally launch the hardware
product in late 2003.
"Also, during the second quarter, we announced that Legend, the
leading manufacturer of technology products in the People's Republic
of China, began shipments of monochrome printers utilizing our
software development kit. We are currently working to expand this
relationship to include bi-level and high performance color
solutions," concluded Mr. Nellor.
Six Months Fiscal 2003 Results
For the six months ended July 31, 2003, total revenues were $11.8
million, a 24.5 percent decrease from $15.7 million for the comparable
period of the prior fiscal year. Revenues decreased primarily as a
result of lower product licensing and engineering services fees, which
were partially offset by stronger sales of the Company's ASICs.
Gross margin for the six months ended July 31, 2003 was 50.7
percent, compared with 58.3 percent for the same period last year. In
addition to the additional accrual of product licensing costs
mentioned previously, the decline in gross margin was due to a shift
in product mix as lower-margin sales of ASICs contributed to a larger
portion of total revenues for the period this year.
The net loss for the first six months of fiscal year 2004 was $3.0
million, or $0.19 per share, compared with a net loss of $584,000, or
$0.04 per share, for the year-ago period.
Guidance
In line with previous guidance, the Company expects third quarter
revenues to be slightly higher than the second quarter's level in the
range of $6.2 million to $6.5 million. After the third quarter, the
Company expects revenues to grow as it attains design wins, recognizes
engineering services revenues, generates new licensing fees and
achieves initial channel sales. For the fourth quarter, the Company
expects revenues at the $10 million level with the target of reaching
a sustainable level of profitability.
The Company believes that its cash and investments balance at July
31, 2003 will be sufficient to fund its operations through to a
sustainable level of profitability and positive cash flow. The Company
expects to end the third quarter with cash and investments greater
than $12 million. Forecasting positive cash flow in the fourth quarter
of the current fiscal year, the Company does not anticipate cash and
investments to fall below the third quarter's level.
Peerless Systems Conference Call
Company management will hold a conference call to discuss its
second quarter fiscal year 2004 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 at 800-283-1693 (703-736-7227 for international
callers). Please go to the web site at least 15 minutes early to
register, download, and install any necessary audio software. For
those who cannot listen to the live call, a replay of the webcast will
be available for 30 days. An audio replay will be available through
September 4, 2003, by calling 888-266-2081 (703-925-2533 for
international callers) and entering the passcode 243985.
About Peerless Systems Corporation
Founded in 1982, Peerless Systems Corporation is a provider of
imaging and networking controllers 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, Kyocera/Mita, Legend, Minolta, OkiData, Ricoh,
Seiko Epson and Xerox. Peerless also maintains strategic partnerships
with Adobe, IBM Microelectronics, and Novell.
Safe Harbor Statement under the U.S. Private Securities Litigation
Reform Act of 1995
This Release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995.
The use of such words in connection with or related to any discussion
of or reference to future operations, earnings guidance, opportunities
or financial performance sets apart forward-looking statements. In
particular, statements regarding the Company's outlook for future
business, financial performance and growth, profitability, product
availability and potential applications and successes and the impact
on future performance of organizational and operational changes all
constitute forward-looking statements.
These forward-looking statements are just predictions and best
estimations consistent with the information available to the Company
at this time. Thus they involve known and unknown risks and
uncertainties such that actual results could differ materially from
those projected in the forward-looking statements made in this
Release. Risks and uncertainties include those set forth in Peerless'
public filings with the Securities and Exchange Commission, including
but not limited to the Company's most recent Annual Report on Form
10-K dated January 31, 2003 in the Section called Risks and
Uncertainties at pages 27 through 37, inclusive, filed on May 1, 2003,
and the Company's most recent Quarterly Report on Form 10-Q dated
April 30, 2003 in the Section called Risks and Uncertainties at pages
14 through 23, inclusive, filed on June 16, 2003.
Current and prospective stockholders are urged not to place undue
reliance on forward-looking statements, which speak only as of the
date hereof. The Company is under no obligation, and expressly
disclaims any obligation, to update or alter any forward-looking
statements, whether as a result of new information, future events or
otherwise. All forward-looking statements contained herein are
qualified in their entirety by the foregoing cautionary statements.
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Schedules
Second Quarter Fiscal Year 2004 Earnings Release
and Conference Call
EL SEGUNDO,
Calif., August 21, 2003 -- Peerless Systems Corporation (Nasdaq:PRLS),
a provider of imaging and networking controllers to the digital
document markets, will announce financial results for the second
quarter ended July 31, 2003, after the market closes on Thursday,
August 28, 2003.
A press release outlining the second quarter financial results
will be distributed after the market closes on August 28, 2003.
Following the release, Peerless Systems will host a conference call
with a simultaneous webcast at 5:00 p.m. Eastern (2:00 p.m. Pacific)
to discuss the Company's operating performance. The conference call,
featuring President and Chief Executive Officer Howard J. Nellor and
Vice President, Finance and Chief Financial Officer William R. Neil,
can be accessed live via the Internet at www.peerless.com or by
dialing into the teleconference at 800-283-1693 (703-736-7227 for
international callers). Please go to the web site at least fifteen
minutes early to register, download and install any necessary audio
software. For those who cannot listen to the live broadcast, a replay
of the webcast will be available for 30 days. An audio replay will be
available through September 4, 2003, by calling 888-266-2081
(703-925-2533 for international callers) and entering the passcode
243985.
About Peerless Systems Corporation
Founded in 1982, Peerless Systems Corporation is a provider of
imaging and networking controllers 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, Kyocera/Mita, Minolta, Konica, OkiData, Ricoh, Seiko Epson
and Xerox. Peerless also maintains strategic partnerships with Adobe,
IBM Microelectronics, and Novell.
Safe Harbor Statement under the U.S. Private Securities Litigation
Reform Act of 1995
This Release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995.
The use of such words in connection with or related to any discussion
of or reference to future operations, opportunities or financial
performance sets apart forward-looking statements. In particular,
statements regarding the Company's outlook for future business,
financial performance and growth, profitability, product availability
and potential applications and successes and the impact on future
performance of organizational and operational changes all constitute
forward-looking statements.
These forward-looking statements are just predictions and best
estimations consistent with the information available to the Company
at this time. Thus they involve known and unknown risks and
uncertainties such that actual results could differ materially from
those projected in the forward-looking statements made in this
Release. Risks and uncertainties include those set forth in Peerless'
public filings with the Securities and Exchange Commission, including
but not limited to the Company's most recent Annual Report on Form
10-K dated January 31, 2003 in the Section called Risks and
Uncertainties at pages 27 through 37, inclusive, filed on May 1, 2003,
and the Company's most recent Quarterly Report on Form 10-Q dated
April 30, 2003 in the Section called Risks and Uncertainties at pages
14 through 23, inclusive, filed on June 16, 2003.
Current and prospective stockholders are urged not to place undue
reliance on forward-looking statements, which speak only as of the
date hereof. The Company is under no obligation, and expressly
disclaims any obligation, to update or alter any forward-looking
statements, whether as a result of new information, future events or
otherwise. All forward-looking statements contained herein are
qualified in their entirety by the foregoing cautionary statements.
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to headlines
To
Participate In B.
Riley & Co. Investor
Conference
EL SEGUNDO,
Calif. August 7, 2003 -- Peerless Systems (NASDAQ:PRLS), a
provider of imaging controllers to the digital document markets,
announced today that it will participate in the B. Riley &
Co. Investor Conference at The Waldorf Astoria Hotel in New
York.
Howard J. Nellor,
President and Chief
Executive Officer,
is scheduled to make
a presentation at
10:55 a.m. Pacific
Time (1:55 p.m. Eastern
Time) on Thursday,
August 14, 2003. The
presentation will
be broadcast live
over the Internet
on the Company's web
site at www.peerless.com.
