SRSL Srs Labs, Inc. (MM)

SANTA ANA, Calif., May 3 /PRNewswire-FirstCall/ -- SRS Labs, Inc. (NASDAQ:SRSL), a leading supplier of surround sound, audio, and voice technologies, announced today record revenues for the three month period ended March 31, 2007 of $5.1 million, as compared to $4.3 million for the same period in the prior year. Net income for the three months ended March 31, 2007 increased by $1.2 million or nearly 8 fold to $1.4 million, or $0.08 per diluted share, compared to $163 thousand, or $0.01 per diluted share for the same period in the prior year. Included in operating expenses from continuing operations for the three month period ended March 31, 2007 and 2006 is $427 thousand and $343 thousand, respectively, of stock based compensation expense. (Logo: http://www.newscom.com/cgi-bin/prnh/20070322/LATH036LOGO) For the three month period ended March 31, 2007, revenue increased by 17 percent as compared to the same period during the prior year, primarily due to significant growth in revenues related to the flat panel televisions and monitors in the home entertainment market and increases in the automotive sector 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 first quarter of 2007 which included: * Record revenues during the quarter due to continued acceptance of our product portfolio in the marketplace * Significantly higher net income as compared to the same period in the prior year, which reflects the benefits of our highly leveragable business model * New license agreements with several world class customers, including three of the top television manufacturers in Europe, and expanded relationships with existing television, telecommunications and automotive customers worldwide." Conference Call SRS Labs will host a conference call and webcast at 2:00 p.m. Pacific time today (5:00 p.m. Eastern time) to review its first quarter 2007 results. The dial-in number for the call is (866) 244-4530; ask for "SRS Labs Q1 Results Conference Call." An audio replay of the conference call will be available until May 11, 2007 at 6:00 p.m. Pacific time via telephone. The audio replay dial-in number is 866-837-8032 and enter access code 1076866. The call will also be webcast live over the Internet. Simply log-on to http://investor.shareholder.com/media/eventdetail.cfm?mediaid=25246&c=SRSL&med iakey=50110A6790364DD02C6AD351F67B4067&e=0 The webcast will be archived on http://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 http://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. SRS Labs, Inc. 2909 Daimler Street, Santa Ana, CA 92705 Tel 949-442-1070 Fax 949-852-1099 http://www.srslabs.com/ Investor Contact: Ulrich Gottschling Chief Financial Officer (949) 442-5596 SRS LABS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS March 31, December 31, 2007 2006 (unaudited) ASSETS Current Assets Cash and cash equivalents $37,113,600 $35,011,425 Accounts receivable, net 913,880 1,180,879 Prepaid expenses and other current assets 625,384 808,940 Total Current Assets 38,652,864 37,001,244 Investments available for sale 5,271,420 5,226,705 Property and equipment, net 367,643 389,667 Intangible assets, net 2,071,245 2,045,139 Deferred income taxes, net 699,472 386,412 Total Assets $47,062,644 $45,049,167 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $232,285 $609,899 Accrued liabilities 852,420 1,295,236 Deferred revenue 245,000 399,565 Total Current Liabilities 1,329,705 2,304,700 Commitments and contingencies Stockholders' Equity Preferred stock-$.001 par value; 2,000,000 shares authorized; no shares issued or outstanding -- -- Common stock-$.001 par value; 56,000,000 shares authorized; 16,800,892 and 16,561,036 shares issued; and 16,126,794 and 15,886,938 shares outstanding at March 31, 2007 and December 31, 2006, respectively 16,802 16,562 Additional paid-in capital 72,105,379 70,574,176 Accumulated other comprehensive loss (228,580) (273,295) Accumulated deficit (23,157,217) (24,569,531) Treasury stock at cost, 674,098 shares at March 31, 2007 and December 31, 2006 (3,003,445) (3,003,445) Total Stockholders' Equity 45,732,939 42,744,467 Total Liabilities and Stockholders' Equity $47,062,644 $ 45,049,167 SRS LABS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31, 2007 2006 Revenues $5,072,403 $4,335,668 Cost of sales 38,540 47,812 Gross margin 5,033,863 4,287,856 Operating expenses: Sales and marketing 1,876,293 1,865,369 Research and development 861,625 654,289 General and administrative 1,377,427 1,637,208 Total operating expenses 4,115,345 4,156,866 Operating income 918,518 130,990 Other income, net 493,796 179,713 Income from continuing operations before income taxes 1,412,314 310,703 Income taxes -- 159,423 Income from continuing operations 1,412,314 151,280 Discontinued operations: Income from discontinued operations before income taxes -- 42,376 Income taxes -- 31,081 Income from discontinued operations -- 11,295 Net income $1,412,314 $162,575 Income from continuing operations per common share: Basic $0.09 $0.01 Diluted $0.08 $0.01 Income from discontinued operations per common share: Basic $0.00 $0.00 Diluted $0.00 $0.00 Net income per common share: Basic $0.09 $0.01 Diluted $0.08 $0.01 Weighted average shares used in the per share calculation: Basic 15,992,704 14,423,611 Diluted 17,081,524 15,843,052 http://www.newscom.com/cgi-bin/prnh/20070322/LATH036LOGO http://photoarchive.ap.org/ DATASOURCE: SRS Labs, Inc. CONTACT: Investors, Ulrich Gottschling, Chief Financial Officer of SRS Labs, Inc., +1-949-442-5596, Web site: http://www.srslabs.com/

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