Exhibit 99.1
NEWS RELEASE
CONTACT INFORMATION:
Scott Sullinger Erica Mannion
NeoMagic Corporation Sapphire Investor Relations, LLC
Chief Financial Officer Investor Relations
(408) 988-7020 (212) 766-1800
NEOMAGIC(R) CORPORATION REPORTS THIRD QUARTER RESULTS
Santa Clara, Calif. - November 20, 2006 - NeoMagic Corporation (Nasdaq:
NMGC), today reported its financial results for the third quarter of fiscal year
2007. Total revenue for the third quarter ended October 29, 2006 was $192
thousand, compared to total revenue of $177 thousand for the second quarter of
fiscal 2007. Total revenue for the third quarter of fiscal 2006 was $8.6
million, primarily as a result of $8.5 million in patent licensing revenue from
Sony under an agreement completed in the third quarter of fiscal 2006. The net
loss for the third quarter of fiscal 2007 was $4.3 million, or a loss of $0.44
per share, compared to a net loss of $4.2 million, or a loss of $0.44 per share,
in the second quarter of fiscal 2007. The second quarter of fiscal 2007 included
a gain on sale of patents of approximately $1.0 million. The Company's expenses
in the third quarter were lower than the second quarter primarily due to a
reduction in development costs for the NeoMobileTV chip. For the third quarter
of fiscal 2006, the Company reported net income of $779 thousand, or income of
11 cents per share. The third quarter of fiscal 2006 included the patent
licensing revenue from Sony.
Cash, cash equivalents and short-term investments declined from $17.1
million at July 30, 2006 to $13.6 million at October 29, 2006.
"We are now addressing several different markets in addition to mobile
phones, including mobile TV, handheld TV, navigation systems, Voice and
Video-Over-IP and wireless cameras. I am excited about our market opportunities
and the increasing breadth of our design wins. In addition to these exciting
opportunities, we have several designs that we expect to go into production over
the next few months," 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:
o NeoMagic is currently sampling its NeoMobileTV chip.
o The MiMagic 6+ has been selected for a wireless camera module
manufactured by LG Innotek.
o NeoMagic has several ISDB-T design wins for the Japanese market.
o The Company is continuing its work with a large semiconductor
manufacturer to develop a Windows Mobile Certified manufacturing kit
targeted for mobile phone manufacturers in Asia.
o Outside of the mobile phone market, the MiMagic 6+ has been selected
for GPS and multimedia processing in an automotive application
currently under development by a Korean OEM.
DIAL-IN INFORMATION
NeoMagic will hold its third quarter fiscal 2007 conference call 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, in the "Investor Resources" section of our web
site. The call can also be accessed by dialing 866-253-5757 in the U.S. and
703-639-1206 internationally. There is no passcode for the live call. An audio
replay of the call will be available for seven days beginning on November 20 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 988011.
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 25 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 Nine Months Ended
--------------------------------------- -------------------------
October 29, July 30, October 30, October 29, October 30,
2006 2006 2005 2006 2005
----------- ----------- ----------- ----------- -----------
Product revenue $ 192 $ 177 $ 158 $ 455 $ 758
Licensing revenue 0 0 8,490 0 8,490
Total Revenue 192 177 8,648 455 9,248
Cost of product revenue 197 115 147 398 783
Cost of licensing revenue 0 0 2,861 0 2,861
Total cost of revenue 197 115 3,008 398 3,644
Gross profit (loss) (5) 62 5,640 57 5,604
Operating expenses:
Research and development 3,171 3,831 2,980 10,286 9,210
Sales, general and
administrative 1,236 1,706 1,767 4,882 4,867
Gain on sale of patents 0 (1,044) 0 (1,044) (3,481)
Total operating expenses 4,407 4,493 4,747 14,124 10,596
Income (loss) from operations (4,412) (4,431) 893 (14,067) (4,992)
Interest income and other 180 234 192 684 486
Interest expense (23) (29) (256) (89) (676)
Income (loss) before income taxes (4,255) (4,226) 829 (13,472) (5,182)
Income tax provision 13 14 50 43 149
Net income (loss) $ (4,268) $ (4,240) $ 779 $ (13,515) $ (5,331)
Basic net income (loss)
per share $ (0.44) $ (0.44) $ 0.12 $ (1.41) $ (0.80)
Diluted net income (loss)
per share $ (0.44) $ (0.44) $ 0.11 $ (1.41) $ (0.80)
Weighted average common shares
outstanding for basic 9,630 9,579 6,740 9,577 6,694
Weighted average common shares
outstanding for diluted 9,630 9,579 6,882 9,577 6,694
NEOMAGIC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
October 29, July 30, January 29,
2006 2006 2006
------------- ------------- -------------
(unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 11,418 $ 14,618 $ 26,695
Short-term investments 2,223 2,506 0
Accounts receivable, net 54 32 9
Inventory 826 733 171
Other current assets 463 612 800
Total current assets 14,984 18,501 27,675
Property, plant and equipment, net 1,226 1,602 2,368
Other assets 422 421 451
Total assets $ 16,632 $ 20,524 $ 30,494
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 968 $ 936 $ 1,735
Compensation and related benefits 1,215 1,171 1,024
Income taxes payable 1,078 1,072 1,059
Other accruals 82 149 264
Current portion of capital lease
obligations 1,244 1,244 1,525
Total current liabilities 4,587 4,572 5,607
Capital lease obligations 0 0 624
Other long-term liabilities 147 146 149
Stockholders' equity:
Common stock 37 36 36
Additional paid-in-capital 111,067 110,709 110,302
Deferred compensation 0 0 (531)
Accumulated other comprehensive loss 0 (1) (2)
Accumulated deficit (99,206) (94,938) (85,691)
Total stockholders' equity 11,898 15,806 24,114
Total liabilities and stockholders'
equity $ 16,632 $ 20,524 $ 30,494