Exhibit 99.1
Licensing Revenue Increased 46% and Semiconductor Revenue Grew 16%
From Same Quarter Last Year
SANTA ANA, Calif., May 13 /PRNewswire-FirstCall/ --
SRS Labs, Inc. (Nasdaq: SRSL), a leading provider of audio, voice and
semiconductor technology solutions, today reported improved financial results
for its first quarter ended March 31, 2003. For the three months ended March
31, 2003, the company reported consolidated revenue of $4,470,374, a 26
percent increase over revenue for the same period last year, and a net income
of $42,534, or breakeven EPS, compared to a net loss of $690,733, or a loss of
$0.05 per share for the same period last year.
SRS Labs increased revenue from its technology licensing business by 46
percent over the same quarter last year and the company's Hong Kong-based
Valence semiconductor group grew revenue 16 percent over the same period in
2002. Consolidated gross margin improved to 85 percent compared to last
year's first quarter gross margin of 77 percent. The company's cash position
remained strong at the end of the first quarter of 2003 with cash, cash
equivalents and investments of approximately $21.8 million.
Chief financial officer of SRS Labs Janet Biski said, "Our first quarter
has generally been the toughest to achieve profitability due to Valence's
traditionally slow sales period during the Chinese New Year holiday as well as
increased year-end public company expenses and marketing expenses in January
related to our major industry tradeshow, the Consumer Electronics Show.
Despite these factors, we showed significant improvement over the first
quarter of last year, mainly due to an increase in revenue of over $900,000.
This quarter represents the first time that the company has achieved a profit
in the first quarter of the year since 1997 and it is also the fourth
consecutive profitable quarter."
Thomas C.K Yuen, chairman and CEO of SRS Labs said, "Our licensing
business remained strong as we increased the penetration of our technologies
in our primary home theater market segments, including DVD players, set top
boxes and televisions. We also expanded the application of our technologies in
new product categories such as portable audio devices, software, and car audio
as we built relationships with key licensees such as eDigital, InterVideo, and
Kenwood."
"On the semiconductor side, Valence continued to execute our plan to
increase the ASIC client base and developed several new ASP chip offerings,
some of which include proprietary SRS audio technologies. These new chips and
other existing ASP chips now form an expanded product offering to address the
underserved segments of the consumer electronics market," Yuen continued.
"Overall, I am encouraged by our first quarter performance. As announced
yesterday, we recently made several key personnel appointments, including Ted
Franceschi as our new general manager of licensing. Through these
appointments, I am pleased to have further strengthened our management team,
which should help us to continue growing our business."
In conjunction with SRS Labs' (Nasdaq: SRSL) first quarter results, you
are invited to listen to its conference call that will be broadcast live over
the Internet http://www.firstcallevents.com/service/ajwz381628483gf12.html or
http://www.vcall.com/EventPage.asp?ID=83905 today, May 13, 2003 at 3pm EDT or
link to the conference from the Investor section of SRS Labs' website at
www.srslabs.com .
About SRS Labs, Inc.
Celebrating a decade in audio technology innovation, SRS Labs has become 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 technologies
can be heard through products ranging from televisions, DVD players, cell
phones, car audio systems and computers. The company also offers hardware and
software tools to professionals and consumers for the production and broadcast
of content featuring SRS technologies. SRS Labs' wholly owned subsidiary,
ValenceTech, is located in Hong Kong and provides custom ASICs and standard
ICs to leading manufacturers worldwide. Based in Santa Ana, Calif., the
company also has licensing representation in Hong Kong, Japan, Europe, and
Korea. For more information about SRS Labs, Inc. please visit
www.srslabs.com . The information on the above-referenced websites 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 and Ms. Biski, 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 general
market conditions concerning the semiconductor business including the
potential adverse impact in Asia and elsewhere from the spread of SARS, 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.
For further information please contact: Investor, Tami Yanito of SRS Labs,
Inc., +1-949-442-1070, ext. 3093, tami@srslabs.com
SRS LABS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
2003 2002
Revenues:
Licensing $2,628,311 $1,795,722
Semiconductor 1,711,819 1,471,142
Other 130,244 288,516
Total revenues 4,470,374 3,555,380
Cost of sales 669,568 793,345
Gross margin 3,800,806 2,762,035
Operating expenses
Sales and marketing 1,352,490 1,260,440
Research and development 1,081,215 965,076
General and administrative 1,314,610 1,233,525
Total operating expenses 3,748,315 3,459,041
Income (loss) from operations 52,491 (697,006)
Other income, net 164,126 87,963
Minority interest 5,430 19,748
Income (loss) before income tax expense 222,047 (589,295)
Income tax expense 179,513 101,438
Net income (loss) $42,534 $(690,733)
Net income (loss) per common share:
Basic $0.00 $(0.05)
Diluted $0.00 $(0.05)
Weighted average shares used in the
calculation of net income (loss)
per common share:
Basic 12,798,238 12,669,407
Diluted 12,983,526 12,669,407
SRS LABS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2003 2002
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $13,225,769 $15,720,860
Accounts receivable, net 920,282 1,074,421
Inventories, net 855,092 807,382
Prepaid expenses and other current assets 407,870 462,442
Deferred income taxes 36,147 36,147
Total Current Assets 15,445,160 18,101,252
Investments available for sale 8,540,024 6,630,771
Furniture, fixtures & equipment, net 1,870,616 1,935,424
Goodwill, net 1,173,102 533,031
Intangible assets, net 1,908,903 1,957,359
Deferred income taxes 147,190 149,498
Total Assets $29,084,995 $29,307,335
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $815,604 $ 1,011,032
Accrued liabilities 1,715,192 2,347,702
Income taxes payable 323,448 341,172
Total Current Liabilities 2,854,244 3,699,906
Minority interest -- 325,371
Stockholders' Equity
Preferred stock - $.001 par value;
2,000,000 shares authorized;
no shares issued and outstanding -- --
Common stock - $.001 par value;
56,000,000 shares authorized;
13,213,498 and 12,876,314 shares
issued; and 12,988,198 and
12,651,014 shares outstanding
at March 31, 2003 and
December 31, 2002, respectively 13,214 12,877
Additional paid in capital 56,957,625 55,966,589
Cumulative other comprehensive loss (173,778) (88,564)
Accumulated deficit (29,847,709) (29,890,243)
Less treasury stock at cost,
225,300 shares at March 31, 2003
and at December 31, 2002 (718,601) (718,601)
Total Stockholders' Equity 26,230,751 25,282,058
Total Liabilities and
Stockholders' Equity $29,084,995 $29,307,335