-----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, QYFRbcbKn6dxZ8qVtEkz/dasrFdH13GEV4iB4aQso+tlON8zjBdm7XCxJ2z2Q2p9 +cByyNf5HGAEs6YibRzXDg== 0000891092-04-002495.txt : 20040513 0000891092-04-002495.hdr.sgml : 20040513 20040513160759 ACCESSION NUMBER: 0000891092-04-002495 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040513 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040513 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: 04803123 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 e17903_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): May 13, 2004 SRS LABS, INC. (Exact Name of registrant as specified in its charter) Delaware 0-21123 33-0714264 -------- ------- ---------- (State or other (Commission File Number) (IRS Employer jurisdiction of Identification No.) incorporation) 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 May 13, 2004. Item 12. Results of Operations and Financial Condition. On May 13, 2004, SRS Labs, Inc. (the "Company") issued a press release announcing its operating results for the first quarter ended March 31, 2004. 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: May 13, 2004 By: /s/ THOMAS C. K. YUEN ------------------------ Thomas C. K. Yuen Chairman of the Board and Chief Executive Officer 2 EX-99 2 e17903ex99.txt PRESS RELEASE Exhibit 99 SRS Labs Reports 2004 First Quarter Results Company Reports a 20% Increase in Top Line Revenue Over Q1 2003 and $0.01 Diluted EPS for the Quarter SANTA ANA, Calif., May 13 /PRNewswire-FirstCall/ -- SRS Labs, Inc. (Nasdaq: SRSL), a leading provider of innovative audio, voice and semiconductor technology solutions, today reported operating results for the first quarter ended March 31, 2004. For the quarter, the company reported consolidated revenue of $5.3 million, an increase of 20 percent over revenue of $4.5 million in the first quarter in 2003. The company reported quarterly net income of $134,929 or $0.01 per diluted share, compared to net income of $42,534, or breakeven EPS in the first quarter last year. The company's balance sheet remained strong at the end of the quarter, with no external debt, and cash, cash equivalents and long-term investments of approximately $25.7 million. The company also generated net cash from operations of $589,069 for the quarter. Beginning this fiscal year, SRS Labs is reporting its revenue in two segments, Semiconductors and Licensing, rather than five segments previously reported. The company decided to reduce its segments because of the materiality of the revenues attributable to the other three segments. Revenue from the component distribution segment will now be reported in the semiconductor segment; and revenues from product sales and Internet and broadcast segments will now be reported in the licensing segment. SRS Labs increased revenue from its Hong Kong-based ValenceTech, Ltd. semiconductor group by 37 percent over the same quarter last year. This increase was attributable to sales growth of both custom ASIC (application specific integrated circuits) and ASP-branded standard chip products. Licensing revenue increased eight percent over the same period in 2003. This growth was attributable to the company's diversification strategy and the recognition of increased revenue in new markets such as PCs, portable audio devices and mobile phones. The company had expected lower licensing revenue during the quarter as a result of the loss of the DVD customer in the third quarter of 2003. Semiconductor and licensing revenue accounted for 45 and 55 percent of total revenue respectively, versus 40 and 60 percent in the same quarter last year. Due to the shift in revenue toward semiconductor, which has lower gross margins, the company reported consolidated gross margin of 83 percent for the quarter versus 85 percent in the first quarter of 2003. Chief financial officer of SRS Labs Janet Biski said, "We are pleased to have improved operating results in the first quarter. We increased our consolidated top line revenue by 20 percent, improved operating income to $135,382 for the quarter versus $52,491 last year, and increased our net profit, reporting diluted earnings of $0.01 versus breakeven EPS last year. Biski continued, "Consistent with our comments made last quarter, our operating expense increase of approximately $550,000 over the same quarter last year reflects continued co-marketing programs to promote the SRS brand, additional R&D professionals hired in the fourth quarter of 2003 to support new customer and technology opportunities, as well as increased G&A expenses associated with being a public company." Thomas C.K. Yuen, chairman and CEO of SRS Labs said, "I am pleased with our results for the first