NEWS
For Immediate Release
Media Inquiries:
Marty Coleman
marty_coleman@genmagic.com
+1 408-774 4420
Investor Inquiries:
Morgen-Walke Associates, Inc.
Suzanne Craig, Lisa Laukkanen or Doug Sherk
+1 415-296-7383
Emily Dupree, Elissa Grabowski
+1 212 850 5698
SUNNYVALE, Calif.-- Oct. 30, 1996 -- General Magic, Inc. (NASDAQ:GMGC) today announced its operating results for the third quarter of fiscal year 1996. The company also announced that it has reduced its workforce from approximately 280 to approximately 200 regular and contract personnel.
For the quarter ended September 30, 1996, the Company incurred a net loss of $12.4 million, or $0.48 per share, compared to a net loss of $11.6 million, or $0.45 per share for the last quarter and $5.1 million, or $0.20 per share, for the same quarter in 1995. The net loss for the third quarter includes write-offs of in-process research and development and acquired technology previously capitalized totaling $1.5 million ($0.06 per share). Without this one-time charge the loss per share would have been $0.42 per share ($10.9 million) which is a $0.03 per share improvement over the second quarter of 1996.
Revenue for the quarter ended September 30, 1996 totaled $0.8 million compared to $1.1 million for the last quarter and $3.2 million for the same quarter in 1995. Revenue for the quarter ended September 30, 1996 was primarily related to customer specific engineering programs and maintenance and support services. The decline in revenue was due primarily to lower license fees resulting from the previously announced shift in strategies to employ Internet standards in the Company's products.
Research and development expenses, exclusive of the one-time charges mentioned above, were $5.5 million for the quarter ended September 30, 1996, compared to $7.4 million last quarter and $4.8 million for the same quarter in 1995. The decrease in expenses from the second to the third quarter of 1996 primarily reflects reduced outside research and development contract services and other expenses.
During the third quarter, the Company recognized a one-time charge of $1.3 million, reflecting the write-off of software technology previously capitalized as a part of software acquired in April, 1996 from Active Paper, Inc. In addition, the Company recorded a $200,000 charge for in-process research and development costs related to the acquisition of Conterra, Inc. in July, 1996.
The Company expects to record a charge related to the reduction in force, ranging from $2 to $4 million in the fourth quarter of 1996.
"This was not an easy decision," said Steve Markman, General Magic's president and chief executive officer, "however, we believe the reduction allows us to better focus on opportunities we see ahead, as well as conserve our nearly $80 million in cash."
"One such opportunity, for example, is our launch of Magic Cap(r) for Windows(r) 95 on October 7. This is an exciting new communications and information management tool which brings the Magic Cap software developed for hand held devices to the desktop for SOHO (small office/home office) users."
General Magic, Inc. was founded in 1990 and provides engaging, active Internet software for business professionals, developers, device manufacturers, service providers and enterprises. General Magic is headquartered in Sunnyvale, California, with offices in Columbia, South Carolina, Paris, France, and Tokyo, Japan. For more information on General Magic and its products, visit General Magic's Web site at http://www.genmagic.com/.
# # #
General Magic, Magic Cap, Telescript and Tabriz are registered trademarks of General Magic, Inc.Windows is a trademark of Microsoft Corporation. General Magic acknowledges the rights of the trademark owners for all trademarks referred to herein.
GENERAL MAGIC, INC.
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
|
ASSETS |
|
Sept 30, 1996 |
Dec. 31, 1995 |
|---|---|---|---|
|
Current assets: |
|
(Unaudited) |
|
|
Cash and cash equivalents and short-term investments |
$79,640 |
$104,725 | |
|
Receivables and prepaid expenses |
2,055 |
4,006 | |
|
Total current assets |
81,695 |
108,731 | |
|
Property and equipment, net |
6,505 |
6,692 | |
|
Other assets |
|
439 |
443 |
|
|
|
|
|
|
|
|
$88,693 |
$115,866 |
|
| |||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
| ||
|
Current liabilities: |
|
|
|
|
Accounts payable, accrued expenses and current portion of capital lease obligations |
$9,622 |
$6,698 | |
|
Deferred revenue |
1,400 |
1,614 | |
|
|
|
|
|
|
Total current liabilities |
11,022 |
8,312 | |
|
| |||
|
Deferred revenue, noncurrent |
14,427 |
15,760 | |
|
Capital lease obligations, net of current portion and other long-term liabilities |
3,482 |
2,702 | |
|
|
|
|
|
|
Total liabilities |
|
28,931 |
26,774 |
|
| |||
|
Stockholders' equity: |
|
|
|
|
Common stock and additional paid-in capital |
164,504 |
162,621 | |
|
Unrealized gain (loss) on investments |
1 |
170 | |
|
Deficit accumulated during development stage |
(104,797) |
(73,699) | |
|
Total stockholders' equity |
59,708 |
89,092 | |
|
|
|
|
|
|
|
|
$88,639 |
$115,866 |
GENERAL MAGIC, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS -
Unaudited
(In thousands, except per share amounts)
|
|
Three-Month Periods Ended September 30 |
Six-Month Periods Ended September 30 | ||
|---|---|---|---|---|
|
|
1996 |
1995 |
1996 |
1995 |
|
Revenue: |
|
|
|
|
|
Licensing revenue |
$ 197 |
$2,669 |
$2,001 |
$7,107 |
|
Other revenue |
557 |
558 |
2,675 |
2,185 |
|
Total revenue |
754 |
3,227 |
4,676 |
9,292 |
|
Costs and expenses: |
|
|
| |
|
Cost of other revenue |
463 |
357 |
2,213 |
1,391 |
|
Research and development |
5,207 |
4,754 |
18,314 |
13,847 |
|
Sales, general, and administrative |
6,309 |
4,675 |
15,840 |
13,058 |
|
Write-off of acquired technology and in-process research and development |
1,542 |
- |
1,542 |
- |
|
Total costs and expenses |
13,834 |
9,786 |
37,909 |
28,296 |
|
Loss from operations |
(13,080) |
(6,559) |
(33,233) |
(19,004) |
|
Net interest, other income and expense |
663 |
1,591 |
2,266 |
4,485 |
|
Loss before income taxes |
(12,417) |
(4,968) |
(30,967) |
(14,519) |
|
Income taxes |
3 |
100 |
131 |
656 |
|
Net loss |
$(12,420) |
$(5,068) |
$(31,098) |
$(15,175) |
|
Net loss per share |
$(0.48) |
$ (0.20) |
$(1.20) |
$ (0.63) |
|
Shares and share equivalents used in computing per share amounts |
26,144 |
25,310 |
26,017 |
24,044 |