EX-99.1
[SPATIALIZER AUDIO LABORATORIES, INC. LOGO]
CONTACT: INVESTOR RELATIONS
Spatializer Audio Laboratories, Inc.
408-453-4180 ext 4
E-mail: investor@spatializer.com
FOR RELEASE NOVEMBER 11, 2004:
SPATIALIZER AUDIO LABORATORIES, INC. NARROWS
THIRD QUARTER LOSS COMPARED TO PRIOR QUARTERS
CASH POSITION IMPROVES WITH NEW LICENSE AGREEMENT
Santa Clara, Calif., November 11, 2004- Spatializer Audio Laboratories,
Inc. (OTC Bulletin Board: SPAZ) today announced its financial results for the
third quarter ended September 30, 2004.
Revenues for the three months ended September 30, 2004 were $205,000,
compared to revenues of $341,000 in the comparable period last year, a decrease
of 40%. Revenues in the nine months ended September 30, 2004 were $611,000,
compared to revenues of $925,000 in the comparable period last year, a decrease
of 34%.
Net loss in the three months ended September 30, 2004 was ($81,000),
($0.00) basic per share, compared with net loss of ($107,000), ($0.00) basic per
share in the comparable period last year. Net loss in the nine months ended
September 30, 2004 was ($328,000), ($0.01) basic per share, compared with net
loss of ($393,000), ($0.01) basic per share in the comparable period last year.
Revenues in the three months ended September 30, 2004 were lower due to
a DVD OEM program with one manufacturer in 2003 for which there was no
comparable program with this account in the current period. The decline in
revenue over the nine month period resulted from the expiration of a licensing
agreement with a major computer account in January 2003 ($125,000 reduction) and
the inability to replace a prior year DVD OEM program in the current nine month
period. This was partially offset by an increase in revenues from cell phone
accounts.
The net loss resulted from decreased revenues, partially offset by
lower operating expenses due to operating cost efficiencies.
At September 30, 2004, the Company had $920,000 in cash and cash
equivalents as compared to $590,000 at December 31, 2003. The increase in cash
and cash equivalents results from a royalty advance received in the third
quarter, partially offset by the net loss. The Company had working capital of
$458,000 at September 30, 2004 as compared with working capital of $792,000 at
December 31, 2003.
"We were able to narrow our loss in the third quarter, as compared with
our prior quarters due to ongoing cost efficiencies", stated Henry R. Mandell,
Chairman and Chief Executive Officer of Spatializer Audio Laboratories. "We've
been able to successfully outsource applications engineering to India that gives
us greater non-critical engineering resources, scope and more rapid project
completion at significantly reduced cost. However, our revenues continue to be
negatively impacted by the effects of the intense pressure on consumer
electronics manufacturers to reduce their costs. Revenue traction continues to
be difficult as we continue our effort to transition to new sources of revenue
for us in the PC and cellular handset markets."
Mandell concluded, "Business remains very challenging and tenuous.
Nevertheless, we continue to win new business in the recordable DVD, PC and
cellular handset markets. These revenues are expected to be more meaningful as
these programs ramp up over the next several months. Our cell phone solutions
are being particularly well received. We also began recognizing a limited amount
of revenue on the recently announced Samsung Electronics license which we will
be realizing over the next several quarters. This license has also improved our
cash position to levels comparable with one year ago. Lastly, our streamlined
operating structure gives us the ability to maximize profit leverage on future
licensing arrangements that we might conclude in the future.
ABOUT SPATIALIZER
Spatializer Audio Laboratories Inc. is a leading developer, licensor and
marketer of next-generation technologies for the consumer electronics, computing
and entertainment industries. The company's advanced audio technology is
incorporated into consumer electronics audio and video products from global
brand leaders including Toshiba, Sanyo and Sharp, among others. Spatializer
stock is traded on the OTC Bulletin Board under the symbol: SPAZ.
The company is headquartered in San Jose, CA, with executive offices in Westlake
Village, CA and representative offices throughout Japan and in Korea. Further
information may be obtained from the company's web site, www.spatializer.com,
Spatializer SEC filings, and by contacting the company's Investor Relations
Department at 408-453-4180 or by writing to investor@spatializer.com.
Safe Harbor Act Statement Under the Private Securities Litigation Reform Act of
1995: Certain information in this news release, including the comments by Mr.
