DTS Reports First Quarter 05 Financial Results

DTS Reports First Quarter 2015 Financial Results CALABASAS, Calif., May 11, 2015 (GLOBE NEWSWIRE) -- DTS, Inc. (Nasdaq:DTSI), a leader in high-definition audio solutions and audio enhancement technologies, today announced financial results for the first quarter ended March 31, 2015.

We had a good start to the year and made important strategic progress during the first quarter. We added Spotify to the Play-Fi ecosystem, partnered with Primetime Solutions, a premium streaming service provider in Thailand, to deliver Headphone:X technology to their customer base, and supported the launch of DTS technologies on the Tmall Box, the OTT service run by Alibaba, said Jon Kirchner, chairman and CEO of DTS, Inc. We also introduced our new object-based audio codec, DTS:X , which is designed to support more immersive entertainment experiences and extend into the virtual reality space. Taken together, these achievements support our progress in elevating the DTS brand across many forms of entertainment delivery -- from cinema, to the home, to mobile. We are excited by the significant opportunities ahead and remain focused on continuing to execute against our strategic plan to deliver a personalized and compelling experience across the entertainment value chain.

Financial Comparison

Q1 2015 Q1 2014

Revenue $33.9 million $36.8 million

Year-over-Year Growth Rate (8%)

GAAP Net Income $1.1 million $14.3 million

GAAP Earnings Per Share* $0.06 $0.81**

Non-GAAP Operating Margin 21% 24%

Non-GAAP Net Income $5.0 million $6.3 million

Non-GAAP Earnings Per Share* $0.27 $0.36

*Earnings per diluted share net of tax

**Note: Q1 2014 GAAP results include a $12.2 million net income tax benefit related to discrete item adjustments

Other GAAP Results

Q1 2015 Amount Per Diluted Share*

Stock-Based Compensation $2.9 million $0.11

Amortization of Intangibles $2.6 million $0.10

*Amount per diluted share net of 30% tax rate

DTS closed the quarter with cash and investments totaling $104.8 million.

The GAAP and non-GAAP reconciling items for the quarters ended March 31, 2015 and 2014 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 continues to expect 2015 revenue in the range of $148 to $155 million with growth more heavily weighted toward the back half of the year and to primarily come from the network-connected markets, specifically connected TVs, mobile devices, and Play-Fi enabled devices. Network-connected markets are expected to represent more than 50% of total revenue in 2015.

The Company expects non-GAAP operating margins in the range of 26% to 30% and non-GAAP diluted EPS in the range of $1.65 to $1.75. On a GAAP basis, the Company expects operating margins in the range of 13% to 15% and diluted EPS in the range of $0.80 to $0.90.

This outlook is based on a number of assumptions that the Company believes are reasonable at the time of this press release. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in the Companys filings with the Securities and Exchange Commission.

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 by excluding 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 varied substantially primarily as a result of cumulative pre-tax losses in the US, which required the Company to record a valuation allowance against all US federal deferred tax assets in 2012. In the first quarter of 2014, the Company effected an international restructuring which involved the transfer of the economic rights of certain foreign intellectual property. As a result of this tax planning strategy, sufficient evidence of US taxable income was demonstrated and the valuation allowance was reversed in the fourth quarter of 2013, and a $12.2 million discrete benefit was recognized in the first quarter of 2014. With the Companys global entity structure now fully operational, management believes the appropriate measure for its first quarter 2015 results is to use its estimated annual effective tax rate before discrete items - approximately 30%. 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 May 11, 2015

DTS will host a conference call and live webcast at 1:30 p.m. Pacific Time to discuss the first quarter ended March 31, 2015 results. To access the conference call, dial 1-888-401-4668 or 1-719-325-2454 (outside the U.S. and Canada). A live webcast of the call w

LINK:	http://www.dts.com/corporate/press-releases/2015/05/dts-reports-first-...
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