Exhibit 99
SRS Labs Reports 2003 Third Quarter Results
Company Reports Quarterly Earnings Per Share of $0.01 and Year-to-Date
Earnings Per Share of $0.01
SANTA ANA, Calif., Nov. 13 /PRNewswire-FirstCall/ -- SRS Labs, Inc.
(Nasdaq: SRSL), a leading provider of audio, voice and semiconductor
technology solutions, today reported financial results for its third quarter
and nine months ended September 30, 2003. For the three months ended
September 30, 2003, the company reported consolidated revenue of $4,886,394, a
decrease of 9.7 percent over consolidated revenue of $5,411,613, for the same
quarter in 2002. For the quarter ended September 30, 2003, the company
reported a net income of $118,826, or $0.01 earnings per share, compared to a
net income of $595,774, or $0.05 earnings per share, for the same period last
year.
Technology licensing revenues decreased 8 percent over the same quarter
last year and semiconductor revenues decreased 2 percent over the same period
in 2002. Consolidated gross margin improved to 75 percent for the quarter
ended September 30, 2003, compared to 72 percent for the same period last
year.
For the nine months ended September 30, 2003, the company reported
consolidated revenue of $13,882,614, an increase of 6.8 percent over
consolidated revenue of $12,995,353, for the same period in 2002. For the
nine months ended September 30, 2003, the company reported a net income of
$127,478, or $0.01 earnings per share, compared to a net income of $109,597 or
$0.01 earnings per share, for the same period last year. The company's cash
and investments position totaled $21.9 million on September 30, 2003.
Janet Biski, chief financial officer of SRS Labs said, "As we have
previously noted in our financial filings, one of the risks associated with
our licensing business is product and customer concentration. From time to
time, certain original equipment manufacturer (OEM) and semiconductor
manufacturer customers may account for a significant portion of revenue from a
particular product application. In the third quarter of 2003, licensing
revenues were adversely affected by the decision of one of our manufacturing
customers who accounted for a significant portion of the company's licensing
revenues from the sales of DVD players, to discontinue the use of our
technologies in the traditional DVD player segment because of pricing
pressures in the DVD market. We were able to offset a majority of the
decrease in the third quarter as a result of revenues generated from new
product categories and the increased penetration of SRS Labs' technologies in
our home theater market. These revenues reflect upon the company's strategy
to diversify its customer base."
Biski continued, "Our gross margins for our ASIC business decreased four
percent from last year, reflecting competitive pricing in the semiconductor
market. In addition, our operating expenses grew as a result of our
promotional investments to support our OEMs, and diversification into new
markets. We also made investments in R&D to develop new technologies and
semiconductor solutions in all of our key markets."
Thomas C. K. Yuen, SRS Labs' chairman and CEO, said: "In the third
quarter, we saw the positive results of our strategy to diversify our
licensing and semiconductor businesses, even as revenues decreased from last
year. We developed new chip solutions with our patented audio, voice and
surround sound technologies for sale to manufacturers in the Asia Pacific
region. Our licensing efforts are focused on continuing the diversification of
our customer base and expanding our technology offerings across new
semiconductor platforms, such as ST Microelectronics and PacketVideo, to
service a larger portion of the consumer electronics marketplace."
Some key highlights for the quarter ended September 30, 2003 include:
-- Home Theater & Consumer Audio - Expanded relationship with Philips
Semiconductor for the global TV market, and Samsung, Sampo, and
Nakamichi for the fast-growing flat panel TV segment
-- Portable and Wireless Devices - Announced an agreement with NEC for
mobile phones and formed partnerships with Intel, ARM, and PacketVideo
for portable and wireless devices
-- ValenceTech - Design wins with Sony and Philips for ASP standard chips
featuring SRS technologies
Yuen continued, "I am pleased with the initial signs of success in our
diversification strategy. We feel that the strong foundation we are building
this year will help insulate us against product and customer concentration
issues and put us in a better position to capitalize on opportunities in
growing markets, such as cell phones and flat panel TVs."
