NMGC Neomagic Corp (MM)

SANTA CLARA, Calif., May 20 /PRNewswire-FirstCall/ -- NeoMagic Corporation (NASDAQ:NMGC) today reported its financial results for the first quarter of fiscal 2009, ended April 27, 2008. Total revenue for the first quarter of fiscal 2009 was $592 thousand, compared to total revenue of $830 thousand for the fourth quarter of fiscal 2008, and $482 thousand for the first quarter of fiscal 2008. Net income for the first quarter of fiscal 2009 was $4.9 million, or $0.39 per share, compared to a net loss of $4.5 million, or $0.36 per share, in the fourth quarter of fiscal 2008 and a net loss of $3.2 million, or $0.26 per share, in the first quarter of fiscal 2008. Included in the first quarter results was a gain on the sale of patents of $9.5 million or $0.76 per share. The first quarter fiscal 2009 non-GAAP net loss was $4.2 million, or $0.33 per share, compared to $4.1 million, or $0.33 per share, in the previous quarter and compared to a $3.8 million net loss, or $0.31 per share, in the first quarter of fiscal 2008. Non-GAAP results exclude the impact of stock-based compensation expenses, gains on the sale of patents, and gains and losses recorded for the changes in fair value of warrant liabilities. "In fiscal Q1 we experienced a pause in our revenue growth, consistent with other handset chip providers in this post-holiday quarter. But I am very pleased with the new design wins we are gathering for our recently introduced MiMagic 8 Applications Processor and our NeoMobileTV Co-processor. Both of these new products have been recognized by our new customers for the exciting mobile TV features they enable. These customers have indicated that they anticipate going into production this calendar year," said Douglas Young, President and CEO of NeoMagic Corporation. "We are pleased to have completed a patent sale transaction in February 2008 for net proceeds of $9.5 million," stated Steve Berry, CFO of NeoMagic. Dial-in Information NeoMagic will hold its first quarter fiscal 2009 conference call to discuss the information contained in this press release today at 8:30 a.m. Eastern Time (5:30 a.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 866-238-0826 in the U.S. and 703-639-1158, internationally. There is no passcode. A replay of the call will be available for 7 days beginning on May 20th at 12:30 p.m. Eastern Time (9:30 a.m. Pacific Time). The replay number is 888-266-2081 in the U.S. and 703-925-2533, internationally. The pass code for the replay is 1240311. The web cast 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 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 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 strong patent portfolio that covers NeoMagic's proprietary array processing and other technology. Information on the Company may be found at http://www.neomagic.com/. 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. Safe Harbor Statement This press release contains forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, related to the Company's design wins, the expectations of revenue based upon design wins and expected orders from those design wins, new products and revenue opportunities from those new products. 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 TV feature phones and other devices developed and marketed by customers that use the Company's products, the success of customers' plans to develop multimedia 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 their production orders, projects or switch to other vendors. In addition, customers may fail to achieve their expected sales objectives due to competitive or other reasons resulting in excess or obsolete inventory requiring write-downs and charges to cost of revenue. Additional risks that could affect the Company's future operating results are more fully described in the Company's most recent annual 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. Non-GAAP Reporting -- The Company's management uses non-GAAP measures to evaluate the performance of our business and to estimate future performance. Since management finds this measure to be useful, we believe that our investors benefit from seeing our results "through the eyes" of management in addition to seeing our GAAP results. For comparison purposes, the Company makes reference to certain gross margin, operating margin, net loss and net loss per share. These non-GAAP results were reached by excluding stock-based compensation expense, gains on the sale of patents, and gains and losses recorded for the changes in fair value of warrant liabilities. We reference those results to allow a better comparison of results in the current period to those in prior periods and to provide meaningful insight to the Company's on- going operating performance. We have