[iMagicTV logo]
news release
iMagicTV Reports First Quarter Results
All amounts in U.S. Dollars
SAINT JOHN, NEW BRUNSWICK, CANADA (June 27, 2002) -- iMagicTV (Nasdaq: IMTV
and TSX: IMT), a provider of software products that allow telephone companies
and other service providers to deliver multi-channel television and
interactive media services over high-speed broadband networks, today announced
its financial results for the first fiscal quarter of 2003 ended May 31, 2002.
Revenues for the first quarter were $724,000 compared with $1.7 million in
the first quarter of last year. The decrease in revenue is the result of a
decrease in license fee revenues, as customers continue to delay the
transition between trials and commercial deployment. As a result of the cost
containment efforts and restructuring initiatives implemented during fiscal
2002, total operating expenses decreased $2.9 million to $3.9 million for the
first quarter of fiscal 2003 from $6.8 million for the first quarter of fiscal
2002. The net loss for the first quarter of fiscal 2003 was $3.3 million, or
$0.13 per basic share, compared to a net loss of $5.4 million, or $0.22 per
basic share, for the first quarter of fiscal 2002. As of May 31, 2002,
iMagicTV had $43.2 million in cash and short-term investments, compared to
$46.0 million as of our year ended February 28, 2002.
"We are extremely focused on winning new customers and increasing revenue,"
said Gerald L. Pond, iMagicTV chief executive officer. "We have strengthened
our executive management team, aligned our Company resources and increased our
partner channel efforts to identify and integrate more closely with our
customers to address their specific requirements for creating revenue
generating applications.
"The broadband market is showing signs of improvement," Pond added. "Our
partner channels are generating increased interest in iMagicTV's products,
especially in Europe. We are exploring new niche applications and markets for
our software, including hospitality and broadband video entertainment to the
personal computer. The prices of set top boxes are dropping and more
manufacturers are entering the market, providing more opportunities on which
to deploy our software platform. Our cash reserves allow us to continue to
drive innovation through our research and development efforts in order to
maintain our predominant market position. After meeting with several of our
key customers recently, I am even more encouraged about our position in the
market and prospects for the deployment of broadband entertainment services."
About iMagicTV
iMagicTV (Nasdaq: IMTV and TSX: IMT) provides software products and related
services that enable telephone companies and other service providers to
deliver multi-channel digital television and interactive media services to
their subscribers over a broadband network infrastructure. iMagicTV's
- MORE -
iMagicTV Reports First Quarter Results
Page 2
June 27, 2002
- -------------------------------------------------------------------------------
software can be deployed over high-speed broadband networks including ADSL,
VDSL, wireless, Ethernet and Fiber to the Home (FTTH) technologies.
Incorporated in 1997, iMagicTV maintains its global headquarters in Saint
John, New Brunswick, Canada, its European headquarters in Cambridge, U.K., its
Asia Pacific headquarters in Singapore and its U.S. headquarters in Atlanta.
For more information, visit www.imagictv.com.
Cautionary Note Regarding Forward-looking Statements Under the Private
Securities Litigation Reform Act of 1995: Certain statements in this press
release constitute forward-looking statements. The words "will," "plan,"
"anticipate," "expect," "intend," "believe" and similar expressions referring
to the future or events to occur in the future are intended to identify
forward-looking statements. Statements regarding iMagicTV's projections or
strategies also constitute forward-looking statements. Forward-looking
statements reflect our current views with respect to future events and are
based on information currently available to us. These statements are not
guarantees of future results, performance or achievement and are subject to
certain risks, uncertainties and assumptions, including those matters
specifically discussed herein, general economic conditions, conditions in the
telecommunications industry, and matters discussed in iMagicTV's filings with
the U.S. Securities and Exchange Commission (SEC). These and other factors may
cause our actual results, performance or achievements to differ materially
from any future results, performance or achievements that may be expressed or
implied by such forward-looking statements. We do not undertake any obligation
to update any forward-looking statement contained in this release.
- MORE -
iMagicTV Reports First Quarter Results
Page 3
June 27, 2002
- --------------------------------------------------------------------------------
ImagicTV Inc.
