(PR NEWSWIRE) Spatializer Audio Laboratories, Inc. Announces Third Quarter Op
Spatializer Audio Laboratories, Inc. Announces Third Quarter Operating Results
Adjustments to Second Quarter Accruals Due to Late Royalty Reporting And
Change in Licensee Royalty Reporting Method Negatively Impacts Third Quarter
Operating Results, Which Would Otherwise Have Reflected a Small Profit
SANTA CLARA, Calif., Nov. 9 /PRNewswire/ -- Spatializer Audio
Laboratories, Inc. (OTC Bulletin Board: SPAZ) today announced its financial
results for the third quarter ended September 30, 2001.
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Revenues for the third quarter of fiscal 2001 were $303,000, compared to
revenues of $630,000 in the third quarter of fiscal 2000, a decrease of 52%.
Revenues for the nine-months ended September 30, 2001 were $1,215,000 compared
to revenues of $1,666,000 in the comparable nine-month period last year.
The company reported net loss for the quarter of $175,000, $0.00 basic and
diluted per share, compared with net income of $104,000, $0.00 basic and
diluted per share, in the comparable period last year. Net loss for the
nine-months ended September 30, 2001 was $267,000, ($0.01) basic and diluted
per share, compared to net income of $386,000, $0.01 basic and diluted per
share, in the comparable nine-month period last year.
The decrease in the revenues reported in the third quarter resulted
primarily from adjustments to revenues accrued in the prior quarter to reflect
actual cash receipts for second quarter operations. The Company's long
standing policy has been to accrue revenue based on estimates derived from
historical and current information available when SEC reports are due. In the
quarter ended June 30, 2001, reporting changes and delayed reporting impacted
these estimates. Effective April 1, 2001, two manufacturers assumed royalty
reporting and payment responsibilities previously held by a single DSP
foundry. The change in reporting entities and the related change in payment
from the previous policy of shipments by the DSP foundry to the manufacturers
to the new policy of royalties based on the manufacturer's shipment of DVD
players resulted in an over-accrual of estimated revenues in the second
quarter. An adjustment of approximately $200,000 was made in the third
quarter.
Revenues for the nine months ended September 30, 2001 were lower because
of the aforementioned adjustment and a flat fee license royalty of 250K earned
in the first half of 2000 for which there were no comparable royalties in the
current year. In addition, royalties on analog integrated circuits have
declined from a major account due to a continuing sales decline of audio
related special purpose ICs.
The net loss for the three and nine month periods are primarily the result
of the decrease in revenue and an increase in operating expenses, primarily
for research and development. The Company previously reported in its second
quarter that it had accelerated its hiring program to capitalize on a brief
supply of engineering talent in the Silicon Valley as a result of industry
layoffs. In addition, the Company stepped up its use of outside consultants
to move several projects closer to completion. These initiatives were trimmed
in the third quarter to more closely synch overhead with current operating
levels.
"It's always disappointing to report a quarterly loss, but when a modest
quarterly profit is turned into a loss due to untimely and inadequate
information, its even more difficult," stated Henry R. Mandell, Chairman and
CEO of Spatializer. "Shareholders sometimes ask why we don't report earlier
and now we unfortunately see why that can be problematic. We have
communicated to our licensee the importance of timely information and the
obvious ramifications from any delayed information."
Mandell continued, "Nevertheless, we are moving our business ahead in
these uncertain times. We reduced our overhead by over 20% compared to the
previous quarter. In the third quarter, we announced our first portable
digital player deal with Sanyo. This reflects a re-established relationship
with the Sanyo organization where there are significant opportunities. We
added Sharp DVD and SONICblue to our licensee family. Zoran Corporation
designated us as a preferred provider on their Vaddis(R) DSP line, including
the new Vaddis V processor. We extended our relationship with
Texas Instruments with new platform availability and are collaborating with
them in a joint marketing effort. Lastly, we announced Spatializer PCE(TM)
that represents the Company's next-generation audio enhancement technology
that both polishes and expands the listener's audio experience. As a small
company, we have accomplished much in the past quarter and I'm proud of our
team. I expect a solid and profitable fourth quarter and look forward to
success in this competitive environment."
About Spatializer
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, SONICblue, Zenith and Kenwood, in PC multimedia
systems and peripherals from Apple and Labtec, in silicon from Matsushita,
Texas Instruments, Cirrus Logic, New Japan Radio Corporation, Zoran, Motorola,
LSI/C-Cube, Tvia, VM Labs, LinkUp and Acer Laboratories Inc, and in MP3
players such as Sanyo 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 Santa Clara, CA, with marketing offices in
Tokyo, Japan. Further information may be obtained from the company's web
site, www.spatializer.com, Spatializer's SEC filings, and by contacting the
company's Investor Relations Department at 408-296-0600 or by writing to
investor@spatializer.com.
Safe Harbor Act Statement Under the Private Securities Litigation Reform
Act of 1995: Certain information in this background news release, including
the comments by Mr. Mandell in this press release 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.
NOTE: Desper Products Inc. is a wholly owned subsidiary of
Spatializer Audio Laboratories Inc. Spatializer(R) is a registered trademark
and Spatializer PCE(TM) is a trademark of Desper Products Inc. All other
trademarks are the property of their respective owners. Copyright (C) 2001
Spatializer Audio Laboratories, Inc.
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
SPATIALIZER AUDIO LABORATORIES, INC. |