A replay of the presentation
will be available
for two weeks following
the event.
Founded in 1982, Peerless
Systems Corporation
is a provider of imaging
controllers 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,
Kyocera/Mita, Minolta,
Konica, OkiData, Ricoh,
Seiko Epson and Xerox.
Peerless also maintains
strategic partnerships
with Adobe, IBM Microelectronics,
and Novell.
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to headlines
Reports
First Quarter Fiscal
Year 2004 Results
EL SEGUNDO, Calif., June 12, 2003--Peerless
Systems Corporation (Nasdaq:PRLS):
Selected First Quarter Highlights:
-- Maintained solid cash and investments balance of $17.0
million, or $1.10 per share
-- Launched Partner to Develop(TM) program to strengthen OEM and
channel relationships
-- Subsequent to the end of the quarter, Legend began initial
shipments of its 22-page per minute monochrome printer based
on Peerless' imaging software development kit (SDK)
Peerless Systems Corporation (Nasdaq:PRLS), a provider of imaging
and networking controllers to the digital document markets, today
reported financial results for the first quarter ended April 30, 2003.
First Quarter Fiscal 2004 Results
For the first fiscal quarter ended April 30, 2003, the Company
reported revenues of $5.7 million, a 33.9 percent decrease from $8.6
million for the same quarter of the prior fiscal year, and a
sequential decrease of 31.4 percent from $8.3 million reported in the
previous quarter. The decrease in sales was attributable to lower
levels of licensing fees based on timing of license payments and
engineering services revenues generated from design win activity. The
results of the quarter exceeded management's prior guidance and were
better than expected due to increased sales of application-specific
integrated circuits (ASICs).
During the quarter, the Company signed three license agreements
totaling $0.9 million, all of which was recognized as revenue in the
first quarter. Engineering services contract backlog decreased to $0.5
million at April 30, 2003, compared with $0.8 million at January 31,
2003. As of April 30, 2003, the Company had $4.3 million in licensing
agreements to be recognized over the next four quarters, compared with
$6.7 million as of January 31, 2003.
Gross margin for the first quarter was 53.0 percent, down from
58.9 percent for the same quarter of the prior fiscal year, and down
from 67.1 percent in the fourth quarter of fiscal year 2003. Gross
margin declined due primarily to product mix as lower margin sales of
engineering services and ASICs contributed to a larger portion of
total revenues in the first quarter.
The Company's first quarter research and development expenses
decreased 9.5 percent to $2.3 million, or 40.3 percent of revenues,
from the previous quarter's expenses of $2.5 million, or 30.5 percent
of revenues, and $2.5 million, or 29.1 percent of revenues, in the
comparable period last year. Sales and marketing expenses were
unchanged at $1.2 million, or 20.6 percent of revenues, compared with
the previous fiscal quarter's $1.2 million, or 14.7 percent of
revenues, and $1.1 million, or 12.8 percent of revenues, in the
comparable period last year. General and administrative expenses for
the first quarter decreased to $1.0 million, or 17.1 percent of
revenues, compared with the previous fiscal quarter's $1.1 million, or
12.7 percent of revenues, and $1.3 million, or 14.9 percent of
revenues, in the comparable period last year. Included in general and
administrative expenses for the first quarter was an insurance
reimbursement in the amount of $200,000 for legal costs associated
with the dismissal of a class action lawsuit in November 2002.
During the first quarter, the Company was favorably impacted by a
gain on the sale of Netreon, Inc., a privately held developer of
storage area network software. Previously announced on February 20,
2003, the Company sold its remaining interest and recorded a $971,000
gain on the sale. Also during the first quarter, the Company realized
a $639,000 gain associated with a subtenant lease buyout.
Additionally, the Company recorded a $121,000 loss for a correction to
fiscal year 2002 accrued interest.
Net loss for the first quarter of fiscal year 2004 was $180,000,
or $0.01 per share, compared with net income of $578,000, or $0.04 per
share, for the same quarter of fiscal 2003 and net income of $528,000,
or $0.03 per share, in the previous quarter.
At April 30, 2003, days sales outstanding (DSO) for receivables
and unbilled increased to 48, compared with 23 at January 31, 2003, as
a result of several licensing transactions that occurred near the end
of the quarter. The Company concluded the first quarter with total
assets of $24.2 million, including cash and investments of $17.0
million, or $1.10 per share, down from $18.0 million as of January 31,
2003. Stockholders' equity remained level with the prior quarter at
$16.2 million.
Commenting on first quarter results, Howard J. Nellor, President
and Chief Executive Officer of Peerless Systems Corporation, said, "As
we expected, first quarter revenues declined from fourth quarter
levels, but exceeded our previous guidance range of $5.0 to $5.5
million. We ended the quarter with a strong cash and investments
balance of $17.0 million, well above our previous forecast of $16.0
million."
Mr. Nellor continued, "We continue to make significant progress in
the development of a line of high-performance color controllers used
in digital document products for the rapidly growing office workgroup
market. According to industry sources, the number of color laser
printers and multifunction office products is expected to increase
annually at a robust 30 percent over the next several years. Providing
a powerful, yet cost-effective solution, our breakthrough technology
will strongly benefit OEMs and channel customers by differentiating
the advantages to help them capitalize on this growing market
opportunity and increase their product sales.
"The Sierra technology is operational and we are well along the
sales cycle with our OEM customers," commented Mr. Nellor. "We have
moved beyond demonstrations and are now in discussions with OEMs as to
how to incorporate our Sierra architecture into their products. While
we work towards a forthcoming design win, we continue to execute our
channel opportunities, targeting initial sales of high-performance
color controllers in late 2003.
"During the quarter, we launched a new marketing initiative called
Partner to Develop to further strengthen our OEM and channel
relationships," added Mr. Nellor. "Under this program, our goal is to
better understand the technology roadmap of our customers and to
jointly develop new products and solutions. To this end, we have
merged our sales and marketing units into a single, integrated
organization. This new structure maximizes our resources and enables
us to respond quickly to our customers' needs from the initial stages
of product development through to market introduction. With Peerless,
OEMs have access to a broad range of cost-effective technologies,
supporting the widest range of device speeds and functionality. We are
committed to providing our OEM and channel customers with a
full-service Peerless team focused on assisting customers to compete
effectively in today's dynamic imaging marketplace."
Subsequent to the end of the first quarter, Peerless announced
that the first Legend printer, a 22-page per minute monochrome
printer, began shipments using Peerless' imaging software development
kit (SDK). In 2002, Legend licensed Peerless' imaging technology for
internal development of its monochrome printer products. "Peerless'
breadth of technologies and services, including our high-performance
color architecture can provide Legend with a unique foundation to
build Legend's future printer products -- from monochrome printers to
networked, high-performance contone color products. Further details
will be provided as future products using Peerless' technology are
introduced to the market," concluded Mr. Nellor.
Guidance
The Company updates its previously stated guidance and expects
second quarter revenues to be roughly similar to first quarter levels
at $5.7 million, up from previous guidance of a continued sequential
decline. After the second quarter, the Company expects revenues to
increase as it attains design wins, recognizes engineering services
revenues, receives third party licensing fees and achieves initial
channel sales. As a result, the Company expects sequential revenue
increases in the third and fourth quarters with the target of reaching
a sustainable level of profitability by the end of the fiscal year
2004 fourth quarter.
The Company believes that its cash and investments balance at
April 30, 2003 will be sufficient to fund its operations through to a
sustainable level of profitability and positive cash flow. The Company
expects to end the second quarter with cash and investments above
$14.0 million. Cash use is expected in the third quarter, but for the
full fiscal year, the Company does not anticipate cash and investments
to fall below $12.0 million on a worst case scenario. Should the
Company succeed in achieving a low level of receivables, launch its
channel product offerings on schedule and not require new engineering
staffing, the Company could end the fiscal year with cash and
investments above $14.0 million.
