NMGC Neomagic Corp (MM)

SANTA CLARA, Calif., Nov. 20 /PRNewswire-FirstCall/ -- 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: * NeoMagic is currently sampling its NeoMobileTV chip. * The MiMagic 6+ has been selected for a wireless camera module manufactured by LG Innotek. * NeoMagic has several ISDB-T design wins for the Japanese market. * 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. * 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 http://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 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, 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 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 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. NOTE: 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. (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 October July October October October 29, 30, 30, 29, 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 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, +1-408-988-7020; 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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