NMGC Neomagic Corp (MM)

SANTA CLARA, Calif., June 8 /PRNewswire-FirstCall/ -- NeoMagic Corporation (NASDAQ:NMGC), today reported its first quarter fiscal year 2007 financial results. Total revenue for the first quarter of fiscal 2007, ended April 30, 2006, was $86 thousand, compared to total revenue of $104 thousand for the fourth quarter of fiscal 2006. Our total revenue for the first quarter of fiscal 2006 was $299 thousand. The decline in revenue from the first quarter of fiscal 2006 to the first quarter of fiscal 2007 was primarily the result of a reduction in sales of our MiMagic 3, MiMagic 5 and companion chip products. Net loss for the first quarter of fiscal 2007 was $5.0 million, or a loss of $0.53 per share, compared to net loss of $4.0 million, or a loss of $0.48 per share, in the fourth quarter of fiscal 2006. "Since our last quarterly call we have received an initial order for our MiMagic 6+. In addition, our traction with customers indicates that we are well positioned to address our chosen markets. I am very excited about the progress that we are making with sales prospects and the number of new programs that are underway," 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 continues to be in discussions with multiple companies with respect to the possible licensing of NeoMagic's embedded DRAM patents. -- Development of the new NeoMobileTV product has been completed. -- The MiMagic 6+ based digital mobile TV solution that was announced in February 2006 in a joint press release between NeoMagic, TTP and the BT Movio subsidiary of British Telecom, has attracted the interest of several OEMs and ODMs. -- NeoMagic announces a design win for a BT Movio product that is expected to be released in 2007 to serve both the Chinese and European mobile TV markets. NeoMagic is engaged with several other ODMs and OEMs to develop phones for the BT Movio opportunity. -- A customer in Asia plans to go into production with a MiMagic 3-based product later this year. -- NeoMagic is actively engaged with Neonode to bring its next generation mobile phone to market. -- Last quarter, management discussed a Japanese OEM customer that had finished a MiMagic 6+ mobile digital TV phone and had completed successful field-testing. Based upon the feedback management has received from this customer, it is not clear whether this phone will go into production. However, discussions with the customer are continuing. -- NeoMagic announces that it has a new design win for an ISDB-T smartphone for the Japanese market. -- The Japanese mobile phone carrier, mentioned last quarter in connection with a platform design win, is working on the next level product plan. NeoMagic is currently in discussions with this carrier about which segment or segments of the market will best be served by the MiMagic 6+ platform. -- Outside of the mobile phone market, the MiMagic 6+ has been selected for a wireless camera module developed by a major Korean OEM. Dial-in Information NeoMagic will hold its first 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 http://www.neomagic.com/, "Investor Resources." The call can also be accessed by dialing 866-244-4637 in the U.S. and 703-639-1179 internationally. There is no passcode for the live call. A replay of the call will be available for seven days beginning on June 8th at 9 p.m. Eastern Time (6 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 898444. 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 http://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 (http://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, 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 http://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, revenue opportunities and the Company's ongoing patent licensing efforts. 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, customers' 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 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 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 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. 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. NEOMAGIC CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended April 30, January 31, April 30, 2006 2006 2005 Product revenue $86 $104 $299 Licensing revenue 0 0 0 Total revenue 86 104 299 Cost of product revenue 86 101 332 Cost of licensing revenue 0 0 0 Total cost of revenue 86 101 332 Gross margin (loss) 0 3 (33) Operating expenses: Research and development 3,284 3,193 3,083 Sales, general and administrative 1,940 2,049 1,790 Gain on sale of patents 0 0 (3,481) Total operating expenses 5,224 5,242 1,392 Loss from operations (5,224) (5,239) (1,425) Interest income and other 270 238 117 Interest expense (37) (1,893) (288) Loss before income taxes (4,991) (6,894) (1,596) Income tax provision (benefit) 16 (2,919) 49 Net loss $(5,007) $(3,975) $(1,645) Basic net loss per share $(0.53) $(0.48) $(0.25) Diluted loss per share $(0.53) $(0.48) $(0.25) Weighted average common shares outstanding for basic 9,521 8,217 6,647 Weighted average common shares outstanding for diluted 9,521 8,217 6,647 NEOMAGIC CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) April 30, January 31, 2006 2006 ASSETS (Unaudited) Current assets: Cash and cash equivalents $21,235 $26,695 Short-term investments 513 0 Accounts receivable, net 7 9 Inventory 152 171 Other current assets 1,039 800 Total current assets 22,946 27,675 Property, plant and equipment, net 1,994 2,368 Other assets 414 451 Total assets $25,354 $30,494 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,184 $1,735 Compensation and related benefits 1,260 1,024 Income taxes payable 1,065 1,059 Other accruals 228 264 Current portion of capital lease obligations 1,637 1,525 Total current liabilities 5,374 5,607 Capital lease obligations 407 624 Other long-term liabilities 145 149 Registration obligation 606 606 Stockholders' equity: Common stock 36 36 Additional paid-in-capital 109,485 109,696 Deferred compensation 0 (531) Accumulated other comprehensive loss (1) (2) Accumulated deficit (90,698) (85,691) Total stockholders' equity 18,822 23,508 Total liabilities and stockholders' equity $25,354 $30,494 (Logo: http://www.newscom.com/cgi-bin/prnh/20020802/NMGCLOGO) http://www.newscom.com/cgi-bin/prnh/20020802/NMGCLOGO http://photoarchive.ap.org/ DATASOURCE: NeoMagic Corporation CONTACT: Scott Sullinger, Chief Financial Officer of NeoMagic Corporation, +1-408-486-3879; or investors, Erica Mannion of Sapphire Investor Relations, LLC, +1-212-766-1800, for NeoMagic Corporation Web site: http://www.neomagic.com/

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