SANTA CLARA, Calif., Feb. 18 /PRNewswire/ -- NeoMagic Corporation
(Nasdaq: NMGC) today reported net sales for the fiscal year ended
January 31, 1999 of $240.5 million, an increase of 93% compared to net
sales of $124.7 million for fiscal 1998. Net income for fiscal 1999 was
$31.2 million, or $1.19 per diluted share, compared to net income of
$20.8 million, or $0.82 per diluted share in fiscal 1998. Fiscal 1999
net income of $31.2 million reflected an effective tax rate of 34%,
whereas fiscal 1998 net income reflected an effective tax rate of 15%.
Net sales for the fourth quarter of fiscal 1999 were $72.0 million, an
increase of 61% compared to net sales of $44.7 million in the fourth
quarter of fiscal 1998, and an increase of 7% compared to net sales of
$67.4 million in the third quarter of fiscal 1999. Net income for the
fourth quarter of fiscal 1999 was $9.0 million, or $0.34 per diluted
share, compared to net income of $8.2 million, or $0.32 per diluted
share in the fourth quarter of fiscal 1998 and $8.6 million, or $0.33
per diluted share in the third quarter of fiscal 1999.
Prakash Agarwal, president and CEO, said, "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. This quarter marks the
completion of our second full year as a public company. In each of
eight successive quarters we have delivered higher revenue, higher
profits, and higher market share."
Business Highlights
According to Mr. Agarwal, "NeoMagic's initial successes have been
in the area of multimedia accelerators for notebook PCs. During this
fiscal year we became the market leader in our chosen field. We have
benefited from end-use demand for anytime-everywhere access to vibrant
world wide web content, and the notebook PC market's resulting moves
towards mainstream machines with full multimedia capability on the one
hand, and thinner, lighter form-factors on the other. Our proprietary
MagicWare(TM) embedded DRAM technology allows our customers to enhance
the features and performance of their designs, while actually reducing
the power consumption for longer life and lower weight in batteries. We
have made our market share gains in the strongest segments of the
notebook PC market."
During the month of January 1999, NeoMagic shipped the twelve millionth
multimedia accelerator using its MagicWare technology. The company also
shipped the millionth unit of its newest product, the
MagicMedia(TM)256AV. This product, first introduced in June of 1998, is
a single-chip multimedia solution, which integrates 2.5 megabytes of
synchronous DRAM, and provides the industry's first 256-bit
architecture for graphics, video, audio and DVD playback acceleration.
During the fourth quarter NeoMagic identified 38 new notebook PC models
which were introduced by customers using the MagicMedia256AV.
In June of 1998, NeoMagic announced the formation of its Consumer
Products Division. Today, in separate releases, NeoMagic announced the
acquisition of the UK-based Optical Drive Development Group of Mitel
Semiconductor and the acquisition of the assets and intellectual
properties of ACL of Israel. According to Mr. Agarwal, "NeoMagic is
pursuing a multi-market strategy extending beyond the notebook arena
and into new markets and applications that capture and store the
richness of the internet experience and benefit from mobility, small
form factor, battery life and the performance benefits that come from
our MagicWare DRAM integration. We are firmly embarked upon new product
development activities for two new markets: DVDs and digital cameras.
These acquisitions are complementary to our own activities in these new
market areas, some of which have been under way for several quarters."
Fiscal Year Financial Review
Key operational ratios for the fourth quarter and fiscal year,
expressed as a percentage of overall sales follows:
Fourth Quarter Fiscal Year
Gross Margins 39.0% 40.6%
R&D Expense 13.1% 13.2%
Selling, General & Admin. Expense 7.9% 8.6%
Operating Income 18.0% 18.8%
Selected fourth quarter financial ratios are as follows:
Current Ratio 3.3
Accounts Receivable Days Outstanding 25
Inventory Turns Per Year 9.2
Revenue Per Employee (Q4 annualized) $1.23 million
In December, 1998 NeoMagic was again selected as the "Best
Financially Managed Company" by the Fabless Semiconductor Association
(FSA), an industry organization of over 200 North American
semiconductor companies which make use of subcontracted wafer
fabrication resources. The FSA and sponsoring financial analysts
evaluated the public fabless semiconductor companies traded on the
NASDAQ by comparing financial indices as of the quarter ending June
1998, which included return on investment, return on equity, inventory
turns, days sales outstanding, cash-per-share, sales-per-employee and
current ratio. Revenue and net income growth was also considered to
determine this year's winner.
