updated 11/9/2010 4:45:35 AM ET 2010-11-09T09:45:35

CALABASAS, Calif., Nov. 8, 2010 (GLOBE NEWSWIRE) -- DTS, Inc. (Nasdaq:DTSI) today announced financial results for the third quarter ended September 30, 2010.

For the third quarter of 2010, revenue increased 40% over the prior year to $21.0 million. Income from continuing operations increased 74% to $3.4 million, or $0.19 per diluted share, for the third quarter of 2010. This compares to revenue of $15.1 million and income from continuing operations of $2.0 million, or $0.11 per diluted share, reported in the third quarter of 2009.

During the third quarter, the Company generated $8.4 million in cash from operating activities and closed the quarter with overall cash and investments of $84.5 million.

"Our third quarter financial performance positions us well to achieve our strong growth objectives in 2010," commented Jon Kirchner, Chairman and CEO of DTS, Inc. "We continued to see strength in the Blu-ray and automotive markets. We are encouraged by our continued progress in the network-connected device category. In our broadcast business, we announced a number of important partnerships, including an IPTV partnership with France Telecom/Orange. Our ongoing progress positively sets the stage for continued growth in 2011 and beyond.

"We expect revenues for fiscal year 2010 to be in the range of $82 to $85 million, GAAP operating margins in the upper 20's, and GAAP income from continuing operations in the range of $0.77 to $0.81 per diluted share. Beginning in the fourth quarter, we will add certain non-GAAP financial measures to our financial reporting discussions, including non-GAAP operating income and non-GAAP income from continuing operations.

"For the fiscal year, non-GAAP income from continuing operations per share is expected to be in the range of $1.05 to $1.10, excluding stock-based compensation, amortization of intangibles and their related tax effects. We expect non-GAAP operating margins to be in the upper 30's, excluding stock-based compensation and amortization of intangibles. Looking ahead to 2011, we currently expect revenue growth to approach or exceed 20% and to see increasing leverage in our business with operating margins improving by another several points," concluded Kirchner.

Within the tables attached to this press release, the Company has included both GAAP and non-GAAP disclosures of its third quarter and year to date 2010 financial results, and its quarterly and full year financial results for 2008 and 2009 as they will be presented in future quarters. In addition, the Company has provided a reconciliation of its GAAP to non-GAAP expected 2010 financial results as discussed above.

Use of Non-GAAP Financial Information

Included within this press release are non-GAAP financial measures that supplement the Company's Consolidated Statements of Operations prepared under generally accepted accounting principles (GAAP). These non-GAAP financial measures adjust the Company's actual results prepared under GAAP to exclude charges and the related income tax effect for share-based compensation and the amortization of intangible assets. 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 Company's management believes that this information can assist investors in evaluating the Company's operational trends, financial performance, and cash generating capacity. Management believes these non-GAAP measures allow investors to evaluate DTS's 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 Monday, November 8, 2010

DTS will broadcast a conference call today, Monday, November 8, 2010, starting at 1:30 p.m. Pacific Time. To access the conference call, dial 877-941-1427 or 480-629-9664 (outside the U.S. and Canada). The live webcast of the call will be available from the Investor Relations section of the Company's corporate website at www.dts.com. A replay of the webcast will begin two hours after the completion of the call. An audio replay of the call will also be available to investors beginning at 3:30 p.m. Pacific Time on November 8, 2010 through November 23, 2010, by dialing 800-406-7325 or 303-590-3030 (outside the U.S. and Canada) and entering the pass code 4329714#.

About DTS, INC.

DTS, Inc. (Nasdaq:DTSI) is dedicated to making digital entertainment exciting, engaging and effortless by providing state-of-the-art audio technology to hundreds of millions of DTS-licensed consumer electronics products worldwide. From a renowned legacy as a pioneer in multi-channel audio, DTS became a mandatory audio format in the Blu-ray Disc standard and is now increasingly deployed in enabling digital delivery of movies and other forms of digital entertainment on a growing array of network-connected consumer devices. DTS technology is in home theaters, car audio systems, PCs, game consoles, DVD players, televisions, digital media players, set-top boxes, smart phones, surround music software and every device capable of playing Blu-ray discs. Founded in 1993, DTS' corporate headquarters are located in Calabasas, California with its licensing operations headquartered in Limerick, Ireland. DTS also has offices in Northern California, Washington, Canada, China, France, Hong Kong, Japan, South Korea, Taiwan and the United Kingdom. For further information, please visit www.dts.com . DTS, DTS-HD, the DTS Symbol and DTS + the DTS Symbol are registered trademarks of DTS, Inc., DTS-HD Master Audio and the DTS logos are trademarks of DTS, Inc. All other trademarks are the properties of their respective owners. © 2010 DTS, Inc. All rights reserved.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause DTS' results to differ materially from historical results or those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements containing the words "planned," "expects," "believes," "strategy," "opportunity," "anticipates" and similar words. These statements may include, among others, plans, strategies and objectives of management for future operations; any statements regarding proposed new products, services or developments; any statements regarding future economic conditions or financial or operating performance; statements of belief and any statements of assumptions underlying any of the foregoing. The potential risks and uncertainties that could cause actual growth and results to differ materially include, but are not limited to, the transition to the next generation optical drives and consumer adoption of such technology, the rapidly changing and competitive nature of the digital audio, consumer electronics and entertainment markets, the Company's inclusion in or exclusion from governmental and industry standards, continued customer acceptance of the Company's technology, products, services and pricing, risks related to ownership and enforcement of intellectual property, the continued release and availability of entertainment content containing DTS audio soundtracks, success of the Company's research and development efforts, risks related to integrating acquisitions, greater than expected costs, the departure of key employees, the current financial crisis and global economic downturn, a loss of one or more of our key customers or licensees, changes in domestic and international market and political conditions, and other risks and uncertainties more fully described in DTS' public filings with the Securities and Exchange Commission, available at www.sec.gov. DTS does not intend to update any forward-looking statement contained in this press release to reflect events or circumstances arising after the date hereof.

DTS-I

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