Exhibit 99.1
FOR IMMEDIATE RELEASE
SRS Labs Reports First Quarter 2009 Results
Santa Ana, Calif., May 7, 2009 - SRS Labs, Inc. (NASDAQ: SRSL), the industry leader in surround sound, audio and voice technologies, reported financial results for the first quarter ended March 31, 2009.
First Quarter 2009 Highlights
· Record revenue of $5.7 million, up 15% year-over-year
· Net income totaled $386,000 or $0.03 per basic and diluted share
First Quarter 2009 Financial Results
Revenues in the first quarter 2009 totaled a record $5.7 million, an increase of 15% from $4.9 million in the same period a year ago. The improvement was primarily due to increased revenues in the personal computer, personal telecommunications, home entertainment and automotive segments.
Operating expenses in the quarter totaled $5.3 million, an increase of 19% from $4.5 million in the same quarter a year ago. The increase was primarily attributable to the continuing investment in additional sales, marketing and engineering personnel; increased sales activities; as well as brand building to broaden SRS product recognition with consumers.
For the first quarter of 2009, net income totaled $386,000 or $0.03 per basic and diluted share, versus net income of $858,000 or $0.05 per basic and diluted share in the first quarter of 2008.
Quarter-end cash and cash equivalents and short-term investments totaled $39.1 million as of March 31, 2009, as compared to $39.4 million at the end of the prior quarter.
Management Commentary
“The first quarter of 2009 was a record revenue quarter for SRS,” said Thomas C.K. Yuen, SRS Lab’s chairman and CEO. Our investment in sales, marketing and engineering infrastructure is beginning to pay off and has contributed to this milestone. The pace of our business activities has increased and we believe we are still on tract to achieve a 25% revenue growth rate in 2009. To properly and strategically build on this business momentum, we plan to judiciously further invest in resources to achieve a higher level of sustainable long-term revenue growth and further solidify our position as the leader in audio and voice technology solutions.” While we remain confident about our competitive position and our expectations about the future, we are also cognizant of the general global economy and any potential impact it may have on our results.”
Conference Call
SRS Labs will hold a conference call later today (May 7, 2009) to discuss these first quarter 2009 financial results. Chairman and CEO Thomas C.K. Yuen and CFO Ulrich Gottschling will host the call starting at 5:00 p.m. Eastern time. A question and answer session will follow management’s presentation.
Dial-In Number: 866-206-7204
Conference ID#: 1353497
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization and instruct you to wait until the call begins. If you have any difficulty connecting with the conference call, please contact the Liolios Group at 949-574-3860
Investors can also listen to the conference call live online by accessing the link on the main page of the investor relations section of www.srslabs.com.
A replay of the call will be available after 8:00 p.m. Eastern time on the same day and until May 21, 2009 on our website at www.srslabs.com or by using the following dial in instructions:
Toll-free replay number: 866-837-8032
Conference ID#: 1353497
About SRS Labs, Inc.
Founded in 1993, SRS Labs is the industry leader in audio signal processing for consumer electronics. Beginning with the audio technologies originally developed at Hughes Aircraft, SRS Labs holds over 150 worldwide patents and is recognized by the industry as the foremost authority in research and application of human auditory principles. Through partnerships with leading global CE companies, semiconductor manufacturers and software partners, SRS audio, surround sound and voice processing technologies have been included in over one billion electronic products sold worldwide including HDTVs, mobile phones, portable media devices, PCs and automotive entertainment. In fact, SRS Labs is the de facto standard of HDTV audio processing with nine of the top ten name brand flat panel TVs featuring SRS technology. Additionally, SRS Labs surround sound solutions provide the professional broadcast and recording industries with high-performance production, back-haul, storage, and transmission capability. SRS Labs supports manufacturers worldwide with offices in the U.S., China, Europe, Japan, Korea and Taiwan. For more information, visit www.srslabs.com.
Safe Harbor Statement
This press release includes forward-looking statements that are based on our current expectations, estimates and projections about SRS Labs, Inc., management’s beliefs and certain assumptions made by us, and events beyond our control, all of which are subject to change. Such forward-looking statements include, but are not limited to, statements relating to our future growth opportunities, competitive position, expansion and investment plans, and operating results and profitability. Forward-looking statements can often be identified by words such as “expects,” “anticipates,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “likely,” “potential,” “continue,” similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results or the commitments made by us herein, and they are subject to risks, uncertainties and assumptions that could cause actual results to differ materially and adversely from those expressed in any forward-looking statement. The risks and uncertainties referred to above include, but are not limited to, the loss of any significant customer; the acceptance of new SRS Labs products and technologies; our ability to increase our brand awareness and enter into new or expanded license arrangements; the impact of competitive products and pricing; general economic and business conditions that may adversely impact sales of consumer products incorporating our technologies or that otherwise may impact our operating results and future performance; the timely development and release of technologies by the Company; and such other factors described in our filings with the Securities and Exchange Commission. The forward-looking statements in this press release speak only as of the date they are made. We do not undertake any obligation to revise or update publicly any forward-looking statement for any reason.
