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EXHIBIT 99.1
Laura Crowley Christina Carrabino (General)
General Magic, Inc. Allison Parker (Investor)
1 + 408 774 4457 Financial Relations Board
[email protected] 1 + 415 986 1591
FOR IMMEDIATE RELEASE
General Magic Announces Second Quarter 2000 Results
Sunnyvale, CA, (August 2, 2000) - General Magic (Nasdaq: GMGC), a leading
voice application service provider, today announced its operating results for
the second quarter ended June 30, 2000.
Revenue for the second quarter ended June 30, 2000, was $2.3 million
compared to $180 thousand in the second quarter of 1999. Excluding a non-cash
adjustment, General Magic incurred a net operating loss of $9.1 million, or
$0.18 per diluted share, in the second quarter of 2000, an improvement of 30%
compared to a net operating loss of $13 million, or $0.33 per diluted share, in
the second quarter of 1999. The net loss applicable to common stock holders for
the second quarter of 2000 included a $7.5 million non-cash adjustment, or $0.15
per diluted share, to accumulated deficit related to preferred stock issued
during the period with favorable conversion and redemption rights and dividends
on preferred stock, compared to a similar $351 thousand non-cash adjustment, or
$0.01 per diluted share, in the same period of 1999.
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Revenue for the six months ended June 30, 2000, was $4.9 million compared
to $335 thousand for the six months ended June 30, 1999. Excluding a non-cash
adjustment, General Magic incurred a net operating loss of $21.1 million, or
$0.42 per diluted share, for the six months ended June 30, 2000, an improvement
of 21% compared to a net operating loss of $26.7 million, or $0.73 per diluted
share, for the six months ended June 30, 1999. The net loss applicable to common
stock holders for the six months ended June 30, 2000, included a $7.6 million
non-cash adjustment, or $0.16 per diluted share, to accumulated deficit related
to preferred stock issued during the period with favorable conversion and
redemption rights and dividends on preferred stock, compared to a similar $885
thousand non-cash adjustment, or $0.02 per diluted share, in the same period of
1999.
Operating expense for the second quarter of 2000 was $11.7 million compared
to $12.2 million for the second quarter of 1999. Operating expense for the six
months ended June 30, 2000 was $ 26.6 million compared to $ 24.5 million for the
six months ended June 30, 1999. Cash and short-term investments totaled $24.6
million as of June 30, 2000, compared to $16.6 million as of March 31, 2000. As
of June 30, 2000, there were 55.6 million shares of common stock outstanding.
The Kelsey Group recently forecasted that the voice medium will create a
$12 billion voice "e-cosystem" by 2005. General Magic is emerging as a major
player in the growing voice applications segment of
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this market. Recently, General Magic delivered the first phase of the OnStar
Virtual Advisor, demonstrating General Magic's ability to rapidly design,
deliver and host sophisticated personality-rich voice applications, and also
announced its strategic partnership with IBM. IBM and General Magic will
integrate their voice technologies to jointly deliver end-to-end voice solutions
that feature General Magic's premier voice user interface. As part of the
agreement, General Magic will leverage IBM's established sales channel.
"IBM and OnStar selected General Magic because of our superior
patent-pending magicTalk communications platform and our many years of expertise
in engineering and hosting complex voice applications," said Steve Markman,
chairman, chief executive officer and president of General Magic. "We believe by
continuing to choose the right strategic partners and customers to leverage our
superior voice technology and expertise, we will exploit the growth in this
emerging market."
General Magic partners with its customers to define and develop innovative
voice solutions for customer relationship management, telecommunication and
e-commerce applications. This quarter, General Magic completed its trial and
focus groups with Bell South Mobility providing both companies with valuable
market data that will be used in designing value-added telecommunication
services.
Also this quarter General Magic successfully completed the recruitment of
key sales and marketing executives who will enable
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the Company to expand its business and increase its share of the growing voice
applications market.
About General Magic
General Magic is a voice application service provider dedicated to delivering
customized voice applications, hosting, and professional services to leading
telecommunications, enterprise, and Internet companies. With it's award-winning
VoiceXML-based magicTalk communications platform and years of experience,
General Magic offers the premier voice user interface that combines language,
personality, and logic, creating a conversation between people and information.
General Magic creates value for it's customers by building voice solutions that
strengthen customer relations, deliver value-added services, and provide access
to content anytime, anywhere. General Magic is headquartered in Sunnyvale,
California. For additional information about General Magic, visit the company's
web site at http://www.generalmagic.com.
General Magic notes that the forward-looking statements in this press release
involve known and unknown risks, uncertainties and other factors that may cause
industry trends, or actual results, performance or achievement to be materially
different from any future trends, results, performance or achievements expressed
or implied by these statements. These include, among others, risks and
uncertainties concerning the adequacy of the Company's financial resources to
execute its business plan; market acceptance of the Company's technologies and
services; the Company's ability to attract, retain and motivate key technical,
marketing and management personnel; the ability of the Company to establish and
maintain relationships with businesses that have high volume customer
interactions, and to establish alliances with companies that offer technology
solutions for such businesses; the challenges inherent in the development,
delivery and implementation of complex technologies; the ability of the
Company's third party technology partners to timely develop, license or support
technology necessary to the Company's services; and the Company's ability to
respond to competitive developments. These and other risks and uncertainties are
detailed in General Magic's Registration Statement on Form S-3 filed with the
Securities and Exchange Commission on May 26, 2000.
