DTS Reports Strong Second Quarter 2014 Financial Results CALABASAS, Calif., Aug. 11, 2014 (GLOBE NEWSWIRE) -- DTS, Inc. (Nasdaq:DTSI), a leader in high-definition audio solutions, today announced financial results for the second quarter ended June 30, 2014.
DTS achieved strong revenue and earnings growth in the second quarter, with double-digit organic growth driven by progress in TV and game console markets as well as continued progress on our comprehensive royalty audit program, said Jon Kirchner, chairman and CEO of DTS, Inc. Importantly, we continue to see momentum in key areas of our business and market interest in innovative technologies like Play-Fi and Headphone:X. Our progress in the first half coupled with a growing product release pipeline has caused us to raise our full year outlook. Looking ahead, we remain focused on the large and attractive opportunities in network-connected devices, including smartphones, TVs and PCs, and expect to see accelerating organic growth over the next few years.
Financial Comparison
Q2 2014 Q2 2013
Revenue $36.2 million $27.2 million
Year-over-Year Growth Rate 33%
GAAP Net Income/(Loss) $7.0 million $(2.0) million
GAAP Earnings/(Loss) Per Share* $0.41 $(0.11)
Non-GAAP Operating Margin 31% 13%
Non-GAAP Net Income $8.0 million $2.1 million
Non-GAAP Earnings Per Share* $0.47 $0.11
*Earnings/(Loss) Per Diluted Share Net of Tax
Other GAAP Results
Q2 2014 Amount Per Diluted Share*
Stock-Based Compensation $2.9 million $0.12
Amortization of Intangibles $2.6 million $0.11
*Amount Per Diluted Share Net of Tax @ 30%
DTS closed the quarter with cash and investments totaling $69.5 million and generated $5.5 million in operating cash flow.
The GAAP and non-GAAP reconciling items for the quarters ended June 30, 2014 and 2013 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.
Business Outlook
The Company raised its outlook for the full year and now expects revenue in the range of $137 to $142 million, non-GAAP operating margins in the mid to upper 20s and non-GAAP diluted EPS in the range of $1.40 to $1.50 based on a 30% effective tax rate. Stock-based compensation expense is expected to be in the range of $0.42 to $0.46 per diluted share net of tax and amortization of intangibles is expected to be in the range of $0.36 to $0.40 per diluted share net of tax. On a GAAP basis, the Company expects its effective tax rate to be approximately negative 5% to negative 10%, which is net of five to six million dollars of discrete item credits. The Company expects GAAP operating margins of approximately 9% to 11% and GAAP diluted EPS in the range of $0.85 to $0.95.
The Company continues to expect its organic growth in 2014 to come primarily from the network-connected markets, specifically connected TVs, mobile devices and PCs. Network-connected markets are expected to represent more than 50% of total revenue in 2014.
Use of Non-GAAP Financial Information
Included within this press release are non-GAAP financial measures that supplement the Companys Consolidated Statements of Operations prepared under generally accepted accounting principles (GAAP). These non-GAAP financial measures adjust the Companys actual results prepared under GAAP to exclude charges and the related income tax effect for stock-based compensation, the amortization of intangible assets, and certain acquisition, integration and restructuring-related costs. Over the past several years, the Companys GAAP tax rate has been subject to substantial variability caused by three-year cumulative pre-tax losses in the US, which required the Company to record a valuation allowance against all United States Federal deferred tax benefits. For the second quarter of 2013, the Companys pre-tax earnings included a normalized 40% effective tax rate as management believed that the Companys inability to utilize its US deferred tax benefits would be temporary. In 2014, the Company effected a complex restructuring of certain intellectual property rights which addressed the issue of US taxable income. With the Companys global entity structure now optimized, management believes the appropriate measure for its second quarter 2014 results is to impute a normalized 30% effective tax rate on the pre-tax earnings of the Company. Reconciliations of GAAP to non-GAAP amounts for the periods presented herein are provided in schedules accompanying this release and should be considered together with the Consolidated Statements of Operations. These non-GAAP measures are not meant as a substitute for GAAP, but are included solely for informational and comparative purposes. The Companys management believes that this information can assist investors in evaluating the Companys operational trends, financial performance, and cash generating capacity. Management believes these non-GAAP measures allow investors to evaluate DTS financial performance using some of the same measures as management. However, the non-GAAP financial measures should not be regarded as a replacement for or superior to corresponding, similarly captioned, GAAP measures.
Conference Call Information for August 11, 2014
DTS will host a conference call and live webcast at 1:30 p.m. Pacific Time to discuss the second quarter ended June 30, 2014 results. To access the conference call, dial 1-888-287-5563 or 1-719-325-2361 (outside the U.S. and Canada). A live webcast of the call will be available from the Investor Relations section of the Companys corporate website at www.dts.com and via replay beginning two hours after the completion of the call. An audio replay of the call will also be available to investors beginning at 4:30 p.m. Pacific Time, August 11, 2014 through 4:30
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DTS Reports Strong Second Quarter 2014 Financial Results CALABASAS, Calif., Aug. 11, 2014 (GLOBE NEWSWIRE) -- DTS, Inc. (Nasdaq:DTSI), a leader in high-definition audio solutions, today announced financial results for the second quarter ended June 30, 2014.