About NeoMagic
NeoMagic Corporation, based in Santa Clara, Calif., is the first
company to pioneer the integration of DRAM, complex logic and analog
circuits into a single chip. The company's proprietary MagicWare(TM)
technology eliminates the need to drive signals off-chip to discrete
memory. NeoMagic's embedded memory approach achieves its performance
advantage while actually lowering the power consumption and extending
the battery life for smaller, lighter weight portable computers.
NeoMagic Corporation has been awarded honors by the Fabless
Semiconductor Association for the past three years: In 1996 as the
industry's "Most Respected Private Fabless Company;" in 1997 and 1998
as the "Best Financially Managed Fabless Company." NeoMagic may be
contacted on the World Wide Web at www.neomagic.com or at 408-988-7020.
Note: This press release contains forward-looking statements, which
reflect management's current intentions and expectations. However,
actual results could vary significantly based on a variety of factors
including and not limited to: general seasonal conditions in the PC
industry, channel inventory levels in the notebook PC market, continued
success in development and ramping of the Company's new products in a
timely and cost-effective manner, foreign exchange rate fluctuations,
manufacturing sub-contractors' abilities to make timely deliveries,
customer acceptance of the Company's new products, and market
acceptance of customers' machines utilizing the Company's products.
Additional risk factors are listed in the Company's Fiscal Year 1998
Form 10K and Fiscal 1999 Form 10Qs.
NeoMagic, MagicGraph, and the NeoMagic circle logo are registered
trademarks of NeoMagic Corporation. MagicWare, and MagicMedia, 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.
NEOMAGIC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
January 31, January 31,
1999 1998 1999 1998
Net sales $71,968 $44,657 $240,503 $124,654
Cost of sales 43,876 25,910 142,881 73,171
Gross margin 28,092 18,747 97,622 51,483
Operating expenses:
Research and development 9,461 5,362 31,756 16,091
Sales, general
and administrative 5,692 4,179 20,740 12,290
Total operating expenses 15,153 9,541 52,496 28,381
Income from operations 12,939 9,206 45,126 23,102
Other income (expense), net:
Interest income and other 876 858 3,810 2,643
Interest expense (397) (435) (1,339) (1,298)
Income before income taxes 13,418 9,629 47,597 24,447
Provision for income taxes 4,432 1,444 16,395 3,667
Net income $8,986 $8,185 $31,202 $20,780
Basic earnings per share $.37 $.36 $1.32 $.95
Diluted earnings per share $.34 $.32 $1.19 $.82
Weighted common shares
outstanding 24,120 22,976 23,710 21,924
Weighted common shares
outstanding, assuming dilution 26,530 25,907 26,153 25,336
NEOMAGIC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
January January
31, 31,
1999 1998
ASSETS
Current assets:
Cash and cash equivalents and
short-term investments $92,728 $71,020
Accounts receivable, net 19,363 11,236
Inventory 19,046 9,342
Other current assets 2,681 3,730
Total current assets 133,818 95,328
Property, plant and equipment, net 8,335 6,232
Other assets 2,221 6,023
Total assets $144,374 $107,583
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Working capital line of credit $-- $21,041
Accounts payable 29,790 9,490
Accrued expenses 10,487 10,652
Obligations under capital leases 702 1,273
Total current liabilities 40,979 42,456
Stockholders' equity 103,395 65,127
Total liabilities and stockholders' equity $144,374 $107,583
SOURCE NeoMagic Corporation
-0- 02/18/99 /CONTACT: Merle McClendon,
Vice President Finance, CFO of NeoMagic Corporation, 408-988-7020/
/Company News On-Call: prnewswire.com or
fax, 800-758-5804, ext. 120874/
/Web site: neomagic.com (NMGC)
CO: NeoMagic Corporation ST: California IN: CPR SU: ERN
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