Exhibit 99.1
NEOMAGIC(R) CORPORATION REPORTS Q3 FISCAL 2006 RESULTS
SANTA CLARA, Calif., Dec. 8 /PRNewswire-FirstCall/ -- NeoMagic Corporation
(Nasdaq: NMGC), a pioneer in developing solutions for multimedia-rich mobile
phones and other wireless handheld systems, today reported its third quarter
fiscal 2006 financial results. Total revenue for the third quarter of fiscal
2006 was $8.6 million compared to total revenue of $301 thousand for the second
quarter of fiscal 2006. Net income for the third quarter of fiscal 2006 was $779
thousand, or income of $0.11 per share, compared to a net loss for the second
quarter of fiscal 2006 of $4.5 million, or a loss of $0.67 per share.
"We are happy to report net income during the quarter. We believe that the
patent licensing agreement with Sony validates the value of our embedded DRAM
technology. During the quarter we made significant progress in securing customer
design wins for our product portfolio and we continued to enhance our sales and
marketing efforts to address the growing mobile digital TV market," said Douglas
Young, president and chief executive officer of NeoMagic.
Conference Call Highlights
Topics to be covered on NeoMagic's quarterly conference call include the
following:
* NeoMagic is in discussions with five companies with respect to
licensing NeoMagic patents. Over the next several months, NeoMagic
expects to contact several more companies.
* In February 2006, NeoMagic plans to demonstrate its mobile TV
solutions at a booth at the 3GSM conference in Barcelona, Spain.
* The Company's MiMagic 3, MiMagic 5 and MiMagic 6+ products are all
being shipped to customers. Each of these products has been tested,
quality assured and is in production at Taiwan Semiconductor
Manufacturing Company (TSMC).
* The Company expects to begin volume shipments of its MiMagic 6+
product during the second quarter of calendar year 2006.
* NeoMagic continues to develop next generation solutions that support
its market strategy and plans to provide more details on new products
during the next several months.
* A customer in Asia plans to go into production with a MiMagic 3-based
product during the second quarter of calendar year 2006. This design
is expected to generate over one million units spread over multiple
years.
* We expect increased orders from NeoNode, a Swedish mobile phone
manufacturer, during the first quarter of calendar year 2006.
* The ODM program for a top five mobile phone OEM that was discussed
last quarter continues to move forward; however we have very little
visibility into the detailed timing for this program.
* One of NeoMagic's OEM customers in Japan has finished a mobile digital
TV phone with the MiMagic 6+ and is using it in field trials. NeoMagic
expects this customer to begin purchasing MiMagic 6+ before July 2006
to meet its production launch schedule.
* The Company has been notified of a design win with a major Japanese
wireless phone operator for a new phone platform design that would use
the MiMagic 6+. A platform design win can be very significant for
NeoMagic since it is the base design that can be used as the template
for multiple phone models. This phone platform design win demonstrates
NeoMagic's push-pull sales strategy where the Company sells its
product to both mobile phone carriers and mobile phone manufacturers.
Dial-in Information
NeoMagic will hold its third quarter fiscal 2006 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) 814-8448 in the US and 703-639-1367 internationally. There is no passcode.
A replay of the call will be available for seven days beginning on December 8th
at 9 p.m. Eastern Time (6 p.m. Pacific Time). The replay number is 888-266-2081
in the US and 703-925-2533 internationally. The passcode for the replay is
797946.
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 mobile solutions that enable new and exciting
multimedia features for handheld devices. These solutions are delivered with the
best combination of 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 digital mobile TV phone, and is developing and
delivering solutions for audio/video processing of the dominant mobile TV
standards including ISDB-T, DMB, and DVB-H. For its complete system solution,
NeoMagic provides multiple operating system ports with customized drivers for
the MiMagic product family. In addition, the Company has developed a suite of
middleware and sample applications for video and audio functionality. NeoMagic
has a patent portfolio of 22 patents that cover NeoMagic's proprietary array
processing technology and embedded DRAM technology. Headquartered in Santa
Clara, California, NeoMagic has research and development centers in Israel and
India. 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, revenue
opportunities and the Company's ongoing patent licensing efforts. Our patent
licensing activities involve various risks and uncertainties, including, without
limitation, uncertainties as to the willingness of other companies to pay
material 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. 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 developed and marketed by
customers that use the Company's products, customer's plans to develop smart
phones and feature phones, the acceptance of advanced multimedia services such
as H.264 television on mobile phones, and the Company's ability to execute
product and technology development plans on schedule. There is not 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
customers may fail to achieve their expected sales objectives due to competitive
or other reasons. 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.
