General Magic, Inc. Reports 1995 First Quarter Results
SUNNYVALE, Calif. — May 9, 1995 — General Magic Inc. (Nasdaq: GMGC) today announced its operating results for the first quarter of fiscal year 1995. Revenues in the quarter ended March 31, 1995 were $4,183,000. The company was in the development stage and had no revenues during the same quarter last year. The company's net loss decreased 29% to $3.6 million or $0.17 per share for the first quarter of 1995, compared to a net loss of $5.1 million or $0.32 per share in the prior year period.
Licensing revenue, consisting primarily of one-time license fees for Magic Cap(TM) and Telescript(TM) technologies, was $3,363,000. The remainder of revenues includes primarily support services fees from the company's licensees.
"We are executing in line with our operating objectives and expect to continue to deliver on our key product milestones," said Marc Porat, chairman and chief executive officer of General Magic. "We are particularly pleased that Magic Cap application development tools are now commercially available from Metrowerks, the leading Macintosh tools provider. Their availability marks the opening of the Magic Cap platform to interested application developers worldwide and should enable them to develop applications for communicators and personal computers."
During the quarter, General Magic began to expand its sales and support presence internationally. The company hired a manager for its sales and support office in Japan, which it expects to open in the second quarter of 1995. The company also announced plans to open a European office in the second half of 1995.
In a related development, General Magic will assume responsibility for commercial Telescript software licensing activities in Europe from Philips Advanced Communication Enterprise (PACE), an affiliate of Philips Electronics N.V. beginning in the second quarter of 1995. The two companies have determined that General Magic is better-suited to pursue Telescript licensing opportunities in Europe, and have therefore terminated their VAR agreement. The company expects this change to have no material effect on its operations or financial condition.
Philips, a member of the General Magic Alliance and a Magic Cap licensee, has re-deployed members of the Philips PACE team to multiple divisions primarily to develop communicator and semiconductor products based on General Magic's technologies. "Philips has developed an enormous technical expertise around the General Magic platforms and will continue to capitalize on that very effectively in our new structure," said Cees Jan Koomen, Managing Director of the Communications & Multimedia Group at Philips Semiconductors.
General Magic Inc. was founded in May 1990 and is headquartered in Sunnyvale, California. Its mission is to create personal intelligent communication products and services by developing and licensing technology to equipment manufacturers, network and information service providers, and software and entertainment companies. 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.
GENERAL MAGIC
(A Development Stage Company)
CONDENSED BALANCE SHEETS
(In thousands)
March 31, 1995 Dec. 31, 1994
(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $118,812 $ 40,747
Receivables and prepaid expenses 1,668 488
Total current assets 120,480 41,235
Property and equipment, net 5,181 3,751
Other assets 210 905
Total 125,871 45,891
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued expenses and current
portion of capital lease obligations 6,814 4,581
Deferred revenue 2,185 3,242
Total current liabilities 8,999 7,823
Capital lease obligations, net of current
portion, and other long-term liabilities 2,537 2,539
Deferred revenue, noncurrent 11,600 10,600
Total liabilities 23,136 20,962
Preferred stock, common stock and additional
paid-in capital 159,462 78,009
Deficit accumulated during development
stage (56,727) (53,080)
Total stockholders' equity 102,735 24,929
Total 125,871 45,891
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three-Month Periods Ended
March 31,
1995 1994
(Unaudited) (Unaudited)
Revenue $ 4,183 $ —
Cost of revenue and operating expenses:
Cost of revenue 538 —
Research and development 4,231 3,013
Sales, general, and administrative 3,786 2,213
Total cost of revenue and operating
expenses 8,555 5,226
Loss from operations (4,372) (5,226)
Net interest and other income 1,075 114
Loss before income taxes (3,297) (5,112)
Income taxes 350 —
Net loss (3,647) (5,112)
Net loss per share $ (0.17) $ (0.32)
Shares and share equivalents used in
computing per share amounts 21,784 16,117
CONTACT:
Marco DeMiroz, Chief Financial Officer of General Magic, 408-774-4291