DTS REVISES FOUR QUARTER AND FISCAL YEAR 0 RESULTS

DTS REVISES FOURTH QUARTER AND FISCAL YEAR 2012 RESULTS CALABASAS, Calif. (March 18, 2013) - DTS, Inc. (Nasdaq: DTSI) today announced that it has revised its financial results for the fourth quarter and fiscal year ended December 31, 2012 to include an additional accrual for foreign withholding taxes in the amount of $0.4 million, and adjustments to the Companys consolidated balance sheet as of December 31, 2012 to reflect the reclassification of deferred tax liabilities and certain unrecognized tax benefits against deferred tax assets.

For the fourth quarter 2012, the revised GAAP net loss was $0.1 million, or $0.01 per diluted share, and the revised non-GAAP net income was $5.7 million, or $0.31 per diluted share. For the full year 2012, the revised GAAP net loss was $15.9 million, or $0.91 per diluted share, and the revised non-GAAP net income was $4.3 million, or $0.24 per diluted share. The Companys 2013 outlook is unaffected by these changes.

The amended release reads: DTS, Inc. (Nasdaq: DTSI) today announced financial results for the fourth quarter and fiscal year ended December 31, 2012.

Revenue for the fourth quarter was $29.8 million, including 86% year-over-year growth from the network-connected markets. This compares to revenue of $29.0 million in the fourth quarter of 2011, which included $1.6 million in royalty recoveries. Excluding royalty recoveries, the 9% year-to-year increase in total revenue resulted primarily from robust growth in the Companys network-connected business, which was bolstered by the acquisition of SRS Labs, Inc. last July. These results were partially offset by the continuing decline in demand for DVD products and a decline in Blu-ray revenue attributable in part to a comparably weaker holiday season in 2012.

Non-GAAP net income in the fourth quarter of 2012 was $5.7 million, or $0.31 per diluted share net of tax, compared to non-GAAP net income of $8.8 million, or $0.52 per diluted share net of tax, in the fourth quarter of 2011. Non-GAAP operating margin in the fourth quarter of 2012 was 26%, compared to 50% in the fourth quarter of 2011, largely due to increased expenses resulting from recent acquisitions as well as investments to support the Companys emerging network-connected business.

GAAP net loss in the fourth quarter of 2012 was $0.1 million or $0.01 per diluted share, compared to net income of $7.1 million, or $0.42 per diluted share, in the fourth quarter of 2011. GAAP net loss for the fourth quarter of 2012 includes $3.0 million, or $0.09 per diluted share net of tax, in stock-based compensation expense; $4.8 million, or $0.15 per diluted share net of tax, in acquisition and integration-related costs; and $2.0 million, or $0.06 per diluted share net of tax, in amortization of intangibles.

For the full year, revenue was $100.6 million, compared to revenue of $96.9 million in 2011. Revenue from royalty recoveries for 2012 was $2.4 million as compared to $2.0 million in 2011.

Non-GAAP net income for the full year was $4.3 million, or $0.24 per diluted share net of tax, compared to $24.7 million, or $1.40 per diluted share net of tax, in 2011. Non-GAAP operating margin for the full year was 24%, compared to 42% in 2011.

GAAP net loss for the full year was $15.9 million, or $0.91 per diluted share, compared to net income of $18.3 million, or $1.04 per diluted share, in 2011. GAAP net income for 2012 includes $11.3 million, or $0.39 per diluted share net of tax, in stock-based compensation expense; $15.7 million, or $0.44 per diluted share net of tax, in acquisition and integration costs; and $4.8 million, or $0.17 per diluted share net of tax, in amortization of intangibles.

The GAAP and non-GAAP reconciling items for the quarters and years ended December 31, 2012 and 2011 can be found in the "Non-GAAP Financial Metrics" schedule attached to this press release and on the investor relations portion of the Companys website at www.DTS.com.

The Company generated $14.8 million in cash flow from operations in 2012, compared to $24.2 million in 2011, and closed the year with cash and investments totaling $77.0 million.

"The fourth quarter concluded a transformative year for DTS. Over the course of 2012, we successfully completed the integration of two acquisitions, realized all anticipated synergies, extended our capabilities as a complete audio solutions provider, and significantly enhanced our network-connected footprint," said Jon Kirchner, chairman and CEO of DTS, Inc.

Mr. Kirchner continued, "DTS is dramatically changing the way consumers experience entertainment - whether on-the-go or at home - and we are very excited about our strong product pipeline, including the products recently announced at CES and Mobile World Congress. New technologies such as our Play-Fi wireless audio delivery technology and Headphone:X , a game-changing technology designed to create an immersive, multi-dimensional sound experience using only a pair of standard headphones, are generating significant industry excitement. We are poised to accelerate our network-connected growth in 2013 and are intently focused on positioning the Company for improved financial performance as we move through our strategic transition."

Business Outlook

For 2013, the Company expects revenue in the range of $140 to $146 million, including a normal level of royalty recoveries. The midpoint of this range reflects approximately 42% year-over-year growth, of which 16 percentage points are expected to be from organic growth and 26 percentage points are expected to come from acquired technologies, which have now been integrated into the Companys ongoing business. The Company expects growth in 2013 to come primarily from the network-connected markets and particularly from the growing licensing of audio processing in TVs and mobile devices. The Company expects the ne

LINK:	http://www.dts.com/corporate/press-releases/2013/03/dts-reports-fourth...
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