reconciled such non-GAAP results to the most directly comparable GAAP financial measures. Our reference to these non-GAAP results should be considered in addition to results that are prepared under current accounting standards but should not be considered a substitute for results that are presented as consistent with GAAP. It should also be noted that our non-GAAP information may differ from the non-GAAP information provided by other companies. (Logo: http://www.newscom.com/cgi-bin/prnh/20020802/NMGCLOGO ) -tables to follow- NEOMAGIC CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) April 27, January 27, 2008 2008 (unaudited) ASSETS Current assets: Cash and cash equivalents $3,880 $964 Short-term investments 2,991 500 Accounts receivable, net 268 529 Inventory 3,702 3,715 Other current assets 534 426 Total current assets 11,375 6,134 Property, plant and equipment, net 635 692 Other assets 539 787 Total assets $12,549 $7,613 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,262 $1,448 Compensation and related benefits 1,402 1,057 Income taxes payable 296 583 Other accruals 246 196 Current portion of capital lease obligations 322 316 Warrant liability 13 38 Total current liabilities 3,541 3,638 Capital lease obligations 256 339 Other long-term liabilities 77 89 Stockholders' equity: Common stock 39 39 Additional paid-in-capital 122,563 122,071 Accumulated other comprehensive income 44 271 Accumulated deficit (113,971) (118,834) Total stockholders' equity 8,675 3,547 Total liabilities and stockholders' equity $12,549 $7,613 NEOMAGIC CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended April 27, January 27, April 29, 2008 2008 2007 Net revenue $592 $830 $482 Cost of revenue 466 703 344 Gross profit 126 127 138 Operating expenses: Research and development 3,075 2,872 2,963 Sales, general and administrative 1,766 1,781 1,559 Gain on sale of patents (9,500) - - Total operating expenses (4,659) 4,653 4,522 Operating income (loss) 4,785 (4,526) (4,384) Interest income and other 72 7 193 Interest expense (10) (12) (24) Gain from change in fair value of warrant liability 24 71 991 Income (loss) before taxes 4,871 (4,460) (3,224) Income tax expense (benefit) 8 (10) 21 Net income (loss) $4,863 $(4,450) $(3,245) Basic and diluted net income (loss) per share $0.39 $(0.36) $(0.26) Weighted average common shares outstanding for basic and diluted 12,456 12,420 12,286 NEOMAGIC CORPORATION Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (In thousands) (Unaudited) Three Months Ended April 27, January 27, April 29, 2008 2008 2007 GAAP Gross profit $126 $127 $138 Stock-based compensation included in: Cost of revenue 8 6 5 Non-GAAP Gross profit $134 $133 $143 NEOMAGIC CORPORATION Reconciliation of GAAP Income (Loss) from Operations to Non-GAAP Loss from Operations (In thousands) (Unaudited) Three Months Ended April 27, January 27, April 29, 2008 2008 2007 GAAP Income (loss) from operations $4,785 $(4,526) $(4,384) Stock-based compensation included in: Cost of revenue 8 6 5 Research and Development 273 208 236 Sales, general, and administrative 211 189 212 Gain on sale of patents (9,500) - - Non-GAAP Loss from operations $(4,223) $(4,123) $(3,931) NEOMAGIC CORPORATION Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Loss (In thousands) (Unaudited) Three Months Ended April 27, January 27, April 29, 2008 2008 2007 GAAP Net income (loss) $4,863 $(4,450) $(3,245) Stock-based compensation included in: Cost of revenue 8 6 5 Research and Development 273 208 236 Sales, general, and administrative 211 189 212 Gain on sale of patents (9,500) - - (Gain) from Change in fair value of warrant liability (24) (71) (991) Non-GAAP Net loss $(4,169) $(4,118) $(3,783) NEOMAGIC CORPORATION Reconciliation of GAAP Net Income (Loss) per share to Non-GAAP Net Loss per share (In thousands, except per share data) (Unaudited) Three Months Ended April 27, January 27, April 29, 2008 2008 2007 GAAP Net income (loss) per share $0.39 $(0.36) $(0.26) Stock-based compensation included in: Cost of revenue - - - Research and Development 0.02 0.02 0.02 Sales, general, and administrative 0.02 0.02 0.02 Gain on sale of patents (0.76) - - (Gain) from Change in fair value of warrant liability - (0.01) (0.08) Non-GAAP Net loss per share (1) $(0.33) $(0.33) $(0.31) Weighted average common shares outstanding for basic and diluted 12,456 12,420 12,286 (1) Amounts may not aggregate to the total due to rounding http://www.newscom.com/cgi-bin/prnh/20020802/NMGCLOGO http://photoarchive.ap.org/ DATASOURCE: NeoMagic Corporation CONTACT: Steve Berry, Chief Financial Officer of NeoMagic Corporation, +1-408-988-7020; or Erica Mannion of Sapphire Investor Relations, LLC, +1-212-766-1800, for NeoMagic Corporation Web site: http://www.neomagic.com/

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