General Magic, Inc. Reports 1995 Third Quarter Results

The Original Press Release

General Magic, Inc. Reports 1995 Third Quarter Results

SUNNYVALE, Calif. — November 7, 1995 — General Magic, Inc. (Nasdaq: GMGC) today announced its operating results for the third quarter of fiscal year 1995. Revenues in the quarter ended September 30, 1995 were $3.2 million. Revenues during the same quarter last year were $2.5 million. The Company's net loss increased 28% to $5.1 million or $.20 per share for the third quarter of 1995, from a net loss of $4.0 million or $.25 per share in the prior year period.

For the nine months ended September 30, 1995, revenues were $9.3 million. Revenues during the nine months ended September 30, 1994 were $2.5 million. The Company's net loss increased 6% to $15.2 million or $.63 per share for the nine months ended September 30, 1995, from a net loss of $14.3 million or $.90 per share in the prior year period.

Licensing revenue, consisting primarily of a nonrefundable, nonrecoupable license fee for Telescript(TM) technologies, was $2.6 million. Other revenue includes support services fees from the Company's licensees.

General Magic, Inc. was founded in May 1990 and is headquartered in Sunnyvale, California. Its mission is to participate in the electronic marketplace by developing and licensing software to leading providers of communication products, network services and network applications. The General Magic Founding Partners Council includes AT&T, Cable & Wireless, France Telecom, Fujitsu, Matsushita, Mitsubishi Corporation, Mitsubishi Electric, Motorola, Nortel, NTT, Oki, Philips, Sanyo, Sony, and Toshiba. To date, General Magic has generated minimal revenues from the sale of products and services based upon its technologies, does not expect to generate any significant revenues in 1995 and expects to incur substantial losses at least through the year ending December 31, 1996.

NOTE: Magic Cap and Telescript are trademarks of General Magic, Inc.

GENERAL MAGIC, INC.

(A Development Stage Enterprise)

CONDENSED BALANCE SHEETS

(In thousands)

September 30, December 31,

1995 1994

(Unaudited)

ASSETS

Current assets:

Cash, cash equivalents and

short-term investments $ 108,120 $ 40,747

Receivables and prepaid expenses 3,799 488

Total current assets 111,919 41,235

Property and equipment, net 5,632 3,751

Other assets 443 905

$ 117,994 $ 45,891

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable, accrued expenses

and current portion of capital

lease obligations $ 5,865 $ 4,581

Deferred revenue 3,413 3,242

Total current liabilities 9,278 7,823

Capital lease obligations, net of current

portion, and other long-term liabilities 2,487 2,539

Deferred revenue, noncurrent 12,600 10,600

Total liabilities 24,365 20,962

Preferred stock, common stock and

additional paid-in capital 161,846 78,009

Unrealized gain on investments 38 —

Deficit accumulated during

development stage (68,255) (53,080)

Total stockholders' equity 93,629 24,929

$ 117,994 $ 45,891

GENERAL MAGIC, INC.

(A Development Stage Enterprise)

CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

Three-Month Periods Nine-Month Periods

Ended Ended

September 30, September 30,

1995 1994 1995 1994

(Unaudited) (Unaudited)

Revenue 3,227 2,500 9,292 2,500

Cost of revenue and operating

expenses:

Cost of revenue 357 — 1,391 —

Research and development 4,754 3,469 13,847 9,581

Sales, general, and

administrative 4,675 2,727 13,058 7,162

Total cost of revenue and

operating expenses 9,786 6,196 28,296 16,743

Loss from operations (6,559) (3,696) (19,004) (14,243)

Net interest and other

income 1,591 151 4,485 407

Loss before income taxes (4,968) (3,545) (14,519) (13,836)

Income taxes 100 425 656 425

Net loss $ (5,068) $ (3,970) [15,175) [14,261)

Net loss per share $ (0.20) $ (0.25) $ (0.63) $ (0.90)

Shares and share equivalents

used in computing

per share amounts 25,310 15,695 24,044 15,818

CONTACT:
Michael Stern, Vice President Business Affairs and Acting Chief Financial Officer of General Magic, 408-774-4235, or Michael(underscore)[email protected]