quarter of 2004. Our diversification strategy has been well received and we are now seeing demonstrable results in both our licensing and semiconductor businesses. We expect to see continued success from our diversification efforts in the later half of the year." "For the near term, we are expecting a seasonal retreat in our licensing business in Q2. Demand remains strong for our semiconductor products, but we have to work closely with our fabrication partners to resolve foundry capacity issues that are impacting the industry, and could have an adverse impact on our business. On the expense front, as a result of encouraging business opportunities that have arisen from our diversification efforts, we plan to continue making timely investments in research and development and sales and marketing in order to accelerate our penetration into new markets. We are still in the early stages of these diversification efforts and established trends have not yet developed. However, management remains focused on achieving top line revenue growth and profitability for the year." Investors can listen to the company's conference call live today at 2:15 pm Pacific (5:15 pm Eastern) through the following link: http://www.firstcallevents.com/service/ajwz406336552gf12.html or through the investor section of SRS Labs' website http://www.srslabs.com/IRMain.asp. Please log on at least 15 minutes early to register and follow the instructions to download and install any necessary audio software. If you 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 2004 First Quarter Conference Call," and provide the pass code 460046. To access the telephone replay, dial (866) 246-6870 and enter the same pass code. The telephone replay will be available until May 14 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' subsidiary, Valence Technologies Limited, 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: investors, 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 Three Months Ended March 31, 2004 2003 Revenues: Semiconductor $2,415,718 $1,764,080 Licensing 2,927,327 2,706,294 Total revenues 5,343,045 4,470,374 Cost of sales 908,871 669,568 Gross margin 4,434,174 3,800,806 Operating expenses: Sales and marketing 1,535,908 1,352,490 Research and development 1,208,687 1,081,215 General and administrative 1,554,197 1,314,610 Total operating expenses 4,298,792 3,748,315 Income from operations 135,382 52,491 Other income, net 237,450 164,126 Minority interest -- 5,430 Income before income tax expense 372,832 222,047 Income tax expense 237,903 179,513 Net income $134,929 $42,534 Net income per common share: Basic $0.01 $0.00 Diluted $0.01 $0.00 Weighted average shares used in the calculation of net income per common share: Basic 13,746,521 12,798,238 Diluted 16,679,373 12,983,526 SRS LABS, INC. CONSOLIDATED BALANCE SHEETS March 31, December 31, 2004 2003 (unaudited) ASSETS Current Assets Cash and cash equivalents $20,392,955 $12,795,620 Accounts receivable, net 783,960 1,230,423 Inventories, net 714,298 753,020 Prepaid expenses and other current assets 1,180,440 1,073,696 Deferred income taxes 23,406 23,406 Total Current Assets 23,095,059 15,876,165 Investments available for sale 5,339,428 10,490,210 Furniture, fixtures & equipment, net 1,750,476 1,661,980 Goodwill, net 533,031 533,031 Intangible assets, net 2,711,664 2,736,810 Deferred income taxes 209,673 193,134 Total Assets $33,639,331 $31,491,330 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $946,809 $1,503,851 Accrued liabilities 1,817,275 1,606,069 Income taxes payable 538,000 430,949 Total Current Liabilities 3,302,084 3,540,869 Commitments and contingencies Stockholders' Equity Preferred stock-$.001 par value; 2,000,000 shares authorized; no shares issued or outstanding -- -- Common stock-$.001 par value; 56,000,000 shares authorized; 14,255,893 and 13,682,282 shares issued; and 14,030,593 and 13,456,982 shares outstanding at March 31, 2004 and December 31, 2003, respectively 14,256 13,683 Additional paid in capital 60,586,595 58,423,249 Accumulated other comprehensive loss (248,408) (336,346) Accumulated deficit (29,296,595) (29,431,524) Treasury stock at cost, 225,300 shares at March 31, 2004 and at December 31, 2003 (718,601) (718,601) Total Stockholders' Equity 30,337,247 27,950,461 Total Liabilities and Stockholders' Equity $33,639,331 $31,491,330 SOURCE SRS Labs, Inc. -0- 05/13/2004 /CONTACT: investors, 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/IRMain.asp / /Web site: http://www.srslabs.com / /Audio: http://www.firstcallevents.com/service/ajwz406336552gf12.html / (SRSL) CO: SRS Labs, Inc.; ValenceTech, Ltd. ST: California IN: CPR CSE ENT MLM SEM SU: ERN CCA -----END PRIVACY-ENHANCED MESSAGE-----