Company Contacts:
Ulrich Gottschling
Chief Financial Officer
SRS Labs, Inc.
Tel 949-442-5596
ir@srslabs.com
Matt Glover
Investor Relations
Liolios Group, Inc.
Tel 949-574-3860
info@liolios.com
SRS LABS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|
| March 31, 2009 |
| December 31, 2008 |
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| (unaudited) |
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ASSETS |
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|
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Current Assets |
|
|
|
|
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Cash and cash equivalents |
| $ | 27,552,884 |
| $ | 31,599,087 |
|
Accounts receivable, net |
| 635,582 |
| 332,711 |
| ||
Prepaid expenses and other current assets |
| 1,026,648 |
| 864,095 |
| ||
Short-term investments |
| 11,505,000 |
| 7,836,000 |
| ||
|
|
|
|
|
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Total Current Assets |
| 40,720,114 |
| 40,631,893 |
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|
|
|
|
|
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Property and equipment, net |
| 412,747 |
| 423,921 |
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Intangible assets, net |
| 2,444,260 |
| 2,354,725 |
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Deferred income taxes, net |
| 3,988,239 |
| 3,471,421 |
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|
|
|
|
|
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Total Assets |
| $ | 47,565,360 |
| $ | 46,881,960 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current Liabilities |
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Accounts payable |
| $ | 439,462 |
| $ | 314,382 |
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Accrued liabilities |
| 960,659 |
| 996,268 |
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Deferred revenue |
| 1,543,751 |
| 1,802,024 |
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|
|
|
|
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Total Current Liabilities |
| 2,943,872 |
| 3,112,674 |
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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; 14,419,418 shares issued and outstanding at March 31, 2009 and December 31, 2008 |
| 14,420 |
| 14,420 |
| ||
Additional paid-in capital |
| 63,105,475 |
| 62,639,075 |
| ||
Accumulated deficit |
| (18,498,407 | ) | (18,884,209 | ) | ||
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|
|
|
|
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Total Stockholders’ Equity |
| 44,621,488 |
| 43,769,286 |
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Total Liabilities and Stockholders’ Equity |
| $ | 47,565,360 |
| $ | 46,881,960 |
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SRS LABS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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| Three Months Ended |
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| 2009 |
| 2008 |
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Revenues |
| $ | 5,704,010 |
| $ | 4,940,988 |
|
Cost of sales |
| 71,972 |
| 25,949 |
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Gross profit |
| 5,632,038 |
| 4,915,039 |
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|
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|
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Operating expenses (i): |
|
|
|
|
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Sales and marketing |
| 2,739,140 |
| 2,143,622 |
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Research and development |
| 1,174,666 |
| 926,762 |
| ||
General and administrative |
| 1,432,127 |
| 1,438,358 |
| ||
Total operating expenses |
| 5,345,933 |
| 4,508,742 |
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|
|
|
|
|
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Operating income |
| 286,105 |
| 406,297 |
| ||
Other income, net |
| 104,633 |
| 449,961 |
| ||
Income before income taxes |
| 390,738 |
| 856,258 |
| ||
Income taxes |
| 4,936 |
| (2,094 | ) | ||
Net income |
| $ | 385,802 |
| $ | 858,352 |
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Net income per common share: |
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|
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Basic |
| $ | 0.03 |
| $ | 0.05 |
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Diluted |
| $ | 0.03 |
| $ | 0.05 |
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Weighted average shares used in the per share calculation: |
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Basic |
| 14,419,418 |
| 15,778,188 |
| ||
Diluted |
| 14,648,122 |
| 16,305,095 |
|
(i) Includes share-based compensation expense as follows:
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| Three Months Ended |
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|
| 2009 |
| 2008 |
| ||
Sales and marketing |
| $ | 115,816 |
| $ | 141,894 |
|
Research and development |
| 107,723 |
| 123,626 |
| ||
General and administrative |
| 242,861 |
| 237,624 |
| ||
Total share-based compensation expense |
| $ | 466,400 |
| $ | 503,144 |
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