(COMTEX) B: Spatializer Audio Laboratories Inc. Reports 3rd Quarter R
B: Spatializer Audio Laboratories Inc. Reports 3rd Quarter Revenues Increase
94% Net Income Increases 215% Over Prior Year For a Seventh Consecutive Quarter
of Profitability
WOODLAND HILLS, Calif., Nov 7, 2000 /PRNewswire via COMTEX/ -- Spatializer
Audio Laboratories, Inc. (OTC Bulletin Board: SPAZ) today announced its seventh
consecutive quarter of profitability and financial results for the third quarter
ended September 30, 2000.
Spatializer reported net income for the quarter of $104,000; $0.00 basic and
diluted per share, compared with net income of $33,000; $0.00 basic and diluted
per share in the comparable period last year -- a 215 percent increase. Net
income for the nine months ended September 30, 2000 was $386,000; $0.01 basic
and diluted per share, compared to net income of $47,000, $0.00 basic and
diluted per share, in the comparable nine month period last year.
"We are very satisfied with our progress. We've met our operating objectives
while achieving our seventh consecutive quarter of profitability," says Henry R.
Mandell, Chairman of the Board and CEO of Spatializer Audio Laboratories Inc.
"During this period we saw exceptionally strong growth of DVD player and DSP
shipments by our licensees in our third quarter. Our revenues and profits are in
line with our expectations. Our investment in R&D and product delays by a number
of our licensees moderated the leveraging of even greater profitability."
Mandell points out that comparison with a comparable period last year is
difficult when one considers Spatializer's volume-based royalty structure. He
explains, "It's important to remember that the volume-based royalty rate has
stabilized under existing agreements ... so going forward, the explosive growth
of DVD and its continued impact on our Company will also become more self
evident. It's worth noting that we achieved these results without any revenues
derived from new licensing deals announced earlier this year. We expect to see
our operating results favorably impacted by agreements with VM Labs beginning in
the fourth quarter 2000 as their products come to market."
Revenues for the third quarter of fiscal 2000 were $630,000, compared to
revenues of $324,000 in the third quarter of fiscal 1999 -- a 94 percent
increase. Revenues for the nine months ended September 30, 2000 were $1,666,000
compared to revenues of $977,000 in the comparable nine-month period last year.
The increase in third quarter net income resulted from greater royalty revenue
in the quarter, partially offset by increases in research and development
expenses driven by the expansion of the Company's engineering team.
The increase in third quarter revenues resulted primarily from increases in
royalties derived from Spatializer N-2-2(TM). The increase in Spatializer N-2-2
revenue, which was driven by a doubling of DVD player or digital signal
processor (DSP) shipments by third parties from which the Company receives a per
unit royalty, was moderated by lower royalty rates as compared to those earned
in the quarter ended September 30, 1999. Some of the Company's license
agreements provide for royalty rate reductions as volume milestones are
achieved. Spatializer's royalty rates were approximately 50 percent higher in
the third quarter of 1999 as one licensee began initial shipments of its DSP
product, compared with the third quarter of 2000. Virtually all volume
milestones were achieved by June 30, 2000, which should stabilize royalty rates
going forward.
Mandell explains that, "At our stockholders' meeting earlier this year, I
outlined that in transitioning to a growth mode we would have to make certain
investments in people, research and infrastructure in order to grow our
business. I even mentioned that I would be willing to sacrifice a quarter or two
of lower profitability in order to ensure the proper foundation for future
growth. Now I'm pleased to report that we have laid this foundation. I see less
need going forward for increased staffing to support our future initiatives,
based on the new investments we have now made. This will enable us to further
leverage future revenue growth into increased profitability."
Earlier this year Spatializer ratcheted up its sales and marketing efforts. In
May, the Company hired Randy Roscoe as Vice President of Sales and Marketing.
During June a new public relations firm was engaged to increase the visibility
of Spatializer's brand and technology.
"On the product side, we introduced the Spatializer DigitalFX(TM) series, which
is our springboard to capturing a substantial share of the wide array of new
business opportunities generated by the digital audio revolution," Mandell
explains. "These include MP3 players, set-top boxes, Internet appliances and
PDAs that will be produced over the next few years. On the research side, we
significantly expanded our engineering team with talented individuals who are
passionate about audio. I'm excited about the potential of our enhanced R&D
capability."
Spatializer concluded three major licensing agreements during the later half of
the third quarter:
Aug. 16 -- Toshiba Corporation signed on to include Spatializer N-2-2(TM)
virtual surround sound software in its SD2300 DVD player -- the first from
Toshiba utilizing the powerful interactive capabilities of the NUON processor
developed by VM Labs Inc.;
Sep. 20 -- Hitachi, Ltd. began including Spatializer N-2-2(TM) Virtual Surround
Sound across its entire DVD Player line-up;
Sep. 25 -- Samsung Electronics Co., Ltd., Digital Products Division incorporated
Spatializer N-2-2(TM) audio enhancement technology into Samsung Extiva -- the
industry's first "all-in-one" entertainment station.