Peerless Systems Conference Call
Company management will hold a conference call to discuss its
first quarter fiscal year 2004 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. Please go to the web site at least 15
minutes early to register, download, and install any necessary audio
software. A replay of the webcast will be available for 30 days.
About Peerless Systems Corporation
Founded in 1982, Peerless Systems Corporation is a provider of
imaging and networking controllers 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, Kyocera/Mita, Minolta, Konica, OkiData, Ricoh, Seiko Epson
and Xerox. Peerless also maintains strategic partnerships with Adobe,
IBM Microelectronics, and Novell.
Safe Harbor Statement under the U.S. Private Securities Litigation
Reform Act of 1995
This Release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995.
The use of such words in connection with or related to any discussion
of or reference to future operations, opportunities or financial
performance sets apart forward-looking statements. In particular,
statements regarding the Company's outlook for future business,
financial performance and growth, profitability, product availability
and potential applications and successes and the impact on future
performance of organizational and operational changes all constitute
forward-looking statements.
These forward-looking statements are just predictions and best
estimations consistent with the information available to the Company
at this time. Thus they involve known and unknown risks and
uncertainties such that actual results could differ materially from
those projected in the forward-looking statements made in this
Release. Risks and uncertainties include those set forth in Peerless'
public filings with the Securities and Exchange Commission, including
but not limited to the Company's most recent Annual Report on Form
10-K dated January 31, 2003 in the Section called Risks and
Uncertainties at pages 27 through 37, inclusive, filed on May 1, 2003,
and the Company's most recent Quarterly Report on Form 10-Q dated
October 31, 2002 in the Section called Risks and Uncertainties at
pages 17 through 27, inclusive, filed on December 16, 2002.
Current and prospective stockholders are urged not to place undue
reliance on forward-looking statements, which speak only as of the
date hereof. The Company is under no obligation, and expressly
disclaims any obligation, to update or alter any forward-looking
statements, whether as a result of new information, future events or
otherwise. All forward-looking statements contained herein are
qualified in their entirety by the foregoing cautionary statements.
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Announces Its First Quarter Fiscal 2004 Earnings Conference Call Webcast
EL SEGUNDO, Calif., Jun 11, 2003 -- Peerless Systems Corporation (PRLS) announces the following Webcast:
What: Peerless Systems Corporation First Quarter Fiscal 2004 Earnings
Conference Call Webcast
When: June 12, 2003 @ 5:00 PM Eastern
Where:
How: Live over the Internet -- Simply log on to the web at the address
above.
Contact: Peerless Systems Corporation William R. Neil, 310-297-3146 or FRB/Weber Shandwick Linda Chien, 310-407-6547 (General Information) Scott Malchow, 310-407-6505 (Investor/Analyst Info.)
If you are unable to participate during the live webcast, the call will be available for replay at or
Peerless Systems Corporation, headquartered in El Segundo, California, is a provider of imaging and networking systems to the digital document markets. Digital document products include printers, copiers, fax machines, scanners and color products, 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 imaging system. Networking systems supply the core software technologies to digital document products that enable them to communicate over local area networks and the Internet.
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to headlines
Schedules First Quarter Fiscal Year 2004 Earnings Release and Conference Call
EL SEGUNDO, Calif., Jun 3, 2003 -- Peerless Systems Corporation (PRLS) , a provider of imaging and networking controllers to the digital document markets, will announce financial results for the first quarter ended April 30, 2003, after the market closes on Thursday, June 12, 2003.
A press release outlining the first quarter financial results will be distributed after the market closes on June 12, 2003. Following the release, Peerless Systems will host a conference call with a simultaneous Webcast at 5:00 p.m. Eastern (2:00 p.m. Pacific) to discuss the Company's operating performance. The conference call, featuring President and Chief Executive Officer Howard J. Nellor and Vice President, Finance and Chief Financial Officer William R. Neil, can be accessed live via the Internet at www.peerless.com or at www.vcall.com . Please go to the Web sites at least fifteen minutes early to register, download and install any necessary audio software. A replay of the Webcast will be available for 30 days.
Peerless Systems Corporation
Founded in 1982, Peerless Systems Corporation is a provider of imaging and networking controllers 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, Kyocera/Mita, Minolta, Konica, OkiData, Ricoh, Seiko Epson and Xerox. Peerless also maintains strategic partnerships with Adobe, IBM Microelectronics, and Novell. For more information, visit the Company's web site at www.peerless.com .
Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995
This release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The use of such words in connection with or related to any discussion of or reference to future operations, opportunities or financial performance sets apart forward-looking statements. In particular, statements regarding the Company's outlook for future business, financial performance and growth, profitability, product availability and potential applications and successes and the impact on future performance of organizational and operational changes all constitute forward-looking statements.
These forward-looking statements are just predictions and best estimations consistent with the information available to the Company at this time. Thus they involve known and unknown risks and uncertainties such that actual results could differ materially from those projected in the forward-looking statements made in this release. Risks and uncertainties include those set forth in Peerless' public filings with the Securities and Exchange Commission, including but not limited to the Company's most recent Annual Report on Form 10-K dated January 31, 2003, in the Section called Risks and Uncertainties at pages 27 through 37, inclusive, filed on May 1, 2003, and the Company's most recent Quarterly Report on Form 10-Q dated October 31, 2002, in the Section called Risks and Uncertainties at pages 17 through 27, inclusive, filed on December 16, 2002.
Current and prospective stockholders are urged not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company is under no obligation, and expressly disclaims any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements contained herein are qualified in their entirety by the foregoing cautionary statements.
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To Present at AeA Micro Cap Financial Conference
EL SEGUNDO, Calif., May 6, 2003--Peerless Systems
Corporation (Nasdaq:PRLS), a provider of imaging and networking
systems to the digital document markets, today announced it will be
presenting at the Fifth Annual AeA Micro Cap Financial Conference. The
conference is being held May 12-14, 2003, at the Monterey Plaza Hotel
in Monterey, California.
Howard J. Nellor, President and Chief Executive Officer, and
William R. Neil, Vice President of Finance and Chief Financial
Officer, are scheduled to present at 2:45pm PDT on Wednesday, May 14,
2003. The presentation will be broadcast live over the Internet at the
Company's web site at www.peerless.com under the Investor Relations
section. A replay will be available for 90 days.
Peerless will also be sponsoring free high-speed Internet access
and free use of its MagicPrint(TM) Internet printing solution during
the conference.
About Peerless Systems Corporation
Founded in 1982, Peerless Systems Corporation is a provider of
imaging and networking systems 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
system. 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,
Kyocera/Mita, Minolta, Konica, OkiData, Ricoh, Seiko Epson and Xerox.
Peerless also maintains strategic partnerships with Adobe, IBM
Microelectronics, and Novell.
Safe Harbor Statement under the U.S. Private Securities Litigation
Reform Act of 1995
This Release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995.
The use of such words in connection with or related to any discussion
of or reference to future operations, opportunities or financial
performance sets apart forward-looking statements. In particular,
statements regarding the Company's outlook for future business,
financial performance and growth, profitability, product availability
and potential applications and successes and the impact on future
performance of organizational and operational changes all constitute
forward-looking statements.
These forward-looking statements are just predictions and best
estimations consistent with the information available to the Company
at this time. Thus they involve known and unknown risks and
uncertainties such that actual results could differ materially from
those projected in the forward-looking statements made in this
Release. Risks and uncertainties include those set forth in Peerless'
public filings with the Securities and Exchange Commission, including
but not limited to the Company's most recent Annual Report on Form
10-K dated January 31, 2003 in the Section called Risks and
Uncertainties at pages 27 through 37, inclusive, filed on May 1, 2003,
and the Company's most recent Quarterly Report on Form 10-Q dated
October 31, 2002 in the Section called Risks and Uncertainties at
pages 17 through 27, inclusive, filed on December 16, 2002.
