EX-99.1 2 a07-8729_1ex99d1.htm EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Investor Contact:

Ulrich Gottschling

Chief Financial Officer

(949) 442-5596

ir@srslabs.com

SRS LABS REPORTS RECORD REVENUES AND NET INCOME FOR Q4 AND FY2006

Santa Ana, Calif., March 22, 2007 - SRS Labs, Inc. (NASDAQ: SRSL), a leading supplier of surround sound, audio, and voice technologies, announced today record revenues for both the three and twelve month periods ended December 31, 2006 of $5.0 and $18.5 million, respectively, as compared to $4.2 million and $14.6 million, respectively, for the same periods in the prior year.  Net income from continuing operations for fiscal year 2006 increased to $3.1 million, or $.20 per diluted share, compared to $1.7 million, or $.12 per diluted share for the prior year. Net income from continuing operations for the three months ended December 31, 2006 increased to $1.2 million, or $.07 per diluted share, compared to $314,000, or $.02 per diluted share for the same period of the prior year.  Included in operating expenses from continuing operations for the three and twelve month periods ended December 31, 2006 is $289,000 and $1.4 million, respectively, related to stock based compensation expensing.  Consolidated net income for the company for the year ended December 31, 2006 increased to $4.7 million or $.30 per diluted share as compared to a net loss of $1.4 million or $.10 per diluted share for the prior year.

For the three and twelve month periods ended December 31, 2006, revenue from continuing operations increased by 21 percent and 27 percent respectively, as compared to the same periods during the prior year, primarily due to continued increases in revenues related to the home entertainment and automotive segments of the business.

Thomas C.K. Yuen, Chairman and CEO of SRS Labs, Inc. commented on the results:  “We are very pleased with the results for the three and twelve months ended December 31, 2006.

1.               The Company recognized record revenues for both the three and twelve months ended December 31, 2006.  Revenues from continuing operations exceeded $5 million for the first time in any quarter.

2.               Net income from continuing operations for 2006 increased by 84% despite recording $1.4 million related to stock based compensation under SFAS 123R as compared to $56,000 during 2005.

3.               The sale of ValenceTech Limited was completed in fiscal 2006 to allow the Company to focus its attention on licensing audio technology.

4.               The Company attracted highly skilled personnel to increase development and sales efforts throughout the world, which we believe will result in continued growth in the future,”

Conference Call

SRS Labs will host a conference call and webcast at 2 p.m. Pacific time today (5 p.m. Eastern Time) to review its fiscal 2006 and fourth quarter results. The dial-in number for the call is (866) 814-8483; ask for “SRS Labs Q4 Results Conference Call.”  An audio replay of the conference call will be available until March 29 at 5:00 p.m. Pacific time via telephone.  The audio replay dial-in number is (888) 211-2648 and the conference ID is 1046465.

The call will also be webcast live over the Internet.  Simply log-on to http://phx.corporate-ir.net/playerlink.zhtml?c=97327&s=wm&e=1485174.  The webcast will be archived on www.srslabs.com for 60 days following the call.



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, cell phones, MP3 players, car audio systems, 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. Based in Santa Ana, Calif., the company also has licensing representation in Hong Kong, Taiwan, Japan, China, 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 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 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.

—     More —

SRS Labs, Inc. 2909 Daimler Street, Santa Ana, CA  92705    Tel 949-442-1070    Fax 949-852-1099   www.srslabs.com



SRS LABS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

 

 

December 31,
2006

 

December 31,
2005

 

ASSETS

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

 

$

35,011,425

 

$

8,752,339

 

Accounts receivable, net

 

1,180,879

 

1,886,780

 

Prepaid expenses and other current assets

 

808,940

 

602,847

 

Assets held for sale

 

—

 

1,859,127

 

Total Current Assets

 

37,001,244

 

13,101,093

 

 

 

 

 

 

 

Investments available for sale

 

5,226,705

 

17,077,170

 

Property and equipment, net

 

389,667

 

425,288

 