In conjunction with SRS Labs' (Nasdaq: SRSL) third quarter results,
investors will have the opportunity to listen to the conference call live
online through the investor section of the SRS website or through the
following links: http://www.firstcallevents.com/service/ajwz392961981gf12.html
or http://www.vcall.com/CEPage.asp?ID=85116 today, November 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 Labs'
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 Labs' 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 overall semiconductor business, 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, product and customer concentration risks, 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.
Investor Contact:
Tami Yanito
(949) 442-1070 x 3093
tami@srslabs.com.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
Revenues:
Licensing $1,854,707 $2,008,554 $6,441,297 $5,240,117
Semiconductor 2,884,248 2,945,687 7,063,008 6,782,127
Other 147,439 457,372 378,309 973,109
Total revenues 4,886,394 5,411,613 13,882,614 12,995,353
Cost of sales 1,242,436 1,505,290 2,812,569 3,413,450
Gross margin 3,643,958 3,906,323 11,070,045 9,581,903
Operating expenses:
Sales and
marketing 1,216,568 995,759 3,840,155 3,188,978
Research and
development 1,032,100 992,839 3,083,438 2,895,436
General and
administrative 1,143,930 1,272,031 3,668,573 3,385,737
Total operating
expenses 3,392,598 3,260,629 10,592,166 9,470,151
Income from operations 251,360 645,694 477,879 111,752
Other income, net 131,925 295,332 414,655 611,882
Minority interest -- 19,178 5,430 59,208
Income before income
tax expense 383,285 960,204 897,964 782,842
Income tax expense 264,459 364,430 770,486 673,245
Net income $118,826 $595,774 $127,478 $109,597
Net income per common share:
Basic $0.01 $0.05 $0.01 $0.01
Diluted $0.01 $0.05 $0.01 $0.01
Weighted average shares
used in the calculation
of net income per common
share:
Basic 13,076,315 12,623,339 12,956,971 12,659,347
Diluted 14,730,290 12,758,058 13,729,676 12,903,526
CONDENSED CONSOLIDATED BALANCE SHEETS
Sept. 30, 2003 Dec. 31, 2002
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $11,290,949 $15,720,860
Accounts receivable, net 1,155,884 1,074,421
Inventories, net 948,816 807,382
Prepaid expenses and other current assets 607,365 462,442
Deferred income taxes 36,147 36,147
Total Current Assets 14,039,161 18,101,252
Investments available for sale 10,687,813 6,630,771
Furniture, fixtures & equipment, net 1,741,506 1,935,424
Goodwill, net 1,173,102 533,031
Intangible assets, net 1,889,577 1,957,359
Deferred income taxes 172,318 149,498
Total Assets $29,703,477 $29,307,335
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $1,164,736 $1,011,032
Accrued liabilities 1,204,232 2,347,702
Income taxes payable 591,806 341,172
Total Current Liabilities 2,960,774 3,699,906
Minority interest -- 325,371
Commitments and contingencies
Stockholders' Equity
Preferred stock - $.001 par value;
2,000,000 shares authorized; no
shares issued or outstanding -- --
Common stock - $.001 par value;
56,000,000 shares authorized;
13,364,198 and 12,876,314 shares
issued; and 13,138,898 and
12,651,014 shares outstanding
at September 30, 2003 and
December 31, 2002, respectively 13,365 12,877
Additional paid in capital 57,366,350 55,966,589
Accumulated other comprehensive loss (155,646) (88,564)
Accumulated deficit (29,762,765) (29,890,243)
Treasury stock at cost, 225,300
shares at September 30, 2003
and at December 31, 2002 (718,601) (718,601)
Total Stockholders' Equity 26,742,703 25,282,058
Total Liabilities and Stockholders'
Equity $29,703,477 $29,307,335
SOURCE SRS Labs, Inc.
-0- 11/13/2003
/CONTACT: investors, Tami Yanito of SRS Labs, Inc., +1-949-442-1070,
ext. 3093, tami@srslabs.com/
/Web site: http://www.srslabs.com/
(SRSL)
CO: SRS Labs, Inc.
ST: California
IN: CPR CSE HRD STW SEM
SU: ERN CCA