NOTE: NeoMagic, and the NeoMagic circle logo are registered trademarks, and
MiMagic is a trademark, 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.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020802/NMGCLOGO )
NEOMAGIC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
------------------------------------ -----------------------
Oct. 31, July 31, Oct. 31, Oct. 31, Oct. 31,
2005 2005 2004 2005 2004
---------- ---------- ---------- ---------- ----------
Product revenue $ 158 $ 301 $ 552 $ 758 $ 2,244
Licensing revenue 8,490 0 0 8,490 0
Total Revenue 8,648 301 552 9,248 2,244
Cost of product revenue 147 304 663 783 2,422
Cost of licensing revenue 2,861 0 0 2,861 0
Total cost of revenue 3,008 304 663 3,644 2,422
Gross profit (loss) 5,640 (3) (111) 5,604 (178)
Operating expenses:
Research and development 2,980 3,147 4,189 9,210 13,876
Sales, general and
administrative 1,767 1,310 1,643 4,867 5,663
Gain on sale of patents 0 0 0 (3,481) 0
Total operating expenses 4,747 4,457 5,832 10,596 19,539
Income (loss) from operations 893 (4,460) (5,943) (4,992) (19,717)
Interest income and other 192 177 123 486 318
Interest expense (256) (132) (173) (676) (250)
Income (loss) before income
taxes 829 (4,415) (5,993) (5,182) (19,649)
Income tax provision 50 50 5 149 19
Net income (loss) $ 779 $ (4,465) $ (5,998) $ (5,331) $ (19,668)
Basic net income (loss)
per share $ 0.12 $ (0.67) $ (0.91) $ (0.80) $ (3.03)
Diluted net income (loss)
per share $ 0.11 $ (0.67) $ (0.91) $ (0.80) $ (3.03)
Weighted average common shares
outstanding for basic 6,740 6,694 6,566 6,694 6,495
Weighted average common shares
outstanding for diluted 6,882 6,694 6,566 6,694 6,495
NEOMAGIC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
Oct. 31, July 31, January 31,
2005 2005 2005
---------- ---------- ---------------
ASSETS
Current assets:
Cash and cash equivalents $ 21,964 $ 14,749 $ 8,944
Short-term investments 0 5,272 16,082
Accounts receivable, net 62 46 12
Inventory 179 108 376
Other current assets 804 835 792
Total current assets 23,009 21,010 26,206
Property, plant and equipment, net 2,639 3,005 3,835
Other assets 413 501 673
Total assets $ 26,061 $ 24,516 $ 30,714
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,507 $ 1,137 $ 1,084
Compensation and related benefits 1,117 894 1,017
Income taxes payable 3,985 3,941 3,851
Other accruals 195 159 225
Current portion of capital lease
obligations 1,408 1,480 1,602
Total current liabilities 8,212 7,611 7,779
Capital lease obligations 1,244 1,453 2,004
Mandatorily redeemable preferred
stock 3,387 3,212 2,971
Other long-term liabilities 12 12 0
Stockholders' equity:
Common stock 34 34 33
Additional paid-in-capital 95,536 95,494 95,606
Deferred compensation (648) (800) (1,280)
Accumulated other comprehensive loss 0 (5) (14)
Accumulated deficit (81,716) (82,495) (76,385)
Total stockholders' equity 13,206 12,228 17,960
Total liabilities and stockholders'
equity $ 26,061 $ 24,516 $ 30,714
SOURCE NeoMagic Corporation
-0- 12/08/2005
/CONTACT: Scott Sullinger, Chief Financial Officer of NeoMagic Corporation,
+1-408-486-3879/
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/Web site: http://www.neomagic.com /