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Company's Popular TruSurround Virtual Surround Technology Featured in Models From Over 20 Major Brand Names

"We are proud that our TruSurround technology continues to be chosen by high quality DVD player manufacturers such as Denon," said Ted Franceschi, executive vice president of licensing and general manager for SRS Labs. "This new agreement is a prime example of our strategy to penetrate new accounts, while expanding the use of our technologies in the higher end DVD player market. We look forward to working with Denon and leveraging our audio expertise to bring the most innovative audio technologies to their customers."

Industry reports show that only 30 percent of U.S. households have a multi-speaker system in their homes. The patented TruSurround technology enables the other 70 percent of home theater listeners to enjoy a thrilling surround sound experience with just two speakers, including the internal TV speakers or two external stereo speakers. TruSurround has been featured in over 15 million consumer products globally including televisions, set-top boxes, and both software and hardware DVD players from the world's leading manufacturers. It has been featured in DVD players from over 20 brand names including Aiwa, Emerson, Funai, Hitachi, LG, Magnavox, Marantz, Mitsubishi, Panasonic, Philips, Pioneer, RCA, Sanyo, Sharp, and Sylvania, among others. Software DVD players from Cyberlink, InterVideo and Orion Studios include TruSurround, and set-top boxes with TruSurround are available from Hughes Network Systems and Sony. TruSurround is also featured in televisions from Mitsubishi, Sony, Sylvania, Toshiba and others.

Stephen Baker, Denon senior vice president of sales and marketing said, "Denon has a strong heritage as an audio company and the sound quality of our products has always been paramount. In fact, we consider our DVD players to be audio components as much as they are video playback devices. We are excited to now offer our customers the ability to enjoy a powerful and realistic surround experience from two channel audio sources through the use of SRS Labs' TruSurround technology."

Estimates by Cahners In-Stat Group indicate that the DVD player market will grow from approximately 18 million units sold in 2000 to 60 million units in 2004. This explosion of DVD player sales which inherently has the capability to deliver 5.1 channels of audio has fueled consumer demand for a home theater surround sound entertainment experience, yet over 70 percent of households still own just a two-speaker audio system. TruSurround bridges the gap between multichannel DVD soundtracks and two-speaker playback systems by delivering a compelling surround sound experience for all two-speaker systems, including internal television speakers. To hear an online demonstration of TruSurround, visit http://www.srslabs.com/LicensingTechMultichannel.asp#TS .

About Denon

From its beginning in the 1930s as a supplier of professional recording studio and broadcast equipment, Denon. Ltd., headquartered in Japan with worldwide offices, has become a world leader in the manufacture of the highest quality audio, audio/video, and software products. Denon is recognized internationally for innovative and groundbreaking products and has a long history of technical innovations, including the development and first commercialization of PCM digital audio.

About SRS Labs Inc.

Celebrating a decade in audio technology innovation, SRS Labs has become a recognized leader in the advancement of audio and voice technology. The company works with the world's top manufacturers to provide a richer entertainment experience through patented sound techniques. SRS technologies can be heard through products ranging from televisions, DVD players, cell phones, car audio systems and computers. The company also offers hardware and software tools to professionals and consumers for the production and broadcast of content featuring SRS technologies. SRS Labs' wholly owned subsidiary, ValenceTech, is located in Hong Kong and provides custom ASICs and standard ICs to leading manufacturers worldwide. Based in Santa Ana, Calif., the company also has licensing representation in Hong Kong, Japan, Europe, and Korea. For more information about SRS Labs, Inc. please visit www.srslabs.com . The information on the above-referenced websites is not incorporated by reference into this press release.

For further information, please contact: Investors, Tami Yanito, ext. 3093, tami@srslabs.com, or Media, Jennifer Drescher, ext. 5010, jenniferd@srslabs.com, both of SRS Labs, Inc., +1-949-442-1070.