NMGC Neomagic Corp (MM)

SANTA CLARA, Calif., Sept. 7 /PRNewswire-FirstCall/ -- NeoMagic Corporation (NASDAQ:NMGC), today reported its financial results for the second quarter of fiscal year 2007. Total revenue for the second quarter ended July 30, 2006 was $177 thousand, compared to total revenue of $86 thousand for the first quarter of fiscal 2007. Total revenue for the second quarter of fiscal 2006 was $301 thousand. The decline in revenue from the second quarter of fiscal 2006 to the second quarter of fiscal 2007 was primarily the result of a reduction in sales for two customers that purchased MiMagic 3 and MiMagic 5 products. Net loss for the second quarter of fiscal 2007 was $4.2 million, or a loss of $0.44 per share, compared to a net loss of $5.0 million, or a loss of $0.53 per share, in the first quarter of fiscal 2007. Net loss for the second quarter of fiscal 2006 was $4.5 million, or a loss of $0.67 per share. The decrease in the second quarter 2007 loss was primarily due to the gain on the sale of four patents for net proceeds of $1.0 million. Cash, cash equivalents and short-term investments declined from $21.7 million at April 30, 2006 to $17.1 million at July 30, 2006. Conference Call Highlights Topics to be covered on NeoMagic's quarterly conference call include the following: -- NeoMagic continues to work with Neonode to bring its next generation mobile phone to market. -- NeoMagic's ISDB-T smartphone design win for the Japanese market has moved into the development phase. -- The Company is working with a large semiconductor manufacturer to develop a Windows Mobile Certified manufacturing kit targeted for mobile phone manufacturers in China. -- 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 second 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 http://www.neomagic.com/ , in the "Investor Resources" section of our web site. The call can also be accessed by dialing 866-206-5917 in the U.S. and 703-639-1106 internationally. A replay of the call will be available for seven days beginning on September 7 at 8:00 p.m. Eastern Time (5:00 p.m. Pacific Time). The replay number is 888-266-2081 in the U.S. and 703-925-2533 internationally. The passcode to access the replay is 943543. 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 providing 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 20 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 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. 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 Six Months Ended July 30, April 30, July 31, July 30, July 31, 2006 2006 2005 2006 2005 Product revenue $177 $86 $301 $263 $600 Licensing revenue 0 0 0 0 0 Total revenue 177 86 301 263 600 Cost of product revenue 115 86 304 201 636 Cost of licensing revenue 0 0 0 0 0 Total cost of revenue 115 86 304 201 636 Gross margin (loss) 62 0 (3) 62 (36) Operating expenses: Research and development 3,831 3,284 3,147 7,115 6,230 Sales, general and administrative 1,706 1,940 1,310 3,646 3,100 Gain on sale of patents (1,044) 0 0 (1,044) (3,481) Total operating expenses 4,493 5,224 4,457 9,717 5,849 Loss from operations (4,431) (5,224) (4,460) (9,655) (5,885) Interest income and other 234 270 177 504 294 Interest expense (29) (37) (132) (66) (420) Loss before income taxes (4,226) (4,991) (4,415) (9,217) (6,011) Income tax provision 14 16 50 30 99 Net loss $(4,240) $(5,007) $(4,465) $(9,247) $(6,110) Basic and diluted net loss per share $(0.44) $(0.53) $(0.67) $(0.97) $(0.92) Weighted average common shares outstanding for basic and diluted 9,579 9,521 6,694 9,550 6,670 NEOMAGIC CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) July 30, April 30, January 29, 2006 2006 2006 (unaudited) (unaudited) ASSETS Current assets: Cash and cash equivalents $14,618 $21,235 $26,695 Short-term investments 2,506 513 0 Accounts receivable, net 32 7 9 Inventory 733 152 171 Other current assets 612 1,039 800 Total current assets 18,501 22,946 27,675 Property, plant and equipment, net 1,602 1,994 2,368 Other assets 421 414 451 Total assets $20,524 $25,354 $30,494 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $936 $1,184 $1,735 Compensation and related benefits 1,171 1,260 1,024 Income taxes payable 1,072 1,065 1,059 Other accruals 149 228 264 Current portion of capital lease obligations 1,244 1,637 1,525 Total current liabilities 4,572 5,374 5,607 Capital lease obligations 0 407 624 Other long-term liabilities 146 145 149 Stockholders' equity: Common stock 36 36 36 Additional paid-in-capital 110,709 110,091 110,302 Deferred compensation 0 0 (531) Accumulated other comprehensive loss (1) (1) (2) Accumulated deficit (94,938) (90,698) (85,691) Total stockholders' equity 15,806 19,428 24,114 Total liabilities and stockholders' equity $20,524 $25,354 $30,494 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 Erica Mannion, Investor Relations of Sapphire Investor Relations, LLC, +1-212-766-1800, for NeoMagic Corporation Web site: http://www.neomagic.com/

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