Intangible assets, net

 

2,045,139

 

2,015,605

 

Deferred income taxes, net

 

386,412

 

380,386

 

Long term assets held for sale

 

—

 

2,065,123

 

Total Assets

 

$

45,049,167

 

$

35,064,665

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Accounts payable

 

$

609,899

 

$

741,811

 

Accrued liabilities

 

1,295,236

 

801,898

 

Deferred revenue

 

399,565

 

537,636

 

Liabilities related to assets held for sale

 

—

 

2,170,701

 

Total Current Liabilities

 

2,304,700

 

4,252,046

 

 

 

 

 

 

 

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; 16,561,036 and 14,953,690 shares issued; 15,886,938 and 14,279,592 shares outstanding at December 31, 2006 and 2005, respectively

 

16,562

 

14,955

 

Additional paid-in capital

 

70,574,176

 

63,574,518

 

Accumulated other comprehensive loss

 

(273,295

)

(496,021

)

Accumulated deficit

 

(24,569,531

)

(29,277,388

)

Treasury stock at cost, 674,098 shares at December 31, 2006 and 2005

 

(3,003,445

)

(3,003,445

)

Total Stockholders’ Equity

 

42,744,467

 

30,812,619

 

 

 

 

 

 

 

Total Liabilities And Stockholders’ Equity

 

$

45,049,167

 

$

35,064,665

 

 



SRS LABS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

Three Months Ended

 

Year Ended

 

 

 

December 31,

 

December 31,

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

5,041,819

 

$

4,164,272

 

$

18,547,529

 

$

14,608,478

 

Cost of sales

 

43,991

 

45,497

 

171,094

 

236,484

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

4,997,828

 

4,118,775

 

18,376,435

 

14,371,994

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Sales and marketing

 

1,850,688

 

1,896,141

 

7,345,133

 

5,192,090

 

Research and development

 

658,322

 

516,237

 

2,572,577

 

2,224,237

 

General and administrative

 

1,387,662

 

1,271,471

 

5,660,260

 

5,170,256

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

3,896,672

 

3,683,849

 

15,577,970

 

12,586,583

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

1,101,156

 

434,926

 

2,798,465

 

1,785,411

 

Other income, net

 

440,916

 

186,814

 

1,135,870

 

673,132

 

Income from continuing operations before income taxes

 

1,542,072

 

621,740

 

3,934,335

 

2,458,543

 

Income taxes

 

309,415

 

307,969

 

868,203

 

795,919

 

Income from continuing operations

 

1,232,657

 

313,771

 

3,066,132

 

1,662,624

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

(Loss) income from discontinued operations, net of income taxes

 

—

 

(3,177,544

)

1,017,079

 

(3,087,009

)

(Loss) gain on disposal of discontinued operations

 

(7,412

)

—

 

624,646

 

—

 

(Loss) income from discontinued operations

 

(7,412

)

(3,177,544

)

1,641,725

 

(3,087,009

)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

1,225,245

 

$

(2,863,773

)

$

4,707,857

 

$

(1,424,385

)

 

 

 

 

 

 

 

 

 

 

Income from continuing operations per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.08

 

$

0.02

 

$

0.21

 

$

0.12

 

Diluted

 

$

0.07

 

$

0.02

 

$

0.20

 

$

0.12

 

 

 

 

 

 

 

 

 

 

 

(Loss) income from discontinued operations per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.00

 

$

(0.22

)

$

0.11

 

$

(0.22

)

Diluted

 

$

0.00

 

$

(0.22

)

$

0.11

 

$

(0.22

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.08

 

$

(0.20

)

$

0.31

 

$

(0.10

)

Diluted

 

$

0.07

 

$

(0.20

)

$

0.30

 

$

(0.10

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in the per share calculation:

 

 

 

 

 

 

 

 

 

Basic

 

15,465,107

 

14,239,344

 

14,955,889

 

14,117,795

 

Diluted

 

16,665,117

 

14,239,344

 

15,465,822

 

14,117,795