General Magic Reports 1996 Third Quarter Results and Announces Reduction in Workforce.SUNNYVALE Sunnyvale, city (1990 pop. 117,229), Santa Clara co., W Calif., near San Francisco; settled 1849, inc. 1912. A city in Silicon Valley, its many manufactures include semiconductors; machinery and instruments; electrical, electronic, and aerospace products; , Calif.--(BUSINESS WIRE)--Oct. 30, 1996--General Magic, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :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 September: see month. 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 Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. totaling $1.5 million ($0.06 per share). Without this one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. 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 support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services . The decline in revenue, was due primarily due to lower license fees resulting from the previously announced shift in strategies to employ Internet standards See Internet Engineering Task Force. 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 Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. 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 July: see month. , 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 v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Markman Mark´man n. 1. A marksman. , 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 for Windows 95 on October October: see month. 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 Soho (sōhō`, sə–), district of Westminster, London, England, known for its continental restaurants. Once a fashionable quarter, it became popular among writers and artists in the 19th cent. (small office/home office See SOHO. ) users." General Magic, Inc. was founded in 1990 and provides engaging, active Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the software for business professionals, developers, device manufacturers, service providers and enterprises. General Magic is headquartered in Sunnyvale, California Sunnyvale ([sʌniveil]) is a city in Santa Clara County, California, United States. It is one of the major cities that make up the Silicon Valley. As of the 2000 census, the city population was 131,760. , with offices in Columbia, South Carolina Columbia is the state capital and largest city of South Carolina. As of 2006, estimates for the population of the city proper is 122,819[1]. Columbia is the county seat of Richland County, but a small portion of the city extends into Lexington County. , 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/. -0- NOTE TO EDITORS: General Magic, Magic Cap, Telescript and Tabriz are registered trademarks of General Magic, Inc. Windows is a trademark of Microsoft Corporation (company) Microsoft Corporation - The biggest supplier of operating systems and other software for IBM PC compatibles. Software products include MS-DOS, Microsoft Windows, Windows NT, Microsoft Access, LAN Manager, MS Client, SQL Server, Open Data Base Connectivity (ODBC), MS Mail, . General Magic acknowledges the rights of the trademark owners for all trademarks referred to herein. -0-
GENERAL MAGIC, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS - Unaudited
(In thousands, except per share amounts)
Three-Month Periods Nine-Month Periods
Ended Sept. 30 Ended Sept. 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 5,520 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
GENERAL MAGIC, INC.
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Sept. 30, Dec. 31,
1996 1995
ASSETS (Unaudited)
Current assets:
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
$ 88,639 $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
CONTACT: General Magic (for Media inquiries) Marty Coleman, 408/774-4420 marty_coleman@genmagic.com or Morgen-Walke Associates, Inc. (for Investor inquiries) Suzanne Craig, Lisa Laukkanen or Doug Sherk, 415/296-7383 or Emily Dupree, Elissa Grabowski, 212/850-5698 http://www.genmagic.com/About/press.html |
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