Spatializer Audio Laboratories, Inc. Reports Fourth Quarter and Annual Results
04/14/99 PR Newswire
(Copyright (c) 1999, PR Newswire)
MultiDisc Technologies, Inc. Reported as a Discontinued Operation
and Marketed for Sale as Recovery Plan Announced in September, 1998 Continues to be Executed
WOODLAND HILLS, Calif., April 14 /PRNewswire/ -- Spatializer Audio Laboratories, Inc. (OTC Bulletin Board: SPAZ) announced today revenues for the fourth quarter and year ended December 31, 1998. Revenues for the fourth quarter of fiscal 1998 were $141,000, compared to $853,000 in the comparable period last year, a decrease of 83%. Revenues for the year were $1,680,000, compared to $2,781,000 in the prior year, a decrease of 40%.
Net loss, including discontinued operation, for the fourth quarter ended December 31, 1998 was $2,655,000, or a loss of ($0.11) per share. This compares with a net loss for the fourth quarter ended December 31, 1997 of $1,861,000 or a loss of ($0.09) per share, an increase of 42%. Net loss from continuing operation for the fourth quarter ended December 31, 1998 was $1,081,000 or a loss of ($0.05) per share. Included in net loss from continuing operations were one time restructuring expenses of $250,000, or ($0.01) per share. Loss on discontinued operation was $1,574,000 or ($0.06) per share. The loss per share includes the effect of approximately $133,000 of the beneficial conversion feature of the Series A 7% Convertible Preferred Stock as well as dividends in arrears of approximately $50,000 related to this preferred stock.
Net loss, including discontinued operation, for the year ended December 31, 1998 was $5,792,000, or a loss of ($0.29) per share. This compares with a net loss for the year ended December 31, 1997 of $4,720,000 or a loss of ($0.23) per share, an increase of 22%. Net loss from continuing operation for the year ended December 31, 1998 was $2,090,000 or a loss of ($0.12) per share. Included in net loss from continuing operations were one time restructuring expenses of $250,000, or ($0.01) per share. Discontinued operations expense and loss on discontinued operation were $2,127,000 ($0.11) per share and $1,574,000, ($0.06) per share respectively. The loss per share includes the effect of approximately $371,000 of the beneficial conversion feature of the Series A 7% Convertible Preferred Stock as well as dividends in arrears of approximately $149,000 related to this preferred stock.
"These operating results reflect the impact of our restructuring as we re-position the Company strategically and financially for the future. Our objective is to refocus Spatializer on its core competency as a leading provider of audio technology for the consumer electronics, Internet and PC markets and to make it profitable," stated Henry R. Mandell, Interim Chief Executive Officer. "While the restructuring and resultant financial results were painful, they were also necessary in order to put the past behind us and enter fiscal 1999 with a streamlined and tightly focused audio technology business."
Mr. Mandell continued, "When we launched our recovery plan, we set out to significantly reduce operating expenses, jump start potential new licensing deals, sell MultiDisc Technologies, and access additional working capital. We have made excellent progress toward achieving these goals over the past several months. Our current overhead structure for continuing operations is 60% lower than our overhead in the comparable period last year, such that profitability over the next twelve months is a realistic objective. The signing at year-end of a license agreement for our suite of technologies with Apple Computer, Inc. is evidence of our aggressive approach to the market, and is a strong validation of our technology. We are actively marketing MultiDisc Technologies, Inc. and are discussing interest from various parties. Lastly, on the most crucial goal of accessing capital, we continue to explore financing vehicles and sources, but in spite of our intensive efforts, we have been unable to date to solidify a transaction. Frankly, such a transaction is key to the Company's ability to continue as a going concern."
Mr. Mandell concluded, "We remain cautiously optimistic that in the coming months, we will be successful in ameliorating our working capital deficiency because the fundamentals of our business are favorable. The digital audio revolution is upon us and Spatializer's technology portfolio is strategically positioned to capitalize on this revolution. Our relationships with Toshiba and C-Cube position us to be a dominant player in the DVD market for virtual surround sound with N-2-2, which is now experiencing rapid growth. Moreover, we believe Spatializer is now operationally positioned for recovery and profitability. By virtue of overhead reductions already in place, the financial break-even point has been dramatically reduced, to equate to fiscal 1998 revenue levels. MultiDisc Technologies, Inc., as a discontinued operation, will no longer be a drag on earnings and working capital as in prior years. Licensing deals closed over the last twelve months, including that with Apple Computer, Inc., are now at the cusp of generating meaningful cash flow in fiscal 1999."
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, Sharp, Sanyo, and Proton and in PC multimedia systems and peripherals from Dell, Gateway 2000, Fujitsu, Seiko-Epson, Iiyama, NEC, Micron and Labtec.
Spatializer stock is traded on the NASD 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 four, five and six 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 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, the continued need for additional capital and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.
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