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Spatializer Audio Laboratories Inc. Reports Fiscal 2003 Operating Results
WEDNESDAY, MARCH 17, 2004 6:30 AM
- PR Newswire
SPAZ
SAN JOSE, Calif., Mar 17, 2004 /PRNewswire-FirstCall via COMTEX/ -- Spatializer Audio Laboratories Inc. (SPAZ) today reported revenues for the twelve months ended December 31, 2003 of $1,269,000, compared to $1,856,000 in the prior year. Net loss for the year ended December 31, 2003 was ($495,000), or ($0.01) per share, compared to net income of $18,000, or $0.00 per share in the prior year.
Revenues for the fourth quarter ended December 31, 2003 were $345,000, compared to $464,000 in the prior year. Spatializer reported a net loss of ($102,000), ($0.00) per share, for the three months ended December 31, 2003, compared to net loss of ($17,000), ($0.00) per share, in the prior year.
Spatializer working capital at December 31, 2003 was $793,000 compared with working capital of $1,125,000 at December 31, 2002. At December 31, 2003, Spatializer had $590,000 in cash and cash equivalents, compared to $859,000 at December 31, 2002.
The decrease in revenues is attributed primarily to the loss or reduction at three key accounts which generated in excess of 20% of total revenue each, partially offset by revenue from a new account. The first lost account was in the PC market, where the customer completed its migration to a new operating system in which it chose not to include any software audio enhancements. The other two accounts were in the DVD player market, where a lower cost solution, or no solutions were selected for low cost, high volume DVD players.
"Fiscal 2003 was a transition year for us," explained Henry R. Mandell, Chairman and CEO of Spatializer Audio Laboratories, Inc. "In 2003, we experienced declining revenues from three major customers, primarily from the curtailment or cessation of use of our products by these customers. Two of these cases were in the DVD player market, where we have been historically strong. During 2003, the DVD player market became largely commoditized, resulting in intense pricing pressure and a steep decline in price and margins. Manufacturers were forced to strip out features, such as those offered by our company, in order to compete. One of these accounts switched to outside sourcing and we were able to expand our relationship with their supplier to recapture most of that revenue. However, a major new design win we were projecting for the DVD market was cancelled due to these cost constraints. Lastly, another PC account migrated completely in 2003 to a new operating system and chose not to include any audio software enhancements."
"To lessen competitive pressures on us, we laid the ground work in 2003 to transition the Company into other growing markets where we believe our value proposition is both resonant and adoption of our technologies more feasible," continued Mr. Mandell. "We developed our new Spatializer ((environ))(TM) technology to serve the cellular telephone market, which culminated in our first design win in that market with Sanyo for the Vodafone system. We also developed Spatializer Audio Alchemy(TM) , a new class of noise reduction technology to address the needs of the digital camcorder, digital camera and DVD authoring markets. We rolled out the new Spatializer Ultra HD(TM) class of whole product solutions to penetrate the digital mobile audio, DVD-R, digital television and PC markets. More importantly, we are awaiting the announcement of new design wins in these markets as documentation is finalized and the related licensee product nears launch."
Mandell concluded, "Such a transition as we have undertaken is not easily accomplished, yet we are beginning to see positive results. To help ensure further positive results and to reduce the financial disruption such a transition entails, we completed a streamlining of our operations in the fourth quarter of 2003 that we expect to result in a 25% reduction in our cost of doing business. This streamlining included a comprehensive overhaul of our domestic and international sales organization and the relocation of our corporate office to lower cost facilities. On a going forward basis, our operating costs have been restructured to deliver a lower break-even level, such that we currently believe profitable operations can be achieved at slightly below Q4 2003 revenue levels. The result of these initiatives is greater bottom line leverage as we look to successfully complete the transition to and further penetrate these more attractive markets."
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 and video products from global brand leaders including Toshiba, Samsung and Sharp, among others. Spatializer stock is traded on the OTC Bulletin Board under the symbol: SPAZ. The company is headquartered in San Jose, CA, with executive offices in Westlake Village, CA and representative offices throughout Japan and in Korea. 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 408-453-4180 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, dependence on third-party technology integrators or chip suppliers, 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 ((environ))(TM), Spatializer Audio Alchemy(TM) and Spatializer UltraMobile HD(TM) are trademarks of Desper Products Inc. All other trademarks are the property of their respective owners.
