SPAZ news:
Monday August 9, 9:00 am Eastern Time
Company Press Release
SOURCE: Spatializer Audio Laboratories, Inc.
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 - news) 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.
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