Fast-growing NeoMagic aims at DVD and digital cameras
semibiznews.com
Semiconductor Business News
(02/19/99, 10:59 a.m. EDT)
SANTA CLARA, Calif. — NeoMagic Corp. has plans to expand into the digital video disk and digital still camera markets through a pair of acquisitions. The news announced yesterday (2/18) comes as the company posts net income of $9.0 million for its fiscal fourth quarter, and continuing sales increases.
"We are pursuing a multi-market strategy extending beyond the notebook arena and into other markets and applications," said Prakash Agarwal, president and CEO.
NeoMagic has acquired the optical drive development group from Mitel Semiconductor, including 16 employees and associated intellectual property, based in Manchester, England. The group will complement NeoMagic's ongoing efforts to bring embedded DRAM to DVD technology. "As Internet bandwidth grows, end-users are demanding more multimedia content in their web experience. DVD is the technology of choice for the storage of multimedia content in the Internet age, and so is a significant market opportunity."
In a separate deal, NeoMagic is acquiring the assets and intellectual property of Tel Aviv, Israel-based ACL, which is known for its complex image processing algorithms. "Growth in the popularity of the Internet is driving consumer demand for images and videos to make engaging web experiences," Agarwal said. "This in turn fuels the need for small, highly portable still and video cameras that capture digital multimedia content in convenient formats." Terms for neither deal were released.
The company reported today total fourth quarter sales of $$72.0 million for the period ending Jan. 31. That's a gain of 61 percent from the $44.7 million reported in the same period last year, and up 7 percent from the preceding quarter's $67.4 million total. That led to net income of $9.0 million, compared to $8.2 million in last year's fourth quarter.
"We are quite pleased with our results for the fourth quarter, and we take great pride in what NeoMagic has accomplished over the fiscal year," said Agarwal.
Total sales for the year were $240.5 million, up 93 percent from revenue of $124.7 million last year. This led to net income of $31.2 million, up from 20.8 million last year. "We are firmly embarked upon new product development activities for these two new markets: DVD and digital cameras," Agarwal said. "These acquisitions are complementary to our own activities in these new market areas."
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