Exhibit 99.1
FOR IMMEDIATE RELEASE
Investor Contact:
Ulrich Gottschling
Chief Financial Officer
(949) 442-5596
ir@srslabs.com
SRS LABS REPORTS RESULTS FOR SECOND QUARTER 2007
Santa Ana, Calif., August 6, 2007 - - SRS Labs, Inc. (NASDAQ: SRSL), a leading supplier of surround sound, audio, and voice technologies, announced today revenues for the three months ended June 30, 2007 of $4.7 million, as compared to $4.3 million for the same period in the prior year. Income from continuing operations for the three months ended June 30, 2007 increased $883 thousand or 218% to $1.3 million, or $0.08 per diluted shared, compared to $406 thousand, or $0.02 per diluted shared for the same period in the prior year. Net income for the three months ended June 30, 2007 increased $359 thousand or 39 percent to $1.3 million, or $0.08 per diluted share, compared to $929 thousand or $0.06 per diluted share for the same period in the prior year.
For the three months ended June 30, 2007, revenue increased by 10 percent as compared to the same period during the prior year, primarily due to continued increases in revenues related to the home entertainment segment of the business. Revenue from flat panel televisions and monitors grew by $1.0 million or 60% on a year over year basis.
Thomas C.K. Yuen, Chairman and CEO of SRS Labs, Inc. commented on the results: “A particular focus of the Company at this time is protection of SRS’s valuable patents and enforcement of its royalty program. The proactive enforcement and administration of these programs will help us to identify improper or unauthorized usage of our intellectual properties, as well as to ensure the accurate and timely royalty reporting by our licensees. As SRS continues to gain in market penetration based on the superiority of its intellectual properties, an important part of our strategy will be to send a clear message of patent enforcement and royalty contract compliance to the marketplace. While there could be a short-term negative impact, we believe that this strategy will have very positive long-term results and will lead to even stronger business partnerships with our customers.”
Conference Call
SRS Labs will host a conference call and webcast at 2 p.m. Pacific time today (5 p.m. Eastern Time) to review its second quarter 2007 results. The dial-in number for the call is (866) 837-9782; ask for “SRS Labs Q2 Results Conference Call.” An audio replay of the conference call will be available until August 13, 2007 at 6:00 p.m. Pacific time via telephone. The audio replay dial-in number is 866-219-1444 and enter access code 1116204.
The call will also be webcast live over the Internet. Simply log-on to http://investor.shareholder.com/media/eventdetail.cfm?mediaid=26673&c=SRSL&mediakey=601139A29C904E1D685B07041B8D17EA&e=0
The webcast will be archived on www.srslabs.com for 60 days following the call.
About SRS Labs, Inc.
SRS Labs is a recognized leader in the advancement of audio and voice technology. The company works with the world’s top manufacturers to provide a richer entertainment experience through patented sound techniques. SRS Labs’ technologies can be heard through products ranging from televisions, LCD and plasma monitors, cell phones, MP3 players, car audio systems, and notebook and desktop computers. The company also offers hardware and software tools to professionals and consumers for the creation, production and broadcast of content featuring SRS Labs’ technologies. Based in Santa Ana, Calif., the company also has licensing representation in Hong Kong, Taiwan, Japan, China, Europe, and Korea. For more information about SRS Labs, Inc. please visit www.srslabs.com. The information on the aforementioned website is not incorporated by reference into this press release.
Except for historical information contained in this release, statements in this release, including those of Mr. Yuen are forward-looking statements and projections (which include statements concerning plans and objectives of management for future operations) that are based on management’s belief, as well as assumptions made by, and information currently available to management. While the company believes that its expectations are based upon reasonable assumptions, there can be no assurances that the company’s goals and strategy will be realized. Numerous factors, including risks and uncertainties, may affect the company’s actual results and may cause results to differ materially from those expressed in forward-looking statements made by or on behalf of the company. Some of these factors include, the acceptance of new SRS Labs’ products and technologies, the impact of competitive products and pricing, the timely development and release of technologies by the company, general business and economic conditions, especially in Asia, and other factors detailed in the company’s Form 10-K and other periodic reports filed with the SEC. SRS Labs specifically disclaims any obligation to update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.
