EX-99.1 2 a07-21102_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 RESULTS FOR SECOND QUARTER 2007

Santa Ana, Calif., August 6, 2007 - SRS Labs, Inc. (NASDAQ: SRSL), a leading supplier of surround sound, audio, and voice technologies, announced today revenues for the three months ended June 30, 2007 of $4.7 million, as compared to $4.3 million for the same period in the prior year.   Income from continuing operations for the three months ended June 30, 2007 increased $883 thousand or 218% to $1.3 million, or $0.08 per diluted shared, compared to $406 thousand, or $0.02 per diluted shared for the same period in the prior year.  Net income for the three months ended June 30, 2007 increased $359 thousand or 39 percent to $1.3 million, or $0.08 per diluted share, compared to $929 thousand or $0.06 per diluted share for the same period in the prior year.

For the three months ended June 30, 2007, revenue increased by 10 percent as compared to the same period during the prior year, primarily due to continued increases in revenues related to the home entertainment segment of the business.  Revenue from flat panel televisions and monitors grew by $1.0 million or 60% on a year over year basis.

Thomas C.K. Yuen, Chairman and CEO of SRS Labs, Inc. commented on the results:  “A particular focus of the Company at this time is protection of SRS’s valuable patents and enforcement of its royalty program. The proactive enforcement and administration of these programs will help us to identify improper or unauthorized usage of our intellectual properties, as well as to ensure the accurate and timely royalty reporting by our licensees.   As SRS continues to gain in market penetration based on the superiority of its intellectual properties, an important part of our strategy will be to send a clear message of patent enforcement and royalty contract compliance to the marketplace.  While there could be a short-term negative impact, we believe that this strategy will have very positive long-term results and will lead to even stronger business partnerships with our customers.”

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 second quarter 2007 results. The dial-in number for the call is (866) 837-9782; ask for “SRS Labs Q2 Results Conference Call.”  An audio replay of the conference call will be available until August 13, 2007 at 6:00 p.m. Pacific time via telephone.  The audio replay dial-in number is 866-219-1444 and enter access code 1116204.

The call will also be webcast live over the Internet.  Simply log-on to http://investor.shareholder.com/media/eventdetail.cfm?mediaid=26673&c=SRSL&mediakey=601139A29C904E1D685B07041B8D17EA&e=0

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

 

 

June 30, 2007

 

December 31, 2006

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

 

$

38,616,425

 

$

35,011,425

 

Accounts receivable, net

 

1,571,063

 

1,180,879

 

Prepaid expenses and other current assets

 

576,033

 

808,940

 

 

 

 

 

 

 

Total Current Assets

 

40,763,521

 

37,001,244

 

 

 

 

 

 

 

Investments available for sale

 

5,230,170

 

5,226,705

 

Property and equipment, net

 

352,069

 

389,667

 

Intangible assets, net

 

2,226,092

 

2,045,139

 

Deferred income taxes, net

 

958,327

 

386,412

 

 

 

 

 

 

 

Total Assets

 

$

49,530,179

 

$

45,049,167

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Accounts payable

 

$

371,613

 

$

609,899

 

Accrued liabilities

 

936,102

 

1,295,236

 

Deferred revenue

 

106,852

 

399,565

 

 

 

 

 

 

 

Total Current Liabilities

 

1,414,567

 

2,304,700

 

 

 

 

 

 

 

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; 16,941,610 and 16,561,036 shares issued; and 16,267,512 and 15,886,938 shares outstanding at June 30, 2007 and December 31, 2006, respectively

 

16,943

 

16,562

 

Additional paid-in capital

 

73,240,360

 

70,574,176

 

Accumulated other comprehensive loss

 

(269,830

)

(273,295

)

Accumulated deficit

 

(21,868,416

)

(24,569,531

)

Treasury stock at cost, 674,098 shares at June 30, 2007 and December 31, 2006

 

(3,003,445

)

(3,003,445

)

 

 

 

 

 

 

Total Stockholders’ Equity

 

48,115,612

 

42,744,467

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

$

49,530,179

 

$

45,049,167

 

 



SRS LABS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2007

 

2006

 

2007

 

2006

 

Revenues

 

$

4,694,852

 

$

4,259,839

 

$

9,767,255

 

$

8,595,507

 

Cost of sales

 

40,522

 

35,293

 

79,062

 

83,105

 

Gross margin

 

4,654,330

 

4,224,546

 

9,688,193

 

8,512,402

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Sales and marketing

 

1,767,717

 

1,885,416

 

3,644,010

 

3,750,785

 

Research and development

 

814,595

 

631,739

 

1,676,220

 

1,286,028

 

General and administrative

 

1,292,181

 

1,357,789

 

2,669,608

 

2,994,997

 

Total operating expenses

 

3,874,493

 

3,874,944

 

7,989,838

 

8,031,810

 

Operating income

 

779,837

 

349,602

 

1,698,355

 

480,592

 

Interest income

 

508,964

 

224,005

 

1,002,760

 

403,718

 

Income from continuing operations before income taxes

 

1,288,801

 

573,607

 

2,701,115

 

884,310

 

Income taxes

 

—

 

167,745

 

—

 

327,168

 

Income from continuing operations

 

1,288,801

 

405,862

 

2,701,115

 

557,142

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

Income from discontinued operations, net of income taxes

 

—

 

152,261

 

—

 

163,556

 

Gain on disposal

 

—

 

371,295

 

—

 

371,295

 

Income from discontinued operations

 

—

 

523,556

 

—

 

534,851

 

Net income

 

$

1,288,801

 

$

929,418

 

$

2,701,115

 

$

1,091,993

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.08

 

$

0.03

 

$

0.17

 

$

0.04

 

Diluted

 

$

0.08

 

$

0.02

 

$

0.16

 

$

0.03

 

Income from discontinued operations per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.00

 

$

0.04

 

$

0.00

 

$

0.04

 

Diluted

 

$

0.00

 

$

0.03

 

$

0.00

 

$

0.03

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.08

 

$

0.06

 

$

0.17

 

$

0.08

 

Diluted

 

$

0.08

 

$

0.06

 

$

0.16

 

$

0.07

 

Weighted average shares used in the calculation of net income per common share:

 

 

 

 

 

 

 

 

 

Basic

 

16,202,909

 

14,622,210

 

16,106,312

 

14,523,459

 

Diluted

 

16,652,184

 

16,334,105

 

16,448,156

 

16,206,277