-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KTuZefHjJYa/XW6IY3DRl6gTkQKfkk4tNDVuiMtuFX2OcsplL8dV/cjnIvIcQCRU 38UlNQdLZ8wgKPSfYL6fHg== 0000891092-04-001415.txt : 20040325 0000891092-04-001415.hdr.sgml : 20040325 20040325135408 ACCESSION NUMBER: 0000891092-04-001415 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040325 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040325 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SRS LABS INC CENTRAL INDEX KEY: 0001016470 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 330714264 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-21123 FILM NUMBER: 04689275 BUSINESS ADDRESS: STREET 1: 2909 DAIMIER ST CITY: SANTA ANA STATE: CA ZIP: 92705 BUSINESS PHONE: 9494421070 MAIL ADDRESS: STREET 1: 2909 DAIMLER ST CITY: SANTA ANA STATE: CA ZIP: 92705 8-K 1 e17318_8k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 25, 2004 SRS LABS, INC. (Exact Name of registrant as specified in its charter) Delaware 0-21123 33-0714264 - ---------------------------- ------------------------ ------------- (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 2909 Daimler Street Santa Ana, California 92705 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (949) 442-1070 Not Applicable -------------- (Former name or former address, if changed since last report) Item 7. Financial Statements and Exhibits. Exhibit No. Description - ----------- ----------- 99 Press Release, dated as of March 25, 2004. Item 12. Results of Operations and Financial Condition. On March 25, 2004, SRS Labs, Inc. (the "Company") issued a press release announcing its operating results for the fourth quarter and year ended December 31, 2003. Attached as Exhibit 99 to this report is a copy of the Company's press release, which is incorporated herein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SRS LABS, INC, a Delaware corporation Date: March 25, 2004 By: /S/ THOMAS C.K. YUEN ------------------------------ Thomas C.K. Yuen Chairman of the Board and Chief Executive Officer EX-99 3 e17318ex99.txt PRESS RELEASE 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 -----END PRIVACY-ENHANCED MESSAGE-----