news release
Contact Information:
Bob Newman Erica Mannion
NeoMagic Corporation Sapphire Investor Relations, LLC
Acting Chief Financial Officer Investor Relations
(408) 988-7020 (212) 766-1800
NEOMAGIC(R) CORPORATION REPORTS Q4 AND FISCAL YEAR 2007 RESULTS
Santa Clara, Calif. - April 24, 2007 - NeoMagic Corporation (Nasdaq:
NMGC), today reported its results for the fourth quarter and fiscal year 2007.
Total revenue for the fourth quarter of fiscal 2007, ended January 28, 2007, was
$117 thousand, compared to total revenue of $192 thousand for the third quarter
of fiscal 2007. Net loss for the fourth quarter of fiscal 2007 was $3.0 million,
or $0.27 per share, compared to net loss of $4.3 million, or $0.44 per share, in
the third quarter of fiscal 2007.
Product revenue for the fiscal year ended January 28, 2007 was $572
thousand compared to product revenue of $862 thousand for the fiscal year ended
January 29, 2006. The fiscal year ended January 29, 2006 also included licensing
revenue of $8.5 million. There was no licensing revenue in the year ended
January 28, 2007. Net loss for fiscal year 2007 was $16.5 million, or $1.65 per
share, compared to a net loss of $9.3 million, or $1.32 per share, in fiscal
year 2006.
Cash, cash equivalents and short-term investments decreased from $26.7
million at January 29, 2006 to $20.5 million at January 28, 2007. During the
fourth quarter, the Company completed an $11.5 million offering of 2,500,000
shares of common stock and warrants to purchase 1,250,000 shares of common stock
at an exercise price of $5.20 per share. Net proceeds after deducting offering
costs were $10.5 million. The warrants were recorded at fair value as a
liability on December 6, 2006. We recognized a gain of $1.8 million in the
fourth quarter of fiscal 2007 for a change in fair value on revaluation of the
warrant liability as of January 28, 2007. We also recognized interest expense in
the fourth quarter of fiscal 2007 of $273 thousand for the portion of offering
costs allocated to the warrants.
"In addition to mobile phones, we now have design wins for multimedia rich
navigation systems, VoIP, wireless IP camera and mobile TV products," said
Douglas Young, president and chief executive officer of NeoMagic. "I am excited
about the production orders we have received and our market opportunities. I
believe that we are now in a good position to capitalize on our growing customer
base," continued Young.
Conference Call Highlights
Topics to be covered on NeoMagic's quarterly conference call include the
following:
o ISDB-T solution is now production ready. Orders have been received
for the MiMagic 6+ from a customer for an ISDB-T-based standalone
mobile TV product.
o Design win with Freenex, a Korean customer, for MiMagic 6+ based
navigation system targeted for the automotive market.
o Orders received from Neonode for production quantities of MiMagic 6+
processors for NeoNode's latest N2 phone.
o Additional orders received from LG Innotek for the wireless IP
camera system that uses NeoMagic's MiMagic 6+.
o LG Innotek's follow-on wireless IP camera product.
Dial-in Information
NeoMagic will hold its fourth quarter fiscal 2007 conference call to discuss the
information contained in this press release today at 5:00 p.m. Eastern Time
(2:00 p.m. Pacific Time). The call can be accessed via the Internet at
www.neomagic.com, "Investor Resources." The call can also be accessed by dialing
(866) 793-1306 in the U.S. and (703) 639-1308 internationally. There is no
passcode. A replay of the call will be available for seven days beginning on
April 24th at 9:00 p.m. Eastern Time (6:00 p.m. Pacific Time). The replay number
is 888-266-2081 in the U.S. and 703-925-2533 internationally. The passcode for
the replay is 340138.
The webcast is also being distributed over CCBN's Investor Distribution Network
to both institutional and individual investors. Individual investors can listen
to the call through CCBN's individual investor center at www.fulldisclosure.com
or by visiting any of the investor sites in CCBN's Individual Investor Network.
Institutional investors can access the call via CCBN's password-protected event
management site, StreetEvents (www.streetevents.com).
About NeoMagic
NeoMagic Corporation delivers semiconductor chips and software that provide
mobile solutions that enable new multimedia features for handheld devices. These
solutions offer low power consumption, small form-factor and high performance
processing. The Company demonstrated one of the first solutions used for H.264
video decoding in a mobile digital TV phone, and is developing and delivering
solutions for audio/video processing of the dominant mobile digital TV
standards, including ISDB-T, T-DMB, E-DMB and DVB-H. For its complete system
solution, NeoMagic delivers a suite of middleware and sample applications for
imaging, video and audio functionality, and provides multiple operating system
ports with customized drivers for the MiMagic product family. NeoMagic has a
patent portfolio of over 27 patents that cover NeoMagic's proprietary array
processing technology, embedded DRAM and other technology. Information on the
Company may be found on the World Wide Web at www.neomagic.com.