Current and prospective stockholders are urged not to place undue
reliance on forward-looking statements, which speak only as of the
date hereof. The Company is under no obligation, and expressly
disclaims any obligation, to update or alter any forward-looking
statements, whether as a result of new information, future events or
otherwise. All forward-looking statements contained herein are
qualified in their entirety by the foregoing cautionary statements.
FRB/Weber Shandwick serves as financial relations counsel to this
company, is acting on the company's behalf in issuing this bulletin
and is receiving compensation therefor.
The information contained herein is furnished for informational
purposes only and is not to be construed as an offer to buy or sell
securities.
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Reports Fourth Quarter and Fiscal Year 2003 Results
EL SEGUNDO, Calif., March 20, 2003--Peerless Systems Corporation (Nasdaq: PRLS):
Selected Fourth Quarter Highlights:
Increased revenues year-over-year and sequentially
Achieved profit for quarter and year versus prior year losses
Improved cash and investments balance to $18.0 million
Signed two license agreements totaling $6.2 million
Focused sales and marketing teams to further penetrate OEMs and channels
Peerless Systems Corporation (Nasdaq: PRLS), a provider of imaging and networking systems to the digital document markets, today reported financial results for the fourth quarter and fiscal year 2003 ended January 31, 2003.
Fourth Quarter 2003 Results
For the fourth fiscal quarter ended January 31, 2003, the Company reported revenues of $8.3 million, a 3.1 percent increase from $8.0 million for the same quarter of the prior fiscal year, and a sequential increase of 6.6 percent from $7.8 million reported in the previous quarter. The increase in revenues was due primarily to higher levels of licensing fees, which more than offset a small decline in engineering services revenues. During the quarter, the Company signed and collected a renewal of a $2.25 million annual license agreement. Additionally, Peerless signed a new $3.5 million license agreement, with $700,000 recognized in the fourth quarter and the remainder to be recognized over the next five quarters.
Engineering services contract backlog increased to $0.8 million at January 31, 2003, compared with $0.6 million at October 31, 2002, and $0.5 million at January 31, 2002. As of January 31, 2003, the Company had $6.7 million in licensing agreements to be recognized over the next five quarters, compared with $6.4 million as of October 31, 2002, and $7.1 million as of January 31, 2002.
Gross margin for the fourth quarter was 67.1 percent, down from 68.4 percent for the same quarter of the previous fiscal year, and up from 64.0 percent in the third quarter of fiscal year 2003. The change from last year's fourth quarter was a result of the increase in third party licensing costs, and the change on a sequential basis was a result of this year's $2.25 million annual license agreement, which has no third party licensing cost. The Company's fourth quarter research and development expenses increased 10.7 percent to $2.5 million, or 30.5 percent of revenues, from the previous quarter's expenses of $2.3 million, or 29.4 percent of revenues. The increase was the result of higher development costs associated with the Company's high-performance color products. Sales and marketing expenses in the fourth fiscal quarter were $1.2 million, or 14.7 percent of revenues, compared with the previous fiscal quarter's $1.1 million, or 14.7 percent of revenues. General and administrative expenses for the quarter decreased to $1.1 million, or 12.8 percent of revenues, from $1.2 million, or 15.5 percent of revenues, reported for the third quarter of fiscal year 2003.
Net income increased significantly in the fourth quarter of fiscal year 2003 to $528,000, or $0.03 per share, compared with a net loss of $2.5 million, or $0.16 per share, for the same quarter of fiscal 2002. Sequentially, the Company's net income tripled from a net income of $180,000, or $0.01 per share in the third quarter of fiscal year 2003.
At January 31, 2003, days sales outstanding (DSO) for receivables and unbilled decreased considerably to 23, compared with DSOs of 42 at October 31, 2002. The decrease in DSOs was a result of the collection in the fourth quarter of the annual license agreement, which represented 27.1% of fourth quarter revenues. The Company ended the quarter with total assets of $24.1 million. This included cash and investments of $18.0 million, compared with $14.7 million as of January 31, 2002. Stockholders' equity totaled $16.2 million.
Additionally, during the fourth quarter, the Company announced that on November 12, 2002, the United States District Court for the Southern District of California dismissed the shareholder class action lawsuit against the Company and two of its former officers. Plaintiffs voluntarily withdrew their suit and no consideration was provided by the Company or its former officers.
Commenting on fourth quarter results, Howard J. Nellor, President and Chief Executive Officer of Peerless Systems Corporation, said, "We are very pleased with our fourth quarter performance. As expected, we posted a profit and achieved a sequential revenue increase. Both gross margin and operating margin were higher than the previous quarter. Additionally, we generated cash of $1.6 million for the quarter and strengthened our cash position to $18 million."
Mr. Nellor continued, "Our strategy remains focused on the development of a line of high-performance color controllers targeting the office workgroup market. Responses to these products have been highly enthusiastic and we continue to work with OEMs to fine-tune the level of performance and functionality to meet their needs. However, we find that macro-economic conditions continue to delay the OEM decision making process."
"Although we didn't achieve the anticipated design win during the fourth quarter, we expect to see our first win in the second quarter of fiscal year 2004. We revamped our sales and marketing organization and strategy to ensure improved performance going forward. We have added several experienced staff and improved our marketing strategy to focus on the needs of the market both at the OEM and channel levels. Our sales and marketing teams are primed and ready to launch our new color technology and product into the marketplace and to penetrate new channels and geographical markets."
Fiscal Year 2003 Results
For the twelve months ended January 31, 2003, revenues were $31.8 million, a 6.7 percent increase from $29.8 million reported for the fiscal year 2002. The increase in revenues was primarily attributable to higher product licensing fees, which offset lower levels of engineering services revenues and sales of application specific integrated circuits.
Gross margin for the fiscal year 2003 improved to 62.0 percent from 55.6 percent for the prior fiscal year. Research and development expenses declined to $9.8 million, or 30.8 percent of revenues, from $13.6 million, or 45.8 percent of revenues, for the fiscal year 2002. The decrease was primarily a result of the Netreon divestiture. Sales and marketing expenses for the year were $4.6 million, or 14.3 percent of revenues, lower than the fiscal year 2002 amount of $6.0 million, or 20.2 percent of revenues as a result of the Netreon divestiture. General and administrative expenses also decreased to $5.1 million, or 16.1 percent of revenues, from $6.9 million, or 23.0 percent of revenues, reported for the fiscal year 2002. Impacting general and administrative expenses for the fiscal year 2003 was a write-off of approximately $700,000 for a reduction in office space at the Company's headquarters, which was partially offset by a recovery and reduction of legal expenses. Lower legal expenses were the result of the successful resolution of all legal matters during fiscal year 2003.
The Company achieved profitability for the fiscal year 2003 versus a net loss for the prior fiscal year. The net income for the year was $124,000, or $0.01 per share, compared with a net loss of $11.0 million, or $0.73 per share, for the fiscal year 2002. Prior year results included two non-recurring items that offset each other: other income of $2.3 million from the settlement of a lawsuit and a loss on divestiture of the Company's storage operations in the amount of $2.3 million.
Subsequent to the end of fiscal year 2003, the Company announced on February 20, 2003, that it had sold its remaining interest in Netreon, a privately-held developer of storage area network software. Peerless will record a gain of approximately $950,000, net of expenses associated with this transaction, which will be reflected in the Company's fiscal year 2004 first quarter results ending April 30, 2003.
Guidance
Peerless' strong fourth quarter results create a difficult performance comparison for the following first quarter. Based on the Company's current expectations of the timing of license agreements, fiscal year 2004 first quarter revenues are estimated to decline 35 to 40 percent to the $5.0 to $5.5 million range. Second quarter revenues are expected to be at the same level or slightly down to the first quarter. After the second quarter, the Company expects revenues to rebound as it attains design wins, recognizes engineering services revenues associated with the design wins and required product customization, and achieves initial channel sales. As a result, the Company expects sequential revenue increases in the third and fourth quarters with the target of reaching a sustainable level of profitability by the end of the fiscal year 2004 fourth quarter.
