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New Licensee Matsushita Holds Position as World's Number One Consumer Electronics Manufacturer

Under terms of the licensing agreement, the first products from Matsushita that include TruSurround technology are the new Panasonic DVD players (RV32, RV62 and RV65) and DVD combo units (NV-ZFD1, NV-VHD1) for the European market. Matsushita sells products under a variety of well-known brand names, including Panasonic, Quasar, Technics and JVC. The Matsushita group includes about 320 operating units in more than 45 countries.

"We are proud that our established TruSurround technology continues to be chosen by the world's leading consumer electronics companies," said Thomas C.K. Yuen, chairman and CEO of SRS Labs, Inc. "These first products from Matsushita provide us with a strong foundation on which we hope to build and continue to work with them to implement our advanced audio technologies in their superior range of consumer electronics products."

Recent 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 75 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.

TruSurround is the established standard for the virtualization of 5.1 surround sound over two-speaker systems and has been featured in over 10 million consumer hardware products globally including products made by Funai Electric, Hughes Network Systems, Mitsubishi Electric Corporation, Sony, Thomson Consumer Electronics, Toshiba Corporation and Pioneer. TruSurround delivers an immersive home-theater surround sound experience to DVD playback systems that are not connected to 5.1 home theater speaker systems. TruSurround is applicable to DVD players, televisions, set top boxes, video game consoles and AV surround sound receivers. To hear an online demonstration of TruSurround, visit http://www.srslabs.com/LicensingTechMultichannel.asp#TS .

About Matsushita Electric Industrial

Matsushita Electric Industrial Co., Ltd., best known for its Panasonic, National, Technics, and Quasar brand names, is a worldwide leader in the development and manufacture of electronics products for a wide range of consumer, business, and industrial needs. Based in Osaka, Japan, the company recorded consolidated sales of US$51.70 billion for the fiscal year ended March 31, 2002. In addition to the Tokyo and other Japanese stock exchanges (6752), Matsushita's shares are also listed on the Amsterdam, Dusseldorf, Frankfurt, New York, Pacific (NYSE: MC; PCX), and Paris stock exchanges. For more information, visit the Matsushita web site at http://www.panasonic.co.jp/global/top.html .

About SRS Labs, Inc.

SRS Labs, Inc. ( www.srslabs.com ) and its subsidiaries provide advanced technology solutions for high growth consumer markets, including home theater, DVD, portable audio, wireless devices, game consoles, automotive, broadcast, Internet and personal computer software. SRS Labs, the parent company, develops the core audio and voice technologies and licenses these patented technologies to over 200 well-known manufacturers and semiconductor companies, including Sony, RCA, Philips, Kenwood, Mitsubishi, Hitachi, Microsoft, and Pioneer. ValenceTech, Ltd., ( www.valencetech.com ) SRS Labs' Hong Kong-based subsidiary, is a leading fabless application specific integrated circuit (ASIC) design and manufacturing company providing analog and digital ASIC solutions to the world's leading manufacturers of consumer electronics, gaming, telecommunications and computer products. SRS Labs' subsidiary, SRSWOWcast Technologies, ( www.srstechnologies.com ) focuses on the Internet and broadcast markets by developing and licensing customized hardware and software products incorporating SRS Labs' patented technologies. The information on the above-referenced websites is not incorporated by reference into this press release.

Except for historical information contained in this release, statements in this release, including those of Mr. Yuen in paragraph three are forward- looking statements and projections (which include statements concerning plans and objectives of management for future operations) 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 goals and strategy will be realized. Numerous factors (including risks and uncertainties) 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. Some of these factors include the general market conditions concerning semiconductor business, SRS Labs' ability to implement its technologies in other Matsushita or Panasonic products, the impact of competitive products and pricing, the timely development and release of technologies by the Company, general business and economic conditions, especially in Asia, and other factors detailed in the Company's Form 10-K and other periodic reports filed with the SEC. SRS Labs specifically disclaims any obligation to update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.

For further information please contact: Investors, Tami Yanito, ext. 3093, tami@srslabs.com, or Media, Jennifer Drescher, ext. 5110, jenniferd@srslabs.com, both of SRS Labs, Inc., +1-949-442-1070.

SOURCE: SRS Labs, Inc.