This press release contains forward-looking statements within the meaning of the
Securities Act of 1933 and the Securities Exchange Act of 1934, including the
Company's design wins, expected orders, production timing, availability of new
products and revenue opportunities. These forward-looking statements reflect
current expectations. However, actual events and results could vary
significantly based on a variety of factors, including but not limited to
customer acceptance of NeoMagic products, the market acceptance of mobile phones
and other devices developed and marketed by customers that use the Company's
products, customers' plans to develop smart phones, feature phones and other
products, the acceptance of advanced multimedia services such as H.264
television on mobile phones and other products, the Company's ability to execute
product and technology development plans on schedule, and the timely
availability of sufficient manufacturing capacity at the Company's foundry to
meet future customer demand for products. There is no certainty that current or
future design wins will result in revenue for NeoMagic or that customer
forecasts will be accurate. Customers may cancel or delay projects or switch to
other vendors. In addition, customers may fail to achieve their expected sales
objectives due to competitive or other reasons. Our patent licensing activities
involve various risks and uncertainties, including, without limitation,
uncertainties as to the willingness of other companies to pay significant fees
to license our intellectual property, the length and uncertain outcome of
licensing negotiations, the possibility that litigation may be required to
enforce patents, and the risks and costs inherent in any patent litigation.
Additional risks that could affect the Company's future operating results are
more fully described in the Company's most recent annual report, its most recent
quarterly report and other filings with the United States Securities and
Exchange Commission (SEC), and are available online at http://www.sec.gov.
NeoMagic may, from time to time, make additional written or oral forward-looking
statements, including statements contained in filings with the SEC and reports
to shareholders. NeoMagic does not undertake the obligation to update any
forward-looking statements that may be made by or on behalf of the company,
except as may be required by law.
NeoMagic and the NeoMagic circle logo are registered trademarks, and MiMagic and
NeoMobileTV are trademarks, of NeoMagic Corporation. All other trademarks are
the property of their respective owners. NeoMagic disclaims any proprietary
interest in the marks and names of others.
- tables to follow-
NEOMAGIC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
January 28, October 29, January 29, January 28, January 29,
2007 2006 2006 2007 2006
Product revenue $ 117 $ 192 $ 104 $ 572 $ 862
Licensing revenue 0 0 0 0 8,490
Total revenue 117 192 104 572 9,352
Cost of product revenue 126 197 101 524 884
Cost of licensing revenue 0 0 0 0 2,861
Total cost of revenue 126 197 101 524 3,745
Gross profit (loss) (9) (5) 3 48 5,607
Operating expenses:
Research and development 3,477 3,171 3,193 13,763 12,403
Sales, general and
administrative 1,198 1,236 2,049 6,080 6,916
Gain on sale of patents 0 0 0 (1,044) (3,481)
Total operating expenses 4,675 4,407 5,242 18,799 15,838
Loss from operations (4,684) (4,412) (5,239) (18,751) (10,231)
Interest income and other 231 180 238 915 724
Interest expense (292) (23) (1,893) (381) (2,569)
Change in fair value of warrant
liability 1,835 0 0 1,835 0
Loss before income taxes (2,910) (4,255) (6,894) (16,382) (12,076)
Income tax provision (benefit) 94 13 (2,919) 137 (2,770)
Net loss $ (3,004) $ (4,268) $ (3,975) $ (16,519) $ (9,306)
Basic and diluted net loss per share $ (0.27) $ (0.44) $ (0.48) $ (1.65) $ (1.32)
Weighted average common shares
outstanding for basic and diluted 11,329 9,630 8,217 10,015 7,074
NEOMAGIC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
January 28, 2007 October 29, 2006 January 29, 2006
ASSETS
Current assets:
Cash and cash equivalents $ 16,468 $ 11,418 $ 26,695
Short-term investments 4,014 2,223 0
Accounts receivable, net 65 54 9
Inventory 1,068 826 171
Other current assets 397 463 800
Total current assets 22,012 14,984 27,675
Property, plant and equipment, net 1,494 1,226 2,368
Other assets 584 422 451
Total assets $ 24,090 $ 16,632 $ 30,494
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,662 $ 968 $ 1,735
Compensation and related benefits 1,017 1,215 1,024
Income taxes payable 1,112 1,078 1,059
Other accruals 100 82 264
Current portion of capital lease
obligations 866 1,244 1,525
Warrant liability 3,853 0 0
Total current liabilities 8,610 4,587 5,607
Capital lease obligations 655 0 624
Other long-term liabilities 148 147 149
Stockholders' equity:
Common stock 39 37 36
Additional paid-in-capital 116,850 111,067 110,302
Deferred compensation 0 0 (531)
Accumulated other comprehensive loss (2) 0 (2)
Accumulated deficit (102,210) (99,206) (85,691)
Total stockholders' equity 14,677 11,898 24,114
Total liabilities and stockholders'
equity $ 24,090 $ 16,632 $ 30,494