The Company believes that the cash and investments amounts on hand at January 31, 2003, will be sufficient to fund its operations through to a sustainable level of profitability and positive cash flow. The Company expects to end the first quarter ending April 30, 2003, with cash and investments above $16 million. For the full fiscal year, the Company does not expect cash and investments to fall below $12 million on a worst case basis. Should the Company succeed in maintaining a low level of receivables, launch its channel product offerings early and not require the anticipated level of new engineering staffing, the Company could end the year with cash and investments above $14 million.
Peerless Systems Conference Call
Company management will hold a conference call to discuss its fourth quarter and fiscal year 2003 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 . Please go to the web site at least 15 minutes early to register, download, and install any necessary audio software. A replay of the webcast will be available for 30 days.
About Peerless Systems Corporation
Peerless Systems Corporation, headquartered in El Segundo, California, is a provider of imaging and networking systems to the digital document markets. Digital document products include printers, copiers, fax machines, scanners and color products, 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 imaging system. Networking systems supply the core software technologies to digital document products that enable them to communicate over local area networks and the Internet.
Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995
This Release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The use of such words including "are expected," "are estimated," "believes," "continue to work," "could end the year," "expects," "expects to end," "focused on development," "if the Company succeeds," "ready to launch," "ensure improved performance going forward," and "will be sufficient," in connection with or related to any discussion of or reference to future operations, opportunities or financial performance sets apart forward-looking statements. In particular, statements regarding the Company's outlook for future business, financial performance and growth, profitability, product availability and potential applications and successes and the impact on future performance of organizational and operational changes all constitute forward-looking statements.
These forward-looking statements are just predictions and best estimations consistent with the information available to the Company at this time. Thus they involve known and unknown risks and uncertainties such that actual results could differ materially from those projected in the forward-looking statements made in this release. Risks and uncertainties include those set forth in Peerless' public filings with the Securities and Exchange Commission, including but not limited to the Company's most recent Annual Report on Form 10-K dated January 31, 2002, in the Section called Risks and Uncertainties at pages 28 through 38, inclusive, filed on May 1, 2002, and the Company's most recent Quarterly Report on Form 10-Q dated October 31, 2002, in the Section called Risks and Uncertainties at pages 17 through 27, inclusive, filed on December 16, 2002.
Current and prospective stockholders are urged not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company is under no obligation, and expressly disclaims any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements contained herein are qualified in their entirety by the foregoing cautionary statements.
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To Present at B. Riley & Co. Investor Conference
EL SEGUNDO, Calif., March 12, 2003--Peerless
Systems Corporation (Nasdaq:PRLS), a provider of imaging and
networking systems to the digital document markets, today announced
that the Company will present at the Fourth Annual B. Riley & Co.
Investor Conference. The conference is being held at the Marriott Los
Angeles Airport Hotel on March 13, 2003. Howard J. Nellor, Chief
Executive Officer and President, and William R. Neil, Chief Financial
Officer and Vice President of Finance, are scheduled to present at
2:40pm PST in the Scottsdale room.
This call is being webcast by CCBN and can be accessed at the
Company's web site at www.peerless.com.
Peerless Systems Corporation, headquartered in El Segundo,
California, is a provider of imaging and networking systems to the
digital document markets. Digital document products include printers,
copiers, fax machines, scanners and color products, 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 imaging system.
Networking systems supply the core software technologies to digital
document products that enable them to communicate over local area
networks and the Internet.
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Schedules Fourth Quarter and Fiscal Year 2003 Earnings Release and Conference Call
EL SEGUNDO, Calif., March 11, 2003--Peerless
Systems Corporation (NASDAQ:PRLS), a provider of imaging and
networking systems to the digital document markets, will announce
financial results for the fourth quarter and fiscal year 2003 ended
January 31, 2003 after the market closes on Thursday, March 20, 2003.
A press release outlining the fourth quarter and fiscal year 2003
financial results will be distributed after the market closes on March
20, 2003. Following the release, Peerless Systems will host a
conference call with a simultaneous Webcast at 5:00 p.m. Eastern (2:00
p.m. Pacific) to discuss the Company's operating performance. The
conference call, featuring President and Chief Executive Officer
Howard J. Nellor and Vice President, Finance and Chief Financial
Officer William R. Neil, can be accessed live via the Internet at
www.peerless.com or at www.vcall.com. Please go to the Web sites at
least fifteen minutes early to register, download and install any
necessary audio software. A replay of the Webcast will be available
for 30 days.
About Peerless Systems Corporation
Peerless Systems Corporation, headquartered in El Segundo,
California, is a provider of imaging and networking systems to the
digital document markets. Digital document products include printers,
copiers, fax machines, scanners and color products, 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 imaging system.
Networking systems supply the core software technologies to digital
document products that enable them to communicate over local area
networks and the Internet.
Safe Harbor Statement under the U.S. Private Securities Litigation
Reform Act of 1995
This Release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995.
The use of such words in connection with or related to any discussion
of or reference to future operations, opportunities or financial
performance sets apart forward-looking statements. In particular,
statements regarding the Company's outlook for future business,
financial performance and growth, profitability, product availability
and potential applications and successes and the impact on future
performance of organizational and operational changes all constitute
forward-looking statements.
These forward-looking statements are just predictions and best
estimations consistent with the information available to the Company
at this time. Thus they involve known and unknown risks and
uncertainties such that actual results could differ materially from
those projected in the forward-looking statements made in this
release. Risks and uncertainties include those set forth in Peerless'
public filings with the Securities and Exchange Commission, including
but not limited to the Company's most recent Annual Report on Form
10-K dated January 31, 2002 in the Section called Risks and
Uncertainties at pages 28 through 38, inclusive, filed on May 1, 2002,
and the Company's most recent Quarterly Report on Form 10-Q dated
October 31, 2002 in the Section called Risks and Uncertainties at
pages 17 through 27, inclusive, filed on December 16, 2002.
Current and prospective stockholders are urged not to place undue
reliance on forward-looking statements, which speak only as of the
date hereof. The Company is under no obligation, and expressly
disclaims any obligation, to update or alter any forward-looking
statements, whether as a result of new information, future events or
otherwise. All forward-looking statements contained herein are
qualified in their entirety by the foregoing cautionary statements.
FRB/Weber Shandwick serves as financial relations counsel to this
company, is acting on the company's behalf in issuing this bulletin
and is receiving compensation therefor.
The information contained herein is furnished for informational
purposes only and is not to be construed as an offer to buy or sell
securities.
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To Present at B. Riley & Co. Investor Conference
EL SEGUNDO, Calif., March 6, 2003--Peerless
Systems Corporation (Nasdaq:PRLS), a provider of imaging and
networking systems to the digital document markets, today announced
that the Company will present at the Fourth Annual B. Riley & Co.
Investor Conference. The conference is being held at the Marriott Los
Angeles Airport Hotel on March 13, 2003. Howard J. Nellor, Chief
Executive Officer and President, and William R. Neil, Chief Financial
Officer and Vice President of Finance, are scheduled to present at
2:40 p.m. PST in the Scottsdale room.
The presentation will be broadcast live over the Internet at the
Company's web site at www.peerless.com under the Investor Relations
section. A replay will be available for 60 days.
About Peerless Systems Corporation
Peerless Systems Corporation, headquartered in El Segundo,
California, is a provider of imaging and networking systems to the
digital document markets. Digital document products include printers,
copiers, fax machines, scanners and color products, 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 imaging system.
Networking systems supply the core software technologies to digital
document products that enable them to communicate over local area
networks and the Internet.