WEDNESDAY, MARCH 17, 2004 6:30 AM
- PR Newswire
SPAZ
SAN JOSE, Calif., Mar 17, 2004 /PRNewswire-FirstCall via COMTEX/ -- Spatializer Audio Laboratories Inc. (SPAZ) today reported revenues for the twelve months ended December 31, 2003 of $1,269,000, compared to $1,856,000 in the prior year. Net loss for the year ended December 31, 2003 was ($495,000), or ($0.01) per share, compared to net income of $18,000, or $0.00 per share in the prior year.
Revenues for the fourth quarter ended December 31, 2003 were $345,000, compared to $464,000 in the prior year. Spatializer reported a net loss of ($102,000), ($0.00) per share, for the three months ended December 31, 2003, compared to net loss of ($17,000), ($0.00) per share, in the prior year.
Spatializer working capital at December 31, 2003 was $793,000 compared with working capital of $1,125,000 at December 31, 2002. At December 31, 2003, Spatializer had $590,000 in cash and cash equivalents, compared to $859,000 at December 31, 2002.
The decrease in revenues is attributed primarily to the loss or reduction at three key accounts which generated in excess of 20% of total revenue each, partially offset by revenue from a new account. The first lost account was in the PC market, where the customer completed its migration to a new operating system in which it chose not to include any software audio enhancements. The other two accounts were in the DVD player market, where a lower cost solution, or no solutions were selected for low cost, high volume DVD players.
"Fiscal 2003 was a transition year for us," explained Henry R. Mandell, Chairman and CEO of Spatializer Audio Laboratories, Inc. "In 2003, we experienced declining revenues from three major customers, primarily from the curtailment or cessation of use of our products by these customers. Two of these cases were in the DVD player market, where we have been historically strong. During 2003, the DVD player market became largely commoditized, resulting in intense pricing pressure and a steep decline in price and margins. Manufacturers were forced to strip out features, such as those offered by our company, in order to compete. One of these accounts switched to outside sourcing and we were able to expand our relationship with their supplier to recapture most of that revenue. However, a major new design win we were projecting for the DVD market was cancelled due to these cost constraints. Lastly, another PC account migrated completely in 2003 to a new operating system and chose not to include any audio software enhancements."
"To lessen competitive pressures on us, we laid the ground work in 2003 to transition the Company into other growing markets where we believe our value proposition is both resonant and adoption of our technologies more feasible," continued Mr. Mandell. "We developed our new Spatializer ((environ))(TM) technology to serve the cellular telephone market, which culminated in our first design win in that market with Sanyo for the Vodafone system. We also developed Spatializer Audio Alchemy(TM) , a new class of noise reduction technology to address the needs of the digital camcorder, digital camera and DVD authoring markets. We rolled out the new Spatializer Ultra HD(TM) class of whole product solutions to penetrate the digital mobile audio, DVD-R, digital television and PC markets. More importantly, we are awaiting the announcement of new design wins in these markets as documentation is finalized and the related licensee product nears launch."
Mandell concluded, "Such a transition as we have undertaken is not easily accomplished, yet we are beginning to see positive results. To help ensure further positive results and to reduce the financial disruption such a transition entails, we completed a streamlining of our operations in the fourth quarter of 2003 that we expect to result in a 25% reduction in our cost of doing business. This streamlining included a comprehensive overhaul of our domestic and international sales organization and the relocation of our corporate office to lower cost facilities. On a going forward basis, our operating costs have been restructured to deliver a lower break-even level, such that we currently believe profitable operations can be achieved at slightly below Q4 2003 revenue levels. The result of these initiatives is greater bottom line leverage as we look to successfully complete the transition to and further penetrate these more attractive markets."
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 and video products from global brand leaders including Toshiba, Samsung and Sharp, among others. Spatializer stock is traded on the OTC Bulletin Board under the symbol: SPAZ. The company is headquartered in San Jose, CA, with executive offices in Westlake Village, CA and representative offices throughout Japan and in Korea. 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 408-453-4180 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, dependence on third-party technology integrators or chip suppliers, 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 ((environ))(TM), Spatializer Audio Alchemy(TM) and Spatializer UltraMobile HD(TM) are trademarks of Desper Products Inc. All other trademarks are the property of their respective owners.