"We engaged an investor relations firm to communicate both our accomplishments
and future potential, and to develop interest within the financial community
about our Company," says Mandell. He stresses that, "Our greatest accomplishment
has been to balance our initiatives and investments and then bring them on line
without sacrificing the ultimate objective of our Company -- to build value for
our stockholders. With the infrastructure and products that we now have in place
and in the pipeline, I'm very optimistic about the future."
Spatializer Audio Laboratories, Inc. is a leading developer, licensor and
marketer of next-generation technologies for the consumer electronics, computing
and entertainment industries. The company's advanced audio technology is
incorporated into consumer electronics audio, video and DVD products from global
brand leaders including Toshiba, JVC, Panasonic, Hitachi, Samsung, Acer, Sharp,
Sanyo, Goldstar, Emerson, Zenith and Proton, in PC multimedia systems and
peripherals from Apple, Dell, Gateway, Hewlett Packard, Sony, Fujitsu,
Seiko-Epson, NEC, Micron and Labtec, in silicon from Matsushita, New Japan Radio
Corporation, ESS, Zoran, Motorola, C-Cube, OnChip Systems, and Acer Laboratories
Inc, and in software compatible with MP3 players such as WinAmp and embedded
with RISC cores from MIPS Technologies.
Spatializer stock is traded on the OTC Bulletin Board under the symbol: SPAZ.
The company is headquartered in Woodlands Hills, CA., with marketing,
engineering and R&D facilities in Santa Clara, CA, and Tokyo, Japan. Further
information may be obtained from Spatializer's SEC filings, and by contacting
the Company's Investor Relations Department toll-free at 888-825-0743 or by
writing to spaz@mdcgroup.com. For Media inquiries please contact Marken
Communications at 408-986-0100 or by writing to Andy@MarkenCom.com.
Safe Harbor Act Statement Under the Private Securities Litigation Reform Act of
1995: Certain information in this news release, including the comments by Mr.
Mandell in paragraphs three, four, six, seven, eight and nine are forward
looking statements 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 financial goals will be realized. Numerous
uncertainties and risk factors 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. These uncertainties and risk
factors include, but are not limited to the continued need for additional
capital, dependence on new technology and intellectual property, dependence on
the PC and consumer electronics industries, dependence on product shipments of
third-party licensees, competition and pricing pressures, and other risks
detailed from time to time in the Company's periodic reports filed with the
Securities and Exchange Commission.
Notices: Spatializer is a registered trademark and N-2-2(TM) and DigitalFX(TM)
are trademarks of Desper Products, Inc. Desper Products, Inc. is a wholly owned
subsidiary of Spatializer Audio Laboratories, Inc.
Spatializer Audio Laboratories, Inc.
Condensed Consolidated Statements of Operations
September 30, 2000
(Unaudited)
Three Months Ended Nine Months Ended
Sept 30, Sept 30, Sept 30, Sept 30,
2000 1999 2000 1999
Revenues:
Licensing/Product Revenues $0 $0 $0 $0
Royalty Revenues 630,129 324,473 1,665,829 976,525
Gross Revenues 630,129 324,473 1,665,829 976,525
Cost of Revenues (70,022) (20,000) (168,088) (28,619)
Gross Profit 560,107 304,473 1,497,741 947,906
Operating Expenses:
General and Administrative 181,669 98,785 426,458 310,662
Research and Development 186,294 73,469 388,338 323,929
Sales and Marketing 90,172 66,713 276,858 189,091
Total Operating Expenses 458,135 238,967 1,091,654 823,682
Operating Profit 101,972 65,506 276,858 189,091
Other Income (Expense) 10,842 (30,854) 24,573 (72,749)
Income Before Taxes 112,814 34,652 430,660 51,475
Income Taxes (9,000) (1,500) (44,271) (4,500)
Net Income 103,814 33,152 386,389 46,975
Net Income per Common
Share Basic and Diluted $0.00 $0.00 $0.01 $0.00
Weighted Average Common
Shares Outstanding 46,706,986 35,322,153 46,622,002 31,423,618
SOURCE Spatializer Audio Laboratories, Inc.
CONTACT: investors, David Castaneda, 888-825-0743, spaz@mdcgroup.com,
r
media, Andy Marken, 408-986-0100, andy@markencom.com, both fo
Spatializer
Audio Laboratories, Inc.
URL: spatializer.com
prnewswire.com
(C) 2000 PR Newswire. All rights reserved.
-0-
KEYWORD: California
INDUSTRY KEYWORD: CPR
SUBJECT CODE: ERN
OTC
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