(PR NEWSWIRE) Spatializer Audio Laboratories, Inc. Reports Second Consecut
Spatializer Audio Laboratories, Inc. Reports Second Consecutive Quarter of
Profitability
Per Unit Royalty Revenue Increases 172% Over First Quarter 1999
Driven By Ramp Up of N-2-2 Royalties From DVD Player Adoptions
WOODLAND HILLS, Calif., Aug. 9 /PRNewswire/ -- Spatializer Audio
Laboratories, Inc. (OTC Bulletin Board: SPAZ) today announced its second
consecutive quarter of profitability and financial results for the second
quarter ended June 30, 1999.
The company reported net income for the quarter of $12,000, ($0.00) basic
and diluted per share, compared with a net loss of $1,092,000 ($0.07) basic
per share in the comparable period last year.
Revenues for the second quarter of fiscal 1999 were $294,000, compared to
revenues of $675,000 in the second quarter of fiscal 1998, a decrease of 56%.
The continued turnaround in net income was driven by a significant
reduction in operating expenses to $250,000 in the quarter ended June 30,
1999, from $1,743,000 in the comparable period last year, a decrease of 86%.
This reduction reflects the impact of the restructuring initiatives
implemented in the fourth quarter of fiscal 1998 and the discontinued
operation of MultiDisc Technologies, Inc.
The decrease in second quarter revenues result primarily from a flat fee
royalty buy-out arrangement of the Desper Products audio division and a
technology evaluation fee of MultiDisc Technologies, Inc. in the comparable
quarter last year, for which there were no comparable revenues in the current
period.
Revenues of $294,000 for the second quarter of 1999 were entirely
comprised of recurring per unit royalties, compared to $9,000 in the
comparable period last year. This reflects the repositioning of the Company's
pricing strategy from royalty buy-outs to per unit running royalties in the
current year, as well as growth driven by royalties on the Company's N-2-2(TM)
virtual surround sound technology which began generating revenues in the
quarter ended June 30, 1999. In addition, recurring per unit royalties
increased from $108,000 in the first quarter of 1999, an increase of 172%.
"I am pleased to report this second consecutive quarter of profitability,"
stated Henry R. Mandell, Interim CEO of Spatializer Audio Laboratories, Inc.
"We are now beginning to see the financial result of our efforts to position
N-2-2(TM) as the de facto virtual surround sound standard for the DVD market,
as our global partners in this market ramp up shipment of N-2-2 enabled DVD
players. It is particularly encouraging to see the upward trend in our
recurring per unit royalty revenue base compared to the comp period last year
as well as last quarter. This is in keeping with the Company's objective I
spelled out last quarter of achieving a larger, more predictable and
diversified revenue base," continued Mandell.
Henry R. Mandell concluded, "With a stabilized royalty revenue base,
combined with sustained overhead reductions, we are ready to enter the next
stage of our recovery program. We expect to expand our revenues in the coming
quarters. The continued ramp-up of N-2-2 enabled DVD players, the anticipated
introduction later this year of Spatializer equipped products from Apple
Computer, Inc., E-commerce revenues from our Internet applications, projected
design wins by Matsushita for its lower cost 3-D stereo chip, as well as from
new licensing agreements which we hope to conclude in the coming months, are
all potential drivers of future revenue growth. While we are encouraged by
our success, we continue to face many challenges to recovery. We continue to
face a working capital deficiency and improving our liquidity is essential.
With renewed interest by the financial community, our improved financial
performance, strong operating discipline, outstanding products, people and
global partners, we are optimistic that we will continue to achieve our
objectives."
Spatializer Audio Laboratories, Inc. is a leading developer, licenser, 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, Panasonic, Hitachi,
Samsung, LG Electronics, and Acer and in PC multimedia systems and peripherals
from , Gateway 2000, Fujitsu, Seiko-Epson, Iiyama, NEC, Micron and Labtec.
Spatializer stock is traded on the OTC Bulletin Board under the symbol:
SPAZ. The company is headquartered in Woodlands Hills, CA., and has
marketing, engineering and R&D facilities in Mountain View, CA, and Tokyo,
Japan. Further information may be obtained from Spatializer's SEC filings,
website or by contacting the company directly.
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 seven and eight 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, the timing and realizable value of the MDT
technology, 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. MultiDisc is a
registered trademark of MultiDisc Technologies, Inc.
Note to editors: All Spatializer press releases are available for
download on the Spatializer web site, www.spatializer.com.
Spatializer Audio Laboratories, Inc.
Condensed Consolidated Statements of Operations
June 30, 1999
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
Revenues:
Licensing/Product Revenues $0 $665,639 $0 $ 672,704
Royalty Revenues 294,122 8,938 652,052 525,282
Gross Revenues 294,122 674,577 652,052 1,197,986
Cost of Revenues (7,784) (9,931) (8,619) (30,290)
Gross Profit 286,338 664,646 643,433 1,167,696
Operating Expenses:
General and Administrative107,709 727,329 211,877 1,167,451
Research and Development 92,741 563,970 250,460 1,163,507
Sales and Marketing 49,216 452,026 122,378 813,499
Total Operating
Expenses 249,666 1,743,325 584,715 3,144,457
Operating Profit (Loss) 36,672 (1,078,679) 58,718 (1,976,761)
Other Income (Expense) (23,093) (4,426) (41,895) (15,404)
Profit (Loss) Before Taxes 13,579 (1,083,105) 16,823 (1,992,165)
Income Taxes (2,000) (9,228) (3,000) (20,380)
Net Income (Loss) 11,579 (1,092,333) 13,823 (2,012,545)
Net Income (Loss) per
Common Share Basic and
Diluted $0.00 $(0.07) $0.00 $(0.11)
Weighted Average Common
Shares Outstanding 29,155,651 21,439,422 28,575,159 21,428,850
SOURCE Spatializer Audio Laboratories, Inc.
-0- 08/09/99
/CONTACT: Henry R. Mandell, Interim Chief Executive Officer of
Spatializer Audio Laboratories, Inc., 818-227-3370, ext. 14,
henrym@spatializer.com/
/Web site: spatializer.com
(SPAZ)
CO: Spatializer Audio Laboratories, Inc.
ST: California
IN: CPR ENT
SU: ERN
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