General Magic and magicTalk are trademarks of General Magic, Inc., which may be
registered in some jurisdictions. Other trademarks are owned by their respective
companies.
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FINANCIAL TABLES ATTACHED
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GENERAL MAGIC, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
--------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 13,482 $ 23,045
Short-term investments 11,133 2,490
Other current assets 991 767
--------- ---------
Total current assets 25,606 26,302
--------- ---------
Property and equipment, net 10,598 11,869
Other assets 3,552 3,534
--------- ---------
Total assets $ 39,756 $ 41,705
========= =========
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable $ 3,687 $ 2,780
Accrued expenses 4,094 8,018
Deferred revenue and other current liabilities 1,279 5,895
--------- ---------
Total current liabilities 9,060 16,693
Other long-term liabilities 2,298 2,692
--------- ---------
Total liabilities 11,358 19,385
========= =========
Commitments
Redeemable, convertible Series D preferred stock, $0.001 par value Stated at
involuntary liquidation preference;
Authorized: 2 shares; issued and outstanding: 2000 -- 1; 1999 -- 1 1,976 10,274
Stockholders' equity:
Convertible preferred stock, $0.001 par value
Authorized: 55 shares; issued and outstanding: 2000 -- 55; 1999 -- 53 2 2
Preferred stock, $0.001 par value
Authorized: 427 shares; issued and outstanding: 2000 -- 0; 1999 -- 0 -- --
Common stock, $0.001 par value; authorized: 100,000 shares;
Issued and outstanding: 2000 -- 55,571; 1999 -- 43,248 56 43
Additional paid-in capital 325,987 282,861
Accumulated other comprehensive loss (6) (3)
Deficit accumulated during development stage (299,414) (270,654)
--------- ---------
26,625 12,249
Less treasury stock, at cost: 2000 -- 46; 1999 -- 46 (203) (203)
--------- ---------
Total stockholders' equity 26,422 12,046
--------- ---------
$ 39,756 $ 41,705
========= =========
</TABLE>
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GENERAL MAGIC, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE-MONTH PERIODS ENDED SIX-MONTH PERIODS ENDED
JUNE 30, JUNE 30,
2000 1999 2000 1999
------------------------------- -----------------------------
<S> <C> <C> <C> <C>
Revenue:
Service revenue $ 2,258 $ 164 $ 4,848 $ 301
Licensing revenue 4 16 10 34
---------- ----------- ----------- -----------
Total revenue 2,262 180 4,858 335
---------- ----------- ----------- -----------
Operating expenses:
Cost of service revenue 1,359 -- 2,530 --
Network operations 2,948 1,588 6,028 3,500
Research and development 1,016 3,070 2,992 6,523
Selling, general and administrative 4,771 6,275 11,824 12,181
Depreciation and amortization 1,524 1,145 3,008 2,118
Compensation expense associated with stock 99 113 253 226
---------- ----------- ----------- -----------
Total costs and expenses 11,717 12,191 26,635 24,548
---------- ----------- ----------- -----------
Loss from operations (9,455) (12,011) (21,777) (24,213)
Total other income (expense), net 389 (1,017) 668 (2,510)
---------- ----------- ----------- -----------
Loss before income taxes (9,066) (13,028) (21,109) (26,723)
Income taxes 6 -- 26 22
---------- ----------- ----------- -----------
Net loss (9,072) (13,028) (21,135) (26,745)
Dividends on preferred stock (107) (351) (255) (634)
Warrants issuance on Series D preferred stock -- -- -- (251)
Beneficial conversion feature of Series H
preferred stock (7,366) -- (7,366) --
Loss applicable to common stockholders $ (16,545) $ (13,379) $ (28,756) $ (27,630)
========== =========== =========== ===========
Basic and diluted loss per share $ (0.33) $ (0.34) $ (0.58) $ (0.75)
========== =========== =========== ===========
Shares used in computing per share amounts 52,007 39,242 49,966 36,807
========== =========== =========== ===========
</TABLE>
Net loss applicable to common shareholders for the three-month period ended
June 30, 2000 includes the net loss for the period and $7.5 million in
adjustments to accumulated deficit related to dividends on preferred stock and
issuances of preferred stock with favorable conversion and redemption rights
during the period. Net loss applicable to common shareholders for the
three-month period ended June 30, 1999 includes the net loss for the period and
$351 thousand in adjustments to accumulated deficit related dividends on
preferred stock during the period.
Net loss applicable to common shareholders for the six-month period ended
June 30, 2000 includes the net loss for the period and $7.6 million in
adjustments to accumulated deficit related to dividends on preferred stock and
issuances of preferred stock with favorable conversion and redemption rights
during the period. Net loss applicable to common shareholders for the six-month
period ended June 30, 1999 includes the net loss for the period and $885
thousand in adjustments to accumulated deficit related dividends on preferred
stock and issuances of preferred stock with favorable conversion and redemption
rights during the period.
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