fiscal quarter ended June 30, 2004. The Company's consolidated net income, computed in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"), for the three months ended June 30, 2004 was $0.2 million, or $0.00 per diluted share and $0.04 per diluted ADR, compared with $16.4 million, or $0.32 per diluted share and $3.19 per diluted ADR, for the same period in 2003. For the second quarter of 2004, the Company's consolidated income from continuing operations was $0.2 million, or $0.00 per diluted share and $0.04 per diluted ADR, compared with $5.4 million, or $0.11 per diluted share and $1.06 per diluted ADR, for the second quarter of 2003.
For the six months ended June 30, 2004, the Company's consolidated net loss was $6.5 million, or $(0.13) per diluted share and $(1.28) per diluted ADR, compared with income of $14.5 million, or $0.28 per diluted share and $2.85 per diluted ADR, for the same period in 2003. For the six months ended June 30, 2004, the Company's consolidated loss from continuing operations was $6.5 million, or $(0.13) per diluted share and $(1.28) per diluted ADR, compared with income from continuing operations of $4.6 million, or $0.09 per diluted share and $0.90 per diluted ADR, for the same period in 2003.
The Company reports net income (loss) and diluted earnings (loss) per share and ADR in accordance with U.S. GAAP.
The results for the second quarter of 2004 were impacted by the increase in the value of the listed equity securities held by the Company, including those held by London Pacific Assurance Limited ("LPAL"), partially offset by the write-down in the book value of one private equity security. The listed equity securities held in LPAL are not available to fund the operations or commitments of the Company or its other subsidiaries. Net realized and unrealized investment gains totaled $1.6 million in the second quarter of 2004, compared to $7.3 million in the second quarter of 2003.
Volatility in the Company's listed equity holdings continues to have a substantial impact on the Company's financial results. The bulk of these listed equity holdings are in Packeteer, Inc. ("PKTR"). The Company's Jersey, Channel Islands based insurance company, LPAL, holds most of the Company's investment in PKTR. During July 2004, LPAL sold 200,000 shares of PKTR for $2.9 million, realizing a gain of $1.7 million, which was offset by the reversal of unrealized gains of $2.0 million recorded in prior periods, resulting in a net loss of $0.3 million for the month of July 2004. Subsequent to June 30, 2004, following PKTR's earnings release, PKTR's share price declined, resulting in a fall in value of $3.1 million on the Company's remaining PKTR holding as of August 4, 2004. PKTR continues to be profitable, to generate cash and has a strong balance sheet. We are holding our current PKTR position at these price levels.
As of June 30, 2004, the book value per share and book value per ADR were $0.56 and $5.58, respectively. These book value per share and ADR computations exclude the number of shares held by the employee benefit trusts and the related cost of those shares.
LPAL continued to serve its policyholders; however, no new policies are currently being sold. Policyholder liabilities for LPAL fell during the second quarter of 2004 by $1.5 million to $23.6 million primarily due to maturing policies. As of June 30, 2004, LPAL's corporate bonds, cash, due from brokers and accrued interest totaled $27.1 million.
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The Company now focuses on its venture capital and consulting business, which works with technology companies that are looking to grow their operations internationally. The Company advises on overseas operations, assists in locating investor capital, and occasionally takes principal positions where the case is compelling and the timeframe for realization could be relatively short. It is still early in the process but consulting fees are now being generated. |