Mandell in this press release are forward looking statements 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
financial goals will be realized. Numerous uncertainties and risk factors 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. These uncertainties and risk factors include, but are not limited to
competition and pricing pressures, delays in new product development, dependence
on new technology and intellectual property, the continued need for additional
capital, dependence on the PC and consumer electronics industries, dependence on
product shipments of third-party licensees, and other risks detailed from time
to time in the company's periodic reports and other filings with the Securities
and Exchange Commission. The company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
NOTE: Desper Products Inc. is a wholly owned subsidiary of Spatializer Audio
Laboratories Inc. Spatializer(R) is a registered trademark are trademarks of
Desper Products Inc. All other trademarks are the property of their respective
owners. Copyright (C) 2004 Spatializer Audio Laboratories, Inc.
-more-
SPATIALIZER AUDIO LABORATORIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
SEPTEMBER 30, DECEMBER 31,
2004 2003
------------ ------------
(unaudited)
Current Assets:
Cash and Cash Equivalents $ 920,047 $ 589,797
Accounts Receivable, net 208,029 345,411
Prepaid Expenses and Deposits 95,074 35,430
------------ ------------
Total Current Assets 1,223,150 970,638
Property and Equipment, net 33,868 42,022
Intangible Assets, net 167,650 192,485
------------ ------------
Total Assets $ 1,424,668 $ 1,205,145
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes Payable to Related Party, Short Term 37,500 37,500
Note Payable 36,745 -
Accounts Payable 17,221 21,466
Accrued Wages and Benefits 39,898 36,973
Accrued Professional Fees 15,000 20,000
Accrued Commissions 38,548 33,856
Accrued Expenses 32,196 28,197
Deferred Income 547,953 -
------------ ------------
Total Current Liabilities 765,061 177,992
Notes Payable to Related Party, Long Term 30,831 70,746
Commitments and Contingencies
Series B-1, Redeemable Convertible Preferred shares,
$.01 par value, 1,000,000 shares authorized, 102,762
shares issued and outstanding at September 30, 2004
and December 31, 2003 1,028 1,028
Shareholders' Equity:
Common shares, $.01 par value, 65,000,000 shares
authorized, 46,975,365 shares issued and outstanding
at September 30, 2004 and December 31, 2003 469,754 470,159
Additional Paid-In Capital 46,429,020 46,428,615
Accumulated Deficit (46,271,026) (45,943,395)
------------ ------------
Total Shareholders' Equity 627,748 955,379
------------ ------------
$ 1,424,668 $ 1,205,145
------------ ------------
SPATIALIZER AUDIO LABORATORIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE THREE MONTH PERIOD ENDED FOR THE NINE MONTH PERIOD ENDED
---------------------------------- ----------------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2004 2003 2004 2003
------------ ------------ ------------ ------------
Revenues:
License Revenues $ - $ - $ - $ -
Royalty Revenues 205,324 341,339 610,863 924,619
Product Revenues - - - -
------------ ------------ ------------ ------------
205,324 341,339 610,863 924,619
Cost of Revenues 26,114 35,147 61,252 93,586
------------ ------------ ------------ ------------
Gross Profit 179,210 306,192 549,611 831,033
Operating Expenses:
General and Administrative 155,268 193,293 528,181 585,830
Research and Development 93,842 122,145 295,630 333,289
Sales and Marketing 11,484 93,488 46,962 295,180
------------ ------------ ------------ ------------
260,594 408,926 870,773 1,214,299
------------ ------------ ------------ ------------
Operating (Loss) (81,384) (102,734) (321,162) (383,266)
Interest and Other Income 744 1,444 2,633 5,908
Interest and Other Expense (1,936) (2,812) (8,702) (10,634)
------------ ------------ ------------ ------------
(1,192) (1,368) (6,069) (4,726)
------------ ------------ ------------ ------------
(Loss) Before Income Taxes (82,576) (104,102) (327,231) (387,992)
Income Taxes 2,000 (2,400) (400) (5,420)
------------ ------------ ------------ ------------
Net (Loss) $ (80,576) $ (106,502) $ (327,631) $ (393,412)
============ ============ ============ ============
Basic and Diluted(Loss) Per Share $ (0.00) $ (0.00) $ (0.01) $ (0.01)
============ ============ ============ ============
Weighted Average Shares
Outstanding 46,975,365 47,406,939 46,975,365 47,406,939
============ ============ ============ ============
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