Safe Harbor Statement under the U.S. Private Securities Litigation
Reform Act of 1995
This release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995.
The use of such words in connection with or related to any discussion
of or reference to future operations, opportunities or financial
performance sets apart forward-looking statements. In particular,
statements regarding the Company's outlook for future business,
financial performance and growth, profitability, product availability
and potential applications and successes and the impact on future
performance of organizational and operational changes all constitute
forward-looking statements.
These forward-looking statements are just predictions and best
estimations consistent with the information available to the Company
at this time. Thus they involve known and unknown risks and
uncertainties such that actual results could differ materially from
those projected in the forward-looking statements made in this
release. Risks and uncertainties include those set forth in Peerless'
public filings with the Securities and Exchange Commission, including
but not limited to the Company's most recent Annual Report on Form
10-K dated January 31, 2002, in the Section called "Risks and
Uncertainties" at pages 28 through 38, inclusive, filed on May 1,
2002, and the Company's most recent Quarterly Report on Form 10-Q
dated October 31, 2002, in the Section called "Risks and
Uncertainties" at pages 17 through 27, inclusive, filed on December
16, 2002.
Current and prospective stockholders are urged not to place undue
reliance on forward-looking statements, which speak only as of the
date hereof. The Company is under no obligation, and expressly
disclaims any obligation, to update or alter any forward-looking
statements, whether as a result of new information, future events or
otherwise. All forward-looking statements contained herein are
qualified in their entirety by the foregoing cautionary statements.
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Announces Sale of Its Remaining Interest in Netreon
EL SEGUNDO, Calif., February 20, 2003--Peerless
Systems Corporation (Nasdaq:PRLS), a provider of imaging and
networking systems to the digital document markets, today announced
the sale of its remaining interest in Netreon, Inc., a privately-held
developer of storage area network software.
In June 1999, Peerless acquired Auco, Inc., which became a
wholly-owned subsidiary of Peerless and was named Netreon. On January
29, 2002, Peerless sold Netreon to a group of investors led by
Netreon's management. Following the divestiture, Peerless continued to
hold an approximately 30% fully diluted minority interest in Netreon.
On February 5, 2003, Computer Associates International, Inc.
announced that it had acquired substantially all of the assets of
Netreon. Concurrently with the acquisition of Netreon by Computer
Associates, Peerless sold the entirety of its interest in Netreon to
Netreon for $1,000,000 in cash. As part of Peerless' sale of its
Netreon interest, Netreon and Computer Associates both released
Peerless from any future legal claims. Peerless will record a gain of
approximately $950,000, net of expenses associated with this
transaction, which will be reflected in Peerless' first quarter
results ending April 30, 2003.
Howard Nellor, CEO and President of Peerless, stated, "We are
pleased that we have seen the successful sale of our remaining Netreon
interest. With this sale, Peerless has increased its financial
capability to execute its entry into the high performance color
imaging market. Given the current economic environment, we believe
this transaction was a winning outcome for all parties involved."
About Peerless Systems Corporation
Peerless Systems Corporation, headquartered in El Segundo,
California, is a provider of imaging and networking systems to the
digital document markets. Digital document products include printers,
copiers, fax machines, scanners and color products, 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 imaging system.
Networking systems supply the core software technologies to digital
document products that enable them to communicate over local area
networks and the Internet.
Safe Harbor Statement under the U.S. Private Securities Litigation
Reform Act of 1995
This Release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995.
The use of such words in connection with or related to any discussion
of or reference to future operations, opportunities or financial
performance sets apart forward-looking statements. In particular,
statements regarding the Company's outlook for future business,
financial performance and growth, profitability, product availability
and potential applications and successes and the impact on future
performance of organizational and operational changes all constitute
forward-looking statements.
These forward-looking statements are just predictions and best
estimations consistent with the information available to the Company
at this time. Thus they involve known and unknown risks and
uncertainties such that actual results could differ materially from
those projected in the forward-looking statements made in this
release. Risks and uncertainties include those set forth in Peerless'
public filings with the Securities and Exchange Commission, including
but not limited to the Company's most recent Annual Report on Form
10-K dated January 31, 2002 in the Section called Risks and
Uncertainties at pages 28 through 38, inclusive, filed on May 1, 2002,
and the Company's most recent Quarterly Report on Form 10-Q dated
October 31, 2002 in the Section called Risks and Uncertainties at
pages 17 through 27, inclusive, filed on December 16, 2002.
Current and prospective stockholders are urged not to place undue
reliance on forward-looking statements, which speak only as of the
date hereof. The Company is under no obligation, and expressly
disclaims any obligation, to update or alter any forward-looking
statements, whether as a result of new information, future events or
otherwise. All forward-looking statements contained herein are
qualified in their entirety by the foregoing cautionary statements.
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Reports
Revenue Increase for Fiscal 2003 Third Quarter
EL SEGUNDO,
Calif., December 3, 2002 -- Peerless Systems Corporation (Nasdaq:PRLS),
a provider of imaging and networking systems to the digital
document markets, today reported financial results for the third
quarter and first nine months of fiscal year 2003.
Third-Quarter Revenues Ahead of Target
For the third fiscal quarter ended October 31, 2002, the Company
reported revenues of $7.8 million, a 1.2 percent increase from $7.7
million for the same quarter of fiscal 2002, and a sequential increase
of 9.6 percent from $7.1 million reported in the previous quarter.
During the quarter, the Company signed a $5 million block license
agreement and a $400,000 license agreement, with Peerless recognizing
$1.5 million and $121,000 in revenue, respectively, in the quarter.
The increase in engineering services revenues was a result of
completing a development contract ahead of schedule. The Company also
benefited from continuing strong sales of its ASIC devices.
Engineering services' contract backlog was $0.6 million at October
31, 2002, compared with $1.5 million at July 31, 2002, and $0.7
million at October 31, 2001. As of October 31, 2002, the Company had
$6.4 million in licensing agreements to be recognized over the next
four quarters, compared with $4.4 million as of July 31, 2002, and
$4.3 million as of October 31, 2001.
Margin Enhancement Generates Profit
Gross margin for the third quarter improved significantly to 64.0
percent from 59.8 percent for the same quarter of the previous fiscal
year, and 57.6 percent in the second quarter of fiscal year 2003. The
improvement in gross margin was largely the result of the engineering
services project that was completed early and under previously
estimated costs, and which drove down the cost of goods sold for the
engineering services.
Third-quarter research and development expenses decreased 6.7
percent to $2.3 million, or 29.4 percent of revenues, from the
previous quarter's expenses of $2.4 million, or 34.5 percent of
revenues. The decline was the result of a decreased level of outside
development costs associated with the Company's high-performance color
products and a reduction in contract labor use. Sales and marketing
expenses in the third fiscal quarter were $1.1 million, or 14.7
percent of revenues, compared with the previous fiscal quarter's $1.1
million, or 15.6 percent of revenues. General and administrative
expenses for the quarter were $1.2 million, or 15.5 percent of
revenues, which decreased from $1.6 million, or 22.2 percent of
revenues, reported for the second quarter of fiscal year 2003. The
second quarter's general and administrative expenses included a
write-off of approximately $700,000 for a reduction in office space
located at the Company's headquarters, partially offset by a recovery
of legal expenses.
Peerless posted a profit compared with losses in the third quarter
of fiscal 2002 and this fiscal year's second quarter. Net income was
$180,000, or $0.01 per share, compared with a net loss of $2.7
million, or $0.18 per share, for the third quarter of fiscal 2002, and
a net loss of $1.2 million, or $0.08 per share, for the prior quarter.
Financial Performance Drives Positive Cash Flow
At October 31, 2002, days sales outstanding (DSO) for receivables
and unbilled were 42, compared with DSOs of 52 at July 31, 2002. The
Company had total assets of $24.1 million. This included cash and
investments of $16.4 million, compared with $14.7 million as of
January 31, 2002. Stockholders' equity totaled $15.7 million.
