Exhibit 99
SRS Labs Announces 2003 Fiscal Year End Results
Company Reports a 4% Increase in Top Line Revenue Over 2002
and $0.03 Diluted EPS for 2003
SANTA ANA, Calif., March 25 /PRNewswire-FirstCall/ -- SRS Labs, Inc.
(Nasdaq: SRSL), a leading provider of innovative audio, voice and
semiconductor technology solutions, today reported operating results for the
fourth quarter and fiscal year ended December 31, 2003.
For the year ended December 31, 2003, the company reported revenue of
$19.8 million and net income of $458,719 or $0.03 per diluted share, as
compared to year end 2002 revenue of $19.0 million and a net income of
$806,352, or $0.06 per diluted share. For the year, SRS Labs increased
licensing and semiconductor revenue by nine and seven percent, respectively,
over 2002. For the fourth quarter ended December 31, 2003, SRS Labs reported
total revenue of $5.9 million and a net income of $331,240 or $0.02 per
diluted share, as compared to fourth quarter 2002 revenue of $6.0 million and
a net income of $696,755, or $0.04 per diluted share.
The company's balance sheet remained strong at year end, with no external
debt and cash, cash equivalents and long-term investments of $23.3 million
compared to $22.4 million as of December 31, 2002, an increase of $934,199.
The company also generated net cash from operations of $807,886.
Chief financial officer of SRS Labs Janet Biski said, "For the year, we
increased our consolidated top line revenue by four percent and improved our
consolidated gross margin to 80 percent, compared to 75 percent in 2002. We
made investments to promote and expand our licensing business, which resulted
in an increase in total operating expenses of $1.1 million. Increased
operating expenses were primarily due to co-marketing programs and other
activities to promote the SRS brand, the relocation of our Valence operations
to increase efficiency, additional R&D headcount to address customer service
and support requirements, as well as increases in G&A expenses associated with
being a public company. Despite this increase in operating expenses, we
improved operating income 76 percent from $542,852 in 2002 to $953,474 in
2003."
Thomas C.K. Yuen, chairman and CEO of SRS Labs said: "Due in part to
external factors such as SARS and economic uncertainty, as well as the loss of
a significant DVD player customer in the second half of the year, we grew only
modestly in 2003. We attribute our ability to achieve growth in this
environment to our ongoing diversification strategies for both the licensing
and semiconductor sides of our business. For licensing, the majority of
revenue was derived from our core home theater market. We are pleased that we
increased mobile phone revenue from two percent in 2002 to six percent in 2003
and we increased revenue from portable audio and wireless devices from just
over one percent last year to five percent this year. Over the last 12 months
we have also positioned the company to make further advances in the PC and
automotive markets. On the semiconductor side of the business, ASP revenue
grew to 24 percent of total semiconductor revenue, compared to 14 percent last
year. This increase is particularly gratifying because one of our goals was to
increase Valence's ASP revenue by expanding the product line to include chips
that embed SRS audio technologies."
New relationships in key markets announced in 2003 include:
* Home Theater/TVs -- Samsung, LG, Zenith, BenQ, and Sampo;
* Mobile phones -- NEC, Samsung and Sharp; platform partnerships with
Texas Instruments ARM, Intel xScale and PacketVideo;
* Portable audio devices -- Samsung, Olympus and iBead; and platform
partnerships with Motorola Coldfire, Telechips and Sigmatel; and
* Computer Multimedia/PC -- Sony VAIO desktops and Toshiba Satellite
notebooks.
Yuen stated, "Looking ahead, we continue to see significant growth
opportunities for both sides of our business. For our ValenceTech
semiconductor group, our growth strategy is to increase sales of our standard
ASP chips in the significant China TV, PC, and mobile phone markets. To
pursue these opportunities, we added R& D personnel and recently appointed
Philip Wong as interim president of ValenceTech. We also relocated Valence's
sales and marketing and administrative offices into combined facilities with
the research and development team, which should improve efficiency. We
continued to work proactively with our fabrication partners to address foundry
capacity issues that are a concern within the industry."
"In the licensing business, we see increasing opportunities in flat panel
monitors, mobile phones, PCs and portable audio devices, and have increased
promotional activities to capture these new opportunities. In addition, with
our broad IP coverage and expanded R&D department, we are developing new
technology solutions geared toward the needs of next generation consumer
electronics products. As part of our ongoing platform partner strategy, we
are porting our technologies to the latest platforms for the wireless and
portable markets, and actively participating in industry conferences to
support our IC partners and drive licensing revenue."
Yuen concluded "We will continue to make investments in sales, marketing
and R&D because we believe that such investments will enable us to scale our
business faster and more effectively yield long term growth."
Investors will have the opportunity to listen to the company's live
conference call today at 1:00 pm Pacific time (4:00 pm Eastern time) through
the investor section of SRS Labs' website www.srslabs.com or through the
following link: http://www.firstcallevents.com/service/ajwz401974003gf12.html.