Consolidated Statements of Operations (unaudited)
(In thousands of U.S. dollars, except per share amounts)
Three months
ended
May 31,
2002 2001
- ----------------------------------------------------------------------
Revenues:
License fees $ -- $ 522
Royalty fees 491 82
Services 233 1,046
- ----------------------------------------------------------------------
Total revenues 724 1,650
Cost of revenues:
Services 429 810
- ----------------------------------------------------------------------
Total cost of revenues 429 810
Gross profit 295 840
Operating expenses:
Sales and marketing 1,458 3,024
Research and development 1,458 2,251
General and administrative 946 1,545
- ----------------------------------------------------------------------
Total operating expenses 3,862 6,820
Loss from operations (3,567) (5,980)
Interest income, net 179 666
Foreign exchange gain 144 15
- ----------------------------------------------------------------------
Loss before provision for income taxes (3,244) (5,299)
Provision for income taxes (54) (139)
- ----------------------------------------------------------------------
Net loss for the period $(3,298) $(5,438)
======================================================================
Basic and diluted net loss per share $ (0.13) $ (0.22)
======================================================================
Weighted average number of shares used in
computing basic and diluted net loss
per share (000's) 24,672 24,596
======================================================================
Adjusted net loss:
Net loss for the period $(3,298) $(5,438)
Add back of non-cash charges:
Stock-based compensation 42 192
Depreciation 500 436
- ----------------------------------------------------------------------
Adjusted net loss for the period $(2,756) $(4,810)
======================================================================
Adjusted basic and fully diluted net loss per share $ (0.11) $ (0.20)
======================================================================
- MORE -
iMagicTV Reports First Quarter Results
Page 4
June 27, 2002
- --------------------------------------------------------------------------------
ImagicTV Inc.
Consolidated Balance Sheets
(In thousands of U.S. dollars, except number of shares)
May 31, February 28,
2002 2002
- ---------------------------------------------------------------------------
[unaudited]
Assets
Current assets:
Cash and cash equivalents $16,343 $45,641
Short-term investments 26,902 359
Accounts receivable, trade, net of allowance of
nil 275 448
[February 28, 2002--nil]
Prepaid expenses, deposits and other receivables 951 904
- ---------------------------------------------------------------------------
Total current assets 44,471 47,352
Capital assets 2,044 2,133
- ---------------------------------------------------------------------------
Total assets $46,515 $49,485
===========================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 700 $ 667
Accrued liabilities 1,274 1,083
Deferred revenue 425 437
Current portion of long-term debt 10 9
- ---------------------------------------------------------------------------
Total current liabilities 2,409 2,196
Long-term debt 1,564 1,496
Shareholders' equity:
Authorized:
Unlimited common shares, no par value
Unlimited preferred shares, no par value
Issues and outstanding:
24,678,063 common shares
(February 28, 2002--24,669,336) 85,703 85,698
Nil preferred -- --
Deferred stock-based compensation (351) (393)
Accumulated deficit (42,284) (38,986)
Reporting currency translation adjustment (526) (526)
- ---------------------------------------------------------------------------
Total shareholders' equity 42,542 45,793
- ---------------------------------------------------------------------------
Total liabilities and shareholders' equity $46,515 $49,485
===========================================================================
- MORE -
iMagicTV Reports First Quarter Results
Page 5
June 27, 2002
- -------------------------------------------------------------------------------
NOTE TO MEDIA, ANALYSTS AND INVESTORS:
Media, analysts and investors are invited to participate in a conference call
to review iMagicTV's fiscal 2003 first quarter financial results.
Thursday, June 27, 2002--4:30 pm (Eastern Time)
To participate in this conference call, please call the following number
approximately five minutes before the call (4:25 pm Eastern Time):
913-981-5507
If you experience problems during the call or reaching the number above,
please call Kristina Korte at Corporate Communications Inc. at (615) 254-3376.
You can also access the conference call via an audio Web cast by visiting the
following link:
http://companyboardroom.com
A replay of the conference call will be available at this web site for a
period of 30 days. A telephonic replay of the conference call will be
available for seven days after the call and can be accessed by calling 719-
457-0820 and entering the passcode 743993.
Investor Relations Contact:
Tracy Torena
iMagicTV
800-660-0333
ttorena@imagictv.com
Media Contact:
Rob Begg
ImagicTV
800-660-0333
rbegg@imagictv.com
- END -