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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): December 17, 1999
METACREATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Commission file number 0-27168
Delaware 95-4102687
(State of incorporation) (I.R.S. Employer Identification Number)
6303 Carpinteria Ave, Carpinteria, CA 93013
(Address of principal executive offices)
(805) 566-6200
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
Please refer to the following press release, dated December 14, 1999, announcing
certain changes to the Company's strategic objective:
METACREATIONS TO FOCUS SOLELY ON E-COMMERCE VISUALIZATION SOLUTIONS FOR THE WEB
COMPANY TO DIVEST ITSELF OF NON-STRATEGIC SOFTWARE ASSETS
CARPINTERIA, CALIF., DECEMBER 14, 1999 -- MetaCreations Corporation (Nasdaq:
MCRE) today announced that it is moving to one strategic objective, which is to
focus solely on e-commerce visualization solutions for the World Wide Web.
MetaCreations' e-commerce visualization business is centered on the Company's
industry-leading, patented MetaStream technology, specifically for the streaming
and display of interactive 3D virtual product presentation over the Web.
The MetaStream 3D streaming technologies are initially being focused on virtual
product merchandising for hard goods, such as electronics, apparel, housewares,
sporting goods, among others. Forrester Research has stated that these markets
are some of the largest and fastest growing segments of e-commerce, growing from
$6 billion in 1999 to $45 billion in 2003. In addition, industry analysts such
as Forrester, CNET and Jupiter Communications have recognized MetaStream as the
leading visualization technology for interactive product merchandising on the
Web.
The MetaCreations Board of Directors is enthused about the progress being made
by MetaStream.com, MetaCreations' initiative for the delivery of e-commerce
visualization solutions. The Company believes that its growth prospects in
e-commerce visualization are very substantial. However, the Company no longer
sees the professional graphics business as offering growth as compared to its
e-commerce visualization opportunities.
As a result, and after careful consideration by the Board of Directors, the
Company has made the decision to significantly restructure its business to focus
on its e-commerce visualization solutions and to divest its graphics software
assets that do not complement this strategy. This will result in the reduction
of approximately 100 of MetaCreations' personnel by year end, all of whom are
associated with the professional graphics business of the Company. The Company
expects to report a loss of approximately $38 million to $42 million this
quarter, substantially as a result of this decision. Additionally, the Company
expects that revenues this quarter will be significantly less than analysts'
forecasts. The Company also expects that cash balances will remain strong at
December 31, 1999, approximating $36 million to $38 million, reflecting that
most of the charges are non-cash.
At the same time, the Company is aggressively ramping up its personnel and
expenditures in MetaStream.com to accelerate the deployment of its e-commerce
visualization solutions. MetaStream 3.0 will provide many new, advanced forms of
interactivity, improved rendering and compression levels for both 2D and 3D
imagery, content security, data collection, and the ability to seamlessly
integrate other media types, such as audio, vector graphics, video and object
movies. This means that e-retailers can give shoppers the confidence that what
they see is what they get. This is a major step forward in moving shoppers past
items like books and CDs, to must-see products like personal electronics,
apparel, furniture, appliances and automobiles.
The next major version of MetaStream, MetaStream 3.0, is also the enabling
technology for a new licensing model for MetaStream, where e-retailers and
e-merchandisers will pay license fees to broadcast MetaStream models from their
sites. MetaStream.com is currently working with licensees for deployment of
MetaStream visualization solutions. The Company expects that MetaStream 3.0 will
go into beta version this month, with full release expected during the first
quarter of 2000.
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MetaStream has most recently been distinguished by receiving PC Magazine's
prestigious 1999 "Technical Excellence" award and Popular Science magazine's
"Best of What's New" 1999 award. Co-developed by MetaCreations and the Intel
Corporation, MetaStream is currently distributed by Intel through its Web
Outfitters service for Pentium III users, by Excite@Home within @Home 1.7, the
new version of the @Home client software, and Microsoft Corporation distributes
major components of the MetaStream viewer within Windows 98 SE. MetaStream is
also available via download from www.metastream.com/plugins.html. In addition,
Minolta and Kodak are in the process of manufacturing and marketing
MetaStream.com's patented MetaFlash 3D cameras for easier, more efficient
capture and creation of MetaStream content.
The Company has engaged the services of Alliant Partners to help with the
divestment of the Company's non-strategic assets. Alliant Partners is
headquartered in Silicon Valley and provides financial advisory services for
technology companies. The Company expects to generate additional cash through
the sale of these non-strategic software assets.
The Company will continue to leverage its graphics software technology to
develop and deploy strategic authoring capabilities for MetaStream e-commerce
visualization. This will include some of the Company's current award-winning 3D
products and related technologies. The Company intends to continue providing
technical support of all of its products.
About MetaCreations
MetaCreations Corporation is focused on e-commerce visualization solutions for
the World Wide Web. MetaCreations' strategy is centered on the Company's
MetaStream technology and software tools designed to make the interactive use of
photo-realistic 3D on the Web practical and pervasive. MetaStream.com is a joint
initiative between MetaCreations and Computer Associates. The Company is
headquartered in Santa Barbara County, California and can be reached on the
World Wide Web at http://www.metacreations.com. Additional information about
MetaStream.com is available at http://www.metastream.com.
These statements regarding estimated results and charges for the quarter are
preliminary and based on partial information and management assumptions.
MetaCreations expects to announce its actual results for the fiscal year and the
quarter at the close of market on or about February 2, 2000.
This release contains forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially as a result of a number of risks and
uncertainties affecting the Company's business. Such risks include, but are not
limited to, the following: no assurance that e-commerce will grow, grow at rates
in excess of the professional graphics business or grow at rates suggested by
industry analysts; no assurance that MetaCreations' ramping up in its spending
on MetaStream.com will accelerate its deployment of e-commerce solutions; no
assurance that Meta Stream 3.0 will ship on time or include the functionality as
described in this press release; no assurance that MetaCreations' new licensing
model for MetaStream will be successful or that e-tailers or e-merchants will
pay license fees to broadcast MetaStream models from their Web sites; no
assurance that the Company will be able to leverage its graphics software
technology to deploy authoring capabilities for MetaStream; no assurances that
the Company will be able to sell its non-strategic assets or generate cash from
the sale of those assets. For a more detailed discussion of factors that affect
MetaCreations' operating results, interested parties should review
MetaCreations' SEC reports, including MetaCreations' Annual Report on Form 10-K
for the year ended December 31, 1998, and Quarterly Reports on Form 10-Q.
# # #
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MetaCreations, MetaStream and MetaFlash are either registered trademarks or
trademarks of MetaCreations Corporation. Other product and company names herein
may be trademarks of their respective owners.
Press Contacts:
Terry Kinninger
Chief Financial Officer
(805) 566-6200
[email protected]
Betty Franklin
Investor Relations
(805) 566-6289
[email protected]
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
METACREATIONS CORPORATION
(Registrant)
DATE: DECEMBER 17, 1999 /s/ TERANCE A. KINNINGER
------------------------
Terance A. Kinninger
Senior Vice President and
Chief Financial Officer