Please log on at least 15 minutes early to register and follow the
instructions to download and install any necessary audio software. For those
who are unable to listen to the live web cast, an online replay will be
available shortly after the call. To listen to the conference call live via
telephone, dial (866) 246-6870 and ask for the "SRS Labs 2003 Year End
Conference Call," and provide the pass code 4052093. To access the telephone
replay, dial (888) 211-2648 and enter the same pass code. The telephone
replay will be available until March 26 at 12:00 a.m. PST.
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, DVD players, cell phones, car audio systems, headphones 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. SRS Labs' wholly owned
subsidiary, ValenceTech, is a Hong Kong-based semiconductor company that
designs and sells 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
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 Ms. Biski and 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 general
market conditions concerning the 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,
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, ext.
3093, tami@srslabs.com, or media, Jennifer Drescher, ext. 5010,
jenniferd@srslabs.com, both of SRS Labs, Inc., +1-949-442-1070.
(Financial Tables to Follow)
SRS LABS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Fiscal Year Ended Dec 31, Fourth Quarter Ended Dec 31,
2003 2002 2003 2002
Revenue:
Semiconductor $10,490,935 $9,779,712 $3,427,927 $2,997,585
Licensing 8,822,357 8,097,394 2,381,060 2,857,277
Other 500,489 1,124,687 122,180 151,578
Total revenues 19,813,781 19,001,793 5,931,167 6,006,440
Cost of sales 4,056,079 4,754,245 1,243,510 1,340,795
Gross margin 15,757,702 14,247,548 4,687,657 4,665,645
Operating expenses
Sales and
marketing 5,487,159 4,625,833 1,647,004 1,436,855
Research and
development 4,263,682 4,189,379 1,180,244 1,293,943
General and
administrative 5,053,387 4,889,484 1,384,814 1,503,747
Total operating
expenses 14,804,228 13,704,696 4,212,062 4,234,545
Income from
operations 953,474 542,852 475,595 431,100
Other income, net 538,278 774,125 123,622 162,243
Minority interest 5,430 77,708 -- 18,500
Income before
income tax
expense 1,497,182 1,394,685 599,217 611,843
Income tax
expense (benefit) 1,038,463 588,333 267,977 (84,912)
Net income $458,719 $806,352 $331,240 $696,755
Net income per
common share:
Basic $0.04 $0.06 $0.02 $0.06
Diluted $0.03 $0.06 $0.02 $0.04
Weighted average
shares used in
the calculation
of Net income
per common share:
Basic 13,033,002 12,648,373 13,258,744 12,616,680
Diluted 14,420,810 12,862,199 16,123,600 12,731,497
SRS LABS, INC.
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2003 2002
ASSETS
Current Assets
Cash and cash equivalents $12,795,620 $15,720,860
Accounts receivable, net of allowance
for doubtful accounts of $87,628
in 2003 and $49,049 in 2002 1,230,423 1,074,421
Inventories, net of reserve of $867,923
in 2003 and $857,986 in 2002 753,020 807,382
Prepaid expenses and other current assets,
including other receivables of $4,033
in 2003 and $24,346 in 2002 1,073,696 462,442
Deferred income taxes 23,406 36,147
Total Current Assets 15,876,165 18,101,252
Investments available for sale 10,490,210 6,630,771
Furniture, fixtures and equipment, net 1,661,980 1,935,424
Intangible assets, net 2,736,810 1,957,359
Goodwill 533,031 533,031
Deferred income taxes 193,134 149,498
Total Assets $31,491,330 $29,307,335
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $1,503,851 $1,011,032
Accrued liabilities 1,606,069 2,347,702
Income taxes payable 430,949 341,172
Total Current Liabilities 3,540,869 3,699,906
Minority interest -- 325,371
Commitments and contingencies
Stockholders' Equity
Preferred stock -- $0.001 par value;
2,000,000 shares authorized;
no shares issued and outstanding -- --
Common stock -- $0.001 par value;
56,000,000 shares authorized;
13,682,282 and 12,876,314 shares issued;
13,456,982 and 12,651,014 outstanding
for 2003 and 2002, respectively 13,683 12,877
Additional paid-in capital 58,423,249 55,966,589
Accumulated other comprehensive loss (336,346) (88,564)
Accumulated deficit (29,431,524) (29,890,243)
Treasury stock at cost 225,300
shares at December 31, 2003 and 2002,
respectively (718,601) (718,601)
Total Stockholders' Equity 27,950,461 25,282,058
Total Liabilities And Stockholders' Equity $31,491,330 $29,307,335
SOURCE SRS Labs, Inc.
-0- 03/25/2004
/CONTACT: investor, Tami Yanito, ext. 3093, tami@srslabs.com, or media,
Jennifer Drescher, ext. 5010, jenniferd@srslabs.com, both of SRS Labs, Inc.,
+1-949-442-1070/
/Web site: http://www.srslabs.com /
(SRSL)
CO: SRS Labs, Inc.
ST: California
IN: CPR MLM PEL STW SEM
SU: ERN CCA