Product Family Expansion to Drive Future Results
"We are very pleased to report these results, which exceeded our
expectations," said Howard Nellor, President and Chief Executive
Officer of Peerless Systems Corporation. "We managed our expenses
well, our revenues came in higher than expected and our gross margin
improvement was exceptional. We are also seeing the direct benefits of
our improved marketing organization as we focus our resources on
developing exciting additions to our product family."
Mr. Nellor noted that Steve Robinson, Peerless' new vice president
of marketing, was an important addition to the management team. "Steve
has begun to refresh our marketing strategy and develop new
relationships. He has a proven track record in the office automation
industry, and will be instrumental in implementing our channel
strategy," he added.
Mr. Nellor continued, "Over the course of the quarter, we
introduced an innovative, high-performance color controller
Application Program Interface that we expect will open new
opportunities because of its appeal to OEMs, VARs, resellers and
third-party developers.
"We continue to be enthusiastic about our high-performance color
architecture, and our enthusiasm was affirmed when we demonstrated
Sierra at recent trade shows. Sierra generated a high level of
interest that exceeded our high expectations and makes us optimistic
that we could see a design win as early as this quarter with licensing
revenues expected around the fourth quarter of fiscal 2004. After that
initial design win, our goal is to have one Sierra design win
quarterly."
Nine-Month Results
For the nine months ended October 31, 2002, revenues were $23.5
million, an 8.0 percent increase from $21.7 million reported for the
same period of the prior fiscal year. The increase from the year-ago
period was due primarily to higher product licensing fees.
Gross margin for the nine months ended October 31, 2002, improved
to 60.2 percent from 50.8 percent for the same period of the previous
fiscal year. Research and development expenses declined to $7.2
million, or 30.9 percent of revenues, from the previous nine-month
period's $10.3 million, or 47.4 percent of revenues. The decrease was
primarily a result of the divestiture of the Company's Netreon storage
operation. Sales and marketing expenses in the recent nine-month
period were $3.3 million, or 14.2 percent of revenues, lower than the
year-ago nine-month period's $4.4 million, or 20.3 percent of
revenues. General and administrative expenses were $4.1 million, or
17.3 percent of revenues, which decreased from $6.2 million, or 28.3
percent of revenues, reported for the fiscal 2002 nine-month period.
The net loss for the first nine months of fiscal 2003 narrowed to
$404,000, or $0.03 per share, compared with a net loss of $8.5
million, or $0.57 per share, for the first nine months of last fiscal
year.
Guidance
According to William Neil, vice president and chief financial
officer, Peerless expects to sign an annual license agreement of
Peerless intellectual property comparable to last year's $2.0 million
annual license agreement with the same OEM, together with two
quarterly license agreements for recently introduced products totaling
approximately $0.9 million in the fourth quarter fiscal 2003. With
these anticipated license agreements, the Company expects to be
profitable on a sequential revenue increase for the fourth quarter
with gross margin above 70 percent, and with operating expenses
approximately 30 percent below fiscal 2002 levels mostly as a result
of the Netreon divestiture. The Company expects to end the fiscal year
with cash and investments above $15 million, up from previous
estimates of $13 million. Previously, Peerless anticipated a decline
in sequential fourth-quarter revenues and a per-share loss of $0.02 to
$0.05.
If the annual license agreement referred to above is not signed
this quarter, the OEM would pay on a per unit basis with the revenues
being recognized on a quarterly basis next fiscal year. This year's
fourth quarter revenues, profitability and year-end cash position
would then be negatively impacted by an amount in excess of $2.0
million.
As to Peerless' revenue and profit expectations for fiscal 2004,
Mr. Neil pointed out that while the one-time annual license agreement
fee will boost fiscal 2003 fourth quarter results if it is timely
signed, it will result in a tough comparable for the following first
quarter. Fiscal 2004 first quarter revenues should be down
approximately 35 percent to 40 percent. Going forward from the first
quarter of fiscal 2004, subject to the timing of block licensing
renewals and Sierra design wins, the Company expects that revenues
will rebound in the second quarter to around the $7 million level.
After the second quarter the Company expects to see revenues to
continue to increase as a result of the launching of Sierra products
into the marketplace and from the penetration of new channels and
geographical markets. Should Peerless achieve the expected design wins
and successfully launch Sierra into the sales channel marketplace,
Peerless believes it will reach sustained profitably by the end of the
fiscal 2004 fourth quarter.
Peerless Systems Conference Call
Company management will hold a conference call to discuss its
third-quarter and nine-month fiscal 2003 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. Please go to the web site
at least 15 minutes early to register, download, and install any
necessary audio software. A replay of the webcast will be available
for 30 days.
About Peerless Systems Corporation
Peerless Systems Corporation, headquartered in El Segundo,
California, is a provider of imaging and networking systems to the
digital document markets. Digital document products include printers,
copiers, fax machines, scanners and color products, 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. Embedded networking systems supply the core software
technologies to digital document products that enable them to
communicate over local area networks and the Internet.
Safe Harbor Statement under the U.S. Private Securities Litigation
Reform Act of 1995
This Release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995.
Statements prompted by, qualified by or made in connection with such
words as "believes," "continue to be enthusiastic," "developing
exciting additions," "does not expect to," "expansion to drive future
results," "expects to," "implementing our channel strategy," "makes us
optimistic," "new," "now expects to be profitable," "on returning to
sustained profitability," "our goal is," "over the course," "raised
its guidance," "to be recognized," "should achieve," "we focus our
resources," "we could see," "we expect," "will rebound," "will be
instrumental," "will result," "will reach," and words of similar
substance signal forward-looking statements. Likewise, the use of such
words in connection with or related to any discussion of or reference
to the Company's future business operations, opportunities or
financial performance sets apart forward-looking statements.
In particular, statements regarding the Company's outlook for
future business, financial performance and growth, including revenue
and cash balances, both quarterly, annually and from specific sources,
profit, spending, including spending on research and development
efforts, costs, margins and the Company's cash position, as well as
statements regarding expectations for the embedded imaging market, new
product development and offerings, customer demand for the Company's
products and services, market demand for products incorporating the
Company's technology, future prospects of the Company, and the impact
on future performance of organizational and operational changes; all
constitute forward-looking statements.
These forward-looking statements are just estimations based upon
the information available to the Company at this time. Thus they
involve known and unknown risks and uncertainties such that actual
results could differ materially from those set forth in the
forward-looking statements made in this Release. Risks and
uncertainties include, but are not limited to: a) changes in the
marketplaces in which the Company offers its products; b) the failure
of Peerless' business strategy for the rendering of complex color
images on a high speed virtual engine (high performance color
products) to produce the desired financial results; c) the failure of
Peerless to maintain its margins due to changes in its business model
in reaction to competitive pressures; d) the delay in or the
non-acceptance by the market of new product and technology offerings;
e) the inability of the Company to retain and attract the technical
talent to compete effectively in the marketplace for imaging; f) the
failure of Peerless' markets to achieve anticipated growth rates; g)
unfavorable economic conditions resulting in decreased demand for
original equipment manufacturers' ("OEMs") products using Peerless'
technology, making it difficult for the Company to obtain new
licensing agreements; h) OEMs' determinations not to proceed with
development of products using Peerless' current and new technology and
product offerings due to, among other things, changes in the demand
for anticipated OEM products, age of Peerless' technology, concerns
about Peerless' financial position and Peerless' competitors offering
alternative solutions; i) Peerless' competitors coming to market with
new products or alternative solutions that are superior or available
at a lower cost or earlier than anticipated or believed to be
possible; j) the markets in imaging and networking may not grow to
anticipated levels; k) the costs associated with the development and
marketing of products for imaging and networking may be higher than
currently forecasted; l) changes in demand for the Company's products
and services based on market conditions and the competitiveness of
Peerless' products from both technological and pricing perspectives;
m) the Company's inability to maintain or further improve operating
efficiencies or to further streamline operations; n) the impact on the
Company's financials of any future need to expand the organization to
meet customer or market demands; o) continuing unfavorable world-wide
economic conditions exacerbated by the terrorist attacks on the
worldwide business and the financial infrastructure; p) incremental
costs of operations arising out of the change in the law
(Sarbanes-Oxley Act of 2002) regarding corporate governance, financial
disclosure, auditor independence, corporate fraud and the accounting
profession in general, and q) other factors affecting Peerless'
business and the forward-looking statements set forth herein, which
risks and uncertainties are described more fully from time to time in
Peerless' public filings with the Securities and Exchange Commission,
including but not limited to the Company's most recent Annual Report
on Form 10-K for the year ending January 31, 2002 in the Section
called Risks and Uncertainties at pages 28 through 38, inclusive,
filed on May 1, 2002, and the Company's most recent Quarterly Report
on Form 10-Q for the quarter ending July 31, 2002 in the Section
called Risks and Uncertainties at pages 16 through 26, inclusive,
filed on September 16, 2002.