– More –
SRS Labs, Inc. 2909 Daimler Street, Santa Ana, CA 92705 Tel 949-442-1070 Fax 949-852-1099 www.srslabs.com
SRS LABS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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| June 30, 2007 |
| December 31, 2006 |
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| (unaudited) |
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ASSETS |
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Current Assets |
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Cash and cash equivalents |
| $ | 38,616,425 |
| $ | 35,011,425 |
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Accounts receivable, net |
| 1,571,063 |
| 1,180,879 |
| ||
Prepaid expenses and other current assets |
| 576,033 |
| 808,940 |
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Total Current Assets |
| 40,763,521 |
| 37,001,244 |
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Investments available for sale |
| 5,230,170 |
| 5,226,705 |
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Property and equipment, net |
| 352,069 |
| 389,667 |
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Intangible assets, net |
| 2,226,092 |
| 2,045,139 |
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Deferred income taxes, net |
| 958,327 |
| 386,412 |
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Total Assets |
| $ | 49,530,179 |
| $ | 45,049,167 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current Liabilities |
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Accounts payable |
| $ | 371,613 |
| $ | 609,899 |
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Accrued liabilities |
| 936,102 |
| 1,295,236 |
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Deferred revenue |
| 106,852 |
| 399,565 |
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Total Current Liabilities |
| 1,414,567 |
| 2,304,700 |
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Commitments and contingencies |
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Stockholders’ Equity |
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Preferred stock—$.001 par value; 2,000,000 shares authorized; no shares issued or outstanding |
| — |
| — |
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Common stock—$.001 par value; 56,000,000 shares authorized; 16,941,610 and 16,561,036 shares issued; and 16,267,512 and 15,886,938 shares outstanding at June 30, 2007 and December 31, 2006, respectively |
| 16,943 |
| 16,562 |
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Additional paid-in capital |
| 73,240,360 |
| 70,574,176 |
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Accumulated other comprehensive loss |
| (269,830 | ) | (273,295 | ) | ||
Accumulated deficit |
| (21,868,416 | ) | (24,569,531 | ) | ||
Treasury stock at cost, 674,098 shares at June 30, 2007 and December 31, 2006 |
| (3,003,445 | ) | (3,003,445 | ) | ||
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Total Stockholders’ Equity |
| 48,115,612 |
| 42,744,467 |
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Total Liabilities and Stockholders’ Equity |
| $ | 49,530,179 |
| $ | 45,049,167 |
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SRS LABS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
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| Three Months Ended |
| Six Months Ended |
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| June 30, |
| June 30, |
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| 2007 |
| 2006 |
| 2007 |
| 2006 |
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Revenues |
| $ | 4,694,852 |
| $ | 4,259,839 |
| $ | 9,767,255 |
| $ | 8,595,507 |
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Cost of sales |
| 40,522 |
| 35,293 |
| 79,062 |
| 83,105 |
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Gross margin |
| 4,654,330 |
| 4,224,546 |
| 9,688,193 |
| 8,512,402 |
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Operating expenses: |
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Sales and marketing |
| 1,767,717 |
| 1,885,416 |
| 3,644,010 |
| 3,750,785 |
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Research and development |
| 814,595 |
| 631,739 |
| 1,676,220 |
| 1,286,028 |
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General and administrative |
| 1,292,181 |
| 1,357,789 |
| 2,669,608 |
| 2,994,997 |
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Total operating expenses |
| 3,874,493 |
| 3,874,944 |
| 7,989,838 |
| 8,031,810 |
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Operating income |
| 779,837 |
| 349,602 |
| 1,698,355 |
| 480,592 |
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Interest income |
| 508,964 |
| 224,005 |
| 1,002,760 |
| 403,718 |
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Income from continuing operations before income taxes |
| 1,288,801 |
| 573,607 |
| 2,701,115 |
| 884,310 |
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Income taxes |
| — |
| 167,745 |
| — |
| 327,168 |
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Income from continuing operations |
| 1,288,801 |
| 405,862 |
| 2,701,115 |
| 557,142 |
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Discontinued operations: |
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Income from discontinued operations, net of income taxes |
| — |
| 152,261 |
| — |
| 163,556 |
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Gain on disposal |
| — |
| 371,295 |
| — |
| 371,295 |
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Income from discontinued operations |
| — |
| 523,556 |
| — |
| 534,851 |
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Net income |
| $ | 1,288,801 |
| $ | 929,418 |
| $ | 2,701,115 |
| $ | 1,091,993 |
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Income from continuing operations per common share: |
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Basic |
| $ | 0.08 |
| $ | 0.03 |
| $ | 0.17 |
| $ | 0.04 |
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Diluted |
| $ | 0.08 |
| $ | 0.02 |
| $ | 0.16 |
| $ | 0.03 |
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Income from discontinued operations per common share: |
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Basic |
| $ | 0.00 |
| $ | 0.04 |
| $ | 0.00 |
| $ | 0.04 |
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Diluted |
| $ | 0.00 |
| $ | 0.03 |
| $ | 0.00 |
| $ | 0.03 |
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Net income per common share: |
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Basic |
| $ | 0.08 |
| $ | 0.06 |
| $ | 0.17 |
| $ | 0.08 |
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Diluted |
| $ | 0.08 |
| $ | 0.06 |
| $ | 0.16 |
| $ | 0.07 |
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Weighted average shares used in the calculation of net income per common share: |
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Basic |
| 16,202,909 |
| 14,622,210 |
| 16,106,312 |
| 14,523,459 |
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Diluted |
| 16,652,184 |
| 16,334,105 |
| 16,448,156 |
| 16,206,277 |
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