Current and prospective stockholders are urged not to place undue
reliance on forward-looking statements, which speak only as of the
date hereof. The Company is under no obligation, and expressly
disclaims any obligation, to update or alter any forward-looking
statements, whether as a result of new information, future events or
otherwise. All forward-looking statements contained herein are
qualified in their entirety by the foregoing cautionary statements.
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Announces Dismissal
of Class Action Lawsuit
EL SEGUNDO, Calif., November 26, 2002 -- Peerless Systems
Corporation (Nasdaq:PRLS), a provider of imaging and networking
systems to the digital document markets, today announced that
on November 12, 2002, in the United States District Court
for the Southern District of California, the Court entered
a stipulation of voluntary dismissal and order dismissing
the shareholder class action suit in its entirety. The dismissal
is without prejudice to the rights of individuals to pursue
separate claims.
As previously disclosed, a shareholder class action lawsuit
was filed on August 28, 2000 against the Company and two of
its former officers in the United States District Court for
the Southern District of California. Plaintiffs submitted
the voluntarily dismissal of the action against the Company
and its former officers. No consideration has been provided
by the Company or its former officers, and each side is to
bear its own costs.
"It is with great pleasure that I can announce that the lawsuit
has been dismissed," said Howard J. Nellor, President and
Chief Executive Officer of Peerless Systems. "We are delighted
with this result and can now devote all of our resources to
aggressively moving forward with our corporate objectives."
About Peerless Systems Corporation
Peerless Systems Corporation, headquartered in El Segundo,
California, is a provider of imaging and networking systems
to the digital document markets. Digital document products
include printers, copiers, fax machines, scanners and color
products, 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 imaging system. Networking systems
supply the core software technologies to digital document
products that enable them to communicate over local area networks
and the Internet.
For more information, visit the Company's Web site at www.peerless.com.
Safe Harbor Statement under the U.S. Private Securities Litigation
Reform Act of 1995: This Release contains forward-looking
statements within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. The use of such words in connection
with or related to any discussion of or reference to future
operations, opportunities or financial performance sets apart
forward-looking statements. In particular, statements regarding
the Company's outlook for future business, financial performance
and growth, profitability, product availability and potential
applications and successes and the impact on future performance
of organizational and operational changes all constitute forward-looking
statements.
These forward-looking statements are just predictions and
best estimations consistent with the information available
to the Company at this time. Thus they involve known and unknown
risks and uncertainties such that actual results could differ
materially from those projected in the forward-looking statements
made in this release. Risks and uncertainties include those
set forth in Peerless' public filings with the Securities
and Exchange Commission, including but not limited to the
Company's most recent Annual Report on Form 10-K dated January
31, 2002 in the Section called Risks and Uncertainties at
pages 28 through 38, inclusive, filed on May 1, 2002, and
the Company's most recent Quarterly Report on Form 10-Q dated
July 31, 2002 in the Section called Risks and Uncertainties
at pages 16 through 26, inclusive, filed on September 16,
2002.
Current and prospective stockholders are urged not to place
undue reliance on forward-looking statements, which speak
only as of the date hereof. The Company is under no obligation,
and expressly disclaims any obligation, to update or alter
any forward-looking statements, whether as a result of new
information, future events or otherwise. All forward-looking
statements contained herein are qualified in their entirety
by the foregoing cautionary statements.
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Schedules Third
Quarter Earnings Release and Conference Call
EL SEGUNDO, Calif., November 20, 2002 -- Peerless Systems
Corporation (Nasdaq:PRLS), a provider of embedded imaging
and networking systems, will announce financial results for
the third fiscal quarter ended October 31, 2002 after the
market closes on Tuesday, December 3, 2002.
A press release outlining the third quarter financial results
will be distributed after the market closes on December 3,
2002. Following the release, Peerless Systems will host a
conference call with a simultaneous Webcast at 5:00 p.m. Eastern
(2:00 p.m. Pacific) to discuss the Company's third quarter
operating performance. The conference call, featuring President
and Chief Executive Officer Howard Nellor and Vice President,
Finance and Chief Financial Officer William Neil, can be accessed
live via the Internet at www.peerless.com or at www.vcall.com.
Please go to the Web sites at least fifteen minutes early
to register, download, and install any necessary audio software.
A replay of the Webcast will be available for 30 days.
Peerless Systems' corporate press releases are available
on the Company's Web site at www.peerless.com.
About Peerless Systems Corporation
Headquartered in El Segundo, CA, Peerless Systems Corporation
is a provider of imaging and networking systems to manufacturers
of color, monochrome and multifunction office products and
digital appliances. Its broad line of scalable software and
silicon offerings and its unique ImageWorks(TM) delivery model
enable Peerless Systems' customers to shorten their time-to-market
and reduce costs by offering a single, scalable solution for
multiple products.
Peerless Systems Corporation was founded in 1982 and has
been listed on the Nasdaq Market since 1996. Peerless Systems
maintains relationships with many OEMs of digital document
products. Its customer base includes blue chip companies such
as Canon, IBM, Kyocera, Minolta, Ricoh, Seiko Epson, Xerox
and other international corporations. Peerless Systems also
holds strategic partnerships with Adobe, IBM Microelectronics,
and Novell.
Safe Harbor
This Release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act
of 1995. The use of such words in connection with or related
to any discussion of or reference to future operations, opportunities
or financial performance sets apart forward-looking statements.
In particular, statements regarding the Company's outlook
for future business, financial performance and growth, profitability,
product availability and potential applications and successes
and the impact on future performance of organizational and
operational changes all constitute forward-looking statements.
These forward-looking statements are just predictions and
best estimations consistent with the information available
to the Company at this time. Thus they involve known and unknown
risks and uncertainties such that actual results could differ
materially from those projected in the forward-looking statements
made in this release. Risks and uncertainties include those
set forth in Peerless' public filings with the Securities
and Exchange Commission, including but not limited to the
Company's most recent Annual Report on Form 10-K dated January
31, 2002 in the Section called Risks and Uncertainties at
pages 28 through 38, inclusive, filed on May 1, 2002, and
the Company's most recent Quarterly Report on Form 10-Q dated
July 31, 2002 in the Section called Risks and Uncertainties
at pages 16 through 26, inclusive, filed on September 16,
2002.
Current and prospective stockholders are urged not to place
undue reliance on forward-looking statements, which speak
only as of the date hereof. The Company is under no obligation,
and expressly disclaims any obligation, to update or alter
any forward-looking statements, whether as a result of new
information, future events or otherwise. All forward-looking
statements contained herein are qualified in their entirety
by the foregoing cautionary statements.
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